Lynn Smith v Arthur John Morris Crawshay
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 30 September 2019 |
| Neutral Citation | [2019] EWHC 2507 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: C31BS199 |
| Date | 30 September 2019 |
[2019] EWHC 2507 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: C31BS199
Matthew Wales (instructed by Kitsons LLP) for the Claimants
Clive Wolman (instructed by Athena Law) for the Defendant
Hearing dates: 28–31 May 2019
Approved Judgment
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.
Introduction
This is my judgment on the trial of a claim brought by the claimants, the executors of the will of the late Hope Crawshay, against the defendant, one of her children. The testatrix was born in 1919. She was married to Darryl Crawshay, who died in 1978. They had four children, Sarah Knight (born in 1942), Simon Crawshay (born in 1944), the second claimant (born in 1950) and the defendant (born in 1953). The testatrix died on 3 November 2010, and probate of her will, made on 24 May 1999, was granted to the claimants on 7 November 2011.
The claim relates to the affairs of a partnership or partnerships carried on between the testatrix and the defendant in the years leading up to the death of the testatrix. Essentially the claim is for the repayment of money which is said to be due from the defendant to the estate of the testatrix upon the dissolution of the business upon her death. The business was one of property development, and was carried on under the name “Genesis Homes” between 1998 and the death of the testatrix in 2010, although the final development was not sold until 2014.
The last full accounts for the business to be produced during the lifetime of the testatrix were in respect of the year ended March 2007, which she and the defendant both signed. They showed cash assets of the partnership as £371,704. The capital account of the testatrix was in credit in the sum of £465,711. The capital account of the defendant was in debit in the sum of £82,121. The sale of the final development at the death of the testatrix (2 St Katherine's Way) took place on 18 February 2014. The defendant as surviving partner had control of this sale. The net sale proceeds were divided equally by him into two, and he paid one half share, £74,179.50, to the estate of the testatrix, and retained the other half share. After the death of the testatrix he had been pressed to produce further accounts to show the position as at the date of the dissolution of the partnership between them. Ultimately accounts were produced by the defendant in November 2015. These accounts purported to show in effect a capital transfer between the testatrix and the defendant of about £274,000 in the year 2007–2008. They also showed a reduction in capital in 2007–2008 of £73,446 and a reduction in current assets between 2007 and 2009 of £62,667. They also showed that the assets of the partnership as at the death of the testatrix were 2 St Katherine's Way and cash amounting to £115,116 in three Halifax accounts.
In broad summary, the claimants' case (resisted by the defendant) is (i) that there was one partnership (rather than two or even three) between the testatrix and the defendant, which was dissolved only on the death of the testatrix on 3 November 2010, (ii) that a property known as 7 Weekaborough Drive is not an asset of the partnership but belongs beneficially to the estate of the testatrix, (iii) that, contrary to the defendant's contention, there was no equalisation of partners' capital in 2007–08, (iv) that another property, known as Lower Polsham Road, acquired in November 2002 in the defendant's sole name, did not belong beneficially to the defendant, but instead was an asset of the partnership, and (v) that the defendant has been overpaid (or has overdrawn) his entitlement under the partnership, and the overpayment or over drawing should be repaid to the claimants.
Procedure
A detailed pre-action letter was sent by the claimants' solicitors to the defendant on 25 September 2014. The claim form itself was issued only on 27 October 2016, with particulars of claim attached. The particulars were however amended on 30 November 2016, under CPR rule 17.1. The defendant's defence is dated 6 February 2017, and the claimants' reply is dated 13 March 2017. Directions to trial were given by District Judge Watson on 10 November 2017. But it was only in August 2018 that notice of the trial was given fixing this hearing. On 25 March 2019 District Judge Watkins refused applications by the defendants for certain further disclosure, relief from sanctions and an injunction against the claimant's solicitors. An application for permission to appeal from this order was dismissed by Mr Justice Birss on 14 May 2019. The claim was tried before me between 28 and 31 May 2019, although written closing submissions were lodged thereafter, on 4 June 2019.
Paragraph 4 of the order of District Judge Watson dealt with witnesses of fact. Expert evidence, to the extent that it was permitted at all, was dealt with in paragraphs 5 – 7 of the order of District Judge Watson, as follows:
“5. It is recorded that the defendant's proposed cessation accounts are those drafted by Mr Roberts (and exhibited to the Particulars of Claim) for the years ended 5 April 2009, year ended 5 April 2010, and the period ended 3 November 2010;
6. The claimants shall have permission to instruct an accountant to draft the claimants' proposed cessation accounts, to be drafted on the basis of the factual matters advanced by the claimants, to be filed and served by 4 pm 27 April 2018, together with an explanation of which factual matters have been taken into account in drafting those accounts, and commenting upon Mr Roberts' aforementioned accounts (insofar as Mr Roberts' accounts may be different from the draft cessation accounts advanced by the claimants);
7. The defendant shall have permission to put written questions to the claimants' expert, such questions to be served by 4 pm 18 May 2018, and the claimant's expert is to serve his written responses by 4 pm 8 June 2018”.
Evidence
Witnesses
The evidence at the trial consisted in part of evidence from live witnesses and in part of evidence from hearsay statements. I heard from the first claimant, Lynn Smith, and an accountant, Paul Collings, for the claimants. On the other side, I heard from the defendant, John Crawshay, and from Anthony Roberts, an accountant who prepared accounts relating to the business.
It had been intended that the second claimant, Deena Patrick, would also give evidence at the trial. Unfortunately, she suffers from a number of severe medical conditions, confining her to a wheelchair and making it difficult for her to read and to speak. I was told by Mr Wales that these conditions are progressive. She had made a witness statement in accordance with the rules, and duly attended at court to give evidence, accompanied by her husband as her assistant and interpreter. However, even though she managed to take the oath she was sadly unable through ill health to deal with the formalities of giving evidence. As a result, her witness statement (dated 15 February 2018) and written answers to previously submitted questions (24 May 2019) were, on the application of the claimants, and without objection on the part of the defendant, admitted as hearsay evidence, for me to give such weight as I thought fit. Counsel for the claimants realistically accepted that, given the progressive nature of the disease from which the second claimant was suffering, I might well give less weight to the written answers to questions (produced only the week before trial) compared to the second claimant's witness statement from 15 months ago.
I add here that, at the start of the third day of the trial, Mr Wales for the claimants asked me to appoint Mrs Patrick's husband as her litigation friend, on the basis that she had lost capacity to conduct the litigation. This application was supported by a short witness statement from Mr Patrick saying that he considered that his wife no longer had capacity. However, there was no medical evidence in support of the application. Given that the first claimant was continuing to give instructions in relation to the proceedings, Mr Wales accepted that there was no pressing need for an appointment to be made straight away. I indicated at the time that the evidence did not seem strong enough at present to overcome the presumption of capacity in the Mental Capacity Act 2005, s 1(2), especially taken with s 2(3), and that in my view it would be preferable therefore to obtain some medical evidence, preferably from a doctor who could compare Mrs Patrick's present condition to what it had been. The matter was left there, and in fact no further application on this aspect was made to me during the remainder of the trial.
I give my impressions of the live witnesses here. Lynn Smith, who is a practising solicitor and a partner in Kitsons, the claimants' solicitors, was a straightforward, careful and transparently honest witness, engaging directly with questions. She accepted correction where necessary, in particular agreeing that she was not particularly good with accounts. Otherwise, cross-examination made little impression on her. In addition, I bear in mind that, as a professional executor, she has no personal interest in this claim and that, as a solicitor, she has both a reputation and a professional status to lose by not telling the truth. Overall, I have no hesitation in accepting her evidence as truthful. Of course, I also bear in mind that she is not a direct witness for some of the events with which I am concerned. For...
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