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Madan v Madan [2007] EWCA Civ 517

Application for permission to appeal in ancillary relief proceedings. Application refused.

This was a second attempt to appeal orders in ancillary relief proceedings and as such had to raise a compelling or important point. The husband had applied for dispositions by the wife to her children, made within the three years prior to the divorce, to be set aside under s.37 of the MCA. That application was originally summarily rejected by the judge so counsel argued, in this application, that the statute gives a presumption that any disposition made within three years of the divorce is intended to defeat the claims of the other spouse and therefore the judge should not have rejected the application. This argument was robustly rejected by the Court of Appeal.

Case No: C5/2007/0488
Neutral Citation Number: [2007] EWCA Civ 517

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Wednesday, 9th May 2007



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MADAN (Appellant)

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MADAN (Respondent)

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(DAR Transcript of
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MR J BOGLE (instructed by Brice Commercial Law) appeared on behalf of the Appellant.


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Judgment (As Approved by the Court)

Lord Justice Wall:
1. Mr Surinder Pal Singh Madan renews his application for permission to appeal against an order made by HHJ Marcus Edwards sitting in the Brentford County Court on 1 March 2007. The order made by the judge was itself made on appeal and what he did on that day, amongst other things, was to dismiss three appeals by Mr Madan against orders made by the district judge on 19 May, 2 June and 5 June 2006 respectively. The district judge then went on to assess the costs of those applications which he ordered Mr Madan to pay. The three orders made by the district judge all arise out of cross applications in proceedings for ancillary relief following the dissolution of Mr Madan's marriage to his wife, Mrs Kanwal Jit Kaur Madan, and it will therefore be immediately apparent that Mr Madan's application for permission is a second appeal and that, as a consequence, section 55(i) of the Administration of Justice Act applies to it as does the consequent rule in the CPR. Therefore there has to be an important point of principle or practice, or some other compelling reason for this court to entertain the appeal. In my judgment, on the facts of this case, section 55(i) places a very substantial obstacle in Mr Madan's way.

2. However, Mr Madan faces a second, equally formidable obstacle in that his application for permission to appeal has already been refused on paper by Wilson LJ on 2 April 2007 in trenchant and reasoned terms to which I shall return in just a moment. For Mr Madan, Mr James Bogle of counsel has invested a great deal of intellectual energy and effort into a skeleton argument which runs to some 66 paragraphs and, in proper pursuance of the practice direction, he has produced an advocate statement dealing with Wilson LJ's reasons for refusing permission.

3. I propose, therefore, first of all to look at the orders made by the district judge. The first was an order dismissing an application which Mr Madan had issued within the ancillary relief proceedings under section 37 of the Matrimonial Causes Act 1973. That application related to sums of money which, it was common ground, his former wife had given to the two, now adult, children of the family and in part on trust for the parties' grandchildren. The district judge dismissed the application under section 37 without a substantive hearing and that, Mr Bogle seeks to argue, is the beginning of the difficulties in the case.

4. The second order made by the district judge refused Mr Madan's application for an adjournment of the proceedings for ancillary relief themselves. These had been fixed for three days for some considerable time. They were due to commence on 5 June 2006 and the order made by the district judge specifically recorded that both parties were to attend for the purposes of cross-examination and the district judge specifically said that the court had jurisdiction to make a final order in the absence of either party in the event that either party failed to attend. The district judge at that point reserved the question of costs but made quite clear that he intended to proceed with the hearing on 5 June.

5. Therefore 5 June was the hearing of the applications for ancillary relief themselves and Mr Madan, in my judgment, made a very serious error at this point. Most unwisely, he did not attend the hearing before the district judge. The result was that evidence was given at that hearing by Mrs Madan and the district judge heard her and found her to be a credible and reliable witness.

6. The result of the hearing for ancillary relief was, I hope I may be forgiven for saying, absolutely standard fare. This was a long marriage. Mrs Madan, I think, is in her early seventies, Mr Madan in his late sixties. There were two adult children and grandchildren. The principal asset, apart from the parties' pensions and a small amount of capital which each had, was the formal matrimonial home. The district judge ordered inevitably that the house should be sold and the proceeds divided equally. He made consequential directions in relation to the conduct of the sale and rights of occupation to determinate on exchange of contracts and he made an order for periodical payments in Mrs Madan's favour, designed to render equal the non-state pensions -- that is the occupational pensions -- which both parties had. Both had worked throughout the marriage. Mr Madan was obviously in more favourable employment and had a bigger pension, but pensions were in payment. Therefore there was no question of a pension-splitting order and, as I say, the district judge took the view that the occupational pensions in payment should continue but should be, as it were, equalised by a countervailing payment of £3,660 per annum during joint lives or until remarriage for Mrs Madan. All other claims were dismissed and the district judge made an order barring Mr Madan from instituting proceedings under the 1975 Inheritance Act, and the district judge ordered Mr Madan to pay the costs. Those were dealt with on a later occasion.

7. What we have here is a very conventional case, as both the district judge and the judge found: a long marriage; parties not in the first flush of youth; plainly, a case for equality of division and a modest capital adjustment because Mr Madan had more capital than Mrs Madan, and a modest adjustment on pension income because Mr Madan had more pension income than Mrs Madan.

8. The only issue in the case, and this forms the subject of Mr Bogle's submission, was that as I say Mrs Madan had, within the three years prior to the institution of the section 37 application, made certain dispositions. She had given money to the two daughters of the marriage and she had also given some money to her grandchildren on trust. The sums were not essentially in dispute; that is according to the judge. The judge hearing the appeal found, and this was not seriously disputed I think, that with the difference of some £10,000 it was common ground that Mrs Madan had made these payments and that she had done so, she said, for the entirely natural and honest reason that she wished to benefit her daughters and her grandchildren. So this was not a disposition that was in any event secret or not known about. It was open and above board and the only question was if it had been done for some inappropriate motive, ie if it had been done to defeat the claim or for some other improper motive, should the money which Mrs Madan had paid over be added back into the pot or if it was, as the district judge eventually found, an entirely genuine series of transactions, should it be deemed no longer to be part of Mrs Madan's assets, and therefore the capital fell to be divided as dealt with indeed by the district judge.

9. The way Mr Madan chose to go about litigating this issue was to issue an application under section 37 of the Act which is designed to set aside and avoid dispositions made by the other party to the marriage with the intention of defeating the claim for ancillary relief by the first party. It is commonly used when, in some cases for example, a husband alienates property or gets rid of money saying he has given it to a third party, or some other party has an interest in it, or a property has been transferred to a third party, the court sets the transaction aside and puts the money back into the pot. Here both the district judge and the judge found that a section 37 application was quite unnecessary. Everyone knew to within £10,000 what the sum of money was; everybody knew where it had gone. The only issue was: was Mrs Madan genuine when she said it had been given to her daughters and grandchildren for the purposes that she did?

10. The chronology at this point is, I think, of some importance because the application for ancillary relief had been issued in the summer of 2005. There had been a FDR in January 2006 and at that point the district judge had fixed the hearing for June, so that the hearing for June had been fixed for the best part of six months. Mr Madan did not issue his application for section 37 relief until 19 May and it was plain from that application that if it was to be heard on its merits the hearing on 5 June would have to be sacrificed. So the first question for the district judge was whether or not he should allow the application under section 37 to proceed to a full hearing, and that application is the subject of the first of the three judgments which were appealed to HHJ Edwards.

11. The district judge in a careful judgment went into the reasons why he took the view that the section 37 application was unnecessary. Thereafter there was an application to adjourn the substantive hearing by the husband because he had issued a notice of appeal against the section 37 application. When the application to adjourn then came before the district judge a few days later, he refused it on the basis that there had been a fixture for a long time and that the issues contained in the section 37 application could be readily dealt with in the hearing for ancillary relief itself.

12. Now it is this point which Mr Bogle seeks to argue is of such fundamental importance that everything that followed thereafter is flawed. What he says is that the statute gives the husband a statutory presumption that any disposition made within the three years was made with the intent to defeat the claim and that because that is the case the summary dismissal by the district judge of the application under section 37 put the husband at so fundamental a disadvantage that it rendered the subsequent hearing for ancillary relief unfair and, as a result, Mr Madan was fully entitled not to attend it. Even if he had attended it, it would still have been unfair. The result was therefore unfair and therefore the judge hearing the appeal or the three appeals should have set the whole thing aside and allowed everyone to start again from the beginning.

13. I propose first of all to deal with what my Lord, Wilson LJ, said about that because it is an argument which I find not only unattractive but wholly without any form of merit. What the Lord Justice said was this:

"An obstinate misapprehension lies at the heart of this proposed appeal. There is no need for a section 37 application unless it seems likely that in the event of success the applicant will need to have his or her award met out of the very assets thus restored to the respondent. There was no need for such an application here because even in the event of his establishing all the matters required under section 37 the husband's award would not have been met out of the assets which the wife had disposed. There would have been an adjustment or elimination of the lump sum payable by him and/or an adjustment in the division of the sale, proceeds of the home. There was no point in dealing with the issue other than notionally and in the light of the identity of the disponees the parties children and grandchildren, there is something unpleasantly mischievous as well as unnecessary about a continued assertion that the court should have considered whether actually to deprive them of what W had given."

14. I respectfully agree with every word of that and in my judgment it fully meets Mr Bogle's point. Mr Bogle seeks to say that the husband should not have been deprived, as I understand the argument, of the advantage of going into the ancillary relief proceedings, although they would not have been of course on 5 June, without the benefit of the presumption that the disposition had been made with the intention of defeating his claim because it had been made within three years.

15. In my judgment there are a series of non sequiturs in Mr Bogle's submissions. First of all, it was not necessary for there to be a section 37 application and indeed Mr Bogle himself in argument this morning found himself, I think, in some difficulty in answering the questions: did Mr Madan really want these transactions set aside? Did he really want his daughters and grandchildren to pay back the money and so on? It was absolutely crystal clear that the issue was: was this money properly in the family pot or not? If it was not properly in the family pot, then the district judge would add it back in; and if it was in the family pot because she, for perfectly sensible reasons, had given the money to her daughters and grandchildren, then the district judge could safely ignore it. The section 37 application was entirely unnecessary.

16. Secondly, the idea that this case hinged on a notional presumption under section 37 is frankly unreal. It did nothing of the kind. The application before the district judge on 5 June was for ancillary relief. It was under section 25 of the Matrimonial Causes Act 1973. The district judge knew all about the transactions which Mrs Madan had undertaken. They were not hidden; they were before him and she gave evidence about them, and it was self evident that if Mr Madan had attended the hearing before the district judge and had persuaded the district judge that his former wife had behaved, in some way, inappropriately in giving this money away, the district judge could and would in my judgment very easily have added it back in. But, as I say, Mr Madan made the very, very serious error of not turning up for the hearing before the district judge in which the claims for ancillary relief were dealt with and, in my judgment, it is quite impossible for him to come along today, through Mr Bogle, and try and persuade us that the hearing was unfair when he deliberately chose to absent himself from it. Furthermore, the only reason he absented himself from it, as I understand it, was a very bad one. It was that he had issued a Notice of Appeal against the refusal to entertain the application under section 37 and therefore it was not appropriate for the district judge to continue with the hearing and therefore Mr Madan was entitled not to participate in it.

17. Once again, in my judgment, those are a series of non sequiturs. First of all, the district judge was quite right in my view to dismiss the section 37 application and, secondly, it did not follow that Mr Madan was in any way disadvantaged by the absence of the so-called presumption and, in my view, everything was to play for at the hearing which he could and should have attended. As it was, the district judge heard Mrs Madan, who had been willing not only to give evidence but had been willing (at the application to adjourn the proceedings) to get the children along if it was necessary for the process. He heard her and he said, and I quote from his judgment:

"It is abundantly clear and there is a wealth of documentary evidence which is cross indexed in terms and the wife has taken to it, on the schedule that the sums spent by her basically came from her savings and from her savings alone and represented perfectly proper expenditure by her on a commendably generous but nonetheless reasonable basis on the parties' daughters and young grandchildren."

That is a finding of fact which, in my judgment, is unshakeable. It is one the district judge was perfectly entitled to reach and Mr Madan simply cannot be heard to come along today and say it was not open to the district judge to make that finding and that he should not have done so.

18. So far I have concentrated on what happened before the district judge. I have left one point out of consideration, but it is an important one, which the district judge weighed, namely really how disproportionate it would have been for the proceedings to have been served on the daughters, perhaps for the grandchildren to have achieved separate representation, for there to have been an adjournment, further delay, additional costs and so on; all reasons why the district judge, in my view, was absolutely right to refuse the section 37 application and to refuse the adjournment.

19. When the matter came before HHJ Edwards he treated it, it seems to me, with a remarkable amount of care and attention. His judgment, which we have in our papers, runs, I think, to some 94 paragraphs. It ends with these words, and they are very wise words in my view:

"There have now been ten hearings of four separate applications brought by the husband, all of which have failed. The wife is a lady aged 71, who has had to live with the husband, and still has to live with him, under the same roof, in circumstances of considerable stress and anxiety, while the husband has persisted in carrying forward this expensive and time-consuming litigation in an entirely inappropriate and ill-advised way, (in which I do not include Counsel for the husband on this appeal, [I think it was Mr Bogle] who has conducted his client's case with skill). These appeals must all be dismissed."

20. But how did the judge go about his task? He went very carefully through all of the arguments advanced in relation to the appeals from the district judge, and the first argument advanced was the very one that I dealt with at the beginning of this judgment: the presumption under section 37. The judge spent some 20 paragraphs dealing with section 37. He deals with the argument fully advanced to him that the husband had been deprived of this legal presumption. He quotes extensively from the judgment given by the district judge. He deals with the frankly absurd argument that the burden of proof had been reversed by the district judge's refusal to deal with the section 37 application. He deals with the argument of proportionality in relation to setting aside and he deals with the question of prejudice, all very fully and carefully dealt with by the judge in answer to the submission that the section 37 adjudication was wrong. I agree with every word the judge said in relation to that and, in my judgment, he was plainly right.

21. He then went on to deal with the question of the adjournment, which was plainly a matter for judicial discretion and plainly a matter which, the district judge was right to say, the hearing had been long fixed, the issues were clear, they could easily be litigated and therefore the district judge had been right to order and refuse an adjournment.

22. He then dealt with the application for ancillary relief itself and, as I have already indicated, it was an absolutely standard order: house sold; proceeds divided equally; directions as to the sale of property; equalising modest order for periodical payments; all other claims dismissed; husband not to claim under the Inheritance Act. All absolutely, if I use the vulgar phrase, bog-standard stuff and Mr Bogle really is in the most enormous difficulty when he comes today and seeks to persuade us not only that there is a point of law in this case, but that there is a point of principle or practice of such importance that this court should entertain it, and that it therefore constitutes a powerful reason why this court should entertain the appeal. None of that applies.

23. In my judgment, the district judge was plainly right in all three orders he made. The judge was plainly right to dismiss all three appeals. The husband's process in this case has been wholly misconceived and he cannot now come to this court and complain that he has not had a fair hearing.

24. I just conclude by reading the remainder of my Lord, Wilson LJ's reasons for refusing permission. He says at paragraph 3:

"There was no justification for the husband's deliberate non-attendance at the hearing before the district judge and it would have been quite wrong for the circuit judge and would be quite wrong for this court to admit further evidence or consider submissions which but for his wilful non attendance the husband could have presented to the district judge."

25. I entirely agree. He then goes on to say:

"The husband has been and is therefore unable to challenge the district judge's findings that the wife's dispositions [and he then quotes part of the passage I have already read and I will not repeat]."

He concludes:

"Having heard this application, had the section 37 application still be on foot this finding would have been defeated, would have defeated it by rebutting the presumption of an intention to defeat and/or by leading the court in its discretion to decline to set the dispositions aside."

26. Mr Bogle complains that that does not address his fundamental point. The fundamental point of unfairness because the husband was constrained to go into the main hearing without the benefit of presumption.

27. I regret to say that I think that is an argument without any merit of any kind and is simply unreal. The issue before the district judge was: how do I divide this pot; what assets are properly within the pot; what assets are not? Presumptions are neither here nor there and the district judge and the judge were both right to find as they did.

28. Mr Bogle also complains about a number of the ancillary orders, including an order that Mr Madan has to keep his study open at all times whilst the house is in the process of being sold. It is of some significance, I think, that although the order of the judge was some time ago and the order of the district judge was last year, the property does not yet appear to have been sold. It plainly needs to be sold, these parties need to disengage and, in my judgment, the case management directions or the directions in relation to the sale, which both the judge and the district judge made, are entirely within their overall discretion when making an order for sale and the consequential matters which have to be dealt with in relation to it.

29. Wilson LJ concludes:

"No part of the proposed appeal has a real prospect of success and so would not even have attracted permission for first appeal. It raises no point of principle or practice and there is no reason to hear it, compelling or otherwise. So it does not meet the specific criteria of the second appeal on the contrary it is an attempted abuse of the process of the court."

30. I regret to say that I have to agree with that. Mr Bogle's industry and energy are, in my view, entirely misplaced. He has taken a series of bad points, none of which has any merit, and therefore in those circumstances I have no hesitation in agreeing with Wilson LJ and suggesting that this application for permission be refused.

Lord Justice Ward:
31. I wholeheartedly agree, but because I have been so rude to Mr Bogle during the course of the argument, I will condescend to a few words of explanation as to why I think he is so wrong. His appeal would centre upon the section 37 application. It was dismissed by the district judge, who said in paragraph 7 of his judgment, on page 88 of our bundle:

"On that basis it seems to me to be clear that it is simply unnecessary, quite apart from being a disproportionate exercise in terms of time, trouble and expense for me to accede to the S.37 set aside application. Mr Madan, in the view I take of the matter, cannot conceivably in my judgment be prejudiced by these dispositions being allowed to remain in place."

32. Now even if Mr Bogle is right that considerations of proportionality and CPR should not be brought into play in considering the exercise of judicial discretion, and I am far from thinking that he is correct about it, the gravamen of the judgment is in the sentence:

"Mr Madan cannot conceivably, in my judgment, be prejudiced by these dispositions being allowed to remain in place."

33. Because they were applications under section 37, the only relief the court could give, if successful, was to set those dispositions aside, dispositions of monies paid by mother to children and grandchildren. He was not really asking for that. He was not bothered about that. What he wanted was the money represented by those dispositions to be brought into account in doing eventual justice between him and his wife. That is precisely what the judge was prepared to accept. As he went on to say, "For the reasons I have indicated, there is and will be more than enough available in terms of the available matrimonial assets for any order, however beneficial it may be in his favour, to be satisfied without the need for a set aside of the dispositions to take place".

34. It seems to me to be an exemplary reason for exercising the discretion which section 37 gives through the use of the words "may order" to say this procedure is hopelessly misconceived, and a waste of time, effort and money. It is a great pity that poor Mr Madan has been brought here to listen to us rage against the way litigation has been uselessly conducted on his behalf. The district judge was perfectly entitled, indeed totally correct, to take the view of the matter he did. So was the circuit judge and therefore this application should be refused.

Order: Application refused.