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England and Wales Family Court Decisions (High Court Judges) |
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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (High Court Judges) >> Simon v Simon & Level (Joinder) (Rev1) [2022] EWFC 29 (21 March 2022) URL: http://www.bailii.org/ew/cases/EWFC/HCJ/2022/29.html Cite as: [2022] EWFC 29 |
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IN THE ROYAL COURTS OF JUSTICE
Strand, London, WC2A 2LL |
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B e f o r e :
(SITTING AS A DEPUTY HIGH COURT JUDGE)
____________________
LAUREN BELINDA SIMON | Applicant | |
and | ||
PAUL MARK SIMON | Respondent | |
And | ||
INTEGRO FUNDING LIMITED ('LEVEL') | Intervenor |
____________________
Jonathan Southgate QC and Simon Calhaem (instructed by BloomBudd LLP) for the Intervenor
Hearing dates: 17th, 18th & 21st March 2022
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Crown Copyright ©
This judgment was handed down REMOTELY in private on 21 MARCH 2022. It consists of 48 paragraphs and has been signed and dated by the judge.
The judge hereby gives leave for it to be reported.
MR CUSWORTH QC:
'The wife in the above numbered proceedings is a party to a loan agreement in relation to a substantial sum with this company ('Level' the trading name of Integro Funding Limited). We have been made aware that she might be attempting to enter into an agreement with the husband whereby she surrenders the entirety of her lump sum which would prevent her from being able to discharge her obligations under the loan agreement. We therefore urgently request that we are joined to the proceedings under case number LV16D01012 prior to the approval of any order. A formal application to join will follow but in the meantime, we urgently request that no order is sealed in relation to this case and that we are heard in relation to any order which is presented.'
My client is deeply concerned that your client and Ms Simon entered into a collusive agreement (seeking to exclude our client's interests) against which you might seek court approval without further notification to them. You have now been prevented from taking that step...
I am deeply concerned that notwithstanding the order made joining my client as party to proceedings you refuse to confirm the status of the proceedings, whether you have had any communications with the court since the private FDR or provide a draft order which I presume to be in existence. Please do so by return.
a. That the husband and wife cannot be compelled to litigate their financial remedy claim if they don't want to;
b. That Level retain their civil rights and remedies against the wife, and that those are unaffected by the sealing of the order;
c. That there is no valid reason given why the order should not now be resealed;
d. That no public policy considerations demand Level's intervention; and
e. The case does not fit within FPR Rule 9.26B.
The court may direct that a person or body be added as a party to proceedings for a financial remedy if –
(a) It is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or
(b) There is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue.
f. Mr Southgate QC for Level describes their position as having an 'assignment of the wife's recovery' in these proceedings. That was the intended route by which the debt would be recovered – is that a sufficient connection to permit Level to be joined to argue their case?
g. The loan was made at a time when the quantum of the wife's award was very much a 'matter in dispute' between the then parties – does it matter that the husband and the wife have since purported to agree?
h. Given Level's intervention and position, is it now 'desirable' to resolve the issue between them and the wife within these proceedings?
'The provisions of CPR r 19.2(2) ought, however, to be given a wide interpretation. The words 'in dispute' ought to be read as 'in issue'. That is consistent with authority that the court's powers to add a party under CPR r19.2 can exist after judgment even though, on a literal approach, there is no longer a matter in dispute: Dunwoody Sports Marketing v Prescott (Practice Note) [2007] 1 WLR 2343.
Giving a similar interpretation to FPR Rule 9.26B (1), the husband's case here would seem equally literal.
70. In the present case, I accept Mr Southgate QC's submission that Q does not stand in the same position as a third-party unsecured creditor, albeit one connected tangentially with the litigation giving rise to the privilege which is under attack. During the course of legal argument, Mr Todd QC invited me to consider Q's position as analogous to that of any external commercial lender or provider of credit. What, he asked, would be the position if the wife in this case had used a Barclaycard to discharge her legal costs? Surely it would not be open to that creditor to intervene in financial remedy proceedings to secure some form of priority in relation to its debt?
71. It seems to me that different policy considerations are engaged in the case, as here, of a professional corporate lender which offers bespoke services designed for the specific purposes of enabling a litigant to participate fully and effectively in litigation flowing from matrimonial breakdown. The role of such lenders has been considered by the courts in several authorities to date.
72. Outside the field of matrimonial law, the principle of access to litigation funding has been recognised for many years. In Gulf Azov Shipping Co Ltd v Idisi [2004] EWCA Civ 292, Lord Phillips MR said this:-
"54. …. Public policy now recognises that it is desirable, in order to facilitate access to justice, that third parties should provide assistance designed to ensure that those who are involved in litigation have the benefit of legal representation."
73. In the field of matrimonial law and family proceedings arising out of divorce and family breakdown, the courts are frequently confronted with situations where one party has direct access to funds, including cash and other liquid resources which will be required to meet often very significant legal costs, in circumstances where the other party's access to such funds may be limited, if they exist at all. In these circumstances the disadvantaged party, usually the wife, cannot seek assistance from conventional commercial lenders because there are usually restrictions on the extent to which she can provide sufficient security for the lending. In its quest to ensure equality of arms and a level playing field, the court has always been astute to ensure that both parties should have access to resources from which they can meet legal fees. Sometimes there will be agreement that one party should provide the other with a litigation fund at the outset. This avoids the additional costs of applications to court and/or the often significantly higher rates of interest charged by specialist litigation funders. Once the litigation is progressing, the court can control future expenditure on costs in a number of different ways but the principle is enshrined that fairness and justice require that both parties have access to litigation funding.
74. In the field of financial remedy litigation, judges in the Family Division have often recognised and endorsed the valuable function which litigation funders such as Q can provide in appropriate circumstances: see, for example, Moor J in Young v Young [2014] 2 FLR 789, Francis J in Weisz v Weisz [2020] 2 FLR 95, and Gwynneth Knowles J in Akhmedova v Akhmedov (above). Mr Southgate QC reminds me that a similar view was expressed by Holman J when this matter came before him on 19 March this year. The availability of this form of finance is now recognised specifically by the court in the context of the provisions of s.22ZA of the 1973 Act. For the purposes of any application made to a court for a legal services provision order against the other party, a litigant generally has to show that he or she has been refused lending by "two commercial lenders of repute": see Rubin v Rubin [2014] 2 FLR 1018 at para 13(vi) per Mostyn J. In this context Mr Southgate QC makes the obvious point that litigation lending and its interrelationship with s.22ZA would break down if applicants and lenders perceived a real risk that a court could, or would, sanction an outcome which left an applicant without any resources to repay the loan at the end of the litigation.
'In considering whether or not it is desirable to add a new party pursuant to CPR r 19.2(2) two lodestars are the policy objective of enabling parties to be heard if their rights may be affected by a decision in the case and the overriding objective in CPR Pt 1'.
It does not matter that it cannot yet be clear that an order will in fact be made which enables Level to enforce the debt owed by the wife, or any part of it. As Edward Murray, sitting as a Deputy Judge of the Chancery Division, said in Abdelmamoud v The Egyptian Association [2015] EWHC 1013:
[59] Since the "directly affected" test is for the purpose of establishing locus standi, it is sufficient that the relevant judgment or order would prima facie be capable of materially and adversely affecting a legal interest. It is not necessary to show that it would, in fact, do so, for that would be the subject of the application itself.'
'iv) The applicant for joinder must show either:
a) that there is an existing matter in dispute which requires for its resolution the joinder of the new party, or
b) that there is a matter in dispute between a party and the proposed new party which is connected to the main matters in dispute between the parties and that it is desirable to resolve all the issues together.
v) Under the first limb it must be clearly shown that an existing matter in dispute between the parties cannot be effectually and validly resolved without the joinder of the proposed new party.
vi) Under the second limb it must be shown that there is a separate dispute between a party and the proposed new party and that it is desirable to hear the matters together. The question of whether it is desirable to hear the matters together extends to the commonality of evidence as well as the saving of costs.'
Nicholas Cusworth QC
21 March 2022