B v B (Divorce: Financial Provision)
| Jurisdiction | England & Wales |
| Judge | SIR MARK POTTER,THE PRESIDENT OF THE FAMILY DIVISION,Sir Mark Potter |
| Judgment Date | 26 October 2007 |
| Neutral Citation | [2007] EWHC 2472 (Fam) |
| Court | Family Division |
| Docket Number | Case No: FD00D12674 |
| Date | 26 October 2007 |
[2007] EWHC 2472 (Fam)
Sir Mark Potter
The President of the Family Division
Case No: FD00D12674
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr James Ewins (instructed by Farrer & Co LLP) for the Applicant
Mr Alexander Thorpe (instructed by FLIP) for the Respondent
Hearing date: 15 October 2007
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.
SIR MARK POTTER THE PRESIDENT OF THE FAMILY DIVISION
This judgment is being handed down on 26 October 2007. It consists of 15 pages and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.
The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.
Sir Mark Potter, P :
In this case the parties began divorce proceedings in 2000. There was significant delay until September 2005 because of satellite litigation. However an overall financial agreement was subsequently reached, and a consent order was made by Deputy District Judge Willbourne in chambers, which was finally sealed on 3 February 2006.
The order was for a lump sum, in which the provisions centred upon division of the parties principal asset, the former matrimonial home at 12 New North Street, London WC1 (“the property”) and the office suite next door.
For the purposes of the order, the market value of the property (which the husband still occupied) was taken on the basis of an agreed independent valuation to be £1.25 million, yielding an equity after redemption of the mortgage and costs of sale and legal fees of £587, 231.00 of which the wife was to receive half. The value of the office suite was agreed to be £300,000.00 with an equity of £264,081.00. The office suite was held in a pension fund and the parties agreed on a division of the equity on the basis that the husband would retain the pension and pay to the wife her half share of £132,041.00. On that basis, the wife was due to receive the sum of £360,000.00, as to which there was a timetable for payment.
Under the terms of the order the husband, who throughout the marriage was a property developer by occupation, was to attempt to re-mortgage the property to pay the wife the lump sum of £360,000.00 in two instalments by 30 April (£270,000.00) and 1 December 2006 (£90,000.00). If the husband did not receive a loan of £900,000.00 from Northern Rock on or before 30 April, the property was to be sold forthwith on the open market, the husband having the conduct of the sale, including the appointment of appropriate estate agents and solicitors, the proceeds being applied to pay the wife her lump sum of £360,000.00, with the balance to the husband.
The husband's mortgage application to Northern Rock was rejected on 13 February 2006 and, on 21 March 2006, he advised the wife that the property was going on to the market without stating what price would be asked.
On 15 April 2006, the wife saw the property advertised in the window of an estate agent at a price of £1,85 million and she was subsequently advised that an offer was made on 11 May 2006 for £1.6 million. It appears that, in the period between mid-February and mid-April 2006 the husband, rapidly put in hand, some £60,000.00 – worth of work, consisting of roof repairs, creation of a roof terrace and other works of redecoration, refinishing and cleaning, thus enabling the property to be marketed in an attractive state. Of the cost of the works effected, he paid out some £12,000.00 to the workmen whom he employed directly on the works, and postponed payment of some £46,000.00 to main suppliers until the sale proceeds were available. He also contracted in the sale to obtain and assign the benefit of the freehold of the property, a 3 year parking agreement at a local parking garage, and an indemnity in respect of roof repairs.
In seeking leave to appeal out of time against the Deputy District Judge's order, the wife puts forward three grounds on the basis of which she asserts leave should be granted. First, she asserts an error of valuation at the date of the agreement. Second, misrepresentation by the husband of the value at the date of agreement. Third, a supervening Barder event by reason of a sudden “unforeseen and unforeseeable” increase in value such as to justify invocation of the court's jurisdiction to revisit the consent order of the Deputy District Judge.
The way the case is put merits a look at the course of events in a little more detail. The situation as to valuation appears to be as follows.
In July 2005, by agreement, the wife commissioned a surveyor's report on the value of the property. It was in a shabby condition, as a result of both wear and tear and a leaking roof. As a property professional, the husband did not consider the valuation realistic and obtained for himself two estate agents' market appraisals to establish whether he should go to the trouble and expense of commissioning his own valuation report. Those two later appraisals, dated 25 October and 14 November 2005 respectively, were for £1.2 million, (with offers expected in the “region of £1.1 million”), and £1.25 million (“to achieve a price of £1.15 million”).
In the light of the price subsequently obtained on sale, I quote one passage from the second estate agent's report as follows:
“Our view is that the property benefits from an excellent location with strong public transport links, and is well-presented subject to re-decoration as discussed. Weighing against this however are a number of negative points, mainly: three story (sic) walk-up and no lift, no car parking, and the surrounding Council estate. Purchasers in the higher price bracket do care about such matters. Additionally you have a problem with the roof which, although it may cost “x” to repair, the reality is that most purchasers do not understand construction matters and will therefore attribute a figure of “x” times 2 or 3 as a discount on market price.”
Given the small difference in figures between the husband's reports and the wife's valuation, the husband did not proceed to obtain his own valuation but negotiated the lump sum agreement on the basis of the wife's valuation.
Having failed to obtain a mortgage to pay off the wife's share, the husband, with a view to speedy sale, immediately had the roof repaired and commenced a comprehensive schedule of largely cosmetic works as already described (see para 6 above). He kept the wife informed of what he was doing. As soon as the roof had been put in order, and most of the work completed, he went to well-known agents in the area, Hurford Salvi and Carr, who on 24 March 2006, having discussed the marketing in their expert team, advised:
“There is general agreement that you will achieve between £1.5 and £1.6 million and after discussing the matter with Russell we would recommend that the asking price be set at £1,850,000 in order that we attract viewings and at the same time allow a margin for negotiation”.
Viewings commenced on 3 April 2006. 20 parties visited the property and an offer was received on 11 May 2006 for £1.6 million which was accepted subject to contract, with early completion.
The Law
It is common ground between the parties that the outcome of this application should depend upon the likelihood of success in the appeal itself. The test is whether the appeal would be certain, or very likely, to succeed: see Barder v Barder (Caluori intervening) [1987] 2 FLR 480 at 495. That was a case in which, on very different facts, a husband who had entered into a consent order in full and final settlement of all claims between the parties following the break-up of the marriage, was permitted to appeal out of time on the basis of the changed circumstances arising from the suicide of the wife following her killing of the children. The relevant passage from the judgment of Lord Brandon of Oakwell in the House of Lords reads as follows:
“A court may properly exercise its discretion to grant leave to appeal out of time from an order for financial provision or property transfer made after a divorce on the ground of new events, providing that certain conditions are satisfied. The first condition is that new events have occurred since the making of the order which invalidates the basis, or fundamental assumption, from which the order was made, so that, if leave to appeal out of time were to be given, the appeal would be certain, or very likely, to succeed. The second condition is that the new events should have occurred within a relatively short time of the order having been made. While the length of time cannot be laid down precisely, I should regard it as extremely unlikely that it could be as much as a year, and that in most cases it would be no more than a few months. The third condition is that the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case. To these three conditions, which can be seen from the authorities as requiring to be satisfied, I would add a fourth, which it does not appear to has needed to be considered so far, but which it may be necessary to consider in future cases. That fourth condition is that the grant of leave to appeal out of time should not prejudice third parties who have acquired, in good faith and for valuable consideration, interests in property which is the subject matter of the relevant...
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