Ahmad v Ahmad
| Jurisdiction | England & Wales |
| Judge | LORD WOOLF, MR,LORD JUSTICE THORPE,LORD JUSTICE HOBHOUSE |
| Judgment Date | 21 July 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0721-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | FAFMI 98/0149/2 |
| Date | 21 July 1998 |
[1998] EWCA Civ J0721-2
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE FAMILY DIVISION
(MR JUSTICE JOHNSON)
Royal Courts of Justice
Strand
London WC2A 2LL
The Master of the Rolls
(Lord Woolf)
Lord Justice Hobhouse
Lord Justice Thorpe
FAFMI 98/0149/2
SIR LOUIS BLOM-COOPER QC, MR P WRIGHT and MR K STARMER (Instructed by Messrs Sheridans, London WC1R 4QL) appeared on behalf of the Appellant
MR A MITCHELL QC and MR K TALBOT (Instructed by Solicitor for Customs & Excise, London SE1 OPJ) appeared on behalf of the Respondent
Tuesday 21 July 1998
I will ask Lord Justice Thorpe to give the first judgment.
This appeal raises questions on the interaction of the Criminal Justice Act 1988 and the Matrimonial Causes Act 1973. The husband and wife are both 54 years of age. The husband came to this country from Pakistan in 1964. He studied as an accountant but failed his examinations. The wife came from Mauritius in 1967 and worked as a secretary for the High Commission. They married in 1970 and after the marriage had three daughters born between 1971 and 1978.
The first matrimonial home was purchased in 1974. The proportion of the purchase price that was not borrowed on mortgage was contributed by the parties from their joint savings. The following year the husband started a wholesale business selling eggs. In order to trade he set up a company called Edman Farm Limited. He was the director and his wife was the secretary but, in reality, it was a quasi partnership arrangement.
From the profits of that business in 1977 they bought their first shop in the Bethnal Green Road. It was a retail business selling food. Thereafter the wife worked in the business exceptionally long hours being largely responsible for the trade, although the husband worked equally hard and was responsible for the accounts and book-keeping. A second shop was bought in the Bethnal Green Road in 1983. That was a wholesale business and was run through a separate company, MBE Limited.
In 1989 the parties had prospered sufficiently to move from their first home in the East End to a property in Woodford Green. That property was purchased largely on mortgage and was conveyed jointly into the names of the husband and the eldest child of the family, who had by then attained the age of 18. Sadly, the marriage broke down in 1992 and from that year the wife ceased to work long hours in the retail shop. The husband left the matrimonial home in the following year and the wife instructed solicitors. However, no proceedings were issued since it was decided to await the completion of the two-year period which would enable a consensual divorce to be pronounced.
Shortly before the completion of that two-year period of separation, the husband was arrested and charged with serious offences involving the evasion of huge amounts of value added tax. These criminal activities were all conducted between February and August 1995.
The wife signed her petition for divorce on 18 November 1995. Two days later in the Queen's Bench Division Potts J made a conventional order under sections 77 and 78 of the Criminal Justice Act 1988 restraining and charging a long list of properties which were in the husband's name. Within the list of properties charged was the first matrimonial home, the final matrimonial home and the two shops in the Bethnal Green Road. The wife's notice of application under the Matrimonial Causes Act was filed two days later on 24 November and her affidavit seeking transfer of property orders pursuant to that notice was filed on 13 June 1996.
The marriage was dissolved by decree absolute on 24 December 1996. At about that stage the husband filed his affidavit within the financial provision proceedings in which he took little issue with the wife's presentation of her claim founded upon the years of quasi partnership work and the years in which she had reared a family of three.
In February 1997 the wife issued complementary proceedings under section 17 of the Married Women's Property Act 1982. To any ancillary relief lawyer those complementary proceedings would appear completely superfluous, but they were tailored to meet the circumstances of the restraining and charging order that had been made by Potts J. The wife was fully aware of that order, at least from 13 June 1996 since she explicitly refers to it in her affidavit of that date.
The next development was a compromise of the wife's claims whether under the Married Women's Property Act or the Matrimonial Causes Act. That compromise was agreed between solicitors acting for the husband and the wife in April 1997. By its terms, she received an outright transfer of one of the shops and the benefit of a trust in relation to all the husband's interests in the other shop and in the final matrimonial home.
In April the husband's trial started. On 11 April the wife issued a summons to vary or discharge the order made by Potts J. Specifically she sought such variation as would enable the compromise to be translated into a consent order, which would have the effect of taking the three properties out of the charging restraints of the Criminal Justice Act and to vest them either in the wife or in trust for her.
The District Judge transferred her applications to a judge of the Division and said that they should be heard concurrently with her application of 11 April. At the same time in the Queen's Bench Division Sedley J transferred her application of 11 April to be heard by a judge of the Family Division concurrently with her applications for financial provision. On 26 June the husband was duly convicted and sentenced to six years' imprisonment. On 30 June an application was taken out, perhaps superfluous, for approval of the contractual compromise of the wife's claims for financial provision. That application, together with the application of 11 April 1997, came before Johnson J on 15 August. That was a vacation sitting. It was brought on in a rush since there had been some intonation that there would be a hearing in the Crown Court of the confiscation application later that month. Johnson J dismissed the wife's application of 11 April and made no order upon her summons of 30 June.
In September the wife sought to appeal that dismissal and issued a summons before Johnson J for leave. The application was opposed and was determined on 31 August at a brief hearing when the application was refused. Leave was given in this court on 29 January after an oral ex parte hearing.
The Customs and Excise's skeleton argument, dated 1 July, revealed an agreement between them and the husband, the nature of which was not disclosed but which was said to be in any event an agreement subject to the consideration of the Crown Court which was likely to be fixed for 1 October. The wife's solicitors immediately wrote asking for disclosure of that agreement. The agreement was disclosed on 13 July and on 20 July the wife's solicitors offered to withdraw this appeal on terms which were not acceptable to the Customs and Excise.
The are essentially two issues that we have been asked to decide today:
1. What order should be made on the appeal? and (perhaps more relevant to the parties)
2. What order should be made in respect of the costs of the appeal?
For the wife, Sir Louis Blom-Cooper says that the appeal should plainly be allowed with costs, and for the Customs and Excise Mr Mitchell says the order below should stand and that this court has no need to concern itself with the proceedings below, although by his skeleton he acknowledges that Johnson J fell into error in one respect.
Can the order of Johnson J, dismissing the application of 11 April stand? In my opinion it cannot. First the wife was entitled to have the charging order varied to remove from its sphere her separate property. Section 78(3) provides that a charging order may be made subject to such conditions as the court thinks fit. Subsection (4) provides that:
"….a charge may be imposed by a charging order only on—
(a) any interest in realisable property being held beneficially by the defendant…."
Plainly there was scope for the wife to ask for the clear definition of what was the husband's beneficial property and what was her beneficial property. Second, she was entitled to seek a determination of her share of the family assets upon the application of the criteria in section 25 of the Matrimonial Causes Act 1973. As between herself and her husband the extent of that share had been compromised in proceedings to which the Customs and Excise had not been joined as intervenors in order to enable them to protect their legitimate interest; that is, to ensure that the bargain was bona fide and not a device to extract assets out of the confiscatory regime to the advantage of the former wife and children.
Mr Mitchell also relies on the case of Re Peters [1988] 1 QB 871. That authority directly prioritises the confiscatory regime above the anticipatory discharge of future maintenance liabilities. Here the wife's claim rested on the past and not on the future. She relied on 22 years of very hard work in a quasi partnership endeavour that ended for her three years before the husband commenced his criminal activities.
Third, a sensible and cooperative arrangement had been set up by interlocutory orders both in the Queen's Bench Division and in the Family Division to enable the determination to be made by a Family Division judge. However, there was little profit in the expense of a trial of the extent of her...
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