A3/2000/5435
Neutral Citation Number: [2002] EWCA Civ 342
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Rimer)
	Royal Courts of Justice
	Strand
	London WC2

	Monday, 11th February 2002
B e f o r e :

LORD JUSTICE WARD and
LORD JUSTICE CHADWICK

- - - - - - - -

(1)  KENNETH WATSON
(2)  PENROSE FOSS
(3)  CATHERINE HUDSON
Claimants/Respondents

-v-

ELLEN PATRICIA O'DRISCOLL
Defendant/Applicant
- - - - - - - -
Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited
190 Fleet Street  London EC4A 2AG
Tel: 020 7421 4040  Fax: 020 7831 8838
(Official Shorthand Writers to the Court)
- - - - - - - -

The Applicant Defendant Miss O'Driscoll appeared in person.

The Respondent Claimants did not appear and were not represented.

- - - - - - - -

J U D G M E N T
1.	LORD JUSTICE WARD: I will ask Lord Justice Chadwick to give the first judgment. 
2.	LORD JUSTICE CHADWICK: This is an application for permission to appeal against an order made on 24th January 2000 by Mr Justice Rimer in proceedings brought by Mr Kenneth Watson and others against Miss Ellen Patricia O'Driscoll. That order was itself made on an appeal against an order made on 7th January 2000 by Master Price. This, then, is an application to which CPR 52.13 applies. Permission cannot be granted on this application unless the court considers that the appeal would raise an important point of principle or practice or that there is some other compelling reason for the Court of Appeal to hear it - see section 55(1) of the Access to Justice Act 1999. 
3.	Miss O'Driscoll is the daughter of Mr Angelo Perotti. Mr Perotti has, for some years now, been engaged in litigation with Mr Kenneth Watson, the attorney administrator of his late uncle, Mr Lorenzo Perotti, who died in 1984. That litigation has been before this court on a number of occasions - and it is described, in some detail, in the judgment which Mr Justice Rimer delivered on 24th January 2000. It is not, I think, necessary to set out the history again in any detail in this judgment. It is enough to mention that, in the course of that litigation, costs orders were made against Mr Perotti in favour of Mr Watson, Miss Penrose Foss and Miss Catherine Hudson. Miss Foss is the second claimant and Miss Hudson the third claimant in these proceedings.
4.	On 18th June 1999 the three claimants made an application, without notice, for a freezing order against Mr Perotti. The purpose of that application was to restrain Mr Perotti from disposing of assets against which the claimants were concerned to enforce, if they could, the costs orders which they had already obtained. That application came before Mr Justice Rimer on 18th June 1999. He made the order sought on that day. 
5.	The assets to which the order applied included, in terms and specifically, a leasehold flat known as 64 Ivor Court, Gloucester Place, London NW1, of which Mr Perotti was then registered as proprietor. The flat had formerly been in the ownership of his brother, Mr Giuseppe Perotti, who died in June 1991. Mr Giuseppe Perotti (or Peppino, as he was more usually known) had, by his will, appointed Mr Angelo Perotti his sole executor and sole beneficiary. 
6.	On 20th June 1999 - that is, some two days after the freezing order of 18th June, but after the order had been served upon him - Mr Perotti purported to assent, as executor of his late brother, to a transfer of the flat 64 Ivor Court to his daughter, Miss O'Driscoll, the present applicant, who had just attained the age of 18 years. The transfer into her name was effected by registration at Her Majesty's Land Registry very shortly thereafter, on 22nd June 1999. The matter came back before Mr Justice Rimer, on notice, on 24th June and he confirmed the freezing order that he had made some days earlier. 
7.	The three claimants in these proceedings took the view that the transfer of the flat by Mr Perotti to his daughter was in breach of the order of 18th June 1999 and was a contempt of court. They instituted contempt proceedings against Mr Perotti in July 1999. Those proceedings came before Mr Justice Laddie on 10th September 1999. He found the contempt proved and he committed Mr Perotti to prison for a term of three months. Mr Perotti has long since served that sentence. His appeal against the order for committal was dismissed by this court in December 2001. 
8.	Mr Perotti had sought to resist the committal proceedings before Mr Justice Laddie on the grounds that, although it might have appeared that he was the legal and beneficial owner of 64 Ivor Court on 18th June 1999 when the freezing order was made by Mr Justice Rimer, the true position was that he had held that flat since his brother's death upon a secret trust for his daughter, Miss O'Driscoll. That trust, it was said, had been imposed by directions given to him, orally, by his brother, Peppino. Mr Justice Laddie rejected that contention; and his decision was, as I have said, upheld by this court in December 2001. 
9.	The present proceedings have been brought by Mr Watson and his co-claimants, against Miss O'Driscoll, to obtain a re-transfer of 64 Ivor Court into the name of Mr Angelo Perotti so that they can enforce against that asset the costs orders which have been made in their favour. The claimants allege that the transfer was made by Mr Perotti at an undervalue with intent to put assets beyond their reach, as persons with a claim against him. Indeed, if they are correct, not only was it made at an undervalue, it was made for no consideration at all. In those circumstances, the claimants invite the court to exercise the powers which it has under Part XVI of the Insolvency Act 1986 - see, in particular, sections 423 and 425 of that Act. The order which they sought was made by Master Price, under CPR Part 24, on 7th January 2000. At that hearing Miss O'Driscoll did not appear in person or by a legal representative. Counsel appeared for the claimants and Mr Angelo Perotti appeared in person on his own behalf. 
10.	The applicant, Miss O'Driscoll, appealed to the judge. That appeal came before Mr Justice Rimer - who was, of course, very familiar with the background and with the circumstances in which he had made the order of 18th June 1999. Miss O'Driscoll was represented by counsel. In the course of a full and careful judgment the judge explained the circumstances in which he refused the adjournment which was sought on 24th January 2000 by counsel then instructed on behalf of Miss O'Driscoll. I read from p.10E of the transcript of the judgment of 24th January 2000:
“On 11th January 2000 a notice of appeal was purportedly served by Miss O'Driscoll. The notice, although it does not bear his name, carries with it the familiar indicia of Mr Perotti's work and it again describes Miss O'Driscoll's address as 43A Ridgemount Gardens, London WC1.”
11.	[The judge had referred to 43A Ridgemount Gardens earlier in his judgment as being Mr Perotti's address and not the address of his daughter.]
“By a witness statement made on 18th January 2000 Mr Perotti claimed that he is the lawful attorney of Miss O'Driscoll. In purported compliance with Master Price's order, he said that she had never had any dealings with the flat's rents. He said her only involvement with it was to sign the assent on 20th June 1999. The appeal has come on for hearing today with unusual expedition because, I am told, Mr Perotti applied for it to be expedited.
At the hearing of the appeal Mr Ilyas of counsel appeared for Miss O'Driscoll. He has only very recently been instructed in the matter. His instructing solicitors, David Parry & Co, were not in court and it appears that their instructions on Miss O'Driscoll's behalf derived not from her but from Mr Perotti acting in his capacity as her attorney. Mr Perotti was also in court and contributed forcefully to Mr Ilyas's submissions in a manner which cannot have made Mr Ilyas's task an easy one. Mr Ilyas applied for an adjournment of the appeal. He said he wanted to be satisfied that Miss O'Driscoll did want to pursue the appeal, to confirm that Mr Perotti's power of attorney was a valid one and to ascertain what Miss O'Driscoll's stance is. Mr Semken [counsel for the claimants] opposed the application and I refused it. I have no reason to believe that all the papers in this matter have not been served on Miss O'Driscoll. The appeal has come on for hearing today because there is a purported notice of appeal from her and because her attorney, Mr Perotti, has sought its expedition. Either all of that reflects her intentions or it does not. If it does, then there is no reason why the appeal should not be heard today. The issues it raises are extremely short and I could not see that their resolution would be assisted by an adjournment. If it does not represent her instructions then no appeal has been made by her and she is now out of time for appealing. In my view, the only consequence of an adjournment would have been to cause the incurring of further costs by the claimants which they will have as miserable a prospect of recovering as they have of the huge sums of costs which have already been awarded in their favour. I did not consider that justice required that burden to be imposed on them. Accordingly, I refused Mr Ilyas's application for an adjournment and heard the appeal.”
12.	I have read that passage because one of the grounds of complaint, or criticism, put forward by Miss O'Driscoll on this application - and elaborated by her father on her behalf - is that she did not have a proper opportunity to present her case to the judge. The judge refused the adjournment for the reasons that he explained. 
13.	The judge went on to express the view that, but for the fact that the assent of 20th June 1999 was made in breach of his order of 18th June 1999, he would have had some reservations whether this was truly a case for summary judgment under CPR 24. At p.14 of the judgment he said this:
“Once it is conceded that Laddie J's findings of fact are not binding on Miss O'Driscoll, it appears to me to follow that the court ought only to uphold the Master's reasoning if it is indeed satisfied that her prospects of persuading another judge to come to a different conclusion at trial are no better than negligible or fanciful.”
14.	The judge indicated that he did not find that question altogether easy, because he had in mind that, notwithstanding Mr Justice Laddie's findings, it would be for another judge to make up his own mind on the secret trust issue on the evidence that was adduced before him at a trial. But he was persuaded that, in the particular circumstances of this case, there was no real prospect of success at a trial; and he said so at p.15B of the transcript. Accordingly, he indicated that he dismissed the appeal, for the reasons which the Master had given.
15.	Nevertheless, there was a second reason which the judge found conclusive. He pointed out that the order of 18th June had specifically prohibited the disposal of 64 Ivor Court. This was not a case in which it could be said that Mr Perotti was not acting in breach of the order by disposing of an asset in which he had no beneficial interest. He was acting in breach of the order, because the order had specifically prohibited him from disposing of 64 Ivor Court, whether or not he had any beneficial interest in it. At that time, of course, there was no reason to think that he was not the beneficial owner. The judge said this at p.15F:
“By specifically identifying the flat as one which Mr Perotti must not deal with the order made plain beyond doubt that the flat was caught by it regardless of whether either Miss O'Driscoll or anyone else might have, or might claim to have, some beneficial interest in it.”
16.	He went on, at p.17B-E, to explain the consequences of a breach of an order made in those specific terms. He said this:
“In these circumstances the assent was therefore a disposition made by Mr Perotti in contempt of court and was in consequence an illegal disposition. Even assuming, as I am for present purposes prepared to, that Miss O'Driscoll (1) was personally innocent of any knowledge that the assent of 20th June 1999 involved a contempt of court and, (2) was in fact at all material times beneficially entitled to the flat under a secret trust, nevertheless it follows, in my view, that Mr Perotti's action in executing the assent was an illegal disposition by him and that in consequence she took the benefit of that assent under an illegal transaction.”
17.	After referring to the decision of Sir Robert Megarry V-C in Clarke v Chadburn [1985] 1 WLR 78, the judge reached the conclusion that, even if he had not been prepared to uphold the Master's order on the grounds that there was no real prospect of success on the secret trust order issue, he would anyway have concluded that the court can, and should, uphold the full force of the order of 18th June 1999 by setting aside the transaction of 20th June 1999 and ensuring that the flat was re-vested in Mr Perotti's name.
18.	The position, therefore, is that the judge decided, first, that whether or not Miss O'Driscoll could have established any beneficial interest in 64 Ivor Court, it would nevertheless be appropriate to order a re-transfer of the registered title, because she could not take advantage of an illegal transaction effected by her father; that is to say, she could not take advantage of a transfer made in deliberate breach of the court's order of 18th June 1999. Secondly, the judge found that, on the facts of this particular case, Miss O'Driscoll had no real prospect of establishing a beneficial interest in 64 Ivor Court. In relation to that second point it is relevant to keep in mind that Miss O'Driscoll has, inevitably, no independent knowledge of the circumstances which are said to give rise to the secret trust - she was only ten years old, or thereabouts, at the time that her uncle Peppino died - so she can only rely on the direct evidence of her father and perhaps, also, of her paternal grandmother, Mrs Ida Perotti. That evidence was not believed by Mr Justice Laddie, after cross‑examination of both Mr Angelo Perotti and Mrs Ida Perotti; and Mr Justice Laddie's judgment on that point was upheld, after a review of the evidence and consideration of the transcript, by this Court in December 2001.
19.	In those circumstances it is impossible to say, in my view, that this is an appeal which would raise any important point of principle or practice, or that there is any other compelling reason why the Court of Appeal should hear it as a second appeal. For those reasons, I take the view that this application must fail. 
20.	I should add that Miss O'Driscoll has appeared before this Court in person to make her application. At her request we have heard her father, Mr Angelo Perotti, on her behalf and as a matter of indulgence. He has said to us all that she wishes to be said on her behalf. But, for my part, I would not wish that indulgence to be taken as any indication that I accept that Mr Perotti had any right to address this court in a transaction in which his interests plainly conflict with those of his daughter. 
21.	LORD JUSTICE WARD: I agree. But I am going to add a few words of my own simply to try to explain to Ellen and her mother why I regard this application as utterly hopeless.
22.	As I said at the beginning, this is a second appeal and therefore Ellen has to show that there is some important point of principle or practice arising in the appeal, or that there is some other compelling reason why the Court of Appeal should be troubled for the third time. The present rule is that you are allowed one appeal, and it is very hard to get beyond that. 
23.	So is there any important point of principle or practice? If the application is directed to the refusal by the judge to adjourn the matter, no point of principle or practice arises whatever. Judges up and down the country refuse adjournments day in, day out, and there is nothing new about refusing an adjournment in this case. On the contrary, for the reasons which the judge gave, and which my Lord has already read out at pages 11 and 12 of the judgment, there was every reason for going on with the appeal, despite the difficulties Mr Ilyas found himself in. The judge had a discretion to exercise. It cannot come close to being a wrongful exercise of discretion with which we could interfere. So that ground is utterly hopeless. 
24.	Looking, then, to the substance of the judgment, one again asks oneself the question, is there some point of practice or principle involved in this? The judge decided it on two bases. First, he looked at the facts and said, “I am not bound by what Mr Justice Laddie did; I look at it independently. But really, for poor Ellen to succeed, in the face of all that went on before Mr Justice Laddie, her task is practically hopeless. Her prospects are negligible.” He therefore decided that the facts were so weighed against Ellen that he was driven to say, “She has no reasonable prospect of success.” That is an exercise of discretion. Again, judges do it all day long. I cannot say that the judge was wrong. On the contrary, now that the Court of Appeal has upheld Mr Justice Laddie, it is looking more and more correct as an overall view of the facts of this case. 
25.	Then the judge's second reason seems to me to be the killer punch and the real knock-out blow. It may be a sad reason, so far as Ellen is concerned, but the sorry fact is that the father in this case knew perfectly well that this flat was specifically covered by the freezing order. No matter who held legal interest or beneficial interest, this flat was named in the order and he was told, “You must not deal with it.” But he did so; and, because this property was actually specified in the order, the execution of the assent was a deliberate breach of the order as it had been drawn. The disposition was therefore illegal and, as a consequence, the transaction is void. So there is no possible ground for attacking that.
26.	Is there any other compelling reason why the appeal should be allowed? Sadly, no. The compelling reason that excites my sympathy is that poor Ellen is swept up into litigation she did not invite and probably did not know much about; that she is utterly baffled and bewildered by the whole process and wonders what on earth, on a Monday morning, she is doing sitting in the Court of appeal, when she could be getting on with her life. That is a compelling reason for me to be sorry for her and for her mother, but, sadly, it is not a compelling reason why this frankly hopeless appeal should be entertained by this court any further.
27.	In agreement with my Lord, this application must be dismissed. 
Order: application for permission to appeal dismissed; application for a transcript of this judgment at public expense refused.