England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice
		2nd February 2018

If this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person. This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.

MR JUSTICE HOLMAN:

1. There is listed before me today, with a time estimate of two hours, a pre-trial review in an application for financial remedies. The main hearing was listed for final hearing to start on Monday, 26th February 2018 with a time estimate of seven days. It is right and fair to say that that fixture has been in the diary for a long period of time; and I dare say, although I have not hunted back through previous orders, that there may well be an order over my name which includes within it the estimate of seven days. It is always a difficulty in cases like this that an estimate has to be given a significant time in advance. Sometimes the issues in a case contract and, indeed, the full time estimated and allowed is not required. Sometimes a case seems to expand like Topsy, and an estimate, which was given in good faith at an earlier stage, begins clearly to be inadequate. I regret that the present case is clearly in the latter category.
2. These parties seem to be locked into a titanic dispute in which, to date, no quarter seems to be given by either of them. It is, itself, but a part of a wider litigation tapestry in which the parties have been litigating in the Companies Court in relation to their own main company. There was, indeed, yet earlier litigation in which the parties jointly pursued an insurance claim, which they catastrophically lost. I have been told today that if one adds up all the costs that these parties have incurred, in either the matrimonial litigation or the linked company litigation, they come to just under £2m inclusive of VAT. This is all in a context in which the assets that they started out with may have been worth, at best, about £6m or £6.5m. Additionally, in the insurance claim they incurred costs of their own, as well as a liability for the costs of the insurance company, which themselves totalled nearly £1m. So this is, frankly, litigation which is completely and utterly out of control.
3. A couple of months ago there was an FDR before probably the most experienced of all current financial judges, namely Mostyn J. Of course, I am not entitled to know, and do not have the slightest idea, what may have been said during the course of that FDR. I know only that these parties had the benefit of appearing before probably the most experienced of all financial judges currently, and one of great wisdom in this field, and yet they were not able to reach agreement. Further, this very morning, partly because Mr Justin Warshaw QC has recently been instructed to represent the husband and was not present at the FDR, I broke off for half an hour with the express purpose of seeing if there was any scope at all for settlement. Of course, in the space of half an hour it would not be possible to reach agreement about, or even discuss, the detail of a case such as this, but it should have been sufficient to see if there were even the beginnings of fertile ground for settlement. But after that I was not informed that there was any prospect of settlement, and so this hearing proceeded further.
4. What has become absolutely clear to me during the course of today, and indeed increasingly clear as the day has worn on, is that, as things stand, this case simply cannot be resolved in the seven days that are currently allowed for it. We went through a draft hearing template earlier this afternoon. It seems to be agreed that two days of judicial reading time would be required. It was clearly agreed that, at best, oral evidence of the husband and wife and the accountant, Mr Levitt, would occupy the whole of the rest of the first week. There is currently a dispute as to whether or not either or both of the husband's adult sons should give evidence, but it would be prudent to allow at least a morning on the second Monday for that purpose.
5. Realistically, in a case of this detail, each advocate is going justifiably to require about a day each for the making of their final submissions. So at the very best the oral evidence and the submissions might be concluded by the end of the second Tuesday, i.e., at the point when the whole seven days have elapsed. A case of this kind necessarily requires about two days of judgment writing time. There is a great deal of detail currently in the case. All attempts to strip away and discard issues seem so far to have been unsuccessful. Then, of course, there is the need for a day for the delivery of judgment and all consequential matters. That timetable effectively requires two weeks or ten days, not seven. I personally simply cannot provide that amount of time in the period that has currently been listed. I already have fixtures for the whole of the Thursday and the Friday of that week which cannot be moved, and which themselves are likely to require pre-reading.
6. Some sense of the range of issues in this case is to be gleaned from the note which
   Mr Warshaw prepared for today. At paragraphs 48 and 49 he identifies a range of issues of conduct that each party has raised against the other. It is right to say that Mr Warshaw then goes on to suggest that none of these points amounts to conduct, or should be taken into account, but Mr Richard Bates, who appears on behalf of the wife, is not willing to accept that. The wife strongly contends that there are issues of conduct, at any rate on the part of the husband, which must be taken into account and are likely to have a significant effect on outcome. These include, but are not limited to, the assertion that the husband made a fraudulent insurance claim and led the wife, unwittingly, into being a party to those catastrophic proceedings, which, as I have said, cost the parties nearly £1m. Further, it is said that there is a piece of gross litigation conduct by the husband in that he falsified a letter purporting to have been received from HMRC, so as greatly to augment any indebtedness by him to HMRC.
7. On the husband's side he makes a whole range of allegations against the wife, which may be seen in paragraph 49 of Mr Warshaw's document. Quite apart from those issues, there appears to be an issue in this case as to a prenuptial agreement. It is common ground that a piece of paper was signed on the day of their marriage, after a long period of premarital cohabitation. The husband would seek to rely on it. Mr Bates has indicated today, on behalf of the wife, that there is a range of reasons why she will argue that it is not worth the paper it is written on. Issues like that will require oral evidence, consideration of authorities around prenuptial agreements, and quite careful consideration by a judge as an additional building block of his judgment. There are, further, huge issues as to the means and assets of the husband and any interrelation between them and those of his sons.
8. There appears, further, to be a very considerable issue in this case as to the true underlying value of the parties' company. The husband asserts that it is capable of being sold as a going concern for a price of some millions of pounds. The wife says that that is, underlyingly, illusory. Apart from its fixed assets, the company is no more than the goodwill of the trading relationship that she and the small staff have with their customers. She says that there are no covenants which require either her or any of the staff to continue to work for the company, and that she could in fact walk away from the company, taking the staff with her, which would have the effect that any residual value of the company would be small. So it can readily be seen that there is a huge range of issues in this case which currently are being litigated with rare intensity, even in the context of matrimonial financial proceedings.
9. A glimpse of the detail of the case, and how these parties seem unable to agree on practically anything, was gained this afternoon when we were discussing an Aston Martin DB9 motor vehicle. There is a huge dispute about some Aston Martin vehicle: who bought it and who paid for it. I was trying to untangle that this afternoon when disarray broke out, with each party asserting that the vehicle they are respectively talking about is not the one that the other one is talking about. So it seems that they could not even agree about the vehicle or vehicles in dispute in that part of the case.
10. All these factors, cumulatively, lead me very firmly to feel that I, at least, could not resolve this case in the seven days that have been asked for and are available. It may be that some other judge would cut through the case more quickly, but my own practice in financial cases of this kind is to hear and consider the oral evidence and submissions with care, to give very careful thought to the preparation of judgment, and indeed to give a judgment of some detail. It cannot be done in seven days.
11. So for those reasons I feel constrained to vacate the hearing that was fixed for 26th February. I regret that. I appreciate that it prolongs the strife, and prolongs what may be a very difficult situation, not only for the parties but for the employees of the company. The fact is that the courts do have to work to a calendar. This case is jostling for space with many other even more needy cases concerning abducted children, children kept from their parents, and, as I was told this afternoon, a new case coming into the list concerning a dying child. I cannot, in all conscience, remove other cases from the list in order to enlarge the available time. So for those reasons, with reluctance but complete firmness, I have decided that I must vacate the hearing that was fixed for 26th February. I have spoken to the Clerk of the Rules. The first available date when a judge can give two clear weeks for this case is 15th October 2018, and that is when it will be re-fixed.
12. A significant part of today's PTR appeared to be directed to a very recent application that was issued for the production of information and documents by the husband's two sons. There is in fact a letter dated 29th January 2018 (last Monday) from one of the sons, Thomas Parker, who says that he only received the application at about 11.30 a.m. last Monday morning in the post. He says, further, that, as it happens, he is moving house literally today.
13. There is much contention between these parties as to whether or not, and to what extent, orders should be made against the sons, and, in any event, it is not fair, being no longer necessary, that I consider what orders to make on that application at such short notice today. So a new PTR will be fixed for 18th June 2018. That is being listed before the same judge whom the Clerk of the Rules has in mind for the substantive hearing on 15th October. I will give directions in terms that have already been discussed, and are self-explanatory, as to the manner in which the application that was issued last Friday will fall to be considered at the hearing on 18th June.