Westbury v Sampson
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE BODEY,LORD JUSTICE SEDLEY,LORD JUSTICE SCHIEMANN |
| Judgment Date | 23 March 2001 |
| Neutral Citation | [2001] EWCA Civ 407 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case Nos: A2/98/7854 & A2/97/1664 |
| Date | 23 March 2001 |
[2001] EWCA Civ 407
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIS HONOUR JUDGE GRAHAM JONES
(sitting as a High Court Judge)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Schiemann
Lord Justice Sedley and
Mr Justice Bodey
Case Nos: A2/98/7854 & A2/97/1664
1996 W 139
W.E. Pawlak (instructed by Messrs Warner Goodman & Street for the Appellant)
J. Cohen Q.C. (instructed by Messrs Blake Lapthorn for the Respondent)
This is an appeal by the Claimant / Appellant against a decision of Judge Graham Jones dated 21st October, 1997 when the Judge dismissed the Claimant's claim in negligence against the Defendant, the Claimant's former Solicitor.
The matter arises out of a consent order dated 4th September, 1990 made in ancillary relief proceedings by Judge MacLaren Webster QC at the Salisbury County Court. It turns on the impact of the Defendant's admitted failure to advise the plaintiff as to the variability of a lump sum order by instalments.
By way of background, the Claimant and his former wife (whom for convenience, I shall call "the wife") were married on 5th May, 1984. They had one child a daughter who is now aged 16.
During the course of the marriage, the Claimant & the wife purchased a valuable property "The Manor House" and also ran an antiques business together.
Unfortunately, the marriage broke down, following which negotiations took place between the parties' respective solicitors to deal with the various financial issues arising.
This led to the consent order mentioned above, dated 4th September, 1990, within which many financial matters were covered; but in particular it was ordered that the wife should pay the claimant £42,500 by way of two instalments, £2,500 within 28 days and £40,000 within six months, whereupon the Claimant's interest in "The Manor House" should be transferred to the wife, subject to the outstanding mortgage. In the event that the instalments were not paid, there was an order for the sale of the property with a corresponding distribution of the net proceeds of sale. In addition the wife was to take over that part of the antiques business which had not already been divided up by agreement. Various other matters were covered and the entire package was expressed as a "clean break".
At the time of that consent order, the gross value of "The Manor House" was taken as being about £275,000 which, after various deductions for the mortgage and so on was reduced to an anticipated equity of about £118,000.
It therefore appeared that there was ample equity from which the lump sum could be paid by the wife to the claimant, if necessary by way of a sale of the property. In addition, there was evidence from the wife's adult daughter by a previous marriage that she (the daughter) and her husband were intending to sell their home, thereby raising capital, with a view to buying into "The Manor House" and living there with the wife. That was in fact the main way in which the wife was expected to have been able to come by a capital sum to assist her in paying out the claimant.
The first instalment of £2,500 was duly paid by the wife to the Claimant. However, the date for the second instalment (4th March, 1991) came and went without the wife paying. It transpired that the proposed arrangements between the wife and her adult daughter had fallen through, following the unexpected failure of the daughter's marriage and that the house proved impossible to sell at the sort of price which it had been expected to obtain for it.
Shortly after March 1991, the Claimant sought & obtained directions regarding the outstanding £40,000, which led to the house subsequently being placed on the market.
In January 1993 (two and a quarter years after the consent order) the wife served on the Claimant an application to vary the consent order but later, for some reason which is unclear, withdrew it. Certainly the Judgement below mentions negotiations going on during 1993, with the aim of redefining the Wife's financial obligation to the Claimant, so that may have had something to do with her holding back from further recourse to the Court.
In November 1993, three years after the consent order, the wife made a second application to vary it, those negotiations having come to nothing.
In December 1993, following a directions hearing regarding the wife's application to vary the consent order, the claimant terminated his retainer with the Defendant being of the view that Counsel briefed by the Defendant for that hearing had not fought his corner sufficiently strongly.
Shortly thereafter, in January 1994, a sale of "The Manor House" was finally achieved. However, the equity turned out to be not £118,000 as anticipated, but only about £18,000. As can be seen, there was thus a reduction of about £100,000 in the expected net proceeds of sale. Of this reduction, about £60,000 was comprised of (a) a reduction of about £40,000 in the anticipated gross sale price (b) an increase of about £5,000 in the anticipated costs of sale and (c) an increase of about £15,000 in the mortgage liability being for reasons other than the wife's default. The remaining £40,000 of the reduction in the expected net proceeds of sale was comprised of (a) an increase of about £10,000 in the mortgage liability through the wife's having stopped paying the instalments in December 1992 and (b) an increase of about £30,000 in the liabilities of the business, which business had gone to the wife by the consent order and which liabilities were charged on the property.
Thus, of the reduction in expected net proceeds of sale, £60,000 was clearly not the fault of the wife; although (as between the claimant and the wife) £40,000 may or may not have been her fault, depending on precisely how and why she caused or permitted the charged liabilities to increase. This is not an area which seems to have been investigated below and no findings were made; although in his affidavit sworn on 3.4.91 seeking directions as regards the order for sale, the Claimant asserted that the wife was at that time "…experiencing great financial hardship" and had insufficient income either to service the debts secured on "The Manor House" or to support herself and the child of the family.
The wife's application to vary the consent order was finally resolved by Judge Shawcross on 24th October, 1995 when he acceded to her application. He found the husband's presentation to be honest and reliable, but the wife's to be dishonest & unreliable as to her income from the antique business.
Nevertheless, he felt that the changes in the underlying assumptions of the consent order caused, for example by the diminution in the expected value of "The Manor House" and by the overall reduction in the equity, made it just and necessary for the amount of the second instalment of the lump sum (£40,000) to be varied downwards. He did therefore so reduce the £40,000 namely to £25,000, of which the wife had already paid the first £2,500, leaving £22,500 still to be paid.
Judging by the text books, the propriety of such an order varying the overall quantum of such an order would appear to be in some doubt; but in my judgement, the cases of Tilley v Tilley 1979 10 Fam Law 89 and Penrose v Penrose 1994 2 FLR 621 make it clear that the jurisdiction created by S31(1) MCA 1973 (below) not only empowers the Court to re-timetable / adjust the amounts of individual instalments, but also to vary, suspend or discharge the principal sum itself, provided always that this latter power is used particularly sparingly, given the importance of finality in matters of capital provision.
Part of the net proceeds of sale of £18,000 (viz £6,000 odd) were directed by the order of Judge Shawcross to be used to pay off the wife's liability to a builder who had been doing work at the house shortly before September 1990 and who had obtained a Charging Order over the house. The remainder of the net proceeds (ie £12,000 odd) were ordered to be paid to the Claimant. The final balance of the redefined lump sum due to the Claimant (i.e. £10,000 odd) was to be found & paid by the wife out of whatever resources she had and / or with the help of her family.
As a matter of pure arithmetic therefore, the claimant was worse off through the variation application, by about £17,500 (being £42,5000 less £25,000). The Wife too was, incidentally, worse off having been expected to come away from the proceedings with about £75,500 worth of equity (£118,000 less £42,500 paid to the Claimant) and having in fact come away: with £30,000 worth of business liabilities taken care of and with a (presumably) debt-free business of unknown value; but with no capital sum, and with an obligation to find the last £10,000 of the Claimant's redefined lump sum, as just mentioned.
In the result, the Claimant (then acting in person) brought proceedings in negligence against the Defendant, his former solicitor, alleging that he had not been properly advised about the variability of lump sum orders payable by instalments under S.31 Matrimonial Causes Act 1973 – see below.
As I have said, it is from the Judgment against him in those proceedings that the Claimant now appeals.
There is a preliminary point with which I must shortly deal, being an application by the Claimant for leave to amend his Notice of Appeal, originally drafted by him when he was acting in person. This would be to augment the original Notice with allegations of negligence arising before 3.9.90, namely...
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