Judd v Brown
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ROBERT WALKER,LORD JUSTICE WARD,LORD JUSTICE SIMON BROWN |
| Judgment Date | 05 February 1999 |
| Judgment citation (vLex) | [1999] EWCA Civ J0205-19 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CHBKF 97/1445/3 |
| Date | 05 February 1999 |
[1999] EWCA Civ J0205-19
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
CHBKF 97/1446/3
ON APPEAL FROM THE CHANCERY DIVISION (IN BANKRUPTCY)
(MR JUSTICE HARMAN)
Royal Courts of Justice
Strand
London WC2
Lord Justice Simon Brown
Lord Justice Ward
Lord Justice Robert Walker
CHBKF 97/1445/3
Miss R Nicholson (Instructed by Leeds Day, 6 Bedford Road, Sandy, Bedfordshire) appeared on behalf of the Appellant
Mr B Isaacs (Instructed by Archer & Archer, Market Place, Ely, Cambridgeshire) appeared on behalf of the Respondent
Friday 5th February 1999
This is an appeal with the leave of the full court from two orders made by Harman J on 20th February 1997. One order was made in the bankruptcy of Mr Richard Brown (9587 of 1994) and the other in the bankruptcy of his brother, Mr Peter Brown (9588 of 1994). Both brothers were adjudicated bankrupt on 12th April 1994 and they have had the same trustee in bankruptcy, until recently Mr Vincent Judd, who was appointed to those offices on 14th December 1995.
The scope of the appeal from Harman J has at a late stage been reduced as the result of an agreement between the principal parties. Nevertheless, in order to understand those points which remain to be decided, it is necessary to set out the background in some detail. On 2nd February 1996 the trustee in bankruptcy applied in the two bankruptcies for orders for possession and sale of certain freehold property including (in 9587) Mr Richard Brown's residence, 62 High Road, Beeston near Sandy in Befordshire ("62 High Road") and (in 9588) Mr Peter Brown's residence, 6 The Knolls, Beeston Green near Sandy ("6 The Knolls"). The judge's orders made declarations (the correctness of which is not challenged on appeal) as to the ownership of 62 High Road and 6 The Knolls, but with those exceptions he refused any relief and dismissed the applications. The trustee in bankruptcy appealed to this court against the judge's refusal to make any order for possession or sale of any of the properties. However, he does not now maintain the appeal in respect of the two houses. That is the effect of the compromise which I have mentioned. Another effect is that the remainder of the appeal is not opposed. However, it is still necessary for this court to be satisfied that the judge's order ought to be varied in any respect.
Before the judge there was an agreed statement of facts, so that the judge did not have to resolve any issues of fact. He was concerned solely with principles of law and the exercise of his discretion, and this court can interfere only if the judge erred in law or exercised his discretion on incorrect principles or in a way that was plainly wrong. The parties' agreement of a statement of facts must have appeared a sensible step with a view to saving time and costs, but it leaves this court with a rather meagre picture of the material on which the judge exercised his discretion. Moreover, since the appeals have taken a very long time to reach this court, it may well be (and indeed counsel has told us) that the position has changed in a number of respects. The narrowed scope of the appeal reduces but does not entirely remove that problem as to what the facts really are.
I should mention that the respondents' counsel's original skeleton argument (on which we have not in the event been addressed) contained some strongly stated observations about dissension between the two bankrupt brothers and a third brother, Mr David Brown, and about the trustee in bankruptcy's attitude to that dissension. There is nothing in the agreed statement of facts about that, nor did the judge make any findings about it. However, I should record that we were told on instructions that the third brother, Mr David Brown, is not merely the principal creditor who took over the carriage of the bankruptcy petitions, but is today the only creditor, and that the trustee in bankruptcy is acting on the strength of an indemnity from him. There is nothing unusual or improper in such an indemnity as such, but it is a point to be borne in mind in considering the matter as a whole.
Those, then, are the three brothers who play a part in the story. They were partners in the business of market gardeners under the name of F W Brown & Son. The partnership came to an end and the bankruptcy petitions were based on breaches of individual voluntary arrangements. But underlying these was a substantial debt due to Mr David Brown from his two brothers with whom he was in partnership.
During the existence of the partnership, various charges were entered into by different members of the family in favour of National Westminster Bank ("the bank") in order to secure partnership borrowings. The former partnership business is (or was until recently) being carried on by a company called Bedpac Ltd ("Bedpac"). What assets Bedpac acquired from the partnership, and on what terms it now occupies or uses land formerly occupied or used by the partnership, are matters which do not appear from the agreed statement of facts and there were no findings by the judge on those points, though we were told a little about it in the course of argument.
I must identify the other individuals who are involved in this matter. One is Mrs Harriet Brown, who is the mother of the three brothers. Then there are the two bankrupt partners' wives and children. Mr Richard Brown is married to Mrs Josie Brown. They have three children, all adult and all daughters. Mrs Josie Brown and her three adult daughters were joined with Mr Richard Brown as respondents to the application in 9587. Mr Peter Brown is married to Mrs Linda Brown and they have one child, an adult son, Mr Steven Brown. They were all joined as respondents to the application in 9588. Mrs Josie Brown and Mrs Linda Brown are or were directors of Bedpac.
I have already mentioned the two family homes. In view of the reduced scope of the appeal, I need not go into details about their ownership or who has been in occupation of them at different times. I should however mention that both family homes were among the assets charged in favour of the bank as security for loans to the partnership. The total sum owed to the bank in November 1996 was approximately £287,000. If nothing has been paid off and interest has continued to accrue, that sum would probably now be in the order of £350,000. However, it appears from the judgment below that at that time interest was, at least in part, being kept down. So it may be that the total sum due to the bank on its security is a good deal less than the last figure which I mentioned.
Mrs Josie Brown has sworn an affidavit which was before the judge indicating that she was not properly advised at the time when she joined in charging 62 High Road to the bank. The affidavit implied, without in terms stating, that she might have a claim against the bank to set aside the charge so far as it affected her half share. Again, it is not necessary for me to go further into that aspect of the matter or into the serious illness of Mrs Josie Brown, which was a matter that bulked very large in the hearing before the judge. It is sufficient to note, at any rate as a matter of conjecture, that those complications may have something to do with the fact that the bank has not so far taken any action to enforce its security against any of the charged property. If the mortgagors are indeed managing to keep up payments of interest on the sum due to the bank, that again would no doubt be a practical consideration of some importance affecting the bank's attitude.
Apart from the two houses there are other pieces of land relevant to the applications. They have been variously described, but for present purposes it is sufficient to treat them as just two units. One is about 26 acres (that is about 10 hectares) of land at Girtford owned by Mr Richard Brown and Mr Peter Brown in equal shares and charged to the bank. The other land (which I will call "the other land") is a collection of three other pieces of land that I need not identify in detail. It was described in the trustee in bankruptcy's original application as being charged to Barclay's Bank, but that was apparently a mistake. Barclay's Bank plays no part in this matter and on the face of things the other land is not charged to the bank, although apparently there is some issue over that point. That land belongs to Mr Richard Brown, Mr Peter Brown, and their mother Mr Harriet Brown as legal owners. We were told, although it is not dealt with in detail either in the evidence that we have seen or in the agreed statement of facts, that that property in fact is held in equity for the mother for a life interest, and then for the two bankrupt sons in equal shares. However, the precise beneficial ownership of it is not, I think, critical to the disposal of these appeals.
The agreed statement of facts included some figures indicating ranges of values for these properties at the time the matter was before the judge. Those valuations, like other parts of the evidence, may now be out of date but it may be worth mentioning them in order to give a general idea of the scale of the matter. 62 High Road was two years ago valued at £70,000 to £75,000, 6 The Knolls was valued at £77,000 to £80,000 and the land at Girtford was valued at £40,000 to £55,000. So the total value of the bank's security, if Mrs Josie Brown's interest is bound, was two years ago in the range of...
To continue reading
Request your trial
-
Re A; A v A
...HR. Jones v Challenger [1961] 1 QB 176, [1960] 1 All ER 785, [1960] 2 WLR 695, CA. Judd v Brown (bankrupts) (Nos 9587 and 9588 of 1994) [1999] 1 FLR 1191, CA; rvsg [1998] 2 FLR 360. K (restraint order), Re [1990] 2 QB 298, [1990] 2 All ER 562, [1990] 2 WLR 1224. Khreino v Khreino (No 2) (co......
- Nicholls v Lan and Another