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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1298.html
Cite as: [2002] 2 FLR 1204, [2002] 3 FCR 298, [2002] EWCA Civ 1298

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		Neutral Citation Number: [2002] EWCA Civ 1298
		B1/2001/2208 CCFMI

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LEICESTER COUNTY COURT
(HIS HONOUR JUDGE HALL)

Royal Courts of Justice
Strand,
London, WC2A 2LL

31 July 2002

B e f o r e :

LORD JUSTICE THORPE
LORD JUSTICE KAY
and
MR JUSTICE FERRIS
____________________

Between:

	JAYNE SHAW	Appellant
	- and -
	PHILIP JAMES ROBERT SHAW	Respondent

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

ANDREW MOYLAN QC (instructed by Messrs Anthony Clark & Co of Lincoln LN1 1TT) appeared for the appellant.
PETER DUCKWORTH (instructed by Messrs Ringrose Law Group of Boston, Lincs PE21 6NE) appeared for the respondent.
____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
____________________

Lord Justice Thorpe:

This appeal well illustrates the extent to which family finances can be unravelled by the unwise and unreasonable conduct of ancillary relief proceedings. The parties to the appeal are in their middle 40s. They commenced cohabitation just before Christmas 1981 when they were in their mid 20s. They married in March 1985 when the wife was already expecting her firstborn daughter. The second was born in 1988 and the third in 1990. The matrimonial home was a property named Scandova built by the husband before the marriage. When the parties separated at the end of 1995 the husband moved in with his parents. This is a farming family and the husband both farmed in partnership with his father and did contract work on his own account.

The wife petitioned for divorce, a decree nisi being pronounced in May 1996. Her application for ancillary relief was issued in the Lincoln County Court in the following month. In the course of the ensuing proceedings a residence order for the three girls was made to the husband. Shortly thereafter his father died and he inherited the family farm. This was the core of the operation, although during the years preceding and following the marriage the husband had acquired substantial additional acres funded either by sales of alternative parcels or by substantial bank borrowing.

The preparation of the ancillary relief proceedings did not proceed smoothly, the wife’s questionnaire being ultimately enforced by a committal application. Thus the proceedings extended for nearly eighteen months before they became ready for trial at the end of October 1997. During this period the wife met an affluent businessman, John Martin-Hoyes. He had been previously married and divorced on more than one occasion and was unattached at their meeting in February 1997. An intimate relationship developed almost at once and by April 1997 the wife was spending the majority of each week with him at his home, some 40 miles from the family farm. We have not seen the affidavits filed by the parties in the ancillary relief proceedings but it is reasonable to assume that the husband made much of this development in preparing for trial. He endeavoured to subpoena Mr Martin-Hoyes to attend the final hearing but the subpoena was not served in sufficient time to prove effective and Mr Martin-Hoyes, perhaps understandably, chose to stay away. We do not have any record of the oral evidence at the trial, which lasted two or three days. We do not have a transcript of the judgment of District Judge Robinson delivered on 31 October 1997. All we have is an agreed note. It is plain that the husband placed heavy reliance on the wife’s relationship with Mr Martin-Hoyes. After recording the history the district judge addressed ‘three main factual issues relating to the wife’. The first of these was headed ‘The Wife and Cohabitation’. I cite his findings in full:

“The wife admits that she met Mr Martin-Hoyes in about February 1997. She says that they started a relationship virtually straight away. Since April 1997 she has spent the majority of time at his house apart from nights at a friend’s house and contact with the children twice per week and at the weekends which have been spent at Scandova or at friends.

Scandova is very close to Grange Farmhouse. The wife says that she felt as though she was living in a goldfish bowl. The husband goes past several times per day. Her health is not good, she is on anti-depressants. Dr .... better for her if out of that environment. I can understand and accept that.

The relationship might continue. Mr Martin-Hoyes does not like her children. Taken her on holiday. He has paid for clothes, weekends and outings and she has had the use of at least 1, 2, or 3 of his vehicles, a BMW and a Mercedes.

Her evidence, her main concern to have a house for herself in this area. Accepts a relationship and may well continue. Her wish and intention to set up home for herself. No intention of remarriage.

Concerned that Mr Martin-Hoyes did not attend. But despite his absence and while she has an ongoing relationship, I do consider that the wife has a fixed intention to buy a house in this area. There have been problems with Mr Martin-Hoyes because of the children and because of work aspirations more convenient for her to live in this area, where she has most of her friends.

Whilst a relationship and cohabited for the last six months, I find that she will be purchasing and setting up home on her own in this area.”

The district judge then turned to deal with factual issues relating to the husband. He found his net worth to be just over £3M. He accepted the evidence of the wife’s expert to the effect that ‘he could sell a reasonable acreage to raise a lump sum’. Of the husband’s evidence he said:

“I have some doubt as to the veracity of the husband’s evidence. He has no interest in the sale of property. It is interesting to note that whilst there have been many demands on the respondent for disclosure of documents with which he has reluctantly complied, there is a lack of documentary evidence in support. I do bear that in mind.”

The district judge then considered the criteria within section 25(2) of the Matrimonial Causes Act 1973 in relation to the facts as he had found them. Under the head of contributions he recorded:

“At the time of the marriage the husband had been a farmer for many years. All the land was acquired during the marriage except for Scandova. The wife’s contribution in looking after the home and the children. The husband will look after them in the future. Inheritance has arrived after the breakdown of the marriage and from the husband’s father.”

Of course in relation to land acquisition Mr Duckworth, who appears for the husband, makes the valid point that a number of the acquisitions during the marriage were in reality financed by sales of land acquired pre-marriage.

In turning to conclusions the district judge recorded the submission of the husband’s counsel to the effect that the wife’s claims should be met by a lump sum of £120,000 for a home together with periodical payments either for a limited period or for a nominal sum. Such a submission was obviously quite unrealistic and was robustly rejected. The district judge awarded her £125,000 to re-house supplemented by a figure of £275,000. In arriving at this figure the district judge first considered a Duxbury capitalisation of the wife’s income needs at £15,000 per annum to supplement an earning capacity of £5,000 per annum. He then cross-checked the figure of £400,000 to ‘see whether it meets the justice of the case having regard to all the circumstances including contributions and the children’.

By this well crafted route the district judge arrived at his order. On the wife’s undertaking to vacate Scandova on or before 10 January 1998, paragraph 1 provided for payment of the first instalment of the lump sum in the sum of £125,000 on or before 10 January 1998 with the balance of £275,000 by 1 July 1998. Paragraph 2 provided for interest in default at the rate of 8%. Paragraph 4 provided periodical payments at the rate of £15,000 per annum from 1 November 1997 until 30 June 1998 with no application thereafter for extension. This was a clean break order on payment of the lump sum. The husband was ordered to pay the costs since he had ‘not made any offer worthy of consideration’.

On 10 November the husband issued a bare notice of appeal and application for stay. It seems that the judge in the Lincoln County Court knew one of the parties and the application was accordingly transferred to His Honour Judge Hall in the Leicester County Court. On 7 January 1998 he dismissed the application for a stay of the first instalment of the lump sum and directed detailed grounds of appeal, which were furnished on 21 January and settled by Mr Duckworth. There are eighteen grounds of which I need note only the following:

“1. Took no account of the wife’s established relationship with Martin-Hoyes, a man of means.

4. Failed to have regard to the age of the wife, the length of the marriage and the reasonable prospect that the wife will remarry and/or continue her relationship with Mr Hoyes.”

Given the agreed note of the district judge’s judgment those grounds were in themselves plainly unsustainable but they indicate the husband’s continuing preoccupation.

Since the husband had not only failed to pay the first instalment but was also in gross default of his obligation to pay periodical payments it is hardly surprising that the wife issued enforcement proceedings on 23 January. Accordingly in March, April and May the sheriff recovered and paid to the wife sums totalling £130,750. That enabled the wife to purchase a property in Waltham, some six miles from the former matrimonial home, possession being taken on 26 June.

The husband’s appeal was fixed for hearing before Judge Hall on 10 July. Given the clear and methodical manner in which the district judge had discharged his statutory function, I find it hard to see how the appeal had any realistic prospect of success. Perhaps the husband’s hopes were pinned upon an expert’s report, presumably commissioned with the leave of Judge Hall. This attracted a riposte from the wife’s expert, whose evidence the district judge had accepted. Of course I make the obvious comment that the proper time for the introduction of expert evidence is in preparation for trial rather than on appeal, even when the rules provide for appeal within the court of trial. Be that as it may the wife’s solicitors by Calderbank letter of 26 June offered to compromise the appeal by accepting the lesser lump sum of £300,000. The husband’s counter proposal of 3 July concluded with the paragraph:

“These proposals are also made on the basis that your client has no current intention to cohabit with Mr Hoyes or enter into a joint purchase with him.”

The counter proposal was rejected on the day that it was advanced. However subsequent exchanges resulted in an agreement effectively concluded on 8 July. The terms were assimilated in a single letter of 9 July from the husband’s solicitors. The terms were stated thus:

“1. The original order to stand but the lump sum payment of £400,000 be reduced to £300,000.

2. The periodical payments that our client pays to your client to be extended until such time as the lump sum payment is made.

3. The lump sum payment is to be made by 31 December 1998 or earlier if possible.

4. Our client will pay your client’s costs of an incidental to the appeal at the same time as the lump sum payment is made.”

Shortly thereafter the wife’s costs of the appeal were agreed in the sum of £42,700.

As these negotiations were coming to fruition the husband swore an affidavit on 8 July which was filed on 10^th. It runs to some fourteen pages and there are recurrent references to the wife’s continuing relationship with Mr Martin-Hoyes. In paragraph 5.3 the husband recorded the information that he had received from the children as to the wife’s life with Mr Martin-Hoyes, which he said, demonstrated ‘the strength and the permanence of the relationship’. In paragraph 7.2 he said ‘she is living with Mr Hoyes, in a lifestyle of indigent luxury, and to a much higher standard than we could previously afford when married’.

In paragraph 8.1 he said:

“All her wants are supplied. Mr Hoyes gives her large sums in cash. For instance, last year when she visited London with my eldest daughter she was flourishing £1000 in notes that he had given her as spending money.”

These passages illustrate the husband’s perception of the relationship between the wife and Mr Martin-Hoyes on the date that he compromised the appeal. Judge Hall made the consent order without evidence or attendance. In form the order repeats the order of the district judge, merely altering the amount of the lump sum and the date of payment of the second instalment. Paragraph 2 repeated provision for interest at the rate of 8% per annum in default. Paragraph 4 repeated the periodical payments order but to run not to 30 December 1998 but until payment of the balance of the lump sum. As Mr Duckworth has pointed out in argument this has the effect of exposing the husband to double penalty on default. However that is the bargain to which he gave his consent.

The costs of the trial were enforceable on and after 1 July 1998 by paragraph 8 of the district judge’s order subsequently confirmed in the consent order. They were not paid and on 28 July the wife commenced enforcement resulting in collection via the sheriff on 9 November. Certainly after compromise the husband made efforts to sell land but public advertisements did not appear before October 1998. None was achieved by 31 December, the date upon which the balance of the lump sum and costs (£217,700 in total) were due. A letter of enquiry from the wife’s solicitors of 18 December went unanswered. A January response referred to difficulties but no application to the court for an extension of time was either made or indicated. Accordingly on 22 January 1999 the wife again issued enforcement proceedings. In February land sales were negotiated to raise about £330,000. However most of that was required to placate the husband’s bank. On 17 February the wife obtained a charging order nisi which was erroneously issued against the inherited farm rather than Scandova. Apparently that error caused the bank to call in the outstanding overdrafts amounting to some £1.3M. At the same time the sheriff sought to take possession of farm machinery. It seems that the husband refused to sign the paper giving the sheriff walking possession with the result that in May 1999 he impounded a variety of essential items of machinery that galvanised the husband's application of 11 June 1999 seeking to set aside the writ of Fi Fa and a stay of execution. Seemingly by way of explanation the husband's solicitors wrote in their letter of 15 June:

“These are the only applications that our client intends to pursue.”

The husband’s affidavit in support was filed on 25 June. It runs to some 54 paragraphs. Again it dwells at length on the relationship between the wife and Mr Martin-Hoyes. In paragraph 33 he said:

“She is supported by Mr John Martin-Hoyes and parades a lifestyle of lavish indulgence.”

In paragraph 43 he said:

“The petitioner spends all her time (as do the children when they visit) with Mr Hoyes at Harmston and small wonder, since it is a luxurious property with a large Jacuzzi, and gym.”

In the concluding paragraph 54 he said:

“The petitioner and Mr Hoyes have recently celebrated 25 months together, I believe it would not be unreasonable for Mr Hoyes to accept responsibility for the petitioner, in fact the period of time they have cohabited may have already established a state of common law wife and husband.”

These statements as to the wife’s circumstances were no doubt deemed relevant to the husband’s application for an extension of time.

On 4 August 1999 the wife issued an application for orders for sale of the husband’s properties in order to recover her due. The application was supported by affidavits sworn on the previous day.

The husband’s application came before Her Honour Judge Deeley who, on 6 October made an order for the filing of further evidence and for trial on a date to be fixed after 16 December with a time estimate of three to four days, an estimate that seems to me bizarre given that the only issue was the manner and date of the husband’s performance of the consent order. The husband’s affidavit of 1 December in compliance with Judge Deeley’s directions runs to some 45 pages. A number of old themes are played again particularly the husband’s perception of the wife’s continuing relationship with Mr Martin-Hoyes. However the charges become more strident. In paragraph 3 the wife is accused of being devious, untruthful and of perverting the course of justice. In paragraphs 29 and 31 he accuses the wife of having testified falsely, both at the trial and before the appeal hearing, concerning her relationship with Mr Martin-Hoyes. In paragraph 37 he said:

“Immediately after the original divorce case it became quite evident that the petitioner had not left John Martin-Hoyes and told the court what she did to increase her financial gain. I would argue that it was not until after the consent order had been accepted by me that I was able to firmly establish that the petitioner had been untruthful and deceptive in her evidence. There is a big difference between me alleging that the petitioner is being deceptive before the appeal, and later obtaining the self-evidence that the petitioner was continuing to live with John Martin-Hoyes, in which she proved her own deception. Accordingly my decision to accept the consent order was influenced by the fact that I could not ultimately prove that the petitioner was being deceptive; she proved that afterwards.”

Such extravagant evidence in support of an application to vary the agreed terms for performance is indicative to me of the degree to which the husband, and through him his lawyers, have been driven by his emotional turmoil at the prospect of having to sell land to provide for a former wife whose subsequent relationship with an affluent and generous man he so plainly resented.

The husband’s application received a hearing date in April 2000. Apparently, as the date approached, the court gave notice that it could not be heard. In those circumstances the parties were surely entitled to an expedited alternative as a matter of high priority. However we are told that the next available date involved a twelve-month wait to 23 April 2001. On 6 April, only two weeks before the fixture, the husband issued a further application. Paragraph 1 sought a rehearing pursuant to CCR Order 37 Rule 1. Paragraph 3 sought alternatively that the husband’s obligation to pay the second instalment be struck out pursuant to section 31(2)(d) of the Matrimonial Causes Act 1973. The grounds of this application were ten in number. As well as the familiar theme that the wife had ‘at all material times .... lied to the husband and to the court about .... her ongoing relationship with Mr John Martin-Hoyes’, there was an allegation that the wife’s expert had given false evidence. No evidence was filed in support of the application, perhaps unsurprisingly given the contents of the affidavits of 25 June and 1 December 1999. But what was absent was any explanation of its belated issue.

On 23 April Judge Hall heard three days of evidence from the husband, the wife and Mr Martin-Hoyes. He heard submissions on the fourth day and delivered his reserved written judgment on 14 May. The order to reflect judgment was not entered until 18 September and was clearly settled by counsel following a hearing to argue the consequences of the judgment. The main effect of the order was to reduce the balance of the lump sum from £175,000 to £70,000 and the periodical payments order from £15,000 to £5,000 per annum. The order for the costs of the appeal in favour of the wife was set aside and the wife was condemned to pay the husband’s costs after the trial before the district judge on an indemnity basis. The sheriff’s costs were to be borne by the parties equally. Judge Hall refused permission to appeal and an application for permission was received by this court on 12 October and granted on 21 November. The appeal was fixed to be heard just prior to its hear-by date for the convenience of counsel.

Before turning to the submissions of Mr Andrew Moylan QC for the wife I should record the basis upon which the judge founded his conclusions. He began by recording the history with evident care. He noted that the effect of the charging order directed to the family farm had led to the cessation of periodical payments and the obligation on the husband to pay off the bank in the sum of £1.38M before the lump sum could be satisfied. He recorded the forced sale of nearly 600 acres to produce £1.34M for the bank. He recorded the submission of Mr Duckworth to the effect that the husband was accordingly left with less than 600 acres and a net worth of about £1.6M as opposed to the £3M he had at the outset.

The judge then dealt at length with the relationship between the wife and Mr John Martin-Hoyes. Having made a number of detailed findings he concluded:

“On the basis of the above I find as a fact that the relationship between the wife and Mr Martin-Hoyes can properly be termed ‘cohabitation’ notwithstanding the periods of time that they spent apart during the week .... here, I am satisfied and find as a fact having seen both the wife and Mr Martin-Hoyes give evidence in chief, and be cross examined, that the level of financial dependency voluntarily and unconditionally assumed by Mr Martin-Hoyes is today significant and long-term. As to the strength of the relationship I have no doubt, and find as a fact, that this a very significant one for both the wife and Mr Martin-Hoyes and will continue for the long-term.”

The judge continued to consider ‘the state of knowledge of the wife about this relationship at the hearings before (a) the district judge and (b) myself’. As to (a) the judge found:

“By the time that the case came before the District Judge the factual basis was very much as it is now. For six months she had spent the majority of her time at Elton Farm House, the nights at a friend’s house, at Scandova or having contact with the children.”

As to (b) the judge found:

“Eight months later the case came before me on the appeal when I made the consent order. By then the relationship had lasted for about fifteen months.”

Then comes the crucial finding:

“I find on the balance of probabilities that there had been a shift in their thinking between the two hearings and that they both knew that their relationship was, on that balance, long-term at the date of the appeal hearing. Further that this was not a change that the wife disclosed at anytime prior to the hearing when the husband had made acceptance of the terms of the agreement conditional upon the fact of non-cohabitation.”

The judge then said that if he were wrong about that:

“The fact that the relationship has continued unabated since that time on the basis herein before set out goes inexorably to show that there was cohabitation within a short time of the appeal hearing.”

The judge then proceeded to consider the leading case of Livesey v Jenkins [1985] 1 AC 424. Within that paragraph, paragraph 24, the judge disposed of the submission that the husband’s application of 6 April came too late. He said:

“I am satisfied that, by filing his application on 11 June 1999 .... he was acting expeditiously in these matters. It was not until 6 April 2001 that he filed his application for rehearing of the appeal .... I am, however, satisfied that the court should entertain this application since the basis of the primary finding that I have made is of non-disclosure at the time of the consent order.”

The judge then considered the application in the context of the decision in Barder v Caluori [1988] AC 20. The judge said that the husband’s assertion in his affidavit of 11 June that the wife was supported substantially by Mr Martin-Hoyes:

“.... would be at the very heart of the change of circumstances argument were it not for the non-disclosure on which I am proceeding. If it were necessary to decide this case on the basis of an application centred round material change of circumstances I would in all probability have been persuaded so to do notwithstanding the lateness of the actual application for it was presaged much earlier. That is not, however the basis on which I deal with the case.”

Finally the judge considered at length Mr Duckworth’s heavy criticisms of the wife for issuing enforcement proceedings in January 1999. Having considered the circumstances that he regarded as relevant the judge reached this conclusion in paragraph 29:

“I am persuaded that the criticisms of the enforcement procedures taken by the wife in 1999 are well-founded. While the consequences might have been unforeseen it was the fact that they were taken that brought about those consequences – the more so if the charging order with the wrong address was served on the bank by the wife’s solicitors. The husband cannot be entirely exonerated from blame for the consequences if he failed to sign the necessary walking possession papers to secure retention of his farm machinery. The primary cause of the problem remains the wife’s enforcement procedures engendered by an ill-founded suspicion that the husband was failing to take steps to pay her instalment of the lump sum and her refusal to believe the wholly justified and factually correct explanation for the delay in paying it.

A combination of the earlier non-disclosure and the enforcement action taken in 1999 taints the case in such a way that the order cannot be allowed to stand. Although the 1999 enforcement would not, in my judgment, be sufficient, the combination of the two gives the husband a powerful and irresistible argument.”

The judge then moved to the consequences. He said in paragraph 30 that he extended time for reopening the matter under CCR Order 37 Rule 1:

“On the basis of the husband’s earlier assertion in affidavit of the relationship between the wife and Mr Martin-Hoyes continuing: T v T [1996] 2 FLR 640 at 662H to 663B”

He proceeded to explain at some length his discretionary evaluation of a revised figure of £70,000 for the second instalment of lump sum and £5,000 per annum by way of periodical payments.

These are startling conclusions but there is an aspect of the evidence which I have yet to mention that undoubtedly influenced the judge. It is of course an aspect most heavily relied upon by Mr Duckworth throughout his submissions. In the absence of a transcript or other record there can be no assertion that the wife’s oral evidence before the district judge was not candid. Indeed from his findings I infer that she was. However replies to questionnaire filed on her behalf on 10 October 1997 were designed to give the impression that she was merely staying with Mr Martin-Hoyes until she could find a place of her own. Then in replies to a later questionnaire given on 30 June 1998 the financial benefits that she was receiving from Mr Martin-Hoyes were undoubtedly understated. Similarly in her affidavits of 3 August 1999 and 6 January 2000, she sought to give the impression that she was generally in her own home when in reality she was generally with Mr Martin-Hoyes. But again this tactical presentation is absent from her oral evidence, the transcript of which has allowed Mr Duckworth to point to the number and variety of the admissions that he obtained in cross-examination. The openness and candour of parties should be judged more reliably on the oral evidence given in the witness box rather than on the statements prepared for them by their lawyers during the course of the adversarial exchanges. Insofar as Judge Hall made adverse findings in relation to the wife’s disclosure he fell into the error of over-reliance on a contrast between these documents and the facts as he found them. Had he concentrated upon the wife’s oral evidence both at the original trial and before him where was the misrepresentation or the material non-disclosure? As to the husband’s appeal, the wife gave no evidence, either written or oral, and she plainly rejected a condition that the compromise rested on an absence of cohabitation with Mr Martin-Hoyes.

Those observations lead me to Mr Moylan’s submissions all of which, in my opinion, deserve to succeed. His first submission was that the husband’s application of 6 April 2001 was hopelessly out of time and should never have been entertained. Secondly he submits that the husband plainly failed to establish any material non-disclosure. Thirdly he submits that even were there any withholding of relevant facts and circumstances they were immaterial, in the sense that they would not have resulted in any different order to that entered on 10 July 1998.

I take those submissions in turn. The application of 6 April 2001 was issued two years and nine months after the consent order and twenty two months after the husband’s application of 11 June which, although only seeking a variation of the terms of performance, was supported by an affidavit raising the gist of his case for release from performance. Mr Moylan points to the non sequitur in the judge’s reasoning and the lack of correlation between the conclusion and its justification. In the passage that I have cited at page 24 of the judgment the judge states that the tardy application should be entertained in the light of his primary finding of non-disclosure at the time of the consent order. Mr Moylan points out, rightly in my judgment, that that reasoning defies the judgment in the case of Harris v Manahan [1996] 4 All ER 454 which, although cited, was not mentioned in judgment. In that authority Ward LJ had said in relation to the time limit imposed by CCR Order 37 Rule 1 at 466:

“The time limit of 14 days provided for rehearings as for appeals is a valuable filter which ought not to be overlooked. It should be rigorously enforced whether the case is one of fraud, mistake, non-disclosure, fresh evidence, or supervening events as in Barder v Barder.”

In the numbered conclusions to that judgment Mr Moylan particularly relied upon these:

“(3) If the leave of the court is necessary then the strict controls suggested by Barder v Caluori should be rigorously enforced.

(4) The requirement that the appeal or rehearing would be ‘certain or very likely to succeed’ assumes special significance. Only in the most exceptional case of the cruellest injustice will the public interest in the finality of litigation be put aside.”

Mr Moylan is equally critical of the passage which I have already cited at page 30 of the judgment. He submitted that the judge’s reliance on ‘.... the husband’s earlier assertion in affidavit of the relationship between the wife and Mr Martin-Hoyes continuing’, could not be any justification for extending time. That circumstance magnified rather than diminished the default. That submission is also, in my judgment, well founded. The husband’s acceptance of knowledge shortly after the order of 10 July was not only plain from paragraph 54 of the affidavit, which I have cited above, but also from his oral evidence at page 93 of the transcript.

In extending his submissions as to the obligation on an applicant to set aside to act promptly Mr Moylan also relied upon the judgement of this court in Hertfordshire Investments Limited v Bubb [2000] 1 WLR 2318, Benson v Benson [1996] 1 FLR 692 and Westbury v Samson [2002] 1 FLR 166.

In my opinion a number of propositions can be drawn from the line of cases which Mr Moylan cites:

i) Happily the majority of disputes as to the division of assets and income following decrees of divorce or judicial separation are compromised either by mediation or negotiation or, after the issue of proceedings, at or as a consequence of the FDR hearing. For the small percentage that remain the judge’s conclusion after the contested trial should be final. Of course there is a right of appeal, which in some cases may not be exercised without prior permission. An appeal, albeit perhaps necessary to correct error or to redress an unfair result, is nevertheless a misfortune for the family in that it increases costs and extends the duration of conflict. Thus there is added requirement for finality at the conclusion of the appellate proceedings. The residual right to reopen litigation is clearly established by the decisions in Livesey v Jenkins and Barder v Caluori. But the number of cases that properly fall into either category is exceptionally small. The public interest in finality of litigation in this field must always be emphasised.

ii) Attempts to reopen final orders in reliance on either Barder v Caluori or Livesey v Jenkins share the same objective but the categories are otherwise obviously distinct, since one asserts a fundamental flaw in the trial process and the other an unforeseen supervening event. Practitioners need to make a simple analysis to establish which category is invoked. A case that realistically invokes both categories is not easy to conceive. During the course of argument there has been some debate as to whether a distinction is to be drawn between the various vitiating factors including, fraud, mistake, misrepresentation, duress and material non-disclosure. The authorities suggest that in other fields fraud stands alone, such is the public interest in its suppression. However the duty of full and frank disclosure that operates in ancillary relief litigation is distinctive. In almost every case the application to reopen will rest on an allegation of material non-disclosure. Litigants are invariably informed of the duty. I find it hard to conceive of non-disclosure, material because of its significant scale, that was unwitting or unintentional. At some level of consciousness the party in breach of the duty acts in the hope or with the intention of diminishing the other party’s allocation. Thus differing degrees of culpability depend upon either the scale of the undisclosed asset or the lengths to which the offender has gone. But distinctions important in other fields, such as the distinction between innocent and false misrepresentation, do not seem to me to have much validity in ancillary relief litigation. In practice there is probably but a single vice, namely intentional non-disclosure achieved either by active concealment or passive failure to mention.

iii) There are a number of routes that may be taken in an endeavour to reopen a final order. In the present case the husband invoked CCR Order 37 Rule 1 as well as the statutory power to vary an order for the payment of a lump sum by instalments under section 31 of the Matrimonial Causes Act 1973. Additionally the final order may be challenged by way of appeal or fresh action commenced by writ: see de Lasala v de Lasala [1980] AC 546. Equally the application may be made in the court of trial by the issue of notice of application: see Robinson v Robinson [1983] FLR 102, cited with approval in the speech of Lord Brandon in Livesey v Jenkins at 442 and, in the context of civil proceedings, in the judgment of Lord Woolf in Wood v Gahlings, Court of Appeal transcript 1996/1525. The Order 37 Rule 1 route appears the most restricted because of the requirement for issue within 14 days. There is no such restriction to be found in section 32 of the 1973 Act nor are there defined time limits applied to the other alternative routes. Given the importance of the overriding principle of finality in litigation, whatever the chosen route the court should clearly exact promptitude and censure delay. This proposition is supported by the judgment of Hale LJ in Hertfordshire Investments Limited v Bubb. There, in relation to civil litigation, she said at 2325:

“In the light of that history, the reasons for the procedural difference between the High Court and the county court, the fact that there is now a choice of remedies between an appeal and an application for rehearing in the county court, and the underlying principle of the Civil Procedure Rules that the rules or principles should be the same whatever the court in which the proceedings are brought, it must be correct, as Mr Crane argues, that the principles governing the exercise of the power to reopen a case after final judgment because of fresh evidence should be the same whatever the procedural route adopted. It would be most unjust if a party to county court proceedings could reopen matters when a party to High Court proceedings could not.”

Later in her judgment having referred to the relevant Civil Proceedings Rules she concluded:

“These give strong support for the proposition that the position after trial is different from the position before and there must normally be a good reason for the delay if one is to extend time.”

iv) Further, and fundamentally, the need for promptitude where the party has opted for the route of an appeal was most plainly stated in the speech of Lord Brandon in Barder v Caluori itself. He defined at 43 the conditions that had to be satisfied to obtain leave to appeal out of time. The third condition was ‘ that the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case’. Although in his subsequent speech in Livesey v Jenkins Lord Brandon did not specifically consider the issue of promptitude there are in my judgment overwhelming reasons for concluding that the same requirement for promptitude should be applied to applications that assert that a final order is vitiated as applies to applications that assert that a final order has been rendered unjust by some subsequent supervening event.

v) What then constitutes reasonable promptitude? Obviously each case must be determined upon its own facts and circumstances. In cases falling within the Livesey v Jenkins category no application can precede the discovery of the evidence that suggests or proves the wrongful advantage taken by the adversary at the trial. Similarly in cases that fall within the Barder category no application can precede the happening of the event relied upon. In either case any judgment must recognise the need to comprehend the extent and consequence of the discovery, the need to obtain competent legal representation and, in many cases, the need to obtain public funding. But where there has been a manifest failure to issue the application or appeal with reasonable promptitude the court should not hesitate to refuse further investigation both in order to uphold the overriding need for finality in litigation but also to avoid the risk of an expensive and fruitless second trial on oral evidence.

vi) The case of Westbury v Sampson [2002] 1 FLR 166 introduces the question of whether the statutory power of variation provided by section 31 of the Matrimonial Causes Act 1973 and specifically limited in its application to lump sums by the provisions of sub-section (2)(d) – (de) opens the door to a general review of the quantum of the lump sum as is arguably suggested by the terms of sub-section (7). In his judgment Bodey J approached the question with caution saying at paragraph 57:

“Nevertheless, given the constant emphasis in the authorities generally on the need to uphold the finality of orders intended to be final, including orders as to capital, it seems to me that very similar considerations ought in practice to be applied under section 31 as those laid down in Barder v Caluori, at any rate as regards varying the overall quantum of a lump sum order by instalments (as distinct from re-timing or ‘re-calibrating’ the instalments).”

I am in complete agreement with that approach. It is frequently the case that the wife’s entitlement is expressed as a lump sum payable by two instalments where the husband’s ability to pay cash is dependent upon realisations whether of land, shares or chattels. That fortuitous circumstance reflected in an order drawn to accommodate the payer should not in my judgement in any way widen the payer’s opportunity to reopen the quantum issue whether in reliance upon Barder v Caluori or Livesey v Jenkins.

I turn next to Mr Moylan’s second submission namely that the judge was wrong to hold the wife guilty of non-disclosure. Again in my judgment this submission was irresistibly made good. The nature and extent of the wife’s relationship with Mr Martin-Hoyes was fully investigated and established at the trial in October 1997. The judge himself recognised, in a passage that I have cited above, that the factual basis then established had not changed in the intervening three and half years. There was nothing more but an extended history. All that Judge Hall held against the wife was a failure to disclose ‘a shift in their thinking’ between October 1997 and July 1998. What within that period of nine months could justify a conclusion that the relationship had moved from transient to long-term? The character of an adult relationship depends more upon feeling than thought. Quality of a relationship depends upon many ingredients including trust, commitment, responsibility and dependence. From these are derived hopes, expectations and intentions. There may or may not be mutuality. One party may be either manipulative, deceitful or abusive. These are all areas which it is difficult if not impossible for a court to explore through the process of trial, particularly nearly three years after the material date.

The judge’s approach seems to me to ignore the principle that there should be finality in litigation. Particularly is that so in the field of ancillary relief. In discharging its duty under section 25 of the Matrimonial Causes Act 1973 it is incumbent upon the court to have regard to assets and needs not only present but also within the foreseeable future. In making his award the district judge had to have regard to the speculative possibility that the relationship between the wife and Mr Martin-Hoyes might wax as well as to the possibility that it might wane. It was one of the factors reflected in his quantification of the lump sum. How then could the husband possibly return to the court asserting a right to reopen the process of trial on the basis that the relationship had endured, and perhaps waxed, in the nine months following trial? The proposition is as fanciful as to suggest that the wife might have applied for more had agricultural land values risen rather than fallen in the months following the district judge’s decision.

I turn now to Mr Moylan’s third submission namely that even the non-disclosure that the judge found would not have justified the reductions that he then made. Again in my judgment the submission is well founded. I start from the proposition that the entitlement that the district judge quantified was essentially an entitlement fully earned at the date of his judgment. The wife had by the date of decree absolute cohabited with the husband for just over fifteen years, nearly twelve of which had been years of marriage. During those years she had made her substantial contribution both as wife and as mother. During those years a substantial proportion of the family’s affluence had been achieved. At the date of the decree absolute she had not even met Mr Martin-Hoyes. It is true that in quantifying the wife’s lump sum the district judge adopted as one approach an estimate of her continuing income need capitalised by reference to At a Glance. But that was only one approach and his alternative assessment of what was fair having regard to all the circumstances (including duration of marriage and contribution) was a sum representing approximately 12% of the husband’s worth. Mr Martin-Hoyes had then, and has now, no legal obligation to maintain the wife in the future. Any assessment of him as a secure supplier of her long-term financial needs has to have regard to his position in the light of his marital history.

My conclusion can be further tested by positing the hypothesis of a marriage between the wife and Mr Martin-Hoyes in, say, 1999 or 2000. Would that have provided the husband with a well-founded application to reopen the consent order? The answer, in my judgment, is plainly in the negative, particularly given the fact that in entering into the compromise of the husband's appeal the wife had accepted a substantial reduction in the capital provision ordered by the district judge.

In stating my opinion on these three issues I am not ignoring the submissions of Mr Duckworth who said all that could possibly be said in defence of the judge. At times Mr Duckworth’s submissions sounded less than realistic but then it was incumbent upon him to advocate his client’s perception of the realities.

A number of lessons can be drawn from this sad case. First I acknowledge that for the family it has a truly tragic dimension. The husband’s litigation strategy and his pursuit of his litigation goals have resulted in the drastic reduction of his farming enterprise and of his overall worth. We know that the wife’s costs of the ancillary relief proceedings to 10 July 1998 amounted to nearly £70,000. Let us assume a like figure for the husband’s costs. Since then both parties have incurred heavy costs in the husband’s applications of 11 June 1999 and 6 April 2001. Then there have been the costs of this appeal. Then there are the sheriff’s costs of £30,000. I have no doubt that the husband’s judgment throughout has been distorted by his perfectly understandable emotional reaction to land sales and consequential reduction in acreage available to farm, particularly once he felt justified in resistance by the wife’s relationship with Mr Martin-Hoyes. However it should not be forgotten that the district judge condemned the manner in which his case had been prepared for and conducted at the original trial.

The procedures which are now universally in force throughout the jurisdiction were being introduced into thirty pilot courts at the date the wife initiated her application. We are told that Lincoln was not a pilot court and accordingly the litigation was regulated by the Family Proceedings Rules in their unamended form without a Financial Dispute Resolution hearing. Had there been a FDR hearing in this case there is at the least a prospect that the husband would have been deterred from the pursuit of unrealistic goals and brought to a compromise. There can be no doubt that there are cases in which the litigant will accept from a judge a realistic appraisal of outcome that he has already rejected from his own advisers.

Further I regard this as yet another case illustrating the unsatisfactory nature of the right of appeal from the final order of the district judge. Such a right of appeal as it then stood existed without permission and entitled the appellant to something approaching a rehearing. This right went far beyond the minimum necessary to correct error or revise unjust outcome. It was in effect a charter for litigants emotionally disturbed and in pursuit of unrealistic targets. This problem was exacerbated by the fact that in the county court the specialist skills lie with the district judges who conduct almost all the trials. The circuit bench, deprived of the opportunity to gain and refresh expertise in the conduct of trials, thus encounter the topic only in an appellate jurisdiction. Lack of recent experience was then compounded by the task, which was not to ask whether the district judge had exceeded the ambit of the wide discretion conferred by section 25 but to carry out the section 25 exercise afresh. These shortcomings have been partially addressed both by the gradual introduction of a ticketing system for the circuit bench in ancillary relief and by the relatively recent decision of this court in Cordle v Cordle [2002] 1 FCR 97, which decides that the circuit judge should not exercise an independent discretion but only review the judgment of the district judge on ordinary appellate principles. However, as this case illustrates, difficulties remain, difficulties which strengthen the urgent need for the long awaited reform of routes of appeal in family proceedings. In this judgment I have differed from Judge Hall on every issue. Judge Hall is a most experienced circuit judge, particularly in family proceedings. I cannot think that such a level of disagreement would be possible in any field other than this, where our opportunities to develop expertise have been so different.

Finally I address the orders which Mr Moylan seeks. First he seeks the restoration of the second instalment of the lump sum to the figure of £175,000 provided by the order of 10 July 1998. To that he is plainly entitled.

Next he seeks the restoration of the order for periodical payments at the rate of £15,000 per annum provided by the same order to run until payment of the second instalment of the lump sum. Mr Moylan submits that that result must follow from the conclusion that the husband has demonstrated no case for reopening the terms of the consent order. Mr Duckworth’s response is that the application of 11 June 1999 sought by paragraph 3 the variation of the continuing order for periodical payments. An order for periodical payments is not written in stone, as is a lump sum order. Such an order is always expressed to be ‘until further order’ importing a fundamental right in either party to seek variation at anytime to reflect change of circumstance. Furthermore as a matter of practice the court does not sanction the enforcement of arrears more than twelve months overdue, save in exceptional circumstances. Finally Mr Duckworth submits that Mr Moylan’s submission seeks to impose upon the husband a double penalty since interest at 8% would run concurrently with the periodical payments at the rate of £15,000 per annum throughout the period of default. He asks how that could be just given the fact that throughout the period of arrears the wife has undoubtedly been in receipt of generous financial support from Mr Martin-Hoyes. Mr Moylan’s response is to stress that the husband advisedly accepted the risk of double penalty in default when he entered into the order of 10 July 1999, a risk that the order of the district judge did not create. Then he points to the husband’s ability to have halted the penalty at anytime. He referred us to the following question and answer during his cross-examination of the husband at page 82:

“Q - If you had sold the Holton le Clay land at the end of 1998 or the beginning of 1999 and paid Mrs Shaw, both the maintenance and the interest would have stopped accruing.