Mr Robert Hurst v Mrs Evelyn Green
| Jurisdiction | England & Wales |
| Judge | Mr Justice Fancourt |
| Judgment Date | 05 February 2020 |
| Neutral Citation | [2020] EWHC 344 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH-2019-000218 |
| Date | 05 February 2020 |
[2020] EWHC 344 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD)
The Rolls Building
7 Rolls Buildings
Fetter Lane, London
EC4A 1NL
Mr Justice Fancourt
Case No: CH-2019-000218
THE APPELLANT appeared as a litigant-in-person
Mr Richard Bowles appeared for the Respondents
Hearing dates: 4 and 5 February 2020
Approved Judgment
On 8 July 2003, Mrs Hannah Hurst (“Mrs Hurst”), the mother of the Appellant and the First Respondent, established trusts and sold property, including her residence, 29 Norrice Lea, in Finchley, to the trusts. She retained a life interest in the property and left the purchase price outstanding. The debt was then settled on further trusts in favour of her children. This was done in an attempt to avoid a future inheritance tax liability on her death, trying to take advantage of a then apparent loophole and a scheme that had some currency at the time.
The firm of lawyers, Berwin Leighton Paisner (“BLP”) acted for the settlor, Mrs Hurst, and/or the family in relation to the transaction, and Mrs Hurst was also advised throughout by the Third Respondent, Mr Mablin, her accountant.
The transaction was proceeded with in a hurry because it was expected that the loophole would shortly be closed by the Revenue. It appears that BLP advised the family on 7 July 2003 and that the necessary documents were executed the next day. It is not wholly clear who was the client of BLP at various times, though at some stage Mrs Hurst did become a client.
The effect of the trusts was that on Mrs Hurst's death the trust property would be realised and distributed. Mrs Hurst died on 1 August 2014, and the Appellant was her Executor.
The Respondents, who were the trustees of the trusts, alleged that the Appellant had failed to pay them substantial sums of money. The Appellant contended that the trusts were voidable on the grounds of undue influence exercised by the Respondents over Mrs Hurst, causing her to enter into the relevant transactions.
On 23 March 2016, the Respondents brought a claim against the Appellant for substantial sums of money that were said to be unpaid by him. On 21 April 2016, the Appellant cross-claimed, seeking to set aside the settlements and denied that any sums claimed by the Respondents were due for that reason. The Appellant also raised other allegations of undue influence and breaches of fiduciary duty.
The matter came before Master Price on 3 August 2016. He heard, in effect, the Respondents' claim for final judgment. The Master held that all the cross-claims raised by the Appellant were unarguable and on that basis he entered judgment for the Respondents for substantial sums.
The relevant parts of his judgment for present purposes are the following. In paragraph 9, he indicated first that none of the allegations of undue influence or breach of fiduciary duty held any water or gave rise to triable issues that had any realistic prospect of success. He then set out the evidence on which the Appellant relied for his assertion of undue influence. He said:
“In contrast to that evidence is the evidence of the Claimants that all this was done on the advice of Berwin Leighton Paisner and with the involvement of the deceased's accountant, Mr Mablin, who is also one of the trustees.”
He continued:
“In my judgment, it is impossible to spell out of the allegations which I have adumbrated anything which could enable a claim in respect of undue influence to be put on its feet.”
In paragraph 12, he said as follows:
“12. There is, of course, no presumption of undue influence that arises in connection with any of this. The deceased was disposing of her estate in what she understood to be a tax efficient manner, acting on the basis of legal and accounting advice, and the matters I referred do not go anywhere near showing actual undue influence on the part of anyone”.
It appears from that part of his judgment that legal advice was a factor in the Master's conclusion. The Master was satisfied that the onus of proving actual undue influence lay on the Appellant, and that nothing in the evidence remotely established a case of actual undue influence.
The Appellant submitted before me that he raised before the Master a presumption of undue influence, but that that possibility was effectively closed down by the Master in argument, as his judgment reflects. The Appellant did not appeal the decision of the Master, or seek to set aside his order.
Following a statutory demand served in 2017, which the Appellant sought but failed to set aside, a bankruptcy petition was presented on 23 October 2017. A Bankruptcy Order was made on 15 February 2018 by Chief Registrar Briggs. The Appellant's bankruptcy was automatically discharged a year later. Notwithstanding that, on 21 May 2019, the Appellant issued an application, pursuant to section 282(1)(a) of the Insolvency Act 1986 for an annulment of his bankruptcy. The Appellant's trustee in bankruptcy is Paul Allen of FRP Advisory. The trustee is not a Respondent to this appeal but he has been notified of it and has indicated that he is content to be bound by the court's decision.
The stated ground of the Appellant's application to annul was that there had been a fraud perpetrated, which gave rise to the bankruptcy debt. The fraud, though not particularised in the application, is alleged to have been committed by the First Respondent, Mrs Green, who is the Appellant's sister, the Second Respondent, Mr Green, her husband, and a solicitor at BLP, who wrote a letter to the Appellant in August 2014.
The allegation of fraud is based on what Mrs Green is alleged to have told the Appellant at a meeting that Mrs Green asserts was a without prejudice meeting to attempt to settle differences, held on 15 August 2018. The evidence of the Appellant is that at that meeting Mrs Green confirmed that Mrs Hurst did not attend a meeting at BLP's offices at any time.
The relevant evidence is the following – paragraph numbers refer to the paragraph numbers of the underlying witness statement of the Appellant:
“21. In the course of our discussions, I referred in passing to the meeting, which had apparently been attended by my mother at BLP's offices. Evelyn expressed her surprise at my reference and asked me who had informed me of that meeting.
22. Evelyn informed me that my mother had never travelled to BLP's offices. The only meeting that my mother had with a representative of BLP was when a solicitor visited her at her home and requested her to sign the relevant documents. Evelyn specifically recalled having given that solicitor a lift to the local underground station after the meeting.
23. Evelyn also expressed the view that it would have been a waste of time requesting my mother to attend a meeting at BLP's offices. My mother would not have understood what was being said to her. It would also have been difficult to persuade my mother to travel to the City for a meeting.
24. Evelyn emphasised that my mother trusted David. If David considered that it was prudent to sign the relevant documents, she would do so. My mother had apparently been reassured by the fact that David's mother had recently signed a similar set of documents on the advice of BLP.
25. Since what Evelyn had just said to me was directly contrary to her witness statement, I asked her whether she was absolutely sure that my mother did not attend a meeting at BLP's offices. She responded in the affirmative.”
What the Appellant there says that he was told by Mrs Green on 15 August 2018 is inconsistent with part of the Respondents' evidence that was before the Master, on 3 August 2016. That evidence was as follows. Mr Green explained in his witness statement the origins of the proposed scheme and said that it was agreed that the family would go to see BLP about the idea. He continues:
“I do not now recall when I spoke to Robert about the proposal. I do not recall the evening he refers to in his witness statement at paragraph 21, but certainly I recall trying to speak to him about the suggested tax planning, asking if he wanted to attend a meeting with BLP and receiving no positive interest from him. I also spoke to Ian about the proposal and asked him if he would come along with Hannah and me to the proposed meeting with BLP. I knew that Hannah trusted and respected Ian's views in relation to her financial affairs, as my father-in-law had done before her, and I knew that she would want Ian to attend.
On 7 July 2003, Hannah, Ian and I attended a meeting with Joanna Tolhurst, an associate solicitor at BLP. Ms Tolhurst explained the proposal in detail and set out what the implications would be for Hannah. I remember that Hannah wanted to know if she would be able potentially to move house during her lifetime and was relieved to know that this would remain a possibility. Otherwise, she seemed content with the essence of the proposal and I imagine was comforted that both Ian and I were in favour of the plan. At some point prior to implementing the planning, there was a discussion as to who would act as the trustees. I recall that Evelyn and I suggested that because Robert could not be a trustee himself, because of his bankrupt status, it might be appropriate for Robert's wife, Stephanie, to be a trustee. Again, I recall that Robert wanted her to have no part in it, and Hannah asked me if I would be a trustee instead. Hannah explained this in her letter of 28 September 2003.
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Mr Robert Hurst v Mrs Evelyn Green
...and its exhibit against the background of the Judgments (a) of Fancourt J. dated 5 February 2020 (the neutral citation for which is [2020] EWHC 344 (Ch)) (‘the First Judgment’) (b) 28 May 2021 (the neutral citation for which is [2021] EWHC 1767 (Ch)) (‘the Second Judgment’) and (c) my own ......