England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
Her Honour Judge Black sitting in the
Brighton County Court on 18th March 2008

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/02/2009

Lord Justice Wall:

Introduction

1. I would like to begin this judgment by apologising to Mr. Blooman for the delay in producing it. This, I fear is due to a succession of urgent children's case which occupied my time both up to and after Christmas, coupled with the fact that I felt it essential to re-read all the papers after the hearing. The delay is, nonetheless, excessive, and I am very sorry about it.
2. I should also add that I have today received information from Mr Blooman that there has been a foreclosure order on the Florida property, and that, pursuant to an order of the American court, the property has been sold for a nominal sum. I say at once that this has not altered the view I have formed of Mr Blooman's application for permission to appeal, although it may well affect the course of action which he hereafter chooses to adopt.

The application

3. This is an application by Mr. Larry John Blooman for permission to appeal against orders made by Her Honour Judge Black sitting in the Brighton County Court on 18 March 2008.
4. I heard oral argument from Mr. Blooman in person on 27 November 2008. However, as that day's listings had been disrupted by the illness of counsel in an earlier case, Mr. Blooman's case was delayed, and I thought the fairest course was to reserve judgment, and to provide Mr. Blooman with my decision in writing. This I now do.
5. The first point I have to decide is whether or not this is a second appeal to which the provisions of section 55 of the Access to Justice Act 1999 apply. As is well known, that section is reads as follows:-

55 Second appeals

(1) Where an appeal is made to a county court or the High Court in relation to any matter, and on hearing the appeal the court makes a decision in relation to that matter, no appeal may be made to the Court of Appeal from that decision unless the Court of Appeal considers that—

(a) the appeal would raise an important point of principle or practice, or

(b) there is some other compelling reason for the Court of Appeal to hear it.

These provisions are reproduced in rule 52.13 of the Civil Procedure Rules 1998 (CPR).

6. The applications made by Mr. Blooman to Judge Black were in the alternative. He applied to set aside an order for ancillary made by district judge Merrick on 24 March 2006, but in the alternative, he sought permission to appeal against the district judge's order out of time. Judge Black refused both applications. In these circumstances, it would, in my judgment, be wrong strictly to apply the provisions of section 55(1) of the 1999 Act or CPR 52.13 to this application. I therefore propose to apply the normal rule, namely CPR 52.3.6, which provides:-

(6) Permission to appeal may be given only where –

(a) the court considers that the appeal would have a real prospect of success; or

(b) there is some other compelling reason why the appeal should be heard.

The background

7. Mr and Mrs Blooman were married on 10 October 1990, and separated in November 2004. They have two children born in October 1991 and December 1995 respectively. Mrs. Blooman petitioned for divorce in March 2005, and made her application for ancillary relief in the divorce proceedings in May of the same year. Mr. Blooman is now 50, and Mrs. Blooman is 48.
8. In December 2005 the former matrimonial home of the parties in Brighton was sold for £530,000 or thereabouts. The net proceeds of sale appear to have been in the region of £400,000 of which £300,000 or three quarters, was paid to Mrs. Blooman, and the balance to Mr. Blooman. Mrs Blooman has re-housed herself and the children from her share of the proceeds.
9. The financial disputes resolution appointment (FDR) in the ancillary relief proceedings took place on 17 January 2006. Mrs. Blooman's case is that an agreement was reached at the FDR, which resolved all the outstanding financial issues. She says that heads of agreement were settled, and the only reason they were not signed on 17 January 2006 was that agreement was reached late in the day, and Mrs. Blooman was left "to sleep on it". However, she says that an exchange of correspondence the following day concluded the matter.
10. Mr. Blooman's position at the time was that everything was agreed with the exception of one important issue, namely the contents of former matrimonial home, which Mrs Blooman retained. Mr. Blooman says that these were worth in the region of £20,000, and that the loss of what would have been his half share is significant in the overall context of the case.

The hearing before District Judge Merrick

11. The question of whether or not there was a binding agreement, and if so; (1) whether it complied with the case of Xydhias v Xydhias [1999] 1 FLR 683; and (2) whether or not it should be made into an order of the court under sections 23, 24 and 25 of the Matrimonial Causes Act 1973 (the 1973 Act) came before district judge Merrick sitting in Brighton and his judgment, running to 150 paragraphs and dated 23 March 2006, is in my papers.
12. I have to say that in my view the judgment of the district judge is somewhat discursive and, in places, self-contradictory. However, he was plainly trying his best to deal with a very difficult situation. The respective financial positions of the parties prior to the FDR seem to me to be as follows. The former matrimonial home had been sold and the proceeds divided in the proportions I have already described. In addition, the parties owned the property in Florida, the gross and net value of which, at the time, is not known to me. This property, however, was to be transferred to Mrs. Blooman, and Mr. Blooman was to pay her a lump sum of £22,500. in instalments. In addition, he was to pay maintenance in the global sum of £1,000 per month.
13. A problem appears to have arisen because although the word "assets" was used by both parties to deal with what the district judge calls "financial products" (each party was to retain their own "assets") no consideration was given to the contents of the former matrimonial home, which, it appears, Mrs Blooman had sold – allegedly for a notional sum. The district judge thus found in terms in paragraph 26 of his judgment that "There was never any agreement or mutually assumed agreement that the contents of the matrimonial home were divided. Nor was there any agreement between the parties as to the distribution of their ownership".
14. The district judge is, in my judgment, rightly critical of Mrs. Blooman and her solicitors in relation to this aspect of the case. In paragraph 31 of his judgment, he says: -

At 16.13 on 21 March 2006, Mrs. Blooman's solicitors wrote by FAX indicating that the contents had gone, been disposed of by Mrs. Blooman, never agreed or notified to Mr Blooman and were of negligible value. It contained an entirely false allegation that Mr. Blooman had taken contents of substantial value. It then goes on to say that they will not release a signed transfer of the Florida property. Mr. Blooman had not asked for this. Mrs. Blooman's solicitors have failed to understand the issues between the parties and misread correspondence and documents.

15. Later in the judgment the district judge refers to the former matrimonial home as a "very substantial house" and says in terms that it is "ludicrous" to suggest that Mr. Blooman with a small van, and in one visit, had removed a substantial percentage of the contents.
16. The district judge also records the absence of any agreement over the contents and Mr. Blooman's statement through solicitors that it was not open to Mrs Blooman to remove contents unilaterally. He is further critical of Mrs. Blooman's solicitors when he says that on 24 January 2006 they "unilaterally inserted a clause in the draft consent orders saying that division of contents had been agreed when it had not and they knew it had not".
17. The district judge then enquires: -

Why are we here? Mrs. Blooman's solicitors have failed to provide definitive information about which terms of the amended draft consent order are agreed, despite several requests in writing, for them to do so. Mrs. Blooman's solicitors have incorrectly asserted that Mr. Blooman is trying to change the agreement accorded on 17 January 2006 whereas by their draft document of 24^th January 2006 it was they who sought to make a unilateral declaration.

18. There follows an exhaustive recitation of the alleged agreement and the parties' assets, followed by an outline of the law, including the relevant provisions of the 1973 Act and the cases. Having undertaken this exercise, the district judge summaries Mr. Blooman's case at paragraph 112 in these words:-

First of all there is the question of the agreementMr. Blooman's case is that the contents of the property were not agreed. They were not part of the discussions. As far as he was concerned they remained still to be dealt with. He says they were worth quite a lot of money, some £20,000 and that they were to be dealt with. He accepts the other terms of the agreement, but that the contents were not part of the deal.

19. The district judge then recites the phrase "each of retain own assets" from the heads of agreement, and comes to the conclusion in paragraph 118 that "assets includes the contents of the former matrimonial home. In paragraphs 120 onwards, the district judge makes it clear that he is very unhappy with the conduct of the parties' solicitors. I quote selectively:-

122. I have to say that I find it almost unforgivable that these matters were not raised at the FDR 20,000. He may have been bit optimistic but it perhaps could have been a significant sum in the context of her personal position.

124 There is not much point in having an FDR and leaving a whole area of nightmare for the parties to be arguing about and back in court. The object is to resolve it all.

125 If nothing is raised one is entitled to assume that there is not an issue. It is mischievous to find oneself at some time afterwards dealing with proceedings about ownership of chattels. It really is the worse scenario (sic).

129 can well understand Mr. Blooman's grief as it were, of what he perceives as being most unfair at the negotiations. It sadly is not his fault. I do not blame him for anything that happened at the hearing. He had lawyers there to help him. He should have been able to rely on them.

20. Although the district judge then went on to described the terms as "very generous so far as Mrs. Blooman is concerned", he came to the conclusion that the agreement as he had interpreted it was "very sensible" and that there was no reason why he should not approve it. He therefore confirmed it and directed that it be incorporated into a court order.

Mr Blooman's application to vary the order for periodical payments

21. On 12 February 2007, district judge Edwards, sitting at Worthing, varied paragraph 2 of the order of 23 March 2006 by reducing it to £550 per month with effect from 1 May 2006, but increasing it to £700 per month with effect from 1 March 2008. I have in my papers the reserved judgment given by the district judge.
22. The relevance of this judgment to the application before me is limited. However, it is noteworthy that the district judge is critical of Mr. Blooman's disclosure, and expressed the opinion that his views had become "obsessive" and were "clouding the judgment of a man who is otherwise highly articulate and intelligent". His conclusion was that Mr. Blooman was not deliberately seeking to mislead, but was "determined to make life as difficult was possible for (Mrs Blooman)". The judgment also reveals that Mr. Blooman had acquired a property; and was engaged in partnership with another woman. For her part, Mrs Blooman had acquired alternative accommodation and was in gainful employment.

The hearing before Her Honour Judge Black

23. As I have already related, Mr Blooman appealed to the circuit judge against district judge Merrick's order, and in the alternative applied for the order of the district judge to be set aside Judge Black heard the case over two days (28 and 29 February) and reserved her judgment, which is dated 18 March 2008. It is, once again, a lengthy document running to some 108 paragraphs.
24. Judge Black made a number of changes to the order. Mr Blooman, it seems, appeared in person before the judge He appears to have urged on her the pressures that he was under at the time the orders were agreed; in particular the fact that he had been forced to leave the matrimonial home and had lost his job – he claimed as a result of telephone calls from his wife.
25. The judge noted that Mr Blooman had been legally represented throughout the proceedings before the district judge. She records his claim that the agreement reached in January 2006 was conditional on:

(a) there being no final hearing (with attendant additional expense) and

(b) there be a time limit on the obligation for him to make periodical payments to Mrs. Blooman.

26. However, the judge found it difficult to understand how Mr Blooman could have considered the obligation to be limited in time given that the heads of agreement read "Husband to make global periodical payments to wife commencing 01.05.06 at the rate of £1,000 per calendar month in advance – RPI linked. Joint lives. Reduced pro tanto by CSA" and that the consent order provided that payments would end on Mrs Blooman's remarriage or the death of either party.
27. Mr Blooman further contended that there had been substantial non-disclosure by Mrs Blooman in relation to the finances of the investment property they owned in Florida.. In particular, Mr Blooman alleged that while he was out of the matrimonial home he was not receiving information from the managing agent of the property and was not aware that insurance premiums on the property had increased and income decreased. There was insufficient money in an account set aside for the purpose to pay the mortgage payments for November and December 2005.
28. In relation to this aspect, the judge considered that Mr Blooman could have made himself aware of the position of the Florida property by making direct inquiry of the managing agents. In any event, the bank had made contact before the March 2006 hearing.
29. The judge next considered the argument that the January agreement had been conditional on there being no final hearing. The judge stated that Mr Blooman had not made this argument in the course of correspondence with Mrs Blooman in the run up to the hearing before district judge Merrick and the only issue before district judge Merrick had been as to the meaning of "retain own assets".
30. The judge next considered the arguments made by Mr Blooman as to the relevance of Mrs Blooman's conduct both to the hearing before district judge and generally She states that Mr Blooman had agreed at the first appointment that allegations of poor conduct against Mrs Blooman were not relevant to his application and that he had not drawn to the attention of Mrs Blooman's solicitors any anxieties he had about proceeding with the hearing before district judge Merrick.
31. The judge noted that Mr Blooman argued that district judge Merrick's decision to approve the terms put before him was clearly wrong, and that, having regard in particular to Mrs Blooman's continued bad conduct towards Mr Blooman and the children, the order should be varied. However, at paragraph 84, the judge concludes that Mrs Blooman's conduct from 2006 – 2008 (on which the judge does not making findings of fact) could not warrant setting aside or allowing an appeal against an order made in 2006.
32. Finally, the judge reached the following conclusions:-

(a) there had been no fraud or mistake to warrant setting aside the order. Any mistake claimed was really a claim that he received bad legal advice (paragraph 90);

(b) there had been no material non-disclosure – at best any matter not disclosed at the time of the January agreement was known by the time of the March hearing (paragraph 91);

(c) there had been no new event taking place since the making of the order invalidating the basis or fundamental assumption on which the order was made (paragraph 92) [ I interpolate: this is a reference to Barder v Calouri – as to which see below];

(d) the order remains executory because Mr Blooman has not complied with it but the basis of the order has not fundamentally changed and so it is not a case in which the court should refuse to enforce the order or consider making a fresh order for ancillary relief (paragraph 93)

(e) there was no duress or undue influence which would warrant the court interfering with the agreement (paragraph 97 on page 31).

33. In relation to the application to extend the time limit for seeking permission to appeal, the judge noted that Mr Blooman remained legally represented after the March hearing and yet the first indication that he wished to appeal was a letter to the court many months after the hearing.
34. The judge then dismissed the application to set aside the order of district judge Merrick, and refused leave to appeal against it out of time.

Discussion: the position as at the date of the hearing before Judge Black

35. The first question which I think I have to ask is whether or not there was a binding agreement reached between Mr and Mrs. Blooman following the FDR on 17 January 2006 which was properly capable of being turned into an order under sections 23 and 24 of the 1973 Act (the Xydhias point). I have to say I think there was.
36. The FDR was on 17 January 2006. By that time, the sale of the matrimonial home of the parties had been completed, although the judge (page 13 of my bundle) appears confused about the dates of exchange and completion, which she has plainly got the wrong way round. However, the point is that come 17 January 2006, the sale of the home had been completed and the contents – it appears – disposed of.
37. I do not have copies of the relevant correspondence, and the district judge is rightly critical of the lawyers' failure to raise the issue at the FDR. The fact remains, however, that Mr. Blooman entered into the agreement in the knowledge that on 22 December 2005, Mrs Blooman had told him that she had disposed of the contents. In other words, he entered into negotiations and into what both the district judge and the judge held to be an agreement; (1) knowing that the contents had been solved; and (2) without the contents being brought into account in the agreement.
38. In my judgment, his subsequent attempts to raise the issue do not assist him. It follows, that if he has a remedy in this respect it is against the solicitors acting for him at the time. If the contents were of value, they should have been brought into account and reflected in the agreement.
39. The second question is whether or not the agreement was capable of being translated into an order under sections 23, 24 and 25 of the 1973 Act. The answer to this, I think, must plainly be "yes". Subject to the value of the Florida property and other "assets" about which I do not know, the order was undoubtedly favourable to Mrs. Blooman, but the simple fact of the matter is that the district judge examined the case with minute care, was critical of Mr. Blooman's disclosure, and came to the clear conclusion that he could properly make an order under the 1973 Act in the terms of the agreement. In my judgment this is a conclusion to which he was entitled to reach.
40. It follows, I think, that the judge, who like the district judge, plainly took great care over the case, was entitled both to refuse Mr. Blooman permission to appeal against the district judge's order out of time, and to refuse to set aside the district judge's order. It also follows that an appeal against Judge Black's decision would stand no reasonable prospect of success, and the application for permission to appeal must be refused.
41. Mr Blooman must appreciate that the powers of this court at this stage are limited. This court is a court of review, not a court of first instance. The question I have to ask is whether or not the order made by the judge was one properly open to her as a matter of law on the facts of the case. If it was, that is the end of the matter, whatever I might have done had I been in the judge's place. The true position, however, is that I was not: I have a different function, and if the judge and the district judge both adopted courses properly open to them, that it an end of the matter.

Conduct

42. I will, however, deal with some of the points which Mr. Blooman makes. I will deal first of all with the question of "conduct". There is no doubt that Mr. Blooman feels his former wife has behaved very badly. From the documents I have seen, it would seem to me that he is right, so far as the question of the contents is concerned. No doubt were Mrs Blooman to be the appellant, she would have a different perspective.
43. However, it is now well established, that "conduct" under section 25(1)(g) of the 1973 Act will only be considered if "it would be inequitable to disregard it". In this respect, the House of Lords, in the leading case of Miller v Miller [2006] UKHL 24 has set the bar very high – see the discussion of conduct by Lord Nicholls of Birkenhead at paragraphs 59 to 65. There is simply no question of the court taking Mrs Blooman's "conduct" into account when considering her financial award in 2006.
44. It is, of course, the case that when deciding what weight should be given, in order to reach a just result, to a prior agreement not to claim a lump sum, Edgar v Edgar [1980]1 WLR1410 includes "conduct" amongst what Ormrod LJ described as "all the circumstances as they affect two human beings" He said that in this context, conduct must be considered "in the complex relationship of marriage". But in the instant case, we are concerned with an agreement reached after Mrs Blooman had misappropriate the contents – if that, indeed, is what she did. Edgar v Edgar therefore, I think, does not apply. But even if it applies, this does not affect my view that both the district judge and the judge were entitled to reach their respective decisions.
45. If, however, by contrast, Mr. Blooman is now able to establish by evidence, not merely by assertion and belief, that Mrs Blooman has frustrated the sale or re-mortgage of the Florida property and thereby lost Mr. Blooman both his equity in the Florida property and the capacity to pay Mrs Blooman a lump sum, this may be financial conduct which it would be inequitable to disregard in any application which Mr. Blooman might subsequently make.

The decree absolute

46. In relation to the decree absolute, the judge is correct when she says that orders for lump sums and property adjustment under sections 23 and 24 of the 1973 Act cannot be made until decree nisi, and cannot be either effective or enforced until there is a decree absolute: - see section 23(5) and 24(3) of the 1973 Act. It would seem that Mrs. Blooman's initial undertaking to execute the transfer of her interest in the Florida property prior to decree absolute was a legitimate device to avoid capital gains tax, since until decree absolute, spouses remain spouses, notwithstanding the making of a decree nisi of divorce. I note in passing that the judge appears to have been sceptical about the likely success of such a device, given the length of the parties' separation.
47. Be that as it may, however, there is no basis upon which Mr. Blooman can impugn the validity of the decree absolute, which affects the status of the parties. They are now no longer husband and wife. The circumstances in which decrees absolute can be rescinded are limited, and this case does not qualify. I do not imagine that in any event, Mr and Mrs Blooman wish to remain married to each other.

The events of 13 January 2009.

48. There are, I think, two ways of looking at the events of 13 January 2009. The first is that the enforced sale of the property for a nominal sum is a Barder event, which vitiates the order for the lump sum. As at the date of the hearing before Judge Black, there had been no Barder event. She herself makes an oblique reference to the case in the extract from her judgment which I have set out at paragraph 32(c) above.
49. By a Barder event, I mean – as the judge expressed it - an unforeseen event which strikes at the basis of the order itself and which, had it been known to the judge at the time, would have meant that he would not have made the order he did: - see Barder v Calouri [1988] A.C. 20. In Barder itself, the unforeseen event was the fact that the wife (who had earlier obtained an order for the custody of the children of the marriage and the transfer into her sole name of the matrimonial home) murdered the children and committed suicide.
50. Lord Brandon of Oakbrook laid down four conditions for granting permission to appeal out of time in such a case. These were:- (1) that the appeal would be very likely to succeed; (2) that the relevant event or events should have occurred within a relatively short time after the making of the financial order; (3) that the application for permission to appeal out of time should be made promptly; and (4) that the grant of leave should not prejudice third parties.
51. I do not think that Mr. Blooman would get himself within (2). In Barder the time scale was weeks after the event rather than months, and at [1988] A.C. 20, 43C-D, Lord Brandon said he would regard it was "extremely unlikely that it could be as much as a year". I do not, accordingly, think that Barder materially assists Mr. Blooman.

Other remedies

52. Mr. Blooman is not, however, devoid of remedies. The district judge plainly took a very dim view of the conduct of his former solicitors. In addition, he can always reply to vary the order for periodical payments, although to do so successfully he will have to give full, frank and clear disclosure of his income from all sources, and to demonstrate that the current order is unjust.
53. Finally, Mr. Blooman should, I think, be aware of section 31(1) and (2)(d) of the 1973 Act which read:-

31 Variation, discharge, etc, of certain orders for financial relief

(1) Where the court has made an order to which this section applies, then, subject to the provisions of this section ….. the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.

(2) This section applies to the following orders [under this Part of this Act], that is to say—

(d) any order made by virtue of section 23(3)(c) or 27(7)(b) above (provision for payment of a lump sum by instalments).

54. It is not for me to suggest that Mr. Blooman should make an application under this section. The most I can do is to say that he should take legal advice.
55. It is, however, clear to me that the outstanding issues need to be resolved, and in my judgment they can only be resolved on the ground. This court, I fear, cannot assist him. Mr. Blooman must therefore understand that this is the end of the road so far as any application for permission to appeal against Judge Black's order is concerned. I have read his letter of 5 February 2009, and taken it into account. It has as not altered my view. If Mr. Blooman has a remedy – and I have no idea of the merits – it does not lie at this point in this court.

Costs

56. Were I to have given permission, the result, I fear, would have been the inevitable dismissal of the appeal. The simple fact of the matter is that any outstanding issues have to be resolved at first instance. Had I granted permission to appeal, it is likely that Mrs Blooman would have been represented on the appeal, and had Mr Blooman's appeal been dismissed, the inevitable consequence would have been an order for costs against him, quite apart from the questions of additional delay and stress.
57. For all these reasons, the application for permission to appeal against Judge Black's order will be refused.