ROONEY v CARDONA Court of Appeal (Civil Division) [1999] 1 FLR 1236, [1999] 1 WLR 1388 HEARING-DATES: 9 February 1999 9 February 1999 CATCHWORDS: Bankruptcy -- Husband and wife grantees of life insurance policy -- Husband adjudicated bankrupt -- Wife making will with husband as executor - - Husband claiming death benefit from policy after wife's death -- Whether husband entitled to claim benefit when an undischarged bankrupt -- Married Women's Property Act 1882, s 11 HEADNOTE: In 1992 the husband and wife effected a life insurance policy with the second defendant, an assurance company in the Lloyds Bank group, in which they were named as grantees. The maturity date was 2002, death benefit to be payable on the death before that date of the first to die of the two lives assured. The policy did not contain any express declaration of trust. In October 1995 the husband was adjudicated bankrupt. The bankruptcy was published in the London Gazette. The plaintiff, an insolvency practitioner, was appointed as his trustee in bankruptcy. In July 1996 the wife died, having previously made a will leaving her entire estate to her son, the first defendant, and appointed her husband and a Mr Cave as her executors. Mr Cave played no further part in the matter. Shortly afterwards, the husband claimed and obtained the policy moneys from the second defendant, after signing a form of indemnity and a declaration that he was legally entitled to the policy and that it had not been as signed, mortgaged, or otherwise dealt with. He signed a form of discharge on the following day. The plaintiff's claim that the second defendant knew of the husband's bankruptcy was disputed by the second defendant. At the hearing of the plaintiff's claim, arising out of the payment of policy moneys by the second defendant to the husband at the time when he was an undischarged bankrupt, four questions were directed to be heard as preliminary issues: (1) If the husband was the sole beneficiary of the policy, was the receipt of the husband as his wife's legal personal representative a valid discharge for the proceeds of the policy against the trustee in bankruptcy pursuant to s 11 of the 1882 Act, assuming the only possible notice of the bankruptcy was the Gazette notice of November 1995? (2) Would the answer to the previous question be different if the second defendant had had actual notice as pleaded? (3) Did the proceeds of the policy devolve on the husband as after- acquired property for the purpose of s 307 of the Insolvency Act 1986? (4) Would the answers to (1) and (2) be different if the second defendant had had no notice of the capacity in which the husband gave the receipt? The judge's negative answer to question (3) was agreed by both sides to be correct. The other three questions, based on an agreed but questionable premise that the policy was effected under s 11 of the Married Women's Property Act 1882 and was subject to the special provisions as to trusteeship in that section, were the subject of the appeal, considered by the court on the same premise. Held -- allowing the appeal -- holding the parties to their agreed starting-point, the policy must be treated as if it had been a life policy effected under s 11 by the wife for the benefit of her husband. On that basis, the wife's personal representative became trustee of her policy on her death, and either, if Mr Cave was still a trustee, the husband had not been entitled to act on his own, or, if Mr Cave had renounced his trusteeship, the husband had become sole trustee of the policy, and sole legal and beneficial owner, and reference to the office of trustee or to the husband being entitled to give a receipt in a fiduciary capacity became unreal. Section 283(3)(a) of the Insolvency Act 1986 had no application because the husband did not hold the policy in trust for any other person. From the moment of the wife's death, no other person had any beneficial interest in the policy. It was property which vested in the trustee in bankruptcy on statutory trust for the husband's creditors. The second defendant must bear the loss as between itself and the creditors, whether or not it had had actual notice of the bankruptcy. On that basis, the fourth question did not arise. All four questions would be answered in the negative. NOTES: Statutory provisions considered Married Women's Property Act 1870, s 10 Married Women's Property Act 1882, ss 11, 17 Bankruptcy Act 1911 Insolvency Act 1986, ss 283, 307, 311 Insolvency Rules 1986 (SI 1986/1925), r 12.20 CASES-REF-TO: Cook, Re [1948] Ch 212 Cousins v Sun Life Assurance [1933] 1 Ch 126 Governors of St Thomas's Hospital v Richardson [1910] 1 KB 271 Griffiths v Fleming [1909] 1 KB 805 Ioakimidis' Policy Trusts, Re, Ioakimidis v Hartcup, [1925] Ch 403 S (Deceased) (Forfeiture Rule), Re [1996] 1 FLR 910, [1996] 1 WLR 235, ChD CASES-CITED: Charlton v Earl of Durham (1869) 4 Ch App 433 Dent (A Bankrupt), Re [1994] 2 FLR 540, [1994] 1 WLR 956, [1994] 2 All ER 904, ChD Howard v Gibbs (1822) 1 GL & J 127 Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896,HL Lee v Sankey (1873) LR 15 Eq 204 Ludlow v Browning (1708) Mod 138 Morgan v Swansea Urban Santitary Authority (1878) 9 ChD 582 Official Custodian for Charities v Parway Estates Developments [1985] Ch 151, [1984] 3 WLR 525, [1984] 3 All ER 1016, CA Royal Brunei Airlines v Tan [1995] 2 AC 378, [1995] 3 WLR 64, [1995] 3 All ER 97, PC Stevens, Re [1897] 1 Ch 422, [1898] 1 Ch 162 Sumner v Henderson (William) & Sons Ltd [1963] 1 WLR 823, [1963] 2 All ER 712, CA Windsor Refrigeration Co v Branch Nominees [1961] Ch 375, [1961] 2 WLR 196, [1961] 1 All ER 277, CA COUNSEL: John McLinden for the appellant; Philip Marshall for the second and third respondents PANEL: Swinton Thomas, Mantell, Robert Walker LJJ JUDGMENTBY-1: ROBERT WALKER LJ JUDGMENT-1: ROBERT WALKER LJ: This is an appeal with the leave of the judge from an order of his Honour Judge Cooke made on 6 August 1998 varying an order of District Judge Hewetson-Brown made on 1 May 1998. The district judge's order answered (at least in part) four questions which had been directed to be heard as preliminary issues in an action by the trustee in bankruptcy of Mr Robert DanielCardona ('Mr Cardona' ) against (as first defendant) Mr Cardona's adult son, who is resident in New York; (as second and third defendants) Black Horse Life Assurance Co Ltd ('Black Horse Life') and Black Horse Financial Services Group Ltd, two companies in the Lloyds Bank group (I will refer to those two companies together as 'Black Horse', as if they were a single company); and (as fourth defendant) Lloyds Bank plc ('Lloyds'). The action was started in the Chancery Division of the High Court against Mr Cardona's son alone. Later it was transferred to the St Albans County Court and the other defendants were added. Mr Cardona's son has taken no part in the proceedings and Mr Cardona himself has absconded to the USA. As does unfortunately sometimes happen, the four questions directed to be heard as preliminary issues can be seen, with hindsight, not to have been the most helpful route to analysing the real issues in the case, which arises out of the payment of policy moneys by Black Horse to Mr Cardona at a time when he was an undischarged bankrupt. I shall set out the facts, which are for present purposes and with one important exception largely undisputed, before I come on to the preliminary issues, the proceedings below and the course which this appeal has taken. In 1992, when Mr Cardona was 62 and his wife Mrs Gloria Antoinette Therese Cardona was 58, they effected a policy with the second defendant, Black Horse Life. The policy was called a low-cost mortgage plan but the policy itself was not charged as a security. The grantees were Mr and Mrs Cardona. The lives assured were Mr and Mrs Cardona. The basic sum assured was Ł60,000, though subject to some fairly complex provisions about unit-linking which I need not go into. There was a monthly premium of Ł453.60. The maturity date was 24 August 2002 (exactly 10 years from the commencement of the policy) when the lives assured, if both living, would have attained the ages of 72 and 68 respectively. Death benefit (Ł60,000 or the bid price of the allocated units, if greater) was payable on the death before the maturity date of the first to die of the two lives assured. Maturity benefit (the bid price of the units allocated) was payable on the maturity date if both lives assured survived until then. The appropriate benefit was payable 'to the grantee(s) or the person(s) otherwise entitled' subject to proof of their entitlement. I should also note -- for reasons which will become apparent -- that the policy did not contain any express declaration of trust, or indeed any reference to the policy being held for the benefit of anyone. It simply named Mr and Mrs Cardona as grantees. Nor did the policy contain any reference to the Married Women's Property Act 1882 ('the 1882 Act'). On 24 October 1995 Mr Cardona was adjudicated bankrupt on the petition of the Inland Revenue. On 22 November 1995 notice of his bankruptcy was published in the London Gazette. On 30 January 1996 the plaintiff Mr Gerard Rooney, an insolvency practitioner, was appointed as his trustee in bankruptcy. On 8 June 1996 Mrs Cardona made a will leaving her entire estate to her son, the first defendant. She appointed Mr Cardona and a Mr Cave as her executors. She died in hospital on 23 July 1996. Her will was proved by MrCardona on 6 September 1996, power being reserved to the other executor. There is no evidence that Mr Cave has either formally renounced probate or taken any step in the administration of Mrs Cardona's estate. Within a short time of his wife's death, Mr Cardona contacted Black Horse's office at Chatham with a view to obtaining the policy moneys. On 8 August 1996 (having already, it seems, made contact on the telephone), he sent to Black Horse a death certificate. He stated in his letter that he could not find the policy but that he would sign a form about that. He signed a form of indemnity and declaration on 21 August 1996 and a form of discharge on the following day. In the form of indemnity and declaration he declared that he was legally entitled to the policy and that to the best of his knowledge it had not been assigned, mortgaged, settled, deposited, charged or otherwise dealt with. On 22 August 1996 he sent these forms to Black Horse, which on 29 August 1996 sent him a cheque for L60.789.41 (the odd sum representing a refund of one premium paid since Mrs Cardona's death, and some interest). The trustee in bankruptcy's amended particulars of claim allege that Mr Cardona paid the cheque into an account in his own name at the Harpenden branch of the fourth defendant, Lloyds, and that payments were made from that account to the first defendant in New York. I must now mention the disputed issue of fact which is referred to in the preliminary issues (although it does not have to be decided as part of them). The amended particulars of claim plead that at all material times Black Horse knew or was deemed to know of Mr Cardona's bankruptcy, by reason of (i) the notice in the London Gazette; (ii) a letter dated 12 December 1995 which the trustee in bankruptcy sent to Black Horse, naming Mr Cardona and giving the policy number almost correctly (the trustee in bankruptcy referred to K 305434 instead of K 30543H); and (iii) a telephone call on 14 February 1996 between the trustee in bankruptcy's partner and a Black Horse employee. I must now come to the preliminary issues. They have, I fear, sent this case off on a track which might, were the issues to be fully explored, prove to be a blind alley. The preliminary issues were, with some small changes in terminology, as follows: (1) If [Mr Cardona] was the sole beneficiary of the policy . . . was the receipt of Mr Cardona, as [his wife's] legal personal representative, a valid discharge [for] the proceeds of the policy against the trustee in bankruptcy pursuant to s 11 of the [1882 Act] assuming the only possible notice of the bankruptcy was the Gazette notice of 22 November 1995? (2) Would the answer to the previous question be different if Black Horse had [actual notice as pleaded]? (3) Did the proceeds of the policy devolve on Mr Cardona as after acquired property for the purposes of s 307 of the Insolvency Act 1986? (4) Would the answer to (1) and (2) be any different if Black Horse had no notice of the capacity in which Mr Cardona gave the receipt? Both sides agree (and are plainly right in agreeing) that the judge gave the correct answer -- no -- to question (3). But the other three questions are based on an agreed but questionable premise, that is that the policy was effected under s 11 of the 1882 Act and was subject to the special provisions as to trusteeship contained in that section. That is the basis on which the preliminary issues were argued both before the district judge and before Judge Cooke. It is also the basis on which the trustee in bankruptcy's notice of appeal was prepared. Notice of an application to amend the notice of appeal was given only a few days before the hearing, and the application was vigorously opposed on behalf of Black Horse. This court is reluct ant to decide issues based on premises which may be mistaken. But in thiscase the preliminary issues had already been so fully debated, and the application to amend was made so late, that this court declined to grant leave to amend, and has considered the appeal on the same basis as that on which the preliminary issues were framed and argued in both lower courts. Until little more than a century ago the common law did not permit a married woman to own any property whatsoever. It became the property of her husband. When a measure of reform was proposed in 1856 one Member of Parliament protested, 'If a woman had not full confidence in a man, let her refrain from marrying him'. The attitude of the common law was mitigated for the wealthier classes by rules of equity providing for separate uses and restraints on anticipation, but it was not until the 1882 Act that Parliament made far-reaching changes, going beyond more tentative reforms in the Married Women's Property Act 1870. The results of most of the changes are so now familiar that statutory authority for them is seldom needed, but s 11 (relating to life policies) and s 17 (providing for summary disposal of disputes about matrimonial property) are still of practical importance. In the case of s 11 that is partly for reasons connected with a quirk of estate duty legislation, now repealed. The original purpose of s 11 was aptly described by Lord Hanworth MR in Cousins v Sun Life Assurance [1933] Ch 126, 133, as: '. . . to enable a trust to be created appropriating policy moneys to the spouse or children of the assured without his going to the trouble of executing a trust deed.' Section 11 of the 1882 Act re-enacts, with some amendments, s 10 of the Married Women's Property Act 1870. Its first sentence reflects the historical significance of the 1882 Act as a whole: 'A married woman may by virtue of the power of making contracts herebefore contained effect a policy upon her own life or the life of her husband for her separate use; and the same and all benefit thereof shall enure accordingly.' Then it continues with the provision which the parties agreed to be relevant: 'A policy of assurance effected by any man on his own life, and expressed to be for the benefit of his wife, or of his children, or of his wife and children,or any of them, or by any woman on her own life, and expressed to be for the benefit of her husband, or of her children, or of her husband and children, or any of them, shall create a trust in favour of the objects therein named, and the moneys payable under any such policy shall not, so long as any object of the trust remains unperformed, form part of the estate of the insured, or be subjectto his or her debts.' There follows a proviso relating to a policy effected with the intention of defrauding creditors, and fairly elaborate provisions relating to the appointment of trustees and the devolution of the policy if no trustee is appointed before the death of the life assured: 'The insured may by the policy, or by any memorandum under his or her hand, appoint a trustee or trustees of the moneys payable under the policy, and from time to time appoint a new trustee or new trustees thereof, and may make provision for the appointment of a new trustee or new trustees thereof, and for the investment of the moneys payable under such policy. In default of any such appointment of a trustee, such policy, immediately on its being effected, shall vest in the insured and his or her legal personal representatives, in trust for the purposes aforesaid . . . The receipt of a trustee or trustees duly appointed, or in default of any such appointment, or in default of notice to the insurance office, the receipt of the legal personal representative of the insured shall be a discharge to the office for the sum secured by the policy, or for the value thereof, in whole or in part.' These provisions replace those in s 10 of the 1870 Act under which new trustees could be appointed by the Court of Chancery. It has been held that a policy which is a life or endowment policy can fall within s 11, at any rate if the life assured dies before the maturity date: Re Ioakimidis' Policy Trust's, Ioakimidis v Hartcup [1925] Ch 403, a decision of Astbury J. It has also been held or opined by the majority of this court in Griffiths v Fleming [1909] 1 KB 805 that a policy on the joint lives of a husband and wife may be regarded as two policies, each effected by one or other of the married couple on his or her own life, and each falling within s 11 of the 1882 Act (see the judgment written by Farwell LJ and read by Kennedy LJ at 817-819). Griffiths v Fleming was an unusual case in that the wife had killed herself soon after the policy was effected, and the life office sought to repudiate liability, not under any express provision relating to suicide but on the ground that the husband (the plaintiff) had no insurable interest in his wife's life so that the policy was avoided by the Life Assurance Act 1774. All three members of the court held that the husband did have an insurable interest in his wife's life, and the joint judgment by Farwell and Kennedy LJJ expressly rested itself on that point (see at 819). However, the joint judgment also expressed the view that the policy should be seen as constituting two separate policies effected under s 11. Had this court allowed amendment of the notice of appeal, Mr McLinden (for the trustee in bankruptcy) would have submitted that the case is distinguishable because Farwell and Kennedy LJJ relied heavily on the husband and wife having completed separate proposal forms so that the issue of the single policy was a 'conveyancing blunder' (see at 818). There is no pleading or evidence of a similar error in this case. Moreover, although Re Ioakimidis shows that a life and endowment policy can be within s 11, it is difficult to see how a joint lives and 10-year endowment policy (which was probably more likely, with average mortality, to produce maturity benefit rather than death benefit, and moreover contained a provision for surrender) could be treated in the way that the simple joint lives policy was treated in Griffiths v Fleming. In that case Farwell and Kennedy LJJ also took that view (at 818) that the joint lives policy with which they were concerned, or rather the component of it effected by the wife, was 'expressed to be for the benefit of her husband' within the meaning of s 11. I find that view puzzling on the wording of the policy as recorded in the report, though conceivably there was some further wording which is not recorded. In Re S (Deceased) (Forfeiture Rule) [1996] 1 FLR 910 (a case concerned with the Forfeiture Act 1982) Rattee J also seems to have been rather puzzled by Griffiths v Fleming, although he followed it and applied it to a joint life and 25-year endowment policy. Had the issue become live, I would have taken the view that this court was not in this case bound to apply the views expressed by two members of the court in Griffiths v Fleming in relation to a policy which they regarded as a mistakenamal gamation of two separate contracts. The policy with which this court is concerned makes no reference to s 11 of the 1882 Act. It is not expressed to be effected for the benefit of Mr Cardona or Mrs Cardona. In the absence of any evidence as to separate proposal forms, I would have been disposed to think that it was not within s 11 of the 1882 Act at all, and that the correct view of its legal effect was the simple and obvious view that Mr and Mrs Cardona, as the grantees and the lives assured, were initially joint owners of the policy both at law and beneficially. But the parties must be held to their agreed starting-point, that the policy must be treated as if it had been a life policy effected under s 11 by Mrs Cardona for the benefit of her husband. I must at this point turn to some of the provisions of the Insolvency Act 1986 ('the 1986 Act') and the Insolvency Rules 1986 ('the rules'). These contain the new law of bankruptcy and although many principles can be traced back to the Bankruptcy Act 1914 and earlier statutes, there are some significant departures. Some care is therefore required in referring to cases decided underearlier statutes. Section 283 of the 1986 Act defines the bankrupt's estate, which by subs (1)(a) comprises (subject to what follows): '. . . all property belonging to or vested in the bankrupt at the commencement of the bankruptcy', ('property' being widely defined in s 436). Section 283(3)(a) takes out of the definition 'property held by the bankrupt on trust for any other person'. Section 306 provides for the automatic vesting of the bankrupt's estate in the trustee in bankruptcy on his appointment, without the need for any conveyance, assignment or transfer. Section 307 deals with after- acquired property. It applies to assets which are in effect windfalls (such as a legacy) and not to assets which merely change their character (such as the vesting of a contingent in terest in settled property, or the payment of proceeds of a policy on its maturity). Section 311 places on the trustee in bankruptcy both the duty and appropriate powers to take possession of the bankrupt's assets and papers. Section 311(4) provides that where the estate includes a chose in action it is deemed to have been assigned to the trustee, but that notice of assignment need not be given 'except in so far as it is necessary, in a case where the deemed assignment is from the bankrupt himself, for protecting the priority of the trustee'. (This last provision is a new one; life policies are assignable under the Policies of As surance Act 1867). Section 312 imposes a converse duty on the bankrupt and s 312(3) and (4) provide as follows: '(3) Any banker or agent of the bankrupt or any other person who holds any property to the account of, or for, the bankrupt shall pay or deliver to the trustee all property in his possession or under his control which forms part of the bankrupt's estate and which he is not by law entitled to retain as against the bankrupt or trustee. (4) If any person without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).' Finally, I should mention r 12.20 of the rules, which provides that a copy of the London Gazette containing any notice required by the 1986 Act or the rules to be gazetted (such as the making of a bankruptcy order) is evidence of the facts stated in the notice. It does not provide that it constitutes constructive notice (or any other sort of notice) of the bankruptcy to all the world. The effect of the assumptions on which the preliminary issues were agreed is that Mr Cardona's personal representatives became trustees of the policy on her death. In view of the uncertain position of Mr Cave, the non-proving executor, that immediately raises two questions which do not appear to be covered by any authority: whether Mr Cave as well as Mr Cardona became a trustee of the policy unless and until he disclaimed the trusteeship, and if so whether Mr Cardona nevertheless had power, as an executor, to call for the policy money and give a receipt without the concurrence of Mr Cave. The first of these questions raises issues of fact on which there is no evidence before the court. The judge referred to Mr Cave as a shadowy figure but regarded his position as irrelevant, because of the joint and several powers of executors. He recorded but rejected Mr McLinden's submission that when s 11 referred to the personal representatives of the life assured it did so as a means of identifying the trustee or trustees who were to be legally entitled to the policy, not as a direction that they were to hold the policy as personal representatives (or were to have the powers of personal representatives). In my judgment the judge was wrong to reject that submission. The whole purpose of the provisions at the end of s 11 is to identify trustees who are to hold the policy moneys on the appropriate trusts, with a statutory direction that those moneys: '. . . shall not, so long as any object of the trust remains unperformed, form part of the estate of the insured, or be subject to his or her debts.' These words could hardly be clearer and they exclude the possibility that Mr Cardona could act on his own in the trusteeship, if Mr Cave was indeed his co-trustee. Mr Cardona acted with great alacrity in obtaining a grant of probate (the judge's reference to 'some time after the events' actually refers to a period of little more than a fortnight) and the fact that he obtained a grant on his own would not constitute even faint evidence that Mr Cave had decided to renounce probate and disclaim any associated trusteeship. However, I should also consider the position on the hypothesis that Mr Cave did disclaim his trusteeship and that Mr Cardona became sole trustee of the policy. On that hypothesis, Mr Cardona would have been sole legal owner and sole and absolute beneficial owner, but for his bankruptcy. In those circumstances references to the office of trustee or to Mr Cardona being entitled to give a receipt in a fiduciary capacity become totally unreal. A man legal and beneficial interests are merged and it would be artificial to treat them as separate. As Harman J said in Re Cook [1948] Ch 212, 215: 'You cannot have a trust existing when nobody is interested under it except the trustee.' In these circumstances, s 283(3)(a) of the 1986 Act has no application because Mr Cardona did not hold the policy in trust for any other person. From the moment of his wife's death (and with Mr Cave's assumed disclaimer of his trusteeship relating back to that moment), no other person had any beneficial interest in the policy. It was property which was vested in the trustee in bankruptcy on statutory trusts for Mr Cardona's reditors, and only the trustee in bankruptcy could give a good receipt for it. The specific provisions of the 1986 Act took priority over the general provisions of the 1882 Act. That is so whether or not Black Horse had actual notice of Mr Cardona's bankruptcy, although if Black Horse did have notice of the bankruptcy it has to some extent brought the loss upon itself. In these circumstances I do not find it necessary to go into old cases such as Governors of St Thomas's Hospital v Richardson [1910] 1 KB 271 which were cited to the court. It is clear that if the trustee of an express trust for other beneficiaries is made bankrupt his trusteeship does not automatically come to an end, although he is liable to be removed and replaced as a trustee. But that principle does not apply here. Mr Cardona'sinterest in the policy vested, without the need for any assignment, in his trustee in bankruptcy. After his bankruptcy Mr Cardona was not entitled to require payment of the policy moneys to himself, and he could not give a good receipt for them. Black Horse was induced to part with the death benefit on the strength of a death certificate and forms of indemnity and discharge which clearly proceeded on the footing that Mr Cardona was the survivor of the grantees and as such solely entitled beneficially. Black Horse was deceived but as between itself and Mr Cardona's creditors it is Black Horse that must bear the loss, whether or not it had actual notice of the bankruptcy. If it did have actual notice then its loss is due to its own carelessness. The notice in the London Gazette does not by itself have any relevant consequences, for the reasons stated by the judge. On the view which I take on the first question in the preliminary issues, the fourth question does not really arise (either as actually formulated or if takento refer simply to Mr Cardona's capacity, regardless of notice). Black Horse appears to have thought (and to have been induced by Mr Cardona to think) thathe was entitled to the policy moneys simply as the survivor of the grantees. There is nothing to suggest that Black Horse had in mind the provisions of s 11 of the 1882 Act. But even if Mr Cardona had referred to s 11 and had claimed to be acting as his wife's executor, the result would be no different. I would therefore allow the appeal and give a negative answer to all four questions raised by the preliminary issues (there is no appeal against the judge's negative answer to the third question). JUDGMENTBY-2: MANTELL LJ JUDGMENT-2: MANTELL LJ: I agree. JUDGMENTBY-3: SWINTON THOMAS LJ JUDGMENT-3: SWINTON THOMAS LJ: I also agree. DISPOSITION: Appeal allowed. SOLICITORS: Pictons for the appellant; Kingsford Stacey Blackwell for the second and third respondents.