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Home > Judgments > 2010 archive

Francis v Francis [2010] EWCA Civ 182

Application by husband for permission to appeal a second time an order in ancillary relief proceedings. Application granted in part on the ground that it raised an important question about the nature of a rehearing and when to apply Barder rules.

By the time of the separation, the couple had two homes in France, as well as one in the UK, and both had expressed their desire to continue living in France. There were also proceeds available from a family trust that received the income of the husband's marine design businesses. Under the order of the district judge, broadly each partner received a house in France, the UK house was to be sold and the assets in the trust to be divided. The district judge also made an adjustment in favour of the husband because of his financial contribution at the start of the marriage: his pre-acquired home in France had been the main home. The husband was also ordered to make a balancing payment to the wife of £412,000 by a certain date to even out the asset split. In the event the husband appealed the order before payment was made which was allowed in part though the judge refused to take account of revised valuations of the French properties as such a drop in property prices was not a Barder event: the value of the property to be retained by the husband had apparently dropped by £150,000 since the order while the value of the wife's property had remained essentially stable.

Wilson LJ allowed the application to appeal only on the narrow grounds that it  raises an important question about the nature of a "rehearing" of ancillary relief proceedings under rule 8.1 (3)(a) of the Family Proceedings Rules 1991 and it was arguable that the principles did not apply to a timely appeal. He refused permission to appeal on two other grounds submitted by counsel for the husband.

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Case No: B4/2009/2191
Neutral Citation Number: [2010] EWCA Civ 182
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, FAMILY DIVISION, PRINCIPAL REGISTRY
(MRS JUSTICE ELEANOR KING)
(LOWER COURT NO: FD07D01331)

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Tuesday 9th February 2010

Before:
LORD JUSTICE WILSON
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Between:
Martin Francis (Applicant)

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Dagmar Ursula Helene Francis (Respondent)

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(DAR Transcript of
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Mr James Turner QC (instructed by Pritchard Englefield ) appeared on behalf of the Applicant Husband.
The Respondent Wife did not appear and was not represented.
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Judgment
(As Approved by the Court)

Crown Copyright©

Lord Justice Wilson:
1. A husband, as it will be convenient to call him notwithstanding a decree absolute of divorce, seeks permission to appeal against an order made, itself on appeal, by Mrs Justice Eleanor King in the High Court, Family Division, Principal Registry, on 17 July 2009.  Over the preceding three, or possibly four, days she had been hearing an appeal by the husband against an order for ancillary relief made in favour of the wife, as it will be convenient to call her, by District Judge Bowman on 14 November 2008.  Before the district judge both the husband and the wife had been represented by junior counsel.  Although Mr Turner QC had, on his behalf, drafted grounds of appeal to the High Court judge, the husband chose to represent himself before her, whereas the wife remained represented by junior counsel.  Now, notwithstanding the filing by the husband of his appellant's notice in person, Mr Turner re enters the case and appears before me today pro bono on an application for permission and for an extension of time in which to file that notice.

2. It follows that the proposed appeal to this court would be a second appeal and that Mr Turner has to satisfy me that one or other of the criteria set by rule 52.13(2) of the CPR is met.  Unless he were to satisfy me of the second criterion (that there was some other compelling reason for this court to hear the appeal) he would also be likely to need to establish that his appeal would have a real prospect of success.

3. The husband, who is English, is aged 68.  The wife, who is German, is aged 47.  They were married in Switzerland on 20 March 1992.  For the husband, it was a second marriage.  At the time of the marriage the husband had significant assets, in particular a home in France and two or three companies of some value.  At first the parties lived in his home in France.  Two children were born, both girls, the older being now aged 17 and the younger being now aged 15.

4. In 1997 that first home was sold and, mainly with the net proceeds thereof, a further home in France was purchased, in the joint names of the parties, in Chateauneuf-en-Grasse.  In 2003, while not disposing of that home, the family moved to London and in due course they purchased a home in Holloway.  Shortly afterwards they purchased, and vested in the sole name of the wife, another property in France near Beziers, known as Bellevue.  In 2007 the marriage broke down and there was a divorce in England, following which the wife made her claims for ancillary relief.  It seems that both parties aspire to live for the future in France, or basically in France, and that, in particular, the husband hopes (although the outcome of these proceedings may dash such hopes) to continue to live in Chateauneuf. The wife, for her part, appears to wish to live at Bellevue.  The complications surrounding their respective aspirations to return to France has been the recent education of the girls in a day school in London.  But such a complication is of course only temporary.

5. The hearing before the district judge took place over five days in June 2008.  On 20 August 2008 she disseminated a very long, intricate, written judgment. On 21 October 2008 there was a further hearing before her, as a result of which her order was, as I have said, made only on 14 November 2008.  It follows that the evidence which she had received, particularly in relation to "current" property valuations, might already have become significantly out of date at the time when her order was finally made.  To her order the district judge helpfully attached a schedule of the assets of the parties, as she found them to be.  She concluded that their total value was £2,318,000. 

6. This total comprised four main components.  First there was the home in Holloway.  It was agreed that such should be sold.  Second there was the home in Chateauneuf.  The district judge found that the husband keenly wanted to continue to live there and would do all in his power to save it from sale.  Such, then, was a property which, by her order, was to be transferred from the joint names of the parties into the sole name of the husband.  Third there was the property at Bellevue, already owned by the wife and to remain owned by her.  And fourth there were the proceeds of sale of a company, Francis Design Ltd, which had been set up a few years earlier as the vehicle for the conduct of the husband's business as a marine designer.  In effect all the shares in the company had been held by a family trust and, pursuant to an interlocutory agreement between the parties, the net proceeds of the shares held by the trustees were taken to be £680,000.

7. The district judge decided that the circumstances of the case made it mainly fit for an equal division of the assets, in addition to which the husband should make periodical payments not only for the girls but also for the wife.  She considered, however, that there should be an adjustment from equality in favour of the husband in the light of his age, of his lack of pension provision and (as I suspect in particular) of his financial contribution, then unmatched by any contribution by the wife, at the start of the marriage.  So the district judge decided that, prior to equal division, a sum of £200,000 (thus being about 9% of the total assets which she had computed) should be ascribed to the husband and that only the balance should be subject to equal division.  In that, for the purposes of the basically equal division which she directed, she provided that the figure entered by her upon her schedule for the value of the home in Holloway should, in the light of its imminent sale, be replaced by the actual price to be achieved on sale, she added that that top slice awarded to the husband should be either £200,000 or, if less, 9% of the value of the total assets as ultimately to be calculated.  Indeed the district judge in judgment went on to observe that the effect of her provision resulted, and was intended to result, in a distribution of 54.5% of the parties’ joint assets to the husband and of 45.5% thereof to the wife.  By her order, the district judge duly made provision for payment to the wife of such sum as would bring her assets up to one half of the balance of the joint assets as ultimately to be calculated, including an initial payment by the husband to the wife of £412,000 by 1 December 2008, of which £356,000 was to count towards her half share.  She also made provision for the husband to make substantial periodical payments not only for the girls but also for the wife. 

8. It may prove to have some relevance that the husband's notice of appeal against the district judge's order was issued in time.  My understanding is that the sum provided to be paid to the wife by 1 December 2008 was not paid but that, at a hearing on that date, Baron J directed that £150,000 should be paid to the wife out of the sum held by the trustees; and I assume that it was so paid.

9. Eleanor King J allowed the husband's appeal only to a very limited extent.  She allowed it in relation to an aspect of the order for periodical payments in favour of the wife made by the district judge.  Also listed before her, however, was an application by the husband to vary that order for periodical payments; and, apparently by consent, the judge also acceded to that application.  In the proposed appeal to this court nothing turns on her alterations, thus made partly by allowing the appeal and partly by variation, to the order for periodical payments to the wife. Therefore the fact that I cannot square the description in the penultimate paragraph of her judgment of the overall effect of her alterations with the terms of the alterations as set out in her order is irrelevant.

10. It follows that, by her order, the high court judge upheld the district judge's award of capital provision to the wife.  However, she recast the sum thus due to the wife.  I expect that there were two reasons for that: namely first that there had been that payment to the wife of £150,000 in the interim and second that, pursuant to the district judge's order, the figure which the latter had taken for the value of the home in Holloway had been able to be replaced with the substantially reduced figure actually achieved on its sale in the interim (subject to the fact that, although contracts had been exchanged for the sale at the date of the high court judge's hearing, completion had not yet been achieved).  Thus the high court judge provided that what remained owing to the wife was £709,000, of which £332,000 should be paid within ten days and of which the balance should be paid by 17 January 2010.  My impression is that either the full sum owing within ten days, or at any rate all but £11,000 thereof, was duly paid.  The balance, however, has not been paid whether by 17 January or at all. 

11. It seems that at an interlocutory stage prior to the hearing of the appeal Mrs Justice Parker had directed up-to-date valuations of the two French properties.  If there exists a transcript of the judgment by which she made that direction, it may prove helpful to discern precisely what she said; and/or to survey any correspondence between the wife's solicitors and the husband referable thereto.  At all events, by the time of the hearing before Eleanor King J, updated valuations, presumably obtained on joint instructions, were available; the precise dates of the valuations are unknown to me. Their arguable significance is that, whereas Bellevue, to be retained by the wife, had dropped in value only minimally from the valuation favoured by the district judge, the property in Chateauneuf, to become the sole property of the husband, had dropped in value significantly, whether prior to the district judge's order in November 2008 or subsequently, namely by £154,000. 

12. This led to the following arguably important observation on the part of the high court judge in judgment:

"36... Given that the husband is to retain Chateauneuf, this means that, despite the district judge having accepted the husband's argument that he should have an enhanced share of the capital to reflect the pre-acquired assets, when set against the current valuations, he will in fact receive less than 50% of the assets.

37. [Counsel for the wife] rightly reminds me that a drop in property prices is not a ‘Barder’ event and the court should put out of its mind the new valuations when considering the appeal."

Thereupon the high  court judge reminded herself of the provision in rule 8.1 (3)(a) of the Family Proceedings Rules 1991 to the effect that an appeal against an order for ancillary relief should be limited to the review of the order of the district judge unless the appellate judge considers that in the circumstances of the case it would be in the interests of justice to hold a rehearing. Then she recorded that “in the present case neither party submits there should be a rehearing”.

13. Mr Turner has persuaded me that, at any rate in this area of the high court judge's judgment, he has a matter fit for appeal, indeed for second appeal.  He has sought also to persuade me that the structure of the district judge's judgment, by which she allowed the net proceeds of sale of the property in Holloway to be brought into the reckoning but made no provision for any updated valuations of the French property, was also unprincipled: but I am wholly unattracted by his assault upon the district judge's disposal.  What is arguable and what, for the purposes of the second appeal, may be important, is his challenge to the high court judge's disposal of this point.  For in my view this area of her judgment raises an important question about the nature of a "rehearing" of ancillary relief proceedings under the subparagraph and whether in respect of a timely (including perhaps a reasonably timely) appeal from a district judge to a high court judge, the principles in Barder v Caluori [1988] AC 20 apply.  It seems to me to be arguable that the principles do not apply to a timely appeal and apply only to an attempt, even if (as is often the case) made in the context of an appeal brought substantially out of time, to reopen a matter which may properly be regarded as having been finally determined, whether by the absence of any timely appeal or by the latter’s due determination.  This court may also have to appraise the apparent submission of the husband to the high court judge that there should not be a "rehearing" within the meaning of the subparagraph.  Did the husband think, and for that matter did the judge think, that a "rehearing" necessarily required a rehearing de novo of all the evidence that, over five days, the district judge had received. If so, was there appealable error in any approach adopted by the high court judge to that effect?  Is it not possible for an appellate judge -- at any rate in ancillary relief proceedings -- to conduct a "rehearing" only in relation to a discrete area of the evidence, in particular, in this case, of the value of the French properties?  Today Mr Turner has shown me a skeleton argument presented by the husband to the high court judge, by which he seems clearly to have been relying on the fresh valuations and to have been complaining that their effect was to negate the district judge's conclusion that he should exit from the marriage with greater capital than should the wife.  So how could he possibly not have been asking for a "rehearing" in relation to the value of the French properties?  Was it just that the judge should first note the district judge's conclusion that the husband should exit with greater capital than should the wife; then proceed to note that, by reference to the current valuations, the effect of the district judge's order was no longer consonant with her intention; but proceed to decline to hold a rehearing in order to consider them; and, in relation to capital provision, then to dismiss the husband's appeal?  Did our rules about the proper ambit of such appeals preclude her from doing otherwise?

14. Ground 3 of the husband's home-made grounds of appeal to this court, inelegantly expressed, complain that Eleanor King J "wrongly treated the appeal on the basis of a Barder event".  But the meaning of ground 3 is clear to me and, in the light of what I have said, will be clear, I trust, also to the wife and to her advisers. 

15. I hereby permit an appeal to proceed on ground 3 but I refuse permission to the husband to appeal on the other three grounds attached to his notice, as reduced, in effect, into two grounds by Mr Turner in his written argument. 

16. The first of Mr Turner's other grounds, as reduced, represents a complaint that the high court judge was plainly wrong not to have found the district judge to have been plainly wrong in making only the limited allowance, which I have described, in favour of the husband in relation to his pre-marital assets.  Indeed Mr Turner this afternoon seeks to cast his net wider and has spoken in terms not only of the husband's pre-marital assets but of the income capacity which the husband brought to the marriage; according to him, the district judge should have made allowance for that too as one component of what one might call compendiously the pre-marital contribution of the husband unmatched by that of the wife.  This new point represents a suggested dive into deep waters and it is far from clear to me that either the district judge or the high court judge was invited to undertake it.  It is quite clear to me that this is not a case in which this court should be tempted to undertake it for itself; and that there is no room for any assault upon the district judge’s assessment of the size of the allowance to be made in respect of the contribution brought by the husband to the marriage.

17. Both before the district judge and the high court judge reliance was also placed by and on behalf of the husband on a pre-nuptial contract which, four days prior to their marriage, the parties had entered into in France.  Mr Turner wishes somehow to link the pre-nuptial contract with the size of the allowance made in relation to the husband's pre-marital assets.  The district judge held that no weight should be attached to the contract and, notwithstanding that, during the pendency of the appeal, this court had delivered its decision in Radmacher and Granatino [2009] EWCA Civ 649, the high court judge concluded that the district judge had been right so to do.  The district judge's findings had been that the parties entered into the contract only because they understood that such was required by French law; that neither had met the lawyer who drafted the contract prior to their date of execution of it on 16 March 1992; that the contract, which was in French, referred to a number of articles of the French Civil Code, of which they understood nothing;  that the wife believed that the purpose of the contract was to allay the concerns of the husband in the event of the failure of the marriage within about a year; that the wife had thought little of the contract; that the husband had regarded it only as part of the ritual of the marriage; and that neither had taken any independent legal advice in relation to it.  Furthermore there was conflicting evidence from French lawyers before the district judge as to the effect of the contract, in particular in relation to the ownership of the house in Chateauneuf, the purchase of which had, as I have said, mainly been funded with the proceeds of sale of the husband's premarital home but which had been vested in the joint names of the parties.  In such circumstances the district judge was clearly right to attach no weight whatever to the contract; and the high court judge was clearly right to consider that the case lay miles away from the decision of this court in Radmacher and that, even in the light thereof, the district judge's treatment of it had been correct.

18. The second of Mr Turner's grounds, as reduced, had related to the district judge's treatment of sums of £200,000, which had been paid to each party by the trustees either out of the company or out of the proceeds of its sale. This afternoon, Mr Turner has -- in my view very wisely -- abandoned that second ground. 

19. The husband's appellant's notice should have been filed by 7 August 2009 and was filed only on 8 October 2009.  But there are extenuating circumstances surrounding the delay. The judge delivered her judgment orally but, when the husband came to bespeak a transcript, it was realised that the court tape-recording system had failed. It must have been a hugely irritating extra burden for the judge to have been required, as she was, to attempt to reconstitute her judgment from her notes; but she did so reasonably promptly and, when her clerk sent the approved judgment to the husband by email on 6 October, he wrote that such should be sufficient to enable the husband to file his appellant's notice.  It had been reasonable for the husband to seek advice about a further appeal and clearly it was extremely difficult for any such advice to be given in advance of a transcript or other version of the judge's judgment.  I hereby grant to the husband the necessary extension of time.

20. As I have said, the final instalment of the lump sum due to be paid to the wife by 17 January 2010 has not been paid.  I hereby stay execution of paragraph 2(b) of the high court judge's order, by which he is obliged to pay it; but I grant to the wife liberty to apply, on notice to the husband, for discharge or variation of this stay at any time between now and the hearing of the appeal.

Order: Application allowed in part