Goldstone v Goldstone

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE THORPE,Lord Justice Hooper,Lord Justice Hughes
Judgment Date28 January 2011
Neutral Citation[2011] EWCA Civ 39
Docket NumberCase No: B4/2010/2039, 2181 & 2360

[2011] EWCA Civ 39

IN THE HIGH COURT OF JUSTICE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM

Before: The Right Honourable Lord Justice Thorpe

The Right Honourable Lord Justice Hooper

and

The Right Honourable Lord Justice Hughes

The Honourable Mr Justice Hedley

Case No: B4/2010/2039, 2181 & 2360

FD08DO4321

Between
Sonia Jayne Goldstone
Appellant in 2039 and Respondent in 2181 &2360
and
Sampson Robert Goldstone & Others
Appellants in 2181 & 2360 Respondents in 2039

Mr Barry Singleton QC and Christopher Lundie (instructed by Irwin Mitchell LLP) for the Appellant/Respondent (Sonia Jayne Goldstone)

Mr Charles Howard QC and Julian Wilson (instructed by Stewarts Law LLP) for the Appellants/Respondents

Hearing dates: Monday 6th December 2010

LORD JUSTICE THORPE

Introduction

1

The question which this appeal decides is whether the preliminary issue, the trial of which was ordered by Charles J on 25 th March 2010, was thereafter governed by the Family Proceedings Rules or the Civil Procedure Rules. The question could hardly be simpler and so too, in my judgment, is the answer. However the submissions in support of the appeal and in response are extensive and reflect the scale on which the underlying ancillary relief proceedings are being fought and the importance that the parties attach to the outcome of this appeal.

Family Background

2

The parties commenced their cohabitation in 1999 when in their twenties. They divided their time between London and Cheshire.

3

In 2001 they moved to Monaco for tax reasons. In the following year the husband set up an alter-ego asset depository, Diadora Foundation. Soon after their first child was born they married in Monaco on 23 rd November 2002.

4

By the summer of 2003 the value of the assets held by the Diadora Foundation mounted to about £13 million.

5

On 11 th February 2005 a second daughter was born to the couple.

6

In February 2006 an agreement was reached between the husband and the Jeeves group. It is the wife's case, for which there is considerable evidential support, that thereafter the Jeeves group has been the depository of the bulk of the husband's fortune.

7

In 2006 the children commenced education in this jurisdiction after which the wife has divided her time between England, Switzerland and Monaco.

8

The marriage failed in 2008, the wife's petition being filed on 16 th September. Earlier that year the husband had prepared a schedule of his assets for his accountants valued in total at a figure approaching £24 million.

9

However, the husband's asset schedule of 6 th October 2008 in response to the wife's Form A put his worth at £10.5 million. At that outset it was immediately apparent that the big issue in the case was the extent of the husband's ownership and control of the assets in the Jeeves group.

The Ancillary Relief Chronology

10

The wife's Form A of 17 th September 2008 sought a property adjustment order in relation to properties in Cheshire, London and Switzerland and, significantly, a Jeeves investment at Ovington Mews.

11

On 16 th October 2009 the wife issued an application under section 37 of the Matrimonial Causes Act 1973 to set aside the root agreement between the husband and the Jeeves group.

12

On 26 th October 2009 Moylan J adjourned generally both the wife's section 37 application and also her application for an occupation order under the Family Law Act 1996, which she had issued on 23 rd October 2009.

13

On 23 rd February 2010, following a failed FDR appointment, Bennett J joined the Jeeves group as respondents. Since they had had no notice of the hearing the order recorded their right to apply to set aside the joinder. This order also defined the wife's applications as being:

i) Her Form A.

ii) Her Section 37 application.

iii) Her application under the Family Law Act 1996.

Further the order allowed the wife to enlarge her Form A to seek a property transfer order in respect of:

a) The Ashley Road properties.

b) Shares in Pearl Limited.

c) Shares in Treasure Trade Limited.

14

Paragraph 20 of the order provided for service on the Jeeves group. Other paragraphs provided for service of the wife's applications and evidence on the Jeeves group and for evidence in response from Jeeves.

15

This was plainly sensible and conventional case management. It had become necessary to provide for a trial. The major issue I have already recorded. Not only did justice demand that the Jeeves group be given notice of the issue and the opportunity to be heard on it but also that the trial judge be given the opportunity to see both sides of the transaction.

16

On 11 th March 2010 the Jeeves group issued an application to set aside their joinder. That application was therefore before the court on 25 th March 2010.

17

On that occasion case management was in the hands of Charles J.

18

The resulting order is comprehensive and I record only those paragraphs that bear most directly on the present appeal:

a) By the first paragraph the wife was required to serve "detailed points of claim" in respect of:

i) Ownership issues relating to Jeeves assets attacked by either her Form A or her Section 37 application; and

ii) Her allegations that the original deal between the husband and the Jeeves group was a sham, as had been asserted in a letter from her solicitors on 9 th March 2010.

b) Following provisions dealt with alternative bases, depending on whether Jeeves chose to contest or to accept their involvement in the trial. These alternative provisions seem to me to ignore the Jeeves application of 11 th March to be discharged.

c) However paragraph 6 provided for a discharge application to be listed on 5 th July with a three day time estimate and paragraph 7 provided for a preliminary issue trial of the wife's claims (as defined by paragraph 1 of the order) on 6 th December with a ten day time estimate.

d) Paragraph 12 of this order granted the wife permission to further amend her Form A to seek property adjustment orders in relation to Jeeves group assets not previously attacked.

19

For the purposes of this appeal the order of 25 th March is the critical order. Subject only to the possibility of the earlier discharge of the Jeeves Group from the arena, it precisely defines all the claims advanced by the wife against the husband and the Jeeves group. It requires both the claimant and the respondents to plead their respective cases and it provides for a trial of the issues as to both ownership and sham. This is the point at which it is submitted that the civil claim has been fully launched and directions given for a civil trial.

20

Points of claim were filed in March and amended on 10 th May 2010. Points of defence were filed on 16 th April and amended on 18 th June 2010. These are very long "pleadings". Additionally on 10 th May, pursuant to order, the wife served a lengthy statement of her case on jurisdiction.

The Trial

21

The trial of the Jeeves application to be discharged came before Hedley J. At its conclusion he observed, handing down his judgment on 30 th July, that he had put himself under considerable pressure in the knowledge that the parties, and indeed the court, needed to know the outcome before the end of term. Thus his judgment is succinct but clear.

22

He first asked whether the Jeeves respondents had been properly joined. He held that the answer depended upon whether the joinder should be seen as within family proceedings or civil proceedings. If within family proceedings, the joinder was proper. If within civil proceedings, then the provisions of the CPR had not been complied with and the order should be set aside.

23

This then was his answer to the question he had posed:

"I have reached the clear conclusion that these are family proceedings. They are both in form and substance the wife's claim for ancillary relief against the husband. What that claim has thrown up i.e. the sham allegation, might if established have a significant impact on third parties. It is right both in terms of safeguarding the rights of third parties and no doubt with a view to ultimate enforcement, that they should have notice of and be joined to the proceedings. However, it is to extant family proceedings that they have been joined; this is not a new action against new parties from a procedural point of view."

24

He then went on to ask whether he should discharge the Jeeves respondents. In answer to that question he said:

"Since I have concluded that they have been properly joined, I am satisfied that the interests of justice require that they remain in these proceedings: fairness to the husband demands this as much as does fairness to wife."

25

Mr Justice Hedley then asked whether Lichtenstein or London was the forum conveniens for the trial of the preliminary issue. He thus expressed his conclusion:

"I did not find this issue particularly easy perhaps because I am sensitive about imposing the jurisdiction of this court on others that are not otherwise subject to it. When however I approach these facts through the lens of Spiliada, I am bound to conclude that the balance overwhelmingly favours trial in England."

Submissions

26

Mr Howard's fundamental submissions are:

a) The wife has brought a direct claim against the Jeeves group. By the successive enlargements of her main claim she is seeking the transfer of an expanding catalogue of Jeeves assets.

b) Jeeves are extraterritorial entities and have no connection with this jurisdiction.

c) The claim that they face is a proprietary claim to be decided in law that excludes judicial discretion....

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