England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
MAYOR'S AND CITY OF LONDON COURT
(HIS HONOUR JUDGE SIMPSON)

		Royal Courts of Justice Strand London, WC2 Wednesday, 16 October 2002

Wednesday, 16 October 2002

1. LORD JUSTICE THORPE: This is an appeal from the judgment of His Honour Judge Simpson in the Mayor's and City of London Court given on 10 December 2001. The appeal is brought by permission of Hale LJ granted on 21 February 2002. The order in the court below struck out the former wife's claim for damages against her former husband advanced on an assertion that he had been the perpetrator of a very serious assault which she undoubtedly suffered on 20 January 1997. The action was struck out on the basis that it was an abuse of process on the application of the principles in Henderson v Henderson. It is perhaps sensible to start with a review of the facts since, in the end, this appeal turns on a careful analysis of the factual background.
2. The parties married in 1961. There were children of the marriage, grown-up by the time of the assault, which I have already dated to January 1997. The marriage was a turbulent one and there were various petitions filed and then withdrawn as the parties reconciled; but the proceedings by which the marriage was dissolved followed their final separation on 1 January 1998. The decree nisi was pronounced on the petition on 23 June 1998. I shall nevertheless hereafter throughout refer to the parties as husband and wife.
3. The wife always had the sense that the very serious injuries that she had sustained in January 1997 effectively disabled her from future employment and were of the greatest significance in any assessment of her future financial needs. Accordingly, when the ancillary relief proceedings were initiated, in her affidavit of 21 July 1998 she stated as follows:

"My employment ceased following a violent assault on me by the Respondent and I wish to raise this assault as an incident of the Respondent's conduct which I wish to be taken into consideration in the ancillary relief proceedings. The Respondent has always denied the assault but medical evidence has shown that the injuries could not have been self inflicted as the Respondent purported to show and I remain adamant that the injuries I received were received at the hands of the Respondent. These injuries have been detailed in previous proceedings ..."

- and she referred to the domestic violence application that she had previously filed with the court. She continued:

"What is relevant in these proceedings is that the injuries I suffered have had a lasting effect on me. I had two fractures of the jaw, severe bruising to the head causing a clot and I had 17 stitches. The attack has left me with anxiety problems and long term damage in my hands and fingers for which I need constant physiotherapy and I still suffer short term memory failure. I suffered psychiatric damage because of the trauma. The assault was not the first within the marriage during which the Respondent showed his domineering and violent nature by frequent assaults, many of them in front of the children."

4. The issue having been squarely raised, directions were given on 12 November for the preparation and filing of medical evidence. The importance of this ingredient within the wife's ancillary relief claim was emphasised by her answers to questionnaire filed shortly afterwards on 26 November 1998.
5. Now earlier in the year, whilst seeking advice from the Citizens Advice Bureau, the wife had read a newspaper advertisement by an organisation called Direct Legal Ltd. She took the paper away with her thinking that she might well approach them to assist her in bringing a civil claim against her husband. She indeed made direct contact with Direct Legal Ltd in October 1998 between the date of the affidavit, which I have read, and the answers to questionnaire to which I have referred.
6. Her relationship with Direct Legal Ltd was advanced in January 1999 when she entered into a no win no fee agreement with them. However, that initiative withered when Direct Legal Ltd went into liquidation in March 1999.
7. What is of the greatest significance is that the wife did not reveal to the solicitors acting for her in the ancillary relief proceedings the communication which she had had with Direct Legal Ltd, or the possibility that she might advance a claim in tort against her husband either at the same time as, or after the determination of, her claim in ancillary relief.
8. Both the spouses had instructed experienced specialists in the field of ancillary relief, and, not surprisingly, they engaged in an exchange of Calderbank correspondence. The opening proposal came in December 1998, and through the period of the wife's engagement with Direct Legal Ltd correspondence evolved with offer and counter-offer in February and March. The final offer came in a letter of 3 March 1999 from the wife's solicitors in which they set out revised proposals for settlement which represented only a small advance on what had gone before.
9. The proposal was accepted on the very day by the husband's solicitors, although they raised a number of subsidiary issues which would need to be tidied up but which were plainly not in any contractual sense counter-proposals. On the same day the wife repudiated the deal so plainly agreed between solicitors and she discharged the firm who had written the letter of offer.
10. There followed a period in which she sought to escape from the compromise, instructing fresh solicitors. This stage culminated in a hearing before the district judge in the county court on 8 June 1999. We have a note of his judgment and we have the order that was drawn to reflect his judgment. It is plain that he addressed the question of whether or not there had been a concluded contract for the compromise of the ancillary relief proceedings and he arrived at the almost inevitable conclusion that there had. He went on to consider, as he was bound to do in the exercise of his independent duty, whether he should make an order in terms of the contractural compromise which would have the effect of the "clean break" dismissal of all the wife's claims on the implementation of the agreement. He reached the clear conclusion that he should, and he made an order condemning the wife in the costs incurred since the completion of the agreement on 3 March.
11. It was in those circumstances that the wife found herself with only the benefits vouchsafed by the ancillary relief compromise. She instructed those who now represent her and the consequence was the issue in November 2000 of the proceedings that came before His Honour Judge Simpson. Pleadings were filed between spring and autumn 2001, and it was upon those pleadings that the judge issued his ruling on 10 December 2001. In a full and clear judgment he considered the relevant provisions of the Matrimonial Causes Act 1973 and he considered the practice and procedure governing the preparation and adjudication of claims brought under those statutory provisions. He carefully considered the principle established by the old authority of Henderson v Henderson, as well as its modern development and understanding. He reached the clear conclusion that the action brought in his court by the wife was plainly abusive and he struck it out.
12. The appeal against that judgment has been most skilfully and attractively argued by Mr MacDonald QC, leading Mr Emanuel who appeared in the court below. He has, first of all, taken the court through the speeches in the most recent House of Lords' authority that considers and explains the application of the principle in Henderson v Henderson, namely Johnson v Gore Wood and Co [2001] 1 All ER 481. He has then taken us with equal care through the facts of the case to enable him to advance his principle submissions. He has submitted that Judge Simpson attached too much weight to the wife's concealed relationship with Direct Legal Ltd. He submits that had it been disclosed to the wife's solicitors in the ancillary relief proceedings and through them to the husband's solicitors in the ancillary relief, it would have made no significant difference. He has also submitted that the possibility of a future claim in tort was something that had to be expressly addressed in the negotiations, and certainly in the order of the court, if it was to be excluded as a future right. He has ultimately said that the crucial question is: were the terms secured by the wife in the compromise other than the terms that she would have secured had she not sought to rely on conduct as an elevating factor?
13. He says that this was a marriage of 38 years duration, to which the wife had made a full contribution, not only as wife and mother but also as business partner, and that accordingly the equal division of capital assets which she achieved was no more than her right and no more than she would have achieved had she relied on all the statutory criteria excluding subsection 2(g). He has said that if that submission does not succeed then he accepts that his appeal must fail.
14. We have, as well, a full skeleton argument filed by Mr Jonathan Marks QC for the respondent. He submits that this is a case in which the wife's tort claim had to be brought, if at all, during the course of the ancillary relief proceedings to enable the court to gauge its effect on the parties' finances, and, if need be, to try the two claims together. He points to the wife's duty to the court and to her husband to disclose her full financial circumstances including any contingent assets from which she might benefit in the foreseeable future. He submits that were the action in tort to proceed it would have the inevitable consequence of reopening the ancillary relief proceedings on the application of the husband, who would be able to submit without fear of any riposte that there had been a material non-disclosure. He then points to the salient features of the evidence which he says support his submissions.
15. I am in absolutely no doubt that Mr Marks is entitled to succeed in all these submissions. I am equally in absolutely no doubt that Judge Simpson was perfectly correct in his conclusion and in the reasoning that supports those conclusions. The reality is that the wife in this case had the plainest obligation to reveal to her solicitors the intention to advance her claim in tort as an independent adjunct to her claim in ancillary relief. She was a fortiori under the plainest duty to reveal to the solicitors acting for her in ancillary relief the instruction that she had given to Direct Legal Ltd and the agreement that she had reached with them. The proposition that that disclosure would have had little, if any, effect upon those negotiating the compromise of the ancillary relief proceedings is manifestly untenable. The suggestion that within the negotiations those acting for the husband had a duty to protect him against such a contingency by writing into the compromise an express term excluding that possibility is, in my judgment, equally untenable. The duty of a solicitor in circumstances such as these is to ensure that his client is fully protected against any claims that might possibly be raised arising out of the marital relationship, and possibly arising out of any joint ownership of property. The duty cannot extend to possible future claims having their origin in tort that have never been framed or even hinted at. The suggestion that those who acted for the husband in the ancillary relief negotiations could possibly have exposed themselves to a claim in negligence for failing to write into the compromise or into the resulting order any direct protection is, in my opinion, fanciful.
16. The crucial submission advanced by Mr MacDonald may have some real foundation. It is not possible to evaluate the extent of the financial security achieved by the wife in the ancillary relief proceedings, since we have only the order and have not seen its translation into financial reality. It appears to be, as Mr MacDonald submits, a straight division of the available capital. He may well have justification in saying that it is hard to discern within that compromise any significant uplift to reflect the alleged conduct and its consequences. But we have to look at the reality. Those who negotiated the compromise inevitably did so against the background of the proceedings as they then stood by the early months of 1999. Issue had been joined upon the events of January 1997, an issue that would be tried out no doubt at considerable expense if it could not be compromised. Then there would be the resulting issue of the extent to which it bore upon the exercise of judicial discretion. That is a particularly difficult assessment, given the rarity of cases in which conduct is invoked by the applicant to augment a claim.
17. So for the negotiators all these uncertainties were in play and it is, in my judgment, unthinkable that the compromise did not reflect these difficult imponderables to some extent.
18. Whilst accepting that the civil claim has essentially different characteristics and entitles the claimant to essentially different reliefs, the plainest fact is that this claimant chose to raise the issue in its different form within the ancillary relief proceedings and chose to compromise those proceedings whilst that issue was fully live.
19. I have considerable sympathy for the appellant in this case. I suspect that the compromise into which she entered was not one that began to reflect the value of her claim in tort, which seems to lie within a band of £120,000 to £150,000. I would equally respect the candour of her evidence in the court below. She freely accepted that she had raised the issue of conduct in the ancillary relief proceedings, and she did not seek to contest in any way that she had independently pursued the possibility of a tort claim with Direct Legal Ltd and had chosen not to disclose that to her solicitors in ancillary relief. Even more honourable is her free concession in the court below that she had only initiated the civil proceedings because of her dissatisfaction with the extent of her recovery in ancillary relief and her acknowledgment that she could not improve upon that recovery by pursuing her rights of appeal in the county court.
20. However in the end were this claim to go forward as a consequence of a successful appeal to this court there would then be the spectre of a hard fought case in the county court with an inevitable sense of injustice to the husband at its conclusion. That Mr MacDonald has freely accepted. There would then be an application in the Oxford County Court in the ancillary relief proceedings to re-open those proceedings on the basis of material non-disclosure. That, as Judge Simpson rightly identified, is an absolutely unacceptable scenario, and I am in no doubt at all that his decision to stifle this claim was most fully justified on the facts.
21. LORD JUSTICE MAY: I agree that this appeal should be dismissed for the reasons which Lord Justice Thorpe has given. I gratefully adopt his account on the facts and circumstances of the case.
22. Mr MacDonald has helpfully referred us to the now leading authority of Johnson v Gore Wood & Co [2002] AC 1, a decision in the House of Lords on the jurisdiction which His Honour Judge Simpson exercised in this case. This, as is well known, goes back at least as far as the decision of Sir James Wigram V-C in his judgment in Henderson v Henderson (1843) 3 Hare 100.
23. The defining passage in the opinion of Lord Bingham of Cornhill in Johnson starts at page 30H, and includes the following:

"It may very well be, as has been convincingly argued ... that what is now taken to be the rule in Henderson v Henderson has diverged from the ruling which Wigram V-C made, which was addressed to res judicata. But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focussing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before."

24. The important highlights of that passage include that the underlying public interest is there should be finality in litigation and that a party should not be twice vexed in the same matter; that there will rarely be a finding of abuse unless the later proceedings involve what the court regards as unjust harassment of a party; that it is not simply a question of whether the matter could have been raised in earlier proceedings, but whether it should have been; and that the court is concerned with a broad merits-based judgment seeking to determine whether in all the circumstances a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.
25. Mr MacDonald then referred us to a passage in the opinion of Lord Millet at page 59. He, too, said that the various defences are all designed to serve the same purpose: that is to bring finality to litigation and avoid the oppression of subjecting a defendant unnecessarily to successive actions.
26. Mr MacDonald has emphasised the paragraph on page 59B in Lord Millett's opinion, which reads as follows:

"In one respect, however, the principle goes further than the strict doctrine of res judicata or the formulation adopted by Sir James Wigram V-C, for I agree that it is capable of applying even where the first action concluded in a settlement. Here it is necessary to protect the integrity of the settlement and to prevent the defendant from being misled into believing that he was achieving a complete settlement of the matter in dispute when an unsuspected part remained outstanding."

27. Lord Millett referred to Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms, and then said:

"While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression ... There is, therefore, only one question to be considered in the present case: whether it was oppressive or otherwise an abuse of the process of the court for Mr Johnson to bring his own proceedings against the firm when he could have brought them as part of or at the same time as the company's action."

28. Mr MacDonald has submitted that in the present appeal this court is not concerned with extending or in any way qualifying the law as analysed in Johnson. He says that this authority points the way to a result in favour of the wife, whom he represents. I agree with the submissions that the court is not concerned with extending or in any way qualifying the law as analysed in Johnson. I also agree that that authority points the way to the conclusion to which my Lord has come. Nothing that I am about to say is to be read as anything other than a straight application of the principles there set out.
29. This is not a case, in my judgment, where in literal terms the tort claim could have been brought as part of the ancillary relief proceedings since sections 23 and 24 of the 1973 Act do not give the Family Court a jurisdiction of that width. The question, rather, is whether the intention to make, or the possibility of making, a tort claim should have been disclosed and brought into play in those proceedings. Taking both the passages from the opinions in the House of Lords' case into account, the question, therefore, is whether the bringing of the action in tort is in all the circumstances an abuse within the terms of Lord Bingham's judgment.
30. Mr MacDonald submits that the compromise of the ancillary relief proceedings did not and should not be seen as having compromised the claim in tort. He submits that the terms of the compromise which the district judge decided should be included in an order of the court clearly did not include any premium for the assault conduct on which the wife relied. That claim, he submits, has never been litigated and justice requires that a means should be found to enable the claimant to be properly recompensed.
31. I accept that the terms of the compromise and the fact that the claimant wishes to bring a claim in tort which has not been decided are relevant factors in determining whether bringing the subsequent claim is an abuse. But I respectfully agree with Lord Justice Thorpe for the reasons which he has given that in all the circumstances the judge was correct to decide as he did.
32. It is not I think necessary to decide whether the ancillary relief compromise and order in strict terms constituted a compromise of any claim in tort. I am strongly inclined to think that they did not and I am prepared to proceed on that basis.
33. In my judgment, the salient factors which together and in all the circumstances render the bringing of this claim an abuse, are first, any claim in tort was centrally relevant to the conduct and determination of the ancillary relief proceedings. As Lord Justice Thorpe has indicated this is so whether or not the claimant had raised conduct as an issue in the ancillary relief proceedings under section 25(2)(g) of the 1973 Act. It is obvious that if the husband were to be liable to the wife for damages for assault the outcome of the ancillary relief proceedings would in all probability have been different. There is no coincidence between relief which could be given in the ancillary relief proceedings and in a claim in tort, but there is a plain overlap. The Family Court could not award general damages and perhaps some other heads of damages in the tort proceedings. But, for instance, a claim for future loss of earnings marches with a claim for future maintenance, if there was one.
34. More importantly, the fund of money, which the ancillary relief proceedings had to address, was the same fund from which the husband would pay damages if he had to.
35. Second, this consideration is reinforced by the fact that the wife did put the relevant alleged conduct of the husband in issue in the ancillary relief proceedings. If the ancillary relief proceedings had gone to a contested hearing, as Thorpe LJ pointed out in argument the issue of conduct would have had to be litigated and determined.
36. Third, as things happened the defendant was, in my judgment, entitled to assume that the outcome of the ancillary relief proceedings would not be followed by a claim in tort. One of the terms of the compromise was that there should be a clean break. Whatever that expression precisely means to matrimonial lawyers, the defendant, absent information to the contrary, was entitled to suppose that the order would bring to an end contentious financial matters between himself and the wife.
37. Fifth, consequently the husband would not have made the compromise and the court would not have made the order if the possibility of the tort claim had been in the open at that stage.
38. Sixth, if there were now to be a claim in tort which was successful, it is accepted that the husband would be entitled to re-open the ancillary relief proceedings. That is plainly a prospect which is in all the circumstances unacceptable both to the husband and the court.
39. Mr MacDonald submits that this is not a Henderson v Henderson case. He emphasises that it is one thing to deny relitigation of something that has been litigated, but another to stop litigation which has not taken place. He for practical purposes accepts that what the wife really wants is a reconsideration in her favour of the ancillary relief proceedings.
40. But in my judgment the Johnson v Gore Wood decision makes plain that abuse of the kind under discussion is not limited to cases where the issue has been litigated and adjudicated on. It can extend to claims which have not been litigated but which ought to have been raised in previously concluded proceedings. In my judgment this case is a plain example of abuse in the terms described by Lord Bingham, and for those reasons I, too, would dismiss this appeal.
41. LORD JUSTICE BODEY: I wholly agree that this appeal should be dismissed and there is nothing I can usefully add to the judgments just delivered.
(Appeal dismissed; costs to be paid by the Appellant; section 11 order against the Legal Services Commission).