Paul Mark Simon v Lauren Belinda Simon
| Jurisdiction | England & Wales |
| Judge | Lady Justice King,Lord Justice Popplewell,Lord Justice Moylan |
| Judgment Date | 15 September 2023 |
| Neutral Citation | [2023] EWCA Civ 1048 |
| Court | Court of Appeal (Civil Division) |
| Year | 2023 |
| Docket Number | Case No: CA-2022-000698 |
[2023] EWCA Civ 1048
Lady Justice King
Lord Justice Moylan
and
Lord Justice Popplewell
Case No: CA-2022-000698
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE FAMILY COURT
SITTING IN THE ROYAL COURTS OF JUSTICE
Mr Nicholas Cusworth KC
(Sitting as a Deputy High Court Judge)
LV 16 D 01012
Royal Courts of Justice
Strand, London, WC2A 2LL
Richard Todd KC and Edward Benson (instructed by Paradigm Family Law LLP) for the Appellant
Jonathan Southgate KC and Simon Calhaem (instructed by BloomBudd LLP) for the Intervenor/Second Respondent
Hearing date: 12 July 2023
Approved Judgment
This judgment was handed down remotely at 11.00am on 15 September 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
This appeal arises out of long, bitter and extortionately expensive divorce proceedings between Lauren Simon (‘the wife’) and Paul Simon (‘the husband’). The wife's litigation loan, which now amounts to over £1m including interest, has been funded by Integro Funding Limited, who trade under the name Level (‘Level’).
On 16 March 2021, a consent order was sealed following the approval of Deputy High Court Judge Nicholas Cusworth KC (‘the judge’) in the circumstances set out below. The effect of the order was to deprive Level of the prospect of repayment of any of the sum to which they were contractually entitled.
Level accordingly made an application to set aside the consent order, having already sought and been granted leave to intervene in the proceedings. Ultimately the consent order was set aside by consent.
The judge directed that Level should remain a party following the setting aside of the consent order and, in a separate order, went on to make extensive case management orders which were designed to drive the matter forward to a financial remedy trial listed for five days in which Level would play a full part as an equal party in the proceedings. The judge also transferred Level's parallel civil claim to the Family Court to be heard following the financial remedy proceedings.
The husband now appeals against those case management orders, and his appeal additionally throws up the issue as to what role, if any, a company who supplies litigation loans such as Level should be permitted to play in the financial remedy proceedings they are funding by way of the provision of a loan to one of the parties.
Background
I take the unusual and rather troubling background largely from the judge's judgment of 21 March 2022. I do so because whilst the orders made by the judge are challenged in this appeal, there is no substantive dispute as to the procedural chronology.
Financial remedy proceedings were issued on 12 February 2016. Disclosure was ordered in relation to a trust of which the husband was trustee as well as a beneficiary. Income and capital from the trust had been routinely used to support the family's lifestyle including a loan from the trust which had funded and was secured against the family home.
The final contested financial remedy hearing came before Parker J in July 2018. The husband's case was that the trust assets were not available for distribution. Parker J held that the husband had been guilty of ‘misrepresentation’, ‘obfuscation’ and ‘distraction’ and made an order for payment of £3m to the wife on a needs' basis. She assessed the assets as amounting to at least £9m, this included the husband's interest in the trust assets which she held to be an available resource.
The husband appealed: he asserted that the judge was in error as the trust assets were not available for distribution and that, as a consequence, the wife had been awarded all the available assets. I granted permission to appeal. In December 2018, in advance of the hearing of the appeal, the wife had applied to Level for a loan to enable her to clear her outstanding costs due to her former solicitors under a ‘Sears Tooth’ agreement and which would also allow her to be represented in both the appeal and in the ongoing contested proceedings in relation to the children. In the usual way, prior to lending the wife the sums she needed, Level obtained a written opinion from the wife's then Queen's Counsel (‘QC’) seeking advice as to the likely outcome of future financial remedy proceedings in the event that the appeal was allowed.
On 14 December 2018, the wife and Level made the first of three loan agreements, the first being for £500,000 which sum was substantially used to meet the costs incurred under the Sears Tooth agreement. Subsequently on 20 June 2019, Level advanced a further £100,000 and, on 27 September 2019, an additional £30,000 was advanced to enable the wife to make an application for a legal services provision order. Altogether this amounted to a total of £630,000. By February 2021 the figure with interest was £865,828. Interest has continued to accrue in the intervening two plus years at 19%.
The appeal from Parker J's order was adjourned until the final determination of parallel children's proceedings. The husband was subsequently granted residence of the children and that appeal was allowed by consent and a retrial ordered.
The judge became the allocated judge in respect of the retrial and on 2 December 2020, dealt with the application made by the wife under s22ZA Matrimonial Causes Act 1973 (‘MCA 1973’) for legal services provision. The husband agreed to provide £45,000 to cover the costs of a private Financial Dispute Resolution Appointment (‘the FDR’). The £45,000 was provided by the husband by withdrawing the funds from the trust.
The FDR took place on 12 February 2021. During the course of negotiations, the wife's QC and legal team became conflicted and withdrew. The wife continued unrepresented and has remained so ever since.
An agreement was reached at the FDR. Under the terms of the agreement, the wife was to receive a life interest in a residential property to be purchased for a figure of £1m by the husband's trust which trust would thereafter own the property absolutely; the wife was to receive no free capital or income in settlement of her claim. Given that the wife had and has no capital of her own, it followed that a consequence of the agreement was that she would have no funds with which to repay any part of the Level loan. A draft consent order reflecting the agreement was signed by the husband and the wife.
Shortly after the FDR, the wife contacted Level and told them that she would not be repaying the loan. Level, on learning of the proposed settlement, wrote to the court on 15 February 2021 copying in the wife's solicitors, the husband's solicitors and Mr Todd KC, who has throughout represented the husband. In their communication to the court Level said that they urgently requested being joined to the proceedings prior to the approval of any order. They continued: ‘A formal application will follow, but in the meantime, we urgently request that no order is sealed in relation to this case and that we are heard in relation to any order which is presented’.
Two days later on 17 February 2021, without informing Level or copying them in, the husband's solicitors wrote to the barristers' clerk at the chambers from which the judge practises as a specialist matrimonial finance barrister, attaching the signed draft order reflecting the agreement reached at the FDR together with a Statement of Information for a Consent Order in relation to a Financial Remedy D81 (‘D81’) which is required by the Family Procedure Rules 2010 (‘FPR’) rule 9.26, together with a schedule of assets, neither of which disclose the husband's interest in the trust. The court was not sent a copy and no formal application was made nor fee paid. The judge was not informed of the letter Level had written two days earlier asking that the proposed order not be made.
The following day on 18 February 2021, Level's solicitors, unaware of the direct communication which had taken place with the judge, wrote to the court in proper form attaching an application seeking joinder in the financial remedy proceedings with a witness statement in support. Although Level had not specifically sought an ex parte hearing, Newton J dealt with the matter on paper the same day and granted the application. The wife, the husband and his solicitors were each notified of the terms of the order.
The receipt of Newton J's order provoked a letter from the husband's solicitors to the court the following day (19 February 2021) asking why the order had been made ex parte and seeking the inclusion of a provision for liberty to apply and a return date. The letter indicated that a stay of Newton J's order would be sought pending an application to set aside the order joining Level to the proceedings. Unhappily, the husband's solicitors did not notify the judge or his barrister's clerk of these developments, nor did they inform the court that a draft order had been sent to the judge at his chambers to approve rather than by way of formal application through the court.
On 22 February 2021, in refusing to agree to a stay of the order which had joined them as a party to the financial remedy proceedings, Level's solicitors said that:
“My client is deeply concerned that your client and Ms Simon entered into a collusive agreement (seeking to exclude our client's interests) against which you might seek court approval without further notification to them. You have now been prevented from taking that step…”
The same day, the court notified the parties that Newton J had amended his order to add a liberty to apply provision and to provide for there to be an ‘on notice’ hearing on the first open date after 11 March...
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