Nayler and Another v Beard
| Jurisdiction | England & Wales |
| Judge | LADY JUSTICE HALE,MR JUSTICE WILSON |
| Judgment Date | 24 July 2001 |
| Neutral Citation | [2001] EWCA Civ 1201 |
| Date | 24 July 2001 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B1/2001/0822 {PRIVATE} |
[2001] EWCA Civ 1201
IN THE SUPREME COURT OF JUDICATURE IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SOUTHAMPTON COUNTY COURT
(His Honour Judge Anthony Thompson QC)
Royal Courts of Justice
Strand
London WC2
Lady Justice Hale
Mr Justice Wilson
B1/2001/0822 {PRIVATE}
MR CHRISTOPHER AYLWIN (Instructed by Bell Pope, Ashley House, 5 Grosvenor Square, Southampton, SO15 2BE) appeared on behalf of the Appellants.
MR TIMOTHY SISLEY (Instructed by Coffin Mew & Clover, Latimer House, 5–7 Cumberland Place, Southampton SO15 2BH) appeared on behalf of the Respondent.
I shall ask Wilson J to give the first judgment.
Before the court is an application for permission to appeal against an order made in civil non-matrimonial proceedings by Judge Anthony Thompson QC sitting in the Southampton County Court on 23 March 2001. 4. In the course of argument yesterday counsel for both sides agreed that, were this court minded to grant permission to appeal, it should treat this hearing as the hearing of the appeal. The court then indicated that, for reasons which it would explain, it was minded to grant permission.
Accordingly this judgment will explain my reasons for having agreed with my Lady that the court should grant permission to appeal and indeed for now proposing that it should allow the appeal.
The appeal raises questions as to the circumstances in which affidavits of means sworn by a party in matrimonial proceedings may be the subject of disclosure and inspection in separate civil proceedings to which he is a party and as to the identity of the court which should be asked to resolve any such issue.
The appellants are claimants in the civil proceedings (which I will call “the partnership proceedings”) which are on foot in the Southampton County Court. The respondent is the defendant and counterclaimant in those proceedings.
The decision of the circuit judge on 23 March, from which the appeal is brought, was to allow an appeal from an order of a district judge of that court dated 15 February 2001. So the appeal to this court is a second appeal within the meaning of section 55 of the Access to Justice Act 1999. 9. The respondent has also recently been a party to divorce proceedings taking place in the Portsmouth County Court. In those proceedings, launched by his wife in 1999 and continuing actively in 2000, he filed three affidavits of means. Apparently they were narrative affidavits, not in the Form E set by the Family Proceedings Rules 1991. Also filed in those proceedings was a report from a forensic accountant prepared upon the joint instructions of the respondent and his wife.
The order of the district judge in the partnership proceedings on 15 February was for disclosure by the respondent to the appellants of three documents or groups of documents:
(1) the report of the accountant filed in the matrimonial proceedings. The respondent complied with that order and afforded the appellants inspection of the report, to which I will return in paragraph 30. (2) the letters passing between the respondent and the solicitor having conduct of his case in the matrimonial proceedings, insofar as they relate to matters raised in the partnership proceedings. Not surprisingly the respondent's appeal against that order was upheld by the circuit judge on 23 March and the appellants do not seek to appeal against that part of his order.
(3) the respondent's affidavits of means filed in the matrimonial proceedings, insofar as they relate to matters raised in the partnership proceedings. The respondent also appealed successfully against that order. It is against the setting aside by the circuit judge of the order for the disclosure of the respondent's affidavits of means that the appellants bring this appeal.
I must now explain the nature of the partnership proceedings.
The appellants and the respondent were partners in a recruitment agency called “Ramsey Hall Associates”. They conducted business through a company called Ramsey Hall Ltd (“the company”). Three shares in the company have been issued. Each of the three shares was vested in the name of each of the three partners.
On 31 January 2000 the respondent left the partnership. On 28 February 2000 he transferred legal title to his share in the company into the joint names of the appellants. On 9 August the appellants issued the partnership proceedings. They alleged that, following certain minor adjustments, the respondent's current account with the partnership was overdrawn at the date of his departure from it in the sum of £86,552. They claimed that sum as due to them.
On 8 September 2000 the respondent filed a defence and counterclaim. The gist of the document was that an account should be taken of the value of the net assets of the partnership at the date of his departure from it and that he should be entitled to one third of them; that, if his current account was in debit, that was a factor to be brought into the overall accounting exercise and that it could not be the subject of an isolated claim by the appellants. The respondent averred that the main asset of the partnership was the company; that up to 28 February 2000 each of the three parties had held his respective share on trust for the partnership and that following that date the appellants similarly held the share which he had transferred to them on trust for the partnership. He contended alternatively that, if the company was not held as a partnership asset in that way, the appellants had, since the date of the transfer of his share to them, held it upon resulting trust for him. He alleged that the value of his one third interest in the company at the date of his departure from the partnership, whether that interest be held through his interest in the partnership or otherwise, was about £378,000; and, in alternative formulations but principally in the form of a request for an account, that was the sum or principal sum which he counterclaimed.
By their reply filed on 4 October the appellants joined issue with the allegation that the company had at any time been an asset of the partnership. They contended that each share in the name of each of the three partners had been held for the benefit of that partner alone; that the respondent had ceded his share to them on 28 February; that the assets of the partnership were negligible; and that the respondent simply owed what he had overdrawn, namely the sum which they had claimed.
On 29 November 2000 a district judge held that the claim was misconceived and that, in accordance with the respondent's counterclaim, there should be an overall account. So he gave summary judgment for the respondent upon the claim and directed that the counterclaim should proceed and indeed that a preliminary issue, namely whether the company was an asset of the partnership, be heard on 26 and 27 February 2001. 17. Thus the date 15 February 2001, being the date of the controversial order for disclosure made by another district judge, was only eleven days prior to the hearing fixed for the preliminary issue. The respondent's appeal against that order was fixed to be heard on 23 February, so that the hearing of the preliminary issue might proceed as fixed. But the court proved unable to hear the appeal on 23 February. So it was adjourned to 23 March and the preliminary issue was postponed to be heard on 2 and 3 August, namely Thursday and Friday of next week. I greatly hope that those dates will not need to be postponed again.
The respondent's appeal was duly heard by the circuit judge on 23 March. I have already explained the result of the appeal and I will address the judge's reasoning in paragraph 27. 19. Under section 55(1) of the Act of 1999 it is only the Court of Appeal which can give permission for a second appeal such as this. So the appellants duly sent their notice of application for permission to this court. It came first before my Lady for consideration on paper. On 25 May she refused permission to appeal. Unusual though it may be to refer exclusively to written reasons, I need to do so in this case. My Lady wrote:
“(1) An application for permission to inspect documents filed in the ancillary relief proceedings should have been made to the district judge in those proceedings: see Family Proceedings Rules 1991, rule 10.20(3). The other party to those proceedings clearly has an interest in whether or not such disclosure should be permitted.
(2) The court having jurisdiction in the ancillary relief proceedings has a discretion whether or not to permit disclosure: see eg S v S (Inland Revenue: Tax Evasion) [1997] 2 FLR 774; R v R (Disclosure to Revenue) [1998] 1 FLR 922; A v A; B v B [2000] 1 FLR 701, esp at pp 712 713. (3) That is the forum in which to consider the balance to be struck between the privacy interests of the parties to the matrimonial proceedings and the fair administration of justice in both the matrimonial and the partnership proceedings. In any given case, the balance may well come down in favour of disclosure: if so, it would then be difficult to argue that the material was not relevant for the purpose of disclosure under the CPR.”
The response of the appellants to those reasons was to ask for the facility to renew their application at an oral hearing but, without prejudice to their contentions, to make application for disclosure under rule 10.20(3) to a district judge of the Portsmouth County Court in the respondent's matrimonial proceedings. Their application, made on notice to the respondent and his wife, is returnable before a district judge on the...
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