Walkden v Walkden

JurisdictionEngland & Wales
JudgeLord Justice Thorpe,Or,Lord Justice Wall,LORD JUSTICE ELIAS
Judgment Date25 June 2009
Neutral Citation[2009] EWCA Civ 627
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: B4/2008/2418
Date25 June 2009

[2009] EWCA Civ 627

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM

HIS HONOUR JUDGE HUNT

YORK COUNTY COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Right Honourable Lord Justice Thorpe

The Right Honourable Lord Justice Wall and

The Right Honourable Lord Justice Elias

Case No: B4/2008/2418

Y006D00247

Between
Martin Robert Walkden
Appellant
and
Kim Hazel Walkden
Respondent

Nicholas Francis QC and Sophie Briant (instructed by Messrs Denison Till) for the Appellant

Bruce Blair QC and Charles Eastwood (instructed by Stowe Family Law LLP) for the Respondent

Hearing dates : Thursday 14th May 2009

Lord Justice Thorpe

Lord Justice Thorpe :

Introduction

1

On 12 th June 2008 His Honour Judge Hunt sitting in the York County Court, granted leave to reopen an ancillary relief order made on 27 th April 2008 on the grounds of a supervening Barder event. The husband appeals that order.

Background

2

The parties are both 46. They married in 1986 and had two children. Their son James is now 21 but their daughter Charlotte is only 15 and is preparing for her A-levels.

3

In 1995 the husband participated in a management buyout of a company Triesse Limited (hereinafter Triesse). He became joint managing director and acquired 45% of the shares. In October 2005 the parties separated and on 26 th October entered into a separation agreement under the terms of which the wife received, amongst other benefits, a lump sum of £350,000.

4

In the first half of 2006 an investment company, Sylvan International Limited (hereinafter Sylvan), approached Triesse with a view to acquisition. Triesse management accounts for the half year to March 2006 demonstrated a pre-tax loss of £46,000. Negotiations for a possible sale terminated in May 2006. This approach was not disclosed to the wife. During this period the separation agreement was varied to give the wife 5% of the value of the husband's shares in the event of a future sale. By subsequent variation requested by the wife, the husband agreed to pay her £81,000 in substitution for the 5% of a possible future sale. That further lump sum was paid in June 2006.

5

An effort was made to embody the terms of the separation agreement into a court order. On 7 th March 2006 the husband had filed a petition for divorce. The marriage was dissolved on the husband's petition by a decree absolute of 22 nd June 2006. However the wife declined to agree to the consent order, preferring to activate a conventional claim for ancillary relief within the suit.

6

In August 2006 the parties each swore voluntary Forms E followed by a voluntary questionnaire from the wife in September.

7

However in September each initiated more formal proceedings. The husband issued a Notice to Show Cause application, that is to say he invited the court to order that the wife should receive no more than what was provided by the separation agreement as varied. The wife countered with a formal application for ancillary relief in Form A.

8

In December 2006 the Sales Director of Triesse resigned from the Board. On resignation he received £94,000 for his holding of 25,000 shares. This transaction valued Triesse at £585,000. Within this transaction, the husband acquired an additional 3% of the shares in Triesse.

9

In the husband's Form E and response to questionnaire, he had put a value of £216,000 gross on his 45% shareholding in Triesse. Applying the Eastwood valuation to his holding, his valuation would be increased to £283,000.

10

The husband did not disclose the Eastwood transaction or his acquisition of the additional 3%.

11

A hearing of the husband's application to show cause and the wife's first appointment were fixed for 16 th January. In preparation the wife swore a statement in answer to the husband's application, she served a questionnaire and she filed a statement of issues. Both swore Forms E. The husband also filed a statement of issues. By these steps proper battle lines were drawn.

12

However, the option of a settlement was also pursued. On 2 nd January the wife's solicitors had written a Calderbank letter offering to accept a further £100,000 in full and final settlement of all capital claims. The letter was not immediately productive and the hearing on 16 th January resulted in a judgment on the husband's application reserved to 25 th January and the adjournment of the wife's first appointment to 6 th March.

13

On either that day or the next the parties negotiated directly and reached an agreement that the wife would accept half the additional lump sum sought by the Calderbank letter, namely £50,000. The deal was recorded by the wife's solicitors in a letter of 18 th January. The essential paragraph read as follows:

“We are informed that your client has agreed to pay our client an additional lump sum of £ 50000, in addition to monies already received, and that the Draft Consent Order should now be amended accordingly.”

14

The final paragraph read:

“We would be grateful if you could revert to us as a matter of urgency to confirm that matters are agreed as above. If so could you please provide us with an amended Consent Order for approval?”

15

The husband's solicitors did not reply until 25 th January, confirming the deal. The letter ended thus:

“We therefore enclose Notice of Application with draft Order attached for signing and return.”

16

On 25 th January the District Judge delivered her reserved judgment dismissing the husband's application to show cause. Why was he not informed on 18 th January that the parties had reached a comprehensive agreement? Why was the travelling draft consent order not put before him for approval? We were not given answers to these obvious questions. It was not until 24 th April that the consent order was submitted to the court. It was perfected three days later.

17

The order was unusual in a number of respects

(a) The husband undertook to continue to pay periodical payments at the rate of £1100 per calendar month (expressed to be for the benefit of the wife and the younger child) until 21 st October 2015, even if the wife were to remarry in the interim.

(b) The parties undertook not to make any application for the variation of the periodical payments order throughout its fixed term.

(c) The husband agreed that on Charlotte's 18 th birthday he would fix her continuing periodical payments directly with her without diminishing the monthly payments to the wife.

18

On 27 th June Sylvan approached Triesse for the second time by letter of 27 th June. At a meeting on 11 th July, Triesse disclosed accounts for the year ending 30 th September 2006 and management accounts for the first nine months for the current year which showed a profit before tax of £353,000. On the basis of those accounts it was agreed that Sylvan would purchase Triesse for £3,700,000.

19

Heads of agreement were signed in August and the sale was completed in October. The husband received 1.8 million for his shares (subject to an estimated CGT liability of £210,000).

20

The wife had wind of this and the husband was not forthcoming when her solicitors sought information. Accordingly the wife on 8 th November issued her application for leave to appeal and/or to set aside the consent order.

The development of the wife's application.

21

It is necessary to record the preparation and presentation of the wife's case in detail. The application of 8 th November sought relief on the following grounds:

“(a) A new event has occurred since the making of the order, which invalidates it.

(b) And/or in the alternative, pursuant to order 37 rule 1 of the County Court Rules 1981, the Consent Order be set aside for material non-disclosure or misrepresentation…”

22

The wife's affidavit in support of 13 th November repeated these two grounds. In relation to the first ground the new event was identified as “the sale of the petitioner's shareholding in the company Triesse Holdings Limited.”

23

Of the second ground the wife said:

“There has been non-disclosure or misrepresentation of material facts…”

24

The District Judge gave directions that required the husband to file an affidavit setting out the full circumstances surrounding the negotiations for and sale of Triesse and for the filing of skeleton arguments on each side.

25

The second directions order was made by Judge Hunt. He ordered the husband to answer the wife's questionnaire and set the case down for a two day hearing before him commencing on 12 th June. The arrangements for the first day were very precise; between 10 and 12 the Judge would read, at 11 the parties would assemble and at noon the trial would begin.

26

The wife's skeleton argument was dated 9 th June. Paragraph 3 stated:

“In her notice of application the wife applied in the alternative to set aside the consent order due to material non-disclosure or misrepresentation by the husband. The wife does not proceed with this application and relies on the principles set out in Barder v Barder.”

27

The following paragraph set out the wife's case on these alternative bases:

“(a) There has been a dramatic increase in the value and liquidity of the husband's shareholding in Triesse since the making of the consent order on 27 th April 2007.

Or

(b) At the time of the consent order there were mistaken assumptions, due to no fault of the wife, about the value of the shares and whether they would be sold within a short period of Consent Order.”

28

Thus on 12 th June the wife's application of 8 th November was supported by her affidavit of 13 th November (Barder plus non-disclosure/misrepresentation) and her...

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