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Law

The Occasionally Boring World of Equitable Accounting

Compensation under TLATA, post Rowland v Blades [2021] EWHC 426(Ch)

Like all good things in life, law can sometimes be just a little boring. Even the more interesting areas of law have their dull sides. Criminal lawyers have shoplifters; matrimonial lawyers have chattels disputes, and commercial lawyers have delightful second homes in Provence.

The most boring aspect of TLATA, which I appreciate is quite a statement in itself, relates to something which is so uninspiring lawyers can’t agree on what to call it: ‘equitable accounting’, ‘occupation rent’, or ‘compensation’. For the purposes of this opinion, I’m going with the word compensation, to cover the court’s power to order payments separate to a declaration of beneficial ownership.

These claims have all the hallmarks of an evening spent in the company of an especially stultifying bookkeeper. They involve a lot of detail. They often don’t involve very much money. The law is opaque, and they have a tendency of going on and on. In some cases, where the parties’ beneficial shares are fixed at the time of purchase, the only thing left to argue about is compensation, which has the effect of thickening the (witch’s) brew. That isn’t to say claims for compensation are not important or valid. But they often involve a huge amount of detail in the pursuit of a relatively minor issue.

In the circumstances, this blog is going to be short: If you can’t make it interesting, at least make it short, as Dorothy Parker might have said. For a recent case which considered the law in relation to compensation, which isn’t in any way boring, see Rowland v Blades [2021] EWHC 426 (Ch)

Here are six short points about compensation:

  1. This is a discretionary remedy

A co-owner who has been unreasonably excluded from property can seek compensation (TLATA s.14(2), s.13(6)) but there is no right to any award. The court exercises a discretion which will be fact sensitive: see Wilcox v Tait [2006] EWCA Civ 1867 per Jonathan Parker LJ at [64]:

“…it is in any event risky, in my judgment, to attempt to formulate general principles to be applied in carrying out an equitable accounting exercise in any given case, if for no other reason than that, as the judge put it in the instant case, equitable accounting, is ‘fact sensitive’. What can at least be said is that an exercise of equitable accounting is not to be confused with an enquiry as to the extent of the parties’ respective beneficial interests in the property in question. Questions of equitable accounting only arise once the extent of the parties’ beneficial interests has been determined, since the requirement to account (where it exists) is a reflection of and derives from those beneficial interests.”

2. As between cohabitants, the law is contained in the statute (TLATA)

Any issue of compensation that might arise between cohabitees should be resolved by reference to ss.12 to 15 of TLATA, which include the right of a trustee of land to occupy the land if that was the the trusts’ purpose (s.12(1)), the power of a trustee to exclude that entitlement, which must be exercised reasonably (s.13(1), (2)), and the power of a trustee to impose obligations to include compensation to a person whose right has been excluded (s.13(6)). Finally there is the checklist of factors at s.15 which must be taken into account where the court exercises a power under s.14. In Stack v Dowden [2007] UKHL 17 at [94] Baroness Hale explained that this supplanted the earlier case law on equitable accounting:

“These statutory powers replaced the old doctrines of equitable accounting under which a beneficiary who remained in occupation might be required to pay an occupation rent to a beneficiary who was excluded from the property. The criteria laid down in the statute should be applied, rather than in the cases decided under the old law, although the results may often be the same”

In Murphy v Gooch [2007] EWCA Civ 603, Lightman J confirmed at [14] that:

“The wider ambit of relevant considerations means that the task of the court must now be, not merely to do justice between the parties, but to do justice between the parties with due regard to the relevant statutory considerations”.

3. In cases of bankruptcy cases, apply earlier case law

The provisions of ss. 12-15 apply between trustees of land. They do not apply in a claim brought, eg, by a trustee in bankruptcy, where the court may apply earlier corpus of case law in relation to the court’s equitable jurisdiction: re Basham (A Bankrupt) [2008] EWHC 1505 (Ch). In Rowland v Blades the court concluded that Basham was ‘very much directed to bankruptcy cases’

4. Compensation can be ordered without proof of ouster

There is no need for actual ouster (i.e. physical exclusion). Compensation can be awarded hwere there was constructive exclusion from a property: see Murphy v Gooch [2007] EWCA Civ 603 at [18], which reflects the position under the earlier authorities on equitable accounting

‘…it was open to the judge and it is open to this court to order credit for an occupation rent if it was or is just to do so, whether or not there was proof of any ouster.’

5. The normal inference is compensation post-dates separation

Unless there is evidence that the parties intended to account to each other for, e.g. costs of improvements during the relationship, the court’s normal inference (which is of course rebuttable) is that issues of compensation arise after cohabitation comes to an end: see Wilcox v Tait

“[65] That said, I agree with His Honour Judge Behrens in Clarke v Harlowe that in the ordinary cohabitation case it is open to the court to infer from the fact of cohabitation that during the period of cohabitation it was the common intention of the parties that neither should thereafter have to account to the other in respect of expenditure incurred by the other on the property during that period for their joint benefit. Whether the court draws that inference in the given case will, of course, depend on the facts of that case.” Jonathan Parker LJ, Wilcox v Tait, at [65], [66]

6. Where the exercise is disproportionate, the court may refuse to deal with compensation (eg. See Laskar v Laskar [2008] EWCA Civ 347)

Rowland v Blades [2021]

As a worked example, in Rowland v Blades, the court accepted that there should be an occupation rent holiday home over nine years, presented with figures £83 per day or £650 per day, £288,800 or £36,000: concluded around £60,000. The conclusion of Deputy Master Hansen is at [156]:

I remind myself that having found that Ms Blades should pay an occupation rent to Dr Rowland, my task in ascertaining the amount of such rent is to do justice between the parties with due regard to the relevant statutory considerations and having regard to my findings of fact above. It seems to me that the fairest way to arrive at the appropriate figure in the particular circumstances of this case, dealing as we are with a holiday home (albeit a very grand one) and an exclusion at weekends (including a Monday or a Friday) only, and having regard to the principles on which mesne profits are calculated by way of analogy, is to ascertain a daily rate for such weekend usage that reflects the open market value of such usage.

Alexander Chandler

18 March 2021

Categories
Law

TLATA: Review of a Decade

Ten Years On From Jones v Kernott

It may come as a surprise to discover that it is now nearly ten years since the Supreme Court handed down its decision in Jones v Kernott [2011] UKSC 53, a case which in many ways epitomises this area of law. It related to a modest bungalow in Thundersley, Essex and involved the sort of questions only Chancery lawyers could devise: ‘Can a constructive trust be ambulatory?’, ‘Should the court impute to the parties a common intention which was neither expressed nor could be implied?’

And, like all good TLATA cases, no one in Jones could agree on the law. The Supreme Court reversed the Court of Appeal ([2010] EWCA Civ 578), which by a 2:1 majority allowed an appeal from the deputy High Court judge, Nicholas Strauss QC ([2009] EWHC 1714(Ch), who had dismissed an appeal from the trial judge, HHJ Dedman in Southend on Sea.

The conclusion of this monumental litigation was that the Supreme Court restored the judgment of first instance (i.e. that the parties held the property in 90% / 10% shares), but were unable otherwise to reach agreement on the legal principles. Four Justices gave their own judgments and the question of whether a common intention can be imputed was narrowly allowed (3:2).

In reading this, family lawyers may already be breaking out in hives, or recalling the elegant description of this area of law as a ‘witch’s brew’, by Carnwath LJ (as he then was) in Court of Appeal in Stack v Dowden [2005] EWCA Civ 857:

But what has happened in the intervening decade? What cases should occasional travellers in this area of law, be aware of since the Supreme Court decisions in Stack v Dowden [2007] UKHL 17and Jones v Kernott? The following is offered as a swift canter through the last decade, along the lines of ‘essential TLATA for the family lawyer’

Express trusts

Pankhania v Chandegra [2012] EWCA Civ 1438, is an important CA decision which confirms that the law in relation to express trusts has not changed since Goodman v Gallant [1986] Fam 106, i.e. that an express declaration in signed writing, e.g. contained on a Transfer Form, conclusively declared co-owner’s beneficial shares, save in cases of fraud or mistake etc. There is no room to run a constructive trust analysis. Per Patten LJ:

“[28] … reliance on Stack v. Dowden and Jones v. Kernott for inferring or imputing a different trust in this and other similar cases which have recently been before this court is misplaced where there is an express declaration of trust of the beneficial title and no valid legal grounds for going behind it.”

Constructive trust

Curran v Collins [2015] EWCA Civ 404: the CA put to bed a similar misreading of Stack v Dowden, to the effect that detrimental reliance remained an essential part of any constructive trust analysis (see Lewison LJ at [78])

In Graham-York v York [2015] EWCA Civ 72 the CA provided guidance on the quantification of share in a sole ownership case, i.e. (1) there was no presumed starting point of equality; (2) the judicial evaluation of a fair share involved a discretion and there was no right answer; (3) the court was not concerned with some form of ‘redistributive justice’; (4) a ‘fair share’ is decided only by considering the parties’ dealings in relation to the property

Barnes v Phillips [2015] EWCA Civ 1056: The court may only consider imputation (where it arises) at the stage of quantifying interests; not the primary stage of establishing whether a party has an interest or whether there has been a change of intention

Resulting Trust

Marr v Collie [2017] UKPC 17, an appeal from Bahamas to the Privy Council, confirmed that where co-owners within the ‘domestic consumer context’ buy a property as an investment, ‘it did not follow inexorably’ that the court would apply a resulting trust analysis (cf. Laskar v Laskar [2008] EWCA Civ 347)

Court Powers

Begum v Hafiz [2015] EWCA Civ 801 confirms that court’s powers under s.14 of TLATA does not include an order to transfer property (a common misconception with family lawyers), but does extend to a limited discretion to give one beneficiary the first opportunity to purchase the other’s share at market value. In the event that this was not paid within a set period of time, the property would go to the open market. (Also see Kingsley v Kingsley [2020] EWCA Civ 297, which confirms that ‘Begum orders’ are not governed by any valuation threshold

Engaged couples

Dibble v Pfluger [2010] EWCA Civ 1005, which is not an unpublished story by Dickens, casts (not very much) light into a long ignored area of law, i.e. the court’s powers under the Law Reform (Miscellaneous Provisions) Act 1970, which extended s 37 of the Matrimonial Proceedings and Property Act 1970 to cohabitees, whereby the court can take into account any contribution made in money or money’s worth in acquiring a beneficial interest

Procedure

‘Ch FDR’: The Chancery Guide now makes reference to the availability of a ‘Chancery Financial Dispute Resolution’ hearing: see Chancery Guide (2019) at § 18.16

Civil Procedure generally: The shockwaves from the Jackson Reforms and Mitchell v News Group Newspapers [2013] EWCA Civ 1537 have subsided, and the leading case is now Denton, Decadent and Utilise [2014] EWCA Civ 906 (another brilliantly named case) which provides for a three-stage test (per Dyson MR and Vos LJ)

“[24] … A judge should address an application for relief from sanctions in three stages.  The first stage is to identify and assess the seriousness and significance of the “failure to comply with any rule, practice direction or court order” which engages rule 3.9(1).  If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages.  The second stage is to consider why the default occurred.  The third stage is to evaluate “all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]”.

Part 36 offers: be aware of the pro forma template at Form N242

Arbitration: a TLATA claim can be arbitrated under the IFLA scheme, with the presumption (subject to the parties’ agreement) that there will be order as to costs. Following the CA decision in Haley v Haley [2020] EWCA Civ 1369, the court may decline to turn an arbitral award into an order where the decision was wrong, whereas previously it was thought that the routes of challenge were narrow and limited to those under the Arbitration Act (see BC v BG [2019] EWFC 7). Query if this broader route of challenge also applies to TLATA claims arbitrated under IFLA where the court has no supervisory jurisdiction in terms of approving an order.

Magiera v Magiera [2016] EWCA Civ 1292, considered the jurisdiction of English courts, in the context of Article 22 of Brussels I: was the TLATA claim made in personem or in rem, and did the EU State have exclusive jurisdiction?

Watch this space

Bear in mind the imminent change to Civil Procedure Rules with respect to witness statements at the Business and Property Courts. From 6 April 2021, Practice Direction 57AC (Witness Evidence at Trial) in claims before the Business and Property Courts – still in draft – which seek to further control the content of statements, with a certificate of compliance signed by the party’s lawyer.

Finally, at some point it will hopefully be possible to deal with a TLATA claim in the family court. This prospect was recommended as long ago as 2016 by Briggs LJ in his final report on the Structure of Civil Courts. However until primary legislation is brought forward, this remains some way off.

Alexander Chandler

8 March 2021

Categories
Law

Costs Rules in Financial Remedies

This article seeks to answer what should be a simple but important question: Which costs rules apply at any given financial remedy hearing?

Non-family lawyers may be surprised how often this issue arises in practice, and that the answer isn’t always straightforward.

Does the court start with the presumption of each party paying their own costs, or does it exercise a wider discretion? Having determined the application, can the court see any ‘without prejudice as to costs’ (i.e. Calderbank) letters, or are these inadmissible?

The two costs regimes

By way of overview, there are two main costs regimes that apply in financial remedy litigation:

(1) the ‘General Rule‘, i.e. presumption of no order as to costs. This is set out at FPR 28.3, and covers ‘financial remedy proceedings’ as defined at FPR 28.4(b). Under the general rule, each party pays their own costs, save where, applying the checklist of factors at FPR 28.3(7), a party’s conduct warrants that he should pay the other side’s costs. Only open offers are admissible on costs, save at the FDR: FPR 28.3(8);

(2) the ‘Clean Sheet‘, i.e. application of a broader discretion, which arises in situations not covered by either (a) the ‘General Rule’ at FPR 28.3 (i.e. presumption of no order) or (b) the ‘General Rule’ in civil litigation at CPR 44.2(2) (i.e. unsuccessful party pays the successful party’s costs). In these cases, which fall between two stools, the court exercises what might be better described as a ‘soft costs-following the event’ approach (i.e. one party’s success is the first thing written down on the ‘clean sheet’). Calderbank offers are admissible.

So, which costs regime applies when ?

(1) First Appointment: General Rule

– The normal order at a First Appointment will be costs in the application.
– Where a party’s default (eg late service of Form E) has caused the First Appointment to be ineffective/ adjourned, costs may be ordered. In addition to the factors at FPR 28.3(7), bear in mind FPR 9.15(6) which requires the court to have “…particular regard to the extent to which each party has complied with the requirement to send documents with the financial statement and the explanation given…”

(2) Discrete hearing to consider Part 25 application: General Rule (probably)

Where an application to instruct an expert is heard as part of a First Appointment, the General Rule would apply;
– Query which costs rules would apply if the court was only dealing with a discrete Part 25 application?
– No authority directly on point, but (I suggest) probably still general rule.

(3) Maintenance Pending Suit: CLEAN SHEET

FPR 28.3(4)(b)(i) expressly disapplies MPS/ LSPO applications from the ‘general rule’, whereby the ‘clean sheet’ applies;
– Accordingly, Calderbank offers are admissible (hence, invariably do send a Calderbank offer, especially when on the defending side).
– In most LSPO applications, the costs of the application are normally included in the sum sought for legal services, whereby a separate costs order might amount to double-counting.

(4) Interim relief, e.g. freezing order, interim injunctions, declarations etc.: CLEAN SHEET

FPR 28.3(4)(b)(i) disapplies “any other form of interim order for the purposes of rule 9.7(1)(a), (b), (c) and (e)” from the ‘general rule’ FPR 9.7(1)(a), (b) and (c) cover different forms of interim maintenance application.
– FPR 9.7(1)(e) refers to ‘any other form of interim order’, i.e. as set out at FPR 20, notably at 20.2(f) a freezing injunction. The normal order at a without notice freezing application hearing is costs reserved (see template attached to UL v BK [2013] EWHC 1735 (Fam)

(5) Section 37 applications: CLEAN SHEET

– Logically, the same rules apply to a Section 37 application (ie an application to restrain or set aside a reviewable transaction) as would apply to a freezing order; hence, clean sheet. See Solomon v Solomon [2013] EWCA Civ 1095, per Ryder LJ at [19]-[25]

(6) FDR appointments: General Rule

– An ineffective FDR might conclude with a costs order, e.g. where there has been a failure to disclose or directions have not been complied with, e.g. applying FPR 28.3(7)(a);
– The editors of Family Court Practice suggest that it is possible that a costs order could be made after an effective FDR (no authority given) – presumably where one party fails to use his best endeavours to reach agreement (9.17(6)). In practice, this possibility can be discounted in all but the most exceptional cases. Any application for costs would also involve a range of difficult questions: How should a court assess ‘best endeavours’ to settle as relevant conduct? Would this arise where one party plays hard ball, refusing to budge from an initial proposal, or negotiating downwards? Or might it cover a failure to respond to an indication?

(7) Final hearing: General Rule

– With the recent revision to PD 28A § 4.4 in relation to open offers, bear in mind the need to send open offers after FDR in addition to the open offers before the final hearing. The importance of these provisions have been underlined by Mostyn J in OG v AG [2020] EWFC 52:

[30] The revised para 4.4 of FPR PD28A is extremely important. It requires the parties to negotiate openly in a reasonable way. To take advantage of the husband’s delinquency to justify such an unequal division is not a reasonable way of conducting litigation. And so, the wife will herself suffer a penalty in costs for adopting such an unreasonable approach.

[31] It is important that I enunciate this principle loud and clear: if, once the financial landscape is clear, you do not openly negotiate reasonably, then you will likely suffer a penalty in costs. This applies whether the case is big or small, or whether it is being decided by reference to needs or sharing.

(8) Variation Applications: General Rule**

General rules applies: FPR 28.3(4)(b) includes ‘financial orders’ which is defined to include a ‘variation order’: FPR 2.3

**However, PD 28A § 4.4 directs that a consideration of the overriding objective “…may be of particular significance” in a variation case. (Although, query what precisely that is supposed to mean in practice)

(9) Set Aside applications: CLEAN SHEET

FPR 28.3(9) expressly disapplies the general rule in set aside applications (i.e. under FPR 9.9A) Also see Judge v Judge [2008] EWCA Civ 1458, per Wilson LJ:

[51] .. her application for an order setting those orders aside was not itself an application for ancillary relief, as defined in r 1.2(1) of the Rules of 1991. So, although the proceedings before the judge were in connection with ancillary relief, they were not for ancillary relief… [53] there was no ‘general rule’ in either direction for the judge to apply to his decision. He had before him a clean sheet; but by reference to the facts of the case, and in particular, the wife’s responsibility for the generation of the costs of a failed application, he remained perfectly entitled to record upon it, as he did, that he would start from the position that the husband was entitled to his costs.  

(10) Intervenor claims: CLEAN SHEET

– Bearing in mind the nature of an intervenor claim (typically to assert an interest in property owned by a spouse) it might be argued that the family court’s approach should not differ materially from the county court’s (which might also have jurisdiction to entertain the issue by way of a TLATA claim), ie the starting point of costs following the event)
Baker v Rowe [2009] EWCA Civ 1162, per Ward LJ at [35]: “…The orders might well have been made in ancillary relief proceedings but they were not orders for nor even in connection with ancillary relief. The rule must be construed purposively as my Lord explained in Judge v Judge … and in his judgment above. Proceedings between interveners do not come within the ambit of the rule. The judge making the costs order has, therefore, a wide discretion”.

Hence, in A v A (No. 2) (Ancillary Relief: Costs) [2007] EWHC 1810 (Fam) W was responsible for a proportion of the trustee’s costs where she had failed to establish her sham case.

(11) Appeals: CLEAN SHEET

– “…an appeal is in my judgment in connection with and not in financial remedy proceedings and therefore is not subject to FPR 28.3(5)… it starts with a clean sheet” H v W (No. 2) [2015] 2 FLR 161 at [21]

Calderbank offers are admissible in an appeal, relating to the costs of the appeal: WD v HD [2017] 1 FLR 160 at [69]

(12) Schedule 1 applications: CLEAN SHEET

This is an important point to note. It is often overlooked that the presumptive order in Schedule 1 is not ‘no order as to costs’ and that Calderbank offers can be sent.

See KS v ND (Schedule 1: Appeal: Costs) [2013] EWHC 464 (Fam) per Mostyn J

[17] Schedule 1 Children Act 1989 proceedings have, since 6 April 2011, been excepted – along with certain other proceedings (of which the most prominent is maintenance pending suit) – from the “general rule of no order as to costs principle” introduced for almost all family financial proceedings with effect from 3 April 2006 by the insertion of rule 2.71 into the then Family Proceedings Rules 1991 (and which now is found in FPR 2010 rule 28.3).

[18] These, and the other specified proceedings, have thus been restored to the position in which all family financial proceedings were before 3 April 2006. Then, the position was that the general rule in RSC Ord 62 rule 3(5) of costs following the event was formally disapplied, but by virtue of the decision of the Court of Appeal in Gojkovic v Gojkovic (No. 2) [1991] 2 FLR 233, [1992] 1 All ER 267 an equivalent, but perhaps less unbending, principle should prima facie apply, at least to ancillary relief proceedings between husband and wife.

For a recent case in which costs were ordered (against the Applicant for her litigation misconduct in pursuing an entirely ‘misconceived’ application): see PK v BC (Financial Remedies: Schedule 1)  [2012] 2 FLR 1426.

Alexander Chandler, 10 February 2021

Categories
Law

What we talk about when we talk about law

Mostyn J in CB v EB: Practice Directions etc.

You know you’ve lost a case when the judgment begins with a compliment.

When a judge describes your argument as ‘elegant’, you’re in trouble. In CB v EB [2020] EWFC 72, an interesting recent decision of Mostyn J, the judgment starts by describing the argument of H’s leading counsel as “bold but eloquent”. To the lay client this seems like a judicial thumbs-up; to a lawyer, it’s time to bookmark the costs rules.

In CB v EB the husband sought to set aside two consent orders made in 2010. He put forward two main arguments: the first (that the orders remained executory/ Thwaite v Thwaite [1982] Fam 1) was abandoned before the hearing; the second involved the argument (the ‘bold’ one) that the family court exercised an almost unfettered power to set aside any order.  

This argument was based on Section 31F(6) of the Matrimonial and Family Proceedings Act 1984, which was amended by the Crime and Courts Act 2013, as part of the legislation that paved the way for the family court which came into existence on 22 April 2014.

H argued that the language of S.31F(6) was framed more widely than the old Order 37 r.1 of the County Court Rules (remember them, older lawyers?), and amounted to break from the past, whereby previous case law did not apply. In support of the contention that the family court’s powers were new, wider and more flexible, H prayed in aid the following passage from FPR PD9A para 13.5:

“An application to set aside a financial remedy order should only be made where no error of the court is alleged. If an error of the court is alleged, an application for permission to appeal under Part 30 should be considered. The grounds on which a financial remedy order may be set aside are and will remain a matter for decisions by judges. The grounds include (i) fraud; (ii) material non-disclosure; (iii) certain limited types of mistake; (iv) a subsequent event, unforeseen and unforeseeable at the time the order was made, which invalidates the basis on which the order was made.” 

Mr Justice Mostyn disagreed:  

[54] I do not agree with Mr Feehan QC. Unsurprisingly, I agree with the editors (of whom I am one) of Financial Remedies Practice 2020/21 (Class Publishing 2020) who wrote at para 4.32:

“The terms of rule 4.1(6) or rule 9.9A or section 17(2) of the Senior Courts Act 1981 or section 31F(6) of the Matrimonial and Family Proceedings Act 1984 do no more than to enable an application to set aside to be made under a ground of challenge recognised by the law as capable of being made at first instance rather than by way of appeal”

The status of a Practice Direction

An interesting part of the judgment is the court’s reflection of the status of a Practice Direction. Mostyn J asked rhetorically:

[59] What is the status of practice directions? In Godwin v Swindon Borough Council [2002] 1 WLR 997, decided before the changes made by the 2005 Act, May LJ stated at [11]:

“Practice directions are subordinate to the rules: see paragraph 6 of Schedule 1 to the 1997 Act. They are, in my view, at best a weak aid to the interpretation of the rules themselves.”

Similarly, in U v Liverpool City Council (Practice Note) [2005] EWCA Civ 475, [2005] 1 WLR 2657, again decided before the changes made by the 2005 Act took effect, Brooke LJ stated at [48]:

“Practice directions provide invaluable guidance to matters of practice in the civil courts, but in so far as they contain statements of the law which are wrong they carry no authority at all.”

[60] In my judgment the changes made in 2005 do not alter the status of practice directions. U v Liverpool City Council was cited with approval by Lord Wilson in Re NY (A Child) [2019] UKSC 49, [2020] AC 665 at [38]. He found that the practice direction in question in that case (FPR PD 12D para 1.1) went too far and was therefore wrong. In CS v ACS Sir James Munby P referred to section 81 of the 2003 Act but concluded at [36] that where there is a conflict between, on the one hand, the statute and the rule and, on the other hand, the practice direction, the latter is required to yield to the former. He found that the practice direction in question in that case (FPR PD 30A para 14.1) was wrong in law and had been made ultra vires the powers of its maker.

[61] So here. The language of para 13.5 of FPR PD 9A must yield to the limitations set by the law to the scope of the set aside grounds.  

In summary, a Practice Direction has no legislative force but provides guidance as to practice. On occasion the Family Procedure Rule Committee oversteps the mark and a higher court calls no ball, leading to the revision of the PD: as happened notably in Wyatt v Vince [2015] UKSC 14 in relation to PD 4A § 2.4 (striking out), Sharland v Sharland [2015] UKSC 60 on PD 30A § 14.1 (appeals) and which may now happen in CB v EB in relation to PD 9A § 13.5 and setting aside.

The Judicial Pyramid

Mostyn J’s review of the status of a Practice Direction calls to mind earlier guidance which reminded practitioners of things we all once knew but which may over the years have faded in the fog of battle.

The late Mrs Justice Baron heard Radmacher at first instance, except at that stage it was anonymised as NG v KR [2008] EWHC 1532. Some might say that Baron J’s decision in Radmacher (awarding £5.56m to H from W’s fortune of £100m) was a far fairer decision than that which was ultimately imposed by the Supreme Court. Others might say that the outcome in Radmacher would never happened in a million years if the genders of the parties had been reversed; I couldn’t possibly comment. In any event that is a matter for a different article. In NG v KR, Baron J gave the following pithy summary of the law, including reference to the judicial pyramid, at para 82:

“At the outset I remind myself that I decide this case in accordance with English law and tradition. In terms of financial relief upon divorce I am bound by the terms of the Matrimonial Causes Act 1973 (the Act) as it has been interpreted in the House of Lords and the Court of Appeal. Decisions of my fellow first instance judges may also be persuasive and/or illuminating. Under statute my first consideration is the two children of the family whilst they are minors. I must also take account of all the circumstances of the case and the factors set out in s 25 of the Act to produce a result which is fair, just and does not discriminate against either party on the grounds of gender or for any other reason. Although fairness has been stated to be in the ‘eye of the beholder’ and I am conscious that I must apply the law carefully and clearly.”  (My italics)

The difference between the decision (ratio) and guidance (obiter)

Finally, there is the difference between ratio and obiter which we all remember from law school but which in practice is often difficult to separate out. Here, we have the magisterial judgment of Moore-Bick LJ sitting in the Court of Appeal in K v K (Children: Permanent Removal from Jurisdiction) [2011] EWCA Civ 793:

86.  I accept, of course, that the decision in Payne v Payne [2001] Fam 473 is binding on this court, as it is on all courts apart from the Supreme Court, but it is binding in the true sense only for its ratio decidendi. Nonetheless, I would also accept that where this court gives guidance on the proper approach to take in resolving any particular kind of dispute, judges at all levels must pay heed to that guidance and depart from it only after careful deliberation and when it is clear that the particular circumstances of the case require them to do so in order to give effect to fundamental principles. I am conscious that any views I express on this subject will be seen as coming from one who has little familiarity with family law and practice. None the less, having considered Payne v Payne itself and the authorities in which it has been discussed, I cannot help thinking that the controversy which now surrounds it is the result of a failure to distinguish clearly between legal principle and guidance. In my view Wilson LJ was, with respect, quite right to warn against endorsing a parody of the decision. As I read it, the only principle of law enunciated in Payne v Payne is that the welfare of the child is paramount; all the rest is guidance. Such difficulty as has arisen is the result of treating that guidance as if it contained principles of law from which no departure is permitted. Guidance of the kind provided in Payne v Payne is, of course, very valuable both in ensuring that judges identify what are likely to be the most important factors to be taken into account and the weight that should generally be attached to them. It also plays a valuable role in promoting consistency in decision-making. However, the circumstances in which these difficult decisions have to be made vary infinitely and the judge in each case must be free to weigh up the individual factors and make whatever decision he or she considers to be in the best interests of the child. As Hedley J said in In re Y (Leave to Remove from Jurisdiction) [2004] 2 FLR 330 , the welfare of the child overbears all other considerations, however powerful and reasonable they may be. I do not think that the court in Payne v Payne intended to suggest otherwise. 

Conclusion

In summary, when citing the law, bear in mind the natural order of things, and separate out the decision from the guidance, bear in mind the judicial pyramid and keep practice directions in their proper place.

Alexander Chandler

29 December 2020

Categories
Law

What are matrimonial debts anyway?

Since the watershed of White v White, and the establishment of London as the ‘divorce capital of the world,’ (see Lord Collins in Agbaje at [37])  the leading cases in financial remedies have invariably involved substantial assets, with all of the trappings that come with High Net Individual status: trusts, foreign property, liquidity of shareholdings and tax efficiency etc.

Those who might think this observation is trite (i.e. financial cases that reach the Supreme Court necessarily do involve substantial wealth) might compare and contrast the leading cases in TOLATA, which concern a terraced house in Willesden (Stack v Dowden) and a bungalow just outside Canvey Island (Jones v Kernott). Not that there is anything wrong with living in Willesden or Thundersley, but those disputes inhabit a very different world from the Supreme Court decisions in Miller; McFarlane Prest v Petrodel Ltd and Wyatt v Vince.

The proverbial alien flicking through the financial remedy case law might be surprised to discover that Britain is not a nation of multi-millionaires engaged in sophisticated tax avoidance, and that the vast majority of financial remedy claims that reach the family court involve modest assets and considerable debt. All the more so as we hurtle towards the economic impact of COVID 19 and lockdown.

No law for the rich

As we all know, the legal principles outlined in cases such as White and Miller; McFarlane apply as much to modest asset cases as they do to big money disputes. In A v L Departure from Equality: Needs), Mr Justice Moor confirmed at [49] that:

“The law in relation to financial remedy cases, as set out in the MCA is, of course, exactly the same for everyone, whether rich or poor. Following White v White… , the obligation in all cases is to be fair but, insofar as there is to be a departure from equality, there has to be good reason for so doing”

But the focus in many modest asset cases is not upon assets, and the increasingly ingenious arguments of counsel as to why they should not be divided equally, but debt. And here there are a number of problems.

The problem with debt

Firstly, the court has no power to re-distribute debt between parties. Any ‘property’ in a debt is held by the creditor, who generally speaking will not be a party to the proceedings. The court cannot make a property adjustment order to adjust indebtedness, just as it cannot transfer the burden of a mortgage. In the time-honoured case of Burton v Burton and Another [1986] 2 FLR 419, Butler Sloss J remarked at p.422 that:

“There is no jurisdiction in the court to order one party to pay out of the proceeds of sale of the matrimonial home the debts of that party or of the other party to the marriage”,

Accordingly, the Family Orders Project’s Standard Precedents include provisions for the discharge of liabilities as undertakings (see § 35, 37), but not as orders. One helpful (but still controversial) innovation of the Standard Precedents is the inclusion of an order to indemnify, as opposed to an undertaking to indemnify (as to the legal basis, see Mostyn J in CH v WH [2017] EWHC 2379).

Secondly, there is the widespread but nebulous concept of the ‘matrimonial debt‘. It is remarkable how often this term is bandied about without any clear explanation as to what it actually means. Does it refer to how the debts arose (i.e. were they incurred for the benefit of the family, and if so what does that even mean in practice?) or when they arose. If the latter, does some sort of presumption arise that loans and credit card debts incurred during a marriage are presumptively ‘matrimonial’ unless the contrary is proven?

There is almost no judicial consideration as to what might be encompassed by this definition (‘matrimonial debt’, as opposed, presumably, to ‘non matrimonial debt’), or whether the court’s approach should somehow be connected to the law on matrimonial/ non-matrimonial assets.

There have in the past twenty years (i.e. post-White) been a grand total of three cases in which a reported ancillary relief/ financial remedies judgment has included the term ‘matrimonial debt’. The first is Whig v Whig [2007] EWHC 1856 (Fam), in which Munby J (as he then was) heard ancillary relief and bankruptcy proceedings together. At [81] there is the following passing reference:

I am inclined to agree with Mr Brett that these were indeed matrimonial debts, insofar as they went, in significant part at least, to support the family’s standard of living. (In saying that I do not overlook the distinct possibility that some of the money was being used by the husband alone for his personal pleasures.)

The other two are in the Court of Appeal decisions in Tattershall [2013] EWCA Civ 774 and Matthews [2013] EWCA Civ 1874 both use the term ‘matrimonial debt’ without any consideration of what this term encompasses or excludes.

Thirdly, there is the problem of evidential proof. Unlike bank statements, there is no obligation to exhibit 12 months’ credit card statements to Form E. Where one party asserts that the other’s indebtedness arose because of his own selfish spending on himself, a questionnaire may be raised which seeks several years of credit card statements. This will often arise in a case where the assets do not justify the costs of what can amount to a spending audit, both in terms of poring over the disclosure, but also the prospect of a longer final hearing where evidence in relation to those debts can be challenged. In many cases, the game (in terms of the sums at issue) will not be worth the candle (in terms of the cost of embarking on this exercise).

Fourthly, there is the problem of lack of clarity over (for want of a better expression) burden and standard of proof apply when it comes to ‘matrimonial debts’. Where Mr Smith’s Form E shows that he has £30k of credit card debt, does he have to show that this was the result of expensive family holidays and costs of living, or does Mrs Smith have to show that the husband has been pursuing expensive extra-familial recreational activities? Should the court approach this issue on a straightforward balance of probabilities, or should the court adopt the higher threshold of the add-back?

In Cowan v Cowan [2001] EWCA Civ 679, Thorpe LJ famously stated the following principle [70]

“The assessment of assets must be at the date of trial or appeal. The language of the statute requires that. Exceptions to that rule are rare and probably confined to cases where one party has deliberately or recklessly wasted assets in anticipation of trial.”

The threshold to establish an ‘add back’ is notoriously high: wanton and reckless expenditure. In Vaughan v Vaughan [2007] EWCA Civ 1085, per Wilson LJ (as he then was) summarised the law at [14]

“…Norris v Norris [2002] EWHC 2996 (Fam)… is the last in a line of authority which stretches back to the decision of this court in Martin v Martin [1976] Fam 335 that, in the words of Cairns LJ, at 342H: ‘a spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to if he had behaved reasonably.’ The only obvious caveats are that a notional reattribution has to be conducted very cautiously, by reference only to clear evidence of dissipation (in which there is a wanton element)”

Some tentative conclusions

There are no easy answers to this problem. But I hazard the following:

  1. Debts present a problem in financial remedy litigation. The court has no power to order a distribution. The best that can be done (absent agreement and undertaking) is to order an indemnity;
  2. The best (i.e. only) definition of a matrimonial debt is that of Munby J in Whig, that they have been incurred in supporting the family’s standard of living. However, that is merely a passing reference which does not consider in detail what might be considered as a ‘matrimonial debt’ (or indeed its obverse, a ‘non-matrimonial debt’)
  3. In many cases, attempting to prove or disprove that debts have been incurred in this way will be difficult. It may involve seeking disclosure going back several years, which the court may (legitimately) refuse at a First Appointment, bearing in mind the overriding objective and the requirement that litigation is proportionate.
  4. What remains unclear in law is whether the court should approach the issue of whether debts are ‘matrimonial’ as a class of add-back (which is generally very difficult to prove, and involves a high threshold) or, where the facts justify it, a lower threshold.
  5. There is however to the writer’s knowledge no authority which backs up or explains why a lower threshold should be applied.
  6. As a general approach, practitioners would do well to bear in mind the Hippocratic Oath: do not make a case more difficult or intractable by pursuing an issue which, due to a cost/benefit analysis, will unlikely result in any profit for your client.

Alexander Chandler, 13 October 2020

Categories
Law

What is an authority?

To what extent do we apply precedent in financial remedies? Now that cases are routinely ‘reported’ on Bailii, what even counts as precedent? Can a case be cited even though it isn’t in the Official Reports or the Family Law Reports? Is there any difference nowadays between an ‘authority’ and what amounts to no more than an example of a judge’s decision in a given case on different facts?

Precedent and Family Law

As any law student knows, England and Wales has a common law legal system. Central to this is the concept of precedent, under which decisions of the higher courts are binding on the lower courts. In Willers v Joyce (re Gubay) [2016] UKSC 44, Lord Neuberger summarised the doctrine of precedent as follows:

” [4] In a common law system, where the law is in some areas made, and the law is in virtually all areas developed, by judges, the doctrine of precedent, or as it is sometimes known stare decisis, is fundamental. Decisions on points of law by more senior courts have to be accepted by more junior courts. Otherwise, the law becomes anarchic, and it loses coherence clarity and predictability”

To what extent does this apply in family law (and more particularly, financial remedies) where the law is discretionary and a more flexible approach is taken to precedent? In B v B (Ancillary Relief) [2008] EWCA Civ 284, Wall LJ reflected that

[54] … the essence of any judicial discretion lies in its application to particular facts, and since each case requires its own particular resolution, the concept of fairness becomes, essentially a matter of judgment. In this context I am reminded of the wise words of Ormrod LJ, in Martin (BH) v Martin (D) [1978] Fam 12… spoken more than 30 years ago on 10 March 1977, but still, in my judgment, as applicable today as when they were first uttered:

‘…It is the essence of such a discretionary situation that the court should preserve, so far as it can, the utmost elasticity to deal with each case on its own facts. Therefore, it is a matter of trial and error and imagination on the part of those advising clients. It equally means that decisions of this court can never be better than guidelines. They are not precedents in the strict sense of the word. There is bound to be an element of uncertainty in the use of the wide discretionary powers given to the court under the Act of 1973, and no doubt there always will be, because as social circumstances change so the court will have to adapt the ways in which it exercises discretion. If property suddenly became available all over the country many of the rationes decidendi of the past would be quite inappropriate.’

Authorities v Examples

What this often leads to is a Cole Porter approach to the citation of case law: anything goes. Where equal weight is attached to a decision of (say) Mr Justice Mostyn as the Court of Appeal (or higher), or where any decision is relied upon, regardless of whether it is in any way authoritative (i.e. setting out new law or summarising existing principles).

Bailii is a tremendous resource, which freely makes available a huge corpus of case law. However, one downside of the availability of e even mundane High Court decisions (where even a decision to adjourn is ‘reported’) leads us to chaos where law cited in scattergun approach. A distinction is rarely drawn between a case which sets out to develop or condense the law

So, are there any rules? And if so, what are they?

The pyramid

At the risk of what Basil Fawlty would describe as stating the bleeding obvious, at the apex of the judicial pyramid is the Supreme Court, then the Court of Appeal, High Court, circuit judge, district judge and finally magistrates.

Mrs Justice Baron, whose early death was a tragedy as much for the Family Division as it was a personal one, put it best at first instance in Radmacher. (Some would argue that her decision in Radmacher was a good deal fairer than the outcome finally achieved in the Supreme Court, but that falls outside the compass of this blog). In Radmacher (which at first instance was anonymised as NG v KR [2008] EWHC 1532 (Fam), Baron J commented:

[82] At the outset I remind myself that I decide this case in accordance with English Law and tradition. In terms of financial relief upon divorce I am bound by the terms of the Matrimonial Causes Act 1973 (“the Act”) as it has been interpreted in the House of Lords and the Court of Appeal. Decisions of my fellow 1st Instance judges may also be persuasive and/or illuminating. Under statute my first consideration is the two children of the family whilst they are minors. I must also take account of all the circumstances of the case and the factors set out in Section 25 of the Act to produce a result which is fair, just and does not discriminate against either party on the grounds of gender or for any other reason. Although fairness has been stated to be in the “eye of the beholder” and I am conscious that I must apply the Law carefully and clearly.

Accordingly, a High Court judge must yield to the Court of Appeal or Supreme Court (which The House of Lords morphed into on 30 July 2009) unless the decision of the higher court was reached through not being properly appraised of the law (i.e. per incuriam, see Mostyn J in UL v BK [2013] EWHC 1735 (Fam) at § 27-29)

What is citable as an authority?

The key Practice Direction which is often overlooked in the family court is the Practice Direction of 9 April 2001: Citation of Authorities. For reasons best known to the law reports, this appears in the Weekly Law Reports (the enjoyably binary [2001] 1 WLR 1001) but not in the Family Law Reports.

While this is directed to civil cases, there is no question that it also applies to the family court, as made clear in a recent amendment to the FPR Practice Direction 27A (emphasis added)

[4.3A.2] Attention is drawn to paragraph 6 of Practice Direction (Citation of Authorities) [2001] 1 WLR 1001 and to Practice Direction (Citation of Authorities) [2012] 1 WLR 780 (both set out in The Family Court Practice) which must be complied with. The reference to “county court cases” in para 6.1 of the first practice direction should be read as including family court cases decided by a judge other than a judge of High Court judge level. Therefore, a judgment on an application attended by one party only, or on an application for permission to appeal, or that only decides that the application is arguable, or by the county court, or in the family court of a judge other than a judge of High Court judge level, may not be cited or included in the bundle of authorities unless either (i) the judgment clearly indicates that it purports to establish a new principle or to extend the present law or (ii) the court for good reason has specifically directed otherwise.

What cannot be cited:

The key provisions of the 2001 guidance are set out from § 6. In particular, § 6.2 provides that the following cannot be cited as authority “…unless it clearly indicates that it purports to establish a new principle or to extend the present law… that indication must take the form of an express statement to that effect.”

  • “Applications attended by one party only;
  • Applications for permission to appeal;
  • Decisions on applications that only decide that the application is arguable;
  • county court cases [extended to CJ and DJ decisions in the county court] unless: (b) cited in a county court in order to demonstrate current authority at that level on an issue in respect of which no decision at a higher level of authority is available.”

Does the judgment purport to create new law?

7.1 Courts will in future pay particular attention, when it is sought to cite other categories of judgment, to any indication given by the court delivering the judgment that it was seen by that court as only applying decided law to the facts of the particular case; or otherwise as not extending or adding to the existing law.

7.2 Advocates who seek to cite a judgment that contains indications of the type referred to in paragraph 7.1 will be required to justify their decision to cite the case.

State your proposition

[8.1] Advocates will in future be required to state, in respect of each authority that they wish to cite, the proposition of law that the authority demonstrates, and the parts of the judgment that support that proposition. If it is sought to cite more than one authority in support of a given proposition, advocates must state the reason for taking that course.

8.4 The statements referred to in paragraph 8.1 should not materially add to the length of submissions or of skeleton arguments, but should be sufficient to demonstrate, in the context of the advocate’s argument, the relevance of the authority or authorities to that argument and that the citation is necessary for a proper presentation of that argument.

Accordingly, applications for permission to appeal are not citeable. Decisions of a CJ or DJ are not citeable unless they arise in relation to an issue in respect of which no authority of a higher level is available. For the best, most flagrant breach of this Practice Direction, look no further than the “authority” of the “meal ticket for life” case of Wright v Wright [2015] EWCA Civ 201 which in truth was authority for nothing at all.

Alexander Chandler, 28 June 2020

Categories
Law

Where the judge goes too far…

Serafin v Malkiewicz [2020] UKSC 23

It isn’t easy being a judge. It isn’t easy getting to grips with the factual and legal complexities of a case, listening to evidence, weighing up the parties’ cases and reaching findings of fact on credibility. The task is more difficult where a case is badly or incoherently pursued, or where one or more parties acts in person. (Those two categories are not mutually exclusive). Or where a judge is faced with the pressures of an inadequate time estimate for a hearing, additional cases being added into the list or the occurrence of one or more of Sedley’s Law of Bundles.

Judges tempers occasionally snap. They are, after all, human.

However, sometimes it goes well beyond that.

Serafin was a claim for libel arising out of articles published in a Polish language newspaper (Nowy Czas/ New Time) which called into question the claimant’s reputation as a businessman.

The trial took place before Mr Justice Jay in October/ November 2017, best known for his role as leading counsel (as Robert Jay QC, prior to his appointment in 2013) for the Leveson inquiry.

By the time of the trial, the claimant (Jan Serafin) was acting in person; hardly an easy proposition in a libel claim involving considerable legal and factual complexity (the article in dispute was alleged to have had thirteen defamatory meanings/ imputations (titled ‘M1’ to ‘M13’), listed before a High Court judge in the QBD, and where the claimant’s first language was not English.

Once the wheels of justice had finished grinding, the claim was dismissed in its entirety. Mr Serafin (who re-instructed his lawyers) appealed to the Court of Appeal on three main grounds, the last being the judge’s conduct of the trial (i.e. ‘serious procedural or other irregularity’: CPR r.52.51(3)(b))

Court of Appeal

The Court of Appeal (Lewison, McCombe, Haddon-Cave LLJ) allowed the appeal, both on substantive grounds relating to the trial judge’s legal rulings (which fall outside the scope of this blog [a.k.a. defamation is not my area of law]) including that the judge was wrong to find that the statements complained of were already in the public domain. The third ground (judicial unfairness) was addressed by the Court of Appeal in its judgment, in a passage (from §108 to 118) which begins, somewhat portentously:

“[108]…It is a fundamental tenet of the administration of law that all those who appear before our courts are treated fairly and that judges act – and are seen to act – fairly and impartially throughout a trial

The court reminded itself that it is wrong for a judge to descend into the arena and give the impression of acting as advocate (§ 110), before concluding that:

“[114]…It will be immediately apparent from reading these extracts (in particular the passages which we have underlined) that the Judge’s interventions during the Claimant’s evidence were highly unusual and troubling. On numerous occasions, the Judge appears not only to have descended to the arena, cast off the mantle of impartiality and taken up the cudgels of cross-examination, but also to have used language which was threatening, overbearing and, frankly, bullying. One is left with the regrettable impression of a Judge who, if not partisan, developed an animus towards the Claimant.

The CA proceeded to annex extracts from the transcript, demonstrating the judge’s “serious transgressions”.

So far, so bad, from the point of view of Mr Justice Jay. While judges periodically see their decisions overturned on appeal, and on occasion find some (often veiled) criticism of their conduct in a given case, it is vanishingly rare for pages of transcript to appear, appended with criticism to a Court of Appeal judgment.

But in part due to the incoherence of the Court of Appeal’s order, the matter did not end there. On 3 June 2020, the Supreme Court weighed in.

Supreme Court

Law on unfair trials

Between §§ 37 and 46 of the court’s judgment, Lord Wilson reviewed the law relating to unfair trials:

[40] The leading authority on inquiry into the unfairness of a trial remains the judgment of the Court of Appeal, delivered on its behalf by Denning LJ, in Jones v National Coal Board [1957] 2 QB 55. There, unusually, both sides complained that the extent of the judge’s interventions had prevented them from properly putting their cases. The court upheld their complaints. At p 65 it stressed in particular that “interventions should be as infrequent as possible when the witness is under cross-examination” because “the very gist of cross-examination lies in the unbroken sequence of question and answer” and because the cross-examiner is “at a grave disadvantage if he is prevented from following a preconceived line of inquiry”.

41.              In London Borough of Southwark v Kofi-Adu [2006] EWCA Civ 281, Jonathan Parker LJ, giving the judgment of the Court of Appeal, suggested at paras 145 and 146 that trial judges nowadays tended to be much more proactive and interventionist than when the Jones case was decided and that the observations of Denning LJ should be read in that context; but that their interventions during oral evidence (as opposed to during final submissions) continued to generate a risk of their descent into the arena, which should be assessed not by whether it gave rise to an appearance of bias in the eyes of the fair-minded observer but by whether it rendered the trial unfair.

42.              In Michel v The Queen [2009] UKPC 41[2010] 1 WLR 879, it was a criminal conviction which had to be set aside because, by his numerous interventions, a commissioner in Jersey had himself cross-examined the witnesses and made obvious his profound disbelief in the validity of the defence case. Lord Brown of Eaton-under-Heywood, delivering the judgment of the Privy Council, observed at para 31:

“The core principle, that under the adversarial system the judge remains aloof from the fray and neutral during the elicitation of the evidence, applies no less to civil litigation than to criminal trials.”

43.              The distinction, drawn expressly or impliedly in all three of the cases last cited, between interventions during the evidence and those during final submissions was stressed by Hildyard J in para 223 of his judgment in the M & P Enterprises (London) Ltd case, cited in para 38 above. He suggested at para 225 that, upon entry into final submissions, the trial had in effect entered the adjudication stage.

In relation to the previously unexplored question of how the conduct of a trial might be unfair to a litigant in person, Lord Wilson added:

“[46] … Every judge will have experienced difficulty at trial in divining the line between helping the litigant in person to the extent necessary for the adequate articulation of his case, on the one hand, and becoming his advocate, on the other. The Judicial College, charged with providing training for the judges of England and Wales, has issued an Equal Treatment Bench Book. In chapter one of the edition issued in February 2018 and revised in March 2020, the college advises the judges as follows:

“8.       Litigants in person may be stressed and worried: they are operating in an alien environment in what is for them effectively a foreign language. They are trying to grasp concepts of law and procedure about which they may have no knowledge. They may well be experiencing feelings of fear, ignorance, frustration, anger, bewilderment and disadvantage, especially if appearing against a represented party.

59.       The judge is a facilitator of justice and may need to assist the litigant in person in ways that would not be appropriate for a party who has employed skilled legal advisers and an experienced advocate. This may include:

Not interrupting, engaging in dialogue, indicating a preliminary view or cutting short an argument in the same way that might be done with a qualified lawyer.”

Training and experience will generally have equipped the professional advocate to withstand a degree of judicial pressure and, undaunted, to continue within reason to put the case. The judge must not forget that the litigant in person is likely to have no such equipment and that, if the trial is to be fair, he must temper his conduct accordingly.”

Lord Wilson concludes at § 49

[49].              What order should flow from a conclusion that a trial was unfair? In logic the order has to be for a complete retrial. As Denning LJ said in the Jones case, cited in para 40 above, at p 67,

“No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.”

Lord Reed observed during the hearing that a judgment which results from an unfair trial is written in water. An appellate court cannot seize even on parts of it and erect legal conclusions upon them. That is why, whatever its precise meaning, it is so hard to understand the Court of Appeal’s unexplained order that all issues of liability had, in one way or another, been concluded. Had the Court of Appeal first addressed the issue of whether the trial had been unfair, it would have been more likely to recognise that the only proper order was for a retrial. It is no doubt highly desirable that, prior to any retrial, the parties should seek to limit the issues. It is possible that, in the light of what has transpired in the litigation to date, the claimant will agree to narrow the ambit of his claim and/or that the defendants will agree to narrow the ambit of their defences. But that is a matter for them. Conscious of how the justice system has failed both sides, this court, with deep regret, must order a full retrial.

As with the Court of Appeal, the Supreme Court’s judgment concludes with several pages of juicy extracts from the transcript, with the Supreme Court’s commentary which is perhaps unique in an English case (“…stops a relevant question”, “…introduces a note of sarcasm”, “… further sarcasm”, etc.)

Conclusion

So, beyond the extraordinary facts of the case, and the (possibly unique) example of a High Court judge being defenestrated in such a public way, what is the interest in the case for a family practitioner?

  1. Serafin contains a helpful precis from the highest court in the land of the expected standards of judicial conduct of trials (§ 37-46)
  2. In Serafin, the court considered to what extent this applied (or might be extended) to litigants in person, by reference to the Judicial College’s Equal Treatment Bench Book.
  3. Most of all, Serafin is a good example of the rule of law and how the adversarial system works in practice. As Lord Denning once said (cited with approval by Lord Wilson in Serafin): “No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.”

Alexander Chandler, 3 June 2020