Anthony James Broom v Maria Del Pilar Molina Aguilar

JurisdictionEngland & Wales
JudgePaul Matthews
Judgment Date10 July 2024
Neutral Citation[2024] EWHC 1764 (Ch)
CourtChancery Division
Docket NumberCase No: CH-2023-BRS-000011
Between:
Anthony James Broom
Respondent
and
Maria Del Pilar Molina Aguilar
Appellant

[2024] EWHC 1764 (Ch)

Before:

HHJ Paul Matthews

(sitting as a Judge of the High Court)

Case No: CH-2023-BRS-000011

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN BRISTOL

CHANCERY APPEALS LIST (ChD)

Bristol Civil Justice Centre

2 Redcliff Street, Bristol, BS1 6GR

Stefan Ramel (instructed by DAC Beachcroft) for the Respondent

Daisy Brown (instructed by Harrison Clark Rickerbys) for the Appellant

Hearing date: 9 April 2024

This judgment was handed down remotely at 10.30am on 10 July 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Paul Matthews HHJ

Introduction

1

This is my judgment on the appeal of Maria Del Pilar Molina Aguilar (“the appellant”) against the major part of the decision of District Judge Taylor handed down on 16 November 2023 at Bristol, after a hearing there on 10 and 11 October 2023. The appeal was instituted by appellant's notice dated 6 December 2023. I gave permission to appeal on 9 February 2024. The respondent to the appeal is Anthony James Broom, who is the current trustee in bankruptcy of the appellant's husband, Michael Alan Chambers (“Mr Chambers”). This judgment also deals with the cross-appeal of the respondent against one part of the decision of District Judge Taylor, notice of which was filed on 11 March 2024, and heard by me at the same time as the appeal.

2

The decision made by the district judge was made on an application brought by the appellant under section 375 of the Insolvency Act 1986, to rescind the order of District Judge Davies made on 18 March 2015 at Gloucester County Court. The order of District Judge Davies itself was made on an originating Insolvency Act application by the respondent's predecessor in title, Eric Stonham, under sections 339 and 340 of the 1986 Act. The order required the appellant to pay sums exceeding £200,000 to Mr Stonham in respect of transactions at an undervalue (or alternatively preferences), interest and costs.

Background

3

The background to this matter is complex, and what follows is only a summary to make the rest of this judgment intelligible. The appellant is a Spanish national, who moved to the UK in 1972 and married Michael Chambers. They lived together in England for more than forty years, until early in October 2014, when, as found by the district judge, they emigrated to Spain, where they now live. In order to avoid any confusion, I should make clear that, on her marriage, the appellant appears to have changed her name to Maria del Pilar Chambers, in accordance with then common English practice (though no legal rule). However, on 28 April 2005, the appellant by deed poll returned her name, as she was entitled to, from Maria Del Pilar Chambers to her earlier name of Maria Del Pilar Molina Aguilar. So far as I am aware, “Molina Aguilar” is not hyphenated, but follows the Spanish custom of using the father's and the mother's family names together in a two-word phrase.

4

The appellant and Mr Chambers originally bought a house in Arlingham, Gloucestershire. In 1978 Mr Chambers became a self-employed builder. To raise finance for his development work the Arlingham house was charged to a bank. In 1988, to raise further finance, the Arlingham property was sold and a smaller house acquired in Dursley, Gloucestershire, to which the charge was transferred. It appears that the borrower in each case was the appellant and Mr Chambers jointly. This borrowing was refinanced in 1993 with a mortgage loan from and the house charged to Birmingham Midshires, dated 6 October 1993. This mortgage loan is referred to as the “First Mortgage Account”. On the face of it, this loan was entirely for the benefit of Mr Chambers's business. He paid the instalments on the loan.

5

In 1996 Mr Chambers was made bankrupt on the petition of HM Customs & Excise in relation to liability for a VAT surcharge. The appellant bought her husband's beneficial interest in the house from the Official Receiver, and it was assigned to her on 25 February 1998. Thereafter the appellant was and remained the sole beneficial owner of the property. However, although the appellant requested Birmingham Midshires to remove Mr Chambers from the mortgage, they refused, and so the legal title remained registered in the joint names of both the appellant and her husband. Thereafter, the appellant paid the instalments on the mortgage loan.

6

The appellant permitted her husband to use parts of her property for his building and development business. These included a large garage, most of the outdoor yard and driveway space, and use of some rooms in the house itself. From about 1998 Mr Chambers took over the payment of the mortgage instalments, which were paid directly from his bank account. The appellant's case is that this represented payment or compensation for the use that he was making of their home for the purposes of his business. In December 2000, the appellant agreed to enter into a further charge of her house to secure finance for her husband's business. I have not seen that charge, but it appears that it was granted by the appellant and Mr Chambers jointly, which would be consistent with the legal title. The former trustee's evidence was that the borrower was once again the appellant and Mr Chambers jointly, though the judge below made no findings about this.

7

The first loan made on that further security was in December 2000, for £15,001. This is known as the “Second Mortgage Account”. But the charge also secured further advances. These were made in August 2001 (£20,000: “Third Mortgage Account”), February 2004 (£78,235: “Fourth Mortgage Account”) and October 2005 (£85,000: “Fifth Mortgage Account”). The sums so advanced were all put into Mr Chambers' business, and the appellant did not benefit from any of them directly. I have not seen any loan agreements, but, in account statements for all these accounts, Birmingham Midshires' “customer” is stated to be the appellant and Mr Chambers jointly. Nevertheless, Mr Chambers paid all the instalments on all of them.

8

In December 2006 Mr Chambers paid £7000 to the appellant, on 4 January 2008 the sum of £10,000 and on 15 January 2008 the sum of £15,000. These are referred to hereafter as the “lump sum payments”. The appellant's case is that these were part repayment of funds which she had in effect lent him, by consenting to charges to secure the sums being placed on her house. On 22 January 2008 the appellant paid £15,000 to her husband, on her case as a further loan.

9

The recession in 2008 affected Mr Chambers' business, and led to his petitioning for his own bankruptcy. He was adjudicated bankrupt for the second time on 23 April 2009. Mr Eric Stonham was appointed his trustee in bankruptcy in July 2009. (In May 2020 he was replaced by the respondent, who is his current trustee.) Mr Stonham sought to claim an interest in the appellant's house, on the basis that her husband had had such an interest. He applied to register a restriction against the title. The appellant objected, explaining her purchase of her husband's original beneficial interest after his first bankruptcy, and the matter was referred to the adjudicator. However, Mr Stonham withdrew his application by letter dated 9 May 2011, before it could be dealt with by the adjudicator. It is convenient to mention here that the appellant sold the Dursley house in November 2013.

The letter of claim and its aftermath

10

In March 2014 solicitors acting for Mr Stonham, DAC Beachcroft, wrote what was in effect a letter before claim to solicitors who had previously acted for the appellant, Rickerbys (now Harrison Clark Rickerbys), on the assumption that they continued to do so. This letter intimated a claim against the appellant on the basis of sections 339 to 342 of the Insolvency Act 1986, dealing with transactions at an undervalue and preferences, arising out of payments made under each of the five separate mortgage accounts with Birmingham Midshires.

First Mortgage Account

11

It was first said that, after Mr Chambers' first bankruptcy and the assignment of his beneficial interest to the appellant, the appellant was the only person liable to Birmingham Midshires under the First Mortgage Account. However, Mr Chambers continued to pay the mortgage instalments on that account to the appellant at least up to the date of the second bankruptcy order in April 2009. These were said to amount to £32,765.06 in the five years before that order was made. The letter said that there must have been an arrangement between the appellant and her husband to make those payments, and that amounted to a transaction at an undervalue. It further said that payments on the whole five years were caught because Mr Chambers was insolvent during the whole of that period.

Second and Third Mortgage Accounts

12

The letter then proceeded to deal separately with claims arising under the Second to Fifth Mortgage Accounts. The letter distinguished between the Second Mortgage Account and Third Mortgage Account on the one hand, and the Fourth Mortgage Account and the Fifth Mortgage Account on the other. As to the former pair of accounts, Mr Stonham assumed that the appellant and her husband were jointly liable for those loans. But Mr Chambers paid all the instalments on these accounts before his second bankruptcy, amounting to £17,316.16. Again, it was said that there must have been an arrangement between the appellant and her husband to make those payments, and that amounted to a transaction at an undervalue. However, the transaction at an undervalue was only as to half the value of the payments (because Mr Chambers was himself liable as to one half), amounting to £8,658.08.

Fourth and Fifth Mortgage Accounts

13

As to the latter two accounts (the Fourth and Fifth), Mr Stonham...

To continue reading

Request your trial
1 cases

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT