England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Family Division (RCJ)
Sir Paul Coleridge sitting as a High Court Judge
FD12D03916

		Royal Courts of Justice Strand, London, WC2A 2LL
		04/12/2015

Approved Judgment (to be read in conjunction with [2015] EWCA Civ 1401)

Lady Justice King :

1. This is the application made by Liu Quan (the wife) for permission to appeal an order made by Mr Justice Coleridge on18 December 2014 in financial remedy proceedings following the breakdown of her marriage to William Stuart Bray (known as Stuart Bray)(the husband). Party also to those proceedings, and to this application for permission to appeal, is Save China's Tigers in the UK (SCT UK) a UK charity dedicated to saving South China's Tigers from extinction.
2. The order was made during the course of bitterly contested financial remedy proceedings between the parties and was made at the conclusion of a so-called OS v DS hearing (so called as it follows a procedure for determining a fundamental finding of fact without which a case cannot be resolved: a procedure first utilised in OS v DS (Oral Disclosure: Preliminary Hearing) [2004] EWHC 2376; [2005] 1 FLR 675.)
3. The preliminary issue to be determined by the judge was whether a trust called The Chinese Tigers South Africa Trust (CTSAT) is or is not a post nuptial settlement capable of variation. The core of the wife's case, as it crystallised over time or, the husband would say, 'evolved', had been that CTSAT had been established not only to advance the cause of the Chinese tiger (the declared aim) but also to provide financial benefit and support for the husband and wife personally over the longer term.
4. Given that the character and purpose of CTSAT was pivotal to the resolution of the financial relief application, the judge provided for the hearing to determine a number of preliminary issues identified by an order on 3 October 2013 as follows:

The hearing on 9 December 2013 shall be utilised to enquire into:

i) The circumstances in which the China Tiger trust was set up.

ii) The purposes of those trusts.

iii) Whether those trusts are nuptial settlements.

iv) The availability of funds within those trusts to the parties.

v) Whether the funds within those trusts can only be utilised for tiger conservation.

5. The judge recorded in his judgment the magnitude of this fact finding hearing; the case lasted a total of 25 days including reading time. The court had before it 33 lever arch files of statements and documents. The judge heard evidence from 8 live witnesses in addition to the husband and wife, and the whole of the evidence was transcribed at considerable expense by "Livenote". Opening and closing notes were extensive. Unhappily, the judge's draft judgment, far from marking the opportunity for the parties to commence negotiations against the backdrop of the findings made by the judge, led only to the filing of substantial further written argument initiated by the wife, pursuant to the so-called Barrell (Re Barrell Enterprises [1973] 1 WLR 19] jurisdiction by which the judge was invited to expand on his judgment and to revisit the evidence and his conclusions.
6. The judge declined to amplify his judgment saying that the use made of the Barrell jurisdiction by the wife was wrong. He said :

78. In deference to the industry of all Counsel I re-read and re-considered the draft judgment in the light of the three notes and have reached these further conclusions:

(i) The use of the Barrell jurisdiction in these circumstances and in the fashion employed by the wife is quite simply wrong and not the purpose of that process. That process is designed to allow the court to look again at particular findings or conclusions where some particular fact or evidence has obviously been omitted, overlooked or has changed since the hearing. It does not afford a party the right to invite the court to start again from scratch and "have another go" at finding for them based on an entire re-arguing of the case. If that were a permissible approach it would result in litigation without end as one Barrell application would inevitably follow upon another and then another. 99 pages of further submissions says it all.

(ii) The implication of the potential findings to all the main parties are, and always have been, patently obvious to all and have caused me to approach the husband's case in particular, with considerable caution. They have been in the fore front of my mind since the first occasion when the case came before me.

(iii) However, there is nothing that I have read in the wife's latest supporting note which causes me to revisit any of the findings or conclusions (legal or factual) which I made or amplify any of my reasoning. The findings were reached, I remind myself, after very careful consideration of the evidence and arguments before, during and after the time when the hearings took place in December 2013 and June and July 2014. Indeed, on the contrary, I am fortified in my findings and conclusions by consideration of the further notes.

(iv) To have descended into the kind of detail which the wife now seeks would hugely increase the length of this judgment on these preliminary issues for no useful purpose.

7. At the end of this fabulously expensive piece of preliminary litigation, having declined further to elaborate on his judgment, the judge declared as follows:

(4) The assets held within the Chinese Tiger South Africa Trust and its underlying companies are not a resource of either the husband or the wife to be considered pursuant to s25 of the Matrimonial Causes Act 1973.

(5) The Chinese Tigers South Africa Trust is not a post nuptial settlement.

In the light of those declarations, the judge dismissed the wife's application for a variation of settlement order pursuant to s24.1(c) of Matrimonial Causes Act 1973. The judge made a substantial number of consequential orders.

8. A notice of appeal was filed on 9 January 2015 on behalf of the wife seeking to appeal the declaration and consequential orders set out above.
9. Lord Justice Ryder considered the application for permission to appeal on paper on 25 March 2015; without reading in the totality of his observations into this short judgment, the heart of his concern lay with the perceived lack of reasoning for the essential conclusion of facts made by the judge. His overall view was:

"All this depends on the facts. I am aware that the husband filed without the court's leave a rebuttal of the appellant's grounds of appeal. I have considered his document de bene esse and am mindful of the costs already expended in this litigation. Given that one of the purposes of an OS v DS hearing is to bring clarity to the parties' negotiations so as to inform settlement or subsequent determination, I have concluded that the judge's reasoning is inadequate. It seems to me that given the judge's refusal to be drawn into further reasoning or correction of his judgment it is important and proportionate to first consider whether the court should make that request of the judge (and if so, in what terms) or whether the lack of reasoning is sufficient to send this matter to the full court."

10. Lord Justice Ryder having unequivocally concluded that the judge's reasoning was inadequate, it seemed to us that the only issue held over for consideration at this hearing is as to whether or not an attempt can or should be made to salvage the judgment by way of further request to the judge for clarification, or whether permission to appeal must forthwith be granted and the matter set down for hearing before a full Court.
11. Unsurprisingly perhaps, Mr Tod on behalf of the wife endorsed an approach which meant that permission to appeal is granted without further ado. Equally unsurprisingly Mr Bray – acting as litigant in person and Mr Harrison, on behalf of SCT UK, did not. Mr Harrison acknowledged that Ryder LJ had had the benefit of reading de bene esse the useful and very detailed response to the wife's application filed by the husband. Notwithstanding that advantage, Mr Harrison submitted, that without Ryder LJ having read in addition, the closing submissions filed on behalf of his lay client, SCT UK at the end of the trial, Ryder LJ was not in a position to reach a concluded decision as to whether or not adequate reasoning was to be found in the judgment. In support of that submission he refers the court to paragraph 36 of the judgment:

"In the end, considering fully the points urged on both sides, I find myself in agreement with the closing submissions made by SCT UK in respect of the wife's change of stance and also the doubts surrounding her credibility and I am driven to find, overall, that she is an unreliable witness upon whom the court cannot rely…."

12. Mr Harrison made an attempt to persuade the court that in those circumstances the court should not regard itself as tied by Ryder LJ's decision, but should consider the application for permission to appeal afresh with the starting point being a consideration of counsel's closing submissions which should be regarded as having been read into, and providing amplification of, the judgment.
13. In my judgment not only would it be wrong in principle for a court to rely on a reference to counsel's separate written submissions without further analysis as a basis for its conclusions on the key issues in the case; but in any event I read the passage to which I have just referred as the type of observation often made by a judge indicating that he favours the overall submissions of one side or the other. I do not read it as incorporating those submissions into the judgment in such a way as to make them an intrinsic part of the judgment and as a part of the critical structure of reasoning upon which his decision rests.
14. It follows that in my judgment Ryder LJ had sufficient material before him with which to reach the conclusion he expressed in his note and therefore the task of this court is limited, as identified by Ryder LJ, to considering what should happen next.
15. Before deciding on the way forward it should however be noted that this court is alert to the fact that Coleridge J, as he then was, is a highly experienced judge who throughout his period of time as a High Court judge routinely dealt with the most complex and lengthy financial dispute cases. This court is also conscious that the length of the judgment is not necessarily commensurate with the number of bundles, files, or the number of days hearing. This court positively encourages (and has only admiration for) the tight succinct judgment. That being said, having read substantially into the case, there is in my judgment a real prospect of the wife succeeding on an appeal, on the basis that the judge's judgment may have gone beyond that of an experienced judge being selective in those issues which he or she feels to be relevant and necessary in order to determine the relevant issues, but has instead left the reader, and more importantly the parties, unable to trace the reasoning which underpinned the judge's conclusions.
16. Whilst in a case of this nature, the judge's assessment of the parties is of critical importance and, as observed by Ryder LJ and underlined by this court, the judge's findings in relation to the parties present a formidable obstacle to the wife in any full appeal; the court none the less has to have a real understanding of the structure and factual matrix upon which the judge's assessment of credibility is founded.
17. The very fact that each of the parties have filed extensive submissions and chronologies for today's hearing in which each rely on numerous facts which are nowhere to be found in the judgment tells it own tale.
18. At this early permission stage where the court considers only whether there is a reasonable prospect of succeeding on an appeal, of particular concern is the lack of analysis as to the alleged "benefits" received by the husband and wife over and above the brief reference to the husband's forensic accountant's evidence; also the lack of analysis of the consequences when the trust comes to an end and, importantly, of the email of 31 October 2011 – referred to as the 'smoking gun' email, which seems to suggest that a time may come where at least the wife if not the husband might have access to some funds.
19. A further potential difficulty is the wildly different competing submissions as to the monies initially invested in the trust. The judgment does not set out the rival contentions or make specific findings in relation to this significant issue. For my part, I am satisfied that there is a reasonable prospect of succeeding in showing that the reasoning found in the judgment is insufficient to enable those representing the wife to advise her with confidence as to whether or not the judge could be shown to have been wrong in having reached the conclusion he did, namely that the assets within the trust are not a resource of either the husband or the wife and, that the CTSAT is not a post nuptial settlement.
20. The court is acutely conscious of the cost of the course proposed by the wife and of the financial impact on the trust whose primary purpose was to fund the protection of Chinese Tigers. Over £2m has already been spent by this couple on this litigation. At the request of the husband and Mr Harrison enquiries have been made as to whether The President of the Family Division (as nominated by the Lord Chief Justice) would, if requested by this court, utilise his powers pursuant to Section 9(1) Senior Courts Act 1981 to invite Sir Paul Coleridge to clarify his judgment and amplify his reasons, notwithstanding that he has retired and no longer sits as a judge.
21. In my judgment, the moment has passed to ask the learned judge to review his judgment with a view to expanding his reasons. Those representing the wife made the Barrell application and the judge responded to the request as set out above. In these circumstances, and given the vast raft of issues in relation to which clarification is sought by the wife now many months after the hearing, rather than support a request being made for Coleridge J further to expand his reasons, I will grant permission for the matter to proceed to a full appeal. It should be said that I have reached that conclusion with considerable reluctance given not only the appalling costs already incurred to date, but also, and on one view more importantly, given the prodigious amount of court time and resources already utilised in determining this preliminary issue.
22. Given the ferocity of the litigation to date, I fear the observations which I feel compelled to make will fall on deaf ears; nevertheless I would urge most strongly that the parties attempt to find a way through to a resolution of these proceedings in their totality. Failure to do so will lead this appeal being heard some months down the road and, if the appeal is allowed, a full rehearing probably as much as a year after that, at huge cost both financially and emotionally for this husband and wife. Such an appeal, it must be remembered, would not mark the end of the litigation whatever the outcome. Both parties have the benefit of highly experienced specialist legal teams, well versed in achieving settlements in cases which at first blush appears to be incapable of being settled. I would entreat the parties rather than now focusing only on the appeal, to use the intervening months to concentrate instead on achieving an agreed resolution to the case.

Lord Justice Briggs :

23. I also agree.