England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, FAMILY DIVISION, PRONCIPAL REGISTRY
(MR JUSTICE BENNETT)
(LOWER COURT No. FD04D01100)

		Royal Courts of Justice Strand, London, WC2A 2LL
		31st July 2007

Lord Justice Wilson:

1. By Appellant's Notice number B4/2007/1277, Mr Thacker seeks permission to appeal against an order for ancillary relief made against him in favour of Mrs Thacker, his ex-wife, by Bennett J sitting in the High Court of Justice, Family Division, on 25 May 2007. By Appellant's Notice number B4/2007/1278, Mr Thacker seeks permission to appeal against a collateral order made by the judge on that date, namely a freezing order designed to provide security for Mrs Thacker in the event of Mr Thacker's failure to comply with the substantive order. The challenge to the freezing order raises no question separate from those raised by the challenge to the substantive order; and in my view permission should either be granted in both cases or refused in both cases. It will not be necessary for me again to refer to the proposed appeal against the freezing order.
2. The judge's order for ancillary relief was that on or before today, namely 31 July 2007, Mr Thacker should make to Mrs Thacker a lump sum payment of £2 million in full and final settlement of all her claims save for one, namely an application for an order for variation of a Jersey settlement, which in effect the judge allowed her to hold in reserve for possible use in case Mr Thacker failed to comply with the lump sum order. The judge also made an order for costs against Mr Thacker and, subject to the grant to him of permission, which I believe he has not taken up, to apply instead for an order for detailed assessment thereof on the indemnity basis, the judge summarily assessed his obligation in respect of costs in the sum of £448,396 inclusive of VAT.
3. Both the parties are, I believe, British citizens. The wife is aged about 38 and lives with another man in Derbyshire, by whom she has a child now aged one and by whom she expects another shortly. The husband is aged 48 and lives in South Carolina. He has a girlfriend, with whom it may be that he partly lives. The parties were married in January 1996 and the judge found that their cohabitation in effect endured until March 1999 and that thereafter, until late 2002 or early 2003, they had a non-cohabiting but sexual relationship. There is no child of the marriage.
4. The substantive hearing conducted by the judge began on 21 May 2007, continued on 22 May and culminated in a judgment delivered orally on 25 May. Mrs Thacker was represented at that hearing by leading counsel. Mr Thacker was not represented and did not appear even in person at the hearing. This fact gives rise to the first ground of proposed appeal.
5. For on 18 May 2007, namely the Friday prior to the Monday when the hearing was due to begin, Mr Thacker's girlfriend faxed to Mrs Thacker's solicitors in London a medical report on Mr Thacker. Although the judge was technically correct to describe it as undated, Mr Anelay QC, who today appears on behalf of Mr Thacker, correctly points out that it seems to have been faxed from the doctor's consulting rooms on that same day, namely 18 May, and so prima facie that date can be attributed to it. The doctor, apparently a GP, wrote as follows:

"I am writing on behalf of my patient, Howard Thacker. Mr Thacker is experiencing attacks of extreme anxiety and depressed moods stemming from an adjustment disorder from his mother's death. Furthermore, he is having severe troubles with insomnia causing him to have extreme fatigue and irritability. He is not well enough at this time, to travel or to spend extended periods in stressful situations. We are personally working on techniques and medication therapy to adjust his mood and improve his overwhelming condition."

In the covering letter the girlfriend asked the solicitors to produce the medical report to the judge on 21 May and she continued:

"Mr Thacker finally collapsed yesterday with an apparent mental breakdown caused by extreme anxiety brought on by his mother's death, financial pressure, bankruptcy and the continual pressure for yourselves in the current proceedings, he is currently unable to focus or perform work, travel or experience further stress.

Clearly and on the strict advice of his locally eminent doctor he unfortunately and most regrettably will be unable to attend the hearing next week. He needs a period of rest and treatment to regain his health and faculties."

6. At the beginning of the hearing leading counsel for Mrs Thacker duly drew the judge's attention to the two letters but opposed the grant of any adjournment. The judge declined to adjourn the hearing. Mr Anelay wishes to argue that in this regard he exceeded the bounds of his discretion and that, in that the judge did not expressly conclude and was, so Mr Anelay says, unable to conclude that the medical report was untruthful, the only proper exercise of his discretion would have been to adjourn the hearing.
7. Courts hearing applications for ancillary relief are not infrequently asked by respondents, usually of course husbands, resident abroad to adjourn the substantive hearing; and the requests are often made by letter even as late as when the substantive hearing is about to begin. In such circumstances medical reports, of course from doctors who cannot be required to attend the English court and to elaborate on their reports, are often put forward in which they assert the respondent's ill-health. The courts then have to form a view, without making any cynical a priori assumption about the mala fides of the application, whether to abort the hearing after so much time has been invested in waiting for it and, at least on the applicant's side, after so large an amount of costs has been incurred in preparing for it. Thus Bennett J had to look at the application in context; and it is clear from the early parts of his substantive judgment, in which he explained his refusal to adjourn, that he purported to do so.
8. Thus the judge noted that the hearing beginning on 21 May 2007 had been fixed for that date as early as July 2006. He recognised the long further delay that would inevitably take place before the Division could offer further dates for hearing. He took note of the fact that Mr Thacker had been in breach of a number of orders for the filing of affidavits and the making of disclosure to Mrs Thacker, such that, on 10 March 2006, a relatively unusual order had been made, namely that, unless Mr Thacker completed his answers to a questionnaire served upon him by Mrs Thacker, he was to be debarred from opposing her substantive applications. The judge also noted that thereafter Mrs Thacker's side had taken the unusual course of declaring that it would be pointless for further orders for disclosure to be made against Mr Thacker, with the result that another interlocutory order had been made, of a character unique at least in my experience, namely that Mr Thacker should:

"be at liberty to provide such statements and documents in discharge of his duty of full and frank disclosure as he may elect."

9. The judge recorded that at a pre-trial review on 19 April 2007 Mr Thacker's solicitor, whom he has re-instructed for the purposes of today's application, told the court that Mr Thacker would be acting in person at the substantive hearing in May. The judge also noted that on 11 May 2007 Mr Thacker had written to Mrs Thacker's solicitors asking for an adjournment not by reference to any ill-health on his part but so that he could apply for public funding. Nor, in the course of an exchange of correspondence to which I will need to return, did Mr Thacker, in writing to Mrs Thacker's solicitors on 16 May 2007, being only 48 hours prior to the production of the medical evidence, mention anything about ill-health.
10. Leading counsel for Mrs Thacker did, however, refer to a document which, according to the judge, strongly suggested that the husband had been in England and staying at Claridges Hotel on or very soon after the date, namely 13 December 2005, of a hearing which the husband did not attend on the grounds of alleged ill-health. Mr Anelay tells us today that that hearing was, in principle, redundant, having been appointed for consideration of the making of a further direction referable to the filing by Mr Thacker of an affidavit which by the time of the hearings he had in fact already filed; and so Mr Anelay suggests that there was really no need or expectation that Mr Thacker would attend that hearing and that the significance of his not doing so and nevertheless allegedly staying in the hotel is therefore very slight. Furthermore Bennett J was told that, following their receipt of the letter from the girlfriend and the medical certificate, Mrs Thacker's solicitors, by way of response, had, in a letter to the girlfriend, sought documentary evidence that, prior to the onset of his alleged condition, Mr Thacker had booked tickets for travel to London for the hearing. The girlfriend had reverted with the words:

"I am not with Mr Thacker at this time and am unaware of his travelling arrangements … I will revert when I have had an opportunity to answer the question fully."

The judge was told that there had been no further communication from the girlfriend. Thus she had been able to confirm that Mr Thacker had suffered an apparent mental breakdown but for some reason had been unable to produce evidence of the number and time of the flight by which, if Mr Thacker had earlier intended to attend the hearing, he had proposed to travel to London.

11. In all of the above circumstances I have no doubt that it was well within the parameters of the judge's discretion to decline to adjourn the hearing.
12. It was Mrs Thacker's case to the judge that Mr Thacker was an extraordinarily adroit entrepreneur; that, in respect of one business venture in particular, namely an internet-based dating agency called uDate, being a business which he had built up and then in effect sold in 2003, he had realised about £22 million; and that the tax-efficient vehicle for the receipt of the sale monies had been a trust set up in Jersey for his benefit, and perhaps also for the benefit of a colleague, namely the Internet Investments Inc. Employee Shares Trust, to which the judge referred as EBT, being short for Employee Benefits Trust. It was Mr Thacker's case, by contrast, as set out his affidavits in form E and answers to questionnaire, that he was heavily insolvent.
13. On 2 May 2007 a district judge acceded to a without notice application on the part of Mrs Thacker to order Coutts & Co, who appear to have been Mr Thacker's principal bankers, at least in England, to attend an inspection appointment and there to produce to the court specified documents referable to their dealings with him. It appears that, confronted with that obligation, Coutts allowed Mrs Thacker's solicitors to take copies of the documents on 11 May. On any view they were put to devastating use on Mrs Thacker's behalf at the hearing before Bennett J. For example:

(a) On 18 August 2004 an officer of Coutts, following a meeting with Mr Thacker, noted that sales by EBT of the shares in uDate had been expected to realise £3.5 million in 2003, £4.5 million in 2004 and £13 million prior to April 2007.

(b) A record of a meeting with Mr Thacker in June 2005 included a note that sales in 2003 and 2004 had yielded for EBT £16 million and that:

"His personal wealth is limited (and having been married twice the structure in place does provide protection)."

The record went on to state that Mr Thacker had given:

"a candid oral explanation of his offshore connected wealth of £16 million although [he] made clear he has no direct entitlement to either capital or income from these funds."

(c) A report of a meeting with Mr Thacker in March 2006 noted that the husband:

"is claiming he has minimal assets as all proceeds from the sale of uDate went into the Jersey Trust. For this reason he is painting as black a picture as possible regarding his personal financial position - hence the pressure on all accounts within the connection. This is tactical!"

(d) A note in February 2007 was as follows:

"Client is going through a divorce at the present time and has been advised by solicitor to keep an account overdrawn as otherwise this may affect his settlement."

(e) Later in February 2007, by e-mail, Mr Thacker stated to the bank:

"I understand, Peter, and clearly I am in the 'wrong'. I just get frustrated when you know and I know 'I' have assets over £10 million and cannot get any 'liquid' quickly enough."

It is clear that the judge made considerable use of the documents produced by Coutts in order to piece together the financial history which Mr Thacker had refused to divulge and, more importantly, to confirm his confident conclusion that Mr Thacker's protests of insolvency were mendacious and that, if he ordered him to pay £2 million to Mrs Thacker, he would be ordering him to pay less than one tenth of his fortune.

14. In promptly drafting grounds of appeal Mr Anelay had indicated to this court that, following perusal of the transcript of the judge's judgment, not then to hand, he might wish to supplement them. In the event his skeleton argument, drawn after his perusal of the transcript, sought to introduce, as a major complaint, the substantial use made by the judge of the documents produced by Coutts in circumstances in which, so Mr Anelay protested, Mr Thacker had had no opportunity to comment upon them. The terms in which Mr Thacker might have commented upon them were, perhaps wisely, not vouchsafed by Mr Anelay, and in the dialogue in court today, my Lord has pointed out that there is still before this court no explanation of the documents on the part of Mr Thacker such as might cast doubt on the construction placed upon them by the judge. Speaking for myself, I find it hard to conceive how Mr Thacker could have retrieved his position from those clear expressions of the extent of his fortune; of his de facto control of EBT; and of his intention not to tell the truth in the proceedings. In the event, however, Mrs Thacker's solicitors, following consideration of Mr Anelay's argument, wrote to this court, with copies to Mr Thacker's re-instructed solicitors. While this court does not generally encourage participation in the proceedings on the part of a respondent at this stage, Mrs Thacker's solicitors were in my view entitled, pursuant to the guidance given by this court in Jolly v Jay [2002] EWCA Civ 277, to write as they did. For they pointed out that, as it happened, Mr Thacker had been given notice of the fact that, ten days prior to the substantive hearing, Coutts had produced documents which Mrs Thacker proposed to use and that indeed he had been given an opportunity to consider them. For, as the enclosures to their letter to this court showed, Mrs Thacker's solicitors had on 15 May, by fax, sent to Mr Thacker an index of the bundles intended to be used at the hearing, from which it was easy for him to see that bundle H represented documents produced by Coutts pursuant to an inspection order and, indeed, in which 20 specific such documents thus produced were identified. Mrs Thacker's solicitors seem also to have faxed the index to Mr Thacker's former solicitors, who, by letter in response dated 16 May, commented upon it in one now irrelevant respect. They added that Mr Thacker himself would respond to the invitation by Mrs Thacker's solicitors to identify a location in London to which all copies of the bundles might be sent in time for his perusal prior to 21 May. Furthermore, by the letter from Mr Thacker himself to Mrs Thacker's solicitors, also dated 16 May, to which I have already referred, he specifically confirmed agreement with the index which they had prepared. I have already observed that in that letter there was no reference to ill-health or any other express suggestion as to why Mr Thacker might not, at any rate in person, attend the hearing on 21 May; I should also here note, however, that in that letter he made no proposal as to an appropriate place in London for delivery of the bundles which a view to his perusal of them prior to the hearing. It seems to me that such represents another ground for suspicion that, even prior to 18 May, he was not planning to attend the hearing. At all events a lot of the ground of Mr Anelay's skeleton argument has as in part he has, been quick with his usual realism to accept been swept from under his feet by proof of the disclosure to Mr Thacker of the existence of the documents produced by Coutts.
15. Mr Anelay would also challenge the judge's approach to the quantification of the award to Mrs Thacker. The context of this challenge is an open letter written by Mrs Thacker's solicitors to Mr Thacker's former solicitors on 16 May 2006, in which they alleged that a fair award to her would be in the sum of at least £2 million and in which they invited Mr Thacker to demonstrate, if he could, either that he could not afford to pay her that sum or that it was otherwise unfair. In the course of the concluding paragraphs of his judgment Bennett J had asked himself, "Why is £2 million which the wife seeks unfair?" Mr Anelay suggests that such was a skewed question for the judge to have posed to himself and that his award, which of course was in that precise sum, should not have been made by reference to whether Mrs Thacker's demand was unfair but, rather, following a neutral enquiry, without preconception, into such an amount as was fair. The argument has superficial attraction but in my view it loses it when the judge's question to himself is placed in context, as follows:

"What then, at the end of my assessment, is the fair outcome? The yardstick of equality is plainly, in my judgment, quite inappropriate. [Leading counsel for Mrs Thacker] never suggested it was, and rightly so. The next question which can be fairly and legitimately posed is this: why is £2 million which the wife seeks unfair? The husband was challenged in the wife's letter of 16 May 2006 to demonstrate why £2 million was unaffordable and unfair and unjust. It must be remembered that even in this Division it is for the wife to establish her case, and not for the husband to disprove it. However, in the particular circumstances of this case it was a legitimate tactic to employ, particularly in the light of the husband's woeful disclosure and obfuscation."

In my view it is clear that the judge correctly asked himself the neutral question, namely as to what would be fair. Then, however, so it seems to me, particularly in light of the fact that, by reason of the shortness of the marriage and the creation of much of Mr Thacker's wealth before the marriage and in particular after its breakdown, there was no question of the judge's favouring of anything approaching an equal division of the parties' assets pursuant to the sharing principle, it was open to the judge to take the figure suggested by Mrs Thacker and to test its appropriateness against all the circumstances which he had by then surveyed. I see no arguable error of methodology there.

16. Finally, not expressly touched upon by Mr Anelay today, there is an intended argument to the effect that the judge fell into error in attributing to Mr Thacker, as part of his resources, the assets of EBT and related entities. In this regard the judge directed himself impeccably by reference to the decision of this court in Charman v Charman [2007] EWCA Civ 503, the judgment in which had been handed down only one day prior to his own judgment. In the light of the documents produced by Coutts it would, with respect to the judge, have been perverse for him to reach any conclusion other than that the trust assets should be so attributed.
17. I see no arguable merit in any part of Mr Thacker's proposed appeals and I would refuse permission for them to proceed.

Lord Justice Maurice Kay:

18. I entirely agree. Mr Anelay has said all that could be said in support of this application. However, the proposed grounds of appeal do not disclose that such an appeal would have a real prospect of success and accordingly, permission is refused.

Order: Applications refused.