Case No. CR-2019-LDS-000669

13.There is a further strip of land which was referred to before me as the “ransom strip”. It is registered with title SYK669453. That strip of land is a strip of land which borders (and fits between) the southern boundary of the Kilnhurst Site and the northern boundary of a housing development built by Ben Bailey Homes Limited. There is vehicular access road to the Kilnhurst Site over part of this strip, towards its eastern end. The access road runs through the housing development and crosses the strip to the Kilnhurst Site. The Kilnhurst Site has the benefit of a legal right of way over the access road. This provides the only access to the Kilnhurst Site. So far as the Kilnhurst Site is concerned therefore the strip is not a ransom strip in the usual sense of the word because of the legal right of way that exists. The strip also contains a 3-metre high earth bund and a 4-metre high acoustic fence, built pursuant to a planning condition by Ben Bailey Homes Limited.14.There is a dispute between Lisa and the Relevant Respondents about ownership of this strip. Title to the strip was registered in the name of John pursuant to a transfer from Avant Homes Limited in February 2019. John then sold the strip as part of the arrangements entered into at the time of the pre-pack sale. 15.Beneficial ownership of the strip by either Company, at any time, is not asserted by anyone. Rather, the potential beneficial owners are members of the Hughes’ family. Through her solicitors, Thomas Mansfield Solicitors Limited (“Thomas Mansfield”), Lisa, as executor of her mother’s estate, sent a letter dated 16 December 2021 to Charles’ and John’s solicitors enclosing draft particulars of claim. 16.As I understand it the substance of Lisa’s allegations is, in brief, as follows. Charles (her father) and Nora (her mother) were trustees of the Kilnhurst Site. They had agreed in principle to buy the strip. However, Charles, in breach of trust, wrongly diverted the opportunity to buy the land to John. John received such land as constructive trustee, knowing of the breach of trust and/or dishonestly assisting in it. John subsequently sold the strip to the same company as bought the relevant business and assets under the pre-pack sale, Remet Processing Limited. As such, John and Charles are liable to Nora’s estate and John also holds traceable proceeds of the strip on trust for the estate. Such proceeds include shares in Remet Processing Limited (“Remet Processing”), the purchaser under the pre-pack sale. I do not understand proceedings in relation to the strip to have been issued, at least at this time.17.For completeness, I summarise John’s case regarding the strip. He says that it was agreed (by way of a “gentleman’s agreement”) in about 2005 by Ben Bailey, of Ben Bailey Homes Ltd, that the strip would be transferred to LWC as part of a finder’s fee for John having put Ben Bailey Homes Ltd in touch with someone selling a plot of land. Lisa did not want LWC to acquire the land, arguing that it would be another liability for LWC to take on (particularly by reference to the need to maintain the structures on the strip). Accordingly, Charles said that he would take the transfer of the strip and Lisa was content with that course. The transfer was not formally completed until title to the strip was transferred to John in 2019 by Avanti Homes Limited, with the agreement of Charles, Charles then being concerned that given the then disputes with Lisa and his age, it would be better to deal with the matter in that manner.18. I shall refer to the strip of land as the “Disputed Strip” because the beneficial ownership of it is disputed. I have not use the term “ransom strip” because that seems to have been used as an emotive term to give the impression that ownership of the strip by the Companies or the Hughes’ family was, at relevant times, crucial to ensure access to the Kilnhurst Site whereas in fact such access is secured by an existing and long standing registered legal easement. 19.By October 2020, in addition to the trading business, the Companies owned: a number of residential properties, 70 acres of farmland and seven acres of industrial space adjacent to its own operations that was, at all material times, and is, occupied by a third party. By October 2020, the Companies employed about 40 persons in the Business.20.After the petition in this case had been presented on 7 June 2019, each of the Companies was placed into administration by its directors in October 2020. Each company is insolvent.21.The scale of the insolvencies of the two companies is indicated by the relevant reports of the Administrator(s). The most recent reports, the last of which is dated 2 November 2022, and covers the 6 months ending on 6 October 2022, envisages an anticipated outcome in the insolvencies as follows:i)The Bank, a secured creditor of both Companies, will not receive a full return of its debts from the Companies but the shortfall will be made up by way of third-party security granted to the Bank. ii)As regards unsecured creditors, it is anticipated that unsecured creditors will receive a sum by way of a distribution of the “prescribed part”, that is the sum which is set aside from the realised assets subject to a floating charge and made available to unsecured creditors of the company in question in accordance with s.176A of the Insolvency Act 1986. However, no further distributions to unsecured creditors are anticipated.iii)Unsecured creditors of LWC are anticipated to receive a payment by way of dividend of 4p in the pound by way of a distribution of the prescribed part.iv)Unsecured creditors of Portbond are anticipated to receive a payment by way of dividend of 46p in the pound by way of distribution of the prescribed part.v)It is unlikely that there will be sufficient funds to make a distribution to unsecured creditors (other than by virtue of the prescribed part) and therefore it is intended to exit the administrations and move to dissolution.vi)Unsecured claims that have been received by the Administrator amount to £113,497 in respect of Portbond and £5.6 million (including a claim by Portbond) in respect of LWC.22.The Companies played no active role in the trial before me. As a result of the Companies entering administration all legal proceedings against them were automatically stayed (see Insolvency Act 1986, Schedule B1 paragraph 43). Disclosure orders were, however, made against the Companies. 23.At the commencement of the trial, I considered that the proceedings should continue against the Companies so that there was no question that they were bound by my findings. However, I considered that no relief should be sought against either Company without further permission of the court. Accordingly, I granted permission for the proceedings to continue against the Companies on those terms, such order being served on the remaining administrator. He of course had the right, on behalf of the Companies, to apply to set aside or discharge such order within 7 days of service of such order as it had been made of the court’s own motion. No such application was made.