KSO v MJO and JMO (PSO Intervening)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Munby |
| Judgment Date | 08 December 2008 |
| Neutral Citation | [2008] EWHC 3031 (Fam) |
| Docket Number | Case No: HG07D00256 |
| Court | Family Division |
| Date | 08 December 2008 |
[2008] EWHC 3031 (Fam)
Mr Justice Munby
Case No: HG07D00256
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
NEWCASTLE-UPON-TYNE DISTRICT REGISTRY
(In Private)
The Law Courts
The Quayside
Newcastle-Upon-Tyne NE1 3LA
Mr James Turner QC (instructed by Stowe Family Law LLP) for the Petitioner (wife)
Mr Valentine Le Grice QC (instructed by Ward Hadaway) for the First Respondent (husband)
Mr Philip Moor QC (instructed by) and Mr Ian Kennerley (of Dickinson Dees LLP) for the Second Respondent (husband's father) and the Intervener (husband's mother)
Hearing dates: 17–19 November 2008
These are ancillary relief proceedings.
The wife issued her petition for divorce in the Harrogate County Court on 25 May 2007. Subsequently, and in circumstances I must shortly describe, the husband's father was joined as a respondent and his mother as an intervener. I shall, for convenience, refer to the parties as the wife, the husband, the father-in-law and the mother-in-law.
There are two children of the marriage, daughters aged 14 and 12 respectively.
The proceedings
The proceedings have had a somewhat complex history, reflected in the fact that by the time the matter was before me the court file was some five or six inches thick. I summarise that history but only to the extent necessary for immediate purposes.
The wife served her Form A on 1 June 2007. Her Form E followed on 24 July 2007 and the husband's on 27 July 2007. The parties' Replies to the Questionnaires which each had served on the other (the wife on 22 August 2007 and the husband on 3 September 2007) were exchanged on 9 October 2007. Both served a Schedule of Deficiencies. The husband replied to the wife's Schedule on 23 November 2007; the wife to the husband's on 11 January 2008, at the same time as the husband replied to the wife's Schedule of Continuing Deficiencies. In the meantime, two things had happened. On 31 August 2007 the District Judge made an order, by agreement of the parties, for the sale of the former matrimonial home. That order has never been implemented. And on 30 October 2007, the wife had applied for maintenance pending suit.
The two Forms E and accompanying documents took up a total of 263 pages; the various Replies to Questionnaires, Replies to Schedules of Deficiencies and accompanying documents took up a further 237 pages – a grand total of 500 pages.
Amongst the documents attached to the husband's Form E were two which bulk large in the issues I have had to consider. One, purportedly dated 2 September 1998, was an agreement expressed to be between, and signed by, the husband and the mother-in-law for the loan (“I … lend you”) of £30,000 by the mother-in-law to the husband “so that you can purchase [the matrimonial home]”. The document continued that it was understood by the husband:
“that this money is a loan and in the event that you come to sell [the property] that you repay to me the original loan of £30,000 plus 10.5% of future increase in the property value. This being the approximate percentage value of the capital I have invested in relation to the cost of [the property] at the time of purchase.”
The other document, purportedly dated 1 February 2007 and signed by the father-in-law, was an acknowledgment by the father-in-law that the husband “has agreed to lend me approximately £500000 to complete the purchase of” a particular property and that “from the date of him paying the monies over to me interest will accrue at 7%”. The document continued, “This rate will apply to any further monies lent to me”.
I should explain that at about that time the husband had sold a business for which he had received net, in cash, a sum not that far short of £1,000,000 – to be precise, £919,491.35. In all the husband claims to have lent £517,532 to the father-in-law. What precisely happened to the other £400,000 odd was never made entirely clear to me, though a substantial amount apparently went in tax.
The wife suspected that the husband was involved, with the father-in-law, in various property transactions and sought to investigate these matters further in her Questionnaire. The answers provided were meagre. In reply to a question requiring the husband to state the extent of his interest in a property known as The Orchard, his only answer was that he had no interest in the property. In reply to a question referring to the wife's belief that the husband might be involved in a deal relating to another piece of land, and which required the husband to “provide full details and supporting evidence of any other property transaction with which he is connected in any way”, his only answer was “the husband has no interest in this property”– which was not, of course, an answer to the question at all.
The wife's response was to issue an application on 6 December 2007 for an order that the father-in-law attend an inspection appointment. On 11 December 2007 the District Judge made three orders: first, she ordered the father-in-law to attend an inspection appointment on 28 December 2007; second, she ordered the husband to respond by 8 January 2008 to the wife's Schedule of Continuing Deficiencies; third, she adjourned the wife's application for maintenance pending suit, the parties having agreed (as recited in the order) that the whole of the monies (including interest) repaid by the father-in-law to the husband was to be held on joint deposit in the names of the parties' solicitors.
The sum as repaid by the father-in-law to the husband and paid into the joint account on 19 December 2007 amounted to £543,287.65. The order further recited the parties' agreement that there should be paid out of the monies in the joint account (i) £53,856.97 to the wife's solicitors and £48,048.40 to the husband's solicitors in respect of their respective costs, (ii) monthly thereafter (a) £2,500 to each party's solicitor on account of future costs, (b) £2,500 to each of the parties in respect of their maintenance and (c) £500 to the wife in respect of the children's maintenance, and (iii) as and when they fell due (a) the outgoings (including the mortgage payments) on the matrimonial home and (b) the school fees and 'extras' for the two children. (The fine detail of this order has been varied from time to time; the details do not matter for present purposes.) By the end of October 2008 over £370,000 had been withdrawn from the joint account in accordance with the orders of the court. The remaining balance as at the date of the hearing before me was only £168,701. The monthly drawings from the account (taking one month with another) are, I was told, something of the order of £19,000, so that, at the current rate of dissipation, the fund will be exhausted within 9 months!
At the hearing on 28 December 2007 the father-in-law was ordered to produce various documents by 11 January 2008. Inspection duly took place on 10 January 2008. The documents disclosed included a number which, on the face of it, were privileged: see C v C (Privilege) [2006] EWHC 336 (Fam), [2008] 1 FLR 115.
On 30 January 2008 the mother-in-law applied to be joined as an intervener. At about the same time the wife applied for an order that the father-in-law be joined as a respondent, the grounds of that application being set out in an affidavit sworn by her solicitor, Mr Jonathan James, on 6 February 2008. On 7 February 2008 the District Judge made an order joining the mother-in-law as an intervener. At the same time she made an order joining the father-in-law as second respondent, the father-in-law being given liberty to apply within 14 days of service of the order for it to be set aside. Unsurprisingly, perhaps, on 26 February 2008 the father-in-law applied for the setting aside of the order joining him. On 17 March 2008 he applied for permission to appeal out of time from the orders affecting him made by the District Judge on 11 December 2007 and on 28 December 2007 – essentially on the ground that the District Judge had been wrong to order the disclosure of privileged documents.
The next day, 18 March 2008, the proceedings were transferred to the Newcastle-Upon-Tyne District Registry.
The father-in-law's appeal came on for hearing before Holman J on 19 May 2008.
Before Holman J the wife took two key points in response to the father-in-law's appeal. In the first place, she said, the order of the District Judge, properly construed, did not require the disclosure of any privileged documents. So, she said, the appeal was misconceived. Secondly, however, she said that, the contentious documents having in fact been handed over, for whatever reason, the appeal was not best calculated to achieve the father-in-law's real objective – which was, presumably, that the privileged documents should not be used – and that if his objective was to be achieved he would have to persuade the court to grant an injunction of the kind considered in Al Fayed v The Commissioner of Police of the Metropolis [2002] EWCA Civ 780, (2002) Times 17 June. So, she said, the appeal was pointless. Various other points were taken which I need not take up time rehearsing. In the upshot, the father-in-law was left to go away and consider matters. Holman's J's order provided that the matter, including the adjourned appeal and any application by the father-on-law for an injunction, was to be listed for hearing by me on 17–19 November 2008.
Two days later, on 21 May 2008, the father-in-law issued an application for the return of the privileged documents and for an injunction.
On 7 August 2008 the husband applied for an increase in his monthly maintenance payment from £2,500 to £6,000; on 2 September 2008 that application was amended to include an application for release of a further £50,000 to the...
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