England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London. WC2A 2LL
		23rd April 2007

Mr Peter Leaver QC: INTRODUCTION

1. On the 17^th December 2001 Park J gave judgment in two cases to which he referred respectively as Godfrey v Power and Power v Valkyrie. In short, Park J found in favour of the claimant in Godfrey v Power and the Defendants in Power v Valkyrie, The present action is the direct descendant of those two earlier cases, and of Park J's judgment.
2. In Godfrey v Power the claimant, Mr Noel Godfrey ("Mr Godfrey"), who is also the claimant in the present action, obtained orders in respect of a property known as The Old Rectory, which was described by Park J as "a development site in Staffordshire". Park J decided that the Fourth Defendant in the present action, Mrs Mary Theresa Power ("Mrs Power"), held The Old Rectory on trust as to 50% for herself and as to 50% for Mr Godfrey. Mrs Power was the First Defendant in Godfrey v Power. In Power v Valkyrie Park J dismissed the claim by Mrs Power and companies with which she was associated or controlled for damages for misrepresentation and other relief, and ordered her to repay the monies that she had borrowed from Valkyrie Properties Limited ("Valkyrie").
3. Park J ordered Mrs Power to pay Mr Godfrey's costs of the Godfrey v Power action, and he also made an order for the sale of The Old Rectory. He dismissed the claims against Valkyrie in Power v Valkyrie, and gave judgment for Valkyrie against Mrs Power in the sum of £368,000. Mrs Power was ordered to pay Valkyrie's costs.
4. Park J also permitted Mr Glen Swain ("Mr Swain") to be joined in the actions, and made orders in his favour. Mr Swain had lent money to Mrs Power in order to assist her to repay part of the monies borrowed by her from Valkyrie. Mr Swain subsequently assigned the debt owed to him by Mrs Power to Mr Godfrey. That debt amounted to nearly £150,000 including costs.
5. On the 17^th January 2003 Park J, inter alia, ordered the trustees of the fund constituted by the proceeds of sale of The Old Rectory to pay the sum of £200,000 to Mr Godfrey by way of interim payment in part satisfaction of his entitlement to 50% of the proceeds of sale of The Old Rectory.
6. On the 9^th May 2003 Park J ordered Mrs Power and others to pay £50,000 by way of payment on account of the costs of Godfrey v Power.
7. It is not necessary in this judgment to give details of every order that was subsequently made. It is, however, necessary to mention that on the 20^th February 2004 Park J ordered the trustees of the fund constituted by the proceeds of sale of The Old Rectory to pay to Mr Godfrey the balance of the fund that remained after a number of other payments had been made.
8. On the 26^th August 2005 Mrs Power was adjudicated bankrupt on her own petition. Mrs Power's Trustee in Bankruptcy is Mr Kevin Brown of Marriotts LLP. He was appointed on the 16^th December 2005. On the 12^th May 2006 the Trustee in Bankruptcy assigned his cause of action and rights of recovery of the properties identified below to Mr Godfrey. Notice of the assignment was given on the 23^rd May 2006.
9. Mr Godfrey proved in Mrs Power's bankruptcy in the sum of £726,800, which included the sums already ordered to be paid but which had not yet been paid, and the estimated outstanding interest up to the date of the proof.
10. The present action is an attempt by Mr Godfrey to recover at least some of the monies owed to him by Mrs Power as a result of Park J's judgment. Central to the claim are two properties in respect of which Mrs Power is said to have an interest. Those properties are Shamrock Cottage ("Shamrock"), which is situated at London Road, Windlesham, Surrey, and 27 Harewood Avenue, London NW1 ("Harewood Avenue"). Both Shamrock and Harewood Avenue are registered freehold properties.
11. Mr Godfrey's claims in the present action are in respect of the dealings with Shamrock and Harewood Avenue. He claims declarations that the registered title owners of each of those properties hold them as bare trustee for Mrs Power, subject only to certain legal charges. In the alternative, Mr Godfrey claims a declaration that certain transfers of each of those properties was at an undervalue and void against him as transactions defrauding creditors pursuant to the provisions of sections 423 to 425 of the Insolvency Act 1986 ("the Act"). Mr Godfrey also seeks an order vesting in him the legal and beneficial interests in each of those properties, and other relief.
12. The Defendants to the present claim, including Mrs Power, are all individuals or companies which have from time to time had an apparent interest in either Shamrock or Harewood Avenue. The Second Defendant, Laurence Power ("Mr Power"), is Mrs Power's husband. Mr Power has himself been adjudicated bankrupt in the past, although at the time of the trial of this action he was not a bankrupt.
13. The First Defendant, Laurence Gerard Torpy ("Mr Torpy"), is an Australian. He is said to be Mr Power's cousin. Mr Torpy lived with Mr and Mrs Power from time to time in the 1990s and, possibly, for part of the period between 2000 and 2002. He was served with the Claim Form at his last known English address, which was Harewood Avenue. I am satisfied that service was effected in accordance with the provisions of Part 6.5(6) of the Civil Procedure Rules 1998. Mr Torpy did not acknowledge service by returning the Acknowledgment of Service Form, but in April 2006 he was contacted by an Enquiry Agent in Australia, Mr John Westall, and the proceedings were then brought to his attention, if he was not already aware of them. He told Mr Westall that he was not prepared to give a witness statement or to travel to England to take part in the proceedings.
14. On the 5^th May 2006 Mr Godfrey's solicitors wrote to Mr Torpy at the address which Mr Westall had stated was his place of residence in Western Australia. Although I am satisfied that service has been properly effected on Mr Torpy, I should record that Mr Ghaffar submitted that, if it were necessary to do so, I should make an order dispensing with service on Mr Torpy pursuant to the provisions of Part 6.9 of the Civil Procedure Rules 1998 or that I should permit service "by an alternative method" pursuant to Part 6.8. I do not believe that it would be appropriate to do so as, if I took either such course, I would, in effect, be giving permission to serve the proceedings out of the jurisdiction when no application for permission had been made.
15. The Third Defendant, Strasbourg Capital Limited ("Strasbourg"), was incorporated in the British Virgin Islands on the 29^th April 1996. It was struck off the British Virgin Islands Companies Register on the 2^nd November 1999 for non-payment of its licence fee. Its address in England was given as "c/o BBHW, Holly Road, Twickenham ". The Claim Form was sent to that address, but was returned with the marking that the address had not been Strasbourg's address since 1998. Mr Godfrey's solicitors were then referred to a Mr Christopher Lovell, an English solicitor practising in Jersey. No response was received from Mr Lovell to Mr Godfrey's solicitors' attempts to serve Strasbourg.
16. As Strasbourg had been struck off the British Virgin Islands Companies Register by the date upon which these proceedings were commenced, and no application had been made to restore it to the Register, it follows that Strasbourg has never been a party to the proceedings.
17. The Fifth Defendant, Bellcove Limited ("Bellcove"), of which Mr Power is the only director, was represented by Mr Blackwood during the trial.

REPRESENTATION OF THE DEFENDANTS

18. After the conclusion of the evidence I ordered the parties to exchange written closing submissions. I also fixed a day for the hearing of closing oral submissions. I duly received the written closing submissions of Mr Ghaffar and Mr Blackwood. Mrs Power requested further time to prepare her written closing submissions. With some hesitation, I gave Mrs Power an additional week. The date for the hearing of the closing oral submissions was fixed for the 20^th March 2007.
19. The evidence hearing had finished on the 23^rd February 2007. On the 26^th February 2007 an application was made on behalf of Mr Godfrey for a Freezing Order to prevent Mr Power and Bellcove dealing with either Shamrock or Harewood Avenue. I adjourned the hearing of that application to the date fixed for the hearing of oral closing submissions on certain undertakings from the parties. One of those undertakings was designed to enable additional funds to be made available to the solicitors acting for Mr Power and Bellcove. I was concerned to ensure, if possible, that the funding difficulties being experienced by those solicitors, of which I had been made aware, were lessened or removed so that Mr Power and Bellcove would still be legally represented at the adjourned hearing.
20. When providing me with his written closing submissions, Mr Blackwood notified me that he might not be at the hearing at which I was to hear closing oral submissions. In addition to the funding difficulties to which I have referred, it appeared that there was some dispute between Mr Blackwood and his instructing solicitors about the terms of his retainer.
21. On the 19^th March 2007 I was informed that Mr Blackwood would not be present the following day. I requested Mr Blackwood to attend. He did so. However, it was clear that he was not prepared to continue to act for Mr Power and Bellcove unless terms satisfactory to him were agreed by his instructing solicitor.
22. In the circumstances, I was requested, and agreed, to grant a further 6 day adjournment of the hearing of closing oral submissions in order to enable Mr Power and Bellcove and Mr Branch of their solicitors, Lass Salt Garvin, to instruct other counsel, if they were able to do so.
23. I am pleased to say that when the date came for the making of closing submissions, Mr Blackwood was present. He made closing submissions on behalf of Mr Power and Bellcove.

THE PROCEDURAL ISSUE

24. Early in the trial Mr Blackwood made the following submissions:

(a) Mr Godfrey's claim under the Act, as assignee of Mrs Power's Trustee in Bankruptcy, ought to be struck out;

(b) Mr Godfrey's claims under the Act as "a victim of the transaction" were being pursued without the permission of the bankruptcy court, and were void; alternatively, the proceedings ought to be adjourned and retrospective permission should be obtained from that court;

(c) in any event, the proceedings were being pursued against Mrs Power without the permission of the court and were void.

25. I can deal with the first of those submissions shortly as it was common ground that such claims had not been assigned and were not, in any event, assignable. It is not necessary, therefore, to say any more about that submission.
26. All of Mr Blackwood's submissions relied upon Mrs Power's bankruptcy. He submitted that Mr Godfrey's claims fell foul of sections 285(2) and 424(l)(a) of the Act and could only be made with the leave of the court; such leave had not been given and could not be given retrospectively. Section 285(2) is in the following terms;

"Any court in which proceedings are pending against any individual may, on proof that a bankruptcy petition has been presented in respect of that individual or that he is an undischarged bankrupt, either stay the proceedings or allow them to continue on such terms as it thinks fit "

Section 424(l)(a) is in the following terms:

"An application for an order under section 423 shall not be made in relation to a transaction except -

(a) in a case where the debtor has been adjudged bankrupt or is a body corporate which is being wound up or is in administration, by the official receiver, by the trustee of the bankrupt's estate or the liquidator or administrator of the body corporate or (with the leave of the court) by a victim of the transaction."

27. This action was commenced on the 23^rd December 2004 and Mrs Power was adjudicated bankrupt, on her own petition, on the 26^th August 2005. Since that date this action has been before the court on a number of occasions and no application has been made by or on behalf of Mr or Mrs Power or Bellcove for a stay of the proceedings, and it has not apparently occurred to a number of experienced judges of this division that a stay should be imposed or that it was necessary to make any order allowing the proceedings to continue against Mrs Power either under section 285(2) or, perhaps more appropriately, under section 285(1).
28. Although no application had been made by or on behalf of Mrs Power for any order under the Act, such an application had been threatened by the solicitors for Mr Power and Bellcove. On the 6^th February 2006 those solicitors wrote to Mr Godfrey's solicitors stating that unless an application for leave to continue the proceedings were made by Mr Godfrey, an application for such an order "in the appropriate terms " would be made by them. That letter was written after the question of the attitude of Mrs Power's Trustee in Bankruptcy to the continuation of the proceedings had been discussed at a hearing before Master Moncaster on the 21^st December 2005. That hearing appears to have been the first occasion that the case was before the court after Mrs Power had been adjudicated bankrupt.
29. Master Moncaster ordered Mr Godfrey's solicitors to inform the court whether the Trustee in Bankruptcy was to be substituted as a defendant or whether he intended to make a Part 20 claim. On the 30^th January 2006 Mr Godfrey's solicitors wrote to Master Moncaster to inform him that the Trustee in Bankruptcy had decided to continue as a defendant "in his capacity as Mary Power's Trustee".
30. By letter dated the 7^th February 2006 Mr Godfrey's solicitors responded to the threat of an application by pointing out that Mrs Power's position had been raised by counsel then acting for Mr Power and Bellcove at the hearing before Master Moncaster on the 21^st December 2005, and that his order had been made as a result of the issue being raised. On the 14^th March 2006 the solicitors acting for Mr Power and Bellcove wrote asking for confirmation that Mr Godfrey's solicitors had informed the court as to the attitude of the Trustee in Bankruptcy. Mr Godfrey's solicitors confirmed their "understanding" of the position the following day. No application for a stay of the proceedings was then made by the solicitors for Mr Power and Bellcove, who at that time appeared to be satisfied with the response they had received.
31. There the matter rested until an application was made by Mr Power and Bellcove to have a unilateral notice (UN1) removed, which Mr Godfrey had registered against Harewood Avenue. The statement in support of that application specifically mentioned sections 285(3) and 424(l)(a) of the Act. That application was heard by Peter Smith J on the 5^th May 2006. The application had been made as a result of Master Moncaster's order dated the 20^th April 2006 which had, inter alia, provided that unless either such an application were made or witness statements were exchanged by Bellcove, Mr Power and Bellcove would be debarred from adducing evidence at the trial without the permission of the court.
32. Peter Smith J dismissed the application for the removal of the unilateral notice, but ordered Mr Godfrey to undertake to pay to Bellcove any damages that it suffered by reason of the registration of the unilateral notice. In default of such an undertaking, Bellcove was at liberty to make a further application to Peter Smith J.
33. Peter Smith J also ordered Mr Godfrey to issue an application either to join the Trustee in Bankruptcy as a claimant or defendant or to amend the Particulars of Claim so as to reflect that he had taken an assignment of the Trustee in Bankruptcy's causes of action against the defendants. Mr Godfrey's legal advisers elected to amend the Particulars of Claim rather than join the Trustee in Bankruptcy, and on the 19^th May 2006 Peter Smith J granted Mr Godfrey leave to amend the Particulars of Claim into the form in which they were at the commencement of the trial.
34. On the 4^th July 2006 Mr Power and Bellcove applied to Blackburne J to break the trial date, which was then fixed for the 10^th July 2006. Blackburne J agreed to vacate the trial date, but rejected an application to transfer the matter to the Bankruptcy Court. That application had been supported by a witness statement from Mr Power and was made on the basis that sections 285 and 424 of the Act required such a transfer. Although he reluctantly agreed to break the fixture, Blackburne J did not make the order transferring the matter to the Bankruptcy Court. It may be that Blackburne J declined to make such an order because the Bankruptcy Court, as it is frequently called, is simply a part of the Chancery Division in which the proceedings were continuing.
35. This short history indicates that, apart from the first of his submissions, which, for the reasons given above, does not in any event arise, Mr Blackwood's procedural application has been considered by this court on a number of occasions, and been rejected on each occasion. In my judgment, the reasons for that rejection are clear, and I am happy adopt to them as my own. As I am satisfied that the matter has previously been considered and ruled upon, it is not strictly necessary for me to say more than that I too reject the application. Out of respect for Mr Blackwood's submissions, however, I will state shortly my reasons for rejecting the application.
36. Section 285(1) of the Act gives to the court a discretion whether to stay proceedings against a bankrupt or to allow them to continue. That discretion is conferred on "any court in which proceedings are pending... ": section 285(2). Thus, both Master Moncaster and Peter Smith J, each of whom was aware that Mrs Power had been adjudicated bankrupt, had the discretion to stay the proceedings, but declined to do so. Mr Blackwood submitted that the general discretion given by section 285 was not applicable to the specific regime provided in section 424. I reject that submission. There is nothing in the wording of the Act that supports that submission.
37. Section 424 is to be found in Part XVI of the Act, which is entitled "Provisions against Debt Avoidance (England and Wales only). Section 423 gives the court, inter alia, discretion to make orders protecting the interests of persons who are "victims of the transaction ". Section 424 also identifies those who can apply for an order under section 423.
38. Mr Godfrey's claim is, in part, made as a "victim" of transactions involving Shamrock and Harewood Avenue. Section 424(1) provides that "an application for an order under section 423 shall not be made in relation to a transaction " except, in a case of either personal or corporate insolvency by the official receiver, the trustee in bankruptcy, the liquidator or the administrator, or if the victim is bound by a voluntary arrangement, the supervisor of that arrangement or the victim, or, in any other case, the victim. The issue that arises in the present case is when the "application for an order under section 423 " was made.
39. In my judgment, the wording of section 424 makes it clear that the application is made when the proceedings, in which relief is claimed under section 423, are commenced. That construction flows from the wording of paragraphs (a) and (b) of section 424(1), which identify who can make an application after the debtor has been adjudged bankrupt or is being wound up or is in administration or is bound by a voluntary arrangement. That wording demonstrates that a victim needs the leave of the court after the debtor's insolvency, but that such leave is not required before the debtor's insolvency. If Parliament had intended the position to be that, unless an application for leave to continue were made, proceedings in which relief was sought under section 423 of the Act would automatically be stayed if the party against whom relief was claimed was adjudged bankrupt or was in the process of being wound up or in administration or bound by a voluntary arrangement, it would have clearly stated that to be the position.
40. What is the position when, as in the present case, proceedings have been commenced, inter alia, for relief under section 423 and the individual or company against whom the claim is made is thereafter adjudicated bankrupt or becomes insolvent or goes into administration or enters into a voluntary arrangement? In my judgment, the answer, so far as concerns an individual, is that unless an application for a stay is made pursuant to section 285, the proceedings can continue. The person in charge of the insolvent entity's affairs, and possessed of that entity's property and assets, can decide whether to adopt the proceedings for the benefit of the creditors as a whole or to abandon them.
41. Mr Blackwood submitted that although the "application" may be made when proceedings are commenced, if those proceedings have not been decided before the debtor's insolvency, they can only be continued with the leave of the court, if the applicant is a "victim ", and by the person in charge of the insolvent entity's affairs, in any other case. Mr Blackwood contended that the application was made at the end of the trial. Prior to that, the application was not an application; it was simply a head of claim. Thus, the leave of the court would have to be obtained at that time.
42. In my judgment, that construction cannot be correct. The draftsman of the Act knew that there would be a period between the commencement of proceedings in which the claim/application was made and the trial of the claim/application and judgment. He cannot have intended that the question of who could make the claim/application could only be decided at the end of a trial. The draftsman knew that the person in charge of the insolvent entity's affairs would have to make a decision whether to continue proceedings that were already in being after his appointment. Indeed, Parliament knows how to prevent existing actions being continued: see, for example, section 130 of the Act which prohibits actions or proceedings being "proceeded with or commenced.....except by the leave of the court" in cases in which a winding-up order has been made or a provisional liquidator appointed.
43. If I am wrong in my construction of sections 285 and 424 of the Act, I would nonetheless give retrospective permission for these proceedings to be continued. I am satisfied that I have the power to do so despite Mr Blackwood's submissions to the contrary. The application is made in proceedings which were commenced before Mrs Power was adjudicated bankrupt. They were not then a nullity, and did not become a nullity by reason of Mrs Power's bankruptcy. At most, after Mrs Power was adjudicated bankrupt, permission was required to continue the proceedings. It would be disproportionate not to grant that leave now, if it were necessary to do so, unless the court was to conclude that the claim was hopeless. No submission to that effect was made, and no such submission would have succeeded.
44. In support of his submission Mr Blackwood relied upon a judgment of His Honour Judge Kershaw QC in Davenham Trust PLC (t/a Booker Montagu Leasing ) v CV Distribution (UK) Ltd and another (unreported, 3^rd April 2006). In that case proceedings had been commenced against a defendant, who at the date of the commencement of the proceedings, was an undischarged bankrupt. The issue that arose was whether retrospective leave could be given for those proceedings. The court had to construe section 285(3) of the Act, which prohibits the commencement of any proceedings against a bankrupt without the leave of the court. It was held that the proceedings were void and could not be retrospectively validated. The facts of that case are not similar to the facts of the present case. At the time the present proceedings were commenced Mrs Power was not a bankrupt. Section 285(3) is, therefore, not relevant. The relevant provision of the Act is section 285(2), which gives the court a discretion and which certainly does not require the court to treat the proceedings as a nullity and void ab initio.
45. Nor is section 285(3) of the Act of any assistance to Mr Blackwood's submission. I prefer the view of Lindsay J in Bristol & West Building Society v Saunders and Bearman [1997] Ch 60 to that of Judge Kershaw QC, namely, that Parliament must use clear words if retrospective leave is not permitted. There are no such words to be found in section 285.
46. In the event, if it were necessary to do so, as neither section 285(2) nor section 424 of the Act requires me to treat the proceedings against Mrs Power as a nullity and void ab initio, but, at most, requires leave to be given to continue the proceedings, I would give that leave retrospectively.
47. I have not referred to the other authorities and text-books upon which Mr Blackwood relied. I intend no disrespect in not referring to them. I have not done so because I have concluded that those authorities and text-books do not provide me with assistance in deciding what is, in my judgment, a matter of construction of the Act.

THE EVIDENCE

48. During the trial evidence was given by Mr Godfrey, Mr Ronald Phelps ("Mr Phelps"), Mr Oliver Kehoe ("Mr Kehoe"), Ms Jaki Fairbrother ("Ms Fairbrother"), Mr Roger Millman ("Mr Millman"), Mr Power, Mrs Power and Mr Gary Nathan ("Mr Gary Nathan"). In addition, expert valuation evidence was given on behalf of Mr Godfrey by Mr N.D. Hanson ("Mr Hanson") and Mr Guy Haller ("Mr Haller"). The evidence of Dr Audrey Giles, a forensic document examiner, which was contained in her Report dated the 4^th May 2006, was not challenged by Mr and Mrs Power and Bellcove. Mr Phelps, Mr Kehoe and Ms Fairbrother had been the subject of a gist evidence notice served on behalf of Mr Godfrey. In the event, they all attended court and gave evidence.
49. In addition to those witnesses, the gist evidence notice served on behalf of Mr Godfrey referred to a Mr Rupert Thomas and a Mr Ian Goddard. Before the commencement of the trial a statement by Mr Thomas was served, and was accepted by Mr and Mrs Power and Bellcove.
50. Mr Power had also served a gist evidence notice. His notice was in respect of a Mr Graham Carlton, Mrs Carol Phelps, Mr Tony Carr and Mr Christopher Lovell. Mr Carlton did not attend court to give evidence. Mr Christopher Lovell, to whom I referred in relation to the attempt to serve Strasbourg, was present in court for the best part of two days. As it turned out, however, Mr Lovell was not called to give evidence. Accordingly, no account will be taken in this judgment of what appeared in the gist notice relating to either Mr Carlton or Mr Lovell.
51. Mrs Phelps had been served with a defective witness summons. In the circumstances, Mr Blackwood accepted, on behalf of Mr Power and Bellcove, that the summons should be set aside and that Mrs Phelps did not have to attend court to give evidence. Mr Carr, an employee of the Bank of Ireland, was also served with a witness summons. The Bank of Ireland applied to have the summons set aside. In the event, it was not necessary for that application to be made as, again, Mr Blackwood agreed that the summons could be set aside.
52. Finally, I should mention that a valuation report by Mr Anthony Frewin had been served on behalf of Mr Power and Bellcove in respect of both Shamrock and Harewood Avenue. Mr Frewin did not attend court to give evidence and no account will be taken in this judgment of his report.
53. I shall state my views on the witnesses who gave oral evidence later in this judgment.
54. Although, as I have said, a number of witnesses gave oral evidence, much of the evidence upon which I have based this judgment was to be found in the documents that were contained in the idiosyncratically arranged trial bundles. Unfortunately, a considerable number of documents, which might have proved helpful, were not to be found in those bundles. It has, therefore, been necessary to reconstruct certain events in respect of which a number of documents have not been available to me. Where I have had to take that course, I have based my conclusions on information contained in documents which were available, and have only drawn inferences which, in my judgment, followed irresistibly from those documents.

THE PARTIES AND THE OTHER MAIN CHARACTERS

55. Mr and Mrs Power are Irish by nationality. They have lived in England for many years. Mr Power has been a property developer since he was about 22 years old: he is now 57 years old. As Park J. said in his judgment in Godfrey v. Power, Mr Power has had his ups and downs as a property developer. In the early 1990s he was made bankrupt. It was during his bankruptcy that some of the important events relating to Shamrock took place.
56. For some years, Mr Power has had significant health problems. Indeed, he was taken ill while giving evidence during the trial before Park J, and I gave him frequent opportunities to take breaks while he was giving evidence before me. Mr Power did not always avail himself of the opportunities offered to him.
57. Mrs Power is a teacher by training, but has devoted much of her life to bringing up her three daughters, one of whom has serious health problems. She became involved in property transactions during her husband's bankruptcy. I formed the opinion that Mrs Power was an intelligent, able and independent minded individual.
58. As I have stated above, Mrs Power was adjudicated bankrupt on the 26 August 2005. After his appointment on the 1^st December 2005, Mrs Power's Trustee in Bankruptcy made it clear that he did not intend to contest Mr Godfrey's claims against Mrs Power, and subsequently assigned his causes of action to Mr Godfrey, as I have stated above. Nonetheless, I took the course of allowing Mrs Power to participate in the hearing as if she were a litigant in person.
59. Most of the proofs of indebtedness submitted in the course of Mrs Power's bankruptcy were rejected by her Trustee. During her examination, which was conducted pursuant to the provisions of CPR Part 71, as to her means as a judgment debtor, Mrs Power claimed to have virtually no assets of her own. However, during her evidence before me Mrs Power admitted that she had given a number of untrue answers during that examination.
60. Mr Godfrey is also Irish. He now lives in New York. When challenged by Mr and Mrs Power, Mr Godfrey's recollection of events was always demonstrated to be accurate, and the challenge was demonstrated to be inaccurate and unfounded. I found Mr Godfrey to be an impressive and credible witness.
61. Mr Kehoe was the manager of the Bank of Ireland's Kingston branch for a number of years. He dealt with Mr and Mrs Power. Mr Kehoe is long since retired. Mr and Mrs Power both attacked Mr Kehoe's honesty and probity. In my judgment, those attacks utterly failed. I found Mr Kehoe to be an impressive and credible witness.
62. Mr Torpy came to England in the early 1990s. He lived with Mr and Mrs Power both at Shamrock and at Harewood Avenue. Occasionally, he lived in rented accommodation. However, for the majority of the time that he spent in this country, he lived with Mr and Mrs Power at one or other of those two addresses. Although Mr and Mrs Power professed to have had a high opinion of Mr Torpy's abilities as a book-keeper and financial expert, there was apart from one or two documents in which Mr Torpy describes himself as a financial adviser, no evidence as to his financial expertise or status. Such evidence as there was as to his recent employment is that in April 2006 he was a credit manager with a company called Cleanaway in Western Australia. Notwithstanding the one or two documents to which I have referred, Mr Torpy told the enquiry agent, Mr Westell, that he had never been a finance broker. These matters are important because, as will be seen, at various times Mr Torpy was named as the borrower in various financial documents and as the owner of Harewood Avenue. There is no indication in the papers as to how Mr Torpy supported himself while he was in England. Indeed, there is no evidence that Mr Torpy had any means of support other than Mr and Mrs Power.
63. Bellcove was incorporated on 19th August 1998. Throughout its existence, Bellcove has been controlled by members of the Power family. Mr Power's brother, Dermot Power, was a director until 1^st February 2006 and remains a shareholder. The address given for Bellcove's registered office appears to be no more than a small locker inside a copy shop.
64. I should also state that I found Mr Phelps and Ms Fairbrother to be credible witnesses, and I accept their evidence. I found Mr Nathan to be a less satisfactory witness, and I approach his evidence with caution.
65. I also accept the unchallenged valuation evidence of Mr Hanson and Mr Haller. Mr Millman, Mr Godfrey's solicitor, has been litigating against Mr and Mrs Power for many years. His evidence was largely involved with taking me through documents, and was not controversial. Although Mr and Mrs Power suggested that Mr Millman was motivated by malice in his dealings with them, I am quite satisfied that he has always conducted himself in a professional manner.
66. As the evidence in the case was directed towards proving the identity of the person who was the beneficial owner of Shamrock and Harewood Avenue, it is to that evidence to which I now turn. Before I do so, however, I shall say a few words about the evidence given by Mr and Mrs Power, and the view that I formed as to their credibility.

MR AND MRS POWER

67. For reasons which will become apparent, I have concluded that I can place no weight upon the evidence of either Mr or Mrs Power. I saw both of them give evidence. Each was in the witness box for a lengthy period. Park J. concluded that Mrs Power was "closely guided" by Mr Power. I have concluded that Mrs Power was an equal actor in the deceit and dishonesty practised by her and her husband.
68. That deceit and dishonesty included forgery of documents, forgery of signatures and lying both to third parties in their business dealings with them, and to the Court. I would not be prepared to accept anything said by Mr or Mrs Power unless their statement was corroborated by independent, preferably written, evidence.

69. In short, both Mr and Mrs Power were dreadful witnesses. On occasion, neither of them made any attempt to make plausible or coherent replies to questions, and on very many occasions their evidence was at odds with the contemporary documents. Mrs Power admitted to forgery of documents on a number of occasions and to lying to third parties on other occasions. Each of them was adept at giving a partially truthful answer which, as Kipling said, told "the blacker lie ".

69. In the light of my finding that Mrs Power's evidence cannot be believed unless corroborated, and the numerous examples of lies that are set out later in this judgment, I do not propose to burden this judgment with the further examples of Mrs Power's lack of credibility which were demonstrated when she was being taken through the evidence that she gave at her examination as to her means.
70. It also became apparent during the evidence of Mr and Mrs Power that Mr Torpy was a man without means, who was prepared to lend his name to, and sign any document in respect of, any transaction to which Mr or Mrs Power asked him to lend his name. On each occasion on which Mr Torpy appears to be either a transferor or a transferee or a borrower, he is in fact merely a nominee for Mr or Mrs Power.
71. The evidence that I heard made it clear that from 1991 Mr and Mrs Power have constantly been in financial difficulty, and have attempted to keep their heads above the water by juggling with their assets in order to keep those assets out of the reach of creditors as well as to raise money. It is those attempts that have led to the present litigation; indeed, they also led to the proceedings heard by Park J.
72. Initially, Mr and Mrs Power dealt with their financial difficulties by involving Mrs Power in property development ventures. From May 1991, when proceedings were commenced by tradesmen against Palm Court Properties in respect of works carried on at Harewood Avenue, Mr and Mrs Power devoted a large part of their energies to structuring their business activities so as to put assets out of reach of, or otherwise prejudice, actual or potential creditors. For many years, Mr and Mrs Power were successful in their efforts, but since Park J's judgment, their success has been evaporating. Now they have arrived at the end of the road.
73. In the light of the view that I have formed in relation to the credibility of the witnesses, I have concluded that each and every transaction in relation either to Shamrock or Harewood Avenue in which Mr and Mrs Power or Mr Torpy were involved was a sham transaction.
74. I have no hesitation in concluding that the dominant purpose of each of those transactions was to remove assets from the reach of actual or potential creditors. Clearly, the transactions were all part of the juggling of assets to which I have referred above, and while I am satisfied that another purpose of the transactions was to raise funds to enable the Power family to continue to live and, if possible, to carry on business ventures which were to be carried out by either Mr or Mrs Power, I am quite satisfied that the dominant purpose was to ensure, so far as possible, that creditors would find it extremely difficult, if not impossible, to get their hands on the assets of either Mr or Mrs Power.
75. I have also concluded that Mrs Power was at all material times the legal and beneficial owner of Harewood Avenue through Palm Court Properties, a company which she owned and controlled through shareholders and nominee directors. In addition, I have concluded that Mrs Power was at all material times the legal and beneficial owner of Strasbourg and Bellcove.
76. With that lengthy preamble, I turn to consider the various transactions relating to Shamrock and Harewood Avenue.

SHAMROCK

77. Mr and Mrs Power were married on the 15th March 1977, and in June 1978 Mrs Power purchased Shamrock. Both Mr and Mrs Power agree that Shamrock was purchased with Mrs Power's own money. On the 4th March 1991, in proceedings brought against Mr Power, Mrs Power made an affidavit in which she stated, inter alia, that Mr Power did not provide any monies towards the "purchase of Shamrock".
78. It appears that Mrs Power had had some independent means when she married Mr Power as before she purchased Shamrock, Mrs Power had owned properties in Teddington, first, at Railway Road and then at Hampton Road.
79. On the 1st June 1978 Shamrock was registered in Mrs Power's name. Since 1978 Shamrock has been Mrs Power's home, and the home of the Power family.
80. Although no mortgage had been needed for the purchase of Shamrock, between 1985 and 1991 two mortgages were taken out using Shamrock as security for their repayment. These mortgages were taken out for the purpose of providing finance for Mr Power's property development and investment business. There is no suggestion that during this period the underlying legal and beneficial ownership of Shamrock changed.
81. The first mortgage was taken out early in 1985. On the 18^th March 1985 a charge was registered by the National Westminster Bank plc on the Shamrock charges register. The charge was to secure monies advanced, but there is no indication of the identity of the borrower or the purpose for which the monies were borrowed. It was not disputed during the hearing that the purpose of the borrowing was as I have described.
82. Then, on the 24^th April 1990 a further charge was entered in favour of Abbey National plc on Shamrock's charges register. That charge was expressed to have priority over the National Westminster Bank charge.
83. The charge in favour of the Abbey National was granted when Mr Power's business was experiencing serious financial difficulties. A number of proceedings were threatened, if not actually started. In May 1991 a Statutory Demand was served on Mr Power. The service of that Statutory Demand was the catalyst for Mrs Power becoming involved in property development activities. In turn, Mrs Power's involvement in business activities led to a request to the Bank of Ireland for funds to help her in those activities.
84. The service of the Statutory Demand also led to Mr and Mrs Power devoting a large part of their energies to structuring their business activities so as to put assets out of reach of, or otherwise prejudice, actual or potential creditors. For many years, Mr and Mrs Power were successful in their efforts, but since Park J's judgment, they have been less successful.
85. By May 1991 Mrs Power needed further funds in order to be able to carry on her business activities. In support of her application for funds, on the 7^th June 1991 she sent a statement of affairs to Mr Kehoe at the Bank of Ireland. In that statement of affairs she stated that Shamrock Cottage had a value of £400,000, which was securing a £60,000 mortgage to Abbey National Building Society.
86. It is to be noted that Mrs Power made no mention in that statement of affairs of the second mortgage in favour of the National Westminster Bank. This was an extraordinary omission as she had mentioned that mortgage in an Affidavit made three months earlier on the 4^th March 1991 in proceedings brought against Mr Power by Mr Carlton in which it was suggested that Mr Power had a beneficial interest in Shamrock. This was the first occasion of which I was made aware on which Mrs Power was less than frank with a potential lender. In that statement of affairs Mrs Power set out other assets, which indicated that she was a wealthy individual. In addition to Shamrock, Mrs Power listed assets well in excess of £250,000.
87. Later, on the 28th October 1991, Mr Kehoe informed his superiors that he had seen evidence that Mrs Power had a credit balance of £169,000 at Barclays Bank, Geneva.
88. According to Mr Power, although no documentary evidence was produced to support this contention, on some date in 1992 Abbey National obtained a County Court possession order in respect of Shamrock, and in 1995 (again, on a date for which no documentary evidence was produced) an order for eviction was issued. It would appear that Mr and Mrs Power managed to stave off the execution of the warrant for possession.
89. Mr Power was adjudicated bankrupt on the 8^th July 1992. He was discharged from his bankruptcy on the 8^th July 1995. During the period between 1991 and 1995 Mrs Power was undertaking a number of property developments, one of which led to the action in which Park J. gave the judgment to which I have referred. Those activities were largely funded by facilities made available to her, or to companies which she controlled, by the Bank of Ireland. A number of tradesman were unpaid, and, in consequence a number of actions were commenced against Mrs Power and her companies. Those actions included the action by Hampton Plumbers.
90. In a document entitled "Asset and Liability Statement of Mary Power as at March 1995"', which was sent to the Bank of Ireland on 15^th March 1995, Shamrock was included as one of her assets, this time with a value of £250,000. The statement included amongst the liabilities a "mortgagor" (it would seem a mistake for mortgagee) to be confirmed in the sum of £130,000. According to this document, Mrs Power's net worth was just over £300,000. The largest liability was her indebtedness to Valkyrie: the claim to repayment of monies owed to Valkyrie was dealt with by Park J.
91. On the 26th October 1995 Mrs Power's then solicitors, Taylor & Co., wrote to her to confirm the sale of Shamrock to Mr Torpy for £240,000. A document entitled "Transfer of Whole", recording the receipt of £240,000 by Mrs Power, was duly stamped. The document was signed by Mrs Power, and purportedly witnessed.
92. In her evidence, Mrs Power said that at the time of this alleged transaction she and her husband were in extreme financial difficulties. The transaction was not arranged by her. She did not know the identity of the person who purportedly witnessed her signature, and she accepted that the witness' signature "may well not be authentic". In my judgment, Mrs Power was being less than frank when she said that the witness's signature "may well not be authentic". I have no hesitation in concluding that she knew that it was a forgery, and that the document as a whole was not a true document. As will be seen, that was not the only document which Mrs Power conceded was not authentic.
93. Mr Power's evidence was that, unbeknown to Mrs Power, Mr Torpy acted as Mr Power's nominee and that, in order to finance the purchase, Mr Torpy ostensibly took out a mortgage with the Woolwich plc. The mortgage was in the sum of £125,000. Mr Torpy was a man of no means: he could not afford to pay £240,000 for Shamrock, or to borrow £125,000 to enable him to do so or to service any mortgage. Nor did he do so. Both Mr and Mrs Power said that, notwithstanding the acknowledgment of the receipt of £240,000 in the transfer, it was agreed between Mrs Power and Mr Torpy that payment of £100,000 of the stated purchase price would be deferred until Mr Power was able to raise sufficient funds and obtain a transfer of the property from Mr Torpy, and that, in turn, Mr Power and Mr Torpy agreed that Mr Power would be responsible for making that payment when Mr Torpy transferred the property to him.
94. Thus, the issue on Mr and Mrs Power's account of the transaction is whether Mr Torpy was acting as nominee for Mr or Mrs Power.
95. I have concluded that there was no sale of Shamrock to Mr Torpy.
96. What happened was that in order to raise money Mr and Mrs Power devised the plan of purporting to sell Shamrock to Mr Torpy. They knew that they would not have been able to raise sufficient monies from either Abbey National or the National Westminster Bank or any other mortgagee. The plan was to "sell" Shamrock to Mr Torpy for a sum which was ostensibly sufficient to pay off the outstanding mortgages to the Abbey National and the National Westminster Bank and which was ostensibly at or near a proper value, namely, £240,000.
97. As part of the plan Mr and Mrs Power arranged for Mr Torpy ostensibly to take a mortgage from the Woolwich Building Society. The sum borrowed was not the full amount of the "purchase price" of £240,000, but £125,000. Mr Torpy did not, and was not intended to or capable of servicing a mortgage. He could not have done so. It was serviced by Mr and Mrs Power. It may well have been that Mrs Power had such borrowing in mind when she stated in the Asset and Liability Statement dated the 15th March 1995 that one of the liabilities was £130,000 for a "mortgagor to be confirmed,
98. Mrs Power duly received the £125,000, ostensibly from Mr Torpy, who was simply her nominee both in the purported sale and in the purported mortgage. The whole transaction was simply a device by which Mrs Power could raise money.
99. When Mrs Power's solicitor wrote to her to "confirm" the sale of Shamrock, he also confirmed the remittance of the balance of the proceeds of sale to her account at Barclays Bank, Camberley. It is that letter which gives the lie to the sale being at £240,000. In evidence, Mrs Power said that she owed National Westminster Bank £13,000 and Abbey National the principal of £60,000 and arrears of interest. It appears, although Mrs Power had no clear recollection on this matter, that there was also a short-term loan from Barclays Bank of £10,000. Mrs Power did not recall the amount of the arrears of interest, but they would have had to have been in excess of £136,000 if, on satisfaction of these liabilities from a sale price of £240,000, only £20,203.89 remained. If, however, the "sale price" was £125,000, the arrears of interest would have been £21,796.11.
100. Although the "Transfer of Whole" recorded the receipt of £240,000, and the document was stamped as if that price had been paid, I am quite satisfied that the only money that was paid in respect of this transaction was £125,000.
101. The conclusion that this was a sham transaction, and that the "Transfer of Whole" was a fraudulent document, is fortified by subsequent events. Mrs Power's financial difficulties did not improve as a result of the receipt of the monies from the Woolwich Building Society. In the action brought against her by Hampton Plumbers, Mrs Power was ordered, on the 11^th July 1996, inter alia, to make an affidavit "stat[ing] when the sum of £240,000 was received" and "the present whereabouts" of the money. She was also ordered to give details of the repayment of all loans made with the money. Unfortunately, Mrs Power's affidavit is not in the documents which were available at the trial.
102. Mrs Power's evidence was that Mr Torpy returned to Australia at some time in 1996. It would seem clear that he made no mortgage payments after that date, even if he had made any such payments prior to that date, which is doubtful. It is not certain when, if ever, he returned to this country.
103. On the 4th January 1999 a solicitor, Mr Hugh Taylor, who had acted for Mrs Power on the "sale" of Shamrock, made a Statutory Declaration in support of an application by Strasbourg to register a Caution against dealings in Shamrock. Strasbourg was stated to be "a purchaser of the land from Laurance Torpy under an Agreement for Sale dated 20th March 1998". However, no Caution was ever registered against the property in favour of Strasbourg, and Strasbourg was never shown as an owner of Shamrock. No "Agreement for Sale" between Mr Torpy and Strasbourg has ever been produced.
104. Two further extraordinary documents subsequently came into existence. The first document bears the date of the 28th September 2000. It purports to be a Declaration of Trust between Mr Power and his three daughters. It recites a transfer of Shamrock, said to be of "even date", between Mr Torpy and Mr Power in consideration of payment of £100,000 to Mrs Power. The document also purports to recite that by a mortgage of the same date between Mr Power and HSBC plc Mr Power charged Shamrock with payment of £250,000 to HSBC and that Mr Power would hold the proceeds of sale upon trust for his daughters. The last recital is particularly difficult to understand as Mr Power, as the purported purchaser, would not be expected to "hold the proceeds of sale ".
105. The second extraordinary document is another Declaration of Trust: this one is dated the l6^th October 2000. It purports to be a Declaration of Trust between Mr Torpy and Mr Power. It recites the transfer of Shamrock from Mrs Power to Mr Torpy dated the 26th October 1995, for the sum of £225,000. (It will be recalled that the 26^th October 1995 transfer document stated the sum to be £240,000, of which receipt was acknowledged.) The Declaration of Trust also recites the payment of £125,000 to Mrs Power from the Woolwich mortgage monies, and that the balance of the price was "deferred until sale". Finally, the document recites an agreement between Mr Torpy and Mr Power that Mr Torpy would hold the proceeds of sale upon trust for Mr Power. Mrs Power's rights are totally ignored.
106. No doubt these documents were intended to provide support for the existence of the scheme of which Mr and Mrs Power gave evidence, the details of which I have set out above. It is a strange omission in the documents that it is not stated that the deferral of the payment of the balance of the purchase price was until sale to Mr Power, if that had been the agreement.
107. The documents contain many other strange features. They are clearly "cut and paste " documents. An obvious example is to be found by comparing Clause F of the 28^th September 2000 document with Clause F of the 16^th October 2000 document. The two clauses are in nearly identical terms. Unfortunately, while the clause might make sense in the later document it makes no sense in the earlier document. Nor does Recital 4 of the later document make any sense at all when taken with the operative clauses of that document.
108. I have concluded that the two documents are forgeries. While similar documents may have been drafted in the office of a firm of solicitors, Fairbrother and Darlow, they were not, according to Ms. Jacki Fairbrother, whose evidence I accept, printed in these solicitors' offices. Indeed, Ms. Fairbrother doubted that the 28th September 2000 document was even drafted in her office, as the layout was not that which was used by her firm.
109. Even more telling is the fact that, although the documents bear the dates September and October 2000 respectively, Ms. Fairbrother was not instructed until March 2001. Ms. Fairbrother's files were removed from her offices in March 2005 by Mr Power, with whom she had fallen out over payment of her bills.
110. Ms. Fairbrother identified another document, a transfer dated the 28th September 2001, as having been prepared in her office. The transfer was of Shamrock and was from Mr Torpy to Mr Power. It recited the Transfer as being "made pursuant to a Deed of Trust dated 16th October 2000 between Mr Torpy and Mr Power under which £100,000 was payable to Mrs Power on completion of the sale". Ms. Fairbrother said that she could not recall seeing the Deed of Trust. If she had, and if it was the same document as the Declaration of Trust which bears that date, she would have noted that Mr Torpy was to hold the balance of the proceeds of sale on trust for Mr Power, and that there was no provision for the payment of monies to Mrs Power.
111. No doubt the error was caused because Mr and Mrs Power had forgotten that it was in the Declaration of Trust dated the 28th September 2000 (which they had forgotten to show Ms. Fairbrother because it was not then in existence) that the £100,000 was recited as being a sum to be paid to Mrs Power.
112. Mr Torpy's signature on the transfer purports to have been witnessed by Mr Glenn Swain who has an address in Singapore. There are serious doubts as to the authenticity of Mr Swain's signature, but I do not have to make any finding in respect of that matter.
113. If, as I consider likely, the two "Declarations of Trust" did not come into existence in September and October 2000, but in late 2001, their genesis may have been inspired by the impending trial of the actions before Park J.
114. As has been stated, the Declaration of Trust dated the 28th September 2000 referred to a mortgage between HSBC and Mr Power in the sum of £250,000. Although there is a document which purports to be a legal mortgage between HSBC and Mr Power and which is dated the 28th September 2001, that document is not signed by HSBC, and, tellingly, it is not referred to in the disclosure made by HSBC.
115. In the light of the above facts, I have no hesitation in concluding that none of the purported transactions relating to Shamrock was genuine. Each was a sham, and a number of them did not take place at all. Throughout and to this day Shamrock remains the property of Mrs Power.
116. If I had concluded that any of the transactions were genuine, I would nonetheless have concluded that they were at a substantial undervalue. The valuation evidence, which was unchallenged, was that in October 1995 Shamrock was worth about £315,000 and in November 2001 about £450,000. In October 1995 the transfer was purportedly made for £240,000, but only £125,000 was paid. In October 2001 the transfer was purportedly for £100,000. Each of those values was a substantial undervalue.
117. It was accepted on behalf of Mr Power and Bellcove that, even if I found that the transactions were genuine, they were at values which were "significantly less than the relevant valuations ". However, it was submitted that the purpose of the transactions was simply to raise money. Although creditors might be prejudiced by the transactions at those values, that was the result of the transactions and not the purpose or the dominant purpose.
118. For the reasons that I have already given, I reject that submission. In those circumstances I have concluded that each and every transaction in relation either to Shamrock or, as will be seen, Harewood Avenue, in which Mr and Mrs Power or Mr Torpy were involved was a sham transaction. I have no hesitation in concluding that the dominant purpose of each of those transactions was to remove assets from the reach of actual or potential creditors. It may also be that another purpose of some of the transactions was to raise funds for business ventures to be carried out by either Mr or Mrs Power, but the dominant purpose was to prejudice creditors.

HARDWOOD AVENUE

119. A British Virgin Islands company, Palm Court Properties Limited ("Palm Court Properties"), was registered as the owner of Harewood Avenue on the 4th September 1984. The company documents available for Palm Court Properties, which was struck off the British Virgin Islands Companies Register on the 31^st December 1992, do not reveal the identity of those who had beneficial interests in Palm Court Properties. The last company search, dated the 23rd April 1993, was inconsistent with other documents as to the identity of the shareholders, each of whom was a corporate shareholder.
120. On the 9th November 1992 a Mr John Qualtrough wrote to the then shareholders of Palm Court Properties, Bridge Management Services Limited and the International Trustee Company Limited. Mr Qualtrough had previously written to solicitors who were then acting for Palm Court Properties in an action commenced against that company for payment of fees for work done at Harewood Avenue, stating that he had been instructed to sell Harewood Avenue.
121. However, on the 15th January 1993 Mrs Power went to the Bank of Ireland with a man said to be Mr Torpy. Mr Kehoe prepared a file note of that meeting. He recorded that Mrs Power told him that she owned Harewood Avenue through an offshore company, but she wanted to dispose of it for tax reasons, and that she was using Mr Torpy "to front the deal". The sale price to Mr Torpy was £120,000. Mrs Power told Mr Kehoe that the ground floor and basement alone were valued at about £150,000. The file note records that Mrs Power had substantial assets, which were held in a bank account at Barclays Bank, Switzerland.
122. The loan requested to enable Mr Torpy, who was described as a "property investor" and as being in his early 40s, to "purchase" Harewood Avenue was approved. The description of Mr Torpy as being a property investor in his early 40s was manifestly inaccurate. He was never a property investor. As I have said earlier in this judgment he did not have the means to acquire properties in his own right, and in January 1993 he was 27 years old.
123. It was Mrs Power's submission that Mr Kehoe had concocted the contents of the file note insofar as they referred to her owning Harewood, that she wanted to dispose of it for tax reasons and that Mr Torpy was "fronting" the deal for her. I reject that submission. I have already stated that I found Mr Kehoe to be a credible witness. I do not believe that he made up these details about what Mrs Power told him.
124. On the 23rd March 1993 an agreement was made for the sale by Palm Court Properties to Mr Torpy of Harewood Avenue for £120,000 (less a retention of £12,000). Completion and transfer purportedly took place on the 24th March 1993, and on the 25th March 1993 Palm Court Properties' directors purportedly resolved to dissolve Palm Court Properties from that date. However, because Palm Court Properties had been struck off the register in December 1992, the purported transfer could not be registered and the sale could not be concluded. This was obviously a blow to Mr and Mrs Power.
125. On 16th August 1993 the Companies Court made an Order winding up Palm Court Properties. Unusually, on the same day Palm Court Properties was restored to the British Virgin Islands Companies Register.
126. On the 22nd September 1993, Mrs Power authorised the Bank of Ireland to apply the funds which the Bank was holding on her behalf to a loan account in Mr Torpy's name. It would, therefore, appear that it was Mrs Power's money that was being used by Mr Torpy to make the "purchase". Subsequently, Mrs Power also guaranteed a further sum of £13,000 which was outstanding in respect of the loan to Mr Torpy.
127. All those events took place in the shadow of the claim against Palm Court Properties in respect of work done at Harewood Avenue. I have no doubt that the "transaction" was intended to defeat or prejudice that claim. Furthermore, as no monies were paid for Harewood Avenue, the whole "transaction" was a sham.
128. I conclude that at this stage Mrs Power was, as she told the Bank of Ireland, the owner of and beneficially entitled to Harewood Avenue. Mr Torpy was, again, just a nominee for her.
129. Subsequently, Mr Torpy who was still without any visible means of support, agreed that he would purchase Harewood Avenue from Palm Court Properties' liquidator, and that he would not reclaim the £120,000 purchase price purportedly paid to Palm Court Properties for Harewood Avenue. The price agreed to be paid by Mr Torpy to the liquidator was £39,403.21. The transfer was completed on the 22nd September 1995. It will be noted that this transaction took place just a month before the purported sale of Shamrock to Mr Torpy for £240,000. The "purchase price" for Harewood Avenue was funded by a loan of £45,000 from Revelaction Finance Limited. The loan was secured by a registered charge.
130. I conclude that, in relation to the transaction with Palm Court Properties' liquidator, Mr Torpy was acting as Mrs Power's nominee, and that the transaction was not a genuine transaction.
131. I have also concluded that Mrs Power was at all material times the legal and beneficial owner of Harewood Avenue through Palm Court Properties, a company which she owned and controlled through shareholders and nominee directors. In addition, I have concluded that Mrs Power was at all material times the legal and beneficial owner of Strasbourg and Bellcove.
132. The valuation of Harewood Avenue in September 1995, which was subject to the rights of a sitting tenant, was about £160,000. As only £39,403.21 was paid (I ignore the £120,000 which was never paid) it follows that the transaction was at an undervalue.
133. Thus, by the end of October 1995 Mrs Power had managed to shelter both Shamrock and Harewood Avenue from her creditors by purporting to sell each property to Mr Torpy. The "sale" of Shamrock had realised £125,000, while the "sale" of Harewood Avenue had cost £39,403.21.
134. On the 31^st January 1996 Mrs Power applied to the Halifax Building Society for a mortgage loan of £70,000 purportedly in order to enable her to acquire a 99 year lease of the "Ground Floor Maisonette" at Harewood Avenue for £125,000. Mrs Power's application form to the Halifax contains very many untruths. Mrs Power gives her present address as Shamrock, which she says that she moved into in June 1985. That answer was untrue: Mrs Power moved into Shamrock when she acquired it in June 1978. Then Mrs Power stated that the deposit for the acquisition was coming from "Matrimonial Settlement". There was no such settlement, and that answer was untrue. Mrs Power then stated that her marital status was "Separated". That answer was untrue. Then Mrs Power stated that her present residential status was "Tenant", that her tenancy had started in 1985, that she was paying £600 per month and that her landlord was Mr Torpy, whose name she spelt "Torpey ". Those answers were all untrue. In the "Additional Details " section of the form Mrs Power stated that she had been separated from Mr Power for 5 years and had only recently received a settlement. This statement was untrue.
135. It would be difficult to imagine a more damaging document than Mrs Power's application form to the Halifax. Absent an explanation for the many untruths, Mrs Power is shown to be a person who is prepared to say anything in order to achieve her ends. Mrs Power neither gave nor attempted to give an explanation.
136. The loan to Mrs Power was approved by the Halifax, and the monies were paid to Mrs Power on the 25^th April 1996. There is no indication in the evidence that any part of those monies was paid to Mr Torpy. Nor is there any indication that the balance of the stated purchase price was paid, although a document purporting to be a lease between Mr Torpy and Mrs Power is included in the trial bundles. The mortgage deed itself is also dated the 25^th April 1996.
137. The signature of Mrs Power on the mortgage deed and of Mr Torpy on the lease each purports to be witnessed by "James Kirby " of an address in Ascot. On the lease Mr Kirby's occupation is given as "Dentist". In cross-examination Mrs Power told me that James Kirby had been her dentist and that he and his family had lived in Ascot, but were not living there in 1996. She admitted that the witness's signature on both documents was a forgery.
138. It would appear that £45,000 of the monies received from the Halifax was used to repay Revelaction the sum that had been lent, purportedly to Mr Torpy, to enable him to purchase Harewood Avenue from Palm Court's liquidator, since on the 25^th April 1996 they served notice of the discharge of the charge that had been registered to secure that loan.
139. Notwithstanding these financial manoeuvres, Mrs Power was still being attacked by her creditors. On the 11^th July 1996 the Basingstoke County Court granted to Hampton Plumbing a legal charge over two properties that were being developed by Mrs Power at Wick Road, Teddington. The court also ordered Mrs Power to give the further information in relation to the sale of Shamrock to Mr Torpy to which I have referred earlier in this judgment.
140. Mrs Power's dealings with Harewood Avenue became even more extraordinary on the 15^th July 1996, just 4 days after the Basingstoke County Court order had been made. On the 15^th July 1996 she purported to charge the whole of Harewood Avenue to Mr Power as security for repayment of a loan of £30,000. Repayment was to be made on thelst August 1996. That charge was duly registered, presumably by Mr Power, and the Halifax was notified of the registration. It is to be noted that when Mr Power cancelled the registration of the charge in his favour the notice referred to the title number of the Ground Floor Maisonette as the property charged. In her evidence Mrs Power professed not to recall this transaction or to notice that the charge in favour of Mr Power referred to the whole property at Harewood Avenue and not just the Ground Floor Maisonette. I do not believe that evidence. There is one simple explanation for the transaction: Mrs Power wanted to put out of reach of her creditors the one asset that remained in her name so that it would rank after the charges in favour of the Halifax and Mr Power.
141. The next extraordinary twist in the dealings in Harewood Avenue took place on the 18^th October 1996 when Mr Torpy purported to transfer the whole of Harewood Avenue to Strasbourg for £30,000. By this date Mr Torpy had returned to Australia, and Mrs Power accepted (as had Mr Power) that Mr Torpy's signature on the transfer document was a forgery. Mr Torpy's signature purported, once again to be witnessed by "James Kirby", whose occupation was given as "Dentist", and whose address was now given as being in Perth, Western Australia. Enquiries by Mr Westall in Western Australia established that there was no registration of a dentist of that name in the State. The address given for Mr Kirby is, however, the address that appeared on a letter purportedly from Mr Torpy to Mrs Power dated the 6^th September 1993. Unfortunately, that letter was relied upon by Mrs Power in the earlier action. In his judgment Park J held that it was a forgery. I do not propose to set out in this judgment what Park J said about the letter, which he referred to as "the Torpy letter". It is sufficient if I refer the interested reader to paragraphs 80 to 83 of Park J's judgment.
142. Mrs Power also admitted that the handwriting in which "James Kirby" appears as well as the handwriting in which Mr Kirby's occupation and address appear is her handwriting.
143. In order to pay the price of £30,000 Strasbourg had to borrow that sum. The lender was, once again, Revelaction Finance Limited, which took a registered charge against the whole of Harewood Avenue as security for the loan. In addition, Revelaction required a personal guarantee from either Mr or Mrs Power.
144. The price of £30,000 for Harewood Avenue was a substantial undervalue. A valuation obtained by Revelaction and dated the 17^th September 1996 gave the value of the property, excluding the Ground Floor Maisonette as between £100,000 and £110,000.
145. It is submitted on behalf of Mr Power and Bellcove, and, I shall assume, by Mrs Power that notwithstanding the forgery of the transfer the registration of the transfer is of "definitive effect", and that Strasbourg was able subsequently to transfer Harewood Avenue to Bellcove. It is submitted that Strasbourg and Bellcove are each entitled to rely upon the "statutory magic" effected by the provisions of section 58(1) of the Land Registration Act 2002: see Argyle Building Society v Hammond (1984) 49 P & CR 148.
146. The "statutory magic", however, is of limited effect. Section 65 and Schedule 4 of the Land Registration Act provide a mechanism to alter and rectify the register. The alteration can be made either pursuant to a court order or without a court order.
147. In my judgment, the purported transfer to Strasbourg was void as a consequence of the forgery of the transfer document. In addition, I am satisfied that Strasbourg was a party to that fraud. Mrs Power submits that Strasbourg held Harewood Avenue as trustee for herself and her children. I reject that submission. I am satisfied that Strasbourg was simply a creation of Mrs Power, and was, in effect, Mrs Power. In other words, I am satisfied that Strasbourg was a party to the fraud. It follows that I find that the transfer to Strasbourg was void.
148. The next transaction involving Harewood Avenue took place in late 1998. On the 30^th September 1998 Revelaction Bridging Limited wrote to Bellcove offering a loan facility of up to £175,000 to enable Bellcove to refinance existing loans on Harewood Avenue. That offer was accepted by Mr Power on behalf of Bellcove.
149. On the 16^th December 1998 Mrs Power's solicitor wrote to her to report the completion of "your sale " of Harewood Avenue, after forwarding "sufficient monies to the Halifax to repay the mortgage account in full". The balance of the sale price was being transmitted to Mrs Power's account at the Royal Bank of Scotland. The transfer from Strasbourg to Bellcove is also dated the 16^th December 1998: the purchase price is stated to be £245,000.
150. In my judgment, the letter to Mrs Power makes it clear that Strasbourg is synonymous with Mrs Power. It was her creature, and, in effect, it was her.
151. Any doubt about the fact that Mrs Power and Strasbourg were one and the same is removed by the application to register a caution over Shamrock in favour of Strasbourg. That application was made on the 4^th January 1999 by the solicitor who acted for Mrs Power on the purported sale to Strasbourg and who was now acting for Strasbourg. That was the application that referred to Strasbourg's agreement to purchase the land from Mr Torpy dated the 20^th March 1998. As I have stated earlier in this judgment, that agreement has not been disclosed. It seems clear that the application was an attempt to protect Shamrock from the Woolwich Building Society, which was attempting to recover arrears which had accrued on Mr Torpy's mortgage.
152. It did not prove easy to register a charge in favour of Bellcove. The Land Registry pointed out that Strasbourg had not lodged evidence of its acquisition of the leasehold interest in the Ground Floor Maisonette at Harewood Avenue. Registration was only effected after Mrs Power made a Statutory Declaration that on the 16^th December 1998 she had "surrendered by way of operation of law the Lease and the Property to the landlord Strasbourg Capital Limited for no consideration and that the Property was then vacant". That Declaration was wholly inconsistent with the letter to Mrs Power from her solicitors dated the 16^th December 1998 in which they reported the completion of "your sale " of Harewood Avenue and the repayment of the Halifax mortgage. In evidence Mrs Power said that the passage from the Statutory Declaration accorded with her memory. She was quite unable to explain how the solicitors letter and the Statutory Declaration could be reconciled.
153. On the 14^th December 1999 a further document came into existence which contained a forged signature. This document was a legal charge in favour of Nationwide Building Society as security for a loan of £245,000 to Bellcove. The charge contained a signature of "Helen O'Connor" in the space left for the borrower's signature. Mrs Power told me that Helen O'Connor was a friend of hers, and that the signature that purported to be that of Helen O'Connor had been written by her.
154. In fact, the original application to the Nationwide Building Society for a loan had been made in June 1998, before Bellcove was incorporated. It may well be that the application was originally made in the name of a company called "Strasbourg Capital (UK) Ltd", but was subsequently changed to an application by Bellcove. The application lists, in answer to a question about "Security details", both Harewood Avenue and Shamrock, which were said to be "Residential Investments - To be let".
155. On the basis of the history of the circumstances in which Bellcove came to be the registered proprietor of Harewood Avenue, I have concluded that the transaction was a sham, and was simply yet another example of the way in which Mr and Mrs Power raised funds by deceiving lenders.
156. If, contrary to the conclusion to which I have come, there was a sale from Strasbourg to Bellcove, that sale was for £175,000 only. It is accepted that at the time Harewood Avenue was worth £245,000. I, therefore, conclude that the sale was at an undervalue.
157. I also conclude that Harewood Avenue was at all material times beneficially owned by Mrs Power. Any other party that was registered as the proprietor, whether Mr Torpy or Mr Power or Strasbourg or Bellcove, was simply Mrs Power's nominee and if that person or entity did hold the legal title it did so as bare trustee for Mrs Power.

CONCLUSION

158. For the reasons set out earlier in this judgment I propose to make the declarations and other orders claimed by Mr Godfrey.
159. I have considered very carefully whether, in the light of the large number of admissions that documents have been forged and lenders have been misled, I should send the papers in this case to the Director of Public Prosecutions. I have no doubt that it would be proper for me to do so.
160. I have, however, concluded, albeit with considerable hesitation, not to do so. Mr and Mrs Power can consider themselves extremely fortunate that I have decided to exercise my discretion in their favour. It cannot often be the case that parties to litigation are found to have behaved in the disgraceful manner in which I have found Mr and Mrs Power to have behaved in the many transactions relating to Shamrock and Harewood Avenue, and yet escape further punishment.
161. I would be grateful if counsel would prepare a Minute of Order to reflect the conclusions that I have expressed in this judgment.