Ed Thomas & Anor v Adam Jones & Anor [2025] EWHC 756 (Ch)

[2025] EWHC 756 (Ch)Case No BR-2022-000317
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Venue Royal Courts of Justice Rolls Building, Fetter Lane London EC4A 1NLDate 08/04/2025
Before
ICC JUDGE PRENTIS
Between
ED THOMAS and MATTHEW CARTERClaimants(as Trustees in Bankruptcy ofClaimantRoderic Alexander Innes Hamilton)ClaimantADAM JONESDefendantsJOHN CHARLES JONESDefendant
Stefan Ramel (instructed by Freeths LLP) for ClaimantsAdam Jones and John Charles Jones in person for in personHearing Hearing dates: 17-20, 24 March 2025
JUDGMENT____________________

ICC JUDGE PRENTIS:

[1]Rai Hamilton and John Jones were apparently successful businessmen, friends from about 2000. In around 2010, suffering an illness and finding himself asset rich and cash poor, Mr Hamilton asked Mr Jones to advise on his business, affairs and assets. By August 2015 Mr Hamilton had suspicions about Mr Jones’ activities. They fell out; since when they and connected parties have issued litigation against the other, the results of which have been negative for each. On 24 May 2023 Roth J found Mr Jones in contempt of court for multiple breaches of freezing orders and undertakings; and on 24 July 2023 a 12-month prison sentence was imposed, which Mr Jones served from 7 August 2023. Had Mr Jones retained monies as obligated then Mr Hamilton may have been able to enforce his judgment; and had he done so, then he may have avoided the bankruptcy order made against him on 23 October 2019. If Mr Hamilton’s trustees, Ed Thomas and Matthew Carter, appointed on 21 August 2020, are successful in this claim under s.423 Insolvency Act 1986, initiated on 15 November 2021, then Adam Jones, Mr Jones’ son, may find himself obliged to sell his family home, bought with the proceeds of his father’s gift of £3m, paid equally on 29 December 2016 and 5 January 2017; and his sister, to whom Adam Jones loaned some of the balance, may have to sell hers.[2]Aside from the £3m, the trustees also challenge on the same basis originally 15 but now 12 “Miscellaneous Payments” by John Jones to Adam Jones, between 26 June 2016 and 23 January 2019.[3]For the reasons then given, at the outset of trial I permitted Adam Jones to defend notwithstanding his breach of the unless order of 13 October 2023; and I refused the trustees’ informal application that I ought not to hear John Jones, as a contemnor.

The law

[4]As is traditional to observe, although headed “Transactions defrauding creditors”, s.423 is not founded in fraud; neither, though it is in the Insolvency Act 1986, is it concerned with insolvency.[5]By s.423(1): “This section relates to transactions entered into at an undervalue; and a person enters into such a transaction with another person if- (a) he makes a gift to the other person or he otherwise enters into a transaction with the other on terms that provide for him to receive no consideration;… (c) he enters into a transaction with the other for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by himself”.[6]s.423(3) describes the necessary purpose: “In the case of a person entering into such a transaction, an order shall only be made if the court is satisfied that it was entered into by him for the purpose-(a) of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him, or(b) of otherwise prejudicing the interests of such a person in relation to the claim which he is making or may make”.[7]s.425 provides examples of orders which may, in the court’s discretion, be made if the undervalue and purpose are satisfied, s.423(2) allowing the court to “make such order as it thinks fit for-(a) restoring the position to what it would have been if the transaction had not been entered into, and(b) protecting the interests of persons who are victims of the transaction”.[8]By s.423(5) a victim is “a person who is, or is capable of being, prejudiced by” the transaction.[9]A victim is also one of those with standing to bring a s.423 application: s.424(1)(c).[10]On the Friday before trial, the Court of Appeal handed down judgment in Re Ethos Solutions Limited; Purkiss v Kennedy and others [2025] EWCA Civ 268, in which, taking into account the Supreme Court in El-Husseiny v Invest Bank PSC [2025] UKSC 4, Newey LJ at [18] stated as follows: “Case law establishes the following propositions as regards section 423 of the 1986 Act: i) In construing section 423, the Court must look at the relevant wording “in the context in which it appears in the section and in the Act as a whole, bearing in mind the purpose for which it was enacted”: see R (O) v Secretary of State for the Home Department [2022] UKSC 3, [2023] AC 255, paras 29 to 31”: El-Husseiny v Invest Bank PSC [2025] UKSC 4, [2025] 2 WLR 320 (“El-Husseiny”), at paragraph 32, per Lady Rose and Lord Richards; ii) It is “unquestionably the debtor’s subjective purpose that must be established”: El-Husseiny, at paragraph 28, per Lady Rose and Lord Richards. The Judge has to be satisfied that the debtor “actually had the purpose, not that a reasonable person in his position would have it”: Hill v Spread Trustee Co Ltd [2006] EWCA Civ 542, [2007] 1 WLR 2404 (“Hill”), at paragraph 86, per Arden LJ. “There can be no doubt but that section 423(3) requires the person entering into the transaction to have a particular purpose” and “[i]t is not enough that the transaction has a particular result”: Hill, at paragraph 130, per Arden LJ; iii) Section 423 will apply “if the statutory purpose can properly be described as a purpose and not merely as a consequence, rather than something which was indeed positively intended”: Inland Revenue Commissioners v Hashmi [2002] EWCA Civ 981, [2002] BCC 943, at paragraph 23, per Arden LJ. Thus, “where the transaction was entered into by the debtor for more than one purpose, the court does not have to be satisfied that the prohibited purpose was the dominant purpose, let alone the sole purpose, of the transaction”: JSC BTA Bank v Ablyazov [2018] EWCA Civ 1176, [2019] BCC 96 (“Ablyazov”), at paragraph 13, per Leggatt LJ. “It is sufficient simply to ask whether the transaction was entered into by the debtor for the prohibited purpose” and, “[i]f it was, then the transaction falls within s.423(3), even if it was also entered into for one or more other purposes”: Ablyazov, at paragraph 14, per Leggatt LJ. In paragraph 17 of his judgment in Ablyazov, Leggatt LJ said that the first instance judge had been “correct” to ask whether the debtor had “positively intended” to put funds beyond the reach of a creditor; iv) “The fact that lawyers may have advised that the transaction is proper or can be carried into effect does not by itself mean that the purpose of the transaction was not the [section 423(3)] purpose”: Arbuthnot Leasing International Ltd v Havelet Leasing Ltd (No. 2) [1990] BCC 636, at 644, per Scott J. See also National Westminster Bank plc v Jones [2001] 1 BCLC 98, at paragraph 107, per Neuberger J; v) For the purposes of section 423(3)(b), “[t]he ‘interests’ of a person are wider than his rights”: Hill, at paragraph 101, per Arden LJ; vi) The transaction at issue need not have been directed at the “victim” making the claim. In Hill, Arden LJ explained in paragraph 101: “For a person to be a ‘victim’ there is no need to show that the person who effected the transaction intended to put assets beyond his reach or prejudice his interests. Put another way, a person may be a victim, and thus a person whose interests the court thinks fit to protect by making an order under section 423, but he may not have been the person within the purpose of the person entering into the transaction. That person may indeed have been unaware of the victim’s existence”; and vii) The fact that the debtor denies having had a section 423(3) purpose need not bar the Court from inferring that he had such a purpose: see Hill, at paragraph 86, per Arden LJ”.[11]To draw out s.423’s relationship with solvency, there is also this quotation from Singh LJ in El-Husseiny [2023] EWCA Civ 555 at [67]:
“The important point for present purposes is that, although section 423 finds itself in the same Act as those provisions which are concerned with bankruptcy or corporate insolvency, its scope is wider. There is no need for there to be any insolvency. The unfortunate reality of life is that even very wealthy debtors are sometimes unwilling, rather than unable, to pay their debts. They may well make strenuous efforts to use various instruments, including a limited company, for the purpose of putting their assets beyond the reach of a person who is making, or may make, a claim against them; or otherwise prejudicing the interests of such a person”
.

Witnesses

[12]The Joneses have been representing themselves. John Jones took the lead in cross-examining Ed Thomas, as he did in making submissions.[13]Mr Thomas can only speak directly to matters which have come to him after taking office. He answered the questions appositely, giving fuller accounts, for example on the destination of the proceeds of sale of No.1 Courtenay Lodge, Hove, where he could. His knowledge of the case was excellent, and his evidence, so far as it could go, reliable.[14]Although primary relief is sought against Adam Jones as recipient, the principal figure in this case is John Jones. He is a strong personality, of decided views and great intelligence, who gives the impression of providing detailed and therefore accurate accounts of his skein of deals, carried out through multiple entities and funding arrangements in various jurisdictions. That reliability is illusory. He is a man quick-witted enough to thread together into plausibility strings of incomplete and partial facts. When picked apart, his narrative often relied on mixing his own person with that of companies of which he did not have sole control; and on transactions, often speculative, for which no paperwork ever existed, because they were said to rely on trust; or for which the paperwork had later been created in post-event reconstruction; or just on a self-created factual construct. We will see examples later.[15]Lying behind both his mode of evidence and the facts of this case is that since 2015 John Jones’s significant motivator has been to prevail in his war with Mr Hamilton, whatever the state of victory may look like. Even after 10 years; at least £1.3m of legal costs; and all his travails, Mr Jones has not got beyond the view that he had never broken with Mr Hamilton, it was the other way round. On 29 September 2015 he had written an email to Mr Hamilton, including this:
“As of tomorrow I shall go on the offensive. You have been warned. The metaphorical bullet is in the breech and the virtual trigger will be pulled. Once the missile leaves the muzzle there will be no calling it back. So meet me and explain what it is you want and cease this ridiculous suicide mission or assume the consequences”
. This was “poetry” said Mr Jones; “lyricism”. Perhaps: it was certainly image charged with meaning; but unlike most poetry it has been put into action.[16]John Jones has spent much of his adult life living abroad, particularly in France. Adam Jones was born and raised there, so came to do his military service in the French marines. Afterwards he became a helicopter pilot, then ran a helicopter business in which his father invested. He is presently, and was in 2016, a self-employed carpenter, joiner and cabinetmaker, with aspirations, like his father, to be a property developer.[17]They are clearly close, as John Jones is with his daughter Samantha Jones and son-in-law Alexander Gabinski. Adam Jones said he looked up to his father, and would wish to help him where he could, including financially, as some recompense for his generosity to him; and he agreed that, for example, had he been asked to hold money for him, he would have.[18]His evidence, though, was less reliable on the critical matters. I do not consider that was because he wished consciously to support his father’s position as being the best for him too: he did not agree with all his father’s evidence; but rather that, as he said, after time his memory had diminished, and he had tried to reconstruct facts from such documentary indicators as could be found, and indeed from his father’s recollection. That led to the contortions we will see over the 3 January 2017 deed of gift, said to cover the £3m payments. On those important matters, and remembering that he cannot speak directly to what was in his father’s mind, and that he is obviously and understandably deeply concerned as to the effect on his family home, his evidence is to be treated with considerable caution.

Facts and findings

[19]It is not disputed that on 29 December 2016 John Jones transferred from his Banque Internationale a Luxembourg (“BIL”) euro account to his son’s Barclays account €1,766,597, being the euro equivalent of £1.5m; nor that on 5 January 2017 he made a further transfer of €1,770,751, which also equated to £1.5m; nor that each transfer was a gift from John Jones to Adam Jones. The issue is whether the trustees can prove that he did so with the necessary purpose: as to which they recognise that their case is one of inference; and the Joneses pray in aid the deed of gift, and John Jones his contemporary assets, resources and anticipated liabilities, rightly not suggesting that either is necessarily conclusive.[20]All are agreed that the breakdown in relations led to “substantial litigation” to which Mr Hamilton and John Jones were parties.[21]In September 2015, Charles Russell Speechlys (on whose petition, presented on 12 August 2019, Mr Hamilton was bankrupted) intimated a claim to be brought by Mercantil Ministros MM Sociedad Anonima (“MMSA”), registered in Costa Rica and of which Mr Hamilton was a director, against John Jones and the Guernsey-registered Walton Properties Limited (“WPL”), in relation to Walton Castle, Clevedon.[22]On 21 October 2015 MMSA and Mr Hamilton’s ex-wife Margarita issued proceedings in the Bristol District Registry to which John Jones and WPL were parties.[23]On 18 January 2016 Mr Hamilton issued a claim in the Royal Court of Guernsey against, among others, John Jones and Ministros Properties Limited, seeking the rectification of Ministros’ memorandum and share register to show him holding 8 of the 10 shares, and Mr Jones 2, with effect from its incorporation on 1 July 2013. John Jones said he “only briefly mentioned” this to Adam, who said that “I learnt of the existence of the Guernsey proceedings only in 2016 when my father mentioned [them] during a conversation relating to the Main Proceedings”, which will be identified next; “I had no knowledge of the details and the matter was not discussed in any depth. All that I was told was that a dispute had arisen between my father and Mr Hamilton and that it revolved around the ‘shareholding arrangements in a Guernsey company’ and nothing more”.[24]What have been called the Main Proceedings were those initiated by John Jones and MMSA in the Chancery Division on 15 February 2016. MMSA’s monetary claim against Mr Hamilton can be put on one side, although it will be noted that both Mr Hamilton and Mr Jones were claiming to be authorised to act on its behalf. Mr Jones’ claim ranged widely, including into the subject-matter of the Guernsey proceedings: he said it was he who was entitled to 80% of Ministros, into which the MMSA shares had been transferred on 23 August 2013; and that he was an 80% shareholder in Solfado SA, into which the shares of SCI Remondiere Properties, which owned Mr Hamilton’s French villa, had been transferred in 2011 or 2012, until such time as Mr Jones was released from the personal guarantee he had given to enable the re-charging of the interest in the villa, and had received the 50% profit share which it was agreed he should have on the use of monies loaned by UBS Monaco in June 2011 and SG Hambros in April 2013.[25]On 29 April 2016 Mr Hamilton filed a defence and counterclaim. This admitted Mr Jones’ 50% profit share and averred Mr Hamilton’s similar right; and founded such rights on the existence of an 11 January 2013 profit sharing agreement. Mr Hamilton counterclaimed for an account and enquiry as to monies received by Mr Jones under it. Mr Jones’ reply and defence to counterclaim denied that the profit sharing agreement was agreed.[26]For reasons which are not clear, Mr Hamilton did not at that point plead the entirety of the profit sharing agreement. The parties to it were himself and Mr Jones together with a Luxembourg company, Hebolux SA, and Pascale Wagner as its managing director. It recited the refinancing obtained on the transfer of various assets to Solfado, the balance of which, together with an additional £4.5m raised from MMSA, were agreed to be used for investments; €600,000 being a loan to Hebolux made indirectly by Solfado through an intermediate company, Walton Castle Limited. In detail which was not yet quoted in the pleadings, the investments would be made “by MMSA or its subsidiaries, [Solfado] or its subsidiaries, and held directly by them or by Hebolux SA in trust for either MMSA or [Solfado]”; it was for that reason that Mr Wagner was a party; and there were direct obligations on him “to oversee and ensure the use of funds… and to distribute the Profit Share in accordance with the terms herein”. As seen, that profit share was equal between Mr Jones and Mr Hamilton; and there were clauses which dealt at least in part with its calculation. The complexities of Mr Jones’ dealings with Mr Hamilton’s affairs are manifest; and this is only a sliver.[27]What was not in the original defence and counterclaim was clause 4 and the dealings with the Place de l’Etoile project. It reads as follows:
“In consideration of the Hebolux Loans, JCJ has pledged to transfer a 5% interest in his profit (to include his nominees and his associated companies) in the property known as Place de l’Etoile in Luxembourg (‘the Project’); AH has requested the following basis of calculation for this 5% profit share: i. the Lux Profit is calculated and payable on each significant receipt of monies (‘Chargeable Event’) by the principals in the Project; ii. Notwithstanding i above, the Hebolux Loans shall be repayable, insofar as the amount received by Hebolux SA permits, on the occurrence of the first Chargeable Event and if insufficient, then on any subsequent Chargeable Event; iii. Because of the complexity of the investment structure, and for AH to understand the value of the Lux Profit, each 3 months from the date hereof JCJ shall issue a schedule to AH to evidence the basis of each Chargeable Event; iv. in any event the Lux Profit shall be paid into the AH Retention Account; v. The entitlement of AH to the Lux Profit is an integral part of this Agreement and of the distribution of Profit Share; vi. The entitlement of AH to Lux Profit shall persist until JCJ and his nominees have no further interest in the Project and the Lux Profit has been calculated and paid. vii. PW shall, as Managing Director of Hebolux SA calculate the Lux Profit with JCJ by reference to JCJ and the relevant entities associates with JCJ and JCJ shall co-operate in the calculation by the provision of relevant documents associated with the Project”
.

AH has requested the following basis of calculation for this 5% profit share:

[28]The Place de l’Etoile was an area of Luxembourg designated for large redevelopment into commercial, retail and residential units. The development was divided into at least five plots, designated A-E. As found by David Railton QC, sitting as a Deputy High Court Judge, when he determined most of the issues in the Main Proceedings in a judgment handed down on 19 December 2017 following a trial the month before, Mr Jones’ interest in it was through Hebolux, which he owned 100%; which itself owned 47% and later 75% of Andromeda Investissements SA; which in turn had two wholly-owned subsidiaries, Etoile Developpement I SA and Etoile Developpement II SA; which directly or indirectly (as ED-II had two of its own subsidiaries) held plots A, B and D.[29]As Mr Railton also recorded, “In the event this property was not developed but was sold in March 2016”.[30]That sale date, then, slots into the month before Mr Hamilton’s Main Proceedings defence and counterclaim.[31]The sale and purchase agreement is dated 31 March 2016. The parties are Andromeda as seller and Project Minerva Properties S.A.R.L. as buyer; ED-I and ED-II and its subsidiaries; and Mr Jones. The sale price was €28m, to be paid in five tranches, the last by release from an escrow account, together with discharge of the €173m liability owed to Aquarelle Etoile II SA under a 12 September 2012 loan agreement.[32]In cross-examination, John Jones confirmed that this sale would generate Chargeable Events under the profit sharing agreement; but that he did not tell Mr Hamilton of this, either pursuant to his clause 4iii obligation or otherwise; and that was because of the ongoing litigation.[33]It follows that at the latest from 31 March 2016 Mr Jones was aware that Mr Hamilton would have a claim against him for his 5% of the Project.[34]As to the net balance which might be due between them, Mr Jones was given an indication when served with the freezing injunction made on 14 June 2016 by Edward Bartley Jones QC sitting as a Deputy High Court Judge, and continued by Arnold J on 22 June. It was for £2.5m, but also restrained his dealings with assets of various companies, including Solfado, Ministros, and MMSA.[35]On 23 June 2016 Mr Hamilton amended his defence and counterclaim to refer specifically to clause 4 of the profit sharing agreement, and stated his belief that “Andromeda SA has now sold its interest in the Place de l’Etoile, for a sum believed to be €150m. The said sale would constitute a ‘Chargeable Event’…”. He averred therefore that Mr Jones was liable to account for his 5%.[36]Mr Jones confirmed that he would have seen this pleading shortly after it was served. He anyway knew that he had not told Mr Hamilton about the Minerva sale. His amended defence to counterclaim of 16 August 2016 denied that there had ever been a binding profit sharing agreement; instead, there were “a number of draft agreements discussed by the parties but never agreed by them”. In cross-examination Mr Jones agreed that was wrong: rather, he knew that he had signed the document, but not that Mr Hamilton had; indeed, Mr Hamilton had after 11 January 2013 indicated as much; so, while he acknowledged that his view might be wrong at law, he believed that it had become binding only on whatever date Mr Hamilton had actually signed.[37]At the same time, Mr Jones was refusing Mr Hamilton access to the Minerva sale agreement; and that not on the basis that he had no interest in it. On 12 August 2016 Trowers & Hamlins for Mr Hamilton wrote to Charles Douglas for Mr Jones: after six requests in July, Mr Jones had still failed to disclose the sale agreement; “our client is further entitled to 5% of the profits your client earned from the Place de l’Etoile project. In order to confirm the value of our client’s share we need certain information which your client has failed to provide us. We therefore also require details of the monies held in the escrow account”. Charles Douglas’ response was that it could not be provided because subject to confidentiality (which would itself show the importance of the clause 4iii disclosure obligation on Mr Jones; Mr Jones said that was not engaged until such time as monies came in, but such position is contrary to its plain words, referable to the date of the agreement itself); Trowers’ reply took the simple and proactive line, not proposed by their opposite number, that they would give an undertaking to preserve the confidentiality. “Our client is more than willing to reach an agreement on Place de l’Etoile, but we need assurance that the loans and interest will be repaid in full, and that the profit share will be paid”.[38]“I admit I was being difficult” was Mr Jones’ take in cross-examination. “I never intended not to pay him what he was due. The only question was what that was”. He was, for the moment, keeping that as a one-sided and closed-door exercise, disclosing nothing, paying nothing.[39]On 23 November 2016 HHJ Raeside QC at the CCMC ordered trial of a preliminary issue, being the shareholding in Ministros, as to which it was agreed that the English court had jurisdiction, in a window of 6 March and 12 April 2017.[40]We then have the 29 December and 5 January gifts.[41]These did not derive from the Minerva sale. As Mr Railton found, “several months” after that was agreed “Mr Jones saw an opportunity in relation to Plot E, which Andromeda successfully exploited by buying and immediately reselling… in December 2016 and January 2017”. Mr Hamilton’s claim, unpleaded and reliant on public documents only, that this was within the profit sharing agreement in the event failed, as it “had not been intended at the time of the PSA, or at any time before the [Minerva agreement] was entered into” that Mr Jones, Hebolux, or Andromeda would have “an involvement in Plot E”. On 27 December 2016 Andromeda received €14.5m for the sale, and the next day paid €2m into John Jones’ BIL euro account from which the £1.5m was on 29 December paid to Adam Jones. The 5 January payment was met from the transfer the day before from Andromeda to John Jones of €2.5m, marked “reimbursement of the shareholder loan account”.[42]John Jones did not tell Mr Hamilton about the Plot E dealings as his view was that he did not have to, Mr Hamilton having no interest in them; but also because he knew that, if he did (and as proved by later events), Mr Hamilton would bring a claim in their respect; and “would do all he could to screw it up”.[43]The defences make no admissions as to s.423(3) purpose; but at trial the Joneses’ tenor has been that of denial; and while a non-admission might be a possible stance for Adam Jones, it is not for his father, whose state of mind, which he must know, is what is in issue.[44]These were gifts. Both were sent with the narrative on the bank transfer “Donation de Mon Vivant”. The Joneses’ evidence is in similar terms, which is not surprising as John Jones assisted Adam, rather as a solicitor would a client as Adam Jones put it, he not having the same litigation experience as his father. They are agreed that these were a “gift, in the form of a life-time donation pursuant to the rules imposed by HMRC in such matters… in utter good faith”; and that reflects the bank statement narrative. Adam Jones confirms that the transfers were “permanent and… not made on the basis that the assets would be held by [me] for the benefit of [my father]”. Again with an eye to that lifetime gift motivation, Adam Jones said this in his statement:
“The gift was a permanent and irreversible alienation of the funds (asset) transferred to me and I was, and still am, the sole and unique beneficiary with no obligation whatsoever to use that gift in any way other than as I saw, and continue to see fit, in my discretion”
. John Jones’ statement evidence was almost identical:
“The gift was a permanent and irreversible alienation of my asset transferred to my son, Adam Nathan Jones as sole and unique beneficiary with no obligation whatsoever incumbent upon him to use that gift in any way other than as he saw fit and in his sole discretion”
. They were, as he put it elsewhere, “a life-time donation… made by me in utter good faith”.[45]I do not doubt that a motivation behind the gifts (a purpose, in s.423 language) was a desire to make a life-time gift in the hope that it might enable tax to be avoided or reduced. John Jones was keen to arrange his affairs to avoid tax; and there is no legal wrong in that.[46]But what immediately strikes as odd is that John Jones should be using this windfall money to benefit his son only. And here the Joneses’ evidential contortions begin. Both witness statements take considerable care in making explicit that the gifted monies were entirely Adam Jones’ to do with as he wished. The joint skeleton shifts the position. Aside from fiscal efficiency, and assistance to Adam in his purchase of 23 Hill Brow, Hove (which we will come onto), the “third purpose” of John Jones’ gift was “to distribute wealth… to provide his children with financial independence in a tax efficient manner”; so Adam Jones “at the suggestion of [his father], loaned €1m of his good fortune to his sister, Samantha Jones and her husband, Alexander Gabinsky to finance the purchase of their own family property. That loan was made by [Adam Jones] without any form of security and on terms that can only be described as generous in the extreme. The reasons for this generosity and lack of means of recovery were solely due to the fact that the 3rd purpose of the loan was for Adam Jones to be able to provide funds to his sister and brother-in-law in a manner that was tax efficient and created no burdensome obligation on the recipients such that they too could enjoy financial security”.[47]So, what were Adam Jones’ monies, and not his sister’s, have become subject to a “suggestion” from his father that a part, much less than half, be loaned by him to her on soft terms; and in the event, on 19 January 2017 he paid to her €434,981, and to her and her husband an identical sum.[48]In cross-examination Adam Jones said that he had been aware for the last 5 or 6 years that his father intended to make a gift from the Place de l’Etoile once it was successful (and therefore not from the unanticipated Plot E investment); it was one of the things which they would discuss, and how his father wished to make his and his sister’s life comfortable. By December 2016 it was known that the gift would be £3m, so Adam Jones warned his bank manager of the incoming monies so they would not be blocked. He was not asked much at trial about the arrangements between himself and his sister, but said there was a “clear understanding” that the gift was to him, while there had been discussions about a loan to his sister. It can be observed that there is a marked difference in treatment between the two siblings, he receiving a gift, from which would be carved out for the benefit of his sister some part of the money, which was to be transmitted not by gift, but loan; and so, presumably, be repayable. At trial that difference was never explained.[49]The elaborations came from John Jones orally. He had asked Adam to lend some of the gift to his sister and brother-in-law, so they could buy their house; he wanted to give his children financial independence, from what had been a windfall profit. It is not clear how a loan from brother to sister equates to financial independence.[50]Wrapped into this was the 3 January 2017 deed of gift, which it is said she had signed because it was intended that she should receive some of the gift. John Jones agreed that she was not referred to in the deed, but said whether a gift was actually made was for Adam to decide, not him; and he did not want to “dictate” the use of his son’s monies. There is an obvious and unsatisfactory tension here.[51]John Jones went on to say that Samantha was not a party to the deed of gift because, as confirmed by his French tax law advisers, were he to make a gift direct to her, as she was resident in France it would be subject to 65% tax. “I didn’t put in any provision [in the deed of gift (which indicates it was his draft)] for my daughter to be the beneficiary of the gift because I did not want her to be exposed to any French tax law obligation… My intent at the time was to ask my son to lend my daughter and son-in-law €1m”. That was not equal to what Adam received, as over the years Mr Jones had given her money to refurbish her house; and a contribution of around €550,000 in 2008 to buy it.[52]Elsewhere in cross-examination John Jones stated that before making the gift he asked Adam if he would make a loan to his sister, and he agreed; the soft terms were 1% interest, and everything repayable in 2030.[53]In a further variant, “I wanted to share the joy of being able to give my children these sums, while all together at Christmas” said Mr Jones.[54]That brings us to the deed of gift, dated 3 January 2017, and made between Mr Jones as “Donor” and his son as “Donee”, the former’s signature being witnessed by Mr Gabinski, the latter’s by his sister. It was only as witnesses that they signed, not because, as John Jones would have it at one point in cross-examination, “they were beneficiaries under it”. It had to be signed that day, and the date is therefore correct, because, John Jones said, his daughter and son-in-law were travelling back to France afterwards.[55]The deed is enmeshed by contradictory and unsatisfactory evidence.[56]It is the Joneses’ defence that the deed of gift was entered into for the reasons it states.[57]The recitals, called “Background”, are these: “A. In December 2016 the Donor’s (indirect) beneficial interest in the Place de l’Etoile Project Plot ‘E’ was sold realising a substantial cash sum. B. The Donee is the Donor’s son. C. The Donor wishes to give to the Donne [sic] a part of the proceeds of sale (the ‘Gift’) to assist the Donee’s purchase of 23 Hill Brow, Hove, Brighton & Hove BN3 6QG (the ‘Property’) D. The Donor wishes hereby to record the terms of the Gift”.[58]So, the only reasons are the father: son relationship, and Adam Jones’ intended purchase of 23 Hill Brow.[59]The “Operative provisions” with which the deed continues and concludes are these. “1. In acknowledgment of their mutual love and affection, the Donor gives £3,000,000… to the Donee. 2. The Gift is not in any way conditional in particular (but not so as to limit the generality of the foregoing), the Gift is not dependant upon the purchase of the Property not [sic] will any balance between the Gift and purchase costs revert to the Donor. 3. The Gift is absolute and the Donee is not intended to have any legal or moral obligation to repay it. 4. The Donor warrants that he is solvent, meaning his [sic] able to pay any and all debts as they fall due, and does not know of any circumstances which might lead to a significant change in his financial circumstances. 5. The Donor warrants that he does not know of any other claim (legal or beneficial) to the Gift or the funds representing it. 6. The Donee acknowledges receipt of the Gift”.[60]Adam Jones’ defence says that at the time of the gift “I had no knowledge of any claim relative to the matter for which the present particulars of claim have been issued, nor did I have any suspicion that any such claim might be brought in the foreseeable future”. His witness statement confirms that “At the time the gift was made I was not aware of any reason why that gift should not be made. My father made the declarations as recommended by the solicitor from whom I took advice, which were words to the effect he was not bankrupt or insolvent, and he had no reason to believe he would become bankrupt or insolvent”. That might be a recollection of paragraph 4. If so, this was drafted after the taking of professional advice, but not by that professional, as the advice does not sound as though it derives from the reading of a draft.[61]In cross-examination Adam Jones said that the deed of gift was his father’s suggestion; that he had also recommended he take independent advice; and that he had therefore instructed Deibel & Allen solicitors. Their Tye Mason gave him initial advice as to whether he could agree “the proposed deed”; the final deed was drafted by his father.[62]John Jones said he had in the past used Mr Deibel of Deibel & Allen; as he was now retired, they suggested Mr Mason, to whom Mr Jones gave “certain limited information”.[63]On 9 December 2016 John Jones emailed Mr Mason, copied to Adam Jones, with the subject “Due diligence”. “Dear Tye, In order to start the due diligence I am setting out the corporate structure under which I have received these funds”. There were then five paragraphs describing not the Plot E deal, but the Minerva sale, of which he attached the purchase and sale agreement; the gift was said to come from amounts in the escrow account, as to which he attached the escrow agreement, an extract from the relevant BIL account, and confirmation from Minerva’s solicitors, Clifford Chance, that they had carried out due diligence on the funds.[64]For whatever reason, Mr Mason, asked to advise, was being fed false facts.[65]His 12 December reply was to Mr Jones, copied to Adam Jones, thanking him for the information which “looks comprehensive. I will go through everything and let you know if I think there are any gaps but I can’t imagine there will be”. He asked for “independent verification of your copy passport”. Mr Jones put him in touch with Subir Desai at Charles Douglas. Mr Mason’s email to him on the evening of the same day notes that “I will be relying on your confirmation as evidence in my own due diligence procedures”.[66]While information relevant to any advice is being provided here, this chain, disclosed by the Joneses, is addressing Deibel & Allen’s onboarding of John Jones as client, rather than Adam Jones. Mr Jones’ view in cross-examination was that Adam Jones was the client, but he was “allowed to liaise”; he could recall no formal engagement letter which might have confirmed the point. Deibel & Allen may already have completed due diligence on Adam Jones, as they were then or were to act for him on the purchase of 23 Hill Brow: it was to their account that on 23 February 2017 he transferred the £1,266,925 purchase monies.[67]Adam Jones was certainly involved at this stage. The other chain disclosed by the Joneses begins with his email of 5 January 2017, not copied to his father, to Mr Mason. “Tye, I hope all is well. I am chasing up the deed of gift. When we initially made contact we discussed a deed of gift and you were going to ask a colleague to either deal with it or advise on it. I really need this deed of gift please”.[68]So, no professional deed of gift has been provided; nor has advice been given. Neither does Adam Jones give Mr Mason the deed of gift which he says had been signed two days before, or even refer to it.[69]That evening Mr Mason responded with a detailed email attaching a draft deed of gift and providing advice. There must have been other communications between these two chains, as Mr Mason says he has drafted the deed “as though the gift will be made on the date of the deed, though I can amend it to refer to a previous gift if it has already been made”. His next sentences also show intermediate communications:
“I have referred briefly to the source of funds. From your perspective, I think it best to include reference to its source- in part because you may be asked about the source at some point but also to refer to the fact that your father will be left with substantial assets after the gift. I appreciate however that your father may not wish to record this”
. The first chain does not record John Jones being left with substantial assets; nor give any reason why he would not wish that to be recorded.[70]Mr Mason then set out options alternative to a gift; drew attention to his not advising on tax consequences, and the risk “however unlikely, should your father go bankrupt” of set aside. “If you are happy with the draft, I will liaise with your father’s solicitors”, which seems to show that in the end Mr Mason was advising Adam Jones, and his father was receiving separate advice.[71]There is no clue as to what that separate advice was; nor any proper explanation from the Joneses as to why Mr Mason’s draft has not been disclosed; nor as to how this email fits into a chronology in which the deed of gift has already been signed, on 3 January, containing references to the Plot E monies undisclosed to Mr Mason (undisclosed because, John Jones said, he did not know it would close before Christmas; a remark which demonstrates his self-serving and on this point untruthful evidence, the Plot E monies being the only, and in the event proclaimed, source of the gift monies). John Jones’ inventive explanations for his son’s 5 January email was that he was chasing Mr Mason to make sure that what they had signed was correct, even if he neither enclosed, nor referred to, the 3 January deed; and that there was no need to send it, because Mr Mason had already given himself, John Jones, the details of the deed’s content over the phone, so allowing him to draft the 3 January deed; again, all that despite no references in anyone’s 5 January emails.[72]This is, literally, nonsense.[73]That does not mean that the trustees have proved purpose. It does mean that little weight can be given to the Joneses’ account in which advice was sought, we know from Mr Mason’s 5 January email by both John Jones and Adam Jones, from separate solicitors, together with a draft deed; yet without disclosure of it to those solicitors then or later, the Jones family just proceeding to sign off their own draft deed; which they had to on 3 January before part of the family, themselves unmentioned in the body of the deed, returned to their home; with the benefit, perhaps, of an unstated obligation, moral or legal, on their brother and brother-in-law to make a loan to them which would enable them to renovate their house; such loan being just that; and being made by Adam Jones even though, as John Jones agreed after an uncharacteristically long silence, he could himself have loaned them the monies direct, without falling foul of any French tax law.[74]More can be drawn out of this. Adam Jones said that “At the time of the gift, I had no knowledge of any creditor of any substance intending any action against my father, or indeed, of any creditor having any claim of substance against my father”. “I had very little knowledge of my father’s business affairs and was not in a position to verify his declarations as to his solvency, however I was aware the success of his recent business dealings in Luxembourg were the source of the wealth he was donating to me”. The Main Proceedings were “discussed during conversations held on the occasion of my father’s visits to my home, but only very superficially”. As we have seen, even with his trusted firm of Deibel & Allen John Jones was sparing with the truth, making no reference to the Main Proceedings, the preliminary issue in which had already been sent for trial in a few months, nor to the freezing injunction by which he and at least some of his assets were bound. In the context of wanting to ensure that the gift to his son, about which they had talked for so many years, which was going to give him financial independence, and which John Jones was professedly “euphoric” to make, was unassailable, I find that an extraordinary omission. More: it is an omission which itself speaks to John Jones’ profound concern over the litigation with Mr Hamilton and what its outcome might be: he did not want it to jeopardise these gifts. That is also why he was withholding from Mr Hamilton even basic information on the Minerva sale, which he was bound to provide under the terms of the profit sharing agreement; and on Plot E, concerned that although, as he said at one point, a claim by Mr Hamilton to those monies was “not particularly in my mind” (in other words, to some degree it was on his mind), and he was later shown to be justified in that by the Railton judgment, Mr Hamilton might just “screw it up”.[75]In my judgment, those matters indicate that John Jones had the requisite purpose at the date of the gifts: he knew of Mr Hamilton’s claims; he knew that they might be of significant value; he knew he owed the 5%, whatever that might be; he knew their dealings had been complex, and had ended in acrimony; he knew that other claims might be brought against him; he was doing all he could to prevail against Mr Hamilton, including deliberately making his life as difficult as possible; and he wanted to put his family first.[76]Mr Jones says that he had no such purpose because he did not at the time perceive the value of any claim by Mr Hamilton as exceeding his assets.[77]By itself, that does not negate the purpose for s.423; but this is a convenient moment to look ahead to the outcomes of the various pieces of litigation, so far as they can be said to speak to John Jones’ state of mind in December 2016.[78]The preliminary issue trial came before John Baldwin QC, sitting as a Deputy High Court Judge. His judgment of 17 May 2017 decided the issue in favour of Mr Hamilton, such that he was the 80% shareholder in Ministros and Mr Jones 20%. Mr Jones was ordered to pay Mr Hamilton’s costs, including £206,000 plus VAT on account, which he says he did.[79]Mr Hamilton now having control, MMSA settled the Bristol Proceedings and in September 2017 was one of the claimants in a claim issued in the Chancery Division to which the defendant was John Jones, the others being Solfado, SCI Remondiere, Walton Castle Limited (incorporated in the BVI), Walton Castle Events Limited (English) and WPL (Guernsey). “In excess of £5m” was claimed against Mr Jones on an account for breach of fiduciary duty. He made a part 20 claim against Mr Hamilton. A consent order was agreed on 17 February 2020 by which Mr Jones agreed to pay £300,000 in full and final settlement, including costs. Receipt of that sum and monies on the sale of the Lodge would cause the 26 July 2019 freezing injunction granted by Lance Ashworth QC to be reduced from £2.5m to £1.5m; but the monies were not paid. Adam Jones said he did know about this matter, which was “discussed in depth because [by] the Particulars of Claim dated October 13th 2017… Claimant No 3 made a claim against me to the effect my father had caused Claimant 3 to pay me £75,609.94 for no value. Following the filing of my witness statement in rebuttal, that claim was discontinued and my involvement in the case ceased… From the time my involvement ceased I only discussed the continuing case [being the Main Proceedings] during casual conversations”. In his Part 18 response John Jones also said he “only superficially” discussed the ongoing case with his son, who also recalled that “I was informed of the unfortunate outcome of the first phase of the case trial caused by Hamilton’s, later proven, perjury”. Nobody has identified to me what that might be.[80]Certain of Mr Railton’s findings from his 19 December 2017 judgment have already been set out. He noted that before him Mr Jones agreed that under the profit sharing agreement he was bound to pay Mr Hamilton 5% of the €9m he was entitled to receive from Andromeda, being €450,000; and more widely “It is not disputed that so far as any Lux Profit is payable under the PSA, it is payable by Mr Jones to Mr Hamilton”. What arose, regrettably, only during trial were “three particular matters”: whether Plot E was within the profit sharing agreement (as above, no); what expenses could be off-set against the €28m sale price, identified in the May 2017 report which for internal purposes investigated whether there was a dividend available for distribution in Andromeda (there was not: it was insolvent); and thirdly “whether a further relevant profit has been realised by reason of the waiver of a loan of €28.5m” in 2016 between ED-I and Andromeda. Mr Railton recorded Mr Jones’ complaint about the late-raising of these substantial arguments, excused by Mr Hamilton on the ground of Mr Jones’ lack of proper disclosure.[81]Mr Railton’s order included an undertaking by Mr Jones not to distribute the €1,243,882 balance of the April 2017 tranche, and continued the freezing orders in varied form; the loan waiver issue was put over to an account and enquiry; and, reflecting his lack of success, in among other costs orders Mr Hamilton was ordered to pay 50% of Mr Jones’ trial costs, with £80,000 on account.[82]Adam Jones’ report of the outcome was moderately accurate: “When the 2nd phase of the case was being prepared I had only very scant conversations with my father… I was told my father had prevailed in all but one minor matter, and a further hearing had been ordered”.[83]The minor matter was not so minor. In December 2018 Master Teverson heard the account and enquiry, and on 4 April 2019 handed down a judgment which found that indeed the loan waiver did give rise to a Chargeable Event; and that Mr Jones owed Mr Hamilton €1,238,661 payable by 1 May 2019. Save for £45,638 recovered from the sale of the Lodge, Mr Jones has never paid that judgment debt, which now stands at more than £2m. (Mr Jones does say that he has made other “substantial payments” towards it “such that the claim is in reality in the region of €1.4m, not taking into account the counterclaims Mr Jones… has against the bankruptcy estate”; but they are not identified; and the purported payment depends on reading the discharge by payment of the agreed sum of £600,000 against the Folk2Folk Limited charge against the Lodge as somehow being for the benefit of Mr Hamilton rather than the chargee).[84]Mr Hamilton’s rights under the Teverson order have vested in the trustees; and hence it is averred, rightly, that they are victims of the payments away of the gift monies which have led to their judgment not being able to be enforced, or have rendered the enforcement of it the harder.[85]The results of this litigation cannot be said to found a belief of Mr Jones in December 2016 that he owed any particular sum: he has ended as the debtor, unable or unwilling to meet his obligations. The loan write-off was a late point, and not one specifically pleaded in December 2016 or thereafter; but it was one which was open to Mr Hamilton, and, whatever the ultimate legal treatment, is one which, had the facts been disclosed by Mr Jones earlier, would have been raised; and we have already seen Mr Jones’ deep reluctance during 2016 to provide Mr Hamilton even with the information to which he was contractually entitled. What also emerges from the slew of litigation, and commented on by Mr Railton and Roth J, is the sheer complexity of their business dealings which, through legal process, they were seeking to unwind. That Mr Jones might end as the debtor was always a risk, and one of which he had actual knowledge at the time of the gifts; further, he knew that he was the debtor for sums under the profit sharing agreement; and (we do not have disclosure of any legal advice to him) certainly by the Railton trial he was accepting he owed €450,000; and he knew he was the one subject to a substantial freezing order.[86]In those circumstances, and given his intense personal animus against Mr Hamilton, that he might have had assets even to discharge all perceived debts in full is of marginal assistance. Mr Jones was going to pay Mr Hamilton nothing unless he had to.[87]However, his list of assets or, as he preferred, resources, and of the depletions, occupied some time at trial, and I will therefore record my views even if these go only to further illustrate the webs of his financial affairs. There is no list of creditors, although in his evidence Mr Jones said that “I had no creditor of any level that was not well within my means to satisfy in a timely and sufficient manner. I had no visibility of any potential creditors that might be of a nature to render me insolvent or which I could not fully satisfy in a timely manner. I disposed of considerable sums of readily available money”. Given his tangled and leveraged dealings, those are not statements which can simply be accepted; but there is nothing beyond the judgments in the Hamilton litigation which would indicate insolvency.[88]In his defence John Jones says that even after the gifts he had assets outside of England and Wales (hence he says not part of the £2.5m freezing order) “in excess of €6m” including a “considerable amount” (unspecified) of cash.[89]The list he produced was part of his disclosure exercise, dealing with disclosure issue 5 “In the period 22 June 2016 to 26 June 2019, what assets did Mr John Charles Jones have, including Mr John Charles Jones’ allegations that he had ‘assets’ exceeding €6.5m and what happened to those assets”. It shows in an “Asset/ Resource” section six “Resources”. Save for two properties, the Lodge and an “Indonesian Islands investment”, they are each described as “a loan available from Andromeda”, so on their face would not be an asset at all because, as a loan, they would be repayable. Whatever, those resources, totalling €13,046,464 are said to be worth €9,546,464 immediately after the making of the second gift, on 3 January 2017. The last section is headed “Asset Depletion”. In broad terms, it contains a list of 14 items on which losses were made, such that by 26 July 2019 Mr Jones was possessed of an asset balance of just €2,637. Mr Jones said those 14 items were not necessarily acquired with the declared resources, but instead to some uncertain extent evidenced further resources which became available over the period, but were then lost.[90]The large picture, then, is that Mr Jones says he was meeting his creditors save for Mr Hamilton; again, supportive of the conclusions on s.423 purpose.[91]The Lodge is the first asset. This has already been addressed, including its ultimate realisation of net monies of £45,638 because, while it is in this list with a value of £825,000 (from Zoopla), it was subject to two charges which are not taken into account.[92]Second are the “Plot E funds”, with a date acquired of December 2016 and a value of €6.5m. These are therefore the first of the four assets founded on Andromeda loans. Mr Jones confirmed that until November 2017 Mr Ullmann was also a director of Andromeda, so he did not himself have untrammelled control; and that Mr Ullman’s permission was needed to move anything from escrow. We also have minutes from an 18 March 2016 meeting at the office of the Societe de Gestion Internationale at which Mr Jones confirmed signing arrangements for Andromeda: Mr Ullmann was a required signatory on all transactions over €100,000. Mr Jones said first that he had avoided this by having the Plot E monies paid to himself directly, which is wrong and contrary to the terms of this schedule; then that Mr Ullmann was relaxed about Mr Jones’ receipts as he was himself receiving monies. We have the BIL statements showing the Plot E monies going to Andromeda; and, for example, the payment from it to Mr Jones of 4 January 2017 was marked not “loan” but “Reimbursement of the shareholder loan account”: a genuine asset.[93]But there is nothing to show Andromeda could either loan or repay Mr Jones €6.5m over the period. He had received €4.1m by 4 January 2017, but a week later it had only €888,247 left after a €9m payment to Blissett Incorporated. Mr Jones received €800,000 of that balance on 17 January 2017, again as reimbursement, and a further €400,000 on 20 January 2017: so, a total of €5.3m.[94]If illustration is needed that the monies do not flow through from the resources section to the depletions, of the €800,000 €300,000 was paid the next day to one Michael Stokes marked “personal loan”, and two days later €200,000 was paid as fees of Michael Cole Associates.[95]Item three is “Luxembourg Tranche 3 Funds”, said to be acquired in October 2017 in the sum of €2m. For these, and others, Mr Jones said he could always borrow earlier against his anticipated receipt; but also agreed that Newey J’s order prevented their use by Andromeda.[96]Item four is “Luxembourg Tranche 4 Funds”, again out of period as February 2018, of €900,000, although Mr Jones said the figure was not precise. What can be seen from bank statements is a payment from Andromeda of €300,000 on 16 February 2018, being part of the €3.68m it received from Silver Etoile the day before; with another €300,000 on 20 February; and on 23 February €1.25m. The last does translate to the asset depletion section, as on the same day Mr Jones transferred €1.1m to a Spanish account of his marked “Transfer for purchase of Villa Palma”. In his 4 July 2019 disclosure affidavit within a freezing order Mr Jones said this was 2-4 Placa Pescateria, Palma, owned by Pescateria 2-4b SLU, itself owned by Holding Palma Investments 2017 SL, in which he had a 99% shareholding. He also said that while the property was worth about €750,000 it was charged to Verdoso International SA to secure a loan of €1.9m to another company, Holding Palma Investments SL.[97]Next are March 2017, so again out of time, “Tranche 2 Funds” of €2,031,214. This was the balance of the April 2017 tranche subject to the March 2017 Charles Douglas undertaking, varied on 30 March to continue to the end of what became the Railton trial; and at the outset of that, and now being €1,243,882, subject to an undertaking until judgment; and then under the Railton order until 28 days after the conclusion of the Teverson hearing. These were not free monies.[98]Finally, the islands. These were said to have been acquired in September 2016 in Mr Jones’ personal name, and be worth €650,000 until written off in 2018. In cross-examination Mr Jones said this was an interest in a partnership, and he never had title to the islands. Despite that, in another freezing order disclosure affidavit, this of 20 September 2019, he said that by early that year he had transferred his interest, credited with a value of €700,000 to Southerland Pte Ltd, a Singapore company, to settle a loan of €332,000 made to him not by that company, but by the Fisher Investment Trust, to enable him to pay legal and living expenses, which loan was secured on his interest in the islands.[99]It follows that none of these were assets of substantial value, or as described.[100]There are 14 items of depletion.[101]First is “Maritim Internacional SL”, actually Maritim Internacional I.Y.R. SLU., acquired in June 2016 through “Ares Securities”, being the Luxembourgois Ares Securities S.A., its value of £350,000 being written off in February 2019. In fact, the 12 December 2016 “Sale Purchase & Share Agreement”, governed by the laws of Luxembourg, has John Jones as a party only “via his holding company Andromeda”.[102]Second is what is called “YSL Marine Loan”, again through Ares, as to which €750,000 was written off in February 2019. A draft November 2016 loan agreement shows the parties as Ares Shares S.A., also incorporated in Luxembourg and with the same company number and registered office as Ares Securities S.A., and YSM Marinas Y Puertos de Espana, S.L.. Mr Jones is not a party, but in this draft is to sign on behalf of “Ares Securities S.A.”, which he is described as representing.[103]Third is Holding Palma International S.L. (HPI), which is linked to the last.[104]Fourth is the Pescateria property, which is dealt with above.[105]Fifth is “Can Pocaroba- Molinar property”; a February 2018 investment of €1.1m which was written off 13 months later.[106]Sixth is “Loan to Atlantic House” Limited in March 2017 of £400,000, written off in May 2018. This was a dealing involving Mr Jones personally. It allowed the borrower to draw down the principal in tranches, and obliged it to repay on demand, at 20% interest. Mr Jones said he made the loan to help one of the directors, Brian Scholfield, who was an old friend; and did so therefore without his usual due diligence.[107]Seventh is “Share subscriptions to GFC” from September 2015, written off in 2018 at £450,000. This was GFC Diagnostics Limited, based in Bicester and intending to exploit a medical diagnostic. In fact, Mr Jones is not recorded as a shareholder until its 31 May 2017 confirmation statement.[108]Eighth are Mr Jones’ £1.3m in legal expenses between 2015 and 2019; and ninth his estimated €400,000 living expenses from 2016 to 2019.[109]Tenth is refurbishment of a property in Mougins from 2016-2017, losing €800.000.[110]Eleventh is the Lodge, which has already been dealt with; as have the Tranche 2 funds, and the Indonesian islands.[111]Last is the “Black Diamond”, a loss of €425,000, with the note “Sold by Andromeda to Black Falcon Diamond Co Ltd. Payment not received”. Mr Jones said that what had been bought, via Andromeda, was an interest in an 823 carat raw black diamond which when carved by laser in Antwerp became a 613 carat falcon’s head; but there were problems with title, a number of others claiming a prior interest.[112]The Miscellaneous Payments are a group of 12 payments; apart from one of £40,000 in relatively small amounts; varying in amount; over a lengthy period, 22 June 2016 to 23 January 2019. In considering s.423 purpose, which must be proved as to each, they are of a very different character to the gifts. It is also the Joneses’ case that, save for part of the first of them, these were not gifts, but payments for services or reimbursement for works done or monies loaned.[113]It is right to say that the Joneses’ evidence has been unsatisfactory in respect of the gifts; and that their evidence as to these payments has been inconsistent and lacking in documentary justification. However, the larger picture into which these are to be put is John Jones’ “Asset Depletion” category which besides containing much larger, and non-familial, transactions which are undocumented, also speaks to his wide disbursement of funds over the period for multiple purposes.[114]Adam Jones’ initial reaction to these came in his 5 February 2021 e-mail to Freeths:
“It would appear evident from the labelling of the various payments that these transfers to me were ‘repayments’ i.e., I have loaned monies to my father or his companies and the payments receive were ‘repayments’ of those loans”
. From “these transfers” that is a passage which finds its way into the particulars of claim. The earlier words, though, make it clear that Adam Jones is basing his reply on the terms of the missive to which he is responding, rather than this being the product of considered investigation. That letter from Freeths was a letter before action, dated 29 January, and demanding that he pay all sums due from his father under the Teverson judgment, amounting to €1,745,984 plus unspecified interest, because of the gifts and miscellaneous payments, they being said to be transactions at an undervalue; and that within 7 days. The terms of the letter were utterly unfair to its lay recipient, and the trustees cannot now criticise his seventh day response to one minor part of it.[115]In his witness statement Adam Jones said these payments were “almost all related to reimbursement for very minor expenditures I advanced to facilitate matters for my father. The vast majority of the payments received from my father… related to payment received in consideration of works I carried out, both at my father’s Hove property and my sister’s property in France”. He explained the apparent contradiction in this as the first part relating to the volume of payments, the second part to value.[116]John Jones’ recollection was that “Almost all the Miscellaneous Payments were made in return for due and valuable consideration, mostly in settlement of invoices raised by my son… relating to professional carpentry work done by him in the course of work done on my and his sister’s property… Other payments… are simple reimbursements for expenditures made on my behalf”.[117]The Miscellaneous Payments are now these, the averred consideration for three being accepted. Their dates and amounts are agreed.[118]On 22 June 2016 €18,475, being £14,100, was transferred, marked “Advance”. John Jones’ 24 March 2024 statement said this was “Reimbursement furniture payment + gift for tools”. Adam Jones recollected part was for tools, and the rest a gift; but was very uncertain; John Jones said the gift part was for the tools. This is a payment for which we have a contemporary document, Adam’s 22 June 2016 e-mail to his father:
“Dad I wasn’t expecting that. I thought you were just sending £10k of which I would take the 4100 out for the work and rest to help with tools. I am going to look at a golf tdi in Brighton”
. So, after the work and the tools, there was some left over.[119]On 28 July 2016 €1,196/ £1,000 was transferred, marked “Reimbursement” and said by John Jones to be reimbursement of payments made on his behalf by Adam, who confirmed he would pay sums on behalf of his father, for his cleaner, and EE phone, and such like; and that his father would just repay as and when, in round figures. I accept that explanation, which also covers the next, of €1,457/ £1,250 on 17 August.[120]On 11 January 2017 €16,256/ £14,000 was paid, again marked “Reimbursement”. John Jones thought these were “Settlement [of] works No 1 Courtenay Lodge and carpentry Villa Jones France”. Adam Jones was not sure that was right, as he recalled it was for machinery for his workshop, although he could not produce any invoices; but he was sure that it was not a gift, and the trustees give no reason why it should be. He also thought the same, for the next, of the end of the same month, 30 January, for a modest €5,338/ £4,500, marked “Repayment”, which his father ascribed to carpentry in France. Again, I accept this was not a gift.[121]Many months pass until the next, which is the one sizeable payment, €45,389/ £40,000 marked “Reimbursement” on 10 October 2017. What is notable is that Adam Jones received another £40,000 the same day, this also marked “Reimbursement” and from Andromeda. John Jones believed this £40,000 was for works at the Lodge, and then in cross-examination for Mougins as well, but that does not explain the second payment (although it does the next, which is €16,996/ £15,000 on 19 October). What does is Adam’s account, of which, again, he was then unsure, that this (and therefore the other) was a partial reimbursement of his Andromeda investment; which was also what he said in his Part 18, which he maintained was accurate. Adam Jones, too, was beguiled by the tale of the black falcon, and wanted some “skin in the game”. On 30 May 2017 he paid £200,000 to an account of Andromeda’s in Abu Dhabi pursuant to the 23 May investment agreement he had with it (although he thought that agreement had been backdated to “make it binding at the time I made the transfer”). Clause 4 of that agreement provided for repayment only on Andromeda’s receipt of proceeds from sale of the diamond, but as Adam said, that did not prohibit Andromeda from repaying part earlier; and at the time he “needed the funds for my own business activities”.[122]Were this the focus of the litigation then doubtless we would have delved into it more deeply. As it is, I am satisfied with Adam Jones’ account.[123]On 19 February 2018 was another payment in respect of the Lodge and France, of €17,592/ £15,000 and marked “Repayment advances”.[124]On 10 August 2018 was a €10,000 “Repayment”, which John Jones ascribed to miscellaneous expenses including his telephone. Not so, said his son. This and the next three, €5,691/ £5,000 on 4 December, €5,646/ £5,000 on 24 December and €2,313/ £2,000 on 23 January 2019, which his father put down to repayments of the Andromeda loan, were in fact repayments of monies loaned for scaffolding in Palma; and Adam Jones remembered that because he was working on Alderney when his father phoned, asking for £35,000 to be transferred immediately so the scaffolding could be paid for; and recalled also the practical difficulties this caused. I believe Adam.[125]Last is a 23 January 2019 €2,313/ £2,000 “Reimbursement”, which again I accept.[126]Even had I found that any of the Miscellaneous Payments after the first were gifts, the trustees’ s.423 case would not have succeeded because they would not have demonstrated the necessary purpose. As I have already observed, this group is of a different quality to the gifts; and there is no suggested link between any date of payment and an event in the litigation or other significant life event for John Jones. They were passing to father and son, but were in among the far greater payments John Jones was using in speculative investments; and those are only the ones we know about. In other words, they do not seem imbued with any special character directed at putting assets beyond the reach of a claimant, or prejudicing such a person’s interests. Indeed, for the first transaction, which was a gift, the gift was for a complete purpose, allowing Adam Jones to acquire further tools of his trade; even it was then topped up by a small amount.

Conclusion

[127]The trustees’ s.423 claim succeeds in respect of the £3m gifts; but fails as to the Miscellaneous Payments.[128]If the terms of relief cannot be agreed between the parties they will be a matter for submission at the consequentials hearing immediately following hand-down. I note that the trustees currently maintain as the suitable relief that which is sought in the particulars, being an order that Adam Jones pay the sums due “into an account in England and Wales which is subject to the freezing injunction and asset preservation order made by Mr Lance Ashworth QC on 26 July 2019”, which would preserve the position for such other of John Jones’ creditors as may have an interest.

Cited in 1 later judgment