Deansgate 123 LLP v Ian Garth Workman
| Jurisdiction | England & Wales |
| Judge | Eyre |
| Judgment Date | 11 January 2019 |
| Neutral Citation | [2019] EWHC 2 (Ch) |
| Docket Number | Case No: D31MA058 E30MA399 |
| Court | Chancery Division |
| Date | 11 January 2019 |
[2019] EWHC 2 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN MANCHESTER
BUSINESS LIST (Ch D)
Manchester Civil Justice Centre
1 Bridge Street West
Manchester M60 9DJ
HIS HONOUR JUDGE Eyre QC
Case No: D31MA058 E30MA399
William McCormick QC (instructed by Hemingways Solicitors) for the First Defendant
Matthew Collings QC and Richard Selwyn Sharpe (instructed by Clough & Willis) for the Second Defendant
Joseph Wigley (instructed by Ashfords LLp) for Deansgate 123 LLP
Steven McGarry (instructed by) for Carol Ann Forrester
Hearing date: 3 rd December 2018
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HH Judge Eyre QC:
Introduction.
On 21 st November 2011 Ian Garth Workman (“Ian Workman senior”) executed a transfer form (“the Transfer Form”) purporting to transfer sundry properties (“the Properties”) to Ian Grant Workman (“Ian Workman junior”), one of his sons. Carol Ann Forrester (“Mrs. Forrester”) and Deansgate 123 LLP (“Deansgate”) have brought proceedings (respectively “the Forrester Claim” and “the Deansgate Claim”) seeking relief pursuant to section 423 of the Insolvency Act 1986 on the footing that the transfer was a transaction at an undervalue or without consideration entered into for the purpose of putting assets beyond the reach of those with claims against Ian Workman senior. Messrs. Workman senior and junior have applied to have those claims struck out as an abuse of process in reliance on the principles deriving from the judgment of Wigram VC in Henderson v Henderson 3 Hare 100, 115.
The Factual and Procedural Background.
Ian Workman senior was formerly married to Susan Workman. Divorce proceedings were commenced in 2010 resulting in the grant of a decree absolute dissolving the marriage. Ancillary relief proceedings had been commenced and a final hearing of those proceedings had been listed for 19 th May 2011. In the course of those proceedings Mrs. Workman had obtained a freezing order against Ian Workman senior.
On 7 th April 2011 Ian Workman senior killed Susan Workman. The death of Mrs. Workman caused the matrimonial proceedings to abate together with the freezing order. On 19 th December 2011 Ian Workman senior was convicted of the murder of Susan Workman.
On 21 st November 2011 Ian Workman senior executed the Transfer Form. That execution had the effect of passing Ian Workman senior's beneficial interest in the Properties to his son but the latter did not become the registered proprietor at that time.
Mrs. Forrester is the sister of Susan Workman and she obtained a grant of probate in respect of her sister's estate. Together with Nicholas and Benjamin Workman (the other two sons of Susan Workman and Ian Workman senior) she brought proceedings against Ian Workman senior seeking damages for the unlawful killing of Susan Workman (“the Damages Proceedings”). Ian Workman senior was debarred from defending those proceedings and a judgment in default for £1.5m was obtained in January 2013 and subsequently upheld by the Court of Appeal. Mrs. Forrester and her nephews had obtained a freezing order against Ian Workman senior in those proceedings. Although Nicholas and Benjamin Workman are parties to the Damages Proceedings they have taken no part in the various hearings and applications with which I am concerned.
Deansgate (then known as Pannone LLP) had acted for Ian Workman senior in his criminal trial. Deansgate brought proceedings in respect of unpaid fees and on 4 th October 2013 it obtained summary judgment against Ian Workman senior in the sum of £145,907 together with costs. By way of enforcement of that judgment Deansgate obtained interim charging orders in respect of the Properties. At that time Ian Workman senior was still the registered proprietor of the Properties. Ian Workman junior was joined to those charging order proceedings.
On 20 th March 2017 the charging order proceedings came before District Judge Burrow in the Preston County Court with a view to determining whether the charging orders should be made final. The order made by the District Judge recited that Messrs. Workman senior and junior had maintained that the effect of the execution of the Transfer Form was that Ian Workman senior held the Properties on bare trust for Ian Workman junior and also recited that Deansgate had “questioned the validity” of the Transfer Form. The order recorded the view of the court (in which the parties were stated to have concurred) that the Preston County Court was not the appropriate forum for determination of the validity of the Transfer Form in the light of the impact that finding could have on the parties to the Damages Proceedings and having regard to the fact that the claimants in the Damages Proceedings would need to be given notice of any application relating to the validity of the Transfer Form. The order then recited the court's view that the charging order proceedings should be adjourned “pending a determination as to the validity of the [Transfer Form] by way of an application in [the Damages Proceedings]”. In the light of those recitals District Judge Burrow adjourned generally the charging order applications and transferred them to the High Court “for further directions following determination of [Ian Workman junior]'s application for a declaration in [the Damages Proceedings] or otherwise on the application of any party.”
On 25 th April 2017 Ian Workman junior made an application in the Damages Proceedings seeking to be joined as a party to those proceedings and seeking declarations that the entire beneficial interest in the Properties had been transferred to him by the Transfer Form; that he was entitled to be registered as the proprietor of the Properties; and that the transfer was not in breach of the freezing order which had been obtained in the Damages Proceedings. Deansgate was not provided with a copy of that application until 19 th October 2017.
In the intervening period Deansgate's solicitors had asked for confirmation that Ian Workman junior had made an application and had asked for copies of it (in their letters of 19 th and 30 th May and 23 rd August 2017). The solicitors for Ian Workman junior responded (on 22 nd May, 6 th June, and 24 th August 2017) saying that an application had been issued; that a sealed copy had not yet been returned from the court; and that Deansgate would only be provided with a copy once a sealed copy had been provided by the court for service on the respondents to the application (namely the claimants in the Damages Proceedings). In that correspondence Deansgate's solicitors had said (in particular in their letter of 19 th May 2017) that even if the validity of the transfer were to be upheld it would be liable to be set aside pursuant to section 423 and that Deansgate would be entitled to make an application under that provision.
At the time of the hearing in front of District Judge Burrow it had been Deansgate's intention to apply to be joined as a party to the application by Ian Workman junior. The parties' shared understanding in that regard was acknowledged in the letter of 23 rd August 2017 from Deansgate's solicitors and that letter indicated that this remained Deansgate's intention at that time.
On 6 th November 2017 Mrs. Forrester's response to Ian Workman junior's application was set out in the witness statement of her solicitor, Hefin Archer-Williams. That statement set out a number of matters which it was said should cause the court to conclude that the Transfer Form was not valid and that the purported transfer had been ineffective. The concluding portion of the statement also made reference to section 423. The relevant passage was headed “the proposed application under sections 423 – 425”. It said that if the declarations sought by Ian Workman junior were granted Mrs. Forrester would seek an order under those sections restoring the position to that which it would have been if the transfer had not been effected. The statement said that it was expected that a similar application would be made by Deansgate.
Deansgate did, indeed, make an application under section 423. That application was issued on 21 st November 2017 but it was not served until some time after the Particulars of Claim had been signed on 20 th March 2018. On 9 th February 2018 Mrs. Forrester's solicitors told the solicitors for Messrs Workman senior and junior that Deansgate's section 423 application had been issued but not served.
The hearing of Ian Workman junior's application had originally been listed for 6 th December 2017 but that hearing was vacated with the agreement of all parties, including Deansgate, the view having been taken that more court time would be needed to deal with the matter. In the correspondence leading up to that adjournment Deansgate's solicitors confirmed to those acting for Ian Workman junior that it remained Deansgate's intention to apply to join the Damages Proceedings with a view to responding to Ian Workman junior's claim and said that they were in the process of drafting an application to that effect. As will be seen below Mr. Collings QC for Ian Workman junior placed considerable emphasis on the fact that court time had been available on 6 th December 2017 at which directions could have been given in this matter.
Ian Workman junior's application was then listed for hearing before me on 15 th February 2018.
Shortly before that hearing Deansgate changed solicitors (notice of change was sent to the...
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