Burns v Burns
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE THORPE,LORD JUSTICE WALLER,LORD JUSTICE CLARKE |
| Judgment Date | 30 July 2004 |
| Neutral Citation | [2004] EWCA Civ 1258 |
| Date | 30 July 2004 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B1/2004/0199 |
[2004] EWCA Civ 1258
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
FAMILY DIVISION
(MR PAUL COLERIDGE QC)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Thorpe
Lord Justice Waller
Lord Justice Clarke
B1/2004/0199
MR L MARKS QC AND MS R KONDAK (instructed by White & Bowker) appeared on behalf of the Applicant
MR A MOYLAN QC AND MS A LYON (instructed by Laceys Solicitors) appeared on behalf of the Respondent
Mrs Burns seeks to appeal a consent order in ancillary relief made by Mr Paul Coleridge QC on 20th July 1999.
The case turns on the history of the marketing of a property near Romsey known as Awbridge Danes. The parties during the marriage purchased that property for a sum of £500,000 in 1994. The husband was essentially a developer and the possibility of onward sale was obviously considered and offers were received in 1996 for sums in the region of £750,000. A professional valuation was obtained in 1997, a year in which offers for the property had risen to something in the region of £850,000. That was confirmed as a realistic market valuation by the firm of James Harris & Co in October 1997.
The marriage between the co-owners, for that the spouses were, broke down and in 1995 the wife initiated her proceedings for ancillary relief. For reasons which have been neither explained nor investigated, those claims took an unconscionable time to come for trial, and in 1996 the husband's case as to the future of Awbridge Danes was stated in his affidavit in the ancillary relief proceedings as follows:
"Whilst I would have preferred to have completed the project before selling Awbridge Danes I have no liquid funds left to complete the works and I therefore reluctantly accept that it must be sold. It was actively marketed last spring through James Harris and the best offer that was eventually obtained was £800,000. Since then James Harris have had it on their books but have not advertised it. The same purchaser who offered £800,000 has recently offered £880,000 which I hope can be bettered."
In the following year, 1997, the wife sought an order under the Trusts of Land Act for the sale of the property so that she could extract her half-share in advance of the adjudication of her ancillary relief claims. That provoked an affidavit from the husband in which he said:
"In paragraph 3 of my Affidavit sworn on 1st September 1997 I accepted with reluctance that Awbridge Danes had to be sold. When [the children] heard that their home was going to be sold they were upset. They are both saying most strongly to me that they do not want their home sold. I therefore do not agree that Awbridge Danes should be sold and my proposal in settlement of all the Petitioner's claims is that she should receive a lump sum from me in return for a transfer of all assets in joint names including Awbridge Danes."
That case succeeded before Holman J, although he expressed his sympathy for the wife's position and made it plain that if her ancillary relief claim was not promptly adjudicated then she might apply again.
That conclusion was reached on 18th November 1997. Thereafter, although the ancillary relief proceedings continued to dawdle, there was no renewed application under the Trusts of Land Act and the case moved towards conclusion. It was Holman J who gave directions for trial on 18th March 1999. His order provided in paragraph 5.2 that the parties jointly instruct Messrs James Harris to prepare a valuation of Awbridge Danes as single joint expert. Paragraph 5.5 recorded that each of the parties agreed to be bound, for the purposes of the hearing, by the opinions of the valuer.
Consequently, a professional valuation was filed, dated 2nd June 1999, by the well-known firm of Savills, who by then had taken over the practice of James Harris. Their valuation of 2nd June was in the sum of £850,000, reflecting the work that had been done on the house since July 1995. Without that work they gave their view that the house would only have been worth £750,000. The husband's final affidavit in the ancillary relief proceedings put his case thus:
"About two years ago when I told the girls that Awbridge Danes had to be sold they were upset. I wanted for their sake to keep it as their home whilst they grew up. Now that they are older I accept it has to be sold. My proposal is to pay the Petitioner a lump sum on a clean break basis in return for all the assets being transferred to me. My hope is that the size of the lump sum will leave me with enough working capital so that I can complete the development of the main house."
The wife was understandably unconvinced by the valuation of Savills, which had not advanced the value in the two years since it had been considered by James Harris. Accordingly, by a letter of 28th June, solicitors challenged the valuation in the sense that they required Savills to reconsider. Savills, by a letter of 14th July, stuck to their guns. They said:
"I agree that over the period of the relevant correspondence and various valuations, there has been a generally strengthening residential market. However, notwithstanding the various figures that have been quoted in the past, we have reassessed the property in its current condition, and in the current market, and thus arrived at the figures set out in our letter of 2nd June."
Upon that basis, the case proceeded to what was a five-day fixture. On the 19th, the first day of the fixture, Miss Florence Baron QC put before the judge her skeleton position. She said on behalf of the husband that the property was in a dilapidated condition, requiring complete renovation:
"[Husband] has not had the funds with which to carry out the necessary work. H wishes to undertake the necessary renovation work and then sell the property."
Later in the skeleton she said in a footnote:
"NB: The Respondent plans to have developed and sold Awbridge Danes before January 2001 when CGT will be due. However, if not, he will apply for further borrowing nearer the time."
It was on that basis that terms were agreed between Ms Baron and Mr Lewis Marks, then appearing as junior counsel for the wife, which were approved by Coleridge J and made the subject of an order of the court on the following day. The terms agreed followed the format urged by the husband, namely transfer of jointly held assets, including Awbridge Danes, to him with a compensating lump sum to the wife. That was, for the wife, a concession from her basic case which had sought the sale of the jointly owned property, Awbridge Danes, and the division of the proceeds of sale.
The subsequent developments are carefully recorded by Mr Lewis Marks QC in his supplemental skeleton at paragraph 5.4. Within at most six days of the entering of the consent order the husband had instructed Wooley & Wallis to market the property. Within three weeks advertising photographs had been taken. Within a month the first offer was in, in the sum of £1.5 million.
It is unnecessary, for the purposes of this judgment, to detail the further developments when interested bidders, not acting in competition, were tendering or contemplating offers in the region of even £2 million. Enough to record that by 4th October the husband had agreed a sale to a cash purchaser in the sum of £1.7 million. Contracts were exchanged on 7th October and completion followed on 29th October.
The order of 20th July required some amendment to reflect accountancy advice on the provision relating to CGT. Accordingly, the order was returned to the court and its ultimate perfection did not come until a few days after the completion of this remarkable sale.
There is within the conveyancing file a significant document which Mr Marks has emphasised. It shows that the husband was instructing the conveyancing partner thus:
"It is absolutely essential the matter is kept strictly private and confidential, even within the office."
Subsequently, the husband, in evidence prepared in response to the present proceedings, has filed an affidavit in which he has sought to explain the remarkable contrast between his presentation to the court and his subsequent dealing. He has asserted that he did a significant amount of improvement to the property between the date of the consent order and the date of exchange. Given the time frame, which I have already established, that hardly seems plausible. Alternatively, he alleges that he used his particular marketing skills to extract an extraordinary price by initially withholding part of the accompanying land. Again, that is an explanation which, in the light of Mr Marks' comments, hardly seems persuasive.
So I pause to ask: what are the principles that apply in circumstances such as these? The duty of full and frank disclosure, which I will for convenience refer to as the duty of candour, was clearly established by the decision in J v J as long ago as 1955. It is perhaps surprising that it was not until the 1980s that the consequences of a subsequently discovered breach of such duty were considered by this court in the case of Robinson v Robinson in 1982, and then by the House of Lords...
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