Arthur Owen (Respondent v Yukiko Owen (Appellant
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ORMROD,LORD JUSTICE DUNN,SIR STANLEY REES |
| Judgment Date | 21 July 1981 |
| Judgment citation (vLex) | [1981] EWCA Civ J0721-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 July 1981 |
| Docket Number | 81/0298 |
[1981] EWCA Civ J0721-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Lord Justice Ormrod
Lord Justice Dunn
and
Sir Stanley Rees
81/0298
1253 1981
MR. T. SCOTT G. BAKER, QC. and MR. P.I.F. VALLANCE (instructed by Messrs S. Rutter & Co., solicitors, London) appeared on behalf of the Respondent (Applicant).
MR. SWINTON B. THOMAS, QC. and MR. P.B. MAULEVERER (instructed by Messrs Smiles & Co., solicitors, London) appeared on behalf of the Appellant (Respondent).
Lord Justice Dunn will give the first judgment in this case.
This is an appeal by a husband from an order of Mr. Justice Wood which he made on 6th July under section 1 of the Matrimonial Homes Act 1967 whereby he ordered that the wife's rights of occupation of the former matrimonial home, 24 Hyde Park Street, London W2, should be terminated forthwith, subject to a provision that she might continue to occupy the house until the husband exchanged contracts for its sale, and that she should vacate the house immediately before the exchange of contracts.
The judge also ordered that a Class "F" charge registered by the wife should be removed forthwith and he made those orders subject to an undertaking by the husband "not without the prior written consent of the wife or further order of the court approving alternative arrangements for her accommodation to exchange contracts for the sale of the property." His solicitors undertook to hold the net proceeds of the sale of the property on payment of a deposit, pending further order of the court.
It was an unusual order and the judge plainly felt difficulty in making it. He made it for two reasons basically. Firstly, because it was said and he accepted, that the overwhelming probability was that this house would have to be sold in any event, and that a better price would be obtained for it if it were sold in the summer than if it were sold in the autumn. Secondly, the judge accepted that the husband had an urgent need for a sum of £145,000 in cash in order to meet a tax liability due to the Inland Revenue and payable by 31st October. So, although the wife's application for ancillary relief has been fixed for 26th October, the judge made the order in the form in which he did.
The background to the matter is a little complicated. The wife is now 42. She is of Japanese origin. She has two grown-up children by a former marriage, aged 22 and 21, who are both living with her at Hyde Park Street. They are both earning and independent. The husband is now 66 years old. They started living together in 1972 while they were both married to other partners. In March 1975 the husband bought a long lease of 24 Hyde Park Street for the sum of £60,000. He lived there with the wife, her two children, and a teenaged boy of his by a previous marriage. They were married in September 1975. The marriage was a very short one. The husband left in 1978 (there is a dispute as to the exact date but it was either the middle or the end of 1978) and they have not lived together since. Each of them filed a petition under section 1(2)(b) of the Matrimonial Causes Act, those proceedings were compromised and the husband was granted a decree on 3rd October 1980 under section 1(2)(d).
In August 1980 an interim order for maintenance pending suit had been made in the sum of £6,500 a year, on the husband's undertaking to pay the mortgage, the insurance and the ground rent of the house.
After the decree nisi, as she was entitled to do, the wife made an application under section 10 of the Matrimonial Causes Act for a review of her financial position, thus holding up the decree absolute, and on 1st December 1980 the husband applied for the decree to be made absolute. He was living by that time with another woman and we are told at that time, at any rate, he wished to remarry. He supported his application with an affidavit and, before making the application solicitors then acting for him wrote to the wife's solicitors on 10th October 1980 (at page 204 of the bundle) and said:
"Our client would like to apply for the Decree Absolute on the expiry of six weeks from the date of the Nisi; in view of your client's obvious anxiety as to her position in the property at Hyde Park Street, our client would be prepared to give an appropriate undertaking to the Court in relation thereto to preserve the position pending the determination of the Ancillary matters or further orders."
A draft undertaking was prepared and produced at the hearing on 1st December, which was in the following terms:
"For the purposes of Section 10(4) of the MCA 1973, I hereby undertake to the Court as follows:"
(The first undertaking is not material.
"2. That I will not disturb the Respondent's continued occupation of the property at 24 Hyde Park Street London W2 until the final hearing of the Respondent's financial claim against me or further Order.
3. That without admitting any liability therefor in the event that at the final hearing of this matter the Court orders me to make a lump sum payment then such sum would be discharged from the equity in 24 Hyde Park Street which I currently estimate as being approximately of the order of £100,000."
By that time the husband, in the financial proceedings, had sworn four affidavits. None of those affidavits referred to any tax liability or suggested that the husband would not be able to meet any reasonable lump sum that was ordered in the financial proceedings. It is, however, right to say that, on 23rd May 1980, the husband's solicitors had written a long letter to the wife's solicitors in which there appears this paragraph (at page 125 of our bundle):
"Further to the above, our client is now facing an immediate claim by him in respect of the Capital Gains Tax payable in respect of the sale of his shares in Hiroko Limited, which sale took place in 1974. We understand that the amount being claimed is in excess of £100,000. These particulars will be dealt with in any further Affidavit that our client may be required to serve in due course."
The husband swore three further affidavits and the matter was not dealt with in any of them.
On 23rd January 1981 the husband's then solicitors wrote another letter to the wife's solicitors in which they referred once again to the claim by the Inland Revenue. They said that the Inland Revenue had issued a writ and that there was no point in contesting it. Then they went on to say:
"The only asset in which our client has any realistic equity is the matrimonial home and it may well be that your client would wish to leave the house at this stage so that it can be sold and the debt to the Inland Revenue paid. Our client genuinely fears that he may well have to consider filing his own Petition for Bankruptcy should the tax problem become insoluble prior to the hearing of your client's Application for Ancillary Relief."
That is the only reference to a possible bankruptcy in the whole of the voluminous documentation which has been placed before the court, and the writ which was issued in respect of the tax liability was issued on 20th November 1980, that is to say 10 days before the husband gave his undertaking in support of his application for the decree to be made absolute. In fact, that application was adjourned to the judge and has not been dealt with. It is not necessary or desirable in these present proceedings to go in any detail into the husband's means. In making the order the judge said in terms that he made it on the assumption that the husband was worth £l million.
The husband owns the long lease of 24 Hyde Park Street. In his original affidavit of means he put a valuation on that of £135,000 subject to a mortgage of £85,000, but in the affidavit in support of the application in these proceedings he put the valuation at £190,000 to £200,000 and the mortgage at only £13,000, and that, on the face of it, would appear to indicate that in the 18 months or so between those two affidavits being sworn, the husband was able to raise over £70,000 to pay off the bulk of the original mortgage. He owns all the shares in a private property company called County and City Securities Limited who owe him on a loan account £150,000. That is how he lives, he says. He does not draw any income but he lives on capital repayments from the loan which, of course, are not taxable.
County and City Securities owns a freehold property at Cambridge Circus which, according to the husband, is valued at £375,000 and is presently up for sale. There is no evidence whatever of the asking price or what it is anticipated it will be sold for, or whether there have been any offers. The company also owns some leasehold properties in Northern Ireland and those properties are charged with the repayment to the bank of an overdraft of £954,500 odd which may give an indication of the value of those properties.
County and City Securities also own a 50 per cent interest in another property company called Rotheroak Limited, the fixed assets of which are valued at £110,000, and a 98 per cent interest...
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