Appeal against an order which: (1) gave the wife an equitable interest in two properties and that this interest was not affected by the husband's bankruptcy and was not waived or otherwise lost during the bankruptcy; (2) the wife's interest remains enforceable against the husband and the Second Appellant; (3) alternatively, that a Declaration of Trust by which the husband and the Second Appellant declared, among other things, that the husband held the properties for the benefit of the Second Appellant alone, should be set aside under section 37 of the MCA 1973. The appeal was dismissed.
Neutral Citation Number: 2016 EWHC 2965 (Fam)
Case No: FD02D01434
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: Monday 21st November 2016
Mr Justice Moylan
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DW (First Appellant)
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CW (Second Appellant)
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The First and Second Appellants appeared in person
Mr Nicholas Fairbank (instructed by Debenhams Ottoway LLP) for the Respondent
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Mr. Justice Moylan :
1. This is an appeal from the Order dated 11th February 2016 ("the Order") made by Deputy District Judge Simpson ("the judge") determining a number of issues in respect, principally, of a property known as 14 DL ("14 DL" or "the Property"). The appeal is brought with permission granted by the judge.
2. In this judgment, for ease of reference, I will call the First Appellant "the husband" and the Respondent "the wife" although they were divorced many years ago. The Second Appellant is the husband's current wife.
3. The issues which were determined by the judge, and which require determination in this appeal, arise out of a final consent order made by District Judge Waller (as he then was) on 20th August 2009 determining financial remedy proceedings ("the 2009 order"). The key issues are:
(a) What is the effect of the 2009 order; did it give the wife an equitable interest in the Property?;
(b) If it did, what is the effect of the husband's subsequent bankruptcy and of events within the bankruptcy on her equitable interest?;
(c) If it survived the bankruptcy, what is the effect on the wife's interest of a Settlement Agreement dated 14th April 2014 (between the husband and the Second Appellant and their respective trustees in bankruptcy) and a Declaration of Trust dated 14th April 2014 (between the husband and the Second Appellant)?;
(d) Should the Declaration of Trust dated 14th April 2014 be set aside under section 37 of the Matrimonial Causes Act 1973?
4. There is also an issue as to the value of the Property, The Order contains a recital that the court is "satisfied that £565,000 is a reasonable price for the sale of (the Property) having considered three letters from estate agents accompanying the (wife's) application dated 13th November 2014 and the sale ordered on 3rd November 2014 may proceed".
5. The focus of the hearing before me was on the Property, with very little attention being paid to another property, namely 67 KR. Both the Property and 67 KR ("the properties") are largely, although not entirely, in an equivalent position. They have both always been registered in the husband's sole name. The difference in the application of the principles set out below results from the fact that the Property is, and at all relevant times has been, the wife's home while 67 KR is the home of the husband and the Second Appellant.
6. The judge decided that the 2009 order gave the wife an equitable interest in the properties. This interest was not affected by the husband's bankruptcy and was not waived or otherwise lost during the bankruptcy. Without, at this stage, going into any detail, the judge also decided that the wife's interest remains enforceable against the husband and the Second Appellant. She decided, alternatively, that the Declaration of Trust dated 14th April 2014 ("the Declaration of Trust"), by which the husband and the Second Appellant declared, among other things, that the husband held the properties for the benefit of the Second Appellant alone, should be set aside under section 37 of the Matrimonial Causes Act 1973 ("the MCA 1973").
7. The judge dealt with the case on submissions alone. She gave permission to appeal at the end of the hearing (which took place on 20th November 2015 and 11th February 2016) and before she had given judgment. This led both to the Order being made (on a date after the hearing) and to the Appellants filing their Notice of Appeal (with Grounds of Appeal) on 2nd March 2016 before the parties had received the judgment which was provided, in writing, on 14th March 2016.
8. The grounds of appeal cover a broad range of matters both substantive and procedural. The Appellants raise a number of issues about the conduct of the hearing before the judge, such as whether they were given sufficient time to make their submissions. They also challenge the sufficiency of the judgment.
9. Given that the judge gave the Appellants permission to appeal and given my own concerns about the sufficiency of the judgment (which is extremely brief), I have, effectively, reheard the case, again on submissions alone. I am satisfied that, save in respect of the section 37 application (as set out below), I have thereby remedied any inadequacies there might have been, both in the conduct of the hearing before the judge and in the judgment.
10. At the end of the hearing before me, I adjourned the case because I did not consider that the parties had dealt sufficiently with the effect of the 2014 transactions on the enforceability of any interest the wife might have. Accordingly, I directed the parties to file submissions dealing with the enforceability of the wife's equitable charge (on the basis that such exists) against the husband and the Second Appellant as purchasers of property from the trustee in bankruptcy. All three parties have provided additional written submissions.
11. By the 2009 order the husband was required to pay the wife a lump sum of £375,000 in three instalments. The husband paid the first two instalments, of £25,000 and £175,000, but has not paid the third instalment of £175,000 which was originally due by 30th April 2010 and then extended to 31st August 2010.
12. The order further provided that, in the event of the husband failing to pay any instalment, the wife was entitled to sell a number of properties to recover the lump sum due to her. The relevant paragraph reads as follows:
"3. Pursuant to the terms hereof in the event that the (husband) defaults in payment of any instalment in respect of the settlement herein by the due dates then the (husband) grants the (wife) an irrevocable authority to offer for sale the following properties which shall be sold forthwith on the open market the (wife) using her best endeavours to maximise the value received:
(i) 14 DL …
(iii) 67 KR …
(and another property, 45 NW) whereupon the net proceeds of sale … shall be paid to the (wife) insofar as will be required to fund the settlement to her together with interest."
Paragraph 4 of the order contained detailed consequential provisions in the event of a sale of the properties including as to the distribution of the proceeds of sale. After payment of mortgages, costs of sale and capital gains tax, the wife was to be paid the lump sum due to her and interest. The balance, if any, was to be paid to the husband.
13. The husband also undertook:
"until payment in full of the … (lump sum not to) carry out any dealings of any nature whether by way of sale, assignment, mortgage, further advance or otherwise in relation to nor take any steps that might adversely affect the values of the properties at 14 DL … and 67 KR …; in the case of DL without the prior written consent of the (wife) such consent not to be unreasonably withheld and in the case of … 67 KR without the (husband) first giving notice to the (wife); and in all cases on the (husband) providing to the (wife) full details of the proposed transaction(s) with documentary evidence in support".
He also undertook to pay the mortgage instalments and for essential repairs and maintenance for the Property whilst the wife lived there.
14. The wife has continued living in the Property pursuant to the 2009 order which gave her the right to live there until payment by the husband of the lump sum or until the sale of the Property "in the case of default in payment of" the lump sum.
15. The order records the wife's agreement to withdraw her application for a restriction against 67 KR and to remove a restriction registered against the Property. The wife did this but registered another restriction against the Property on 9th June 2011 based on her having a: "Beneficial interest in the proceeds of sale pursuant to orders made in divorce proceedings and subsequent enforcement". The details given are as follows: "(The husband) is in default under orders that have been made for money to be paid to (the wife) and the court has directed that in default (the Property) is to be sold and the proceeds paid to (the Wife) …".
16. There were a number of further orders in 2010, 2011 and 2012 dealing with the implementation of the 2009 order. They did not change any substantive elements of the order save, as referred to above, the extension of time for payment of the final instalment of the lump sum. On 25th March 2011 the husband was ordered to provide details of all properties in which he had an interest and of all outstanding mortgages and other information relating to his assets. Despite a further order on 20th September 2011, the husband never complied with this obligation.
17. On 23rd November 2010 the court made a further order for sale in respect of 67 KR. After payment of mortgages and costs of sale, the outstanding lump sum instalment was to be paid to the wife. This order contains the following recital:
"The (Second Appellant) … has confirmed that she will fully co-operate in the sale and will not seek to assert any claim against 67 KR such as would defeat the (wife's) claim".
This order has never been implemented.
18. On 18th March 2011 bankruptcy proceedings were commenced against the husband.
19. Directions as to evidence were given by the family court on 25th March 2011 and 20th September 2011.
20. As referred to above, on 9th June 2011 the wife registered a restriction against the Property.
21. The husband was made bankrupt on 2nd March 2012. A bankruptcy order was also made against the Second Appellant. Save to say that the husband was discharged from bankruptcy on 2nd March 2013, I deal with the bankruptcy process later in this judgment after setting out what happened in the family proceedings leading to the order now being appealed.
22. On 18th April 2012 the wife's solicitors wrote to the family court stating that, as a result of the husband's bankruptcy, the husband and wife "agree that there seems to be no point in having any further hearings in relation to this application". They requested that the husband's application (which is not specified) be adjourned generally.
23. On 15th August 2014 the wife issued an application for a number of orders to enable the sale of the Property to take place and for the payment to her of the outstanding lump sum and interest.
24. On 3rd November 2014 (by paragraph 7) an order for sale was made in respect of the Property. The order further provides that the net proceeds of sale, "being the gross sale price less redemption of any mortgages which have priority over the (wife's) charge", shall be paid into court. The husband was ordered to serve a statement setting out his objections to the proceeds of sale being paid to the wife.
25. On 5th November 2014 the Second Appellant registered a restriction against the Property "pursuant to the Declaration of Trust".
26. On 28th November 2014 the husband sent a letter to the court setting out his objections to the sale proceeds being paid to the wife.
27. The husband's application for permission to appeal the order of 3rd November 2014 was dismissed by Mostyn J on 26th November 2014. His order contains the following recital:
"For the avoidance of doubt it is recorded that paragraph 7 of the order dated 3rd November 2014 shall be interpreted as being an implementation of paragraph 3 of the order dated 20th August 2009 …".
28. On 9th December 2014 District Judge Hess (as he then was) signed the sale documentation on behalf of the husband pursuant to an application made by the wife on 13th November 2014. This was to enable a sale to take place at £565,000.
29. On 16th June 2015 DJ Hess joined the Second Appellant to the family proceedings because of the restriction she had registered. He gave directions for the filing of submissions by all three parties. The wife was required to set out her claim in respect of the net proceeds of sale of the Property and the Appellants were required to set out their arguments in reply.
30. On 13th August 2015 the wife issued an application under section 37 of the MCA 1973 seeking an order that the Declaration of Trust be set aside. No directions were given in respect of this application prior to the hearing on 20th November 2015.
31. On 20th November 2015 the judge decided to deal with the case on hearing submissions only. The case was adjourned part heard and the judge ordered the parties to file submissions "dealing with the issue of the status and effect, if any, of (the wife) voting in the bankruptcy upon her beneficial interest in" the Property and 67 KR.
32. The wife's cousin, who acted on her behalf in the bankruptcy, filed a statement dated 23rd December 2015. He states that he only voted in respect of the appointment of the trustee and that there had been no vote on the distribution of assets nor any distribution because the sums realised by the trustee went entirely on fees.
33. He further asserts that the wife's security was not surrendered during the bankruptcy and that it was not possible to put a value on her security because the equity in the properties (after payment of prior mortgages) was not clear. He also refers to a letter from the trustee's solicitor dated 16th July 2014 which said:
"(The wife) claimed to have an equitable interest in both the properties in light of the matrimonial order … This was disputed by the trustee as set out in our letter of 7th March 2014. Notwithstanding, it was clear that any sale of the properties would lead to further expenses being incurred to establish the extent of (the wife's) interest." (my emphasis)
34. Turning now to deal with the progress of the bankruptcy.
35. The wife did not seek professional assistance in respect of the bankruptcy but, as referred to above, was represented by her cousin.
36. A Proof of Debt was completed by the wife's cousin. This gives the total amount of her claim as £239,750.29. In the section dealing with "Particulars of any security held, the value of any security and the date it was given", the three properties, referred to in paragraph 3 of the 2009 order, are listed together with the date of the order. No value is given for the security.
37. The cousin voted on the appointment of trustees as a creditor in the sum of £239,750.
38. On 14th June 2012 the solicitor acting for another creditor wrote to the then trustees' solicitors stating that their client and the wife were the only unsecured creditors who had "proved for unarguable liquidated" amounts. This was written to request one of the trustees to resign (which he did). The wife's cousin is recorded as consenting to the contents of the letter.
39. Both the husband and the Second Appellant were discharged from bankruptcy on 2nd March 2013.
40. On 17th February 2014 solicitors acting for the trustee wrote to the wife requesting her to give vacant possession of the Property to enable it to be sold.
41. The cousin replied on 21st February 2014 asserting that the 2009 order gave the wife "secured creditor status" in respect of the properties.
42. The solicitors for the trustee responded on 7th March 2014 that the 2009 order "does not purport to grant (the wife) an equitable interest in or a charge over the Property" or any other property: "it is our client's position that you (the wife) remain an unsecured creditor". It is worth noting that the solicitors only refer to the 2009 order and do not seek to rely on any of the matters raised by the Appellants as to the effect of the wife's conduct in the bankruptcy (by which, the Appellants submit, the wife has given up or lost any interest she might have had in the properties).
43. The dispute between the solicitors and the cousin continued in further correspondence. He continued to contend that the 2009 order gave the wife an equitable charge or interest as a result of which she was a secured creditor. The solicitors, likewise, continued to contend that the 2009 order did not give the wife an equitable interest in or charge over either the Property or 67 KR.
44. In addition, at a hearing on 11th March 2014 of possession proceedings brought by the mortgagee (Lloyds Bank Plc) in respect of the Property, the district judge, when making a possession order, expressed the view that he did not think the 2009 order gave the wife an equitable charge. I refer to this because it is relied on by the Appellants. I also note that, in the email sent following the hearing by the trustee's counsel to the trustee, he refers to the trustee wanting the surplus proceeds to be paid into court so that "any dispute between (the wife) and the trustee could be resolved". The district judge did not do this but it demonstrates that the trustee believed there was or might be a continuing dispute.
45. On 14th April 2014, the trustees in bankruptcy (of the husband's and the Second Appellant's estates) entered into, what is called, a "Settlement Agreement" with the husband and the Second Appellant. One of the recitals in the Agreement records that the husband and the Second Appellant "have agreed to purchase any interest the estates in bankruptcy may have" (my emphasis) in eight properties (including the properties) and other assets (cars). The specific terms of the Agreement are as follows:
"… the Officeholders agree to accept payment of the Settlement Monies in full and final settlement of the estates in bankruptcies interest in the" properties and other assets referred to above."
The "Settlement Monies" total £230,000 of which £115,000 is "paid for the benefit of" the husband's estate in bankruptcy and £115,000 for the Second Appellant's estate.
46. The trustees also agreed to remove any restrictions "they have or they are able to remove, as trustees effecting a sale, and that are registered against" the properties.
47. The Agreement does not refer to any transfer of the interest which vested in the trustees pursuant to section 306 of the Insolvency Act 1986 (which provision is referred to in the recitals in the Agreement). The payment made is simply "in full and final settlement of the estates in bankruptcies interest in the" specified properties and other assets.
48. It seems to have been assumed that no transfers were required. Certainly, as referred to above, the husband had remained the sole registered owner of the properties because the trustee was never registered as the proprietor. For whatever reason no transfer took place. The trustee simply agreed to remove all restrictions registered against the properties in respect of his interest.
49. Also on 14th April 2014 the husband and the Second Appellant entered into the Declaration of Trust. Under this they declared, among other provisions, that the husband "will hold the Properties … on trust" for himself and the Second Appellant "in the following proportions". In respect of the Property and 67 KR, the husband held these "100%" for the Second Appellant.
50. The sum paid by the Appellants to the trustees in bankruptcy, namely £230,000, was lent to them by a third party pursuant to an agreement also made on 14th April 2014 (called the Framework Agreement). The third party was given an option to purchase both properties.
51. On 16th June 2014 the husband's trustee in bankruptcy provided a Progress Report ("the Progress Report"). This refers to the sale to the Appellants of his and the Second Appellant's trustee's interests in the properties. The Property is said to be subject to charges in favour of HBOS and Lloyds Bank totalling approximately £485,000. The Report also records, in order to provide information relevant to the sum which they received from the Appellants, that there was an "Ownership dispute", namely:
"Creditors should also be aware that there is an ongoing ownership dispute in respect of 14 DL between (the husband) and his ex-wife" (my emphasis).
The Report also states, under the heading "Unsecured Creditors" that 22 claims were received but "not adjudicated".
52. On 9th July 2015 Registrar Baister adjourned the husband's application under section 281(5) of the Insolvency Act 1985 for the court to release him from his continuing lump sum liability. During the course of the hearing the registrar commented that it would be wrong for him to exercise any discretion until the question of what rights the wife had under the 2009 order had been determined. In his view the order "obviously creates some sort of right, if only to have the properties sold and the lump sum paid out of it". He also remarked, in response to the husband's submissions, that the trustees could only sell "what they had" and that the wife's rights, if she had any, did not vest in the trustees.
53. The husband and the Second Appellant challenge all elements of the judge's decision. I do no more than summarise their extensive submissions, which I have taken fully into account when determining the matters raised by this appeal.
54. The core of their case is that the wife has no interest which is enforceable against the Second Appellant as sole beneficial owner of the properties. In their submissions at the hearing before me, the Appellants focused on three matters:
(a) that the 2009 Order did not give the wife any interest in the properties;
(b) (i) that the wife's conduct during the bankruptcy resulted in her losing any such interest or security as she might have had; and
(ii) that the trustee in bankruptcy determined that the wife was an unsecured creditor, which determination is binding.
I deal with their submissions on these matters before turning to their other submissions.
55. (a) The 2009 Order:
The Appellants submit that the 2009 order did not give the wife any interest in the properties. It did not make her a secured creditor or give her an equitable interest. They submit that the order should be interpreted having regard to what the parties intended it to provide, which can be seen from the actions of the wife, her solicitors and the family court. That there was no intention to give the wife security is demonstrated, for example, by the fact that she agreed to remove the, and withdraw her application for a, restriction and by the letter written to the court by her solicitors on 18th April 2012 (adjourning the proceedings because of the bankruptcy). If the wife had an equitable interest then surely, they argue, the wife would have sought to enforce it earlier.
56. They submit that the 2009 order merely contained administrative provisions dealing with the distribution of the proceeds of sale if the properties were sold. The fact that the wife was not given any interest in or right against the properties was, they submit, "also determined by the subsequent Family Court Orders".
57. (b)(i) The wife's conduct during the bankruptcy:
The Appellants contend that, even if the 2009 order did make the wife a secured creditor and give her an interest in the properties, the wife can no longer rely on this security and interest because of her actions during the course of the bankruptcy. They put their case in a number of ways including that the wife has surrendered or "given up" her rights "in accordance with the rules" as provided by section 283(5) of the Insolvency Act 1986 ("the IA 1986").
58. As for the wife's actions, the Appellants rely on the form of the wife's "Proof of Debt" and on the fact that she voted as a creditor for the full amount of her claim on the appointment of the trustee.
59. As referred to above, the wife submitted a proof claiming the full amount, namely £239,750. Although she gave particulars of the security she held, she did not give any value to her security.
60. The Appellants also submit that, because the wife voted on the appointment of a trustee as a creditor in the total amount due to her, she cannot now resile from that position. The Insolvency Rules 1986 ("IR 1986") provide, by rule 6.93(4), that:
"A secured creditor is entitled to vote only in respect of the balance (if any) of his debt after deducting the value of his security as estimated by him".
61. As a result of these actions the Appellants submit that the wife can no longer rely on such security or interest as she may have had. They rely on the Insolvency Service's Technical Manual which states, at para 16.90, that a secured creditor (i) can rely entirely on their security and not submit a proof; or (ii) can surrender their security and prove for the whole amount of the debt; or (iii) can place a value on their security and prove for the balance of their debt. The Manual refers to IR 1986, rule 6.93(4), as set out above, and rule 6.109(2) which provides:
"If a secured creditor voluntarily surrenders his security for the general benefit of creditors, he may prove for his whole debt, as if it were unsecured."
The Appellants submit that the wife either surrendered her security or placed a value of nil on her security and proved for the whole amount of her claim.
62. They also rely on IR 1986, rule 6.115(2), which provides:
"(2) … if a secured creditor—
(b) has voted in respect of the unsecured balance of his debt,
he may re-value his security only with leave of the court."
63. (b)(ii) The trustee in bankruptcy's determination:
The Appellants submit that the trustee formally adjudicated that the wife was an unsecured creditor principally, it appears, through the correspondence between the trustee's solicitors and the wife and her cousin as referred to above. The Appellants contend that this was a "decision" under IR 1986, rule 6.104 which, if dissatisfied, the wife had to appeal within 21 days under rule 6.105.
64. They submit that the trustee could not have sold the properties without making such an adjudication. They rely on Parker v Nicholson and Others  EWHC 3881 (Ch) in which Registrar Barber said that, save in exceptional circumstances, it is for "officeholder to get on and make a decision on the proof" (para 23).
65. Further Submissions:
The Appellants' case is expanded in their written submissions provided after the hearing. Again, I propose only to summarise these sometimes overlapping submissions.
66. They submit that the properties vested in the trustees of both Appellants with each trustee holding 50%. They rely on parts of the Progress Report where the trustee refers, without detail or explanation, to "jointly owned assets".
67. I find it difficult to understand this submission given that the husband has always been registered as the sole proprietor and that there is no evidence of the Second Appellant having an interest in the properties (other than under the Declaration of Trust). I deal with this submission further below and, for the purposes of summarising the rest of the Appellants' submissions, I will refer to trustee rather than trustees.
68. The properties vested in the trustee by operation of law. The Appellants appear to submit that this was a registrable disposition within section 27 of the Land Registration Act 2002 ("LRA 2002") although they also submit that the transfer to the trustee in bankruptcy did not need to be registered to take effect.
69. Next they submit that the Settlement Agreement effected a transfer of the properties. The mechanism by which this was achieved was as follows - "The Trustees removed the restrictions that protected their proprietorship and the property was transferred." By removing the restriction registered against the properties they became "re-registered" in the husband who holds them subject to the Second Appellant's rights under the Declaration of Trust.
70. The Appellants submit that there were, therefore, transfers by the trustee which were also registrable dispositions. Registration was completed, as required by section 27, by the removal of the trustee's restriction. The Appellants make the point that, if the trustee has not transferred his interest in the properties, they would remain vested in the trustee.
71. They also rely on section 29 of the LRA 2002, which I set out below. As I understand it, the Appellants submit that the wife's interest was not protected under any of the provisions of section 29(2). In addition, in response to the wife's case, they submit that any such interest as might have been protected would have been overreached by the disposition effected by the Settlement Agreement.
72. As for the application to set aside the Declaration of Trust, the Second Appellant questions how the court could determine this application without her having had an opportunity to give any evidence. She contends that she entered into the Settlement Agreement and the Declaration of Trust in good faith. She asserts that she would not have entered into debt to purchase the properties from the trustee if she had thought that the wife had an interest in them. It is also submitted that the husband has made no reviewable disposition within the scope of section 37.
73. Mr Fairbank submits that the 2009 order gave the wife an equitable interest in the properties because the sale provisions secured a defined debt. He relies on Hughmans Solicitors v Central Stream Services Ltd (In Liquidation)  EWCA Civ 1720 (see below) and Fisher and Lightwood's Law of Mortgages 14th Ed para 12.24 which states:
"Subject, where relevant to the registration or protection of the order, a charging order has the like effect and is enforceable in the same courts and in the same manner as an equitable charge …".
74. He submits that the trustee in bankruptcy acquired the husband's interest in the properties subject to the wife's interest as provided by section 283(5) of the IA 1986. As a result, the wife's interest in the properties was not affected by the bankruptcy. Further, in response to the Appellants' specific submissions, Mr Fairbank submits that the wife did nothing during the bankruptcy which amounted to a waiver or surrender of her security or interest as submitted by the Appellants. He also submits that the trustee made no determination or adjudication in respect of the wife's interest. The fact that the trustee made no such adjudication can be seen from the terms of the correspondence and the Progress Report.
75. In his further written submissions, Mr Fairbank submits that the wife's interest remains enforceable against the properties. There has been no "registrable disposition of a registered estate for valuable consideration" within section 29 of the LRA 2002. The husband's interest in the properties vested in the trustee by operation of law: section 306 of the IA 1986. This was not a registrable disposition: section 27(5) of the LRA 2002.
76. Nor, he submits, did a registrable disposition take place as a result of the Settlement Agreement because there has been no transfer of the legal estate. The trustee simply agreed to payment of the sum set out in that Agreement in settlement of his interest in the properties. Mr Fairbank additionally relies on the fact that the Declaration of Trust refers to the husband alone as holding the properties and that the Framework Agreement refers to him alone as the registered proprietor.
77. Accordingly, Mr Fairbank submits, section 28 of the LRA 2002 applies and the priority of the wife's interest which affects the husband's registered estate is not affected by the dispositions which took place in 2014.
78. He further relies on Hughmans v Central Stream para 30:
"The effect of section 28 is to apply the rule of equity that equitable interests rank in priority according to the time of their creation, save where section 29 or 30 provides otherwise".
79. Mr Fairbanks also submits that the wife's interest was not overreached because any purchase monies were not paid to two trustees or a trust corporation.
80. Finally, in respect of the Declaration of Trust, he submits this was in breach of the husband's undertaking in the 2009 order not to carry out any dealing in relation to the properties. It was also contrary to the recital to the order of 23rd November 2010 which recorded the Second Appellant's confirmation that she would co-operate in the sale of 67 KR and would not seek to assert any claim against that property which would defeat the wife's claim.
81. I propose to deal with the issues, briefly summarised, as follows:
(a) What was the effect of the 2009 order;
(b) What was the effect of the husband's bankruptcy;
(c) What was the effect of the 2014 transactions;
(d) Should the Declaration of Trust be set aside under section 37 of the MCA 1973?
(a) The effect of the 2009 order; did it give the wife an equitable interest in the properties"?
82. As referred to above, the Appellants rely significantly on the conduct of the parties, the wife's solicitors and the court since the 2009 order. They refer to what they describe as the "family court's own interpretation of the" 2009 order and that the family court would have enforced an equitable interest if this had been considered to exist.
83. In my view, the answer to the last point is that the meaning and effect of the 2009 order have never been determined by the court. The family court has not "found", as submitted by the Appellants, that the 2009 order could not be enforced once the bankruptcy petition had been served. The court gave a number of directions and then, at the request of the parties, adjourned the proceedings without making any determination. Nor did the court make any determination when dealing with the possession application on 11th March 2014. The issue of whether the wife had an enforceable interest in the Property was not before the judge and was not determined by him.
84. Further, I am not dealing with the construction of an agreement between the husband and the wife but the effect of a court order. I have seen none of the correspondence leading to the making of the consent order. In any event, in the absence of any application for rectification (which would be too late now), the terms of the order must be interpreted in their own right. As Thorpe LJ said in Xydhias v Xydhias  1 FLR 683, at p. 691:
"The decision of the Privy Council in de Lasala v de Lasala  AC 540 demonstrated that … the rights and obligations of the parties are determined by the order and not by any agreement which preceded it".
The subsequent conduct of the parties or of the wife's solicitors cannot change the meaning and effect of the 2009 order.
85. In interpreting the effect of the 2009 order the Appellants also rely on the wife's agreement in the order in respect of restrictions and the husband's undertaking not to deal with the properties. They suggest that these provisions do not support the order being construed as giving the wife an equitable interest in the properties.
86. I take all the provisions of the 2009 order and all the other matters referred to by the parties into account but, in my view, it is clear that paragraphs 3 and 4 comprise an order (or orders) for sale under section 24A of the MCA 1973. Paragraph 3 provides that, in the event of the husband defaulting in payment of any instalment, the properties "shall be sold". This is an order for sale within s.24A(1). Paragraph 4 contains "consequential or supplementary provisions" within s.24A(2), including for the payment of the lump sum due to the wife from the proceeds of sale of the properties.
87. As a result, did the 2009 order give the wife an equitable interest in the properties? In my view it did and the judge, in coming to this conclusion, correctly applied the decision of Hughmans Solicitors v Central Stream Services Ltd (In Liquidation)  EWCA Civ 1720.
88. In Hughmans the court had to determine "whether a contract compromising legal proceedings created a proprietary interest in property": per Ward LJ (para 1). The contract provided for the sale of a property with the proceeds of sale being applied to pay the creditor £100,000 in settlement of its claims against the debtor. The circumstances were, therefore, different in that the court was not construing rights under an order. However, in the course of his judgment Ward LJ said:
"26. … the passage from Palmer v Carey illustrates a more general principle that if for valuable consideration the owner of a property agrees to hold the property on terms which appropriate it for the benefit of another party, and the agreement is one which the court will enforce by an order for specific performance, the effect of the agreement is to create an equitable interest in the property in favour of the latter party …
27. If, as is clearly the case, an equitable charge creates an equitable interest in the charged property, it would be strange indeed if the agreement in this case did not also create an equitable interest in favour of the company. The essential element of an equitable charge is that, in the event of a default by the debtor in the payment of his debt, the chargee is entitled to an order for the sale of the charged property and for the payment of his debt out of the proceeds of sale … The present case is in our view a stronger case for the creation of an equitable interest. The obligation under the agreement is an unqualified one to sell the property and to pay the proceeds of sale to the company … in settlement of the company's claim … The property is wholly appropriated to that settlement".
89. In my view, it is clear that the 2009 order gave the wife an immediate equitable interest in the properties. The position could be said to be stronger than that which existed in Hughmans in that an order for sale has already been made in this case. In the event of default in payment of any instalment of the lump sum, the order gives the wife the immediate right to sell the properties and to the payment of the lump sum due from the proceeds of sale, the very rights which Ward LJ identifies as being the essential elements of an equitable charge creating an equitable interest.
90. The structure of the 2009 order was to secure payment of the lump sum by means of the order for sale. I have been unable to find an authority which deals directly with the rights created by such an order. However, if further support were required for my conclusion, and although it was not referred to during the hearing before me (it was referred to at the hearing before Registrar Baister), the decision of Mountney v Treharne  Ch. 135 would provide such support. In that case it was decided that a transfer of property order gave the wife an equitable interest applying, what is called, the Maclurcan line of authority after the case of Maclurcan v Maclurcan (1897) 77 LT 474. In Maclurcan it was decided that an order directing the provision of security in respect of a maintenance order created an immediate equitable charge (provided the property the subject of the charge was sufficiently identified). The same principle would clearly apply in respect of a lump sum order and, in my view, with greater force in respect of an order for sale made to secure payment of a lump sum.
(b) The effect of the husband's bankruptcy on the wife's interest:
91. The two principal issues raised are: (i) whether the wife's conduct during the bankruptcy resulted in her losing any such interest as she might have had under the 2009 order; and (ii) whether the trustee in bankruptcy determined that the wife was an unsecured creditor. Before dealing with these issues, I briefly address the effect of the bankruptcy in general terms.
92. It is clear that the trustee acquired both of the properties subject to the wife's proprietary rights. It is well established that a trustee takes no better title to property than the bankrupt has. This is also specifically provided by section 283 of the IA 1986:
"(1) Subject as follows, a bankrupt's estate for the purposes of any of the Group of Parts comprises –
(a) all property belonging to or vested in the bankrupt at the commencement of the bankruptcy
(5) For the purposes of any such provision in this Group of Parts, property comprised in a bankrupt's estate is so comprised subject to the rights of any person other than the bankrupt (whether as a secured creditor of the bankrupt or otherwise) in relation thereto, but disregarding -
(a) any rights in relation to which a statement such as is required by section 269(1)(a) was made in the petition on which the bankrupt was adjudged bankrupt, and
(b) any rights which have been otherwise given up in accordance with the rules."
93. The husband's interest in the properties vested in the trustee on appointment and did so by operation of law, "without any conveyance, assignment or transfer": section 306(2) IA 1986.
94. Contrary to the Appellants' submissions this was not a "registrable disposition". A registrable disposition is defined by section 132 of the LRA 2002 as, "a disposition which is required to be completed by registration under section 27". Section 27 (which I set out in paragraph 120 below) provides, by subsection (5), that dispositions of a registered estate which have to be completed by registration exclude "a transfer on the … bankruptcy of an individual proprietor".
95. I now turn to consider the two issues referred to above.
96. (i) Did the wife's conduct during the bankruptcy result in her losing any such interest as she might have had under the 2009 order?
The Appellants rely on the form of the wife's "Proof of Debt" and the manner in which she voted on the appointment of the trustee.
97. It is not clear to me that the wife's conduct in the bankruptcy could affect her interest in the properties for purposes other than those of the bankruptcy. Her equitable interests did not form part of the husband's estate in bankruptcy and were not amenable to any steps taken by the trustee. However, looking at the terms of section 283(5)(b), it would seem possible for the wife to have "given up" her rights so that the husband's interest in the properties would be comprised in his bankruptcy estate unencumbered by those rights. I propose, therefore, to consider the points advanced by the Appellants in more detail.
98. The key question, in my view, is whether the wife gave up her rights "in accordance with the rules": section 283(5)(b) of the IA 1986. The rules to which I have been referred are IR 1986, rules 6.93(4) (secured creditor voting), rule 6.109(2) (voluntarily surrendering) and 6.115(2) (re-valuing after voting).
99. I do not consider that, by acting in the manner in which she did, the wife gave up or surrendered her interest in, and rights against, the properties. I have been referred to no authority on what amounts to a surrender or the giving up of rights. However, in order to answer the question, I clearly need to look at the nature and effect of the wife's conduct in the bankruptcy.
100. I have no doubt that the wife did not intend to give up or surrender her rights. This is made plain from the correspondence with the trustee in 2014 in which the wife's interest in the properties is being asserted.
101. Further, I have no doubt that the trustee did not consider that the wife was giving up or surrendering her rights. The correspondence in 2014 between the trustee and the wife and her cousin also make this clear. The trustee does not refer to the wife giving up or surrendering her interest. The only issue identified is the effect of the 2009 order and whether it gave the wife any rights against or interest in the properties. This can also be seen from the Progress Report which, to repeat, refers to the "ongoing ownership dispute" (my emphasis) albeit only in respect of the Property.
102. In these circumstances, I cannot see why I should now, retrospectively, decide that the wife had given up or surrendered her rights.
103. Further, for the avoidance of doubt, I do not consider that the wife's actions constituted her surrendering or otherwise giving up her rights. She refers in her proof of debt to her having security. She referred in the correspondence with the trustee to her having an interest in the properties. The fact that she did not put a value on her security can be explained, as stated by the cousin, by her lack of knowledge of the relevant facts needed to place a value on it (which would probably have been available to her if the husband had complied with his disclosure obligations under the various orders referred to above). Also, as referred to below, the rules do not suggest that, by voting, a secured creditor is treated as having surrendered or given up their rights. The acts relied on by the Appellants are not sufficient to establish that the wife was surrendering her security or otherwise giving up her proprietary rights.
104. (ii) Did the trustee make a decision in respect of the wife's interest or proof?
It is clear to me that he did not. For example, in the letter from the trustee to the wife's cousin dated 16th July 2014, the trustee stated that "any sale of the properties would lead to further expenses being incurred to establish the extent of (the wife's) interest" (my emphasis). None of the letters refer to the trustee as having made a decision. The letter of 7th March 2014 from the trustees' solicitors refers to "our client's position" (my emphasis). This was repeated on 10th March. Further, in the Progress Report, as referred to above, the trustees refer to the "Ownership dispute" as being ongoing. The Report also states that the claims received have not been adjudicated, making it clear that there has been no determination within IR 1986, rule 6.104, as submitted by the Appellants.
105. Dealing with one additional point in relation to the wife's voting on the appointment of the trustee, I consider that rule 6.115(2) only applies to the future conduct of the bankruptcy. The requirement to obtain the leave of the court to re-value the security for the purposes of the bankruptcy cannot affect the nature of the security. Given that the trustee never sought to obtain any determination as to the extent of the wife's interest in the properties; that he acquired the properties subject to her interest; and that the Settlement Agreement refers only to any interest the trustee "may" have in the properties, I do not consider that this rule has the effect of depriving the wife of her interest in the properties. Further, it is clear from IR 1986, rule 6.119 that the previous provisions (including rule 6.115(2)) only affect the value put on the security for the purposes of the bankruptcy and not the actual value of the security. Under rule 6.119, the amount subsequently realised by the secured creditor is automatically treated as the value.
106. In summary, therefore, the wife did not surrender or otherwise give up her rights during the bankruptcy and the trustee made no determination as to the nature or extent of her interest.
(c) The effect of the 2014 transactions on the wife's interest:
107. In their further written submissions, the Appellants submit, as referred to above, that 50% of each of the properties vested in each of their trustees in bankruptcy.
108. The husband has always been the sole registered proprietor of the properties. Accordingly, it would seem that this submission is based on the Second Appellant being entitled to an equal share of the properties under some form of trust or other equitable interest. It is not clear how this is said to have arisen and, in any event, it is inconsistent with the terms of the 2009 order under which the whole of the proceeds of sale of the properties (after deduction of mortgages, costs and CGT) were, to the extent required, to be paid to the wife.
109. The Second Appellant submits that she has "my own legal rights to at least 50% of all assets accumulated during our marriage" and refers to her having made her "own personal financial contribution towards the purchase" of the properties. These bald assertions do not begin to establish that the Second Appellant had any interest in the properties prior to 2014. If she had any such interest, I have no doubt that this would have been advanced by her and/or the husband at a far earlier stage of the proceedings (including in 2009). The only hint of any potential claim is the recital in the order of 23rd November 2010 in which it is recorded that the Second Appellant "has confirmed that she will fully co-operate in the sale and will not seek to assert any claim against 67 KR such as would defeat the (wife's) claim". However, this does not indicate that the Second Appellant has a claim but merely that she will not make any claim.
110. There is no evidence that the Second Appellant had any beneficial interest in the properties prior to the Declaration of Trust. Accordingly, the properties formed part of the husband's estate and vested in his trustee in bankruptcy subject to the wife's interest. The terms of the Settlement Agreement do not affect this. Indeed, the trustees could not between themselves decide the nature of the husband's interest in the properties so as to bind the wife.
111. The effect of the Settlement Agreement is not altogether clear. Mr Fairbank submits that there was no transfer of a registered estate. The Appellants submit that there were transfers by the trustee.
112. To repeat, the Agreement provides only for the payment of a sum "in full and final settlement of the estates in bankruptcies interest" in eight properties (including the properties) and other assets. There is no reference to the trustees executing a transfer of an interest in the properties (or any other property). One of the recitals refers to the husband and the Second Appellant having agreed "to purchase any interest the estates in bankruptcy may have" in the properties and the term relating to restrictions refers to the trustees "effecting a sale". However, there is no reference to the need for any of the properties to be vested or re-vested or, as I have said, to any transfer. The removal of a restriction does not effect a transfer or re-vesting.
113. As referred to above, the husband has always been the sole registered owner of the properties (the trustee was not registered as proprietor). It is clear that the husband and the Second Appellant considered that he remained the sole registered owner of the properties pursuant to the 2014 transactions. The Declaration of Trust refers to him (and him alone) holding the properties on trust. The question, therefore, is how might there have been a transfer of the legal estate by the trustee to the husband which transfer was registrable under section 27 of the LRA 2002?
114. It seems reasonably clear that none of the parties involved in the 2014 transactions (the husband, the Second Appellant and the trustee) considered that a registrable disposition had taken place as no attempt was made to register any disposition. As referred to above, the Settlement Agreement merely required the trustee to remove any restriction registered against the properties. Removing a restriction is not the same and does not have effect as, as submitted by the Appellants, the transfer of a registered estate nor, as they also submit, the registration of a disposition.
115. There are certain circumstances in which a property will automatically re-vest in the bankrupt without the need for any transfer. As far as I am aware they are set out in section 283A of IA 1986 which is headed: "Bankrupt's home ceasing to form part of estate" and provides:
"(1) This section applies where property comprised in the bankrupt's estate consists of an interest in a dwelling-house which at the date of the bankruptcy was the sole or principal residence of -
(a) the bankrupt,
(b) the bankrupt's spouse or civil partner, or
(c) a former spouse or former civil partner of the bankrupt.
(2) At the end of the period of three years beginning with the date of the bankruptcy the interest mentioned in subsection (1) shall –
(a) cease to be comprised in the bankrupt's estate, and
(b) vest in the bankrupt (without conveyance, assignment or transfer).
(3) Subsection (2) shall not apply if during the period mentioned in that subsection—
(a) the trustee realises the interest mentioned in subsection (1),
(b) the trustee applies for an order for sale in respect of the dwelling-house,
(c) the trustee applies for an order for possession of the dwelling-house,
(d) the trustee applies for an order under section 313 in Chapter IV in respect of that interest, or
(e) the trustee and the bankrupt agree that the bankrupt shall incur a specified liability to his estate (with or without the addition of interest from the date of the agreement) in consideration of which the interest mentioned in subsection (1) shall cease to form part of the estate.
(4) Where an application of a kind described in subsection (3)(b) to (d) is made during the period mentioned in subsection (2) and is dismissed, unless the court orders otherwise the interest to which the application relates shall on the dismissal of the application –
(a) cease to be comprised in the bankrupt's estate, and
(b) vest in the bankrupt (without conveyance, assignment or transfer)."
The Property was the wife's sole or principal residence at the date of the bankruptcy and, I assume, 67 KR was the sole or principal residence of the husband. Accordingly, they are within the provisions of section 283A.
116. It can be seen from the section that a property will automatically re-vest in a bankrupt in the circumstances set out in sub-section (2) unless any of the circumstances set out in sub-section (3) apply. None of the circumstances set out in sub-sections (3)(b) to (d) apply in his case.
117. The provisions, which could apply to the circumstances of the present case, are those set out in (3)(a) or (3)(e). The latter seems the more likely, although the Settlement Agreement was between the husband and the Second Appellant and both trustees and not just between the husband and his trustee. However, I have found nothing which suggests that, in such circumstances, a property automatically re-vests unless that is the intended effect of the wording of (e).
118. I would be speculating if I were to seek further to identify why there has been no transfer. It may be that the trustee considered that, because the husband remained the registered legal owner, no transfer was required. However, the result is that, in 2014, there was no registrable disposition because there has been no transfer of a registered estate.
119. In case I am wrong and there was a transfer which was a registrable disposition or there needs to be a transfer which would be a registrable disposition, I propose also to consider what the effect of a registrable disposition would be on the wife's interest in the properties. It would not matter whether the disposition was to the husband or to the husband and the Second Appellant. However, as referred to above, because the husband remains the sole registered owner of the properties, if a transfer has already been effected by the trustee in bankruptcy, it has clearly only been a transfer to the husband.
120. As referred to above, a registrable disposition is defined by section 132 of the LRA 2002 as, "a disposition which is required to be completed by registration under section 27". Section 27 provides:
"(1) If a disposition of a registered estate … is required to be completed by registration, it does not operate at law until the relevant registration requirements are met.
(2) In the case of a registered estate, the following are the dispositions which are required to be completed by registration -
(a) a transfer,
(5) This section applies to dispositions by operation of law as it applies to other dispositions, but with the exception of the following –
(a) a transfer on the death or bankruptcy of an individual proprietor".
121. Sections 28 to 31 of the LRA 2002 deal with the effect of dispositions of a registered estate on the priority of an interest. Only sections 28 and 29 are relevant:
"28 Basic rule
(1) Except as provided by sections 29 and 30, the priority of an interest affecting a registered estate or charge is not affected by a disposition of the estate or charge.
(2) It makes no difference for the purposes of this section whether the interest or disposition is registered.
29 Effect of registered dispositions: estates
(1) If a registrable disposition of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of registration.
(2) For the purposes of subsection (1), the priority of an interest is protected -
(a) in any case, if the interest—
(i) is a registered charge or the subject of a notice in the register,
(ii) falls within any of the paragraphs of Schedule 3, or
(iii) appears from the register to be excepted from the effect of registration, and
(b) in the case of a disposition of a leasehold estate, if the burden of the interest is incident to the estate.
(3) Subsection (2)(a)(ii) does not apply to an interest which has been the subject of a notice in the register at any time since the coming into force of this section."
122. If there has been no registrable disposition, then, pursuant to section 28, the priority of the wife's interest would not be affected by the disposition of the estate.
123. If, on the other hand, there has been a registrable disposition (which I also propose to assume was made for valuable consideration), her interest would only be protected if it comes within any of the provisions of section 29(2). Her interest is not a registered charge and has not been protected by a notice, section 29(2)(a)(i). This leaves section 29(2)(a)(ii). Does the wife's interest fall within any of the paragraphs of Schedule 3?
124. Schedule 3 lists those unregistered interests which override registered dispositions. They include, in paragraph 2, "Interests of persons in actual occupation":
"2 An interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation, except for –
(a) an interest under a settlement under the Settled Land Act 1925 (c. 18);
(b) an interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he could reasonably have been expected to do so;
(c) an interest –
(i) which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition, and
(ii) of which the person to whom the disposition is made does not have actual knowledge at that time ...".
This paragraph clearly applies to the Property because the wife was, and was known by all the parties to be, in actual occupation. It does not apply to 67 KR. Accordingly, the priority of the wife's proprietary interest would be protected in respect of the Property (but not 67 KR) even if there has been, or were to be, a registrable disposition completed by registration.
125. The final issue on this aspect of the case is whether, as submitted by the Appellants, the wife's interest would have been overreached notwithstanding the terms of section 29(2). The simple answer is that, even making the assumptions which I have, there has been or would have been no conveyance with the scope of section 2 of the Law of Property Act 1925. In particular, there are no "trustees of land" because the trustee in bankruptcy in this case is not a trustee of a trust of land.
126. Accordingly, on the basis that there has been no registrable disposition, the wife's interest in each of the properties remains enforceable against the husband and the Second Appellant. Further, even if there were a registrable disposition, her interest in the Property remains enforceable.
(d) Should the Declaration of Trust dated 14th April 2014 be set aside under section 37 of the Matrimonial Causes Act 1973?
127. Given my conclusions as set out above, it is not necessary for the Declaration of Trust to be set aside in order for the wife to be able to enforce her equitable interest against the properties. Section 28 of the LRA 2002 applies because there have been no registrable dispositions. Further, her interest is enforceable against the Property even if there has been a registrable disposition.
128. However, I still need to decide whether to allow the appeal from the order made by the judge under section 37.
129. The judge set aside the Declaration of Trust in respect of the properties. She found that the husband and the Second Appellant had "tried to manoeuvre themselves free of his responsibilities under the" 2009 order. She also refers to the Declaration as being in breach of the husband's undertaking in that order not to carry out any dealing of any nature in relation to these properties.
130. On reading the papers in this case I was immediately concerned at the failure to afford the husband and, more importantly, the Second Appellant any opportunity to adduce any evidence in response to the section 37 application. I appreciate the apparent strength of the wife's case. However, I consider that the judge was wrong to determine this application on submissions alone. The Second Appellant, as a litigant in person, was significantly disadvantaged in not having any opportunity to give any evidence to seek to explain the circumstances in which she entered into the Declaration of Trust. She was entitled to have an opportunity to give evidence on the matters relevant to the determination of whether the Declaration was a reviewable disposition.
131. Further, in the absence of any evidence, I do not see how the judge could properly have concluded that the Second Appellant had "tried to manoeuvre" as referred to above.
132. Accordingly, I do not consider that the judge was in a position properly and fairly to determine the application under section 37. I propose, therefore, to set this part of her order aside.
133. For the reasons set out above, I agree with the judge that the wife's equitable interest in the properties is enforceable against the husband and the Second Appellant.
134. In summary, the 2009 order gave the wife an equitable interest in the properties which she did not surrender, give up or otherwise lose as a result of the husband's bankruptcy or in the course of the administration of the husband's estate by the trustee.
135. The 2014 transactions did not include a registrable disposition of the properties and, accordingly, the priority of her interest is not affected by any disposition.
136. Even if there has been a registrable disposition, the priority of her interest against the Property is protected because it is an unregistered interest which overrides a registered disposition within section 29(2) of the LRA 2002. It is also not an interest which would have been overreached.
137. The final issue I propose to address in this judgment relates to the recitals in the Order dealing with the sale price for the Property. The Order records:
"7 The court is satisfied that £565,000 is a reasonable price of sale of (the Property) having considered three letters from estate agents accompanying the (wife's) application dated 13th November 2014 and the sale ordered on 3rd November 2014 may proceed.
8 The court authorises the disposition of the registered estate of (the Property) by (the wife) for the agreed sale price of £565,000 (or thereabouts) … ".
Having regard to the amount of time which had elapsed between November 2014 and 11th February 2016, I find it difficult to understand how the judge considered it appropriate to include the above recitals in the Order.
138. Under the 2009 order the wife is under an obligation to "use her best endeavours to maximise the value received". The amount of time which has elapsed since the order of 3rd November 2014 (which in any event did not stipulate the price at which the Property was to be sold) and since the sale documents were signed in December 2014 mean, in my view, that, potentially, the wife could be acting in breach of her obligation if she sold the Property for £565,000. I will consider how this issue should be addressed when dealing with the form of my order.
139. I will also address the issue of costs when determining the form of my order and any other consequential issues.
140. Following the draft judgment being sent to the parties, the Appellants provided additional, lengthy (45 pages in total), written submissions. In these they invited me to change my judgment. I have read their submissions and do not consider they justify any changes to my judgment as set out above.