England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(MR JUSTICE PARK)

		Royal Courts of Justice Strand London WC2 Monday, 15th October 2001

Monday, 15th October 2001

1. LORD JUSTICE JONATHAN PARKER: Before the court are two applications by Mr Angelo Perotti, who appears in person, for permission to appeal against orders made by Park J.
2. By the first of the applications (Court of Appeal reference number 2001/1655) permission is sought to appeal against the order of Park J dated 3 May 2001 whereby he dismissed Mr Perotti's application that his Halifax Bank account be unfrozen and/or that the bank be restrained from imposing restrictions on his operation of that account. By his second application (Court of Appeal reference number 2001/1656) permission is sought to appeal against Park J's order dated 21 June 2001 whereby he dismissed Mr Perotti's applications that (1) he be allowed to repay to his mother moneys held by him as trustee for her, and (2) charging orders on a property known as 64 Ivor Court of which he is the beneficial owner be set aside, on the basis that they were improperly obtained, or alternatively that they be varied so as to permit him to repay the sums which he contends that he holds as trustee for his mother.
3. I turn to the first of the two applications. On 24 June 1999, following judgment in two actions, one of which was brought by Mr Perotti against Mr Kenneth Corbett Watson and others, and the other of which was brought by Mr Watson and others against Mr Perotti, Rimer J made a freezing order against Mr Perotti, limited to assets up to a value of £283,000. Mr Perotti applied to Park J by an application dated 27 April 2001 for the relief which I indicated earlier. Mr Perotti submitted to Park J, in summary: (a) that it was never the purpose of a freezing order to prevent a person carrying on his "normal business life" and settling household bills; (b) that as long as a person could not dissipate his assets he should be free to continue his usual business; (c) that he, Mr Perotti, had written to Mr Watson's solicitors in about May 2000 inviting them to unfreeze his Halifax Bank account (which is a current account), but that they had refused (they had only authorised withdrawals of £200 per week for living expenses, and Mr Perotti's monthly mortgage repayments of some £711); (d) that as there was no money in the account to be protected, it was unnecessarily oppressive to disable Mr Perotti from operating his current account; (e) that the Halifax Bank was contravening the terms of the freezing order in refusing to allow Mr Perotti to write cheques against cash which he had specifically paid into the account in order to cover the payments in question; and (f) that it was "lunacy" (his word) that he could not carry forward his weekly allowances, but rather that each weekly allowance would fall away if he did not withdraw the permitted maximum sum of £200 per week.
4. By his order dated 3 May 2001 Park J dismissed that application. In so doing he expressed sympathy for Mr Perotti's position, but concluded that there was no basis for varying the freezing order so as to exclude the Halifax account from its operation.
5. Mr Perotti now seeks permission to appeal against that order on the following grounds (again I summarise): (a) that he was not given a fair and impartial hearing and that the judge misdirected himself; (b) that the judge had not dealt specifically with his primary application that the account be excepted from the operation of the freezing order (that is to say unfrozen); but rather that the judge had confined his judgment to the second aspect of Mr Perotti's application and addressed the question whether the restrictions imposed by the bank on the operation of the account in relation to payments to his mother should be continued; (c) that despite Mr Perotti's insistence the judge had refused to consider adequately, or at all, the primary application which Mr Perotti had made; (d) that there are no assets in the bank account in question and accordingly no assets susceptible of being subject to the freezing order; and (e) that the judge was partial in failing to consider the whole of Mr Perotti's application.
6. In his oral submissions this morning in support of this application Mr Perotti has referred me to a note in an earlier edition of the White Book under the old rules, dealing with the jurisdiction to grant freezing orders. The note reads as follows:

"In addition it should be noted that a Mareva injunction is not granted to improve the position of the plaintiff as against other creditors by giving him priority over the assets of the defendant nor to prevent the defendant from paying debts as they fall or to punish him for his alleged misdeeds or to enable the plaintiff to exert pressure on him to settle an action, but solely to prevent the plaintiff being cheated by the defendant disposing of his assets out of the jurisdiction or dissipating them within the jurisdiction..."

and then authority is referred to, namely the decision of this court in PCW (Underwriting Agencies) Ltd v Dixon [1983] 2 All ER 158. Mr Perotti submits that the freezing order in the instant case was not obtained in conformity with those principles and accordingly should be discharged, or at least that the operation of the Halifax account be excepted from its operation.

7. In my judgment, however, there is no substance at all in any of those proposed grounds of appeal. Park J explained clearly to Mr Perotti why there was no ground for excepting the bank account from the operation of the freezing order, and he went out of his way to suggest improvements which might be made to the terms of the order so as to render it more easily workable. Far from any question of partiality, it seems to me that the judge was entirely even-handed, and that he considered Mr Perotti's points with care and, indeed, a degree of sympathy. Putting it perhaps rather crudely, it seems to me plain that the judge leant over backwards to be fair to Mr Perotti.
8. In my judgment a proposed appeal against Park J's order of 3 May 2001 has no real prospect of success, and I accordingly dismiss the first application.
9. I turn now to the second application.
10. The bases upon which the two limbs of the second application to this court were made to Park J are set out in Mr Perotti's 9th and 11th witness statements. In relation to both limbs of the application he relied before Park J on a "trust document" dated 1 December 1999 which purports to record that his mother had transferred to him a sum of £40,000 for him to hold on her behalf as trustee for her beneficially. Mr Perotti further relied on the fact that in earlier proceedings before Laddie J it was accepted on all sides that money paid to Mr Perotti by his mother belonged to her beneficially. He also asserted that the money was paid to him before any charging orders were made. He submitted that Mr Watson's solicitors had misled him into thinking (before the charging orders were obtained over his property at 64 Ivor Court) that if he sold that property he could not use the proceeds to pay the costs of his own legal representation. He further submitted that his mother ought not to be deprived of her life savings, that she was an innocent party, and that accordingly he should be allowed to make the required repayments to her.
11. As to the second limb of the application before Park J Mr Perotti repeated his allegation that Mr Watson's lawyers had, in effect, perpetrated a fraud against him by inducing him to believe that if he sold the property at 64 Ivor Court he could use the proceeds only to pay outstanding costs orders in favour of Mr Watson. In this respect I read an extract from paragraph 2 of his 11th witness statement. The extract reads as follows:

"I was scandalously and intentionally misled by Mr Watson and his lawyers into believing that if I sold 64 Ivor Court I could use the proceeds only to pay costs orders against me! That was a fraud perpetrated on me! There can have been no other intention for so misleading me. At the said hearing in the Court of Appeal on 19-5-2000, before Lord Justices Aldous and Clarke, Mr Semken [counsel for Mr Watson] Made his said concession without seeking instructions from his instructing solicitors! Therefore, at all times Mr Watson's lawyers were aware that the Freezing Order entitled me to sell all my assets in order to pay for my legal advice and representation."

12. Mr Perotti also relied before the judge on the fact that his mother had brought an action against him seeking a declaration to the effect that he holds her moneys as trustee for her beneficially, and that Mr Perotti had, in his Defence in that action, effectively admitted that claim. Mr Perotti submitted to the judge that in those circumstances he was entitled either to an order setting aside the charging orders completely as having been improperly obtained, or alternatively to an order varying the charging order so as to enable him to repay his mother the moneys held by him as trustee for her.
13. By his order dated 21 June 2001 Park J dismissed both limbs of that application. The judge concluded that he was effectively bound by a finding made by Laddie J at an earlier hearing (I note that that hearing took place prior to the signing of the trust document to which I referred earlier) to the effect that the moneys paid to Mr Perotti by his mother were not trust moneys. The judge concluded that in the circumstances he would treat those moneys as having been a loan by Mr Perotti's mother to him, rather than an outright gift; and he according proceeded on that basis. Whilst the judge had sympathy for Mr Perotti's feeling that he had been misled by statements made by Mr Watson's solicitors, it did not follow, in the judge's view, that he should be allowed to repay his mother the outstanding loan or any part of it. The judge accordingly dismissed the first limb of the application. As to the second limb the judge concluded that there had been no impropriety in the manner in which the charging orders had been obtained. Moreover (and this seems to me to be a pertinent point) the judge pointed out that even if Mr Perotti had been able to sell 64 Ivor Court the freezing order would effectively have caught the proceeds of sale and have prevented him from making the repayments which he was now seeking to make. Park J accordingly rejected the second limb of Mr Perotti's application.
14. Mr Perotti's proposed grounds of appeal against that order are to be found in his 13th witness statement. In summary, he submits as follows:

(a) that the judge misdirected himself in law or principle and/or in fact. In particular he submits that while the judge held that he was bound by the judgment of Laddie J in the earlier proceedings he failed to hold that he was equally bound by judgments made against Mr Watson and his lawyers. In this respect, Mr Perotti relies in particular on a passage in the judgment of Rimer J following trial of the two actions to which I referred earlier, where, referring to Mr Watson and his lawyers, the judge said:

"Equally, of course, nor should they take advantage of his disadvantages or act unfairly towards him or knowingly mislead the court in any way."

(b) Mr Perotti submits that Mr Watson obtained an advantage over him by misleading him to the effect that he could not sell the property at 64 Ivor Court and use the proceeds of sale to meet the costs of legal representation; (c) Mr Perotti contends that the judge failed to acknowledge that his mother was not bound by the judgment of Laddie J since she was not a party to the proceedings to which that judgment was delivered; (d) Mr Perotti submits that the judge failed to deal with his submissions that his mother's evidence in the hearing before Laddie J had not been challenged at that stage by or on behalf of Mr Watson; (e) Mr Perotti contends that it is wrong for his mother to suffer prejudice or to be denied her rights in contravention (as he would have it) of the European Convention on Human Rights; (f) Mr Perotti submits that the judge misdirected himself in his findings that he could have argued against and/or appealed against the charging orders, because he did not know, being a litigant in person, that he could have opposed them; (g) Mr Perotti submits that had he not been misled by Mr Watson's lawyers he would have sold the property at 64 Ivor Court and then would have had enough money for legal representation which could have enabled him to succeed in the litigation.

15. Elaborating on those submissions in the course of his oral argument this morning Mr Perotti submits, once again, that these charging orders were obtained by fraud; he submits that the effect of the fraud is that the Solicitors' Indemnity Funds standing behind Mr Watson's solicitors has obtained an unfair advantage. As to his mother's evidence, Mr Perotti has referred me to paragraph 32 in the judgment of Laddie J, where Laddie J said this:

"I did not find much of Mrs Perotti's evidence of assistance. Whether true or false, she would have said whatever her son demanded of her. But it is clear that Mrs Perotti was concerned that money that she had passed to her son, in circumstances I will consider below, might not come back to her if the financial orders made against her son were executed."

16. It is also material to note that before Park J at the hearing of the second application on 21 June 2001 there was an application by Mr Watson that Mr Perotti repay the balance of a loan of £80,000 secured on 64 Ivor Court to the lender, Woolwich Building Society Plc. Before the judge, Mr Watson had submitted that Mr Perotti had not in fact expended the entirety of the £80,000 loan which he had taken out to pay the costs of an appeal before this court, and that accordingly the balance fell to be repaid as the appeal has subsequently been dismissed without costs. As to that, the judge concluded that it was plainly correct that in the circumstances Mr Perotti repay the balance of the loan, and he accordingly granted Mr Watson's application. In his application for permission to appeal Mr Perotti seeks also to appeal against that part of the judge's decision on the footing that Mr Watson's application was made in bad faith and in breach of an undertaking not to petition for Mr Perotti's bankruptcy.
17. Once again, despite Perotti's submissions (which he has made with commendable brevity and courtesy) I am quite unable to find any substance in any of the proposed grounds of appeal which Mr Perotti has urged upon me in relation to either limb of the second application. It seems to me that the judge was plainly bound by Laddie J's earlier finding that the moneys paid by Mr Perotti's mother to Mr Perotti were not held by him as trustee, and that in treating those moneys as a loan the judge was taking the course most favourable to Mr Perotti in the circumstance. Nor can I see any basis for interfering with the judge's conclusion that the charging orders had not been obtained improperly, as Mr Perotti alleges. Nor did the judge conclude that the charging orders had been obtained fraudulently. Moreover, as the judge pointed out, even if Mr Perotti had sold his property at 64 Ivor Court before any charging orders were obtained the proceeds would nevertheless have been caught by the freezing order. Nor can I see any basis for a submission that the property rights of Mr Perotti's mother have somehow been infringed. In the circumstances, I can see no basis for any argument based upon the provisions of the European Convention on Human Rights. Mr Perotti's further points which he has made this morning also seem to me to lack any substance.
18. All in all, despite his submissions, I conclude that the proposed appeal against Park J's order dated 21 June 2001 would have no real prospect of success, and I accordingly dismiss that application also.
19. I should add that, in accordance with the rules, I have considered whether there may be some other compelling reason why the Court of Appeal should hear the proposed appeals. I have been unable to find any such compelling reason, and accordingly the applications are dismissed.
(Applications refused; no order for costs; transcript to be provided to the Claimant at public expense).