Sarah Knight v Richard Knight
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 29 April 2019 |
| Neutral Citation | [2019] EWHC 915 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: D31BS660 |
| Date | 29 April 2019 |
[2019] EWHC 915 (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: D31BS660
Richard Dew (instructed by Samuels) for the Claimants
Alex Troup (instructed by Beviss & Beckinsale) for the Defendants
Hearing dates: 18–20 March 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 by claim form issued on 2 October 2017 for a declaration that the proceeds of sale of a property known as Close Court, Eddys Lane, Newport, Barnstaple, Devon (“Close Court”), amounting to £204,442 plus accrued interest, are held on trust by the first two defendants for the benefit of the claimants as administrators of the estate of the late Ralph Stephen Knight (“Stephen”). The first claimant is the divorced former wife of Stephen, who died on 22 March 2014, aged only 66 years. The second claimant is her father. The first defendant is her former brother-in-law, Stephen's brother, Richard. The second defendant is Richard's wife, Lesley-Anne. The third defendant is the daughter and only child of the first claimant and Stephen. She is now aged about nine years. Her litigation friend is the first claimant's mother (and the second claimant's wife), Elinor Gregory.
The first and second defendants have two children, Jason and Josephine, both now adult. By virtue of an order of District Judge Watson dated 11 April 2018, notices under CPR rule 19.8A were directed to be served upon them. I assume that the direction was complied with. They have however not sought to be joined to the proceedings or to take any formal part in them (and so by rule 19.8A(6) each is bound by my decision as if he or she were a party), although each gave a witness statement in support of the defendants' case. Stephen and Richard had another brother, Martin, who had died in 1994, leaving a widow, Dawn, who also gave a witness statement. Martin, Stephen and Richard were the sons of Denis Knight and his wife Joan. Joan died in 1999, and Denis died in April 2008.
The dispute is about Close Court, which Stephen purchased in 1976 jointly with his then girlfriend, but with the aid of a mortgage loan. Close Court is an original nineteenth-century house on two floors, enlarged in the twentieth century and possessing also a double garage with direct access to the public highway. When the relationship with the girlfriend broke up, he bought out her interest, and the property (with the mortgage) was transferred into Stephen's name alone. There are then three dealings with the property which are of particular significance in this case.
First, in June 1995, when Stephen was facing the prospect of being made bankrupt, he sold Close Court to a friend, Trevor Steel, for the sum of £56,000. Trevor Steel took out a mortgage loan in order to buy it. Stephen continued to live in the property, paying sums from time to time to Trevor Steel in respect of his occupation. The second was in 2000, when Trevor Steel wished to emigrate to America permanently. He eventually sold Close Court to the defendants jointly for £59,500. The defendants obtained a mortgage loan from Nationwide Building Society for £48,000. Stephen continued to live at Close Court and paid sums from time to time to the defendants in respect of his occupation. The third dealing took place following the death of Denis Knight in April 2008. Probate of Denis Knight's will was granted on 11 July 2008 to Stephen and Richard jointly, as his executors. On 21 May 2010 the mortgage granted by the defendants over Close Court was redeemed and the loan repaid using monies from Denis Knight's estate. Questions have arisen as to the terms on which that was done. There was also an abortive attempt at a “property swap” between Stephen and the defendants in early 2009, but in the end nothing came of it. Finally, after Stephen's death, there were discussions between the claimants and the defendants.
Witnesses
The trial of the claim took place between 18 and 20 March, with written closing submissions which were filed and served on 25 March 2019. At the trial, the following witnesses were tendered for cross examination: Sarah Knight (the first claimant), Elinor Gregory (her mother), Gordon Gregory (her father, the second claimant), Michael Ashworth, Richard Knight (the first defendant), Lesley-Anne Knight (his wife, the second defendant), Josephine Kinght and Jason Knight (their children), Elaine Stokes, Ian Budge and Alan Schofield. I give here my impressions of those witnesses.
Sarah Knight was a businesslike and precise witness, quick to pick up on ambiguities in the questions put to her, and to correct any small errors. As her cross-examination proceeded, she became more guarded. I think she is convinced that she is in the right, and that she did not tell me anything which she knew to be untrue. But I am not sure that she told me the whole story. Whilst I treat the essentials of her evidence as true, and generally prefer her evidence to that of the defendants, I exercise some caution nonetheless.
Elinor Gregory is the mother of the first claimant. She was calm and collected witness, giving her evidence in a straightforward way. I accept her evidence. However, except in relation to a particular meeting, she had limited evidence to give on the issues arising in this claim.
Gordon Gregory is the second claimant, and the father of the first claimant. He was a quiet but determined witness. He also gave his evidence in a straightforward way, and I accept it. Again, his evidence was limited.
Michael Ashworth was an accountant friend of Stephen's, whom Stephen asked for advice in 1995. He was also a straightforward witness, although understandably his recollection of events over 20 years ago was not the best. Moreover there were some hints of difficulty in understanding complex issues. In cross-examination, he accepted without any hesitation that in 1996 he had been convicted on charges relating to the possession and production of cannabis and counterfeit banknotes and had gone to prison for 4 1/2 months. But I see no reason to disbelieve his evidence merely on that account. Just because a person is shown to have behaved dishonestly on one occasion (over 20 years ago) does not mean that he must be lying now. His evidence, in any event, was both plausible and limited. He was also one of the few witnesses called with no axe to grind or interest in the result.
Richard Knight, the first defendant, was, I am sorry to say, a very unsatisfactory witness. From the very beginning of his cross-examination he was constrained to accept that evidence in his witness statement was wrong, although he had just confirmed its truth and completeness to his own counsel. Sometimes he gave oral evidence directly contrary to that in his witness statement, so that one or the other must be untrue. Sometimes he gave entirely new evidence, not mentioned in his witness statement (or anywhere else), but clearly intended to strengthen it. He was frequently evasive in his answers, going off at tangents, and in some cases he did not answer the question at all. On a number of occasions during his cross-examination he changed his evidence, sometimes from one sentence to another. I am satisfied that he was making up much of it as he went along.
He made a great deal of his repeated assertions, both in the papers and in oral evidence, that he was an honest and an honourable man. Given that he has chosen to put his character in issue in this way, I assume in order to support his case, I regret to have to say that, on the basis of the evidence he (and others) gave before me, that is not my impression. For example, in cross-examination he said that he did not see it as a lie to tell the mortgage lender from whom he was proposing to borrow a large sum of money that they were buying the house for almost £60,000, when in fact the true price paid was just over £50,000. Unless supported by a reliable, independent source, I can place no reliance on his evidence at all.
Josephine Knight is his and the second defendant's daughter. She was a forthright, confident and open witness, but quite evidently very loyal to her parents. I am satisfied that she was telling me what she believed to be the truth, although in fact she had no direct evidence of her own to give, having derived her knowledge of the material facts from others, and in particular her parents.
Jason Knight is the first and second defendants' son. He too was a forthright and open witness. He was also loyal to his parents. Once again I am satisfied that he was telling me what he believed to be the truth, but like his sister he had no direct evidence of his own to give.
Lesley-Anne Knight is the second defendant, and the wife of the first defendant. She was very firm and clear in her evidence, and knows her own mind. She had a need to be in control in the process, not only by correcting the questioner, but also by asking him questions. I found it difficult to accept her evidence in relation to some meetings at which she was present. It may be that, firm and clear as she was, she has convinced herself that she and her husband are in the right, and that therefore the facts must be those which support their case. However, on a number of other important issues she told me that she had no direct knowledge herself, but was relying on what she was told by her husband, the first defendant....
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