BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST
Fetter Lane London EC4A 1NL |
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B e f o r e :
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(1) ANDREW FRANK PITMAN HUBBARD (2) NIGHAT HUBBARD |
Claimants |
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- and - |
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(1) ROBERT WILLIAM PITMAN HUBBARD (2) ANN VERONICA HUBBARD |
Defendants |
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STEPHEN WILLIAMS of Williams Solicitors LLP appeared for the First Defendant
JAMES FENNEMORE instructed by Sinclair Gibson LLP appeared for the Second Defendant
Hearing 5-7 March 2025
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Crown Copyright ©
Introduction
First claimant Andrew
Second claimant Nikki as her preferred shortening of Nighat
First defendant Robert
Second defendant Ann
Karen Hubbard Karen
The Trust
3.1 High Trees Farm, Quintons Road, East Bergholt held under Land Registry title no. SK248663 (defined in the Declaration as the First Property). The registered proprietors were Robert and Ann.
3.2 Freehold Land at High Trees Farm held under Land Registry title no. SK263026 (defined in the Declaration as the Development Land). The registered proprietors were Robert and Ann.
3.3 High Trees Bungalow, Gaston End, East Bergholt held under Land Registry title no. SK248661 (defined in the Declaration as the Second Property but also referred to as the Bungalow and Moore's Cottage). The registered proprietors were Robert and Andrew until 2010.
"Robert Hubbard and Ann Hubbard declare that they hold the First Property and the Development Land as trustees of land and Robert Hubbard, Ann Hubbard and Andrew Hubbard declare that they hold the Second Property as trustees of land on trust as follows:
3.1 In respect of the Development Land only:
(a) as to Robert's Plot for Robert Hubbard absolutely;
Then as to the Remaining Development Land:
(b) as to 80% for Robert Hubbard and Ann Hubbard as set out in clause 5
(c) as to 10% for Andrew Hubbard absolutely
(d) as to 10% for Nighat Hubbard absolutely
3.2 In respect of the First Property and the Second Property
(a) as to 40% for Robert Hubbard absolutely
(b) as to 40% for Ann Hubbard absolutely
(c) as to 10% for Andrew Hubbard absolutely
(d) as to 10% for Nighat Hubbard absolutely"
"a plot for a single private residential dwelling on the Development Land as indicated on the plans or drawings that accompanied the application for Planning Permission and to be selected or determined in accordance with clause 4;"
"4.1 Within 10 Working Days of the date on which Planning Permission is granted, Robert Hubbard shall select a plot for a single private residential dwelling on the Development Land which he shall be entitled to absolutely".
Background
11.1 In 2003, Robert inherited a 75% interest in the Bungalow with Andrew inheriting a 25% interest. Robert inherited a 100% interest in the remaining land at High Trees Farm (the First Property and the Development Land).
11.2 On 28 October 2004 Robert and Ann agreed the terms of a financial order in their divorce. Decree nisi had been pronounced on 7 October 2004.
11.3 On 2 August 2005 Mr and Mrs Chart entered into what was described as a joint venture with Robert with a view to maximising the financial potential of the land at High Trees including the Bungalow. The sum invested gave Mr and Mrs Chart a 10% interest in the "Estate" and their interest was secured by a charge being registered. The agreement formalised an earlier arrangement. The investment of £250,000 by Mr and Mrs Chart was made in 2003.
11.4 Between June 2005 and January 2006 Mr and Mrs Jull invested £125,000 in return for a 5% share of the High Trees development along similar lines as Mr and Mrs Chart.
11.6 On 16 August 2005 the Trust was executed. Ann's case is that from that point onward she lived a completely separate life from Robert and that she had no significant involvement with the developments.
11.7 In March 2006 Andrew agreed to a charge over the Bungalow in respect of a loan facility with Lloyds TSB Bank for Robert and Ann in the sum of £550,000. The charge was dated 27 September 2006. The loan was used to repay Robert's borrowing from NatWest Bank.
11.8 Between 2007 and 2008 Robert undertook works of renovation and improvement to the Bungalow. Robert and Karen started living there and have remained living there since.
11.9 On 5 February 2010, the Bungalow was transferred from the joint names of Robert and Andrew into Robert's sole name and on the same date Robert transferred the remaining land from his sole name into the joint names of himself and Ann. Andrew's position as a trustee of the Bungalow with Robert was treated as having ended.
11.10 At around the same time a section 106 agreement was entered into with the planning authority relating to the planning consent Robert had obtained enabling the two barns to be converted and two further houses to be built.
11.11 On 22 October 2010 Robert and Ann entered into a Development Agreement with Knight Developments Limited ("Knight") for Knight to develop and sell the two barns and to build two new houses. Lloyds TSB Bank PLC is also a party (described as the Lender) for the purpose of providing consent to the development. Robert and Ann remained the registered proprietors of the land.
11.12 On the same date Robert and Ann granted an option to Knight in consideration of an option fee of £40,000 for the development of much of the remaining land at High Trees Farm. Lloyds TSB and Mr and Mrs Chart were parties to the agreement. Paul Robinson Solicitors acted for Knight and it is likely that Mr Chart's law firm, Barnett Alexander Conway Ingram LLP (otherwise BACI), acted for Robert and Mr and Mrs Chart. Under the option Knight agreed to use "every reasonable endeavour" in consultation with Robert and Ann to obtain planning consent for a residential development on the land.
11.13 Between 2012 and 2013 the barn and house developments were built and sold. The last of the four properties was sold in December 2013.
11.14 On 10 October 2014 a parcel of farmland was sold to Michael and James Harris for £532,875.
11.15 Robert says a document that has been called 'the 2014 spreadsheet' showing the income received and expenditure incurred was produced in 2014. It does not include the proceeds of the Harris sale but appears to include expenses claimed until the end of 2014.
11.16 In 2016 the option agreement was assigned by Knight to Countryside Properties Limited ("Countryside").
11.17 In 2017 Countryside obtained planning consent for the construction of 144 houses on the High Trees land. The consent was challenged by the Parish Council. By July 2020 the planning consent was free from further challenge.
11.18 On 9 October 2020 Penningtons Manches Cooper LLP, acting on behalf of Andrew and Nikki, wrote to Robert and Ann asking them to provide an account.
11.19 On 15 April 2021 an offer to settle the account on a payment of £1,030,985.20 to Andrew and Nikki was made in a letter from Williams Solicitors acting on behalf of Robert. An account was provided with the letter.
11.20 On 28 October 2021 Hubbard Developments Limited borrowed £242,232.12 (with £335,249.51 being repayable at the end of 18 months) from Ascent Funding Limited.
11.21 On 17 December 2021 this claim was commenced by Andrew and Nikki (Benchmark Solicitors LLP were acting for them).
11.22 On 9 February 2022 the option granted to Knight (and later assigned to Countryside Properties) was varied.
11.23 On 30 March 2022 Countryside acquired the land under the option agreement for £5.5 million. Countryside sold the option and the housing development pursuant to the planning consent was subsequently built and the plots sold by another developer.
11.24 On 4 May 2023 Robert and Ann reached agreement between them about the proceeds of sale held by the solicitors acting for them on the sale, Barker Gotelee, and Robert provided Ann with an indemnity about any future liability relating to the Trust.
11.25 Robert and Ann's divorce was then concluded, Ann resigned as a trustee and Karen was appointed in her place.
14.1 The defendants admitted in their amended defences that they had entered into the Trust.
14.2 The Development Land had been sold by the defendants to Countryside on 30 March 2022 for £5.5 million.
14.3 The defendants' conveyancing solicitors Barker Gotelee had held £1.2 million from the proceeds of sale and £650,000 had been paid to the claimants as an interim payment.
14.4 The parties had agreed that it remained open to Robert to select a plot pursuant to clause 4.1 of the Trust and that he had selected Plot 69.
"1. By 4 p.m. on 2 September 2024 the Claimants shall file and serve in the form of a Scott Schedule ("the Scott Schedule") their objections ('the Objections") to the Defendant's account as set out in the "Final Account" prepared by Thomas Quinn dated 4 June 2024 for the period 2004 to 31 October 2023.
2. Any application by the First Defendant to strike out or seeking summary judgment on the Objections shall be made by 4 p.m. on 9 September 2024.
3. By 4 p.m. on 23 September 2024 the Defendants shall file and serve their responses to the Objections in the appropriate column in the Scott Schedule and at the same time file and serve any further witness statements on which they rely. The Defendants shall by the same time also disclose by copy any further documents relied on and any known adverse documents.
4. By 4 p.m. on 14 October 2024 the Claimants shall file and serve their response to the Defendants' responses in the appropriate column in Scott Schedule and at the same time file and serve any further witness statements on which they rely. The Claimants shall by the same time also disclose by copy any further documents relied on and any known adverse documents.
5. A hearing shall be listed to determine the Objections and to settle the account, with a time estimate of 3 days plus 1 day of pre-reading. The account shall not be on the footing of wilful default."
28.1 Record the amount objected to and assert that the account is overstated by the amount in question.
28.2 State that the defendants have not produced evidence about how the amount is made up or that it is an authorised deductible expense in whole or in part.
28.3 Put the defendants to strict proof of the item of expenditure.
30.1 To assert that the objection is deficient due to failure to comply with paragraph 3.2 of Practice Direction 40A.
30.2 To rely upon the trustees having made a decision to incur the item of expenditure relying on their power under section 8 of the Trustee Act 2000.
30.3 In the case of older items of expenditure, to rely upon limitation if the allegation is one of breach of trust. Robert refers to Kekwick v Kekwick.
"While D2 cannot speak to the specific factual allegations underlying D1's response, she does not disagree with it. To the extent that the Court accepts D1's response, D2 adopts and relies upon it."
The trial
The law
39.1 Trustees are under a duty to keep accounts and records: Henchley v Thompson [2017] EWHC 225 (Ch) [16] which sets out a helpful passage from G Thomas and A Hudson in the law of Trusts 2nd ed. at 10.146 and Snell's Equity 35th ed. Chapter 29.
39.2 The consequences of a failure to keep and preserve records can be very serious. In Snell at 20-010 the principle is put in the following way:
"The accounting party must therefore be prepared to document each item, and presumptions may be made against them if they have not kept proper records or have destroyed them. The court will lean particularly hard against a professional who has not kept adequate records or anyone who destroys records in bad faith. In other circumstances, the court may not require documentary evidence for every entry in an account. A non-professional fiduciary who has acted in good faith may be granted fair and reasonable allowances despite having neglected to keep proper accounts."
Gray v Haig (1885) S.C. 13 Beav. 65; 52 ER 587 is cited in Snell at 20-010 as authority where a professional trustee has not kept proper records or has destroyed them. The case concerned the failure by an agent to preserve records. Indeed, it appears from the report that records were destroyed by the agent after proceedings were commenced. At [226] Sir John Romilly MR said:
" the case is very different when the transactions to which they relate are recent, where the accounts arising from them have not been finally adjusted, or the balance ascertained or paid, and still more when that destruction takes place by the person who has actually filed a bill to have the accounts taken of those very transactions to which these books relate. In such a case some very cogent reason must be given to satisfy the Court that the destruction was proper or justifiable, and, in the absence of any such satisfactory reason, which is the fact here, I am compelled to act on the principle laid down in the well-known case of Armory v. Delamirie (1 Strange, 505), and presume, as against the person who destroyed the evidence, everything most unfavourable to him, which is consistent with the rest of the facts, which are either admitted or proved."
He said at the end of his judgment:
"I cannot conclude this case without expressing my regret that I have felt it my duty to make a decision on these points which will lead to so stringent a decree against Mr. Gray. It cannot, however, be too generally known or understood, amongst all persons dealing with each other, in the character of principal and agent, how severely this Court deals with any irregularities on the part of the agent, how strictly it requires that he who is the person trusted shall act, in all matters relating to such agency, for the benefit of his principal, and how imperative it is upon him to preserve correct accounts of all his dealings and transactions in that respect, and that the loss, and still more the destruction of such evidence, by the agent, falls most heavily on himself."
Robert and Ann are not professional trustees and the court has no basis for leaning hard on them on that basis alone. Nevertheless, a trustee who fails to keep records, or destroys them, can expect only limited sympathy from the court, unless there is a full and clear explanation about what has happened and a careful attempt to explain entries in the account. Where the destruction of records is recent, or where a cogent reason for the destruction of records is not provided, the court is likely to lean against trustees in favour of the beneficiaries.
39.3 There are three stages to the taking of an account in common form. First, establishing whether there is a right to an account and, if there is, whether the court should exercise its discretion to make an order for an account to be taken; secondly, the taking of the account; and thirdly whether consequential orders should be made: Snell at 20-006. Here, stage one has been established. Stages two and three remain to be completed. The essential point is that consequential orders do not follow automatically from the account being finalised.
39.4 The purpose of trust accounts is to tell beneficiaries what the trust assets were, what has been done with them, what they currently comprise and what distributions have taken place: see Ball v Ball [2021] EWHC 1020 (Ch) at [24]. This necessarily involves the court considering whether expenses claimed by the trustees are properly chargeable to the trust.
39.5 There is no set form for the provision of accounts: see Henchley v Thompson at [41]. The level of detail that the trustees must provide and the formality of the account statements is context specific. It will vary with the size and nature of the trust: see Ball v Ball at [25]. In the context of a trust of land which contemplated its development and sale, the trustees are required to keep full records of income and expenditure and to retain them.
39.6 The burden of proof varies according to the nature of objection. Where the objection relates to income, the burden lies upon the beneficiaries; where it relates to expenditure and outgoings, the burden lies on the trustee: see Exsus Travel Limited v James Turner [2014] EWCA Civ 1331 McCombe LJ at [21]-[22] and Snell at 20-010. The way it is put in Lewin 20th ed. at 41-005 is as follows:
"A claimant to an account in common form need not allege or prove any default in the trustee's dealings. An order for an account of administration in common form requires the trustee to account only for what he has actually received, and his disbursement and distribution of it. Accordingly, such an account enforces the trustee's primary duty to hold the trust property for the beneficiaries, paying out sums only as he is authorised to do under the terms of the trust. It is thus incumbent on the trustee to justify any payments made, and not on the beneficiary to prove any breach of trust." Lewin 20th ed. 41-005
39.7 Traditionally it is said that income is 'surcharged' and expenses are 'falsified'. Although those terms have been in use for many years, for my part, I do not find them helpful; their meaning is obscure, and they are not readily understandable by anyone other than trust lawyers. I note that Practice Direction 40A, which governs the taking of accounts, uses the neutral term "objection" and in paragraphs 3.1 and 3.2 seek to put in plain English the different notions that may be considered in relation to income and expenditure, including those that are relevant to an account taken on the basis of wilful default. Although there may be imperfections in the drafting (see: Hubbard v Hubbard [2024] EWHC 3123 (Ch) at [35]-[36] the language used is much preferable to archaic terms such as surcharge and falsify.
39.8 An account in common form is distinct from an account on the basis of wilful default. The former is an account based upon what has actually been done with the trust assets, what they comprise and what recoverable expenses the trustees have incurred for which they wish to be indemnified. By contrast, in an account taken on the basis of wilful default the court may investigate what ought, or ought not, to have been done and what the trust assets ought to comprise. Essentially the difference is between the 'is' and the 'ought'. Thus, it is not part of the account in this case to look into whether the developments could have been undertaken in a different way, or could have achieved a higher return, or whether agricultural land could have been let for a greater rent than was achieved. Equally it is not the court's role to investigate whether services could have been obtained at a lower cost; see Snell at 20-17 and Lewin 41-003.
"The real question is whether, in relation to any particular unsecured borrowing, the trustees are entitled to an indemnity as against the trust property, in respect of that personal liability. That will largely depend upon whether the purpose for which the money was raised by an unsecured borrowing was a proper purpose of the trust, such that the borrowing and expenditure of the money was not a breach of trust."
"If it appears to the court that a trustee is or may be personally liable for any breach of trust, whether the transaction alleged to be a breach of trust occurred before or after the commencement of this Act, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the court in the matter in which he committed such breach, then the court may relieve him either wholly or partly from personal liability for the same."
The evidence
Discharging the BOP in relation to expenditure
47.1 Is it plausible that the expenditure was incurred? Is it of a type which would be expected?
47.2 Are there any documents which provide evidence of the expenditure being incurred and paid?
47.3 Is there plausible oral evidence of the expenditure being incurred and paid, whether or not there are documents?
47.4 If there is an absence of material documents, is there a good reason for that absence?
47.5 What efforts have been made to locate and produce documents by the party upon whom the burden lies?
47.6 Is the court able to reach conclusions about expenditure having been incurred and paid based upon the evidence (oral, documentary and inferential) taken together?
47.7 If there is sufficient evidence of an item of expenditure being incurred, was it was incurred on behalf of the trust, as opposed to being for the personal benefit of the trustee?
Robert Hubbard
"14. Given past events neither my solicitor Mr Williams nor I understood what was meant by "not authorised" until a meeting between legal advisers on Microsoft Teams on 15th November 2024 to which I listened in. In response to a question from Mr Williams Mr Woodhouse explained that "not authorised" meant:
14.1 There was no charging clause specified in the Trust Deed; and
14.2 The Trustees did not ask for or obtain permission from their clients to develop the site.
This was the first occasion these allegations had been raised in what is now a 19-year period since the signing of the Declaration of Trust.
15. Given the above summary and the contents of C's Particulars of Claim, Pennington's letter of October 2020 and much more, I became very surprised at being called upon to answer these objections but in this statement, I will do my best. I cannot prepare this statement or give evidence on any basis that is not set out in those objections as I would not have notice of any other challenges or time to prepare for them. I ask the court to bear with me please as in 2019, following a serious accident . I suffered from 3 frontal lobe strokes and a heart attack, therefore I can have difficulty concentrating."
"As I prepare for the final hearing, following the submissions of the C's objections to the accepted Account, I am still unsure what the actual dispute is."
"After the C's and Ann's beneficial interests had been fully paid, I became the sole beneficiary of the trust. Therefore, the trust was closed, this position being formally ratified by the trustees in December of 2023. The value of the remaining trust assets were insufficient for my own beneficial interest to be fully discharged."
"46.1 Externally-
1) All windows resized and replaced with wooden framed, double-glazed units.
2) All external brickwork waterproofed, rendered and painted.
3) A wooden framed, double-glazed conservatory was constructed.
4) Landscaping to the land adjacent to the property.
5) Installation of underground LPG tank.
6) Laying down several hundred meters of fencing and hedging.
46.2 Internally
1) All internal walls, ceilings and floors were removed and reconstructed.
2) The internal square footage was increased from approximately 1,900 sq ft to approximately 2,970 sq ft, a consequence of the construction of a new first floor running the full length of the property.
3) The whole property was rewired, replastered, new central heating system, new Kitchen, bathrooms, new floor coverings throughout, new internal woodwork, including staircase, doors etc, with the whole property being decorated to the required standard."
Karen Hubbard
"8. I prepared the income expenditure accounts with the aid of bank statements, cheque book stubs and invoices. This is the way I produce every set of accounts I prepare for my clients. Robert used his business account for all transactions.
9. The developments at High trees Farm were run as a business. The first I knew of the trust was when Mr Copson of Withers solicitors produced it in 2021. I knew there was a written agreement to give Andrew 20%, but I had no knowledge of any detail. Robert always said to me we must account to his brother for 20% of the profit after he settled with Ann.
12. In 2014 after the barn sales, I compiled spreadsheets [sic] showing the totals to date using the yearly data I had recorded. These spreadsheets were shared with Andrew, Ann, John Chart, Dave Jull and Param. It was up to Andrew to keep Nikki informed. All data was seen and accepted by everyone at that time. The claimants have never asked for any information on the accounts produced in the 2014 spreadsheet until this litigation began.
13. Due to the laptop in which I did all the work until 2017 disappearing, I do not have the historic spreadsheets. The 2014 spreadsheet exhibited by Robert was produced on my own business laptop and remained there. I used my own device for the accumulations as it was easier to produce with the figures in front of me on Robert's device. There was no cloud to save documents to.
14. full records were kept. The claimants saw the 2014 spreadsheet and asked for no further information. Every year my practice was to dispose of all paperwork over 6 years old. AS far as I am concerned however all the transactions are properly recorded to 2014 in the 2014 Spreadsheet. I will go through the objections with my accountants [sic] hat on, but without any evidence from the claimants that the figures are incorrect I feel my job is done." [my emphasis]
"Andrew just said he didn't understand them even though they were explained. Unfortunately, all the bank statements and the laptop which contained my work were stolen during a visit from Andrew shortly after Robert's release from hospital. I was fortunate in that all of the important information was duplicated in other documents that I retained.
".
Ann Hubbard
Andrew Hubbard
Nikki Hubbard
David Jull
Witness evaluation
"18. This work was done by the trustees in 2014. The details of which are summarised in the 2014 spreadsheet.
19. Several years after the compilation of the spreadsheet, the paperwork used to compile these accounts was destroyed. At least six year period prior to their disposal, an account position statement was presented to all participants, who in turn accepted the information produced. "
100.1 Although it is crucial to Robert's case, he deals very sketchily in his trial witness statement about providing the 2014 spreadsheet to Andrew and Nikki. He just says it was provided to all participants without saying how that was done. Mr Woodhouse took him to his first witness statement dated 24 March 2023 in which he said at paragraph 25 the spreadsheet was sent to only three people, Mr Jull, Mr Chart and Ann. Notably he did not say it was sent to Andrew or Nikki. However, when cross-examined, he first said Andrew had received the spreadsheet in 2014 and when it was pointed out there was no record of it being sent electronically, he said it was handed to him in August or September 2014.
100.2 His evidence about the loss of his laptop was significantly developed. He confirmed that he believed Andrew had taken it and provided much detail of when this happened in 2019. The laptop was an old one that he had not used for three or four years. It was on his desk upstairs with an envelope containing bank records. Andrew went upstairs while Robert was confined to a wheelchair downstairs and took both items. How he managed to leave the house without the theft being obvious was not explained. Robert said the theft had been reported to the police but no crime number was provided in the evidence. Crucially, Robert's evidence about why the old laptop was important was jumbled and incoherent and does not mesh with Karen's evidence.
100.3 Having maintained that his business account bank statements provided information about expenditure including interest charged to the Trust in the 2014 spreadsheet, he then said he another account at Coutts Bank which had not been mentioned previously.
100.4 At one point he was asked about attempts to obtain records from Bidwells. He said he had written to them but had not obtained anything. He later volunteered that he had some invoices from Bidwells on his phone.
100.5 When questioned about the destruction of records he mentioned for the first time that boxes containing records has been burnt in 2019.
Income
(1) Countryside sale
Rental income
(2) Barns and Harris sale Income
(3) Accruing interest
Expenditure
(1) Costs to 2014 objections 11 and 53 to 71. [There is a gap in the numbering between 60 and 69]
Objection 53 Phil Summers £6,622
Objection 54 Birkett Long £4,465
Objection 55 Bidwells up to 2009 £154,300
"21.3 Bidwells carried out a lot of the early work, beginning in 2005. My recollection is that they were paid large sums for this work, which involved putting together the planning applications. As far as I can remember, I would have been involved alongside Robert in instructing them and signing documents (but I cannot remember the specifics)."
Objection 56 BACI (Barnett Alexander Conway Ingram LLP) £15,000
Objection 57 Roger Balmer up to 2010 - £24,675
Objection 58 Bank valuations £7,682
Objection 59 (1) [there are two entries numbered 59] Development of Bungalow up to 2008 £298,000
Objection 59(2) Bank solicitors and Gerry £5,160
Objection 60 RWH costs £35,670
Objection 70 Land Acquisition £10,800
Objection 71 High Trees Bungalow running costs (also described as High Trees costs/fees) £187,094
(2) Loan interest objections 12, 24, 28 and 73.
Objections 12 and 73 - £278,849 (the two objections relate to the same item).
"D's were not empowered to take out loans and D's have to date provided no evidence that the loan was used for authorised purposes and not Ds' personal expenses and purposes."
Objection 24 Lloyds loan interest repaid - £50,000
Objection 28 Ascent Funding loan interest £80,523
(3) Barker Gotelee objection 13
"No objection to £76,395 expense but Cs seek an order for assessment under s71(3) of the Solicitors Act 1974".
It is accepted that Barker Gotelee acted for the trustees on the sale of the High Trees development land to Countryside. Barker Gotelee charged £49,946 for their work in relation to the conveyancing.
(4) BACI objection 14
(5) Williams Solicitors Objection 15, 18 20
Objection 15 - £62,000 (notes 5 and 11 in the Thomas Quinn account)
Objection 18 - £533,648 (note 11 in the TQ account)
Objection 19 £64,300 (note 5 in the TQ account)
Objection 20 - £285,467 (notes 5 and 11 in the TQ account)
Total - £945,415
"D's have failed to provide evidence as to how this sum is made up or that it is an authorised deductible expense in full or in part. Ds put to strict proof. Cs in any event seek an order for assessment under s71(3) of the Solicitors Act 1974".
"Objection is deficient in (a) the understated amount received by the accounting party, (b) how much more the accounting party should be treated as having received, (c) the respects in which account is not accurate; and (d) the grounds on which each contention is made (CPR PD 40A paragraphs 3.2 (a) to (d). Trustee authorised (TA s. 8). Proforma invoices produced with daily entries in narrative produced contemporaneously as work done. Costs considerably exacerbated by C's 8 threats of injunctions and HMLR notices designed to stop the sale to Countryside Properties to bust the trust [Costs Bundle Part 2 pp6-118, 156-221]"
"67. Mr Williams has assured me that the pro forma invoices represent a true final position of his charges. He always supplied a detailed narrative in the invoices he supplies at the time he performs the work."
195.1 Pro-forma invoice 1550 is dated 26 July 2021. Its description of the charges says "To part payment on the sale of High Trees Farm Development as agreed. Narrative attached." The charge is £35,000 + vat = £42,000. There is no narrative attached.
195.2 Pro-forma invoice 1522 is provided in three versions. The first version is dated 26 July 2021. It comprises 12 pages and is for a total of £102, 349.76 including vat and disbursements. The second version is dated 22 May 2023 and comprises 45 pages. It totals £571,762.44 including vat and disbursements. The third version is dated 29 May 2024. It comprises 8 pages plus a separate narrative that runs to 21 pages. It also totals £571,762.44.
195.3 Pro-forma invoice 1575 is dated 29 May 2024. It comprises 26 pages and is for a total of £257,183.20.
195.4 Pro-forma invoice 1603 is also dated 29 May 2024. It comprises 7 pages and is for a total of £52,169.
196.1 Barker Gotelee (acting for the trustees)
196.2 Birketts (acting for Countryside)
196.3 Grier and Giles Perry of Openview (both firms negotiated with Countryside on behalf of one or both trustees).
196.4 Withers and later Sinclair Gibson (acting for Ann)
196.5 Benchmark Solicitors (acting for Andrew and Nikki)
196.6 Mr Chart (as an investor and up to 2021 as a solicitor acting for the trustees)
196.7 Bennett Griffin (acting for Mr Jull, another investor)
196.8 Ascent Funding
196.9 Planning Officers
196.10 Anglian Water
197.1 The sale to Countryside (the extent of overlap between Mr Williams and Barker Gotelee is not known).
197.2 Negotiations with Withers (later Sinclair Gibson) acting for Ann and dealing with Robert's matrimonial proceedings.
197.3 Negotiations with investors.
197.4 The dispute between Robert and the claimants both before and after the claim was issued.
197.5 Arranging borrowing for Hubbard Developments Limited.
(6) Farm running costs/maintenance objection 17
"This income has been received since 2005. Any income generated from the farm rental has been used to cover farming costs."
"This item represents some of the spending on the farm paid by Robert as shown in the RH Account column of the Account."
"40. looked after the cutting of 6 acres of grassland, arranging for and looking after any tools necessary for the maintenance of 1.5 miles of hedging to be cut, keeping the weeds and brambles at bay, and reducing the rabbit population."
"41. We paid him every month for his work as well as paying for invoices for tools, lawn mower servicing repairs and fuel."
(7) RH costs reimbursed objections 21-23, 25 and 34
Objection 21 is "RH costs reimbursed (paid by BG) [Barker Gotelee] - £200,000 (note 5)
Objection 22 is "RH costs reimbursed (from Rashid money)" £85,000 (notes 4 and 6)
Objection 23 is "RH costs reimbursed "from Lloyds loan drawdown)" - £35,000 (notes 3 and 6)
Objection 34 is "RH costs" - £14,708
"Costs reimbursed to RH have been deducted from the total reimbursement due. £825,000 due to RH 15% commission fee on sale. Less amounts paid."
19 Williams £64,300
21 RH costs reimbursed (paid by BG) £200,000
22 RH cost reimbursed (from Rashid monies) £85,000
23 RH costs reimbursed (from Lloyds drawdown) £35,000
25 RH costs reimbursed (Ascent loan) £156,230
(8) Openview Developments Ltd - objection 29 - £66,000
216. 1 July 2019 £3,600 "Fees in respect of advice and consultancy relating to Land under option to Countryside Plc at Moores lane, East Bergholt".
216.2 14 January 2020 £2,400 This invoice describes the work undertaken in the same way as the first invoice.
216.3 1 March 2020 £66,000 "Fee agreed, in respect of the Sale Land at Moores Lane, East Bergholt. The invoice charges a fee of 1% of the sale price of the land at £5.5 million.
(9) Miscellaneous objections 30-33 and 36
Objection 30 - Insurance £5,875
Objection 31 Ground maintenance £10,350
Objection 32 Environment Agency £2,250
Objection 33 Lawn mower repairs/fuel £3,300
Objection 36 Mike Wooley £3,000
219.1 Insurance Robert says the claim is for the cost of insuring trust properties. Karen asserts that they never included insurance on the Bungalow in the trust accounts. The charge includes insuring a road for public liability. Karen says " there are no historic invoices but I am convinced the figure is properly recorded." But she does not say where the invoices were recorded or how the trustees arrived at a figure of £5,875 without having any records. I accept that some insurance expenditure would have been incurred but the amount has not been established.
219.2 Ground maintenance Karen says these charges were for road repairs, fencing, hedge planting etc but there are no "historic receipts". Robert says the claim "was compiled from charges as they were made." Similar considerations arise to those mentioned above. It is unclear how a figure of £10,500 has been arrived at in the absence of any records. I accept that some expenditure on ground maintenance would be expected but the amount has not been established.
219.3 Environment Agency Robert says the charge is a normal charge for a farm the size of High Trees. Karen says it is the charge by the Agency for draining farmland water into ditches and she refers to an invoice showing it is an annual cost. The invoice is for the financial year 1 April 2019 to 31 March 2020 and is for general drainage charges for £175.68. This is another example of a puzzling approach to the account on the part of the trustees. They do not explain how the figure of £2,250 has been calculated or estimated or the period that is covered. They do not say what efforts, if any, have been made to obtain duplicate invoices or a summary of historic charges.
219.4 Lawn mower repairs/fuel Robert says this was an obvious, necessary cost and the amount was compiled from charges as they were made. As on previous occasions he does not say where the record was compiled or produce it. This item would also appear to overlap with the charges under item (6) above objection 17.
219.5 Mike Wooley Robert says Mike Wooley was a consultant he hired (he does not say when) for housing market analysis. Karen says something slightly different. She says Mike Wooley was employed to do some work on the property market, cost of building materials etc. "He provided useful information in working out the costs to Countryside Properties for build out before negotiations began." But no documentary evidence of the fee being incurred or paid has been produced. It is unclear how the trustees know how much was paid in the absence of any records at all.
(10) RWH Annual Payment - objections 35 and 72
(11) RWH 15% Countryside sale objection 37
Objection 35 is RWH annual payment of £25K per annum - £425,000
Objection 72 is RWH annual payment - £25K per annum - £250,000
Annual payment:
"81. . In practice this £25,000 was no more than a contingency fund, necessary to cover the numerous costs that did not warrant being recorded in the common account as a 'payment for my time' done so in order to simplify the accounting process."
"50. £25,000 was paid for 17 years and recorded correctly, which covered all monies paid to Robert for running the development and covering all other business expenses not in the account."
"30. It was agreed by Robert, Andrew and I (I cannot remember exactly when) that Robert would be paid in return for the works he was overseeing in relation to the property developments. I do not recall the agreement ever being formalised or written down. I know that Nikki was not privy to these conversations, but I always assumed she would have been told by Andrew."
"In 2010, it was agreed that R Hubbard would receive from the consortium a total of £42,200 per year, calculated retrospectively from 2005, which would cover ongoing consortium expenses. Consortium members were to pay their pro-rata amount.
No money was paid to me by anybody until 2016. At the end of 2014, following the sale of a property, I effectively paid myself back from the money that I earned (up to the end of 11/14)."
15% developer's fee - £825,000
(12) Thomas Quinn objection 38
(13) Opening bank balance objection 39
(14) Chart and Jull payments objections 41 and 42
"This appears to be borrowing of Ds or D1's for Ds or D1's living expenses or purposes."
(15) AH Legal Costs objections 43-44
(16) Limitation and wilful default
Allowances
"My Lords, the question with which your Lordships have to deal in this case does not admit of very precise treatment. How much money belonging to a ward may be spent upon his bringing up must in each case depend upon the circumstances of the case, and no rule applicable to every case can ever possibly be laid down so as to bring out a definite sum.
The only rule that can be laid down in such a case is that the boy should be brought up in such a way as is appropriate to the position which he is afterwards to fill."
"I do not propose to go into details. As I have said, I do not think the matter is susceptible of being treated as if one could go through every item of this account, or even heads of the account, and say what was spent, or what ought to have been spent, in a particular month or in a particular year."
Ann's liability as trustee
Findings in the account
Income
259.1 Countryside sale proceeds reduced from £5.5m to £5,449,310.
259.2 Rental income £107,500.
259.3 Sale of Rashid land £220,000.
259.4 Option agreement £40,000.
259.5 Land sold to Pond House £1,000.
259.6 Barns and Harris land £2,053,298.
259.7 Interest received as of 22/04/2025-£51,719.73.
Expenditure
Cost to 2014 - £749,468
Loan interest - £278,849
BACI - £49,248
Williams Solicitors - £945,415
Farm running costs - £36,189
RH costs reimbursed - £200,000, £85,000, £35,000, £156,230
Lloyds loan £50,000
Ascent loan interest - £80,523
Openview Developments - £66,000
Insurance - £5,875
Ground maintenance - £10,350
Environment agency - £2,250
Lawn mower repair/fuel - £3,300
RWH costs - £14,078
RWH annual payment - £425,000
Mike Wooley - £3,000
Thomas Quinn - £8,640
Opening bank borrowing 2004 - £766,878
John Chart - £92,000
Dave Jull - £30,000
Sinclair Gibson - £20,000
Ann Hubbard legal fees - £200,000