Dart v Dart
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE THORPE,LORD JUSTICE PETER GIBSON,LADY JUSTICE BUTLER-SLOSS |
| Judgment Date | 02 July 1996 |
| Judgment citation (vLex) | [1996] EWCA Civ J0702-3 |
| Docket Number | FC3 96/6111/F |
| Court | Court of Appeal (Civil Division) |
| Date | 02 July 1996 |
[1996] EWCA Civ J0702-3
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
PRINCIPAL REGISTRY
(HONOURABLE MR. JUSTICE JOHNSON)
Royal Courts of Justice
Strand
London WC2
Lord Justice Butler-Sloss
Lord Justice Peter Gibson
Lord Justice Thorpe
FC3 96/6111/F
MR. JAMES MUNBY QC & MISS CAROLINE WILBOURNE (Instructed by Margaret Bennett Solicitors, Charlton House, 5A Bloomsbury Square, London, WC1A 2LX) appeared on behalf of the Appellant
MR. BARRY SINGLETON QC & MR. LEWIS MARKS (Instructed by Messrs Lee & Pemberton, 45 Pont St, London, SW1X 0BX) appeared on behalf of the Respondent
Mr and Mrs Dart are aged 37 and 38 years respectively. They both come from Michigan and married on 25th October 1980. There are two children of the marriage, William who is 13 years and Arianna who is ten. The Dart family has made a great fortune by manufacturing foam cups. The husband's father has been the principal architect of this success. It enabled the husband and the wife to live to a higher standard than any of their Michigan friends and associates. The husband bought a substantial site and on it built a lavish home. It was ready for their occupation in September 1989. In the following two calendar years their family expenditure averaged £225K per annum. In 1992 that expenditure rose to nearly £350K. In 1993 the husband and the wife debated tax exile in furtherance of a scheme to vest a substantial part of the Dart fortune in the husband. In the end England was the chosen haven and in August 1993 the family arrived in London with the intention of taking up permanent residence in this jurisdiction. An expensive house was chosen in Upper Phillimore Gardens and large sums were spent on its lavish improvement. It was conveyed into the joint names of the husband and the wife. Shortly thereafter the husband renounced his US citizenship. In 1993 the family's annual expenditure amounted to just over £400K. By the beginning of 1995 the marriage was in difficulty. On 3rd February 1995 the husband petitioned for divorce in the Principal Registry on the grounds of the wife's conduct. Four days later the wife filed a petition for divorce in Michigan. On 3rd March 1995 the wife filed an answer in London challenging the court's jurisdiction, alternatively seeking a stay under paragraph 9 of Schedule 1 of the Domicile and Matrimonial Proceedings Act 1973. However the prayer of that answer sought the full range of ancillary relief for herself and the children rather than the narrow range of ancillary relief which the court has power to order on imposing a stay under Schedule 1. There were Children Act proceedings but on 30th May 1995 the husband agreed to the wife returning with the children to the former matrimonial home in Michigan.
Of course a hazard for very rich families in tax exile is that when the marriage breaks down the first round of contested litigation results from the determination of each of the spouses that the financial litigation should be in the jurisdiction of his or her preference. After taking independent advice each may have a broadly similar perspective as to which of the available jurisdictions is most likely to prove favourable to an applicant and which to a respondent. It is plain that Mrs Dart decided that she would do better in Michigan whilst Mr Dart thought he would do better in London. The result was competing proceedings in the Principal Registry and in the Ingham County Circuit Court,Michigan. As the jurisdictional race developed the wife applied by a notice of application of 17th May 1995 for the dismissal, alternatively stay, of the husband's petition. On 14th June 1995 Mr Justice Johnson dismissed that application declaring that the husband's petition was well founded on his habitual residence and in the exercise of his discretion rejecting the application brought under paragraph 9 of Schedule 1 of the 1973 Act. The wife's costs in the application of 17th May dismissed 14th June are stated to be £406K. Mr Justice Johnson ordered the wife to pay the husband's costs of the summons. They amount to £144K and are estimated to tax at £120K. Thus the probable extent of the wife's liability as a result of her challenge to the jurisdiction amounts to some £526K.
Having defeated her jurisdictional challenge the husband issued a notice of application on 28th June 1995 for the court to determine his financial liability to the wife. The wife, despite the judgment of Mr Justice Johnson of 14th June, continued to pursue competing proceedings in Michigan and on 23rd August 1995 the Michigan court took jurisdiction on marital property. In September 1995 a decree nisi was pronounced on the husband's London petition and in October that decree was made absolute. In the London ancillary relief proceedings the husband naturally took the Thyssen defence to applications for disclosure saying, with evident justification, that since he recognised that he was rich enough to comply with any order that the court might make, detailed financial disclosure was superfluous. Despite the clear and settled law upon which that position rested, the wife's London solicitors on 21st September 1995 served a most detailed questionnaire and threatened that if the husband persisted in his assertion of the Thyssen defence the point would be taken to the House of Lords. The husband, no doubt with resignation, submitted and on 20th October 1995 he served his answer backed by 19 pages of schedules and 35 ring binders containing approximately 7000 pages of supporting documents. At about the same time he wrote an open offer to the effect that in an endeavour to end the attrition of the litigation war he would pay her a lump sum of £10M on the basis that she would transfer to him her share of the London house but would retain in her sole name the former matrimonial home in Michigan valued at £1M. The wife did not accept the offer nor did she even respond to it. From 13th February 1996 she served a supplemental questionnaire and what was called a schedule of deficiencies. By then Mr Justice Johnson had a firm grasp of the ancillary relief proceedings and at a pre-trial review on the 15th February counsel on the wife's behalf was obliged to concede that most of the further information sought had in fact already been supplied.
The hearing of the husband's application for the determination of his financial liabilities was fixed for hearing before Mr Justice Johnson on 11th March 1996 with a time estimate of five days. In the preceding week skeleton arguments were lodged. The wife sought for herself £122M in addition to the Michigan house. The husband offered approximately £5M in addition to the Michigan house. At the conclusion of the trial Mr Justice Johnson reserved for a few days and delivering judgment on 21st March ordered the husband to pay a lump sum of £9M in addition to the Michigan house. There was no Calderbank correspondence, the husband's only offer being the open offer of 15th October 1995, never formally withdrawn but implicitly by the delivery of his skeleton argument. The only proposal from the wife was her skeleton claim to a total of £123M. Since by his judgment Mr Justice Johnson required the transfer to the husband not only of the wife's half share in the London home but also her shares in the Dart Company, the offer exceeded the judgment by £1M in cash and the value of the shares, £150K. Mr Justice Johnson ordered the wife to pay the husband's costs of the ancillary relief proceedings, not only from the date of the offer but throughout in condemnation of her unjustifiable insistence on superfluous detailed disclosure. Subsequently the husband applied to the Michigan court to accord comity to the order of Mr Justice Johnson but his application was refused on the 7th April. However the husband immediately appealed that refusal and the Michigan Court of Appeals on the same day stayed the financial proceedings due to commence on the following day pending determination of the husband's appeal. We were told that that appeal is unlikely to be listed before October and beyond lies the spectre of an appeal to the Michigan Supreme Court and beyond that, subject to leave, to the Federal Court.
In addition to the costs incurred by the wife in challenging jurisdiction in London she has incurred costs in Michigan stated to amount to £1M. Her solicitor own client costs in the London ancillary relief proceedings are stated to total £877,025. Of her total solicitor own client bill in London put at £1.4M only £30K has been paid on account, the rest of the work being done on credit. The husband's ancillary relief costs amount to £477,127. Mr Justice Johnson in his judgment described the preparation of the case in these terms:
"The extravagance of the preparations in this case defies moderate description. The husband's initial disclosure was in my view adequate, I would say more than adequate, for the purpose of these English proceedings. Nonetheless on the wife's behalf repeated requests were made for yet further information and yet further documents. The result is that there have been in court an astonishing 72 ring binders all of substantial size. The wife's repeated questions and demands for information were aimed at challenging the husband's present wealth and the various routes by which it came to him; and the past expenditure of the family. The information and documents which were provided by the husband were provided voluntarily and the court was never asked to adjudicate on the justification for the wife's demands....
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