Neutral Citation Number: [2007] EWHC 1509 (Ch)
Case No: 6133 OF 2006
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 29/06/2007

Before :

MR JUSTICE BRIGGS
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Between :

	PAUL CHARLES MARKHAM	Appellant 	
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	MOIRA KARSTEN	Respondent	

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Birgitta Meyer (instructed by Bevan Brittan LLP) for the Appellant
Blair Leahy (instructed by DWF Beckman) for the Respondent

Hearing date: 21st June 2007
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Judgment

Mr Justice Briggs:
Introduction 
1.	This is an appeal from a Bankruptcy Order made by Registrar Jacques on 7th February 2007 on a petition presented on 12th June 2006 and preceded by a Statutory Demand dated the 2nd May 2006.  The petition was opposed on behalf of the respondent (and appellant on this appeal) Mr Paul Charles Markham, on the basis that he denied owing the alleged or any debt to the petitioner Mrs Moira Karsten, and that there was, on the evidence, a genuine triable issue as to the existence of the debt, within the meaning of paragraph 12.4 of the Practice Direction on Insolvency Procedings.  
2.	In the forefront of Ms Karsten’s case before the learned Registrar lay two documents, both apparently signed by Mr Markham, dated respectively the  17th August and the  7th October 2005, in each of which Mr Markham  appeared to acknowledge an existing indebtedness in excess of £1.1million  (albeit in slightly different amounts ).  Since it was common ground that there had been no repayments by Mr Markham since then,  Mrs Karsten’s submission was that it was an open and shut case.  
3.	In bare outline, the learned Registrar reached the same conclusion, mainly on the ground that Mr  Markham’s evidence seeking to explain away those two apparent admissions was incredible.  In a careful reserved judgment he directed himself by reference to dicta in National Westminster Bank Plc v Daniel  [1993] 1WLR 1453,  Re a Company 006685 of 1996 [1997] BCC 830 and Portsmouth v Alldays Franchising Ltd [2005] EWHC 1006, and there has been no criticism of his description of the test to be applied.  The main issue on this appeal is whether in applying that test he reached the wrong conclusion.
4.	The matter did not however turn entirely on questions of credibility.  It was submitted to the learned Registrar on Mr Markham’s behalf that even if he were disbelieved as to the circumstances in which those two apparent admissions came into existence, there was nonetheless a genuine triable issue whether the second of them could be impugned for undue influence, on the ground that at and for a period prior to the relevant time Mrs Karsten had been Mr Markham’s solicitor.  That submission was rejected by the learned Registrar on grounds of legal analysis.  Finally, even if there had been triable issues sufficient to deprive both of the above documents of their status of conclusive admissions, the learned Registrar held that there was in any event nothing to displace what he described as a presumption that payments made by one of two cohabitees to the other were to be regarded as loans, it being common ground that such payments had been made by Mrs Karsten to Mr Markham.  
5.	Again in summary, the main grounds of appeal before me are firstly, that the learned Registrar should not have dismissed Mr Markham’s evidence about the apparent written admissions of debt as incredible: secondly that in any event they were both arguably tainted by undue influence; and thirdly that there was no legal principle that in the absence of an agreement to the contrary, payments made by one cohabitee to or for the benefit of another were to be regarded as loans.  The arguments advanced by Miss Meyer on Mr Markham’s behalf went a little beyond what had been submitted (by a different advocate) to the learned Registrar and even slightly beyond Mr Markham’s written grounds of appeal but, having heard submissions from Miss Leahy on behalf of Mrs Karsten, I ruled that Miss Meyer should not be prevented from adducing those further arguments, dependent as they were upon evidence which had been before the learned registrar, in circumstances where it was not submitted by Miss Leahy that, had they been raised earlier, her client would have sought to adduce further evidence.  
6.	Miss Meyer also applied for permission to adduce further evidence on appeal, consisting of a fifth witness statement of Mr Markham dated 27th February 2007.  Initially, Miss Leahy neither objected nor consented to the admission of this further evidence, and I ruled that only a part of it should be admitted and only for a strictly limited purpose.  During subsequent argument, Miss Leahy sought to rely more generally upon Mr Markham’s fifth witness statement, and in the circumstances, with the agreement of both sides I then admitted it in its entirety.
The Background Facts  
7.	Before addressing the grounds of appeal directly, I must first describe something of the relevant factual background.  It is common ground that in 1999/2000 Mr Markham and Mrs Karstsen began a sexual relationship together, for most of which they cohabited, living together as what used to be called man and wife but is now more commonly called partners. To distinguish their relationship from that of business partners I shall call them domestic partners.  Their relationship began at a time when Mr Markham had already been declared bankrupt, and Mrs Karsten, who has been a practising solicitor throughout, acted for and assisted him in relation to his bankruptcy from the outset of their relationship, if not a little time before it commenced.  It appears that she also acted for Mr Markham in relation to other legal matters, and the evidence suggests (as is common ground ) that a solicitor/ client retainer between Mrs Karsten (or a firm of solicitors by whom she was employed) and Mr Markham subsisted until May 2006, albeit the evidence does not show continuous activity on her part in relation to his legal affairs.

8.	It is, as I have said, common ground that during their relationship Mrs Karsten made numerous payments to or for the benefit of Mr Markham .  Mrs Karsten’s case is that they amounted in aggregate to well in excess of £1 million, and although the amount of the payment is not agreed, she produced documentary evidence before the Registrar of payments amounting in aggregate to a very substantial sum.

9.	 Mrs Karsten does not suggest that the basis on which she made these payments was recorded in a written agreement between them.  She said that they were all loans, whereas Mr Markham said that they were the aggregate of gifts and payments made on the basis on an informal understanding that, by way of quid pro quo, he would provide her with emotional support, some business advice and would look after her three children.

10.	From time to time prior to 2005, it appears that Mrs Karsten made unsuccessful attempts to have this financial aspect of their relationship set down and agreed in writing.  For example, Mrs Karsten produced a copy of a declaration of trust dated 1st October 2002, between Mr Markham and herself, signed by her but not by him, recording that “ £1,100,000 having been lent to the said Paul Markham by Moira’ O’Hara (her maiden name) it is hereby DECLARED the property known as  2 Codrington Mews, London W11 1AW is held in trust by the said Paul Markham for the said Moira O’Hara”

11.	In his turn Mr Markham produced as an exhibit to his fourth witness statement copies of what he described as correspondence passing between him and Mrs Karsten between 2nd and 4th April 2002 in which, on 2nd April, she said that she would not enforce any debt she had against him until he died, and in response on the 4th April he asked for a short note confirming that the monies that she had paid for things were “ gifts not a loan or debt” which she declined to provide. That evidence having come too late for a reply, the learned Registrar was told on instructions that Mrs Karsten denied ever having sent the purported letter of 2nd April, and the learned Registrar described both documents as suspicious, and Mr Markham ’s evidence about them as incredible.

12.	In my judgment, the question whether those letters were written as Mr  Markham suggests is (if relevant) plainly a triable issue.  The learned Registrar’s conclusion that they were suspicious and that the evidence which referred to them was incredible was based upon the assumption that the letter of 2nd April from Mrs Karsten gave the confirmation requested by Mr Markham in his letter of 4th April. In fact it did nothing of the kind since, while proffering deferred enforcement, it plainly described the payments as giving rise to debts rather than having been gifts.  In my judgment Mr  Markham’ s evidence about them, whether true or not, is not inherently incredible.  

13.	Mrs Karsten deposed to a further effort in 2004 to persuade Mr Markham to record an agreement about their financial relationship in writing, and she produced a more detailed from of agreement, again, signed by her but not by him, containing an acknowledgement of a  £1.1 million loan and providing for a trust of 2 Codrington Mews by way of extinction of part of the debt by reference to the value of the property as at  1st October 2000, less any outstanding mortgage, and further providing for the balance of the debt to be secured on a property owned by Mr  Markham in Paris.  She described in her evidence how she even gave Mr  Markham money with which he should have obtained legal advice before signing the document, but which, in the event, she said that he used to defray other expenses.   Again, nothing was signed.

14.	The parties’ sexual relationship ended in 2005 but they continued to cohabit, sleeping in separate rooms until April or May 2006.  Mrs Karsten’s case (and evidence) is that she first obtained a signed acknowledgment that Mr Markham had borrowed £1.15million from her, and that he would hold 2 Codrington Mews on trust for her, in the form of a single page manuscript written by her and dated 19th August  2005, but signed by him above the date.  That document has come to be known as “the Acknowledgment”. Mr Markham denies signing it and, as I have said, the learned Registrar found that denial to be incredible.

15.	The second of the two documents containing an alleged written admission of debt by Mr Markham takes the form of a deed (“the Trust Deed”) dated 7th October 2005 and made between Mr Markham and Mrs Karsten (therein named O’Hara) apparently signed by Mr  Markham and witnessed by one Matthew Watson.  It  is also signed by |Mrs Karsten.  On this occasion, it records a loan to Mr Markham by Mrs Karsten of £1.125 million, contains a declaration of trust to have effect as from 1st October 2000 over 2 Codrington Mews for the extinguishing in part of that debt, and has attached a Land Registry Transfer purporting to record a transfer of that property from Mr Markham to Mrs Karsten for  £600,000 signed by Mr Markham, but neither dated nor signed by Mrs Karsten.

16.	Mrs Karsten’s case is that she prepared and left those documents for signature (if approved) by Mr Markham in an envelope on 3rd October 2005, and on 6th October she found copies signed by Mr  Markham as I have described in an envelope on her pillow.

17.	Mrs Karsten relies upon copies of unanswered letters by her to Mr Markham in March and April 2006 appearing to record an oral agreement by him to pay her £600,000 on account by the end of April or in early May.  Having received no response, she issued the Statutory Demand and Bankruptcy Petition on the dates which I have identified.  

18.	For completeness I should add that, taken as a whole, Mrs Karsten’s evidence presents an internally consistent picture of a financial relationship in which it was always orally agreed and understood that her payments to him or for his benefit were loans rather than gifts, but in which despite request, Mr Markham had been reluctant to acknowledge that in writing until August and October 2005 in the manner which I have described.

19.	It is necessary (not least because of the reliance placed upon it by the Registrar) to summarise the chronological history of this litigation.  The Statutory Demand both referred to and exhibited a copy of the Trust Deed, but while it described the Acknowledgement as “an agreement confirming the debt” signed by Mr   Markham  on 17th August 2005, it did not exhibit it. The Statutory Demand came to Mr Markham’s attention in May 2006.  

20.	In his first witness statement made on 1st August 2006 he denied any indebtedness to Mrs Karsten, or any recollection of having signed the Trust Deed.  He acknowledged that the signature on the exhibit to the Statutory Demand resembled his signature, and said that if it were found that he had signed it,  “I will say that I was intoxicated at the time I signed and did not know what I was signing.”  He said that she had frequently acted as his solicitor and had requested him to sign a trust deed for his two younger sons and implicitly trusted her in relation to his affairs.  The same witness statement also put in issue the validity of service of the Statutory Demand and Petition, and there then ensued a squabble about the validity of service which was only resolved by the learned Registrar’s judgment  on 2nd February 2007, in favour of Mrs Karsten, as to which there is no appeal.

21.	In the meantime, at the first hearing of the Petition on 13th September ( by which time Mr Markham had made a short  2nd witness statement dealing only with the service issue),  Deputy Registrar Brettle gave directions designed to resolve the question whether the signature on the Trust Deed was Mr Markham’s, by reference to a single joint handwriting expert.  Further directions in that regard were given by Mr Registrar Simmonds on 6th November, for the production of authenticated copies of original signatures from Mr Markham  for comparison purposes, and upon his failure to provide those, he was debarred from denying that his signature appeared on the Trust Deed.

22.	The next hearing of the Petition was listed for 7th December.  By this time Mrs Karsten had made and served a witness statement dealing with the merits of her case, dated 4th October 2006, and exhibiting all the documents upon which she later relied, including a copy of the Acknowledgement.  

23.	On 7th December Mr Markham made and served a further short witness statement, the primary purpose of which was to obtain an adjournment of the hearing listed for the  11th December on the grounds of his ill health.  It said nothing about the merits and contained no substantive reply to Mrs Karsten’s evidence.  I was told that it is possible that Mr Markham’s then advisors (since replaced) thought that he would in the ordinary course be cross examined about those matters at the hearing.  

24.	On 11th December the learned Registrar refused an adjournment, and dealt with the question of service first.  Time then having run out, he adjourned the balance of the hearing to 19th December.  In the meantime Mr Markham made a fourth witness statement dated 18th  December, giving further evidence about the signature of the Trust Deed, denying for the first time having signed the Acknowledgment, and producing copies of the April 2002 letters which I have already described.  The hearing was then duly concluded on 19th December.  Following judgment, Mr Markham’s fifth witness statement, which I eventually admitted by consent,  was made on 27th February 2007, primarily  for the purpose of showing that his witness statement of  18th December 2006, which followed criticism of his case on the merits expressed at the hearing on 11th December, did not consist of recent fabrication,

The Trust Deed
25.	As is reflected in the Statutory Demand, Mrs Karsten’s primary case, and indeed the main ground for the learned Registrar’s decision, is based on the Trust Deed, his signature of which Mr Markham had by December 2006 become debarred from denying.
26.	He had in his fourth witness statement amplified his evidence about the Trust Deed by saying, without withdrawing anything which he had previously said about it, that Mrs Karsten had procured his signature to a blank document, on representing that it was to be a trust deed for the benefit of his children, and that she would complete the relevant details at a later stage.  He went so far as to suggest, contrary to the fact, that this is what he had said in his first witness statement in August 2006, and that he was “horrified to discover (following the service of a Statutory Demand and a Bankruptcy petition) that the document was not a Trust Deed for the benefit of my children, but was in fact a purported Trust Deed for the acknowledgement of a debt due to the Petitioner….”.
27.	He sought to support this case by producing copies of what purported to be letters from the witness to the Trust Deed, Mr Watson.  The first of them, dated 4th December 2005 and addressed, by hand, to Mrs Karsten suggested that she had taken advantage of Mr Markham when he was drunk to sign a document, and that she had obtained Mr Markham signatures by “false pretence”.  The second letter, addressed to Mr Markham’s then solicitors, dated 14th December 2006 made much the same allegation, but in more detail. Although the first of those letters stated Mr Watson’s readiness to depose to the truth of its contents in court, no witness statement from him was produced.
28.	The learned Registrar was therefore faced with evidence from Mr Markham that while he could not remember signing the Trust Deed, he signed it while intoxicated and while the document was in blank, after being told that it was to be a trust for his children. This evidence was supported by letters of the attesting witness, one of which purported to know about the use of false pretences some six months prior to the earliest date upon which Mr Markham purported to have discovered that himself.  
29.	In my judgment the learned Registrar was both entitled and correct to conclude that Mr Markham’s evidence about the Trust Deed was incredible.  As he himself put it, “If he cannot remember signing it, I fail to understand how he can say it was blank, when he signed it…”, and,  “unless he is permanently intoxicated, which I consider as sufficiently unlikely as to be disregarded, he cannot both say that he does not remember signing the Trust Deed and that he was intoxicated when he signed it.”  Mr Markham’s evidence about the Trust Deed does not therefore disclose  a genuine triable issue.
30.	The remaining question in relation to the Trust Deed is whether there is a genuine triable issue that it was obtained as the result of undue influence.  The case put to the learned Registrar was based upon the existence of a solicitor and client relationship between the parties at the time of the preparation and signing of the Trust Deed, so that it must be presumed to have been executed under her undue influence.  For Mrs Karsten it was submitted to the learned Registrar that the relevant relationship between the parties was not that of solicitor and client, but that of domestic partners, so that there is no irrebuttable presumption of undue influence
31.	The learned Registrar accepted that submission.  He said:
“It is quite true that the Petitioner is a solicitor, but, with respect, that is irrelevant.  What is relevant is that they were living together as domestic partners, when they entered into the Trust Deed, a fact that the Respondent is at |pains to emphasise in his written evidence before me.  It clear to me that they entered into the Trust Deed in that capacity.  It is worth remembering that the Respondent’s case is that the monies in question were given by her to him for looking after her children.  His case is entirely consistent, and consistent only, with the transaction being a domestic one.  The fact that the Petitioner does not accept that the monies were given by her to him, but were loaned by her to him, in no way assists the Respondent’s case based on undue influence.  In my judgment, this is not a case where a presumption of undue influence arises.”
32.	Before me, Mr Markham’s case on undue influence was put more broadly.  Miss Meyer submitted that even if the relevant relationship was that of domestic partners, the evidence disclosed an arguable case of a dependency by Mr Markham upon Mrs Karsten in relation to the handling of his own affairs sufficient to give rise to an evidential inference rather than a rebuttable presumption that she was in a position of influence over him.
33.	I have not found this aspect of the appeal at all easy.  The starting point is the re-statement of the law of undue influence to be found in the decision of the House of Lords in Royal Bank of Scotland Plc v Etridge (No2) [2002] 2 AC 773.  All the conjoined appeals were about husband and wife cases (which, as the learned Registrar recognised, are closely analogous with cases of domestic co-habiting partners who are not married).  There are however authoritative dicta by way of summary of earlier authorities in relation to special relationships, such as that of solicitor and client.  Lord Nicholls said this, at paragraph 18:
“The law has adopted a sternly protective attitude towards certain types of relationship in which one party acquires influence over another who is vulnerable and dependent and where, moreover, substantial gifts by the influenced or vulnerable person are not normally to be expected.  Examples of relationships in this special class are parent and child, guardian and ward, trustee and beneficiary, solicitor and client, and medical adviser and patient.  In these cases the law presumes, irrebuttably, that one party had influence over the other.  The complainant need not prove he actually reposed trust and confidence in the other party.  It is sufficient to him to prove the existence of the type of relationship.”
34.	It by no means follows from the existence of an irrebuttable presumption that one party to such a special relationship had influence over the over, that every gift or transaction between them is presumed to have been brought about by the exercise of undue influence.  This is apparent from paragraph 24 of Lord Nicholls’s speech, by reference to the following dictum of Lindley LJ in Allcard v Skinner (1887) 36 Ch D 145, at  185:
“But if the gift is so large as not to be reasonably accounted for on the grounds of friendship, relationship, charity, or other ordinary motives on which ordinary men act, the burden is upon the donee to support the gift”
Lord Nicholls said this:
“The second prerequisite, as expressed by Lindley LJ, is good sense.  It is a necessary limitation upon the width of the first prerequisite.  It would be absurd for the law to presume that every gift by a child to a parent, or every transaction between a client and his solicitor or between a patient and his doctor, was brought about by undue influence unless the contrary is affirmatively proved.  Such a presumption would be too far-reaching.  The law would be out of touch with everyday life if the presumption were to apply to every Christmas or birthday gift by a child to a parent, or to an agreement whereby  a client or patient agrees to be responsible  for the reasonable fees of his legal or medical advisor.  The law would be rightly open to ridicule, for transactions such as these are unexceptionable.  They do not suggest that something may be amiss. So,  something more is needed before the law reverses the burden of proof, something which  calls for an explanation.  When that something more is present, the greater the disadvantage to the vulnerable person, the more cogent must be explanation before the presumption will be regarded as rebutted.”
35.	In my judgment the learned Registrar’s analysis of this issue in the paragraph which I have quoted from his judgment is, with respect, over-simplistic.  For my part, I cannot envisage why a relationship of solicitor and client between two parties to a transaction should be irrelevant merely because they are also in another well-recognised relationship in which influence, or the reposing of trust and confidence, may arise.  On the contrary, it seems to me that the influence which is presumed to exist between solicitor and client may be strengthened if they are also in a marriage or domestic partner relationship.
36.	Nor in my judgment is it correct to confine the presumption of influence, as between solicitor and client, to transactions of a legal rather than domestic nature.  The classic cases are about gifts rather than legal transactions.  In any event, the Trust Deed was at  least to some extent a legal transaction, both because it gave rise for the first time to a binding trust of the relevant property and because it recorded in writing for the first time the existence of a debtor creditor relationship between the parties, and constituted an account stated as to the relevant debt.

37.	In my judgment the evidence disclosed a clear triable issue as to the existence of the relevant relationship of trust and confidence between the parties.  The more difficult question is whether the transaction constituted by the Trust Deed is, within the confines of a relationship which was both that of solicitor and client and that of domestic partners, one that called for an explanation, or rather one that is merely unexceptionable.  More precisely, the question is whether there is a triable issue that the transaction calls for an explanation.  In that context, I consider that everything depends upon what might be established at a trial as to the relevant background preceeding the execution of the Trust Deed.

38.	If for example it were proved (as Mrs Karsten asserts in evidence) that the parties had from the outset orally agreed that payments by her to him or for his benefit were to be loans rather than gifts, and that she had carefully and painstakingly calculated the amount outstanding by October  2005,  then the transaction constituted by the Trust Deed (or at the very least that part of it recognising the  continuing existence of a debt of £1.125 million) would indeed be unexceptionable.  It would be no more than putting into writing what the parties had in substance already agreed by their words and conduct.  

39.	By contrast, if it were shown at trial that (as Mr Markham contends) the payments were gifts or the informal quid pro quo for his looking after Mrs Karsten’s children, then the Deed of Trust, purporting to record the contrary, would plainly be disadvantageous to Mr Markham and something calling for an explanation.  

40.	There is of course a substantial undistributed middle between those two extremes, including for example the by no means unlikely scenario that Mrs Karsten transferred substantial sums of money to Mr Markham or for his benefit in circumstances where neither of them either discussed or gave significant thought to the precise legal basis upon which this was taking place.  Such things routinely occur between co-habitees in relation for example to the ownership of their dwelling house; see Stack v Dowden [2007] 2 WLR 831.

41.	In the present case, it is by no means clear beyond a genuine triable issue that the parties orally agreed that which the Trust Deed records.  On the contrary, if there was an exchange of letters in April 2002 in the terms reflected in the copies produced in evidence by Mr Markham (as to which I have already held that there is a triable issue) then the parties appeared to have been at odds with each other on that very question long before the end of the harmonious period of their relationship.  

42.	True it is that the evidence suggests that Mrs Karsten sought to obtain Mr Markham’s  signature to trust deeds in  2002 and  2004 broadly reflecting that which she asked him to sign in October  2005, but it is common ground that he did not sign those earlier deeds, and in my judgment it is significant that, in 2004,  Mrs Karsten appeared to have recognised that the deed which she then wished him to sign was of sufficient significance to merit his obtaining independent legal advise before doing so, if necessarily at her expense.  It is not suggested that in October 2005 Mr Markham was invited to or did obtain any such advice during the three day period which Mrs Karsten suggests he had between receiving and returning the Trust Deed duly signed.  

43.	It is of course tempting to conclude that since Mr Markham has chosen to tell a pack of lies about the circumstances in which he signed the Trust Deed (as the learned Registrar rightly concluded), the court should be slow to conclude that there exists an arguable case of undue influence, even if he signed an otherwise complete document while sober.   But the tenderness of a court of equity to the possible victim of undue influence extends as much to the foolish liar as to those who are wise and honest, and wherever it is arguable that a transaction procured by a solicitor from her client calls for explanation, the jurisdiction exists also for the encouragement of the better conduct of solicitors, quite apart from the protection of persons who might prove to be their victims.

44.	In my judgment therefore, there is a genuine triable issue as to the existence of a case of undue influence in relation to the Trust Deed, and the learned Registrar was wrong to reach a contrary conclusion.  In so saying, I am far from suggesting that an affirmative outcome to that issue is probable.  It may well be that it is improbable.  Numerous decisions under the closely analogous CPR Part 24 show that summary judgment rejecting a defence is not appropriate merely because the defence is improbable.  Probabilities are properly a matter for trial.  

45.	I see no reason to conclude that the test for the existence of a genuine triable issue in relation to the defence to a bankruptcy petition should be more stringent than that applied to a defence under Part 24.  I consider that as a matter of analysis that two tests must be broadly equivalent.  Just as there is no reason to dismiss a petition and require a claimant to commence proceedings in which he is likely to obtain summary judgment, so there is no reason to make a bankruptcy order where, had the petitioner proceeded by ordinary proceedings the respondent/defendant would have obtained permission to defend (even if only upon conditions, due to his defence being regarded as shadowy).  
46.	Furthermore, it seems to me that where the issue in question is whether the transaction procured by a solicitor with someone who was at the time her client disclosed an arguable case of undue influence, that is of itself good reason for requiring the matter to be tried, and for the solicitor to face cross examination as to the righteousness of the transaction, if the matter is otherwise finely balanced. 

The Acknowledgement
47.	I can deal with this aspect of the appeal much more briefly.  The Acknowledgment records the existence of a slightly larger debt as between the parties, but its effect is otherwise much the same as the Trust Deed.  Mr Markham’s defence before the learned Registrar was simply that he denied signing it.  No undue influence case was advanced in relation to the Acknowledgement either before the learned Registrar or in the Grounds of Appeal, although I permitted that argument to be advanced on Mr Markham’s behalf, for the first time on appeal, based upon essentially the same evidence as that relied upon in relation to the Trust Deed.
48.	Again, the learned Registrar describes Mr Markham’s evidence that he did not sign the Acknowledgment as incredible, but for very different reasons than those given in relation to the Trust Deed. It will be recalled that the Acknowledgement was mentioned in, but not exhibited to the Statutory Demand, and was not produced to Mr Markham until exhibited to Mr Karsten’s witness statement dated 4th October 2006, that is after Mr Markham’s first and second witness statements, but before his third and fourth.
49.	The learned Registrar’s reasons for treating this evidence as incredible appear for the following paragraph of his judgment:
“I reach this conclusion for the following reasons.  First, there is the fact that he made no mention of the Acknowledgment, which was potentially fatal to his opposition to the Petition, in any of his first three Witness Statements, despite it having been mentioned in the Statutory Demand.  Secondly, there is the fact that he only mentioned it,  and claimed that the signature on it was not his signature, after Counsel for the Petitioner sought to rely on it at the hearing on 11th December 2006.  The absence of any mention of the Acknowledgement in any of his first three Witness Statements, coupled with the timing of his first mention of it and his claim that the signature on it was not his, is in my judgment, so overwhelming as to render the claim that he did not sign it incredible”
50.	While I accept that the matters relied upon by the learned Registrar make it improbable that Mr Markham did not sign the Acknowledgement, in my judgment those reasons fall short of justifying a conclusion that the evidence ought to be treated, without further testing, as incredible.  First, it does not seem to me to be wholly unreasonable for Mr Markham to have awaited sight of what the Statutory Demand called “an agreement confirming the debt”, before addressing it in evidence.  Secondly, the only witness statement of Mr Markham in which he failed to address the Acknowledgment, which followed his sight of it was his third, but that, as I have said, was taken up almost entirely with the justification for his unsuccessful attempt to have the hearing on 11th December adjourned, and did not address the merits of the case at all.  Of course it may be said that a prudent and well advised litigant should have sought inspection of the “agreement” once seeing that it was relied upon in the Statutory Demand, and should not have let the opportunity of making a third witness statement go by without addressing it.  Those are matters which would no doubt feature heavily in cross examination, and which may ultimately be decisive on the balance of probabilities.  But in my judgment they go no further than that.
51.	It follows that I must assess afresh the question whether Mr Markham’s evidence that he did not sign the Acknowledgement is incredible, on the totality of the evidence before me.  As to that, there is little beyond the evidence referred to by the learned Registrar.  True it is that, as Miss Meyer pointed out, the signature on the Acknowlegement is in a significantly different style from that on the other documents in the bundle which bear Mr Markham’s signature, but having regard to his failure to adduce authenticated comparables when his signature on the Trust Deed was directed to be subjected to expert analysis, I place little reliance on that.
52.	Secondly, although in his fifth witness statement Mr Markham, no doubt on advice, went to considerable trouble to set out those aspects of his case which, although not mentioned in his third witness statement, he had communicated to his legal advisers before 11th December (when his case was roundly criticised on the merits) it does not appear that he included this evidence about his not having signed the Acknowledgment.

53.	Finally, there is of course the similar fact that Mr Markham attempted, but ultimately abandoned, an attempt to put in issue the authenticity of his signature on the Trust Deed, which he signed some two months later than the Acknowledgment.  Again, that is a factor which may fairly be said to be likely to taint the whole of his evidence even when it comes to be tested at trial, but is not in my judgment sufficient even when coupled with the matters upon which the learned Registrar relied, to justify a conclusion, without trial, that the evidence on this point must be rejected.

54.	I can deal much more briefly with the issue of undue influence in relation to the Acknowledgement, not least because on the view which I have formed that there is a triable issue as to its authenticity, the undue influence point does not necessarily arise at this stage.  Nonetheless it seems to me, for the reasons which I have given in relation to the Trust Deed that, albeit perhaps with less force, there is a triable issue as to undue influence in relation to the Acknowledgement as well.  It is slightly less a “legal” document than the Trust Deed, and, not purporting to be by way of agreement,  may lack the contractual force of an account stated.  Nonetheless, it seems to me that there are possible (even if unlikely) outcomes at trial as to the factual pre-history which might cast the Acknowledgement in a light which calls for explanation. 

Presumed Loan 
55.	My conclusion that neither the Trust Deed nor the Acknowledgement constitute, either together or separately a sufficient basis for concluding, beyond the existence of a genuine triable issue, that Mr Markham has no defence, leaves outstanding the learned Registrar’s final basis for his decision, reflected in the following succinct paragraph of his judgment:
“Even I am wrong so far, the fact remains that the Petitioner has paid sums in excess of £1 million to or for the benefit of the Respondent, according to the evidence before me.  As between persons who are not man and wife, there is no presumption of advancement and, therefore, the monies must be treated as having been loaned and not given.  On that basis alone the Petitioner is entitled to the Order that she seeks.”
56.	This final basis for the learned Registrar’s conclusion is in my judgment, again, an oversimplification.  True it is that where there is a dispute between the payer and recipient of a sum of money as to whether it was a loan or gift, and no presumption of advancement arises between them, the onus is on the recipient to prove that it was a gift ; see Seldon v Davidson [1968] 1WLR 1083, per Wilmer LJ at  1088F and per Edmund Davies LJ at 1090F.  In that case, the Court of Appeal upheld the case management decision of the county court judge that it was for the defendant who admitted receipt of money from the claimant to go first, and prove that the payment was by way of a gift, as he alleged.
57.	In the present case, were the matter to proceed by way of a claim by Mrs Karsten for repayment by Mr Markham, and the pleadings showed that Mr Markham admitted receipt of the payments alleged, it would be for Mr Markham to open the case at trial.  But Mr Markham’s evidence in both his fourth and fifth witness statements, was that the payments were not by way of loan but rather by way of gifts, or by way of a quid pro quo in return for his providing emotional support to her and for looking after her children.
58.	The only basis upon which the evidential presumption referred to by the learned Registrar in the passage of his judgment which I have just quoted would be conclusive against there being any genuine triable issue would be if it could properly be assumed that Mr Markham’s evidence about that was incredible, like his evidence about the Trust Deed.  The learned Registrar did not so conclude, and he prefaced his reliance upon the evidential presumption that there was a loan by the remark “even [if] I am wrong so far”, meaning, as I interpret it, even if he had been thus far wrong to conclude (among other things) that Mr Markham’s evidence about the Trust Deed and the Acknowledgment was incredible.  
59.	In my judgment the fact that it would be for Mr Markham to prove his case at the trial that the payments were by way of gift or informal quid pro quo rather than by way of loan, cannot of itself lead to the conclusion that his allegation to that effect discloses no genuine triable issue.  It therefore falls to me to decide, upon the whole of the evidence now available (including Mr Markhams’s fifth witness statement ) whether there is a genuine triable issue in relation to that question.
60.	Mr Leahy submitted that I should reject Mr Markham’s evidence on this point as incredible.  She relied on the fact that it was only hinted at for the first time in his fourth witness statement, that none of the material relied upon by Mr Markham in support (such as the April 2002 letters of Mrs Karsten’s will)  provided significant support to his case, that the aggregate of the payments amounted to more than half of her personal wealth, and that his evidence from this issue was inevitably tainted by the incredibility of his evidence about the Trust Deed.
61.	I accept that all those matters point to it being improbable that Mr Markham’s evidence about the nature of the payments received from Mrs Karsten would be accepted at trial.  But in my judgment the evidence on that issue falls just short of being inherently incredible, to the degree sufficient to make it just to deprive Mr Markham of the opportunity to seek to establish his case at trial.
Conclusion
62.	It follows that, because I have been unable to concur with the learned Registrar’s view that there is no genuine triable issue raised by Mr Markham’s evidence, this is not a case in which he ought to have made a Bankruptcy Order. This appeal must therefore be allowed.
63.	Since however it appears that there may be other creditors who would wish to support the Petition, I will hear submissions as to an appropriate form of order.