Lisa Walton and Another v Shan Allman
| Jurisdiction | England & Wales |
| Judge | Mr Justice Snowden |
| Judgment Date | 18 November 2015 |
| Neutral Citation | [2015] EWHC 3325 (Ch) |
| Court | Chancery Division |
| Docket Number | The County Court sitting at Chesterfield Claim No: High Court Chancery Appeal No: CH/2015/0272 |
| Date | 18 November 2015 |
[2015] EWHC 3325 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
7 Rolls Buildings
Fetter Lane, London
EC4A 1NL
Mr Justice Snowden
The County Court sitting at Chesterfield Claim No:
1UD58766
High Court Chancery Appeal No:
CH/2015/0272
Rebecca Bailey-Harris (instructed by Paul Brook Solicitors) for the Appellants
Yasmin Yasseri (instructed by Hutton's Solicitors) for the Respondent
Hearing date: 27 October 2015
This is an appeal with the permission of Mrs Justice Asplin against an order of HHJ Godsmark QC sitting in the Nottingham County Court on 29 January 2015, refusing to grant the Appellants, Mr and Mrs Walton, relief against sanctions. The appeal raises questions of the application of the principles in Denton v TH White Limited [2014] 1WLR 3926, together with the jurisdiction to grant a charging order against an unquantified beneficial interest of a judgment debtor in property registered in the sole name of a third party.
Background
Mr and Mrs Walton live at Oak Tree Farm, Broad Tree Hill Road, Tickhill, Doncaster, DN11 9HB, with Title No. SYK320499 ("the Property"). The Property is registered in the sole name of Mr Walton and was acquired by him in 199Mr and Mrs Walton were married on 11 September 1998.
In 2011, Mrs Walton issued proceedings against the Respondent, Mrs Allman. The claim was for breach of contract over the sale of a pony. At some point prior to the trial of the claim, Mrs Allman made an application for security for costs against Mrs Walton. That application was resisted by Mrs Walton and in the course of her resistance she served a witness statement dated 20 March 2012 in which she said:
"I verily believe that by virtue of marriage my contribution to the marriage, both as a wife and a mother, I have an equitable interest in the property and there is nothing that renounces this equitable interest".
On the basis of that evidence, the application for security for costs against Mrs Walton was dismissed.
The trial of the claim took place in August 2012 before Mr Recorder Grubb in Cardiff County Court. The Recorder dismissed the claim and ordered Mrs Walton to pay Mrs Allman's costs to be subject to a detailed assessment if not agreed. On 13 December 2012 an interim costs order was made for a payment on account by Mrs Walton to Mrs Allman of the sum of £30,000. Those costs have not been paid.
Relying upon the assertion by Mrs Walton in her witness statement that she had an equitable interest in the Property, on 11 January 2013 Mrs Allman issued an application for a charging order in respect of the judgment debt due to her. That application came before District Judge Hendicott in the Cardiff County Court on 21 January 2013. The District Judge made an interim charging order on the papers. He then transferred the application for the charging order to Chesterfield County Court, that being the county court local to Mrs Walton's home.
It became apparent between the grant of the interim charging order and the hearing to make the order final that Mr Walton disputed that his wife had any interest in the Property. Accordingly, on 11 April 2013 District Judge Davies, sitting at Chesterfield County Court, made an order for the service of witness statements by Mr and Mrs Walton dealing with the question of whether Mrs Walton had any interest in the Property registered in her husband's name.
The witness statements were served on 25 April 2013. It was apparent from Mrs Walton's statement that she had fundamentally altered her stance in relation to the question of whether she had an interest in the Property. Mrs Walton's statement said:
"I accept that I did not have in interest in Oak Tree Farm aforesaid either on a legal or an equitable basis. I further confirm that I have never had such an interest".
On 25 November 2013 District Judge Davies made a further order obliging Mrs Walton to provide inspection of a number of identified documents by 16 December 2013. Mrs Walton failed to comply with that order. On 21 January 2014 District Judge Davies, of his own motion, made a further order that Mrs Walton should make specific disclosure by 5 February 2014 of specified documents (such as planning applications, correspondence with agents in relation to planning applications and all relevant security documents relating to the Property) that were in her possession or control, failing which she should be debarred from adducing any evidence at the hearing other than that which had been previously contained in her witness statement.
District Judge Davies also made an order giving Mr Walton formal permission to intervene in the proceedings on the basis of his claim to be the sole legal and beneficial owner of the Property. The District Judge also ordered Mr Walton to provide disclosure of any documents upon which he might seek to supplement his witness statement by the same date, and debarring him from adducing any further evidence in default of production of such documents.
The trial to determine the beneficial interests in the Property and to make the charging order final or to dismiss it took place on 24 April 2014 before District Judge Davies. At the trial, counsel for Mr and Mrs Walton suggested that the court did not have requisite information before it to assess the beneficial interest of Mrs Walton in the Property. The skeleton argument of counsel for Mrs Allman asserted that the bank statements of Mr and Mrs Walton were highly relevant to the question of whether she had a beneficial interest in the Property, stating,
"Mrs Walton has declined to disclose bank statements or other documents to indicate segregation of incomes or expenditures associated with the Property. It is submitted that the wholesale lack of disclosure indicates collusion between Mrs Walton and her husband or potential concealment of evidence that would provide significant assistance to the court. Mrs Walton cannot deny the existence of such documents and has not explained her failure to address the same."
At the hearing before District Judge Davies, Mrs Walton declined to give oral evidence even though she was present. She said that she was suffering from stress and that it would be medically harmful for her to give evidence. Mr Walton gave evidence and was cross-examined. District Judge Davies disbelieved Mr and Mrs Walton's evidence. He found that the evidence pointed to the existence of a common intention constructive trust. District Judge Davies decided to make the charging order over Mrs Walton's beneficial interest in the Property final, albeit that he did not quantify the amount of that interest. The District Judge also ordered Mr and Mrs Walton to be jointly and severally liable for the costs owing in the amount of £12,261.16 payable forthwith.
That costs order was not complied with, and on 11 July 2014 Mrs Walton sought permission to appeal out of time against the District Judge's order. On 13 October 2014 HHJ Inglis, sitting in the Nottingham County Court, gave permission to appeal and ordered that the appeal should be by way of a re-trial before a Circuit Judge. He further went on to make the directions which are the heart of the current appeal. These directions were in the following terms:
"3. Mr and Mrs Walton must by 4.00 pm on 3 November 2014 give disclosure of all documents which have been in within their possession or control relating to,
a. the circumstance in which Mr Walton acquired the property;
b. all dealings by either of them with the property since Mr Walton acquired it including any dealings by the creation or satisfaction of charges, the making of or paying for improvements to it and the provision of purchase money if any;
c. any applications for planning permission made in respect of the property since Mr Walton acquired it;
d. any other matters relevant to the beneficial ownership of the property.
4. Insofar as the disclosure made in paragraph 3 of this Order includes any documents which are no longer within the possession or control of [Mr or Mrs Walton], [Mr or Mrs Walton] (as appropriate) shall by 4pm on 3rd November 2014 file and serve a witness statement explaining what has become of them….
7. If either [Mr or Mrs Walton] fails to comply with paragraphs 3, 4 and 5 of this Order the appeal shall stand dismissed without further order".
Although giving permission to appeal, HHJ Inglis left the costs order (for payment of £12,261.16) undisturbed. Those costs have not been paid.
The date for the hearing of the appeal was fixed for 29 January 2015 with a time estimate of one and a half days.
Mr and Mrs Walton gave disclosure of a number of documents pursuant to the order of HHJ Inglis. Those documents did not include any bank statements or a number of other categories of relevant documents, but Mr and Mrs Walton did not provide any witness statements explaining the absence of those documents.
After inspecting the documents that had been provided, on 26 November 2014 Mrs Allman's solicitors wrote to Mr and Mrs Walton's solicitors requesting copies of the bank statements of Mr and Mrs Walton. They pointed out that the disclosure of such bank statements was essential as it would shed light on how Mr and Mrs Walton arranged their finances and how they discharged the outgoings on the Property and their other household expenses.
On 27 November 2014 the solicitor acting for Mrs Allman spoke to the solicitor acting for Mr and Mrs Walton (Mr. Paul Brook). The attendance note of the telephone call records that Mr Brook said that he had asked his clients about the bank statements and "if they have them he'll disclose them".
On 8 December 2014 Mr and Mrs Allman's solicitors sent an email chasing disclosure of Mr and Mrs Walton's bank statements. The...
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