Maxine Reid-Roberts & Anor v Hsiao Mei-Lin & Anor [2026] EWHC 49 (Ch)

[2026] EWHC 49 (Ch)Case No CH-2024-000120
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD)
ON APPEAL FROM THE ORDER OF DEPUTY ICC JUDGE FRITH
DATED 10 APRIL 2024: [2024] EWHC 759(Ch)
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 15/01/2026
Before
THE HONOURABLE MR JUSTICE CAWSON
Between
MAXINE REID-ROBERTSAppellantsBRIAN BURKEAppellant
Mr Steven Fennell (instructed by DLA PIPER UK LLP) for Appellants and Respondents to Cross-AppealMr Thomas Robinson KC and Mr Zihang Liu (acting pro bono through Advocate) for First Respondent and the Appellant in Cross-AppealHearing Hearing dates: 3 and 4 December 2025
Approved JudgmentThis judgment was handed down remotely at 10.30am on 15 January 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................

Ms Lin’s Cross Appeal and Trustees’ Respondents’ Notice thereto 46

[1]This is an appeal and a cross-appeal, brought with the permission of Richard Smith J, against the decision of Deputy Insolvency and Companies Court Judge Frith (“the Deputy Judge”) dated 10 April 2024, which is reported with the neutral Citation number [2024] EWHC 759 (Ch).[2]The Appellants (“the Trustees”) are the joint trustees in bankruptcy of the Second Respondent, Audun Mar Gudmundsson (“Mr Gudmundsson”). The First Respondent, Hsiao Mei-Lin (“Ms Lin”), was formerly married to Mr Gudmundsson, and owned together with him the property known as 9 Southcote Road, London N19 5BJ (“the Property”).[3]By his Order dated 10 April 2024, the Deputy Judge declared that the Trustees and Ms Lin each held 50% of the beneficial interest in the Property and ordered that Ms Lin should deliver up to the Trustees vacant possession of the Property on 1 August 2032, whereafter the property was to be sold with conduct of the sale being given to the Trustees.[4]By the appeal, the Trustees argue that the Deputy Judge was wrong to find that there were “exceptional circumstances” in Ms Lin’s favour for the purposes of s. 335A(3) of the Insolvency Act 1986 (“IA 1986”), and wrong, in exercising his discretion pursuant to s. 335A(2) IA 1986, to defer the date at which Ms Lin was to deliver up vacant possession of the Property for as long as over eight years from the date of his Order. It is the Trustees’ case that possession ought to have been deferred for no more than about three months.

Trustees’ Appeal 105

[5]By her cross-appeal, Ms Lin argues that the Deputy Judge was wrong not to find that Mr Gudmundsson had transferred his beneficial interest in the Property to Ms Lin prior to his bankruptcy in the course of a WhatsApp and email exchange in December 2018, such that Ms Lin was the sole beneficial owner of the Property at the date of Mr Gudmundsson’s bankruptcy, and so the Trustees have no claim thereupon.[6]For the reasons set out below, I have concluded that: i) The Deputy Judge was right to find that Mr Gudmundsson had not transferred his beneficial interest in the Property to Ms Lin prior to his bankruptcy, albeit for different reasons than as found by the Deputy Judge; ii) The Deputy Judge was entitled to find that there were exceptional circumstances for the purposes of s. 335A(3) IA 1986, but wrong to defer sale, and the delivery up of possession, for as long as over 8 years. A period of just over 18 months from the hand down of this judgment should, I consider, be substituted, i.e. requiring vacant possession to be delivered up by 31 July 2027, rather than 31 July 2032.[7]Mr Stephen Fennell appeared on behalf of the Trustees, and Mr Thomas Robinson KC and Mr Zihang Liu appeared on behalf of Ms Lin acting pro bono through Advocate. Mr Gdmundson, although a party to the proceedings below and this appeal, did not appear and was not represented, either here or below.[8]I am grateful to counsel for their most helpful written and oral submissions. Particular thanks are due to Mr Robinson KC and Mr Liu for acting on a pro bono basis, thereby enabling Ms Lin to be represented in the difficult circumstances in which she finds herself in through no fault of her own and the Court to be assisted by their submissions.

Background

[9]The background circumstances are set out in some detail in the Deputy Judge’s judgment (“the Judgment”), and are, in essence, as follows.[10]Mr Gudmundsson and Ms Lin met in 2006 or 2007. They married in 2009, and the same year purchased the Property. The TR1 transferring the Property into their joint names declared that they held the Property as beneficial joint tenants, although such beneficial joint tenancy will subsequently have been severed in the context of the divorce proceedings referred to below, and/or upon Mr Gudmundsson’s bankruptcy.[11]Mr Gudmundsson and Ms Lin have a son, born in 2010, and a daughter born in 2014. Mr Gudmundsson, who is Icelandic, ran a mezzanine finance business, advancing funding through corporate structures.[12]Mr Gudmundsson and Ms Lin separated in 2016. Ms Lin remained at the Property with the children, with Mr Gudmundsson being allowed unsupervised visits. Mr Gudmundsson suffered from drug addiction, and it is Ms Lin’s unchallenged evidence that she was subjected to physical and mental abuse during the marriage. In early 2017, unsupervised visits to the children ceased after Ms Lin alleged, amongst other things, that Mr Gudmundsson had had “drugs paraphernalia” at his flat. Later that year, Mr Gudmundsson was hospitalised for methamphetamine abuse.[13]On 13 October 2017, Ms Lin presented a divorce petition and commenced financial remedy proceedings under the Matrimonial Causes Act 1973. Mr Gudmundsson commenced divorce proceedings in Iceland, but these did not proceed.[14]In January 2018, Mr Gudmundsson filed and served his Form E giving details of his assets and liabilities for the purposes of the divorce proceedings. In March 2018, the Family Court made an order providing for the children to live with Ms Lin, with Mr Gudmundsson’s contact with the children being subject to drug testing.[15]The financial remedy proceedings were heard between 18 and 20 February 2019 by HHJ Meston QC, sitting in the Central Family Court. However, prior thereto, in December 2018, and whilst the financial remedy proceedings were on foot, Mr Gudmunsson and Ms Lin communicated with regard to the settlement thereof and of other aspects of the divorce. These communications included a WhatsApp and email exchange on 2 December 2018 and 3 December 2018 which, Ms Lin alleges, led to an immediate and effective transfer by Mr Gudmundsson to Ms Lin of his beneficial interest in the Property.[16]It is necessary to set out this exchange in full: WhatsApp Messages 02.12.18 Mr Gudmundsson:
"I suggest that the responsibility of taking care of the kids goes to u 100%, then I can sign over my share of southcote road to u without any complications as I don't need any accommodation in London."
Mr Gudmundsson:
"Please let me know that u r happy with this and we can then close the financial part of the divorce this week." 03.12.18 Ms Lin: "with some monthly maintenance then ok."
Mr Gudmundsson:
"It goes without saying the monthly maintenance for the kids in accordance with CMS."
Ms Lin:
"Are you saying I have full custody of kids?"
Mr Gudmundsson:
"Yes that is what I was saying, moving out of London for good and out of the kids life."
Ms Lin:
"I will take house and full custody of kids. And my paintings [in] Iceland should be returned then is done."
Emails 03.12.18 Ms Lin:
"Dear adudun I will have full custody of kids and take the house. This week we shall finish the paperwork. According to what we agreed. You are welcome to visit kids and I will never stop you seeing them. Just to let you know. Please email your lawyer and me the confirmation of the arrangements ASAP. So I can tell my lawyer this has been agreed to proceed ASAP. Kind regards Hsiaomei"
Mr Gudmundsson:
"Hsiaomei, For avoidance of doubt this is not agreed. I sent this in relation to your "offer" that I could use a bedroom in southcote when I have the children. I sent you a simple question regarding that offer 4 days ago which I have not had any response to although I have sent a reminders. I wanted to understand whether you were making a genuine offer or if this was just a smoke screen. The email below confirms that this battle of yours has very little to do with the welfare of our children and it saddens me tremendously. All the best, Audun Már Gudmundsson"
Ms Lin:
"Hi Audun Clearly in you offer there is nothing mention about the room. I have accepted your offer and you should honour your word. I did not ask any extra maintenance or Lum sum is just a clean cut want to make peace with you and move on life with kids. I am happy you visit kids and will never stop you see them .and kids can have holiday in Iceland. And my reply to your offer is – yes I will take this offer have the house and have kids 100% Kind regards Hsaio Mei"
Mr Gudmundsson:
"Hi Hsiaomei Why don't you just keep the house in London and the kids move with me to Iceland. You can visit them as much as you as want going forward. It's your call whether you want to spend more time on trying to agree on solution or not. All the best, Audun Mar Gudmundsson"
[17]These communications between Mr Gudmundsson and Ms Lin (“the December 2018 Communications”) were plainly not regarded at the time as having settled matters as the financial remedy proceedings were heard by Judge Meston at the hearing on 19 and 20 February 2019, which was contested. Following the hearing, judgment was reserved.[18]As Judge Meston later identified in his judgment that was not handed down until March 2020, a difficulty in the case was the investigation and determination of complex and sophisticated trust and other financial arrangements that Mr Gudmundsson had put in place, involving the use of tax avoidance schemes. For this purpose, he had been assisted in respect of tax planning and associated services by a legal firm in London called Jirehouse Partners LLP (“Jirehouse”) run by a Stephen Jones (“Mr Jones”). These arrangements had led to a purported liability of Mr Gudmundsson to Esquiline Finance Limited (“EFL”) of in excess of £2.4m. A concern that Ms Lin expressed in the financial remedy proceedings was that whilst this purported liability had been created, Mr Gudmundsson, possibly through his family, had interests in trusts set up as part of the same tax planning exercise.[19]It is common ground that Judge Meston, due to pressure of other work, had been unable to produce a reserved judgment before 22 September 2019. At that point, Ms Lin’s Solicitors notified him of developments concerning Mr Jones and Jirehouse, with Jirehouse having been closed down by the Solicitors Regulation Authority, and Mr Jones having been sentenced to prison for contempt of court. It was said that these developments supported an earlier submission that the purpose behind a restructuring of the trusts connected with the tax planning had been to put assets beyond Ms Lin’s reach.[20]In the light thereof, Judge Meston held back from finalising his judgment until he had given Mr Gudmundsson the opportunity to comment on these further submissions. Matters then became further complicated by allegations concerning Mr Gudmundsson’s possession of drug paraphernalia that had been identified by his and Ms Lin’s son at his flat, and the provision by Mr Gudmundsson of a false negative drug test report. Further, at around this time Gudmundsson ceased to instruct, and therefore to be represented by solicitors.[21]At a hearing on 7 November 2019, Mr Gudmundsson appeared with a McKenzie friend and asked for time to raise money to instruct new solicitors.[22]On 18 November 2019, Nicholas Ortlieb, a friend of Mr Gudmunsson served on him a statutory demand relating to a loan in respect of which £157,019.75 was outstanding. There is no dispute that this sum was due and owing to Mr Ortlieb (“Mr Ortlieb”) at this time.[23]On 3 December 2019, Mr Gudmundsson wrote to Judge Meston with regard to a contact hearing the following day, stating that he would not be attending the hearing. The hearing proceeded in his absence, and Judge Meston continued a suspension of direct contact between Mr Gudmundsson and his children.[24]The financial proceedings were fixed for judgment to be delivered on 27 January 2020.[25]On 22 December 2020, Mr Ortlieb presented a bankruptcy petition against Mr Gudmundsson based upon his failure to pay the statutory demand.[26]On 22 January 2020, Mr Gudmundsson emailed Judge Meston seeking a delay in the hand down of judgment due to take place on 27 January 2020 until further matters could be considered. This resulted in the delivery of the judgment being further delayed in that, on 27 January 2020 when the matter was ventilated before him, Judge Meston felt unable to proceed to deliver his judgment until such matters as had been raised by Mr Gudmundsson could be considered.[27]Further emails were sent by Mr Gudmundsson seeking to delay matters until judgment was finally handed down on 4 March 2020. However, in the meantime, on 26 February 2020, a Bankruptcy Order had been made on Mr Ortlieb’s petition.[28]It is not in dispute for present purposes that Mr Gudmunsson did not inform either Judge Meston or Ms Lin about the statutory demand or the bankruptcy petition prior to the hand down hearing on 4 March 2020. Given that these matters were only raised for the first time at this hearing, Judge Meston did not make any order different than that which he had already decided that he should make, namely, to order that Mr Gudmundsson’s interest in the Property be transferred to Ms Lin.[29]Thereafter, Ms Lin applied to have the Bankruptcy Order annulled. This application was heard by Chief ICCJ Briggs on 23 and 24 March 2021. Having indicated at the end of the hearing that he would dismiss the application, Chief ICCJ Briggs handed down a reserved judgment on 6 April 2021 giving his reasons for doing so (see [2021] EWHC 820). It was Ms Lin’s case on the application to annul that there had been collusion between Mr Ortlieb and Mr Gudmundsson with regard to the statutory demand and the presentation of the bankruptcy petition, and that Mr Gudmundsson had been technically solvent at the time of the making of the Bankruptcy Order, having been less than frank with regard to his assets, and access to funds in Iceland.[30]By the time that Ms Lin made her annulment application, the Trustees had been appointed as Mr Gudmundsson’s trustees in bankruptcy by the Secretary of State, and they were joined as respondents to the annulment application. They were represented at the hearing before Chief ICCJ Briggs by Mr Fennell.[31]In dismissing the annulment application, Chief ICCJ Briggs found that Mr Gudmundsson, who had been extensively cross-examined at the annulment hearing by leading Counsel acting for Ms Lin (other than Mr Robinson KC), had been an honest witness with regard to his account of events, and that there had been no collusion between him and Mr Ortlieb, who had not been joined as a party to the application.[32]At paragraph 71 of his judgment, Chief ICCJ Briggs referred to Mr Gudmundsson having been cross-examined as to why he did not inform the Family Court or Ms Lin that Mr Ortlieb was pressing for payment, to which he was recorded as having replied:
"A. I had raised this many times in the court- I raised the fact in court that I was on the verge of being made bankrupt. I then in late 2019 I asked Miss Lin if she could help out with £15,000, she said "no". she was not even going to help with a few thousand pounds to help me be represented in court by a barrister. I was also afraid. Miss Lin got me arrested, kept my children from me; I was refused a loan from my own wife, I was afraid of the UK and my ex-wife. So yes I was not a happy bunny. "
[33]At paragraph 72 of Chief ICCJ Briggs’s judgment it is recorded that Mr Gudmundsson was further asked if he had concealed the bankruptcy, to which he replied:
"I did not know I had to tell the judge that I had been made bankrupt in February. It was not a deliberate omission. I didn't think it relevant. I thought that the court system was the same in Iceland and one court would get information from another court- and it would automatically show up with Judge Meston. It was not done to throw the spanner into the wheel."
[34]At paragraph 73 of his judgment, Chief ICCJ Briggs commented on these responses as follows: “I was not invited to disbelieve the evidence of Mr Gudmundsson on this issue. I find there to be no reason to disbelieve him”.[35]At paragraph 82 of his judgment, Chief ICCJ Briggs commented that there was no evidence to support the ground that Mr Gudmundsson was able to pay his debts as they fall due or that he had some tangible and immediate prospect of being able to do so. At Paragraph 83, he went on to conclude as follows:
“83. It was not postulated that Mr Gudmundsson’s motive or purpose was “to baulk the claim the wife was making for a transfer of property order” as was the case in Re Holliday. However, even if that were the case, the authorities demonstrate that cannot alone make a debtor’s own petition an abuse of process. That must be all the more so when a creditor petitions and initiates the bankruptcy. The evidence supports a finding that Mr Gudmundsson was unable to pay his debts as they fell due.”
[36]At a consequentials hearing on 21 April 2021, and in circumstances in which an order for costs had been made against her in relation to the Trustees’ costs of the annulment application, leading Counsel acting for Ms Lin informed the Court that she would place the Property on the market for sale forthwith, and would seek to complete a sale of the Property as soon as reasonably practicable and in any event by no later than 20 August 2021.[37]On 13 February 2023, and no sale of the Property having taken place as indicated, the Trustees issued an application for possession of the Property, and seeking an order for sale thereof. The application sought a declaration with regard to Mr Gudmundsson’s joint interest in the Property.[38]On 22 May 2023, Mr Gudmundsson wrote to the Trustees’ Solicitors, in the course of which he said:
“… the reason for my bankruptcy was really to defeat my wife’s claim for the house in a moment of emotional stress and weakness by agreeing to a friend suing for a debt, I owed him …”
[39]The Trustees’ application dated 13 February 2023 was heard by the Deputy Judge on 23 February 2024. In her skeleton argument filed and served for the purposes of that hearing, it was alleged by Ms Lin for the first time that there had been a transfer to her of Mr Gudmundsson’s interest in the Property in the course of the December 2018 Communications referred to in paragraph 16 above.[40]On 10 April 2024, the Deputy Judge handed down the Judgment. The Order made following a consequentials hearing on 15 April 2024 provided, as referred to above, for Ms Lin to deliver up vacant possession on 1 August 2032, and for the Property to be sold thereafter with conduct of the sale being given to the Trustees. The Deputy Judge refused the Trustees’ application for permission to appeal.[41]On 4 July 2024, Fancourt J refused permission to appeal on paper.[42]On 21 July 2024, Peel J handed down judgment on Mr Gudmundsson’s appeal against the order made by Judge Meston on 4 March 2020 in the financial remedy proceedings. The appeal was allowed on the basis that pursuant to s.283 IA 1986, Mr Gudmundsson’s assets fell within his estate for bankruptcy purposes, and pursuant to s. 306 IA 1986, vested in the Trustees. Consequently, following the making of the Bankruptcy Order, Judge Meston had had no power to order a transfer of Mr Gudmundsson’s interest in the Property to Ms Lin, and so the order made by Judge Meston required to be set aside.[43]Peel J went on to order that in the improbable event of there being any surplus in the bankruptcy, then such surplus should be vested in Ms Lin. Drawing heavily on the Deputy Judge’s findings in the Judgment, Peel J stated that he considered this to be the just outcome given Mr Gudmundsson’s conduct: “… in concealing the fact of his bankruptcy from [Ms Lin] and depriving her of the opportunity to secure for herself the entirety of the [Property]”.[44]At an oral renewal hearing on 11 October 2024, Richard Smith J granted the Trustees permission to appeal. Further, on 21 February 2025, Richard Smith J granted Ms Lin permission to cross-appeal.[45]The Cross-Appeal logically falls for consideration before the Appeal in that if the Cross-Appeal is successful, then the Appeal itself is, strictly, otiose. Cross-Appeal and Trustees’ Respondents’ Notice thereto Introduction

Cross-Appeal and Trustees’ Respondents’ Notice thereto

[46]The issues raised by the Cross-Appeal and the Respondents’ Notice thereto are whether the December 2018 Communications included a disposition by Mr Gudmundsson of his beneficial interest in the Property in favour of Ms Lin and, if so, whether such disposition was in writing such as to satisfy the requirements of s.53(1)(a) and/or (c) of the Law of Property Act 1925 (“LPA 1925”), that is: “… in writing signed by the person” disposing of the same. Ms Lin maintains that the December 2018 Communications did so, and that the requirements of s.53(1)(a) and/or (c) were satisfied both in respect of the WhatsApp messages and the emails.[47]In paragraph [62] of the Judgment, the Deputy Judge, having in previous paragraphs regarded the recent decision of the Court of Appeal in Hudson v Hathway [2023] KB 345 as being a highly relevant and analogous authority, concluded that:
“The WhatsApp messages on their own evince a clear intention on the part of [Mr Gudmundsson] to release his share of the [Property] to his wife. So too does his email quoted in the paragraph above [i.e. the last in the sequence] saying ‘why don’t you just keep the house in London and the kids move with me to Iceland’.”
[48]The Deputy Judge went on to record that Mr Robinson KC submitted that the effect thereof was that the sole beneficial ownership of the Property had, since December 2018, been with Ms Lin, such that whilst Mr Gudmundsson’s legal interest in the Property had vested in the Trustees, this was subject to Ms Lin’s beneficial interest in the whole Property. However, the Deputy Judge did not make any specific finding to this effect, and his finding that the 2018 Communications evinced a clear intention on the part of Mr Gudmundsson “to release” (my emphasis) his beneficial share to Ms Lin is, as I see it, as consistent with an intention to do so in the future as with the making of an immediate disposition.[49]At paragraph [65] of the Judgment, the Deputy Judge concluded that because the emails within the 2018 Communications finished “All the best, Audun Mar Gudmundsson”, the requirements of s.53(1) were satisfied. To the extent that any one or more of the emails did amount to an immediate disposition of Mr Gudmundsson’s interest in the Property, it is not disputed that this amounted to “writing signed by” Mr Gudmundsson sufficient to satisfy s. 53(1).[50]At paragraph [66] of the Judgment, the Deputy Judge went on to hold that the requirements of s.53(1) were also satisfied in respect of the WhatsApp messages. This is very much in dispute. The Deputy Judge commented that the WhatsApp messages did not conclude with Mr Gudmundsson’s name, but he identified that his name was “in the header to the messages for the purpose of identifying [Mr Gudmundsson] as the sender and authenticating the message as originating from him.” The Deputy Judge regarded this as being the decisive consideration, particularly having regard to the observation of Nugee LJ in Hudson v Hathway (supra) at [181]. Nugee LJ had there spoken in terms of the email in that case satisfying “the requirement in the authorities that it [i.e. the name “Lee” added at the end thereof as a signature] was added to authenticate the document”.[51]However, the Deputy Judge then went on at paragraph [67] et seq to consider the decision of the Court of Appeal in Xydhias v Xydhias [1999] 1 All ER 386, which was concerned with the question as to whether the parties to divorce proceedings can reach binding agreements with regard to the disposition of property. At paragraph [71] he concluded that:
“Xydhias provides binding authority to the effect that whilst the parties to the divorce proceedings can engage in negotiations to resolve issues, any agreement they reach will have to be approved by the judge having the conduct of the matter. It will then be recorded in the appropriate Court order.”
Relying thereupon, he went on, in paragraph [72], to conclude that it followed that there was no disposition as Ms Lin contended, and thus that Mr Gudmundsson’s beneficial interest had vested in the Trustees.[52]It is the Deputy Judge’s reliance upon Xydhias that forms the basis of the cross-appeal. It is common ground between the parties that this decision requires to be considered in the light of the subsequent decision of the Court of Appeal in Soulsbury v Soulsbury [2008] Fam 1. The net effect is that the parties are agreed that this authority shows that it is necessary to distinguish an immediate disposition of an interest in property from an agreement to dispose of the same, and that it is only the latter that might be caught by the binding authority of Xydhias. I agree that this is the proper analysis of the position, and that to the extent that the Deputy Judge did find that there was an immediate disposition of Mr Gudmundsson’s interest, he was wrong to find that Xydhias provided authority to the effect that such disposition was ineffective.[53]On this basis, the Cross-Appeal must be allowed, whereupon the issues raised by the Trustees’ Respondents’ Notice come into play. They thereby maintain that the Deputy Judge was wrong to find, if indeed he did, that the 2018 Communications effected an immediate disposition of Mr Gudmundsson’s interest in the Property in favour of Ms Lin, and wrong to find that the requirements of s.53(1) LPA 1925 were satisfied, at least in respect of the WhatsApp messages.[54]I will deal firstly with whether the Deputy Judge was right to find that was an immediate disposition of Mr Gudmundsson’s interest in the Property in favour of Ms Lin before considering whether he was right to find that the requirements of s.53(1) were satisfied.

Immediate disposition?

[55]As already touched upon, Ms Lin places great reliance upon the decision of the Court of Appeal in Hudson v Hathway.[56]In this case, an email exchange was found to amount to a disposition by one member of an unmarried couple (Mr Hudson) to the other (Ms Hathway), in circumstances in which the couple had separated some years previously. A point highlighted by Mr Robinson KC was that it was only in the Court of Appeal, and at the initiative of that Court itself, that the point was argued that the email exchange amounted to a disposition of a beneficial interest. It was submitted that this undermines any argument based upon this point being taken late in the day by Ms Lin, or with regard the parties having not attached any contemporaneous significance to the exchange within the financial remedy proceedings.[57]In Hudson v Hathway, the key parts of the email exchange between Mr Hudson and Ms Hathway were set out in the judgment of Lewison LJ at [11] et seq. The exchange was also set out by the Deputy Judge at [52] of the Judgment.[58]In Hudson v Hathway at [50], Lewison LJ held that Mr Hudson’s emails of 31 July and 9 September 2013 were sufficient in form to amount to a release by Mr Hudson of his equitable interest in the house. The key parts of the emails included the following concerning the jointly owned house:
“You know what, I want none of the proceeds of that either. Take it. Buy yourself somewhere you can afford to live . What I want is an end to it. So have everything that's available to have now and when the house is sold” and “Yes, that’s right . . . Under this arrangement, I’ve no interest whatsoever in the house, so whilst I will continue to contribute, I won’t do so forever”
[59]Lewison LJ held in relation to these words that they:
“… evince a clear intention to divest himself of that interest immediately, rather than a promise to do so in the future. His email of 30 July 2013 said in relation to the house, “Take it”; and in his follow up on 9 September he disavowed any interest in it. Further emails, with which Mr Learmount supplied us at the end of the hearing (and in particular those of 2 July 2014 and 25 August 2014) confirm the finality of that decision.”
[60]Lewison LJ had earlier identified that whilst it was not technically possible for one joint tenant to assign their beneficial interest to another joint tenant, s 36(2) LPA 1925 preserves the right of one joint tenant to release their interest to the other joint tenant. However, this requires no particular form of words, and the Court is simply concerned with whether the joint tenant has evinced an intention to divest himself of his interest in the property immediately. This then amounts to a disposition for the purposes of s. 53(1)(a) and/or (c).[61]It is Ms Lin’s case that by the 2018 Communications, and indeed by the emails taken alone, Mr Gudmundsson did evince an intention to divest himself of his interest in the Property immediately.[62]I understand it to be common ground that whether Mr Gudmundsson did evince such an intention requires an objective consideration of the words used by Mr Gudmundsson set in their context – see e.g. Halsbury’s Laws, Vol 32 (Deeds and Other Instruments) at [362]-[363].[63]Mr Robinson KC submits that, applying such an objective test to the language used by Mr Gudmundsson in the relevant exchanges, points to the inevitable conclusion that Mr Gudmundsson was thereby intending to effect an immediate disposition of his interest in the Property to Ms Lin, and that the present case is closely analogous with Hudson v Hathway. It is submitted that the WhatsApp messages make clear Mr Gudmundsson’s immediate intention to leave London, hand over custody of the children, and give up his share of the Property to Ms Lin as he had no need of accommodation in London. As to the suggestion made by the Trustees that he would not have irrevocably transferred his interest until the other terms of the consent order between the parties were agreed, Mr Robinson KC submits that this is pure speculation.[64]On behalf of the Trustees, Mr Fennell submits that the context and circumstances of the present case are very different from those involving the unmarried couple in Hudson v Hathway, not least because, in the latter case, there were no matrimonial proceedings on foot, and no suggestion that the parties were legally represented.[65]Mr Fennell makes the following particular points with regard to the 2018 Communications as contained in the WhatsApp and email exchanges: i) In the second of the WhatsApp messages, Mr Gudmundsson asks Ms Lin to let him know if she is happy, and then says, “we can then close the financial part of the divorce this week”. This is said to point to an intention that the financial aspects of the divorce should be closed by something more formal than an exchange of WhatsApp messages. ii) In the first of the emails, although Ms Lin confirms what Mr Gudmundsson had proposed with regard to her having custody of the children and taking the Property, she suggests that they should “finish the paperwork According (sic) to what we agreed”, and then suggests that Mr Gudmundsson emails his lawyer and herself so that she could tell her lawyer what had been agreed. It is submitted that this points, if anything, to agreement as to what might go into the “paperwork” rather than an intention by Mr Gudmundsson to effect an immediate disposition. iii) With regard to Mr Gudmundsson’s final email, and the suggestion therein that Ms Lin keep the house, and that he move to Iceland with the children, it is submitted that this followed on from Mr Gudmundsson having, in the earlier emails, reneged on any earlier agreement with regard to the Property, and amounted to a mere proposal that was not accepted.[66]Considering the WhatsApp messages and emails comprising the 2018 Communications in their context, I have come to the firm view that they do not demonstrate Mr Gudmundsson evincing an intention at any point to unequivocally and immediately relinquish his interest in the Property in favour of Ms Lin. To the extent that the Deputy Judge found otherwise, I consider that he was wrong to do so.[67]The following particular matters, considered collectively and in totality, lead me to this conclusion: i) I consider that the context of the divorce proceedings is important, as was the fact that the parties had instructed Solicitors who might ordinarily have been expected to be involved with regard to the finalisation of any settlement agreement, and any dispositions of property, or interest therein, in order to give effect thereto. This is in contrast to Hudson v Hathway, where there were, inevitably, no divorce proceedings on foot, nor any apparent involvement of solicitors, in respect of communications regarding how the shared assets should be dealt with some years after separation. ii) I regarded it as being of some significance that Mr Gudmundsson and Ms Lin began their communications by way of the relatively informal medium of WhatsApp messages. Whilst it might be technically possible for a WhatsApp message to have the requisite dispositive intent and satisfy the requirements of s.53(1) LPA 1925, the use of such a medium does, as I see it, and considering the matter objectively, point against an intention to affect such a significant transaction as the transfer of a beneficial interest in a relatively high value property such as the Property. iii) Taken on their own, the emails do not, I consider, assist Ms Lin. In the first email that he sent, Mr Gudmundsson sought to renege on what he might previously have proposed by stating that “for the avoidance of doubt” the terms that Ms Lin had outlined were “not agreed”. This can, as I see it, hardly have amounted to a disposition of any kind. In the final email in the chain, Mr Gudmundsson refers to Ms Lin keeping the house, but this is in the context of a proposal: “Why don’t you just keep the house”; coupled with a proposal, contrary to that initially suggested in the WhatsApp messages, that the children move with him to Iceland rather than remain with Ms Lin. As I read this particular email, Mr Gudmundsson was making his suggestion of Ms Lin keeping the house conditional upon the children moving to Iceland with him, a suggestion first made in this email. iv) I agree with the submissions made on behalf of the Trustees that the language used in the WhatsApp messages and emails is not indicative of an intention on the part of Mr Gudmundsson to divest himself of his interest in the Property forthwith in the way that Mr Hudson’s email communications were in Hudson v Hathway. Hence, for example, Mr Gudmundsson referring to signing things over, and closing the financial part of the divorce aligned with Ms Lin talking in terms of finishing the paperwork and to telling lawyers what had been agreed. v) Further, the language of the WhatsApp messages does, to my mind, point more towards agreement to Mr Gudmundsson divesting himself of his interest in the Property as part of an overall divorce settlement, rather than as pointing to an intention to immediately divest himself thereof. Thus, for example, in the first of the WhatsApp messages, Mr Gudmundsson suggests that responsibility for the children goes to Ms Lin and “then” he could “sign over” his share of the Property. By the time that Ms Lin comes back to accept what had been proposed, as she did in her final WhatsApp message and her first email, Mr Gudmundsson had changed his mind, as he made clear in his first email in response to the first email that he received from Ms Lin. vi) This change of mind, and denial of any agreement by Mr Gudmundsson, is very different from the position in Hudson v Hathway, where, at [50], and in finding a clear intention on the part of Mr Hudson to divest himself of his interest in the house, Lewison LJ placed significance on the fact that Mr Hudson had not just said “take it”, but had subsequently disavowed any interest in the house. He also placed some reliance on further emails, written sometime after the event, which indicated finality.[68]I therefore conclude that the evidence falls well short of supporting a finding that Mr Gudmundsson, by the 2018 Communications, evinced an intention to divest himself immediately of his beneficial interest in the Property.[69]On this alternative basis, I consider that the Deputy Judge was correct in concluding that Mr Gudmundsson did not divest himself of his beneficial interest in the Property, and that the same therefore formed part of his estate on bankruptcy and became vested in the Trustees, and that his decision to this effect should be upheld.[70]In the circumstances, it is not strictly necessary for me to consider whether the WhatsApp messages were sufficient to satisfy the requirements of s.53(1) LPA 1925. However, in case I should be wrong in relation to my conclusion with regard to whether Mr Gudmundsson evinced an immediate dispositive intention, I shall consider the alternative ground relied upon by the Trustees for upholding the Deputy Judge’s decision, namely the argument that the WhatsApp messages do not satisfy the requirements of s.53(1).

Satisfaction of the requirements of s.53(1) LPA?

[71]The requirement for signed writing is a feature of a number of statutory provisions including s.53 LPA 1925 relating to the creation or disposal of interests in land, the declaration of trusts, and the disposition of an equitable interest. Other statutes requiring signed writing include s.4 of the Statute of Frauds 1677 (requiring guarantees or some memorandum or note thereof to be in writing signed by the party to be charged or their authorised agent before they can be enforced), s.2 of the Law of Property (Miscellaneous Provisions) Act 1989 (relating to contracts for the sale of land and requiring the same to be contained in one document signed by the parties), and the predecessor to the latter, s.40 of the Law of Property Act 1925 (which was couched in somewhat similar language to s.4 of the Statute of Frauds 1677 providing that the contract would not be enforceable unless it or some note or memorandum thereof was signed by the party to be charged).[72]For present purposes, it is to be noted that unlike s.2 of the Law of Property (Miscellaneous Provisions) Act 1989, s.53(1) does not require the signed writing to be contained in one document, and that more than one document can be taken together to satisfy the requirements of s.53(1) as to writing – see Re Danish Bacon Co [1971] 1 WLR 249.[73]WhatsApp messaging is now a well established method of sending encrypted messages linked to the telephone numbers of mobile phones using the WhatsApp “app” downloadable to mobile phones. Communication between two users will create a “chat” within the app between them such as that in respect of the WhatsApp messages in the present case as shown on page 636 of the appeal bundle. The app, when the relevant “chat” is opened on the recipient’s mobile phone, will show the name of the sender at the top, at least if the sender is in the recipient’s “contacts”. Otherwise, it may simply show the sender’s mobile telephone number. There are not believed to be any significant differences between 2018, when the exchanges took place, and now so far as these features of WhatsApp are concerned.[74]There was no expert evidence before the Deputy Judge with regard to how the sender’s name comes to be so shown at the top of the chat, and the court proceeded below simply on the basis that it is possible that the name reflects how the sender is referred to in the recipient’s own contacts. It would appear now certainly to be the case that that is how the sender’s name will appear. However, the position in 2018 is, perhaps, less certain.[75]The present WhatsApp messages as relied upon in evidence are screenshots taken from Ms Lin’s mobile phone as recipient. They show Mr Gudmundsson’s name at the top misspelt as “Audun Gudmumdsson”. This may be because Ms Lin misspelt his name in her own contacts. However, I proceed on the basis that in sending the relevant WhatsApp, Mr Gudmundsson is likely to have known that his name, or some representation thereof identifying him as the sender, would appear at the top of the WhatsApp messages feed when the relevant chat was opened on Ms Lin’s phone.[76]It is Ms Lin’s case that Mr Gudmundsson’s name so appearing in the relevant WhatsApp chat feed on her phone is sufficient to amount to Mr Gudmundsson’s signature for the purposes of s.53(1) LPA 1925 in each of the relevant WhatsApp messages on the basis that the touchstone for determining what is a signature is an intention to authenticate the document, and Mr Gudmundsson’s name was added to the top of the relevant WhatsApp feed to authenticate the document by showing who it came from. It is her case that it does not matter whether or not Mr Gudmundsson put the name there himself, so long as the intention behind the same was to authenticate the fact that the relevant WhatsApp’s came from him. This conclusion is said to be supported by the authorities to which I will return and essentially reflects the Deputy Judge’s approach as set out in paragraph [66] of the Judgment.[77]Mr Fennell, on behalf of the Trustees, accepted that a WhatsApp message could be sufficient “writing” for the purposes of s.53 LPA 1925, and that a WhatsApp message could properly be regarded as signed for the purposes of thereof if the name of the sender appeared in the actual message in a similar way to a signature in an email, rather than in the automated WhatsApp header at the top of the chat feed.[78]However, Mr Fennell disputed that a WhatsApp header could amount to a signature for the purposes of s.53(1). He submitted that such a header could, at best, have a status no greater than the sender’s email address added by the relevant email provider to the top of a sent email, which has been held not to be sufficient to amount to a signature sufficient to satisfy the requirements of s. 4 of the Statute of Frauds 1677 on the basis that the same does not demonstrate an authenticating intention. Further, Mr Fennell submits that there must be an intention to connect the name with the contents of the writing so as to authenticate not simply the document, but the whole of it, and that a WhatsApp header is insufficient to demonstrate such an intention.[79]Given the way the parties put their respective cases, it is necessary to look at the authorities in some detail.[80]In Lobb v Stanley (1844) 5 QB 574 it was held sufficient for the purposes of an acknowledgement that required to be signed and in writing that it began with the words “Mr Stanley begs to inform”. At p. 581, Lord Denman CJ commented that it was “a signature of the party when he authenticates the instrument by writing his name in the body.” He went on to say that the object of all the statutes “is merely to authenticate the genuineness of the document.”[81]In Holmes v Mackrell (1858) 3 CB (NS) 789, another acknowledgement case, it was held sufficient that the defendant’s name had been written at the top of the document. Lord Cockburn CJ held this to be sufficient on the basis that:
“the whole is in his handwriting, and he has affixed his name at the top.”
Williams J identified that the object of the statute was merely to authenticate the genuineness of the document, and he held that that had been done as much as if the defendant had said “I promise” and had subscribed his full name.[82]The leading 19th century case is the decision of the House of Lords in Caton v Caton (1867) LR 2 HL 127. In that case the name of the party against whom specific performance was sought appeared in different parts of the relevant document, but only in such a way as to refer to the particular part where it was found, or as being a form of reference or description rather than promise or undertaking. It was held that this was insufficient to satisfy the requirements of the Statute of Frauds 1677 on the basis that a signature sufficient to satisfy the requirements of the statute required to be introduced so as to govern or authenticate every material and operative part of the instrument.[83]The following passages from the speeches in the House of Lords are of particular relevance for present purposes: i) At p.139-140, Lord Chelmsford LC observed that the mere circumstance of the name of the party being written by himself in the body of a memorandum of agreement would not itself constitute a signature. As he put it:
“It must be inserted in the writing in such a manner as to have the effect of “authorising the instrument,” or “so as to govern the whole agreement …” “… The name of the party and its application to the whole of the instrument, can alone satisfy the requisites of a signature. In the memorandum in question, Mr Caton’s name is incidentally introduced with reference to a particular purpose, or as a matter of description, and this mention of his name would clearly be insufficient in itself, it cannot have any new effect given to it by the introductory words of the memorandum.” ii) At p.143, Lord Westbury said: “Probably the phrases “authenticate” and “authenticity” are not quite felicitous, but the meaning is plainly this, that the signature must be so placed as to show that it was intended to relate and refer to and that in fact it does relate and refer to, every part of the instrument … It must shew that every part of the instrument emanates from the individual so signing, and that the signature was intended to have that effect. It follows, therefore, that if a signature be found in an instrument incidentally only, or having relation and reference only to a portion of the instrument, the signature cannot have that legal effect and force which it must have in order to comply with the statute, and to give authenticity to the whole of the memorandum.”
[84]In Tourret v Cripps (1879) 48 HJ Ch 567, the issue was whether a printed heading saying:
“Memorandum from A.B.”, was a sufficient memorandum for the purposes of s.4 of the Statute of Frauds 1677. Hall VC held that it was. He referred to earlier authority to the effect that when a party desiring to sell sends to the party desiring to buy a document containing the name of the former party in such a way as to show that the sender recognised it to be his own name, and the document contained the terms of the contract, then that was a sufficient note in writing to bind the sender. He went on to point out that: “It contains his name, and it is not disputed that the document, without exception, is in the defendant’s own writing.”
It is argued on behalf of Ms Lin that the heading in that case is analogous to the heading to the WhatsApp messages in the present case.[85]In Goodman v J Eban Ltd [1954] 1 QB 550, a rubber stamp was applied by a solicitor to a bill of costs and was said to be sufficient by way of signature for the purposes of s. 65 of the Solicitors Act 1932. At p. 557, Lord Evershed MR having earlier doubted whether, if he had considered the matter afresh, he would have regarded the rubber stamp as sufficient, went on to say that:
“In my judgment, therefore, it must be taken is established, from the citations which I have made, that where an Act of Parliament requires that any particular document be “signed” by a person, then, prima facie, the requirement of the Act is satisfied if the person himself places upon the document and engraved representation of his signature by means of a rubber stamp.”
[86]He later went on to say at p. 559 that it was unnecessary for the purposes of the case to express any view whether the same result would follow if the “signature” impressed by the stamp was not a facsimile representation of the solicitor’s handwriting, but a mere typed representation of his name or that of his firm, although he the observed that, “ex facie it would not appear to carry the same warrant of authenticity.”[87]The first authority that I was referred to relating to what was said to be a “signature” contained within the body of an email was J Pereira Fernandes SA v Mehta [2006] 1 WLR 1543. What purported to be the signature was not contained within the body of the email itself, but the sender’s email address was automatically inserted at the top of the email by the relevant internet service provider. This case is heavily relied upon by the Trustees, because they say that that the “signature” sought to be relied upon in that case is analogous, and served a similar function, to the header to the WhatsApp messages in the present case.[88]Having referred to the passage from the speech of Lord Westbury in Caton v Caton at p.143 referred to in paragraph 82(ii) above, HHJ Pelling QC, sitting as a

Judge of the High Court, commented at [26] that:

“The name of the party, and its application to the whole of the instrument, can alone satisfy the requirements of a signature”
. He went on at [27] to say:
“In the light of the dicta cited above, it seems to me that a party can sign a document for the purposes of section 4by using his full name or his last name prefixed by some or all of his initials or using his initials, and possibly by using a pseudonym or a combination of letters and numbers (as can happen for example with a Lloyds slip scratch), providing always that whatever was used was inserted into the document in order to give, and with the intention of giving, authenticity to it.”
[89]At [29], Judge Pelling went on to say that the issue in that case was not whether the document was created electronically as opposed to as a hardcopy, but whether the automatic insertion of a person’s email address after the document had been transmitted by either the sending and/or receiving internet service provider constituted a signature the purposes of s. 4 of the Statute of Frauds 1677. He held that it did not, commenting at [30] that:
“In my judgment the inclusion of an e-mail address in such circumstances is a clear example of the inclusion of a name which is incidental in the sense identified by Lord Westbury in the absence of evidence of a contrary intention. Its appearance divorced from the main body of the text of the message emphasises this to be so. Absent evidence to the contrary, in my view it is not possible to hold that the automatic insertion of an e-mail address is, to use Cave J's language [in Evans v Hoare [1892) 1 QB 593 at 593], ""intended for a signature"". To conclude that the automatic insertion of an e-mail address in the circumstances I have described constituted a signature for the purposes of section 4 would I think undermine, or potentially undermine, what I understand to be the Act's purpose, would be contrary to the underlying principle to be derived from the cases to which I have referred and would have widespread and wholly unintended legal and commercial effects.”
[90]A subsequent authority heavily relied upon by Ms Lin, is WS Tankship II BV v The Kwangju Bank Ltd [2011] EWHC 3103. In this case, a bank’s guarantee, which to be enforceable required a signature under s.4 of the Statute of Frauds 1677, was transmitted by SWIFT, the provider of secure financial messaging services to banks and other institutions internationally. The body of the guarantee did not contain the guarantor bank’s name, although there was reference within the body of the guarantee to “the undersigned”. However, the SWIFT system generated an output message header which did include the guarantor’s name. Blair J held that the system-generated header was sufficient to amount to a signature.[91]At [154], Blair J opined that, as a matter of common sense, authentication by sending was equivalent (in modern times) to authentication by signing, and so within the spirit, if not the letter of s. 4 of the Statute of Frauds. He explained his reasoning for finding that the system generated header was sufficient to satisfy the letter of s. 4 at [155] as follows:
“ In fact however, the conclusion is in my view erroneous, because the words “Kwangju Bank Ltd” are contained in the header to the SWIFT message. It is said on behalf of Kwangju Bank that this is not text which it typed in, but an output message header, that is, text generated by the SWIFT messaging system. That may be correct, but the name appears, and in my opinion it is a sufficient signature for the purposes of the Statute of Frauds. The words “Kwangju Bank Ltd” appear in the header, because the bank caused them to be there by sending the message. They were “voluntarily affixed” in the words of the old cases (c.f. J Pereira Fernandes SA v. Mehta [2006] 1 WLR 1543 dealing with email addresses). Whether or not automatically generated by the system, and whether or not stated in whole, or abbreviated (in fact the name of the bank appeared here in complete form), this is in my judgment a sufficient signature for the purposes of the Statute of Frauds. The position is analogous to that considered by Christopher Clarke J in Golden Ocean Group Ltd v. Salgaocar Mining Industries Pvt Ltd [2011] EWHC 56 (Comm) who at [103] observed that “an e-mail, the text of which begins “Paul/Peter”, may be regarded as signed by Peter because by that form of wording Peter signifies that he is addressing Paul and authenticates the content of the whole of what follows”
. Therefore, I reject Kwangju Bank’s submissions in this regard.”[92]Neocleous v Rees [2019] EWHC 2462 (Ch) concerned the question as to whether an email ending “Many thanks, David Tear” was “signed” when the “signature” was automatically generated by the Microsoft Outlook email software used by a solicitors’ firm. HHJ Pearce held that it did, accepting the claimant’s submission that where a party types an email which ends “Many Thanks” knowing that the computer upon which it is typed will automatically include the sender’s name after the text, there is a clear indication of an intention to authenticate. He explained this at [54] – [55] as follows:
“54. … It was common ground that the rule that a footer of this type be added to every email involved the conscious action at some stage of a person entering the relevant information and settings in Microsoft Outlook. Furthermore, Mr Tear knew that his name was added to the email. Indeed, the manual typing rather than automatic inclusion of the words "Many Thanks" at the end of the email strongly suggests that the author is relying on the automatic footer to sign off his name. 55. In such circumstances, it is difficult to distinguish between a name which is added pursuant to a general rule set up on an electronic device that the sender's name and other details be incorporated at the bottom from an alternative practice that each time an email is sent the sender manually adds those details. Further, the recipient of the email has no way of knowing (as far as the court is aware) whether the details at the bottom of an email are added pursuant to an automatic rule as here or by the sender manually entering them. Looked at objectively, the presence of the name indicates a clear intention to associate oneself with the email—to authenticate it or to sign it.”
[93]The final relevant decision is Hudson v Hathway (supra) concerning the disposition by Mr Hudson of his beneficial interest in the jointly owned property to Ms Hathway by way of an email exchange as referred to above. The relevant emails were subscribed “Lee” by Mr Hudson. This was held to be sufficient by the Court of Appeal to satisfy the requirements of s.53(1)(a) and (c) LPA 1925. Having referred to a number of the authorities referred to above, Lewison LJ, at [67], concluded that there was a substantial body of authority to the effect that deliberately subscribing one’s name to an email amounted to a signature. On that basis, he held that the relevant emails were signed for the purposes of s.53(1)(a) and (c) LPA 1925.[94]In his judgement, Nugee LJ, at 181, having observed that Mr Hudson had added his name “Lee” to the bottom of the emails, commented that this was an entirely conventional way to end or “sign off” on email, and that he had no doubt that: … “it satisfies the requirement in the authorities that it was added to authenticate the document. Adding your name at the end of an email confirms that the email comes from you. That seems to me enough to mean that the email is signed by you for the purposes of section 53(1) of the LPA 1925.”[95]I agree with the submissions on behalf of the Trustees that the present case is closely analogous to J Pereira Fernandez SA v Mehta (supra). I consider that the header within a WhatsApp “chat” identifying the sender is analogous to the email address that is added by the relevant service provider to the top of an email, utilising the sender’s email address which, in most cases, will be chosen by the sender albeit often utilising the email service provider’s domain name (e.g. xxxx@gmail.com). It is not, as I see it, part of the actual message itself, but merely provides a mechanism designed by the relevant service provider to allow the sender of the email or WhatsApp message to be identified. It is, I consider, therefore, properly to be regarded as incidental to the message itself, rather than as forming part thereof.[96]In J Pereira Fernandez SA v Mehta, Judge Pelling, applying Caton v Caton (supra) at p.143 per Lord Westbury, correctly identified as important considerations in determining whether what was claimed to be a signature sufficient to satisfy the requirements of s.4 of the Statute of Frauds 1677 actually did so, the following: i) The application of the name to the whole of the relevant document; ii) the requirement for an authorising intent, which would be absent if the signature appeared incidentally, e.g. where the “signature” was added automatically by the email or messaging service.[97]As to the latter of these considerations, although the email signature in Neocleous v Rees, was, in a sense, added automatically, the footer added automatically by Microsoft Outlook was only present because of a conscious decision to insert the contents, and the sender of the email was aware that their name was being applied as a footer, and the recipient had no reason to think that the presence of the name as a signature was unknown to the sender. In the circumstances, there was, understandably, found to be the necessary authenticating intent[98]Whilst Blair J in WS Tankship may have opined that authentication by mere sending was within the spirit of s.4 of the Statute of Frauds 1677, he did distinguish this from the letter thereof at [154]. Further the way that he analysed matters at [155] clearly recognised that mere sending of an electronic communication was not enough, and that one did have to identify a signature, in that case the header added by the SWIFT system on the sending of the message, in order to satisfy the relevant statutory provision requiring a signature.[99]With regard to Hudson v Hathway (supra), the reference by Nugee LJ at [181] to the adding of a name at the end of an email to confirm that the email came from the sender again demonstrates that the mere sending of a document is not enough if there is no identifiable signature.[100]In WS Tankship, there was a specific finding that the bank’s name appeared in the header because the bank “caused them to be there by sending the message.” There are, as I see it, a number of distinctions between WS Tankship and the present case, in particular: i) In WS Tankship, the heading was associated with the particular document under consideration, namely the guarantee that had been communicated through the SWIFT system. In the present case, the heading within the relevant “chat” did not specifically relate to the messages that are relied upon by Ms Lin, but to all the messages within the relevant “chat”; and ii) Mr Gudmundsson did not, as I see it, cause the heading to appear by sending the relevant messages. Rather the heading was already there in the WhatsApp app as it appeared on Ms Lin’s phone before the relevant messages were added to the chat.[101]In these circumstances, I find it difficult to see that there can have been the necessary authenticating intent in relation to the heading and the WhatsApp messages on the basis that the heading was incidental to the messages rather than being an integral part thereof.[102]On this basis, I do not consider that the WhatsApp messages would have satisfied the requirements of s.53(1)(a) or (c) LPA 1925 even if I had found that the WhatsApp messages were to be read as effecting a release or disposition of Mr Gudmundsson’s interest in the Property.[103]This serves to reinforce my overall conclusion that there has been no such release or disposition given that I find it impossible to see how, taken alone, the relevant emails could have affected such a release or disposition given that Mr Gudmundsson disputes therein that there has been any agreement, and plainly makes any proposed transfer of his interest conditional upon him being permitted to take the children to Iceland.

Conclusion in respect of Cross-Appeal

[104]Albeit for different reasons than as expressed by the Deputy Judge, I consider that he was right to hold that Mr Gudmundsson’s beneficial interest in the Property still remained vested in him when he was made bankrupt, and that the Cross-Appeal must therefore be dismissed. Trustees’ Appeal Introduction[105]The central question for the Deputy Judge was as to how he should exercise his discretion under s. 14 of the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”) on the Trustees’ application pursuant thereto for an order for sale of the Property in which both Ms Lin and Mr Gudmundsson’s bankruptcy estate have an equal beneficial interest. Such an application is required by s. 335A IA 1986 to be made to the bankruptcy court and dealt with as provided for by this provision.[106]S. 335A(2) provides that on such an application: “… the court shall make such order as it thinks just and reasonable having regard to:- (a). The interests of the bankrupt’s creditors; (b). where the application is made in respect of land which includes a dwelling house which is or has been the home of the bankrupt or the bankrupt’s spouse or civil partner or former spouse or civil partner –(i) the conduct of the spouse, civil partner, former spouse or former civil partner, so far as contributing to the bankruptcy;(ii) the needs and financial resources of the spouse, civil partner, former spouse or former civil partner; and (ii) the needs of any children; and (c) all the circumstances of the case other than the needs of the bankrupt.” (i) the conduct of the spouse, civil partner, former spouse or former civil partner, so far as contributing to the bankruptcy; (ii) the needs and financial resources of the spouse, civil partner, former spouse or former civil partner; and (ii) the needs of any children; and[107]However, s. 335A(3) provides that where, as in the present case, the application is made after the end of the period of one year beginning with when the relevant interest vested in the trustee in bankruptcy, then:
“the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt’s creditors outweigh other considerations.”
[108]The circumstances in which it is appropriate for an appeal court to interfere with the decision of a judge that the circumstances are “exceptional” for the purposes of s. 335(3), or to interfere with the overall exercise by a judge of their discretion under s. 14 of TOLATA as affected by s. 335A IA 1986 are plainly very limited.[109]As Jonathan Parker J put it in Claughton v Charalambous [1998] BPIR 558 at 562:
“What is required of the court in applying s. 335A(3) is, in effect, a value judgment. The court must look at all the circumstances and conclude whether or not they are exceptional. That process leaves, it seems to me, very little scope for the interference by an appellate court. No doubt there may be cases where an appellate court can and should interfere. For example where there is an error of law appearing in the face of the judgment, or where a conclusion which the court below has reached is so plainly wrong as to raise the inference that in reaching that conclusion the court somehow misdirected itself in law.”
[110]In Re Spiritroom Ltd [2019] EWCA Civ 932, [2019] BCC 1031, at [76], the judgment of the Court of Appeal (McCombe, Leggatt and Rose LJJ) observed that: “… On a challenge to an evaluative decision of a first instance judge, the appeal court does not carry out a balancing task afresh but must ask whether the decision of the judge was wrong by reason of some identifiable flaw in the judge’s treatment of the question to be decided, “such a gap in logic, a lack of consistency or a failure to take account of some material factor, which undermines the cogency of the conclusion.””.[111]Mr Robinson KC helpfully referred to the summary of the basic principles concerning appellate challenges to the exercise of a discretion by a judge at first instance, albeit in a different context, as set out by Saini J in Azam v University Hospital Birmingham NHS Foundation Trust [2020] EWHC 3384 (QB) at [50] to [52]:
“50. An appellate court will only interfere with a discretionary evaluation where an appellant can identify one or more of the follows errors: (i) a misdirection in law; (ii) some procedural unfairness or irregularity; (iii) that the Judge took into account irrelevant matters; (iv) that the Judge failed to take account of relevant matters; or (v) that the Judge made a decision which was "plainly wrong". 51. Error type (v) requires some elaboration. This means a decision which has exceeded the generous ambit within which reasonable disagreement is possible. 52. So, even if the appeal court would have preferred a different answer, unless the judge's decision was plainly wrong, it will be left undisturbed. Using terms such as "perversity" or "irrationality" are merely likely to cause confusion. What is clear is that the hurdle for an appellant is a high one whenever a challenge is made to the outcome of a discretionary balancing exercise. The appellate court's role is to police a very wide perimeter and it will be rare that a judge who has exercised a discretion having regard to relevant considerations will have come to a conclusion outside that perimeter. I would add that an appellate court is unlikely to be assisted in such challenges by a simple re-argument of the points made to the judge below. It needs to be underlined that an appellate court in an appeal such as the present is exercising a CPR 52.21(1) "review" power. It is also well-established that the weight to be given to specific factors is a matter for the trial judge and absent some wholly unjustifiable attribution of weight, an appellate court must defer to the trial judge.”

The Deputy Judge’s Decision

[112]The Deputy Judge concluded that there were “exceptional circumstances” for the purposes of s. 335A(3) IA 1986.[113]Under the heading in his Judgment relating to this issue, the Deputy Judge commented on the fact that only £203,000 had been realised in Iceland as against £925,000 originally estimated, compared with what he identified as being the £228,000 odd required to pay creditors apart from Ms Lin and EFL.[114]The Deputy Judge considered in some detail the claim of EFL in the bankruptcy of some £2.3 million, which has been accepted for proof by the Trustees without challenge. He identified that EFL was now in liquidation with creditor claims of almost £13 million, but expressed the view that there was “significant doubt as to the overall position of [this] is principal creditor of the estate” - see paragraph [101] of the Judgment. This led him to conclude, in his “Conclusions on the prejudice to creditors” in paragraphs [102] and [103] of the Judgment, that there was “some doubt concerning the nature and extent of the liabilities of the estate” relating primarily to the EFL debt. He referred to EFL as being the vehicle through which a dishonest solicitor (namely Mr Jones) had misappropriated funds from its creditors, and referred to the fact that creditors in EFL will recover their lost monies from Jirehouse’s insurers who will be subrogated to their rights to lodge proofs in the liquidation of EFL, although he considered that the question as to whether or not the insurers would do so was a matter of “some conjecture”.[115]Although the Deputy Judge considered the above matters under his heading in the Judgment dealing with exceptional circumstances, it is reasonably clear therefrom that the Deputy Judge limited his actual decision in relation to exceptional circumstances to the matters relied upon by Mis Lin as constituting exceptional circumstances as referred to in paragraph [75] of the Judgment, namely: i) What was alleged to be Mr Gudmundsson’s misconduct in not informing the Family Court or Ms Lin of the service of the statutory demand and resulting bankruptcy petition in his communications between November 2019 and February 2020 during which time he was seeking to delay the handing down of judgment, which Ms Lin submitted was deliberate misconduct designed to, and which did frustrate Ms Lin’s efforts to secure sole beneficial ownership of the Property; and ii) The present state and deterioration of Ms Lin’s mental health and that of her son.[116]The Deputy Judge primarily dealt with Mr Gudmundsson’s alleged misconduct in paragraph [119] et seq of the Judgment under the heading:
“What were the consequences of the failure to disclose the statutory demand to the Family Court? ”
[117]At paragraph [120], the Deputy Judge referred to Ms Lin’s contention that had she known about the statutory demand or petition at an earlier stage, then she would have sought an expedited hearing, in which case the Deputy Judge regarded it as:
“… completely foreseeable that the handing down of the judgment would have been accelerated by the judge and the property adjustment order made.”
At paragraph [123], the Deputy Judge identified that what he had to determine was whether, as a result of the actions of Mr Gudmundsson, the outcome would have been different had he been more forthcoming about his true intentions, specifically after he was served with the statutory demand. At paragraph [126], the Deputy Judge considered it highly likely that Judge Meston would have appreciated the importance of expediting the matter and making a property adjustment order before the presentation of a bankruptcy petition. He felt able to conclude, at paragraph [129], that the conduct of Mr Gudmundsson and its consequences clearly took the case out of the ordinary and therefore amounted to an exceptional circumstance for the purposes of s 335A.[118]The Deputy Judge then dealt with the second of the matter that was relied upon by Ms Lin as amounting to an exceptional circumstance, namely Ms Lin’s diagnosis with PTSD and complex development trauma and the diagnosis of her son with ADHD. At paragraph [130] of the Judgment, he described this as relating to the effect of the behaviour of Mr Gudmundsson on the mental health of Ms Lin and her son, and whether it would be exacerbated by the making of an immediate order for possession of the Property.[119]The Deputy Judge then, at paragraph [131] et seq of the Judgment, described the evidence relating to the mental health of Ms Lin and her son, which I will return to in more detail, observing that there was evidence that Ms Lin had profound and as yet unresolved consequences of domestic abuse, exhibiting the primary symptoms of PTSD as a result.[120]At paragraph [135] of the Judgment, the Deputy Judge referred to Re Citro [1991] Ch 142 as authority for the proposition that the natural and sad consequences of debt and improvidence in every bankruptcy involving families with young children does not, in itself, amount to exceptional circumstances for present purposes. However, he referred to Mr Gudmundsson having set in train events that frustrated the entirely legitimate application that Ms Lin had made in respect of the Property, and opined that his behaviour towards his wife and their two children could not, on any view, be described as normal. He therefore concluded, at paragraphs [137] and [138], that the consequences of Mr Gudmundsson’s behaviour must have had a significant effect on the mental health of his former wife and their son and that the present case could be distinguished from the circumstances described in Re Citro such that they were properly to be regarded as exceptional within the meaning of s, 335A IA 1986.[121]The Deputy Judge then, at paragraph [141] et seq of the Judgment, went on to exercise the discretion that arose under s. 335(2) IA 1986, but, having found that there were exceptional circumstances, he did so without assuming that the interests of creditors outweighed all other considerations.[122]I would make the following observations with regard to the factors that the Deputy Judge took into account in concluding, in the exercise of his discretion, that an order for sale of the Property ought to be made, but that the sale of the Property and the obligation of Ms Lin to deliver up possession for the purposes thereof, ought to be deferred until August 3032: i) At paragraph [141], he identified that Ms Lin would receive 50% of the net proceeds of sale, but considered that it might prove to be over optimistic to assume that she would receive over £750,000 bearing in mind the costs that she was liable to pay. He considered that Ms Lin would certainly have to move to a smaller property away from the area, thus causing disruption to the education of the children and running the risk of a deterioration in both her mental health and that of her son. ii) At paragraph [142], he said that he considered that Ms Lin and the children were the victims of Mr Gudmundsson’s misconduct, and his insolvent estate the beneficiary thereof. He considered that the circumstances were such that creditors would receive a dividend that they would not have received but for Mr Gudmundson’s misconduct. iii) At paragraph [143], he recognised that income that Ms Lin was able to make out of letting parts of the Property represented the family’s only source of income, with the consequence that delivering up possession would render them destitute in the sense of no longer receiving that income. iv) At paragraph [145], he considered the position concerning creditor claims and the extent to which they would be submitted for proof to be uncertain. The EFL proof particularly caught his eye, with “recent events”, he thought, calling in to question the correctness of admitting it to proof in full in circumstances in which “the creditors of EFL have the benefit of the judgment in their favour and in due course will receive a substantial payment from the professional indemnity insurers of Jirehouse.” He referred to this, and also the Trustees’ continuing investigations potentially having a significant effect on the outcome of the bankruptcy. v) On the basis thereof, at paragraph [146] he considered the present case to be one of those unusual cases where the equities lay with the family of the bankrupt and not with the creditors of the insolvent estate due to the exceptional circumstances. vi) The date selected for the deferment of the sale of the Property was said to tie in with the educational needs of the children. As the daughter would be 18 in February 2032, then in order to ensure that her preparation for any school examinations would not be interrupted, the appropriate course, the Deputy Judge considered, was to defer sale until after midnight on 31 July 2032. The basis of the

Trustees’ Appeal

[123]So far as the Deputy Judge’s finding of “exceptional circumstances” for the purposes of s. 335A(3) IA 1986 is concerned, the Trustees contend that the Deputy Judge was wrong to find that either Ms Lin’s contentions with regard to Mr Gudmundsson’s conduct or those with regard to Ms Lin’s mental health or that of her son warranted a finding of exceptional circumstances.[124]As to Mr Gudmundsson’s conduct, the Trustees contend that, as a matter of fact, there is no evidence that the latter was causative of Ms Lin losing the ability to secure a transfer of Mr Gudmundsson’s beneficial interest in the Property to her and that, in any event, the evidence, and in particular that represented by the findings of Chief ICCJ Briggs in determining Ms Lin’s annulment application, is inconsistent with any deliberate attempt on the part of Mr Gudmundsson to defeat Ms Lin’s claim to a transfer of his interest in the Property notwithstanding what Mr Gudmundsson might have said, sometime after the event, in his email dated 22 May 2023 referred to in paragraph 38 above.[125]Further, it is submitted that, as a matter of law, the circumstances of the making of the bankruptcy order are not a relevant consideration for the purposes of deciding whether or not a sale of the property should take place when a trustee in bankruptcy applies for an order for sale in a situation such as the present. For this proposition, reliance is placed upon what was said by Henderson J in Everitt v Budhram [2010] Ch 170 at [29]-[30].[126]In so far as the decision as to exceptional circumstances was based upon the alleged mental health issues of Ms Lin and her son, it is submitted that the evidence fell well short of demonstrating any properly diagnosed condition, and that it failed to provide any evidence at all as to the practical effects thereof regarding the ability of Ms Lin and her son to cope with the position that they now find themselves in.[127]If the Trustees are right that there are no exceptional circumstances, then it is plainly up to this Court to consider the discretion afresh under s. 335A(2), and it is submitted that, in doing so, the Court is bound to make an immediate order for possession and sale, perhaps allowing for a period of grace of no more than three months.[128]If the Trustees are wrong with regard to their arguments as to exceptional circumstances, and the Judge was right to conclude that there were exceptional circumstances so as not to require him to assume that the interests of creditors outweigh all other considerations, then the Trustees submit that the Deputy Judge erred in making an order for sale deferred for as long as over eight years. Mr Fennell relied, in particular on the decision of Henderson J in Grant v Baker [2016] EWHC 1782 (Ch), [2016] BPIR 1409, in particular at [44] and [45], in support of the proposition that even where exceptional circumstances exist, it is still necessary to have proper regard to the statutory scheme governing how a bankrupt’s estate is to be dealt with, providing not only for the payment of creditors pari passu, but also for the payment of the costs and expenses of the bankruptcy. It is submitted on the basis of this authority that it would only be in truly exceptional circumstances, which it is submitted do not exist in the circumstances of the present case, that it would be appropriate to defer sale for more than a period measured in years rather than months. It is the Trustees’ case that the Deputy Judge erred in failing properly to take these considerations into account.[129]It is further contended that the Deputy Judge erred in the following further respects in the exercise of his discretion, namely: i) Firstly, the Trustees challenge the Deputy Judge’s conclusion that creditors stand to gain a windfall that they would not have gained but for misconduct on the part of Mr Gudmundsson. They point to the fact that other factors delayed the handing down of judgment in the financial remedy proceedings, including pressure of work on Judge Meston, and intervention by Ms Lin’s own legal representatives on 22 September 2019, that required a further train of enquiry and a response from Mr Gudmundsson before judgment could be finalised. It is said that it simply has not been demonstrated that Mr Gudmundsson’s failure to tell anybody about the statutory demand meant that Ms Lin lost out, in circumstances in which she would not otherwise have done so, from obtaining an order for the transfer of Mr Gudmundsson’s interest in the Property to her before the bankruptcy petition was presented on 22 December 2019. ii) At paragraph [145] of the Judgment, the Deputy Judge commented that there were still further assets that might be realised from the Trustees’ continuing investigations that might have a significant effect on the outcome of the bankruptcy. However, under cross examination, one of the Trustees, Maxine Reid-Roberts, who the Deputy Judge regarded to be a good witness, made clear that the Trustees did not have the assets or backing from creditors to continue investigations. iii) The Trustees submit that the Deputy Judge, in considering the position of creditors, took into account considerations that he ought not to have taken into account, and did not take into account considerations that he ought to have taken into account. In particular, as is said to be apparent from paragraph [145] of the Judgment, the Deputy Judge’s focus was very much upon the position of EFL as a creditor, which he used to support his observation that the position concerning creditor claims generally, and the extent to which they would be submitted for proof, was uncertain. However, it was submitted on behalf of the Trustees that there were a number of flaws in this approach: a) So far as the EFL proof was concerned, despite what Mr Gudmundsson had had to say about this liability, the Trustees had considered, and had been unable to identify any proper basis for disputing it, hence admitting it to proof. EFL was, itself, in liquidation, with creditor claims of approximately £13 million, and whilst certain creditors might be indemnified by the insurers of Jirehouse, those creditors only amounted to approximately £7 million out of the £13 million odd, and there was no reason to believe that the insurers would not submit subrogated claims even if they did meet the creditors’ claims. In any event, EFL had significant other creditors. Consequently, it is submitted that the Trustees had no practical option but to proceed on the basis that EFL was a significant creditor within Mr Gudmundsson’s bankruptcy, and that there was no proper basis for proceeding otherwise. b) Further, it is pointed out by the Trustees that, even apart from EFL, there are significant other creditors within Mr Gudmundsson’s bankruptcy who have submitted proofs, including Mr Ortlieb (whose debt of £157,019.75 was considered by Chief ICCJ Briggs as being genuine, and untainted by any collusion with Mr Gudmundsson), American Express Services Europe Ltd with a debt of £20,296.47, and Boodle Hatfield LLP with a debt of £36,164.97. c) The Trustees point out that the Deputy Judge made no mention of the costs and expenses of the bankruptcy, including the Trustees’ time costs and legal costs. An estimated outcome statement prepared on 20 July 2022 put the figure in respect thereof then at £420,096.70. iv) It is submitted that whilst the Deputy Judge did identify the Property as a source of income for Ms Lin and the support of her and the children, and did take into account that she would receive a not insignificant sum on the sale of the Property, he failed to consider in any real detail the alternatives available to her. In particular, it is said that whilst the Deputy Judge referred to the need to move to a smaller property away from the area, no apparent consideration was given to renting an alternative smaller property that might have been entirely suitable, and/or as to the ability of Mr Lin to return to work .

Ms Lin’s response to the appeal

[130]Ms Lin’s response to the appeal is to say that, as identified by Jonathan Parker J in Claughton v Charalambous (supra) at 562, the Deputy Judge’s consideration as to whether there were exceptional circumstances for the purposes of s. 335A(3) involved an evaluation exercise that leaves little scope for interference by an appellate court. It is submitted that the Deputy Judge correctly took into account the effect of Mr Gudmundsson’s behaviour and Ms Lin’s and her son’s mental health, and that he was perfectly entitled to come to the conclusion that he did.[131]Likewise, so far as the exercise of discretion is concerned under s. 335A(2) IA 1986, it is submitted that the Deputy Judge correctly directed himself as to the principles to be applied, and that his decision is not flawed by any omission or inclusion of irrelevant considerations. It is submitted that he carried out a careful balancing exercise in relation to the various factors involved, and that it is simply not open to this Court to interfere with the wide scope of the discretion afforded to him and that to do so would amount to impermissible “island hopping”.

Exceptional circumstances?

[132]I first consider whether the Deputy Judge was entitled to conclude there were exceptional circumstances before going on to consider whether the exercise of his discretion is properly open to challenge.

Principles to apply

[133]The relevant principles to be applied regarding s. 335A(2) and (3) IA 1986 were helpfully summarised by Lawrence Collins J in Dean v Stout [2005] EWHC 3315, [2005] BPIR 1113, at [6] et seq. To paraphrase therefrom: i) The presence of exceptional circumstances is a necessary condition to displace the presumption that the interests of creditors outweigh all other considerations, but the presence of exceptional circumstances does not debar the court from making an order for sale; ii) Typically, exceptional circumstances relate to the personal circumstances of one of the owners such as a medical or mental condition; iii) The categories of exceptional circumstances are not to be categorised or defined and the court makes a value judgment after looking at all the circumstances; iv) The circumstances must be exceptional and this expression is intended to apply the same test as that applied in decisions made prior to IA 1986 such as Re Citro(a bankrupt) [1991] Ch 142; v) It is not uncommon for a wife with children to be faced with eviction in circumstances where the realisation of her beneficial interest will not produce enough to buy a comparable home in the same neighbourhood or indeed elsewhere, but such circumstances could not be described as exceptional; vi) For the purposes of weighing the interests of creditors, the creditors have an interest in the order for sale being made even if the whole of the net proceeds will go towards the expenses of the bankruptcy and such fact is not an exceptional circumstance justifying the displacement of the presumption that the interests of creditors outweigh all other considerations.[134]The question arises, in the present case as to the extent to which the Court is entitled to have regard, in considering whether there are exceptional circumstances, to the circumstances leading up to the making of the bankruptcy order, and in particular the conduct of the bankrupt in relation thereto. As I have already identified, Mr Fennell, on behalf of the Trustees, relies upon the decision of Henderson J in Everitt v Budhram (supra) at [29] and [30] in support of the contention that the Court is not entitled to have regard to such matters.[135]On this point, Mr Robinson KC points to the decision of the Court of Appeal in Re Holliday (a bankrupt) [1981] 1 Ch 405 and, in particular, to the observations made in relation thereto by Walton J in Re Lowrie (a bankrupt) [1981] 3 All ER 353 at p. 355j-356a, where he described Re Holliday as being a “brilliant example” of a case where there were exceptional circumstances, going on to comment that that was a case in which the bankruptcy petition had been presented by the husband himself:
“… as a tactical move, and quite clearly has a tactical move, to avoid a transfer of property order in favour of his wife, or ex-wife, at a time when no creditors whatsoever were pressing and he was in a position in the course of a year or so out of a very good income. He had gone off leaving the wife in the matrimonial home, which was the subject matter of the application, with responsibility for all the children on her own. One can scarcely, I think, imagine a more exceptional set of facts, and the court gave effect to those exceptional facts.”
[136]Mr Robinson KC submits that the present case is a similar such case.[137]The decision in Re Holliday (supra) was considered and reviewed in some detail by the Court of Appeal in Re Citro (supra). At p. 153F, Nourse LJ identified that Re Holliday (supra) was the only reported bankruptcy decision in which a sale within a short period of time had not been ordered. At p. 157C, Nourse LJ referred to the not uncommon situation of a wife with young children being faced with eviction in circumstances in which the realisation of her beneficial interest would not be enough to buy a comparable home in the same neighbourhood, and where there were liable to be problems with schooling and so forth. Whilst engendering a natural sympathy, such circumstances could not, he considered, be described as exceptional, being “the melancholy consequences of debt and improvidence with which every civilised society has been familiar.” He said that it was only in Re Holliday that such circumstances had allowed the wife’s voice to prevail.[138]Nourse LJ then went on to consider what circumstances there may have been in Re Holliday to make it exceptional, expressing the view that the only special feature of the latter case that made it exceptional was a finding that even with the passage of time until a sale took place, creditors would be paid in full, and that postponement of payment of the debts would be unlikely to cause any great hardship to creditors.[139]With regard to the husband’s conduct in Re Holliday, Nourse LJ went on, at 157H, to say:
“I would not, myself, have regarded it as an exceptional circumstance that the husband had presented his own petition, even “as a tactical move.”
That was not something of the creditors’ choosing and could not fairly have been held against them.”[140]This does lend some support to Mr Fennell’s reliance upon Everitt v Budhram (supra), and his argument that a consideration of exceptional circumstances cannot extend to the circumstances leading up to the making of the bankruptcy order itself. However, the particular circumstance unsuccessfully relied upon in Everitt v Budhram was the fact that the bankruptcy petition had related to a debt in respect of council tax, and that the conduct of Oxford City Council in deploying bankruptcy proceedings rather than obtaining a charging order over the relevant property impinged in some way upon the integrity of the bankruptcy order. Further, Nourse LJ reasoning in Re Citro for rejecting the relevance of the bankrupt having presented his own petition in Re Holliday, even as a tactic, was that that this was not a consideration that could fairly be held against creditors, because it was not a matter of their own choosing.[141]However, these authorities do not, in my judgment, provide an absolute bar against considering the circumstances leading up to the making of the bankruptcy order so long as it is fair to creditors to do so, and that doing so does not involve a challenge to the integrity of the bankruptcy order itself by suggesting that it ought not to have been made. Further, what Nourse LJ’s reasoning in Re Citro does demonstrate with regard to exceptional circumstances is that it is permissible to look at the particular circumstances of the creditors within the bankruptcy, such as those in Re Holliday, where one had creditors who were likely to be paid in full, albeit with some delay if sale were deferred.

Exceptional circumstances in the present case?

[142]I turn to consider whether the Deputy Judge was entitled to find that there were exceptional circumstances in the present case.[143]I do have a number of concerns regarding the Deputy Judge’s findings in relation to misconduct on the part of Mr Gudmundsson. It does appear to be part of the Deputy Judge’s reasoning that Mr Gudmundsson’s conduct operated such that he prevented an order for the transfer of his interest in the Property to Ms Lin being made that would otherwise have been made – see e.g. paragraph [127] of the Judgment where he referred to the action of Mr Gudmundsson having “sabotaged the effect of an order that would otherwise have been made.”[144]I note Mr Gudmundsson’s email dated 22 May 2023 referred to in paragraph 38 above, but against this, are the findings of Chief ICCJ Briggs made after Mr Gudmundsson had been cross examined at the annulment hearing as referred to in paragraphs 31-35 above. Collusion with Mr Ortieb was not established, and Chief ICCJ Briggs found Mr Gudmundsson to be generally a good witness in respect of the explanations that he gave, albeit that it may not have been directly put to him that he had deliberately acted to defeat a transfer of his interest in the Property to Ms Lin. In particular, Chief ICCJ Briggs appears to have accepted Mr Gudmundsson’s evidence of his belief that the fact of the bankruptcy petition, for example, would have been communicated to the Family Court, and therefore that he did not consider that anything was being concealed from the Family Court.[145]Further, the misconduct that the Deputy Judge based his findings upon only commenced on 3 December 2019, some two weeks after Mr Gudmundsson had had the statutory demand served upon him - see paragraph [110] of the Judgment. The bankruptcy petition was presented on 22 December 2019. Given the outstanding issues that had arisen in respect of the finalisation by Judge Meston of his judgment, it does seem to me to be a matter of speculation as to whether Judge Meston would have been able to, and would in fact have handed down judgment and made the relevant order in Ms Lin’s favour before the bankruptcy petition was presented even if Mr Gudmundsson had mentioned the fact of the service of the statutory demand in his communication with Judge Meston on 3 December 2019.[146]The Deputy Judge, at paragraph [126] of the Judgment, says that it must be considered highly likely that Judge Meston would have fully appreciated the importance of expediting the handing down of his judgment in the circumstances. However, there were various issues on which he was awaiting further submissions from the parties, and I am far from convinced that a judge in a Family Court would necessarily have expedited matters so as to defeat the interests of creditors in the way suggested.[147]What is clear from paragraphs [142] and [144] of the Judgment is that what concerned the Deputy Judge was the misconduct coupled with the delay in the handing down by Judge Meston of his judgment for the various reasons that I have referred to, and that the practical effect thereof was to confer something of a windfall on creditors bearing in mind that if the judgment had been handed down within the ordinary course of, perhaps, some three months from the financial remedy hearing in February 2019, then Mr Gudmundsson’s interest in the Property would have been transferred to Ms Lin well prior to any question of a statutory demand and bankruptcy petition arising. I consider that, even apart from any misconduct on the part of Mr Gudmundsson, this is capable of amounting to an exceptional circumstance, or at least to amount to a factor that the Court is entitled to take into account in considering, together with other factors, whether there were exceptional circumstances.[148]Consistent with Nourse LJ’s analysis of Re Holliday in Re Citro at p. 157 D-H, this is, I consider, a circumstance leading up to the making of the bankruptcy order that the Court is entitled to take into account in that it does not involve a challenge to the integrity of the bankruptcy order itself, and is, I consider, something that can be taken into account in considering the position of creditors without any unfairness to them given the windfall likely to have resulted from the delay, however caused.[149]As identified above, the second major criticism of the Deputy Judge made on behalf of the Trustees is in respect of his findings regarding Ms Lin’s and her sons mental health. In essence, it is said that the evidence fell well short of demonstrating any properly diagnosed mental health conditions, and that the evidence fails to explain the practical effect thereof on the ability of Ms Lin and her son to cope with the position that they now find themselves in. Mr Fennell suggested that the sort of evidence required in a situation such as the present is equivalent to the sort of evidence that would be required by the Court in considering an application to adjourn a hearing on the grounds of ill health.[150]It is necessary to consider the evidence relied upon with regard to ill-health in some detail. The following was relied upon by Ms Lin: i) A letter dated 9 February 2024 from Dr Alice Jardine of the Junction Medical Practice that refers to the fact that Ms Lin has been diagnosed with complex development trauma, but does not further explain the prognosis or consequences. ii) A letter dated 16 September 2022 from the “Better Lives Family Service”. Unfortunately, only the first page of this letter has been produced, so it does not provide details of the professional qualifications of the author thereof. However, it refers to Ms Lin as having presented as someone who continued to have quite profound and as yet unresolved lived consequences of domestic abuse. The letter went on to say that Ms Lin exhibited many of the primary symptoms of PTSD, commonly seen in victims of abuse, particularly, “flashbacks” sleep disturbance/nightmares, irritability and nervousness. It did say that this was yet to be formally confirmed by medical diagnosis. iii) An email dated 30 July 2019 has been produced that had had attached to it an ADHD assessment report relating to Ms Lin’s son. Unfortunately, the report itself is not produced. iv) GP records relating to Ms Lin’s son refer to him having been referred to the paediatric allergy service on 29 January 2024. There is reference in the notes to a previous diagnosis of ADHD under CAMHS. Further down, the notes appear to date this to 6 July 2023. There is also in these notes a reference to the son’s counsellor for mental health. v) A letter from the son has been produced in which he says:
“I have ADHD and sometimes when I am stressed it can feel overwhelmingly. I find school very stressful and then I get behind. I get anxious. Mum has organised for me to see a counsellor.” vi) Ms Lin has said as follows in her witness statements. Significantly, she was not cross examined there upon and therefore must, I consider, be taken at her word thereupon: “The children (and I) have had deeply traumatic time during the divorce and are only now beginning to recover. As per professional advice from Islington Family and Social Services, and the Woman Protection Service, Solace, it is vital that the children have stability living in the family home and going to the same schools. … I have been diagnosed with PTSD symptoms including Anxiety and Depression, due to financial, mental, and physical abuse suffered in the marriage. My son, [XXX], has been diagnosed with ADHD and Anxiety. He suffers from Asthma. … I ask the Court to consider that after a prolonged period of trauma suffered by myself and the children due to Mr. Gudmundsson aberrant behaviour, that a threat to the stability that the family house affords us, will have severe long-term detrimental effect on my children’s mental health at this vulnerable age and may damage my future prospects irrevocably. … Both children (and I) suffered from trauma at this time due to the financial, emotional, mental abuse. I have been diagnosed with PTSD symptoms suffering Anxiety and Depression. [Son] has ADHD. He also has Asthma which flares up in stress and Anxiety. [Daughter] suffers anxiety triggered by disruption. I have worked over the last 10 years to protect the children settling the children in a secure stable environment. It is highly recommended by Islington Social Service, and Better Life family service, that that stability in relationships and security at home are key to allow them (and me), to recover emotionally and psychologically. Therefore, I ask the court to take into consideration that it is vital that they stay in the family house as long as possible, until at least the age of 18.”
[151]This evidence might have been a lot stronger, and there are obvious holes in it. Further, it is an unsatisfactory feature of the evidence that Ms Lin’s diagnoses in respect of PTSD and complex development trauma, and the practical effects thereof are not really explained. In addition, Mr Fennell makes a fair point that the Deputy Judge was wrong to analyse matters in terms of the effect Mr Gudmundsson’s conduct had on Ms Lin and the children, rather than how their conditions were presented, in so far as he did so.[152]However, on the basis of the evidence before him, I consider that the Deputy Judge was entitled to conclude that there were, in consequence of diagnosed mental health issues, features of the present case that distinguished it from the commonplace melancholy consequences of debt and improvidence suffered by a wife with children facing eviction in consequence of her husband’s bankruptcy. In particular, the evidence does suggest that having to move, and disturbing education would have a significant detrimental effect on Ms Lin’s son’s health, and that, although improving, her own mental health condition is liable to be detrimentally affected by, at least, a sudden move.[153]Consequently, whilst I consider that there were some errors in the Deputy Judge’s approach to the misconduct on the part of Mr Gudmundsson, and whilst there are deficiencies in the evidence as to the state of Ms Lin and her son’ mental health, I have come to the conclusion that the Deputy Judge’s overall evaluation that there are, in the present case, exceptional circumstances is one that he was entitled to come to.[154]The justifiable exceptional circumstances are, in my judgment, to be found in a combination of: i) The delay in the handing down of judgment following the hearing of the financial remedy proceedings in February 2019, which meant that a transfer of Mr Gudmundsson’s interest in the Property to Ms Lin which would otherwise have occurred well prior to a bankruptcy petition being presented did not occur in circumstances in which the delay was, at least, in part down to Mr Gudmundsson’s conduct; and ii) The evidence of diagnosed mental health conditions suffered by Ms Lin and her son.

Exercise of discretion under s 335A(2)

[155]I recognise that, on the basis of the authorities that I have referred to above, it would only be appropriate for me to interfere with the exercise by the Deputy Judge with his discretion if I were to conclude that he had taken into account irrelevant matters, failed to take into account relevant matters, and/or was plainly wrong recognising the wide ambit of the discretion open to the Deputy Judge. Nevertheless, I am satisfied that the Deputy Judge did err in the exercise of his discretion under s. 335A(2), even recognising that he was not obliged to assume that the interests of creditors outweigh all other considerations, in postponing the order for sale for as long as in excess of 8 years.[156]I recognise that the Deputy Judge did, in the present case, make an order for sale, albeit suspended over 8 years. Thus, this is not a case where there has been an indefinite suspension of an order for sale as such. However, to most if not all intents and purposes, I consider that a suspension for a period of over 8 years practically amounts to an indefinite suspension given how long creditors will be kept out of their money, and how long before funds will be available to meet the costs and expenses of the bankruptcy.[157]Grant v Baker (supra) was an indefinite suspension case. In that case, Henderson J at paragraph [44] and [45] expressed the view that, notwithstanding the exceptional circumstances found to exist, the court should still exercise its powers under s. 335A with the object of enabling the bankrupt’s interest in the property to be realised and made available for distribution among the creditors, and also to defray the costs and expenses of the bankruptcy. Thus, so he held, it would only be in wholly exceptional circumstances that any delay measured and more than months would be appropriate even where there were held to be exceptional circumstances. This reasoning applies, as I see it, with equal force to a case, such as the present, where there is a very lengthy deferment of the order for sale, as it does to an indefinite suspension case. I note in addition that, by and large, the cases in which indefinite suspensions have been upheld are those where there was no reasonable expectation of the indefinite suspension lasting very long, e.g. where a very sick person was allowed to remain in the matrimonial home where there was no expectation of them surviving particularly long.[158]I consider it a fair criticism of the approach of the Deputy Judge that he did not, as I read his judgment, have proper regard to how the statutory scheme ought to operate in a case such as the present. Whilst I consider that he was entitled to take into account the windfall aspect of the creditors’ position that I have referred to, I consider that he was required to properly balance this against other considerations, including, in particular, the fact that even if there might have been some element of windfall in favour of creditors, there were costs and expenses within the bankruptcy, thought to amount to some £420,000 as at 20 July 2022, and which are liable to be very much more significant now. As was pointed out by Henderson J in Grant v Baker at [45], an order for sale should normally be made even if the whole of the net proceeds will be exhausted in paying the expenses of bankruptcy.[159]The Deputy Judge makes no mention of the costs and expenses of bankruptcy in dealing with the exercise of his discretion. Further, it is clear from the Judgment, that the Deputy Judge focused very much on the position of EFL, without referring in terms to the position of other creditors. It is, of course, possible that he will have had them in mind, and factored them into his decision. However, if he had done so, it is difficult to see how he could have said at paragraph [145] of the Judgment that the position concerning creditor claims, and the extent to which they would be submitted for proof, was uncertain given the creditor claims that had been submitted for proof as referred to in paragraph 129(iii)(b) above that could not be regarded as uncertain. Further, there can have been no real certainty other than that the costs and expenses of the bankruptcy were very significant.[160]So far as EFL itself is concerned, I consider that the Trustees’ criticism of the Deputy Judge’s approach is made out to the extent that he regarded this as an uncertain claim within the bankruptcy in circumstances in which the Trustees had accepted EFL’s proof, and where EFL was in liquidation with very significant creditors of some £5 million even if indemnity insurers might meet the claims of creditors worth some £7 million. However, even in the latter event, it is, as I see it, mere speculation that those indemnity insurers would not, themselves, submit subrogated claims within EFL’s liquidation.[161]In short, I consider that the Deputy Judge erred in so far as he, as referred to in paragraph [145] of his judgment, exercised his discretion on the basis that the position concerning creditor claims and the extent to which they would be submitted for proof was uncertain. I consider that he should have proceeded on the basis that EFL had a certain substantial claim in the bankruptcy. However, even if that is wrong, I consider that he should have proceeded on the basis that there were other claims within the bankruptcy which were certain, and which had been submitted for proof, namely those referred to in paragraph 129(iii)(b) above. In the circumstances, the Deputy Judge has, as I see it, in exercising his discretion, taken into account matters that he ought not to have taken into account, and failed to take into account matters that he ought to have taken into account.[162]Tied in with this last point is the Deputy Judge’s finding in paragraph [145] of the Judgment that there were still further assets that might be realised from the Trustees’ continuing investigations that might have a significant effect on the outcome of the bankruptcy. As referred to in paragraph 129(ii) above, the Trustees’ evidence was clear to the effect that there were not funds available to make further investigations with regard to whether or not there were further assets within the bankruptcy. Consequently, there can only have been a speculative prospect that further assets might come to light that might have a significant effect on the outcome of the bankruptcy. This is, as I see it, a further consideration that ought not to have been taken into account.[163]I consider it a further fair criticism of the Deputy Judge’s approach that he did not give any real consideration to the alternatives that might be available to Ms Lin. It is correct that he did identify that Ms Lin would stand to receive a not insignificant amount out of the proceeds of sale of the Property, albeit diminished by various liabilities or costs. Further, he did identify the fact that any substitute property would have to be smaller, and not within the same vicinity with the implications for schooling etc. However, no real consideration appears to be given to finding a rental property, which could be smaller than the Property given that the latter is large enough to house lodgers, and to do so within the more immediate locality.[164]In these circumstances, and given the issues that I have identified and accepted in the Deputy Judge’s approach, I consider that it is for me to exercise the discretion that arises under s. 335A(2) afresh, guided by the approach of Henderson J in Grant v Baker (supra) in which case there had been held to be exceptional circumstances.[165]Striking what I consider to be the appropriate balance between the interests of creditors and the requirement to meet the costs and expenses of bankruptcy, as against the undesirable and difficult position that Ms Lin and her children now find themselves in, I consider that the appropriate course is to substitute a date of 31 July 2027 for the date of 31 July 2032 referred to in paragraph [147] of the Judgment, as the date until when sale ought to be deferred and when Ms Lin is required to deliver up possession of the Property.[166]This is more generous than the time allowed in Grant v Baker, particularly bearing in mind the time since the hearing at first instance, but is, I consider, justified on the basis that: i) As at 31 July 2027, the son will be aged 17, and will have completed a further full school year; ii) This will allow time to enable Ms Lin and the children to adjust and find alternative accommodation either to buy, or more likely to rent, in a difficult rental market. One would hope that some measure of agreement could be reached between the Trustees and Ms Lin with regard to the mechanics for sale that would allow the proceeds to be used to put down a deposit for rent, and meet the first few months’ rent of alternative premises. iii) It ought to enable creditors (to the extent that there is any dividend) and the costs and expenses of bankruptcy to be met within a not unreasonable period of time in the circumstances in circumstances in which creditors at least are fortunate that the finalisation of the matrimonial finance proceedings were delayed for so long.

Conclusion

[167]In conclusion therefore: i) I dismiss Ms Lin’s cross-appeal, albeit for different reasons than those of the Deputy Judge; ii) I allow the appeal to the extent of substituting the date of 31 July 2027 as the date until when sale of the Property ought to be deferred and when Ms Lin will be required to deliver up possession, in place of the date of 31 July 2032 provided for by the Deputy Judge’s Order.