England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BRISTOL COUNTY COURT
(HIS HONOUR JUDGE BARCLAY)
(LOWER COURT No. GL00D00828)

		Royal Courts of Justice Strand, London, WC2A 2LL
		6 February 2007

LORD JUSTICE WILSON:

1. Mr Wildin, whom it will be convenient to describe as the "husband" notwithstanding a decree absolute of divorce, applies in person for permission to appeal against in effect two orders made by His Honour Judge Barclay in the Bristol County Court on 28 November 2006 in proceedings for ancillary relief between the husband and the lady whom it will be convenient to describe as "the wife". Before the circuit judge the husband, as here, represented himself, whereas the wife was represented by counsel.
2. In substance the circuit judge had before him two matters. First was an appeal by the husband against a substantive order made by District Judge Thomas in the Gloucester County Court on 9 March 2006. Although the husband was out of time in filing Notice of Appeal against that order, the circuit judge waived that irregularity and in effect granted the husband permission to appeal to him out of time. The circuit judge went on, however, to dismiss the substantive appeal. Second was an attempted appeal on the part of the husband from an interlocutory order in the proceedings made by Deputy District Judge Humphreys on 14 October 2005. The husband's Appellant's Notice in that regard was dated 3 July 2006, in other words eight months out of time. It will also be realised that, instead of appealing promptly, the husband had let the proceedings move forward through the substantive stage addressed on 9 March 2006. The circuit judge refused the husband an extension of time appealing against the order dated 14 October 2005.
3. The husband wishes to appeal to the Court of Appeal against both the circuit judge's dismissal of his appeal against the order dated 9 March 2006 and his refusal to grant an extension of time for appealing against the order dated 14 October 2005. It follows that both limbs of the proposed appeal count as proposed second appeals because in both cases the decisions are of district judges and there has been an initial appeal and/or attempted appeal to the circuit judge. A highly unfortunate consequence of the decision of the husband to shed the legal representation which he had at earlier stages of his forensic struggle with the wife is that, as has emerged this afternoon, he has until today been unaware of the provisions of rule 52.13(2) of the Civil Procedure Rules 1998. The paragraph provides that this court will not give permission for a second appeal unless it considers that the appeal would raise an important point of principle or practice or there is some other compelling reason for it to hear it. That is an exceedingly high threshold for a litigant to cross; and the rationale for it is that there has already been one stage of appeal or attempted appeal and that the litigants, and indeed the courts, should be spared undue prolongation of litigation. As I will explain, there is no way in which the husband can cross that threshold; and, had he still been represented, I cannot think that his case would have been put before this court.
4. The husband is a chartered accountant. The three adult children of the family all work with him in the business: one is now a chartered accountant and a second is soon to become a chartered accountant. Until 2003 the business, known as Wildin and Co, was conducted through a partnership. In 2003, however, a limited company was formed in order to conduct it. The company is called Wildin and Co (Accountants and Financial Advisers) Limited. All the ordinary shares of the company were vested in the children but the husband retained about 85% of the redeemable preference shares therein and thereby continued to control the company. There is also still in existence a partnership between the husband and a man named Mr Lewis but its affairs appear to be collateral to the business conducted by the company. There is a second company, named Expresser Limited, which has for long been owned by the children. Expresser owns the premises from which the accountancy company does its business; and it seems that Expresser is in receipt of a substantial management fee (inclusive of rent) from the accountancy company as well as rent from other enterprises and that it is out of Expresser that the salaries of the children are paid.
5. Central to the complaints laid by the husband before the circuit judge, and to those which he would lay before this court, is an allegation that he was disabled from presenting written and oral evidence from the children as to his current finances in the substantive hearing conducted by District Judge Thomas.
6. The background is that the husband and wife were married in 1973 and separated in about 2000. The husband attains the age of 55 next week and, were he to suggest that at that sort of age it was appropriate for him substantially to reduce his income, the court would have to look carefully at the bona fides of the suggestion.
7. On 28 March 2002 by consent a substantive order for ancillary relief was made in favour of the wife. Capital provision was made by the husband for the wife, including a provision for her mortgage to be repaid by the husband over four years at the rate of £600 per month. That provision, and whether it has been complied with, are not relevant to this matter. The relevant provision of the substantive order is that the order is that the husband should make periodical payments to the wife in the sum of £20,000 per annum, index-linked. I do not know the precise amount now payable thereunder by reason of the index-linking over the last five years. The wife, who is aged 53, works as a home care assistant at a salary of about £11,000 per annum. It is clear that she is substantially dependant upon continued maintenance from the husband.
8. On 14 October 2003 the husband, then represented, issued an application to vary downwards the order made against him only 18 months earlier for periodical payments. On 26 August 2004 Deputy District Judge Paddison dismissed the application. It had been the husband's case before the deputy district judge that he would in future receive a salary from the accountancy company of only £5,000 per annum together perhaps with dividends on his preference shares amounting to about £28,000 per annum. The deputy judge disbelieved the husband's evidence; rejected his assertion that control of the accountancy company was now vested in the children rather than himself; and concluded that he was not satisfied that the husband had given true disclosure of his financial circumstances and that he did not accept that the husband's standard of living had altered or that his income was any less than when the order had been made on 28 March 2002.
9. Eight weeks after the decision of the deputy judge there were two intriguing developments. For on 30 October 2004 the husband on the one hand and the three children on the other entered into two agreements, which were drafted by the husband and which they signed. There was no prior consultation on their part with lawyers or with any other outside professional person. The husband has told me today that he and the children decided to enter into the agreements because the deputy judge had failed to discern the realities which the agreements were seeking to demonstrate. By the first agreement it was provided that, until 14 February 2007 (namely the husband's 55th birthday), he would provide services for the accountancy business in return for a net monthly salary of £4,000. At the foot of that first agreement there was even a provision that the husband would sell to the children all the furniture in the home which he occupies at a price of £10,800 on the basis that, until his 55th birthday, it would remain available for his use. By the second agreement the husband declared that, in consideration of payment by Expresser of his tax debts and debts owed by him to the accountancy company, he held the preference shares in the company on trust for the children and that, when he ceased to work for the company on 14 February 2007, he would transfer to them legal title in those shares.
10. The husband allowed arrears to accrue under the maintenance order which the deputy district judge had refused to vary. On 21 April 2005 the wife issued a judgment summons in respect of them. The husband's response, at one level remarkably effective in that it has stalled the process of the judgment summons for almost two years, was to issue on 11 May 2005 yet a further application for downwards variation of the order dated 28 March 2002.
11. On 14 October 2005 Deputy District Judge Humphreys held an FDR meeting referable to the new application. By the time of the hearing before the circuit judge a transcript of the proceedings on 14 October 2005 was available. It has come as a considerable surprise to me that there is any facility for transcripts to be obtained of FDR meetings; and in an appropriate case this court might wish to investigate the practice of the county courts in that regard. There is, of course, intended to be an iron curtain cast around discussions at FDR meetings, with no facility for either party to refer in subsequent proceedings to what was there said. In fact, however, nothing has been lost by the provision of the transcript of the proceedings on 14 October 2005 in this particular case because the district judge quickly recognised that there was no point in conducting an FDR meeting and proceeded almost immediately to move to the giving of directions referable to the husband's application.
12. We can see from the transcript dated 14 October 2005 that the husband sought leave to call the three adult children as witnesses. As the circuit judge was later to observe, it is far from clear that he needed leave in order to call proposed witnesses of fact, which the children would have been. It was clearly agreed on all sides at the hearing on 14 October 2005, including by the husband, that it was unfortunate, to say the least, that he should aspire to call children to give evidence against their mother. Even the husband said that he did not wish to call them but considered that he needed to do so in order that they might confirm to the court that he was doing a lot less in the business than previously and that they were then running it. Counsel then appearing for the wife strongly opposed the purported application for leave to call the children and the deputy judge then purported to refuse permission to the husband to call them. He said that it would be invidious and inappropriate to involve them and that he did not consider that, if adduced, their evidence would assist the court in that the crucial issues would depend upon documentation, in particular in relation to the business. There was then the following exchange between the husband and the deputy judge:

"THE HUSBAND: But can it be noted that I did request it please in case it needs to be appealed at any stage?

THE DEPUTY JUDGE: Well, do you want to appeal my decision?

THE HUSBAND: No. I just need you to note please, that I have requested it and it was denied."

13. I cannot move from the transcript of the proceedings on 14 October 2005 without also adverting to the fact that the husband told the deputy judge that his financial circumstances were the same as they had been when his first application for variation had been rejected on 10 September 2004. He explained, just as he has explained to me this afternoon, that in the proceedings launched in 2005 he was simply attempting to present matters more clearly than his lawyers had done in the first proceedings. Of course, if nothing significant had changed since the dismissal of his first application, there was, as a matter of law and in the absence of any appeal against the order 10 September 2004, no justification for the husband's second application to proceed at all.
14. The order of District Judge Thomas dated 9 March 2006 was made following a hearing on 1 February 2006 at which counsel other than counsel who had represented her on 14 October 2005 appeared for the wife. In a careful judgment District Judge Thomas explained that he did not regard the two documents dated 30 October 2004 as "genuine" or as "valid"; that the children were under the control of the husband; that he placed no reliance upon the documents; that the husbands retention of the preference shares in the company enabled him to continue to exercise full control over it; that, in that the largest component of the income of Expresser came from the accountancy company, the husband indirectly controlled that company's income and, albeit even more indirectly, the children's income; that the husband remained the sole director of the accountancy company; that the husband had surprisingly failed to produce accounts for the accountancy company for the year to 30 June 2005 and that the husband's explanation that his daughter had not yet been able to complete them was unsatisfactory; that, as before, all the husband's personal expenditure, including credit card expenditure, was met out of company bank accounts and that therefore everything depended upon the way in which the husband chose to present the allocation between what he was spending personally and what he was spending on behalf of the business; that in March 2005 the husband -- or the business -- had bought for his use a second-hand Bentley motor car for £107,000, financed, so the district judge found, partly by a further mortgage upon the husband's home; and that generally the husband was living a lifestyle unrelated to a purported income of only £48,000 per annum net, being a figure unrelated to any visible monthly payment being made out of the business to the husband.
15. Now I turn to a section of the district judge's judgment which formed a central plank in the husband's appeal to the circuit judge. It is a section entitled "Evidence from the Children". It must be borne in mind that the district judge did not have a transcript of the proceedings on 14 October 2005 later obtained and made available by the husband to the circuit judge. The district judge recorded that the husband had contended before him that at the hearing on 14 October 2005 he had sought leave to file statements from the children and call them to give evidence and that his application had been refused. The district judge proceeded to say as follows:

"If the husband's recollection is right (and I do not accept that it is) he could and should have appealed the order of Deputy District Judge Humphreys. Further he did not ask during the hearing before me for the hearing to be adjourned in order for those children to give evidence.

The husband had not prepared statements in relation to the children's evidence nor was it clear from his evidence that they would in fact be willing or able to give evidence.

In her evidence the wife said that she did not think they would be prepared to come to give evidence.

I do not think there is any justification in the husband complaining that he has been prevented from being allowed to call them to give evidence."

16. It is now clear from the transcript of the proceedings on 14 October 2005 that the husband's recollection of having asked for leave to file statements by the children was correct; and so we can see that, through no fault of his, the district judge was wrong on 9 March 2006 to refuse to accept that the husband's recollection had been right. Why, even allowing for the change of counsel, the wife's legal team did not make clear to the district judge that the husband's recollection was correct I do not know. What of the district judge's assertion that, had the husband's recollection been correct, he could and should have appealed against the order dated 14 October 2005? In this regard the husband's complaint is that the refusal of permission to call the children never found its way into the order dated 14 October 2005, as drawn; and that indeed, as the circuit judge's later investigation of the court file confirmed, the husband had written a letter to the court asking for the order to be so amended as to include the refusal of his application referable to the children, being a request to which the court had never attended. The husband's case before the circuit judge was accordingly that it had never been open to him to have appealed against the refusal and that the district judge's criticism of him in that regard was also misplaced. In my view the circuit judge was right, by reference to the transcript of proceedings on 14 October 2005, to regard the husband's contention in this regard as disingenuous. For, as I have already explained, the deputy judge had on that occasion specifically asked the husband whether he wished to appeal against the refusal of permission and the husband had replied that he did not wish to do so and that he sought only a note that permission had been refused in case he wished to appeal against it in the future. It was open to the circuit judge to conclude (indeed it was scarcely open to him to reach any other conclusion) that the husband had taken a conscious decision not to appeal against the refusal, at least pending determination of the matter by the district judge on 9 March 2006. To the extent, which is debatable, that it was difficult to appeal against a refusal not included in the order, the husband could have pressed much more urgently for its inclusion. The husband well knew of the facility to appeal against interlocutory rulings, and to do so in advance of the substantive determination of his application, because there had been extensive discussion on 14 October 2005 as to whether he wished to appeal another decision of the deputy district judge relating to the choice of a valuer of his home.
17. But the bigger question, to which the circuit judge turned his attention, was whether evidence from the children might reasonably have altered the district judge's disposal of the husband's application. In this regard the circuit judge had the benefit of written statements signed by each of the children on 3, 3 and 4 July 2006 respectively. The statements are in similar, although not identical, form. They do little more than to aver that the two agreements dated 30 October 2004 were freely entered into; that since about 2004 the husband had worked less in the business and that their duties had correspondingly increased; that they now performed most of its work and that, although the husband was the only director of the accountancy company, he was in effect only a consultant. It was the circuit judge's conclusion that such evidence would not have advanced the husband's case in the way in which he wished it to do so; that the central flaws in the husband's cases both to the deputy district judge on 10 September 2004 and to the district judge on 1 February 2006 had been the absence of independent documentary evidence that his income, which paradoxically he was contending in the second application to be substantially higher than the figures which had been pressed upon the court in the first application, were significantly reduced from the figures which obtained when the consent order had been made on 28 March 2002.
18. The application to the circuit judge for a lengthy extension of time for appealing against the order dated 14 October 2005 was almost inevitably destined to be refused. The husband had in effect elected not to appeal but to await events at the substantive hearing before the district judge. It was open to the circuit judge, indeed in my view correct for the circuit judge, to conclude that the children's evidence did not repair the gross deficiencies of the husband's presentation to the district judge. I should add that there was a free-standing application by the husband to the circuit judge to adduce further evidence to him from the children on the appeal from the order dated 9 March 2006. That was little more than an attempt by the husband to extricate himself by the back door from the difficulties which beset his late appeal against the order dated 14 October 2005; and it fell inevitably to be refused.
19. I trust that the husband understands that the courts always critically examine transactions purportedly entered into by a husband, whether with a business colleague or a cohabitant or, as in this case, the adult children of the family working with him, when they are presented to the court as reducing his ability to meet his obligations by way of maintenance to the wife. The curious agreements hatched between the husband and the children only weeks after the dismissal of his first application fell, even by ordinary standards, for the most critical scrutiny. So did the large sums chosen to be paid by the business to Expresser and, of course, the very small sum chosen -- or ostensibly chosen -- to be paid by the business to the husband. And when, upon investigation, the district judge on 9 March 2006 perceived that the purported agreements, and in particular the purported salary of £40,000 per annum net, bore no relation to the way in which the husband was being funded out of the company, and when the district judge also observed that expenditure by and on behalf of the husband, including, most egregiously, by the purchase of a Bentley motor car for £107,000, continued at a rate vastly in excess of that to be expected of the recipient of an income of £40,000 per annum, it was inevitable that the second application for variation should fall for the same treatment as had the first.
20. Even had this proposed appeal been only a proposed first appeal, I would have concluded that it carried no real prospect of success and would have refused permission. However, in that it is a proposed second appeal, it can clearly be seen that it in no way fulfils the criteria to which I have referred. I have given a fuller judgment than necessary only out of courtesy to the husband and in an attempt to explain to him why, regardless of the confusion at one stage about what had occurred at the hearing on 14 October 2005, his application was doomed to fail. The husband can take the matter no further and so at long last the wife can proceed with her judgment summons.

Order: Application refused.