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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Holmes v Wheeler-Johns [2002] EWCA Civ 1650 (28 October 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1650.html Cite as: [2002] EWCA Civ 1650

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM TORQUAY AND NEWTON ABBOT COUNTY COURT
(HIS HONOUR JUDGE TYSACK QC)

		Royal Courts of Justice Strand London, WC2 Monday, 28th October 2002

Monday, 28th October 2002

1. LADY JUSTICE HALE: This is an application for permission to make a second appeal from the order of His Honour Judge Tyzack in the Torquay and Newton Abbot County Court on 28th August 2002 dismissing the applicant's appeal against the order of District Judge Walker made on 10th May 2002 in ancillary relief proceedings between the applicant and his wife. He also applies for a stay of execution of District Judge Walker's order. A major problem facing the applicant is that under section 55(1) of the Access to Justice Act 1999 permission to make a second appeal cannot be given unless the case raises an important point of principle or practice or there is some other compelling reason for the case to be heard. We cannot give permission to appeal simply because another court might reach another conclusion in the case; and it is particularly difficult to give permission where the first court has heard both the parties give evidence and reached conclusions on that.
2. This is, on any view, an unusual case. The parties were married in May 1998. The wife was a widow then aged 94 and the husband was aged 43. He was a dealer in antiques and property. The parties lived in flats in Osborne House, which is a large and imposing property on The Hoe in Plymouth. It was bought by the wife in 1997 before the marriage. Indeed, the applicant husband tells me today that the reason that they got married was to save inheritance tax, on the understanding that although the house was in her name its acquisition and development was a joint venture between them and therefore it would be left to him in her will. On marriage the wife also had a portfolio of stocks and shares. She had had first charge over three properties owned by the husband. Again I have seen the particulars relating to those properties and the charges were registered, two of them in 1996 and one of them in 1998. The husband was declared bankrupt in January 2000 with a deficiency of nearly £169,000. He is due to obtain his discharge in July 2004. During 2002, loans of £50,000 each were taken out on the security of the wife's share portfolio (for the purpose of refurbishing Osborne House). The judge found that shortly after the first of those loans, £26,000 had been spent, along with the part exchange of a Range Rover, on a Mercedes sports car which, on the evidence, the wife did not like but the husband did. The portfolio was sold in May 2001, leaving the wife with a Capital Gains Tax liability estimated at £122,500.
3. The parties separated in December 2000. The wife left Osborne House and, I am told today, moved into a residential home. The husband stayed in his flat in Osborne House and, indeed, he is still there. The decree nisi of divorce was in December 2001; the degree absolute in January 2002.
4. So at the hearing before the District Judge the wife owned Osborne House, subject to mortgages totalling around £116,000, leaving an equity of £372,000, bank accounts totalling £278,000, and shares of £30,000 but was subject to a Capital Gains Tax liability of £23,000. The husband had in his possession (albeit paid for from the wife's bank account on which he was a signatory) a Mercedes Sprinter van which he used in his business, some household belongings, and some valuable furniture and other items which were in his flat.
5. The District Judge heard evidence from both parties. That is the problem facing the applicant today. The husband was acting in person, which he now realises may have been a mistake, but that is the case. The wife was represented by counsel. The wife, despite her advanced years, impressed the District Judge as a witness. She wanted to sell Osborne House so that she could clear her liabilities. Obviously it was of no use to her then because she was living elsewhere.
6. The husband, on the other hand, wanted to live in his flat for the rest of his life but in such a way that the flat would not be accessible to his creditors. His case -- and it is essentially the same case that he has put before me today -- is that the acquisition of Osborne House was a joint venture between them. He had owned three properties and the proceeds of those properties had contributed to the acquisition of Osborne House. Those properties (of which he has shown me the particulars today) were:

(1) 39 Higher Efford Road, a former council house which had been his father's and which was bought with a sitting tenant but on which the wife had a first charge taken out in October 1996. That house was given by his wife to a former partner of his with whom he had a relationship.

(2) 10 Watson Gardens, which had been owned by him and was sold. That also had a sitting tenant and again was subject to a charge dated December 1996 in favour of the wife.

(3) 13 Clifton Place, which was subject to a charge dated April 1998 in favour of the wife. The proceeds of sale of Clifton Place (£38,000) were paid into the account in the wife's name which was termed "the business account". That is the account on which the husband was a signatory. At the time the money was paid in, that account had an overdraft of £22,700. Soon after that the Mercedes Sprinter van was bought out of that account. The District Judge said that the overdraft was because of sums drawn from the business account by the husband, as the District Judge held, and not by the wife, and without an explanation. He found it difficult to relate these to the refurbishment of Osborne House because a further £100,000 had been borrowed for that. He found that the proceeds of all three properties seemed to have gone elsewhere, one way or another. Furthermore, the wife had had first charge on all three properties and he did not accept that the wife had not given some value for those first charges.

7. Quite apart from the problems raised by the husband's bankruptcy, therefore, the District Judge did not think that the husband's contributions merited the share of the property for which he was asking. But, in any event, if he gave the husband an interest in Osborne House, it would only go to his creditors in any event. He took the view that the sale of Osborne House so that the wife could clear her liabilities was essential. This was even though he had a very clear balance sheet of assets from which he knew perfectly well she had bank accounts. But he took the view that the wife faced substantial indebtedness as a result of the husband's actions, without a satisfactory explanation of where all the money had gone. So he ordered the husband to vacate Osborne House in six weeks. He allowed the husband to keep his van but otherwise made a clean break order.
8. The husband filed a notice of appeal within the time limit in May, although I have not seen that notice. The wife sadly died on 14th June 2002. Her Honour Judge Sander ordered that an application for permission to appeal be filed by 19th July, otherwise the appeal be dismissed -- I suspect she meant "amended grounds of appeal" to take account of the death -- and she ordered that the order to leave the property be stayed until the hearing of that application. The amended grounds of appeal were not served until 5th August 2002, but His Honour Judge Tyzack disregarded that. Notice of the appeal hearing was given on 14th August, and the person appointed executrix of the wife's will was given leave to intervene in the proceedings. The husband tells me today that she had been a lady carer in the residential home into which the wife had moved. Thereafter the wife had moved to live with her carer not having known her for very long. He feels an understandable resentment at the comparative positions in which they now find themselves.
9. The husband had by then consulted solicitors and wanted to be represented by counsel. There is in the bundle a skeleton argument from Colin Elliot dated 5th August 2002. The solicitors applied for an adjournment, but it was not granted. I have not seen the judgment giving the reason for this.
10. The main points made by counsel in that argument were that the District Judge had not, in so many words, carried out the balancing exercise required by section 25 of the Matrimonial Clauses Act 1973. The wife's debts could have been discharged out of her bank accounts without selling Osborne House (though it has to be said that would only have left her with £38,000 in disposable capital). The District Judge could have given the husband the personal right to live in Osborne House, which would not have gone to the creditors, and the assumption on which the order had been made had been invalidated by the death of the wife so soon afterwards (Barder v Barder and Caluori [1988] AC 20). This has meant that the Circuit Judge could only set aside the District Judge's order and could not make a fresh one under the Matrimonial Causes Act as the divorce suit was abated (Amey v Amey [1992] 2 FLR 89 at 93), but this would leave the husband free to make an application under the Inheritance (Provision of the Family and Dependants) Act 1975, which is what he wants to do.
11. Against that, counsel for the wife argued that it was difficult to see how any order under the 1975 Act could benefit the husband personally. He had originally said (in evidence) to the District Judge that he did not want any money from the wife, but he was now saying that he did. The District Judge did not ignore the parties' income and earning capacity. He considered the matters in section 25 to the extent necessary to deal with the case put forward by the husband. The husband had a business. The District Judge knew that the husband would have to find alternative accommodation. He had been living in Osborne House without payment since the separation. Osborne House was of no use to the wife and was the ideal way to pay off the debts and produce some income for her. She had only a limited income from her state pension and a small annuity. The argument was that the husband had already had a great deal, on the findings of the District Judge, from this very short and highly unusual marriage. The wife's death changed nothing because it could not have been far from anyone's mind at the hearing given her very advanced age and the fact that she was by then living with a carer.
12. His Honour Judge Tyzsack heard the case on 28th August and dismissed the appeal. His reasoning was that the District Judge had heard the parties give evidence. He had reached firm conclusions on the facts, in particular as to the contribution made by the husband. The husband was putting forward the same basic case that he had put before the District Judge. He wanted the court to revisit those facts. His Honour Judge Tyzack also made the point about bankruptcy.
13. The main point made in the grounds of appeal and the skeleton argument before this court is that judge should have granted an adjournment to enable legal representation. The difficulty with that is that this is a matter for the judge's discretion. There is not an entitlement to such an adjournment, and it is particularly unfortunate in this type of case if somebody has represented themselves at the hearing where all the evidence is considered and then wants counsel to represent them at an appeal hearing. An appeal hearing these days is not a complete rehearing of the case. The Circuit Judge simply has to conduct a review of what happened in the court below. He cannot rehear the evidence. He cannot make a complete revisit to the case and decide it afresh. All he can do is decide whether the District Judge must have a got it wrong (Cordle v Cordle [2002] 1 FLR 207, disapproving the previous practice before the Civil Procedure Rules, rule 52.11 in Marsh v Marsh [1993] 1 WLR 744). So there were limits to what the Circuit Judge could do in any event.
14. Furthermore this death was not really what we call a Barder event. In Barder v Barder (and another case called Smith v Smith [1992] Fam 69) a much younger wife had committed suicide very shortly after the order and that had not been contemplated in any way in the proceedings in front of the District Judge. But nobody could possibly approach a case like this without imagining that the wife had only a short while to live: so it is not a fresh event. The case was decided on the District Judge's view of the parties' respective contributions, and with his findings of fact and his exercise of discretion on that basis it is very difficult indeed for an appeal court to intervene.
15. As far as the effect of the bankruptcy is concerned, the husband today points out that when they were drafting the wife's will back in 1999 they sought advice from an insolvency practitioner so as to secure that he might have Osborne House free from the demands of his creditors. I have not seen a copy of the will, but no doubt some device was used which might make that possible, although even then the insolvency practitioner was concerned that the Official Receiver might seek to go behind that device.
16. Drafting wills is completely different from the powers of the court under the Matrimonial Causes Act. Under that Act all the court can do is make a transfer or a settlement in favour of one of the spouses, and a transfer or settlement in favour of one of the spouses is not going to avoid the attentions of the Official Receiver. Thus, no doubt regrettably in the way things have turned out, there is no real power that the court would have, whether under the Matrimonial Causes Act or under the Inheritance (Provision of the Family and Dependants) Act 1975, that would achieve what the applicant wants.
17. So there are three reasons why I cannot give permission to appeal, and I believe the applicant understands them. The first is that the District Judge heard the evidence and formed his view of the facts on the basis of that evidence. Now that the wife is dead nobody else can do that, so that it would be doubly unjust to revisit it. The second is that, in any event, it was an exercise of discretion based on the particular circumstances of the case and does not raise an important point of principle or practice which would enable this court to intervene. The third is the effect of the bankruptcy, which would make it virtually impossible for the husband to get what he wants.
18. I add to my judgment the expectation that the executors will give the applicant the same sort of breathing space that the District Judge contemplated before attempting to remove him from Osborne House.

Order: Application refused. Applicant to be provided with a transcript of the judgment at public expense.

(Order does not form part of approved transcript)