England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BIRMINGHAM COUNTY COURT
(His Honour Judge D Hamilton)

		Royal Courts of Justice Strand London WC2 Friday, 15th March 2002

1. LORD JUSTICE WARD:This is an application by Mrs Waite for permission to appeal three parts of an order made by His Honour Judge Hamilton on 13th August 2001. He had ordered, first, that the application of the petitioner, Mrs Waite, to set aside the order for ancillary relief made on 22nd September 2000 be dismissed; secondly, that her application for a variation of the order for periodical payments be dismissed; thirdly, injunctions to restrain her entering the former matrimonial home or to interfere with its sale. The fourth order made by the judge on that day was to put into effect an order of committal of Mrs Waite to prison for 14 days which had been suspended when it was made on 21st May 2001 by His Honour Judge MacDuff. That is a full-blown appeal and is fully before us.
2. There is a quite separate application for permission to appeal orders of 26th October 2001 also made by Judge Hamilton, when he ordered that an offer of £230,000 could be accepted as the price for the sale of the former matrimonial home. He then gave consequential directions that, if Mrs Waite did not sign any contract of sale or conveyance within seven days of being requested to do so, a district judge could sign on her behalf.
3. There is, sadly, a long history to this matter which I must recite, albeit as shortly as I can. Husband and wife together ran an electronics business called Swaptronics Limited. The company was set up so as to give the wife a shareholding of 50 per cent of the shares of the company; the husband held 49 per cent, and the remaining share was held by an accountant, Mr Bhatti. When the marriage was in its crisis stage - and I rely largely on recollection for some of this - an extraordinary general meeting of the company was called by the husband. As I recollect it, there was a huge dispute as to whether or not notice had been properly given to Mrs Waite. She certainly stoutly denied that she ever had proper notice of that meeting. Be that as it may, the meeting was held and it was resolved that the assets of the company be sold to Birchleaf Limited for £10,000. The purchasing company, it appears, also took over the liabilities of Swaptronics.
4. That transaction has always been regarded with the gravest suspicion by Mrs Waite; and I cannot but say, as I have said on previous occasions, that it also excited my suspicion to quite a high degree because, hey presto, immediately after the sale Mr Waite became an employee of the purchasing company and, so far as I know, remains in the employment of that company. He now has at least some shareholding in that company, to an extent to which I am not clear, and certainly I am sure Mrs Waite believes that any other shareholders are merely his nominees. Whatever my suspicion may have been, an attempt by Mrs Waite to force a purchase of her shareholding at a fair and proper value was brought in the Chancery Division and it eventually came to grief, precisely how is again not clear to us today. This much is clear: that Mrs Waite challenged what had happened, believing that this was a devise entered into by the husband to cheat her out of the full value of her shareholding in a company which she had helped to build up. But she lost, and her attempt to appeal those Chancery proceedings was at some stage dealt with by me, I think at an interlocutory stage, and eventually, it would seem from the papers, dismissed by this Court in a judgment of Lord Justice Robert Walker, who shared my scepticism about some aspects of the husband's conduct. So that matter has come to the Court of Appeal and Mrs Waite has been unsuccessful.
5. I now go to the ancillary relief proceedings. They were decided by His Honour Judge Hamilton on 22nd September 2000. His order was that the former matrimonial home be offered for sale forthwith but, importantly, he directed that Mrs Waite should have the conduct of the sale, with full freedom to appoint estate agents and solicitors and to take such steps as she was advised to sell the property, then thought to be worth perhaps £250,000. He directed that the net proceeds of sale, after payment of the costs of sale and the satisfaction of debts due to Lloyds Bank, be applied as to the first £25,000 to Mr Waite and the balance to Mrs Waite. Subsequent to that order the judge increased the amount due to Mr Waite to £36,000 because he was satisfied that Mrs Waite had lied to him about a sum of money owing to her former solicitors which, upon subsequent investigation, it transpired was not in fact owed to them. There were further directions in the event that the sale price exceeded £235,000, but they are no longer material. The judge also made an order for maintenance pending suit and periodical payments thereafter, giving the wife £1,000 a month for a year from 1st August 2000 and, from 1st August 2001 to 31st July 2002, a nominal sum of five pence per annum, but he made a direction that the wife would not be entitled to apply for an extension of that term beyond 31st July 2002.
6. Unfortunately, Mrs Waite was quite unable to accept that order and, although I need not recite them, various subsequent orders were made taking away from her the conduct of the sale and giving the husband the conduct of the sale; and eventually, as she still remained unwilling to comply, an order was made by Judge Hamilton that she had to deliver up possession of the property on 11th May 2001. That was extended to 16th May 2001. Then on 21st May 2001 the matter came before His Honour Judge MacDuff. He was satisfied that Mrs Waite had not given up possession as she had been ordered to do and he made an order for her committal to prison for 14 days, but he suspended it upon terms that Mrs Waite give up possession of the property by noon on 29th May 2001.
7. Mrs Waite appealed that order. On 16th July 2001 it came before this Court, consisting of Lord Justice Thorpe, Lady Justice Hale and Mr Justice Astill. Her appeal was dismissed, but in the course of their judgments the court expressed concern that the husband was himself in contempt of an order of the court for having failed to pay the periodical payments to the wife. Although that did not affect their judgment in dismissing the appeal against the order Judge MacDuff made, they did express unease about the position and they urged that, when the matter came back to Judge Hamilton, as it was due to do in a few days' time, he should undertake the task of assessing whether arrears were owing and, if so, in what sum, and dealing with payment of those arrears immediately.
8. A week later, on 23rd July, the matter came back before Judge Hamilton. It was now an application to commit the wife for her failure to comply with the suspension of the order of Judge MacDuff. The application to commit had in fact been made early in June. It had come before the court on two previous occasions. This was the third. Judge Hamilton adjourned the application to commit to 13th August; but he did find that the arrears amounted to £1,000 and he ordered that they be paid forthwith, otherwise there was to be no committal. The husband paid those arrears and they had been paid when the matter came before Judge Hamilton on 13th August, on the occasion that he made the order now under appeal.
9. It is convenient, therefore, to deal with the committal appeal first. Miss Cudby, who now appears on Mrs Waite's behalf under the Bar Pro Bono scheme, and for whose submissions I express my gratitude, submits that the order made by Judge Hamilton to give effect to the suspension was a wrongful exercise of discretion for two reasons. First, she submits that it was wrong for the judge to entertain the application for committal which had been made back in June at a time when the husband was in arrears with his periodical payments and was therefore himself a contemner. As to that, although the court has a power to refuse to entertain an application made by a person who is himself or herself in contempt of an order of the court, in my judgment that does not amount to more than that the court has a discretion, at the time it hears the application, whether or not to entertain it. It does not lead to the issue of the application being set aside as irregular in some shape or form. In view of the fact that Mr Waite had purged his contempt by 13th August, I can see no reason why Judge Hamilton should not have entertained his application on its face value. The contempt by Mr Waite had been purged and it no longer affected the court at that moment of judgment.
10. The second submission is that the judge was wrong because it was only on that occasion that he decided to dismiss Mrs Waite's application challenging the order for sale and seeking to set it aside, and she could not be held to have been in contempt until he had made that decision. The fallacy in that submission, however, is that the suspension was ordered on 21st May. It was suspended provided she gave up possession by 29th May. She did not. She was in clear breach and never sought to deny it, and at the time she was in breach - at the time when she refused to give up possession - she had not yet made the application to challenge the ancillary relief order of September 2000. That challenge came much later - possibly in some informal way on 23rd July, but by more formal application on 2nd August. Consequently, because she was in contempt through failing to do what the court had ordered, the judge had no reason not to enforce the suspension. In fact, Mrs Waite has served that term of imprisonment. I can see no ground to criticise the judge enforcing the suspension. I would dismiss her appeal against that part of his order of 13th August.
11. I turn to the other directions which he made on that day. The application before him was made by Mrs Waite as a litigant in person. The judge was not critical of the manner in which it was made. In fact, Mrs Waite wrote making an application, first:

"... to set aside the court order of His Honour Judge Hamilton of 22nd September 2001 on the grounds that the respondent had committed perjury and fraud. Fresh evidence that came to light in May 2001 to be accepted by the court."

12. Secondly:

"Under section 27 of the Matrimonial Causes Act 1973 a variation of maintenance."

13. By section 27 I think she really means section 31, but that does not much matter. What Mrs Waite wished Judge Hamilton to accept was that at last she had the evidence to confirm her long-standing belief that her husband had cheated her. That was the case that took four days before the judge in September 2000. That was the case which he had emphatically rejected; and the application for permission to appeal his judgment of 22nd September had been dismissed by me.
14. The fresh evidence is contained in a conversation Mrs Waite held with a lady with whom Mr Waite was associating at or about that time. The conversation was recorded by Mrs Waite without the knowledge of that other lady, who I will call "T". The passages on which she relies are these. Mrs Waite told T of the application for her committal and said to her:

"... [S] said that you knew for sure about the shambolic transaction of the company that Terry has done.

T said:

"Well, for sure. I have no proof. You realise that it was all hearsay."

15. The conversation continued:

"MRS WAITE:Yes, hearsay, we all know that he did it, but if you got it from the horse's mouth then you've got more than we got.

T:Yes, but I don't know the implications. I can tell you what he had said. I really, I don't want to get involved because I have nothing to do with Terry and I have no desire to do so at all. I am very sorry about your predicament. I think it is unfair and you know it is a bit ridiculous, but certainly, at the time, he said he did not sell the company, he mainly transferred the assets.

MRS WAITE:Ya, ya, we know that, but also as I said, you've got it from the horse's mouth. [S] says that he also told you how he was recycling money to his father.

T:What happened was, when he bought the house in Rugby, he had a letter pinned on the board from his father saying that his father lent him £10,000 for the deposit. ... And eventually he said that his father never gave him the money, that he had it all alone."

16. T also revealed, after prompting by Mrs Waite, that Mr Waite had kept some £400 or £500 somewhere in the house, perhaps in a gun cabinet or under the floorboards.
17. Miss Cudby submits that that shows evidence to support the fundamental case that in the sale to Birchleaf the company was hugely undervalued;that consequently Mrs Waite had been cheated out of the value of her shareholding, and that the sum of £10,000 from Swaptronics Limited's account was a complete undervalue of its assets.
18. In my judgment the single sentence, "... he said he did not sell the company, he mainly transferred the assets", takes this case no further forward at all. The judge so understood the position. In his judgment given on 22nd September he was aware of the case Mrs Waite was asserting and he was fully aware of the husband's allegation that he was transferring the assets of Swaptronics Limited to Birchleaf Limited for £10,000; though, as the judge also pointed out, it appears to have been a term of the sale that the company assumed the liabilities of Swaptronics. Part of those liabilities involved borrowings which had been secured by way of charge on the matrimonial home and, to the extent, therefore, that someone else assumed that liability, the benefit of the sale was in that way now accruing to the benefit of Mrs Waite. I simply cannot see that there is any further evidence in that taped telephone conversation which goes anywhere near supporting the case of fraud that Mrs Waite has to establish. In order to justify a second attack on the judgment of September she has to establish that the husband perpetrated a fraud on the court when he gave evidence.
19. The second aspect relates to the allegation that the husband did not borrow £10,000 from his father at all. That becomes material in this way. The judge, in his careful judgment, had taken account of the financial obligations of each of the parties. So far as Mr Waite is concerned, he found that he owed about £1,600 on a credit card; he owed some £15,000 to Lloyds Bank on two five-year loans; and he owed, it was said, £13,000 (not £10,000) in respect of an interest-free loan from his father, incurred when he bought a property, I assume, shortly after the separation of the parties. But in addition to that he had a contingent liability for a sum in excess of £22,000 to cover legal aid charges, which would have been charged on the money that he recovered from the proceedings. In addition, there was a joint debt of £14,500 to Lloyds Bank under an old current account.
20. When the judge exercised his discretion to order the sale he did so because he felt:

"(i)it would be unjust to Mrs Waite to leave her without financial support for the transition period until she is able to support herself;

(ii)it would be unjust to Mr Waite to leave him with liabilities not only for the joint current account but also for other debts incurred over the last seven years which, if possible, should be paid off or reduced from the net estate which he shares with his wife."

21. But he went on to add:

"There seems, therefore, to be no alternative to an order for sale of Gate Farm House. Mrs Waite may be an unwilling participant in this exercise: it may even be necessary for the court to deploy its powers to ensure that the order is implemented. It does seem likely, however, that a sale is now inevitable in any event now that Mrs Waite's creditors (the third and fourth defendants in the Companies Act proceedings) are seeking a charging order - indeed they may by now have obtained it."

22. They were seeking to recover their costs of that action, and those costs had been assessed at a sum approaching £21,000.
23. It is submitted that the judge was wrong not to bear that in mind. Assuming for the moment that the allegations can be supported, the question is whether it would have made any material difference to the eventual order which the judge made. The best point advanced by Miss Cudby, and a powerful point, is that, when the judge discovered Mrs Waite had lied about her indebtedness to her former solicitors in the sum of £11,000, he took that into account and increased the amount due to the husband from £25,000 to £36,000. Therefore, submits Miss Cudby, he ought to do the same if the husband lied about the indebtedness to his father. I fully understand that argument and it has troubled me. However, at the end of a careful consideration of the whole tenor of the judgment of Judge Hamilton, I am not persuaded that it would have made any difference at all. The husband's indebtedness to the legal aid fund of £22,000 was, whatever the order may have tried to make, a liability which would bite on amounts that he recovered. The first £22,000 would therefore go to satisfy the Law Society. His other debts were in the region of £16,000, which would not be paid out of the £36,000 that he was being allowed under the order. So it seems to me that it would have made no difference to the eventual outcome of this case. The sorry fact is that the judge gave the whole of the value of the matrimonial home, bar those debts, to Mrs Waite; and even if we subtract £10,000 for the fictitious debt (if it be so) to the father, Mrs Waite is not able to satisfy me she would have got more than the judge actually ordered.
24. Miss Cudby criticises the judge's dealing with the fresh evidence. He did not have the advantage of a transcript of the conversation, as we did. He was given the tape and, times being as hard in the Birmingham County Court as they are elsewhere within the court service, they did not have a tape recorder that enabled him to play it and he had to sit in his motor car to listen to it. It may be that he dealt quite cavalierly and shortly with its content, which he was inclined to dismiss as in part gossip (which it was) and in part tittle-tattle (which it was). He was satisfied that it did not add up to "anything of substance". Having given the whole conversation careful consideration with the benefit of the transcript, I am satisfied that was a conclusion which was undoubtedly correct. It follows that I see no real prospect of success on a challenge to those parts of his order and I would refuse permission to appeal them.
25. I turn to his dismissal of the wife's application to vary the periodical payments order. He dealt with that in this way, saying: "Mrs Waite has chosen to spend the last 11 months resisting the order. She has applied delaying tactics all the way. The major delaying tactic was serious delay in going to the Court of Appeal in an attempt to challenge the order of 22nd September."
26. Secondly, he seems to have had regard to the fact that:

"It was never the intention of that order that Mrs Waite should be allowed to spend the last 11 months in the way in which she has and then have an extension of her maintenance. That was made clear in the judgment, in which I said that, to justify an extension, the court would require clear evidence of proper efforts to obtain employment and to support herself. There have been no such efforts."

27. Miss Cudby submits that the judge should not have held it against the wife that she was exercising a right to seek permission to appeal. That is true. But the order of the court gave the conduct of the sale to Mrs Waite. She had full freedom then to deal with the property and to get the best price she possibly could. Had the order been implemented in the way it was directed it should be, then there was every prospect of Mrs Waite obtaining the release of sufficient capital to enable her to settle in her new home and to begin to take the steps necessary to adjust to the process of a clean break. That she did not do so is a fact which is a material matter for the judge to bear in mind. She had not made any attempt to obtain employment. Her application was informally made. There is no written application in the papers before me, and it was an application unsupported by any evidence to show that there was any change in the circumstances in which she was placed then in August and the circumstances in which it was envisaged she would have been placed had the order remained. She fails because she cannot show that change of circumstances. The judge had a discretion to deal with that matter and I am not satisfied it will be shown that he was plainly wrong in dismissing her application. I would dismiss that application as well.
28. Miss Cudby realistically recognises that, if the order of 13th August stands, then the administrative directions given on 26th October for the district judge to sign the documents in default of Mrs Waite's doing so is an order against which no challenge can be mounted. I would dismiss, therefore, her application for permission to appeal against the order of 26th October.
29. I conclude by saying (probably vainly, but, being optimistic by nature, I shall say it again) that I have had sympathy for Mrs Waite's predicament. This is the third time I have said it. Mrs Waite wishes to rely on the conversation she had with the lady. There are passages in it which she really ought to pay attention to. Her friend (if she is a friend) urges her to get on with her life and to put this behind her. In the words of her friend, "Can you not let it pass? Can you start a new life once and for all?" Mrs Waite says that it is not so simple. I understand, but I do wish for her sake that she could get on with a new life.
30. Her applications must be dismissed.
31. LORD JUSTICE NOURSE: I agree.
32. I wish to add a few words on the transcript of the telephone conversation between Mrs Waite and T, the lady referred to by my Lord, which Mrs Waite thinks took place on some date in June 2001. It is on that transcript that Mrs Waite principally relies in seeking to upset Judge Hamilton's order of 13th August 2001. Miss Cudby criticised the judge's treatment of what T said in that conversation as having been too cursory and too quickly dismissive. I can understand that criticism, though, as my Lord has explained, the judge only had a tape recording of the conversation, to which he had to listen in his car. He also said that not all of what was said by T was audible to him.
33. In any event, the strong reliance which is now placed on the transcript has made it necessary for this court to give it the most careful consideration. For my part, I have sought, like my Lord, to do that, examining it minutely in order to see whether anything said by T could give any real support to Mrs Waite's case. Having done that, I have come to the conclusion, broadly for the same reasons as those advanced by my Lord, that that question must be answered in the negative.
34. On all other questions I agree with the reasoning of my Lord and do not wish to add anything of my own.
35. I too would dismiss the appeal and the three applications for permission to appeal.
Order: appeal dismissed and applications for permission to appeal dismissed.