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OS v DS (Oral disclosure: Preliminary hearing) [2004] EWHC 2376 (Fam)

Using an oral hearing for preliminary discovery in ancillary relief proceedings

Case No: LN02D00278

Neutral Citation Number: [2004] EWHC 2376 (Fam)

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 06/10/2004

Before :

THE HONOURABLE MR. JUSTICE COLERIDGE

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Between :

OS Petitioner

- and –

DS Respondent

OS v DS (Oral disclosure: Preliminary hearing)

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Nicholas Mostyn QC and Tim Bishop (instructed by Withers) for the Petitioner

Lewis Marks QC and James Ewins (instructed by Rooks Rider) for the Respondent

Hearing dates: 4th – 6th October 2004

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Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

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The Hon. Mr. Justice Coleridge

The Hon. Mr Justice Coleridge :

1. Today I approved a settlement of an application for ancillary relief. In round terms the value of the settlement to the wife was £2m. Nothing exceptional arises out of the fact or amount of the settlement. However the procedural route by which the settlement was achieved was novel and, dare I say, innovative. Following settlement Counsel have invited me to set out shortly the procedure adopted in this case as it is thought to be potentially of wider professional interest. I agree with them and am happy to do so.

2. The background facts are simple. This was a case involving a marriage of some eight years between a husband and wife both of whom had been married before. There was a twenty year age difference between them and there were grown up children but not of this union. The husband was a wealthy man by the time of the marriage. His wealth was generated largely from his commercial interests in Africa. By the time of the separation these interests were contained within corporate structures based in offshore tax havens (Jersey and British Virgin Islands). It was a very complex picture with a complex international history.

3. The wife's petition was issued as long ago as February 2002 and her Form A in October 2002. There were contested maintenance pending suit proceedings. By the time of the First Appointment in March 2003 it was apparent that the underlying financial issues were complicated and hotly contested. Lengthy Questionnaires were served and answered which, inevitably gave rise to further questions; applications were made to join other parties (both corporate and human); and eventually further applications were made for leave to serve letters of request abroad. The whole application was properly transferred to the High Court and it was first listed before me by way of a further First Appointment on 14 October 2003.

4. At that hearing I allocated the case to myself and made a comprehensive raft of orders directed to the provision of further detailed information by the husband and designed to timetable the case to conclusion. Many of the orders for disclosure were in fact by consent. I did not at that stage join any other parties as the husband was indicating that he would "use his best endeavours to obtain information" from those mentioned on the list of potential parties. The wife at that stage was content to accept that course. As part of the case management a further directions hearing was scheduled for 19 February 2004.

5. Entirely predictably, by the time of the February 2004 hearing there remained or had arisen, so far as the wife was concerned, dozens of unanswered questions. So, understandably and conventionally, that hearing was intended to deal with the further questionnaires and the applications to join and for leave to serve letters of request. By this stage a final hearing had been fixed for ten days in May 2005.

6. It was at that stage that the procedure took a novel turn.

7. It occurred to me in my pre-reading for the February 2004 directions hearing that it would be highly desirable, before making any further decisions about disclosure or production of further documents or joinder of other parties, to have the opportunity of hearing from the husband on oath in relation to a number of the crucial, central and highly contested financial issues, both historical and current. As practitioners in this field know only too well, there are often innocent explanations for transactions. And on the other hand decisions to join third parties to expensive complex litigation in which they are only likely to figure peripherally are not lightly made. Furthermore, although certain explanations had been tendered the plausibility of such explanations normally has to wait until it can be tested at the final hearing with all the inevitable attendant increase in costs and delay.

8. Accordingly I suggested to Counsel that a further hearing involving the oral examination and cross examination of the husband at this relatively early stage in the process might considerably shorten the whole and dispense with the need for many of the further documents and/or the joinder of intended parties. Although this was, I believe, a novel proposal, at least in the ancillary relief jurisdiction, both Counsel readily, even enthusiastically, agreed with this suggested procedure. They considered that it would be likely to save time overall and to enable them to tender more accurate and realistic advice about eventual outcome than would ever be the case if the only predictors available to them were the usual statements, documents and their own client's untested explanations.

9. With counsels' agreement I therefore gave the following directions to enable a three day "preliminary/oral discovery" hearing to be as effective as possible.

"There be a hearing, fixed for 4th October 2004 for 3 days, before Coleridge J, for the purpose of taking oral evidence from the Respondent and resolving the issue of joinder of (i) Mr A; (ii) B Ltd.; (iii) C Ltd. and (iv) D Ltd (BVI), for the purposes of which hearing the following directions shall apply:-

a. Counsel for the Petitioner and Respondent do agree a Statement of Issues on or before 16th July 2004;

b. The parties' solicitors do agree any further bundles on or before 30th July 2004;

c. The parties' solicitors do agree a re-designation and full pagination of all bundles to be used at the hearing on or before 30th July 2004 (the existing bundles to be re-designated A-E etc.).

d. Counsel for the parties do exchange skeleton arguments on or before 1st October 2004, such skeletons to take the place of an oral opening of the case at the hearing;

e. 4th October 2004 shall be a reading day;

f. On 5th & 6th October 2004 the following timetable shall apply:-

i. There shall be no oral opening;

ii. The Respondent's Counsel shall have 1 hour to examine the Respondent in chief;

iii. The Petitioner's Counsel shall have until 1 p.m. on 6th October 2004 to cross-examine the Respondent;

iv. The Respondent's Counsel shall have 1 further hour to re-examine the Respondent;

v. The remainder of the hearing shall be used for further legal argument, directions and provisional findings.

10. The directions were fully complied with and the hearing commenced yesterday. By the short adjournment on the first day the husband had been carefully and effectively cross examined by the wife's counsel on many of the crucial disputed issues and documents. Negotiations ensued and the entire ancillary relief application had been settled by the end of that day. The resulting saving of court time (10days) and costs is self evident and very significant.

11. The advantages of adopting this process in the appropriate case seem to me to be:

a. At a far earlier stage than would otherwise be the case explanations and factual issues can be fully tested.

b. The need for production of further documents can be more rigorously considered. Trips down blind alleys can be ruled out or at curtailed.

c. Preliminary indications or even findings can be made.

d. The parties (and particularly the party under scrutiny) are able to appreciate at an early stage what they face in terms of examination both orally and in terms of the production of further documents and the involvement of other parties.

e. Advisers are in a far better position to make accurate assessments of outcome and so negotiations are more likely to be fruitful.

f. No time overall is wasted as the final hearing, where these issues would normally be explored, is almost certain to be shortened.

g. The Court is able to immerse itself in the detail at an earlier stage and give more focussed directions and, in the right case, indications.

12. I would not seek to suggest that this is the ideal procedure in all, or even the majority of, complex ancillary relief cases. Further any judge considering this course or conducting such a hearing must be astute to ensure that both parties' right to a fair hearing is not jeopardised. But where the financial substratum of the resources is bound to require considerable elucidation I consider that this procedure has many advantages including those set out in the previous paragraph.

13. I have no doubt that the court has the power within the rules to order a hearing of this type. Whether it is designated as a trial of a preliminary issue or oral discovery or the first part of a split final hearing (c.f. public law children cases) the court has the necessary tools to case-manage in this way. After all the court is primarily conducting an inquiry, not an adversarial trial. The procedure is, in my view, concordant with the overriding objective applicable to ancillary relief proceedings set out in FPR 2.51B.

14 In the recent and not dissimilar case of J - v - V 2004 1FLR 1042 (involving serious non disclosure) I commented, not for the first time, on the obvious desirability of putting "the cards on the table face up at the earliest stage if huge costs bills are to be avoided" in these cases. The court should always be vigilant to discover new and better ways of encouraging and assisting parties to that end so that they can resolve their litigation in as cost efficient a manner as possible. I commend this as a procedure worthy of employment in the right case.