HP v AP
| Jurisdiction | England & Wales |
| Judge | Willans |
| Judgment Date | 31 March 2023 |
| Neutral Citation | [2023] EWFC 49 |
| Docket Number | Case No: UB15D00132 |
| Court | Family Court |
[2023] EWFC 49
HIS HONOUR JUDGE Willans
Case No: UB15D00132
IN THE FAMILY COURT AT BRENTFORD
Alexandra Rd,
Brentford
TW8 0JJ
The Applicant acted as a litigant in person
Greg Williams (instructed by Laurus Law) for the Respondent
Hearing dates: 30–31 March 2023
Introduction:
) On 12 September 2017 the parties, plus legal representatives, attended a round table negotiation meeting. The purpose of the meeting was to find a compromise to the parties ongoing financial proceedings (“the 2017 proceedings”). The meeting was successful, and an agreement was reached. A central term of the agreement was that the former matrimonial home should be transferred to the applicant subject to a charge in favour of the respondent not to be exercised save with the permission of the court (or with the parties' consent) after one of a number of triggering events had occurred. On 26 April 2018 this was formally approved as an order of the Court.
) On 28 July 2021 the applicant applied to set aside the consent order on the basis that the respondent had been guilty of non-disclosure which invalidated the basis on which the agreement had been reached. On 30 July 2021 the respondent applied for an order for sale of the former matrimonial home in execution of the deferred charge.
) This attended hearing was listed to consider these opposing applications. I bear in mind the papers found in an extensive hearing bundle; the live evidence of both parties and the submissions made at the conclusion of the case. I bear in mind all of this evidence whether or not I specifically refer to it within this judgment.
) The applicant acted as a litigant in person with the assistance of a McKenzie Friend. The respondent has instructed solicitors and was represented by counsel.
Parties Positions
) The applicant points to evidence on which she relies to show there was a material nondisclosure within the 2017 proceedings and contends that had there been full disclosure she would (a) not have entered into the agreement in question, and (b) the outcome would have materially different.
) The respondent contends the application is wholly misconceived with much of the information on which the applicant places reliance having been subject to disclosure within the 2017 proceedings. It is accepted certain information was not disclosed (in a literal sense) but it is contended such information was of such a nature as to not require disclosure within proceedings at that point of time (and that there was consequently no ‘non-disclosure’ as alleged). In essence the respondent claims the applicant is doing no more than repeating the arguments which were canvassed at the time of the 2017 proceedings, and which were fully known at the time the consent order terms were reached.
The Proceedings
) This case has suffered from delay in significant part as a result of a lack of judicial availability. There have been two hearings on 19 November 2021 and then on 10 January 2022. Pursuant to these directions I have focused statement evidence and a wealth of documentation, both contemporaneous and relevant to the previous 2017 proceedings.
The Order under review
) I do not need to recite the full terms of this final consent order but note that the order refers within the definitions section to three properties being:
a. ……. (“No. 42”)
b. ……. (“the FMH”), and
c. …….
) At §4 of the order the parties agreed a clean break to including with regards to all claims in respect of No. 42. At §5 the applicant agreed she had no legal or beneficial interest in that property. At §8 the parties agreed a transfer of the FMH to the applicant with a charge back in favour of the respondent as to 20% of the net proceeds of sale of that property. The parties agreed the charge would not be exercisable without permission of the Court or the consent of the parties and subject to the earlier of:
a. 31 July 2021
b. …….
The parties have one child who attained his majority in July 2021. This likely explains the triggering event set out in §9(a) above.
Legal Principles
) This application is properly brought pursuant to FPR 2010 r.9.9A(2) in that a party may apply to the original court to set aside a financial remedy order where no error of the court is alleged. This is the case where the contended factor is non-disclosure leading to the Court acting under a misunderstanding of the facts. This procedural approach is confirmed in Sharland 1 and Gohill 2.
) The onus is on the party seeking the set aside to establish the new evidence is material and would have led the Court to make a substantially different order. However, where the evidence establishes a prima facia case of fraud (or intentional non-disclosure) then the burden shifts to the other party to prove the order would have been substantially the same with full disclosure. Fraud or deliberate misrepresentation as to the true circumstances will be a powerful reason to reopen an order. Establishing fraud gives the applying party a right to reopen the case with the burden then shifting to the offending party to show the new facts would not have made a difference to the court's decision. However, whilst there is a far-reaching duty of disclosure in financial proceedings:
“It is not every failure of frank and full disclosure which would justify a court in setting aside an order …On the contrary, it will only be in cases where the absence of full and frank disclosure has led to the court making…an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters,
the disclosure of which would not have made any substantial difference to the order…are likely to find their applications being summarily dismissed. 3
) A party relying on undue influence as ground for setting aside an order must establish the pressure emanated from the other party not the surrounding circumstances. However, where a party has been represented this may carry significant weight in rebutting a suggestion of undue influence.
) I do not set out the law with regards to sale of a property on application to enforce a deferred charge as the issue is agreed subject to my decision on the first application.
The issue at the heart of this case
) In the 2017 proceedings the parties found themselves in dispute as to their beneficial interests in No.42. It was not in dispute that this had previously been a mortgage-free property owned by the respondent's parents. However, by the time of the proceedings the respondent's mother was deceased and his father had transferred the legal title in the property to the respondent.
) The key disagreement between the parties was as to whether the father had also transferred his beneficial interest to the respondent and as to the purpose behind the transfer. The applicant claimed the property formed part of the marital pot for distribution whilst the respondent argued he held the legal title as a bare trustee with his father being the absolute beneficial owner with a right to demand return of the legal title. As a result, the father was joined as an intervenor to the proceedings. He agreed with the respondent's account of the transaction.
) The father and respondent explained the transfer of legal title had been undertaken to permit the respondent to borrow on the property so as to invest in additional property and particularly a home in which the family could live. Pursuant to this agreement the respondent had borrowed against the property, and this had permitted the purchase of variously identified property, ultimately culminating in the FMH. They agreed such borrowing was in any event subject to the approval of the father and that the father could demand a return of the property at any time. The applicant viewed this account as false and an attempt to alienate matrimonial property from the court's distributive function. She argued the beneficial interests had followed the legal interest.
) This dispute was heading for a 4-day final hearing when the parties attended the round table meeting. The parties agree that prior to the meeting the applicant signalled she would not be pursuing an interest in No.42. As such the round table meeting proceeded on the basis of a negotiation of the agreed matrimonial assets. The agreement was reached and approved by the court.
Background
) I do not consider it necessary to provide a background account given the issues in dispute. I have set out the features which are relevant to the issues I am asked to decide. In my
analysis below I will draw upon additional features which are viewed by the parties as having relevance.Agreed facts
) The following is agreed.
i) The respondent's father owned No.42 mortgage free prior to transfer to the respondent. The property was not transferred for consideration. The transfer deed refers to it as having been gifted. The property was transferred into the sole name of the respondent. No trust deed or other document was drafted to explain the transaction and the impact on beneficial entitlement.
ii) Post transfer the respondent took out a secured loan with Nationwide against No.42 in the amount of £12,000 in 1998. Of this £6,000 was paid into his Barclays account. This loan was not referenced within the 2017 proceedings. In 1999 the respondent took out a second loan against No.42 with Nationwide for £17,000. This was used in part to settle the earlier loan. This loan was not referenced within the 2017 proceedings. The second loan was settled in around 2003.
iii) In November 2003 the respondent took out a secured loan against No.42 with C&G in...
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