Nicholas Stewart Wood v Kate Rebecca Watkin
| Jurisdiction | England & Wales |
| Judge | Barber |
| Judgment Date | 24 May 2019 |
| Neutral Citation | [2019] EWHC 1311 (Ch) |
| Court | Chancery Division |
| Docket Number | BR-2018-000180 |
| Date | 24 May 2019 |
[2019] EWHC 1311 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
RE: KARL ERIC WATKIN
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
Royal Courts of Justice
7 The Rolls Building
Fetter Lane
London
EC4A 1NL
ICC JUDGE Barber
BR-2018-000180
James Pickering (instructed by Womble Bond Dickinson) for the Applicants
Gabriel Moss QC (instructed by Hinde Law LLP) for the Respondent
Hearing dates: 13 and 14 February 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.
ICC Judge Barber
This is the application of the trustees in bankruptcy of Karl Eric Watkin, who was made bankrupt on 10 December 2012 on a petition of the Bank of Scotland presented on 18 May 2012. The application is brought against Karl Watkin's daughter, Kate Watkin, for declarations and other relief in relation to 3 properties known as 64 Crossgate, Durham, DH1 4PR, 40 Rowallan Road, London SW6 6AG and 8 Albert Street, Durham, DH1 4R, purchased in 2003, 2006 and 2007 respectively (together ‘the Properties’). Each of the Properties was purchased in the sole name of Kate Watkin and registered in her sole name at HM Land Registry shortly after purchase. The Applicants maintain that Karl Watkin was at all material times sole beneficial owner of each of the Properties ‘on resulting trust principles.’ Their alternative case is that all sums paid by or on behalf of Karl Watkin towards the purchase of each of the Properties were transactions defrauding creditors pursuant to s.423 of the Insolvency Act 1986. In relation to the fairly modest sum of £2,010.38 forming part of monies raised by re-mortgage of Rowallan Road in July 2008, the Applicants also contend that Kate Watkin's retention of that sum was a transaction at an undervalue pursuant to s.339 IA 1986.
Written Evidence
For the purposes of this trial I have read the following witness statements and their attendant exhibits:
(1) First, second and third witness statements of Nicholas Wood dated 29 January 2018, 29 May 2018 and 16 August 2018 respectively;
(2) Witness statement of Kate Watkin dated 27 April 2018;
(3) Witness statement of Kate's mother, Mrs Jill Watkin, dated 28 April 2018.
I have also considered further documents set out in the bundles agreed for use at the hearing, to which reference will be made where appropriate.
General Comment on Written Evidence
This case proceeded by application notice and supporting statements. No directions for pleadings or disclosure were given. Regrettably, there were certain categories of documents in the Applicants' possession of material significance to the issues raised by their application which were not exhibited to their supporting statements and were not otherwise produced in evidence until I directed their production on day one of the trial. Some other document categories of material significance were not produced at all.
By way of example (1) the Official Receiver's bankruptcy questionnaire, completed by Karl Watkin, was not produced until day one of the trial, on my direction; (2) the transcript of an interview by Grant Thornton of Karl Watkin on 4 November 2013, which contained questions regarding the Properties, was not produced until day one of the trial, on my direction, notwithstanding prior requests made by the Respondent for its production; (3) a detailed ‘bespoke’ questionnaire, prepared by Grant Thornton for Karl and completed by him ahead of the interview of 4 November 2013, containing written responses by Karl to questions regarding the Properties, was not produced at all, despite my direction on day one of the trial that it be produced. I was told that it could not be located; (4) no transcript or notes of a 3 hour interview by Grant Thornton of Karl's wife, Jill Watkin, were produced; (5) save for a few selected pages of bank statements, added to the bundles partway through trial to prove a given point, the bank statements relating to Jill and Karl's joint bank account, which the Applicants accepted that they had taken into their possession and which were plainly relevant to issues raised in the application, together with bank statements relating to Karl's other bank accounts, which the Applicants had taken into their possession, were not produced in evidence.
Office-holders bringing an application by application notice and witness statement must take proper steps to ensure that all non-privileged documents in their possession which are of obvious relevance to the issues raised by their application are exhibited to their supporting statements. If this long-standing practice is not honoured, it may prove necessary for directions for pleadings and formal disclosure to be given in a higher proportion of office holder applications than is currently the case.
Oral Evidence
I heard oral evidence from Nicholas Wood, Kate Watkin and Jill Watkin.
Mr Wood
Mr Wood is a partner in the firm of Grant Thornton UK LLP. He was appointed, together with David John Standish, a partner in the firm of KPMG LLP, as joint trustee of Karl Watkin in 2013.
I have some reservations as to the accuracy and fairness of Mr Wood's written evidence. I have highlighted at paragraph 4 of this judgment some key documents which were not exhibited to his statements. I set out other examples of the selective and at times inaccurate presentation of the case in Mr Wood's statements during the course of this judgment. The description of Mr Quinn as simply a ‘business colleague’ of Karl Watkin (Wood (1) paragraph 18) is one such example; the assertion that net rental receipts from all three properties were paid into Karl and Jill's joint account (Wood (1) paragraph 35.4) is another.
In oral evidence, whilst for the most part Mr Wood did his best to engage with the questions put to him, he was prone to moments of obduracy. When it was put to him by Mr Moss QC that the trustees had ‘chosen’ not to exhibit material bank statements, for example, he avoided the question by stating: ‘they are not exhibited’. The question was put to him three or four times. On each occasion, he responded in the same way, each time avoiding the issue whether the failure to exhibit bank statements was deliberate or an oversight. When he was asked to accept that it was wrong of him not to have disclosed the Official Receiver's questionnaire and the transcript of Grant Thornton's interview with Karl Watkin of 4 November 2013, he simply looked down in the witness box and ignored the question, apparently hoping that no one would notice that he was not answering. It was only when I intervened that he gave an answer, stating that he had not deliberately failed to comply with his professional obligations.
There were also material gaps in his knowledge. When asked what had happened to the detailed ‘bespoke’ questionnaire, prepared by Grant Thornton for Karl and completed by him ahead of the interview of 4 November 2013, for example, he stated that that had been ‘Mr Standish's duty’, that he hadn't been able to track it down overnight, that he hadn't read it, and that he did not even know if it existed. Yet it was obvious from reading the transcript of the Karl Watkin interview of 4 November 2013 that the interview itself mostly comprised ‘follow up’ questions to those answered by Karl in the questionnaire; a questionnaire which was never produced.
Overall, whilst I found Mr Wood to be a truthful witness, it was clear from his testimony that he knew little of any probative value about the issues arising in this case and had played very little part in the investigations himself.
Jill Watkin
As a witness Jill Watkin engaged openly and honestly with questions put to her, volunteering additional relevant information as she went along. She readily accepted the limits of her own knowledge; accepting, for example, that she did not know whether the monies paid from the joint account towards the purchase of given properties were technically ‘Kate's’ monies, or monies belonging to Jill and Karl; as she put it: ‘activity on that account was massive’. She also readily accepted that she could not remember the precise circumstances in which Mark Quinn came to contribute to the purchase price of one of the properties; he was a ‘very close family friend’ as she put it, adding, ‘we discussed things all the time with Mark.’ Whilst her recollection of events was not in all respects perfect, this was hardly her fault; it was partly due to the passage of time and partly due to missing documents, including bank statements which the Applicants had taken into their possession and had failed to adduce. Overall, I am satisfied that Jill answered all questions put to her honestly and truthfully to the best of her recollection.
Kate Watkin
As a witness Kate engaged readily and honestly with questions put to her. When pressed to state whether funds paid from her parents' joint account towards purchase of the properties were their monies or hers, for example, she openly responded ‘how do you quantify in a family context?’ explaining that she and her siblings received money from share sales and legacies which were paid into her parents' joint account, and that whilst ‘money has gone both ways’, her parents ‘did have more of my money than was put into the properties’. She readily accepted that she had made errors in the past (when seeking to recall how rental receipts from the Durham properties had been dealt with, for example) and took responsibility for her mistakes. Whilst at times Kate was hindered in her responses by missing...
To continue reading
Request your trial
-
Emirates NBD Bank PJSC (a company incorporated in the Emirate of Dubai) v Rashed Abdulaziz Almakhawi
...course, only a presumption — which applies to transfers between parent and child, even where the child is not a minor: Wood v Watkin [ 2019 EWHC 1311 (Ch), [2019] BPIR at [82]–[93] (ICC Judge Barber). 3 112 So far as the evidence admissible to rebut the presumption is concerned, the author......
-
English High Court Considers Presumption Of Advancement Between Parent And Child In Context Of Parent's Bankruptcy Following Substantial Gifts To Child
...Nicholas Stewart Wood and David John Standish (as the joint trustees in bankruptcy of Karl Eric Watkin) v Kate Rebecca Watkin [2019] EWHC 1311 (Ch), trustees in bankruptcy sought to establish that a bankrupt (the Bankrupt) was the sole beneficial owner of three properties (the Properties), ......