W v H (ex parte Injunctions)
| Jurisdiction | England & Wales |
| Judgment Date | 2000 |
| Year | 2000 |
| Date | 2000 |
| Court | Family Division |
Divorce – Financial provision – Interlocutory relief – Ex parte injunctions – Third party – Correct approach when wife seeking to recover property which was or appeared to be vested in third party or in some corporate or trust entity – Correct approach on grant of ex parte injunction against third party – Whether claimant wife required to give undertaking or cross-undertaking in damages.
During the course of ancillary relief proceedings a dispute arose in relation to the husband’s assets in this jurisdiction, and in particular the ownership of a former matrimonial home, known as B Prop. Until recently the registered owner of B Prop was B Co and the wife’s case was that at all times the beneficial owner was the husband, albeit through shareholdings of companies set up by him or on his behalf. She alleged that his recent transactions purporting to sell the property to a third party, X, were shams and/or designed to defeat, inter alia, her claims for financial relief, and that X was a long-standing friend of the husband. X asserted that he was simply the purchaser of the shares in B Co having paid what he believed to be the full market price, and his solicitor swore an affidavit asserting that all the interest formally held by the husband in the shares of B Co had passed to X, and exhibiting, inter alia, a copy of the share purchase agreement. On the wife’s ex parte application for an injunction, the judge made an order restraining X and B Co from disposing of or dealing with B Prop or disposing of or dealing with the shares in B Co. The order as sealed did not indicate what evidence was considered by the judge and contained no undertaking in damages. X and B Co sought to discharge the injunction, and at the hearing the issue arose as to the correct approach to be adopted in the Family Division in ancillary relief cases: (i) where, on an application for interlocutory relief, assets which a wife said belonged in truth and reality to the husband were, or appeared to be, vested in some other person, or in some corporate or trust entity; (ii) when injunctions were granted ex parte against third parties; and (iii) whether in granting an ex parte injunction in such circumstances it would be appropriate to require the claimant wife to give an undertaking or cross-undertaking in damages.
Held – (1) Where, as in the present case, a wife was seeking to recover property which, at least on the face of it, was vested in a third party who was producing documents which, if taken at face value, showed that he had acquired the property as a purchaser for value, the correct approach was to proceed on the footing that, at this interlocutory stage, the third party’s claims had to be taken seriously. In these situations the robustness of the approach adopted by the Family Division in cases where a husband sought to obfuscate or to hide or mask the reality behind shams, artificial devices and similar contrivances that the property remained his property
was out of place. Accordingly, on such an application for interlocutory relief, the primary question for the court was whether the wife could establish a properly arguable case. The wife had to satisfy the court that there was a serious question to be tried (a) as to whether the husband and third party were parties to a ‘sham’, which in this context meant that the acts done or documents executed were intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intended to create, or an agreement or series of agreements which were deliberately framed with the object of deceiving third parties as to the true nature and effect of the legal relations between the parties, and/or (b) as to (i) whether the husband’s intention in entering into the transaction was to defeat her claim and, if so, (ii) whether the third party was a purchaser for value, acting in good faith and without notice of any improper intention on the husband’s part.
(2) The following practice should normally be adopted in the Family Division in ancillary relief cases when injunctions are granted ex parte against third parties: (i) any ex parte order containing injunctions should set out on its face, either by way of recital or in a schedule, a list of all affidavits, witness statements and other evidential materials read by the judge; (ii) the applicant’s legal representatives should whenever possible liaise with the associate with a view to ensuring that the order as drawn contains this information; (iii) on receipt of the order from the court the applicant’s legal representatives should satisfy themselves that the order as drawn correctly sets out the relevant information and, if it does not, take urgent steps to have the order amended under the slip rule; and (iv) the applicant’s legal representatives should respond forthwith to any reasonable request from the party injuncted or his legal representatives either for copies of the materials read by the judge or for information about what took place at the hearing. Persons injuncted ex parte are entitled to be given, if they ask, proper information as to what happened at the hearing. At the very least they are entitled to be told, if they ask, (a) exactly what documents, bundles or other evidential materials were lodged with the court either before or during the course of the hearing and (b) what legal authorities were cited to the judge. Accordingly, it would obviously be prudent for those acting for applicants in such cases to keep a proper note of the proceedings, lest they otherwise find themselves embarrassed by a proper request for information which they are unable to provide.
(3) Whilst every case had to be considered on its own facts and there was no rigid rule, in a case concerning property matters where a wife sought to injunct a third party outside the family it would only be in unusual or exceptional circumstances that the court would decide not to exact an undertaking or cross-undertaking in damages.
(4) In the instant case, the wife had established a good arguable case and upon her giving an undertaking in damages, the injunctions granted against X and B Co would be continued until final determination of the substantive issues between the wife, X and B Co.
Cases referred to in judgmentA-G v Newspaper Publishing plc [1988] Ch 333, [1987] 3 All ER 276, [1987] 3 WLR 942, CA.
A-G v Times Newspapers Ltd [1992] 1 AC 191, [1991] 2 All ER 398, [1991] 2 WLR 994, HL.
Art Corp v Schuppan (1994) Times, 20 January.
Behbehani v Salem [1989] 2 All ER 143, [1989] 1 WLR 723, CA.
Brink’s-MAT Ltd v Elcombe [1988] 3 All ER 188, [1988] 1 WLR 1350, CA.
Chappell v Davidson (1856) 8 De GM & G 1, 44 ER 289.
Colledge v Crossley (1975) Times, March 18, CA.
Green v Green [1993] 1 FLR 326.
Hadjiloucas v Crean [1987] 3 All ER 1008, [1988] 1 WLR 1006, CA.
Hoffmann-La Roche (F) & Co v Secretary of State for Trade and Industry [1975] AC 295, [1974] 2 All ER 1128, [1974] 3 WLR 104, HL.
Howard v Press Printers Ltd (1904) 74 LJ Ch 100, Ch D and CA.
Interoute Telecommunications (UK) Ltd v Fashion Gossip Ltd (1999) Times, November 10, Ch D.
Khreino v Khreino (No 2) (court’s power to grant injunctions) [2000] 1 FCR 80, CA.
Midland Bank plc v Wyatt[1995] 3 FCR 11, [1995] 1 FLR 696.
Nicholas v Nicholas [1984] FLR 285.
Oberrheinische Metallwerke GMBH v Cocks [1906] WN 127.
Purba v Purba[2000] 1 FCR 652, [2000] 1 FLR 444, CA.
Seaward v Paterson [1897] 1 Ch 545, [1895–9] All ER Rep 1127, CA.
Smith v Day (1882) 21 Ch D 421, CA.
Snook v London and West Riding Investments Ltd [1967] 2 QB 786, [1967] 1 All ER 518, [1967] 2 WLR 1020, CA.
Wakefield v Duke of Buccleugh (1865) 11 Jur NS 523.
Z Ltd v A-Z [1982] QB 558, [1982] 1 All ER 556, [1982] 2 WLR 288, CA.
ApplicationOn 29 June 2000 the applicant, Mr X, who on 6 May 2000 had purportedly purchased the shares in B Co (who was the registered proprietor of B Prop), from the husband, sought to discharge an injunction granted by Kirkwood J on 19 June 2000 on the wife’s ex parte application which restrained them from disposing of or dealing with, inter alia, B Prop or disposing of or dealing with the shares in B Co. The facts are set out in the judgment.
Stephen Smith QC (instructed by Withers) for X and B Co.
Mark Everall QC (instructed by Sears Tooth) for the wife.
The husband did not appear.
Cur adv vult
12 July 2000. The following judgment was delivered.
MUNBY J.I give judgment in this matter in open court because the case raises points of practice in relation to the grant of ex parte injunctions in the Family Division. I have prepared the judgment in anonymised form and nothing must be published which might lead to the identification of the children involved in this case.
H and W are Saudi Arabians. They married on 29 September 1981. There are five children born respectively in 1982, 1984, 1985, 1988 and 1990. In the early 1990’s the family started to live in this country. On 18 July 1996 W petitioned for divorce. By a Form M13 dated 16 September 1996 W applied for ancillary relief. I am told that in addition there is a supplemental petition and an application in Form A, both dated 31 May 2000.
W has some assets in this country. Her case, as I understand it, is that although H has assets outside the jurisdiction his only assets of any real value in this country are two valuable residential properties, one in London which I shall refer to as A Prop and the other, B Prop, in the Home Counties. I am primarily concerned with B Prop, which was acquired in 1993. B Prop is registered at HM Land Registry. It appears that at all material times, at least until recently: (i) the registered proprietor of B Prop was B Co, a company incorporated in the British Virgin Islands; (ii) B Co had two issued bearer shares held by Swiss lawyers, Messrs S, for the trustees of a Jersey trust, B Trust; (iii) the trustees of B...
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