Sears Tooth (A Firm) v Payne Hicks Beach (A Firm) and Others
| Jurisdiction | England & Wales |
| Judgment Date | 1998 |
| Date | 1998 |
| Year | 1998 |
| Court | Court of Appeal (Civil Division) |
Costs – Divorce – Ancillary proceedings – Financial provision – Lump sum – Wife executing deed of assignment and assigning her rights under a lump sum order in favour of solicitors in consideration for provision of legal services – Whether such rights assignable – Whether assignment contrary to public policy.
In November 1993 the wife instructed a firm of solicitors, PHB, to act for her in proposed divorce proceedings. The wife subsequently became dissatisfied with PHB and instructed another firm, ST. PHB submitted their bill of costs for services rendered, but the wife instructed ST to contest the bill who accordingly instituted proceedings for negligence in the county court. In July 1994 the wife paid in full ST’s first bill of costs from her savings, but in December 1994 she was unable to pay the second bill for £10,899. As an order for maintenance pending suit had taken the wife’s disposable income beyond eligibility for legal aid, the funding of her litigation became critical. Accordingly, in February 1995 at ST’s invitation she executed a deed of assignment in which she agreed to assign to them her rights in any financial provision and costs orders other than periodical payments orders made in the financial relief proceedings. In October 1995 the husband was ordered to pay to the wife a lump sum of £85,000 on or before a set date and was also ordered to pay the wife’s costs on the standard basis. In November 1995 the judge in the county court ordered that PHB were entitled to their outstanding fees and in February 1996 an order was made that the wife make an interim payment of £11,000 within 48 hours. On 12 March 1996, following the wife’s failure to comply with that order, PHB obtained a garnishee order nisi attaching whatever was owing from the husband to the wife up to £11,025, which was subsequently served on the husband. ST applied to set the garnishee order aside on the basis of the deed of assignment. The district judge refused to set aside the garnishee order nisi holding that it was contrary to public policy for solicitors to receive such an assignment from their clients and that the ordinary requirements for the validity of a legal or equitable assignment of a chose in action had not been satisfied. The district judge further held that since rights under an order for periodical payments were not assignable, rights under a lump sum order, being extricably linked to the former, had the same feature. ST appealed. In light of the judge’s ruling as to the unenforceability and professional impropriety of the deed, the husband applied for an order that (i) ST pay his costs of the ancillary proceedings and (ii) they should bear the costs of those proceedings incurred by them on behalf of the wife.
Held—(1) A deed of assignment of rights under a lump sum payment in ancillary proceedings was valid as a contract for valuable consideration to assign a future chose in action and assignable since the lump sum order could not be discharged or varied. The essence of a lump sum was that it carried all the incidents of outright ownership.
(2) The deed was not champertous or otherwise contrary to public policy and was valid. Far from striking at public justice, the main tendency of such a deed was to promote it by securing proper advice and representation for a significant constituency of wives who were ineligible for legal aid and were seeking to assert their rights against more powerful husbands. However, when considering such a deed the solicitors must, as they clearly did in the current case, advise the wife to seek independent advice before entering into it. Also such a deed was a discoverable document and should be disclosed to the court and the husband.
(3) In the instant case, even though the assignment to ST was valid and therefore took priority over PHB’s rights as garnishees, ST’s rights could not exceed the amount of their outstanding costs at the date of service of the order nisi on the garnishee which was 12 March 1996. The deed only covered such part of her rights to financial provision as might be due to the solicitors. Nothing could be due to them until it was billed so bills delivered before 12 March 1996 gave the relevant amount which showed that they had rights against the husband of £71,720 plus interest. But at that date the husband owed the wife a lump sum of £85,000 and costs of £16,184, a total of £101,184 plus interest. It followed that ST, with rights against the husband of £71,720 plus interest were unable to object to a garnishee order which attached £11,025 against an indebtedness in the husband to the wife of £101,184 plus interest. Accordingly, ST’s appeal would be dismissed. However, since the deed was valid and enforceable, it followed that the husband’s application for costs would be dismissed.
Cases referred to in judgmentAnderson v Radcliffe (1860) LJ QB 128.
Calderbank v Calderbank [1976] Fam 93, [1975] 3 All ER 333, [1975] 3 WLR 586, CA.
Camdex International Ltd v Bank of Zambia [1996] 3 All ER 431, [1996] 3 WLR 759, CA.
Duxbury v Duxbury [1992] Fam 62n, [1990] 2 All ER 77, [1991] 3 WLR 639n, CA.
Giles v Thompson [1993] 3 All ER 321, CA; rvsd [1994] 1 AC 142, [1993] 3 All ER 321, [1993] 2 WLR 908, HL.
Glegg v Bromley (Glegg and anor, claimants) [1912] 3 KB 474, [1911–13] All ER Rep 1138, CA.
Gould v Skinner [1983] Qd R 377, Bris SC.
Harrison v Harrison (1888) 13 PD 180, CA.
Haseldine v Hosken [1933] 1 KB 822, CA.
Jonesco v Evening Standard Co Ltd, Re an undertaking by Wingfields, Halse and Trustram, solicitors [1932] 2 KB 340, [1932] All ER Rep 678, CA.
Pittman v Prudential Deposit Bank (Ltd) (1896) 13 TLR 110, CA.
Practice Direction [1988] 2 All ER 63, [1988] 1 WLR 561.
Radcliffe v Anderson (1860) El Bl & El 819, 120 ER 715; affg (1858) El Bl & El 806, 120 ER 710.
Simpson v Lamb (1857) El & Bl 84, 119 ER 1179.
Trendex Trading Corp v Crédit Suisse [1980] QB 629, [1980] 3 All ER 721, [1980] 3 WLR 376, CA; affd [1982] AC 679, [1981] 3 All ER 520, [1981] 3 WLR 766, HL.
Trippas v Trippas [1973] Fam 134, [1973] 2 All ER 1, [1973] 2 WLR 585, CA.
Watkins v Watkins [1896] P 222, CA.
AppealThe appellant solicitors, Messrs Sears Tooth & Co (a firm), (ST), appealed from the order of District Judge Wigfield sitting in the Central London County Court on 9 September 1996, whereby he refused ST’s application to set aside a garnishee order made in favour of the wife’s former solicitors, Messrs Payne Hicks Beach & Co (a firm), (PHB), for outstanding fees over a lump sum payment owed by the husband to the wife in ancillary proceedings and in respect of which ST contended the wife had assigned her rights to them in consideration for the provision of their legal services. The husband applied for an order, inter alia, that (i) ST pay his costs in the ancillary proceedings and (ii) ST bear the costs of those proceedings incurred by them on behalf of the wife. The hearing took place and judgment was given in chambers. The case is reported with the permission of Wilson J. The facts are set out in the judgment.
Jeffrey Burke QC and Philip Moser (instructed by Sears Tooth & Co) for ST.
Mark Herbert QC and Tracey Angus (instructed by Payne Hicks Beach & Co) for PHB.
Elisabeth Lawson QC (instructed by McBride Wilson & Co) for the husband.
Christopher Wood (instructed by Anthony Gold & Co) for the wife in the ‘ST proceedings’.
Valentine Le Grice (instructed by Sears Tooth & Co) for the wife in the ancillary proceedings.
Cur adv vult
17 January 1997. The following judgment was delivered.
WILSON J. Section A: introductionTwo matters are before the court.
The first is an appeal from an order made by District Judge Wigfield dated 9 September 1996 in the Central London County Court. Instead of coming before a judge of that court, the appeal was wisely transferred to be heard in the Family Division of the High Court. The district judge’s order was to refuse the application of the appellants, Messrs Sears Tooth & Co (a firm), (ST), to set aside
a garnishee order nisi made in favour of Messrs Payne Hicks Beach & Co (a firm), (PHB), attaching £11,025 owing by DT (the husband) to UT (the wife). The district judge did not in terms make absolute the garnishee order but, subject to this appeal, the way is clear for that to take place.
Proceedings for ancillary relief have been on foot in the Family Division between the wife and the husband. In those proceedings the wife was initially represented by PHB but has thereafter been represented by ST, both being firms of distinguished reputation in the field of ancillary relief. PHB obtained judgment against the wife, first, for payment of their outstanding costs, to be taxed if not agreed, and then pending taxation for an interim payment of £11,000. They obtained a garnishee order nisi attaching £11,025 (inclusive of a court fee of £25) owing to the wife by the husband pursuant to orders made mainly by myself at the substantive hearing of the ancillary proceedings. ST applied to set the order aside on the basis of a deed by which the wife had purported to assign her rights under any orders in the ancillary proceedings to themselves in consideration of the provision of legal services.
The district judge first held that it was contrary to public policy for solicitors to receive such an assignment from their client and that it was therefore invalid. Second, he held that in any event the ordinary requirements for the validity of a legal or equitable assignment of a chose in action had not been satisfied. Finally, he held that, since rights under an order for periodical payments were not assignable, rights under a lump sum order, being inextricably linked to the former, had the same feature. The first ground of his decision identifies a point of principle which impacts on a grave and widespread problem encountered increasingly in the Family Division: namely how can a spouse, usually a wife, who is ineligible for legal aid but who has negligible capital, secure legal...
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