A2/2001/2254 
Neutral Citation Number: [2002] EWCA Civ 981
IN THE SUPREME COURT OF JUDICATURE 
CIVIL DIVISION 
ON APPEAL FROM THE HIGH COURT 
CHANCERY DIVISION
(Mr Justice Hart)
The Royal Courts of Justice
The Strand
London

Friday 3 May 2002 
Before:

LORD JUSTICE SIMON BROWN 
Vice President of the Court of Appeal, Civil Division 

LORD JUSTICE LAWS

LADY JUSTICE ARDEN 

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Between:
 THE COMMISSIONERS OF INLAND REVENUE

Claimant/Respondent 
and: 
(1) MOHAMED AKRAM HASHMI 

(Executor of the Estate of Muzamil Ghauri Deceased) 
Defendant
(2) OMAR GHAURI 
Defendant/Appellant 
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Transcript prepared from the Steno Notes
of Smith Bernal Reporting Limited
190 Fleet Street  London EC4A 2HD
Tel:  0207 404 1400
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MR N CADWALLADER (instructed by Emsleys, 35B Main Street, Garforth, Leeds) appeared on behalf of the Appellant
MISS K SELWAY (instructed by Commissioners of Inland Revenue, Solicitors Office, Somerset House, London WC2R) appeared on behalf of the Respondent
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JUDGMENT
Friday 3 May 2002 
1.	LADY JUSTICE ARDEN: This is an appeal by the second respondent (“Omar”), with the permission of the judge, against the order of Hart J dated 4 October 2001, setting side a written declaration of trust dated 20 February 1989 made by Mr Muzamil Ghauri (“Mr Ghauri”), whereby Mr Ghauri declared that he held the beneficial interest in the property known as 83 Buslingthorpe Lane, Leeds, on trust to Omar, pursuant to section 423 of the Insolvency Act 1986. The deed was stated to be in consideration of natural love and affection and in favour of Omar, the son of Mr Ghauri, who was then 16. 
2.	For some years Mr Ghauri had been carrying on the business of an Indian restaurant at 83 Buslingthorpe Lane (“the property”). Mr Ghauri had the opportunity of buying the freehold in the property in 1989 for £18,000. He bought it and executed the declaration of trust on the same day. In 1993 the Inland Revenue received information that Mr Ghauri had, either alone or with his eldest son, Karim, purchased properties in this country and in Spain with business profits which had not been declared to the Revenue. This led to an investigation. The investigation resulted in an agreement between Mr Ghauri and the Revenue for settlement of unpaid tax liabilities, interest and penalties. The amount of the admitted undeclared profits of the restaurant business were £885,000 for the period from 6 April 1983 to 5 April 1994. The Revenue brought proceedings under section 423 of the Insolvency Act 1986 to set aside the declaration of trust, following disclosure of the declaration of trust which did not occur until after Mr Ghauri died in July 1997. 
3.	I now turn to section 423. This provides:
“(1) This section relates to transactions entered into at an undervalue, and a person enters into such a transaction with another person if - 
(a) he makes a gift to the other person or he otherwise enters into a transaction with the other on terms that provide for him to provide no consideration; or
. . .
(c) he enters into a transaction with the other for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by himself.
(2) Where a person has entered into such a transaction, the court may, if satisfied under the next subsection, make such order as it thinks fit for -
(a) restoring the position to what it would have been if the transaction had not been entered into, and 
(b) protecting the interests of persons who are victims of the transaction. 
(3) In the case of a person entering into such a transaction, an order shall only be made if the court is satisfied that it was entered into by him for the purpose -
(a) of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him, or 
(b) of otherwise prejudicing the interests of such a person in relation to the claim which he is making or may make.”
4.	I shall refer to the purpose which is required to be shown by virtue of subsection (3) as “the statutory purpose”.
5.	There is no direct evidence of Mr Ghauri's intention. The judge held that the evidence was sufficient to draw an inference that Mr Ghauri had the purpose in section 423(3). He relied on the fact that there had been “a persistent pattern of gross under declaration of profits” over the years preceding 1989. In his judgment the inescapable inference was that the defendant had acted deliberately and dishonestly and that the defendant would have known that, should his dishonesty be uncovered, he would be liable for tax, interest and penalties in very considerable amounts. The judge held that Mr Ghauri was therefore in 1989 sitting on “a potential financial bomb” although there was no inevitability that it would ever explode. 
6.	He found that the amount of unpaid liabilities up to and including the 1988/1989 tax year amounted to some £86,000 exclusive of penalties and interest. At the same time Mr Ghauri's assets consisted of the property, his dwelling-house at 160 Shadwell Lane (valued in the disclosure of assets to the Revenue at some £83,500 but later valued in 1998, so it appears, at £170,000) and various bank accounts of unknown amount. The judge held that it could hardly be supposed that after tax Mr Ghauri thought he would be likely to be left with a sufficient sum to discharge tax liabilities in respect of past years which had accrued as a result of his dishonest conduct. This was particularly so as his contemplation must have been that he would persist in his dishonest practices and therefore, in the judge's words, “clock up further potential liabilities”. The judge also relied on the fact that the declaration did not have immediate effect. The restaurant carried on in the property was sold in December 1991. After it was sold the property was let and the rent was paid to Mr Ghauri. Moreover, in the course of the Revenue's investigation Mr Ghauri disclosed the property as his apparently unencumbered property. As I have explained, Mr Ghauri died on 23 July 1997. He had had serious health difficulties for many years before that and was ill in 1989.
7.	The judge then turned to the question whether as a matter of law the statutory purpose had to be a dominant purpose. He accepted that so far as his family was concerned Mr Ghauri was a caring parent who honestly desired to secure his children's future, and the declaration of trust was a product of such a desire. He accordingly held that Mr Ghauri had two purposes in making the declaration. He wanted to give Omar the security of the property as an asset for the future. In addition, he wanted to put the property beyond the reach of creditors, should creditors emerge. The judge expressed himself satisfied that Mr Ghauri would have been alive to the fact that the transaction would have had that effect and therefore had that purpose at the date of the declaration. 
8.	The judge then turned to the authorities. In Chohan v Saggar [1992] BCC 306, Mr Evans-Lombe QC (as he then was), sitting as a Deputy High Court Judge of the Chancery Division, held that section 423(3) required a plaintiff to show a dominant purpose to remove assets from the reach of actual or potential claimants or creditors, but not excluding the possibility that there might be other purposes behind the relevant transfer. In the later case of Pinewood Joinery v Starelm Properties Limited [1994] 2 BCLC 412, Judge Moseley QC, sitting as a Judge of the High Court, expressed doubt as to whether it was necessary to find a dominant purpose. In Royscot Spa Leasing Ltd v Lovett [1995] BCC 502 the matter was touched on in the judgment of Sir Christopher Slade in this court. He referred to the holding of Mr Evans-Lombe in Chohan v Saggar and added at 507G:
“For the purposes of this appeal, though without deciding the point, I am content to assume in favour of the plaintiffs that the relevant purpose which has to be established in the application of s 423 is substantial purpose, rather than the stricter test of dominant purpose.”
9.	Sir Christopher Slade went on to point out that the actual point of the transfer had to be investigated and that the test was not solely an objective one. In In re Brabon, unreported, 3 March 2000, Jonathan Parker J held as follows:
“I start with the words of section 423(3), set in the context of the mischief at which the section is directed. The subsection itself does not apply any epithet to the word 'purpose'. . . Once that is accepted, and given that, notwithstanding section 423 is entitled ‘Transactions defrauding creditors’, it is not necessary for the trustee to establish dishonesty, I confess that I find some difficulty in distinguishing between a ‘dominant’ purpose and a ‘substantial’ purpose. On the basis that there is a difference, however, and that ‘substantial purpose’ is indeed a lesser test than ‘dominant purpose’, I am content to proceed in the instant case on the footing that ‘substantial purpose’ is the correct test. I emphasise, however, that I do so on the same basis as the Court of Appeal in Royscot Spa: that is to say, on the basis that if the trustee cannot meet the lesser test, a fortiori he could not meet the stricter one.” 
10.	In his judgment in this case Hart J also expressed the view that there was no warrant in the statutory language for any qualification of this statutory purpose as being the dominant purpose. Moreover, in his judgment, in the classic type of case to which this section is intended to apply it will frequently be the case that the motive to defeat the creditors and the motive to secure the family for the future will co-exist in such a way that even the transferor himself may be unable to say which was uppermost in his mind. The judge considered it was difficult to see why the statutory purpose should not exist where there are two purposes of equal power. However, the judge held on the evidence that if it was, as it was, necessary for him to find that the statutory purpose was the dominant purpose, there was material on which he could and did reach that conclusion. He relied particularly on the facts that no steps were taken after Mr Ghauri's death to ensure that the interest of Omar under the declaration of trust was protected by endorsement on the land register. He held that did not show an overwhelming intention to benefit Omar as at the date of the trust deed. Accordingly the judge held that the statutory purpose was Mr Ghauri’s dominant purpose in executing the declaration of trust and he proceeded to make the declaration to which I have referred.
11.	The grounds of appeal may be summarised in the following way. The inference that Mr Ghauri had the statutory purpose was not supported by the evidence; alternatively, that the court was not entitled to draw the inference that the statutory purpose was Mr Ghauri’s dominant purpose on the evidence before it.
12.	I turn now to the appellant's submissions. Mr Neil Cadwallader, who appears for the appellant, submits that there was insufficient evidence on which the judge could find that Mr Ghauri was likely to be left with insufficient funds to discharge his tax liabilities. He also submits that it was necessary to find that Mr Ghauri thought about defrauding the Revenue positively. I can deal with that last point briefly. As I see it, it is sufficient if the court can draw the necessary inference as to the statutory purpose. 
13.	Mr Cadwallader submits that the evidence about assets was not comprehensive. I can deal with this point too at this stage. The answer to this point is that the judge had to do deal the best he could with the evidence available. It is accepted that Mr Ghauri's assets included Shadwell Road and the bank accounts, but Mr Cadwallader says that the judge did not take into account the ongoing profits; but he clearly did so because he refers to the sums admitted in respect of under-declared profits in the period 1983 to 1989. On the liabilities side, it is accepted that the tax liabilities were £86,000-odd at the date of the declaration of trust, to which there would have to be added penalties and interest, although we are told that the amount of penalties is a discretionary matter. Mr Cadwallader argues that the judge should have taken into account the lease of the property. He accepts, however, that the lease may have been merged into the freehold after it was acquired, and that the judge was entitled to take that view. Certainly no rent was paid by Mr Ghauri after the date of the purchase. Mr Cadwallader also submits that the judge failed to take into account the value of the business. But the judge did take into account the prospect of future profits with, of course, their concomitant tax liabilities. It would be double counting if the judge also took into account the goodwill of the business. Mr Cadwallader submits that the judge should have taken into account 104 Burley Road, but in 1994 this was Karim's property and the evidence did not show that Mr Ghauri had owned it in 1997. 
14.	Mr Cadwallader then submits that the judge was not entitled to find that the deed was not intended to have any immediate effect. On his submission, if it had been intended to have immediate effect, there could be no intent to defraud. In my judgment, this does not follow since it was intended that the deed should have effect at some point in time, at the latest on Mr Ghauri's death. Mr Ghauri could foresee that at that point in time creditors could be left unpaid if the Revenue discovered his fraud. 
15.	Mr Cadwallader submits that the judge did not consider the evidence as a whole and was wrong to ignore Mr Cadwallader's submission that Mr Ghauri did not intend to defraud the Revenue. Of course this was part of the evidence that the judge had to consider. Mr Cadwallader submits that the judge assumed that Mr Ghauri intended the deed to have the effect of defrauding the Revenue because he would have realised it could have that effect. I accept that the distinction between result and purpose must be clearly borne in mind when considering whether the statutory purpose is satisfied. 
16.	In short, Mr Cadwallader submits that the inference drawn by the judge as to Mr Ghauri's purpose was against the weight of the evidence. He also challenges the judge's finding that the intention to defraud the Revenue was Mr Ghauri’s predominant purpose on the ground that the finding was not open to the judge on the evidence before him. 
17.	Miss Kate Selway for the respondent supports the judge's reasoning. She submits that the judge was entitled to find that the purpose to defraud was dominant for three reasons in particular. First, Mr Ghauri continued to receive the rent after the sale of the corner shop business carried on in the property in 1991; secondly, during the course of investigation Mr Ghauri disclosed the property as apparently his own and unencumbered; and, thirdly, Mr Ghauri did not protect the interest of Omar on the land register and accordingly he could have sold the property free of Omar's interest. 
18.	I turn to my conclusions. 
19.	I take first the question of law as to the requirement of the statutory purpose in 423(3). It is clear that the purpose need not be the sole purpose: see Royscot Spa Leasing v Lovett at 407D per Beldam and Nourse LJJ. In this court it is an open question as to whether as a matter of law the purpose specified in 423(3) as to which the court has to be satisfied must be a dominant purpose. I should add in relation to the question of sole purpose that it cannot sensibly be maintained that by using the definite article before the word “purpose” in 423(3) Parliament only intended to catch transactions where the statutory purpose was the sole purpose. That is established by the Royscot Spa case. 
20.	I now turn to the question of predominant purpose. In Chohan v Saggar Evans-Lombe J took the view that the statutory purpose should be a dominant purpose. This was doubted in Royscot Spa, where this court proceeded on the basis that it was sufficient if substantial purpose was shown. The matter has been considered by several judges at first instance, as Hart J explained in his judgment.
21.	Section 423 is a new section. It stems from the Insolvency Act 1985. Its predecessor, section 172 of the Law of Property Act 1925, had a long history. According to the Annotated Guide to the 1986 Insolvency Legislation by Sealy and Milman, 5th Edn (2002) page 466, there had been a provision on these lines since 1571, and that ultimately its ancestry could be traced back to the Paulian action of Roman law. However, its judicial interpretation had not always been consistent and it was heavily criticised by the report of the Review Committee on Insolvency Law and Practice (Cmnd 8558, 1982)(the Cork Report). That report explained that the meaning of the expression “intent to defraud” was not entirely clear and in consequence recommended that section 172 should be re-enacted in an amended form to make a number of matters clear. In this connection the report recommended that the necessary intent should be an intent on the part of the debtor to defeat, hinder, delay or defraud creditors, or to put assets belonging to the debtor beyond their reach (report, paragraph 1215(b). It is interesting to note that, as part of the same recommendation, the report also recommended that such intent should be capable of being inferred whenever it was the natural and probable consequence of the debtor's actions in the light of the financial circumstances of the debtor at the time, as known, or taken to have been known, to him.
22.	Section 423 plays an important role in insolvency law. It can moreover apply even though the debtor is not in a formal insolvency. The counter-consideration is that, unlike transactions at an undervalue and preferences, which may be avoided only in a formal insolvency, under section 423 the stricter requirements of section 423(3) must be satisfied. In my judgment section 423(3) is a carefully calibrated section forming part of a carefully calibrated group of sections. It only applies to transactions which are gifts or have a gratuitous element (section 432(1)). The transaction is only set aside for the limited purposes of subsections (2)(a) and (b). The onus is on the claimant to show the statutory purpose (see (3)) and although there is very wide jurisdiction to make appropriate orders under 424, these may not prejudice the interests of bona fide purchasers for value under subsequent transactions. Even, however, as regards a party to a transaction potentially falling within section 423, there are significant checks and balances. This is not of course a comprehensive summary of the section: for a fuller description, see Muir Hunter on Personal Insolvency or Transactions Avoidance in Insolvency by R Parry, 2001, chapter 10. 
23.	The question arising on this appeal is whether on the true construction of section 423 the purpose shown must be a dominant purpose. In my judgment the answer to that question must be arrived at taking into account the role, as explained above, of section 423 in insolvency legislation. Accordingly it is not necessarily helpful to apply the construction placed on similar words in different provisions and none was suggested. In my judgment there is no warrant for excluding the situation where purposes of equal potency are concerned. That was pointed out by His Honour Judge Moseley QC in the Starelm Properties case and is in my judgment correct. Thus one purpose can co-exist with another. Moreover, as Jonathan Parker J said in In re Brabon, there is no epithet in the section and thus no warrant for reading one in. Accordingly, in my judgment, the section does not require the inquiry to be made whether the purpose was a dominant purpose. It is sufficient if the statutory purpose can properly be described as a purpose and not merely as a consequence, rather than something which was indeed positively intended. Moreover, I agree with the observation of the judge that it will often be the case that the motive to defeat creditors and the motive to secure family protection will co-exist in such a way that even the transferor himself may be unable to say what was uppermost in his mind. 
24.	To take a homely example, suppose that I need to post a letter and also need to take the dog for a walk, and combine both operations in the same outing. I approach this example on the footing that neither objective counts as trivial. It will be clear that I have two purposes in leaving the house. It is a meaningless enquiry to ask whether I regard one of those objects as superior to the other or regard them as of equal potency. By contrast, if I go out to post a letter and the dog gets out of the house, slips under the gate and runs after me, it could certainly not be said that I had two objects in that I was not intending to take the dog for a walk at the time. Likewise, if I go to take the dog for a walk, and going past the postbox find an unposted letter in my pocket and take the opportunity of posting a letter at the same time, it will not be correct to say that I had two objects in that walk. I had only the one object, that of walking with the dog, and the posting of the letter was but a consequence of it. On the other hand, if I decide to take the dog for a walk but take the view that I will use the opportunity to post the letter at the same time, it can be said that I had two objects in that outing even if I would not have posted the letter until another day but for the need to take the dog for a walk. 
25.	I cite these examples to emphasise that for something to be a purpose it must be a real substantial purpose; it is not sufficient to quote something which is a by-product of the transaction under consideration, or to show that it was simply a result of it, as in the Royscot Spa case itself, or an element which made no contribution of importance to the debtor's purpose of carrying out the transaction under consideration. I agree with the point made by Lord Justice Laws in argument, that trivial purposes must be excluded.
26.	I now turn to apply the law as I have found it to be to the present appeal. In my judgment it was open to the judge to draw inferences which are appropriate, contrary to Mr Cadwallader's submission. As Bowen LJ said in Edgington v Fitzmaurice (1885) 29 ChD 459 at 483, the state of a man's mind is as much a fact as the state of his digestion. There then comes a consideration of this court's proper approach to the judge's evaluation of the facts. The point has often been made before that the appellate court should not interfere in the judge's evaluation of matters of fact unless he is plainly wrong. One such case is Pehrsson v von Greyerz, a Privy Council case, unreported, no 2 of 1998, 16 June 1999. Lord Hoffmann delivered the judgment of the Privy Council. The Privy Council criticised the Court of Appeal of Gibraltar for coming to a different view from the judge as to whether evidence of a gift should have been accepted. Lord Hoffmann continued:
“Their Lordships consider that the Court of Appeal did not take sufficient account of the difficulty faced by an appellate court in making a verdict on the basis of evidence, which the trial judge has disbelieved. It may be the case that if the judge had known that one of the reasons that he gave for rejecting the evidence of a witness was wrong, he would have been willing to accept it. On the other hand, it may have made no difference. Not having seen the witnesses, the appellate court cannot easily form a view about their general credibility. It must be remembered that in reversing the judgment of a civil court, the appellate court (unless it orders a new trial, which in this case is not a practical possibility) is substituting a positive finding in favour of the losing party. It has often been said on the highest authority that it should not take such a step unless it is satisfied that the judge’s conclusion was ‘plainly wrong’. As Page-Wood LJ said in The Alice (1868) LR 2 PC 245, 252:-
‘  we should be most unwilling to come to a conclusion different from that of the Judge of the Court below merely upon a balance of testimony; and on its being affirmed by the Appellant that the testimony ought not to have been credited by the Judge of the Court below. He had an opportunity of testing, in the most ample manner, the conduct and demeanour of the witnesses; and we should require evidence that would be overpowering in its effect on our judgment with reference to the incredibility of the statements made by any witness, and the general testimony to which credit has been so given, before we could venture to come to a conclusion not only in favour of an Appellant in a case of this kind, but of course a conclusion adverse to a Respondent; thus inflicting on the Respondent a loss occasioned by the Board coming to a conclusion different from that which was come to on evidence, as to the value of which we have not the same facilities and means of forming a judgment as were possessed by the learned Judge who decided in the first instance.’
The Court of Appeal noted that the judge had not expressly said that he attached importance to the demeanour of the witnesses. But their Lordships would not expect or require judges to make specific mention of so obvious a matter. As Lord Wright said in Powell v Streatham Manor Nursing Home [1935] AC 243, 267:-
‘  where the evidence is conflicting and the issue is one of fact depending on evidence, any judge who has had experience of trying cases with witnesses cannot fail to realize the truth of what Lord Sumner says: as the evidence proceeds through examination, cross-examination and re-examination, the judge is gradually imbibing almost instinctively, but in fact as a result of close attention and of long experience, an impression of the personality of the witness and of his trustworthiness and of the accuracy of his observation and memory or the reverse.’”
27.	Although Lord Hoffmann was specifically dealing with the situation of conflict of oral testimony and the situation was an extreme one, the general point remains that the appellate court should be slow to differ from a trial judge who has heard all the evidence, particularly when witnesses have given oral evidence and been cross-examined.
28.	I now turn to the evidence in this case. Mr Cadwallader drew up in his submissions a formidable list of factors pointing against the judge's conclusion. He referred to the fact that the deed was expressed to be in consideration of natural love and affection for his son. It was explained in those terms at the time by Mr Ghauri to his lawyer, it was carried out through legal offices and documented as a gift when all kinds of attempts might have been made to dress it up as something else or conceal it altogether. It was not an unusual way of making provision for one's family members. The donee was a person to whom Mr Ghauri showed the deed and whom Mr Ghauri wished to interest in the family business, which was not a new venture but already established at the time of the deed. The deed was made at a time when Mr Ghauri was gravely ill but when there was no evidence that he thought he was about to become insolvent, and at a time when he had substantial assets and the prospect of ongoing profits from the business, the gift was also made four years before investigation by the Revenue and six years before the settlement report by the Revenue in November 1997 which led to the settlement between Mr Ghauri and the Revenue. So far as the intention of the deceased was concerned, the effect of the deed should have been to put assets out of the reach of the claimant, yet he appears to have relied upon it in the course of the investigation and appears not to have concealed the property from the Revenue in the course of their investigation. But the judge concluded otherwise. There was, in my judgment, material upon which he could do so. In particular, the only explanation for the consistent and considerable under-declarations of profit was an intention to defraud the Revenue. That was a matter which the judge was entitled to infer had been constantly in Mr Ghauri's mind for a number of years by the time of the declaration of trust. I reject the submission that the judge's findings with regard to Mr Ghauri's financial position were unsound for the reasons I have already given. The judge was entitled to reject the evidence of the family members that the purpose of the declaration of trust was family provision. 
29.	That leads to the question: was the judge entitled to find that the intent to defraud the Revenue was the dominant purpose? This does not now arise. However, it was clearly more difficult for this to be established. It was said that the declaration of trust was an unusual way to settle the property. Mr Ghauri retained the profits and dealt with the property as his own. I agree with Mr Cadwallader that this could have been seen as breach of trust. The judge relied on the fact that Mr Ghauri had received rent from the property after the business was sold. Mr Cadwallader submits that the facts are equally inconsistent with the inference that Mr Ghauri, who had been in occupation of the property when it was purchased, was entitled to occupy the property, perhaps by reason of some tenancy at will, and was acting in breach of trust. However, in my judgment, the judge was entitled to attach significance to the use by Mr Ghauri of the property as his own. Indeed, as part of the Revenue settlement Mr Ghauri offered to charge the property in favour of the Revenue. The fact that the property was included in Mr Ghauri's assets as disclosed to the Revenue, at first sight seems consistent with mistake, since Mr Ghauri was no doubt receiving rent from the property. There might seem to be no reason why he should have wanted to disclose the property as his asset at this stage. However, I accept Miss Selway's submission that it was open to the judge to conclude that Mr Ghauri's intention in so doing was to avoid an immediate challenge by the Revenue. 
30.	So far as failure to register Omar's interest at the Land Registry was concerned, it can be said that the facts are equally consistent with Mr Ghauri not having appreciated the need to do this, and there is no suggestion that he thought to take advantage of this situation. However, it was a factor which the judge was entitled to consider was significant in the context of the evidence as a whole.
31.	There are other factors which the judge did not expressly take into account, but they are not in my judgment such as to show that his conclusion was plainly wrong. In all, I consider that there was sufficient material for the judge to reach the conclusion that he did. In the circumstances I would dismiss this appeal.
32.	LORD JUSTICE LAWS: I agree. It is clear that the statutory purpose referred to in section 423(3) of the Insolvency Act 1986 need not be the only purpose for which the impugned transaction was entered into. Moreover, there is in my judgment no warrant for a construction of the statute which would qualify the term “purpose” by the adjective “dominant”. No such qualification is required to make sense of the Act or to give it pragmatic efficacy. On the contrary, it is easy to envisage cases where more than one purpose is at hand between whose weight or influence it is on the evidence impossible to distinguish in practical terms. 
33.	In such a case, in my judgment, the application of section 423(3) is by no means necessarily excluded. What in my judgment is required is that the claimant show that the donor, vendor or settler was substantially motivated by one or other of the aims set out in section 423(3)(a) and (b) in entering into the transaction in question. There may be cases in which, even absent the statutory purpose, the transaction would or might have been entered into anyway. That would not necessarily negate the section's application; but the fact-finding judge on an application made to him under section 423 must be alert to see that he is satisfied that the statutory purpose has in truth substantially motivated the donor if he is to find that the section bites. 
34.	It seems to me to be manifest that an inference that Mr Ghauri entertained the statutory purpose was readily available from the primary facts here, certainly on the footing that the section is to be construed as I would construe it. This construction is, I apprehend, entirely consonant with my Lady's approach to the statute. 
35.	For these reasons and those given by my Lady I too would dismiss the appeal.
36.	LORD JUSTICE SIMON BROWN: To have a transaction struck down under section 423 of the Insolvency Act the creditor (“the victim” in the language of the statute) must satisfy the court that the debtor entered into it “for the purpose of” putting assets beyond the creditor's reach or otherwise prejudicing his interests. Must that be the debtor's (a) sole purpose or (b) dominant purpose or (c) merely a substantial purpose; if the latter, how should the question be approached? As Lady Justice Arden and Lord Justice Laws have demonstrated, the arguments against the test being one of sole or dominant purpose, and in favour of it being one of substantial purpose, are compelling.
37.	Rather more difficult, however, as it seems to me, is the correct approach to that test. At an early stage in the argument I suggested that the question for the judge might be, “Am I satisfied that this transaction would not have been entered into (on the facts of the present case, that this gift would not have been made) but for the debtor's wish to put his assets beyond his creditors’ (or prospective creditors') reach?” If, in other words, the judge were to conclude that the gift would or might have been made in any event, then on this approach the creditor's claim to set it aside would necessarily fail. Such an approach assumes that if the gift would have been made in any event, it could not properly be said to have been made for the purpose of putting it beyond the creditors' reach. 
38.	I became persuaded, however, that this is the wrong approach. Assume, say, that the debtor makes a gift partly out of a wish to avoid inheritance tax and partly to escape his creditors; and assume further that he would have made it in any event purely for inheritance tax purposes. That, to my mind, should not save the gift from being set aside. Escaping the creditors may well, after all, have been a substantial factor in the donor's thinking. No more should a gift, in my opinion, be saved merely because the debtor would in any event have made it to benefit the donee. 
39.	It therefore seems to me that the test cannot be refined beyond saying that in each case the question to be asked is: can the court be satisfied that a substantial purpose of the debtor's transaction was (putting it in shorthand) to escape his liabilities? 
40.	I would, however, add this. If in fact the judge were to find in any given case that the transaction is one which the debtor might well have entered into in any event, he should not then too readily infer that the debtor also had the substantial purpose of escaping his liabilities. The judge in the present case, although accepting that the debtor wanted to secure his son's future, found that his dominant purpose was to put the property beyond the Revenue's reach. For my part, I would question whether the evidence entitled him to go quite that far. He was, however, in my judgment certainly entitled to conclude that this was one of the debtor's purposes, and not a negligible one. Such a conclusion was, in my judgment, sufficient to sustain his decision. 
41.	I too, therefore, would dismiss this appeal.
ORDER: Appeal dismissed with costs, those costs to be subject to detailed assessment.
(Order not part of approved transcript)