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You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> Mainwaring v Bailey [2024] EWHC 2296 (Fam) (05 September 2024) URL: http://www.bailii.org/ew/cases/EWHC/Fam/2024/2296.html Cite as: [2024] EWHC 2296 (Fam) |
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FAMILY DIVISION
ON APPEAL FROM THE FAMILY COURT AT CARDIFF
HHJ Furness KC
NP20D04014
Strand, London, WC2A 2LL |
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B e f o r e :
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Philip John Mainwaring |
Appellant |
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- and - |
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Susan Claire Bailey |
Respondent |
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Roger Thomas (instructed by Talbots Law) for the Respondent
Hearing date: 28 August 2024
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Crown Copyright ©
Ms Justice Henke :
Introduction
Preliminary Applications and This Hearing
My Decision
The Law
(a) there is a real (realistic as opposed to fanciful) prospect of success; or
(b) there is some other compelling reason to hear the appeal.
"The exigencies of daily court room life are such that reasons for judgment will always be capable of having been better expressed. This is particularly true of an unreserved judgment such as the Judge gave in this case. These reasons should be read on the assumption that, unless he has demonstrated the contrary, the Judge knew how he should perform his functions and which matters he should take into account. This is particularly true when the matters in question are so well known as those specified in section 25(2) [of the Matrimonial Causes Act 1973]. An appellate court should resist the temptation to subvert the principle that they should not substitute their own discretion for that of the Judge by a narrow textual analysis which enables them to claim that he misdirected himself."
"114. Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them. The best known of these cases are: Biogen Inc v Medeva plc [1977] RPC1; Piglowska v Piglowski [1999] 1 WLR 1360; Datec Electronics Holdings Ltd v United Parcels Service Ltd [2007] UKHL 23, [2007] 1 WLR 1325; Re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33, [2013] 1 WLR 1911, and most recently and comprehensively, McGraddie v McGraddie [2013] UKSC 58, [2013] 1 WLR 2477. These are all decisions either of the House of Lords or of the Supreme Court. The reasons for this approach are many. They include:
i) The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed.
ii) The trial is not a dress rehearsal. It is the first and last night of the show.
iii) Duplication of the trial judge's role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case.
iv) In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.
v) The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).
vi) Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.
115. It is also important to have in mind the role of a judgment given after trial. The primary function of a first instance judge is to find facts and identify the crucial legal points and to advance reasons for deciding them in a particular way. He should give his reasons in sufficient detail to show the parties and, if need be, the Court of Appeal the principles on which he has acted and the reasons that have led him to his decision. They need not be elaborate. There is no duty on a judge, in giving his reasons, to deal with every argument presented by counsel in support of his case. His function is to reach conclusions and give reasons to support his view, not to spell out every matter as if summing up to a jury. Nor need he deal at any length with matters that are not disputed. It is sufficient if what he says shows the basis on which he has acted. These are not controversial observations: see Customs and Excise Commissioners v A [2002] EWCA Civ 1039, [2003] Fam 55; Bekoe v Broomes [2005] UKPC 39; Argos Ltd v Office of Fair Trading [2006] EWCA Civ 1318; [2006] UKCLR 1135."
"2. The appeal is therefore an appeal on a pure question of fact. The approach of an appeal court to that kind of appeal is a well-trodden path. It is unnecessary to refer in detail to the many cases that have discussed it; but the following principles are well-settled:
i) An appeal court should not interfere with the trial judge's conclusions on primary facts unless it is satisfied that he was plainly wrong.
ii) The adverb "plainly" does not refer to the degree of confidence felt by the appeal court that it would not have reached the same conclusion as the trial judge. It does not matter, with whatever degree of certainty, that the appeal court considers that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached.
iii) An appeal court is bound, unless there is compelling reason to the contrary, to assume that the trial judge has taken the whole of the evidence into his consideration. The mere fact that a judge does not mention a specific piece of evidence does not mean that he overlooked it.
iv) The validity of the findings of fact made by a trial judge is not aptly tested by considering whether the judgment presents a balanced account of the evidence. The trial judge must of course consider all the material evidence (although it need not all be discussed in his judgment). The weight which he gives to it is however pre-eminently a matter for him.
v) An appeal court can therefore set aside a judgment on the basis that the judge failed to give the evidence a balanced consideration only if the judge's conclusion was rationally insupportable.
vi) Reasons for judgment will always be capable of having been better expressed. An appeal court should not subject a judgment to narrow textual analysis. Nor should it be picked over or construed as though it was a piece of legislation or a contract."
"(2) We repeat what Maurice Kay LJ said in para 15 of his judgment in the Grace case [2014]1 WLR 3432, as quoted above: "no judge will certify an application as [TWM] unless he is confident after careful consideration that the case truly is bound to fail. He or she will no doubt have in mind the seriousness of the issue and the consequences of his decision in the particular case."
"The test for the grant of permission to appeal on an application to the Court of Appeal or to the High Court or Family Court under the first limb of the relevant sub-rule is that the appeal would have a real prospect of success". The case of Tanfern v Cameron MacDonald [2000] 1 WLR 1311 confirms that "the prospect of success must be realistic rather than fanciful."
(a) The evidence could not have been obtained with reasonable diligence at trial;
(b) The evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and
(c) The evidence must be such as would presumably be believed, or in other words, it must be apparently credible though it need not be incontrovertible.
These propositions do not apply to cases where the evidence to be admitted relates to matters which have occurred after trial or where there was no trial on the facts.
The Appellant's Case
Ground 1: Perceived Bias. The Learned Judge had given the Appellant, who was at the time of the first instance hearing a litigant in person, a perception of bias. Accordingly, the Appellant had asked HHJ Furness KC to recuse himself. HHJ Furness KC had refused that application.
Ground 2: Misunderstanding of the civil judgment.
Ground 3: Unreasonable outcome. The outcome arrived at by the Learned Judge was one that no reasonable tribunal would have reached.
(a) Perceived Bias. Examples leading to a perception of bias are said to include:
i. Statements made at the PTR by HHJ Furness KC that the Appellant would be paying interest on the property in any event.
ii. Seeking to go behind the civil judgment in favour of the Respondent without due explanation.
iii. Repeatedly blaming the Appellant for his desire to retain the boat (one of the marital assets) and seemingly punishing the Appellant for doing so in the outcome.
iv. Criticising the Appellant for failing to provide evidence of his mortgage raising capacity but not making the same requirement of the Respondent and gave her enough capital to buy a home outright, and
v. Failed to give weight to the Respondent's lifestyle and relationship.
(b) Misunderstood/misused the civil judgment. It is said that the learned Judge went beyond the bounds of his discretion when he laid the blame of the civil case solely at the door of the Appellant. Further, it is argued that he ignored what was termed a "clear finding" that the Appellant was jointly liable for the debt on the principal sum and that the interest of £34,917.19 was the Respondent's sole responsibility. In addition, the Appellant relied upon paragraph 111 of the judgment of HHJ Furness KC wherein he stated:
"The discrepancy in their end position is largely due to the costs of the civil claim which the husband had incurred in seeking and failing to establish that the loan from SC was a gift and was to [the Respondent] alone even though he accepted that the monies were used for joint benefit."
It is said that that paragraph demonstrates that the learned Judge took an irrelevant matter into account.
(c) Unreasonable outcome. It is argued that the Appellant, at almost 60 years of age and in poor health, is unable to re-house himself whereas the Respondent, who is 53 years of age, is said to have 15 years of working life ahead of her. It is submitted on behalf of the Appellant that the Respondent has been over-compensated. There was, it is said, no reason in this case to depart from equality. The Appellant was awarded a net sum of about £155,000 and the Respondent £210,000. From the award, the Respondent could purchase a home for herself outright; the Appellant could not. The learned Judge was wrong in using the agreed valuation of £88,000 for the boat and ought to have taken judicial notice of depreciation given that agreement had been reached at an FDR two years previously. Had the pot been properly calculated and divided between the two parties equally, both would have been able to rehouse themselves.
The Judgment
"No agreement was reached. The boat 'Whatever' was valued for final hearing at £88,000 (Euros 100,000). [The Respondent] agreed not to deal with the net proceeds of sale of properties without the express written consent of the [Appellant], he agreed to pay all outgoings including the mortgages on the property at Shamrock House and 14 Amyas Close."
"The hearing on 11 January had taken more than twice the time estimate of the parties because I allowed the [Appellant] to address me on almost every line of the proposed order and in a number of respects I made orders which were contended for by the [Appellant] and opposed on behalf of the [Respondent]."
"27. I must bear in mind that the overall intention of the Court should be to achieve fairness between the parties. I bear in mind too that "in general it can be assumed that the marital partnership does not stay alive for the purpose of sharing future resources unless this is justified by need or compensation. The ultimate objective is to give each party an equal start on the road to independent living" per Baroness Hale at paragraph 144 of Miller v Miller, McFarlane v McFarlane [2006] 1 FLR 1186.
28. There are three main distributive principles: sharing, needs and compensation, shaped by the overarching principle of fairness. Each party is entitled to an equal share of the assets of the partnership unless there is good reason to the contrary- this is the yardstick of equality which the courts have stressed must not be elevated to a rule. The rationale of White is 'fairness' not 'equality'.
29. The burden of proof in civil or family cases lies upon the party making the assertion and that person must prove the assertion on the simple balance of probabilities."
I note that on appeal there is no criticism of the law the learned judge set out in his judgment.
"51. The sale proceeds were to be applied to pay the costs of sale and to redeem the mortgage with the proceeds thereafter to be divided equally with the judgment sum to be paid from the wife's share.
52. I indicate straightaway that although that sets out the distribution according to the civil claim it does not bind the matrimonial court as any money received by either party will be within the matrimonial pot and must be considered as being available for distribution as deemed appropriate by this Court. The key findings are that the loan was made to both parties and used for their joint benefit. There is no reason why the liability arising therefrom should be seen as anything other than joint.
53. The husband argues that the judgment only dealt with the original loan and not the other amounts which contribute to the overall debt. He disputed that the additional £40,000 + should be his responsibility. In his evidence it was clear that he believed the civil court has determined that he is not responsible for any of these additional sums. I disagree that any such positive finding was made, the parameters of what the judge was asked to decide are set out in paragraph 12 of the judgment – he was asked to determine whether the E160,000 was a loan or a gift and, if a loan, whether it was to W alone or joint. He found it was a joint loan. He was not asked to determine responsibility for the other sums as W had agreed that judgment should be entered for those sums anyway. This is exactly in accord with what the husband's own solicitor indicated in his letter of the 25th January 2024 which H attached to his statement about these matters.
54. H's solicitor also underlines that W had agreed the interest even though the Recorder made a finding that interest had not been considered at the time the loan was made. Mr Thomas accepts that but says that means that interest would be chargeable from the due date of repayment which was the 5th July 2018 and has been calculated on that basis.
55. In my judgment in respect of the interest and the administrative charge there is a very clear argument that these arise from the original joint loan and must be seen as joint. The parties have had the benefit of the loan, if they had borrowed money from a Bank they would have had to pay interest, now the Court has determined based on the admission of the wife, that interest is payable on this loan. It was a joint loan and the interest is therefore a joint liability too. Both parties have benefitted from the loan in being able to make investments and the interest agreed by the wife was at a commercially appropriate rate for a private loan (bank rate plus 4%), particularly as it only began to run from a date in 2018 some 2 years after the original loan. I have no hesitation in coming to that determination.
56. The same applies to the administrative charge. SC sought to protect his interest by securing a charge. There were costs in doing so. Given it was H who was alleging that it was a gift rather than a loan, he can hardly complain about the necessity of doing that, the cost of SC doing so or indeed the need for that to be seen as a joint liability.
57. The third additional sum is an additional loan of £5,200. This was not considered within the judgment in the civil claim and therefore needs to be determined within these proceedings but perhaps with some acknowledgment that it is a loan from someone who has already loaned monies to the parties jointly.
58. W says that this money was used to carry out essential repairs on a property at 84, Maple Street under threat of prosecution. She said so in her Form E. There are documents in the bundle that confirm the threat of prosecution and the need to carry out work estimated at £5,600 + VAT [D251-255]. The husband says: "My position on the loan of £5,200.00, however, remains the same as my position on any essential costs spent on our assets. That is, that those costs are a cost from the estate and not solely for one person. Such costs include mortgage payments, service charges, council tax, berthing costs and essential works. In this case of the £5,200, I am happy for the costs outlined for this money to form part of our financial resolution. As this loan has always formed part of the civil trial, it is only now that it is coming to the forefront of negotiations."
59. Thus he agrees that this loan was used for an essential purpose and should be considered as a joint liability. He agreed this in oral evidence too.
60. For the reasons stated I am satisfied that all the sums which constitute the judgment in the civil case should be seen as joint liabilities and treated accordingly when considering any distribution between the husband and wife.
61. As will appear later in the judgment this argument is somewhat illusory anyway as if I determined that the £40,000 + of additional liability, or the interest in particular, it would alter the distribution so that 'needs' would come into play in any event."
"112. Thus as it happens the application of the sharing principle provides a figure of £209,695 and applying the needs principle for the [Respondent] reaches a figure of £210,270.
113. On either basis the [Appellant] will end up with assets of between £154,00 and £155,000 which will not enable him to purchase a property of the same value as the [Respondent] unless he can raise a small mortgage of about £27,000. He says that is impossible but there is no evidence from a broker about that (despite a court order) […] I am not convinced it would not be impossible for him to raise such a sum largely because I am not convinced that I have a full picture of his income. Anyway to some extent he is the author of his own misfortune as the decision to retain the boat has had a significant financial consequence which could have been avoided. He is determined to keep the boat and thus would not be able to be rehoused anyway."
My Reasons
(a) The Euros 160,000 was advanced by the Claimant as a loan; and that
(b) Whilst this was initially sent to the bank account of the First Defendant [the Respondent to this appeal] , this was clearly envisaged and understood to be a loan to both the First and Second Defendant [the Appellant], initially to assist with the planned purchase of a Portuguese property but then was used by them subsequently for their joint benefit, indeed, part of it being used to acquire another property in the UK.
"As to the terms of the loan, I am not satisfied on the evidence that there was agreement reached other than the broad one that the Claimant would provide a loan to his friends on the understanding that it would be paid back in a reasonable timescale. I do not find on the balance of probabilities test there was any specific agreement on the precise date of repayment or any other terms including that of any applicable interests."
"Therefore, in summary: I find that a loan was provided as opposed to a gift; and that this loan was both to the First and Second Defendants as opposed to just the First Defendant."
(a) The Respondent was to repay the Claimant £178,057.19 by 4pm on 10 August 2023.
(b) The claim for an order for sale of the property (Shamrock House) was to be stayed generally.
(c) There shall be liberty to apply for all parties in relation to the preceding paragraph.
(d) The sale proceeds of the property shall be applied as follows:
(e) To pay the costs and expenses of effecting the sale of the property.
i. To redeem the first charge to the bank.
ii. The sale proceeds after the above deductions shall be divided equally between the Appellant and the Respondent.
(f) From the Respondent's share any sums due to the Claimant under the charge shall be paid and any remainder paid to her.
(g) Provision was made for costs against the Appellant and the Respondent.
"The discrepancy in their end position is largely due to the costs of the civil claim which the husband had incurred in seeking and failing to establish that the loan from SC was a gift and was to [the Respondent] alone even though he accepted that the monies were used for a joint purpose."
That is not HHJ Furness KC punishing the Appellant. In that paragraph he is simply setting out the net effect of his order and how the disparity arises. Paragraph 111 has to be read in the context of the judgment as a whole and paragraph 106 of the judgment in particular.