Gourisaria v Gourisaria [2010] EWCA Civ 1019

Case No B4/2010/1297[2010] EWCA Civ 1019IN THE COURT OF APPEAL ( CIVIL DIVISION )ON APPEAL FROM THE HIGH COURT OF JUSTICEFAMILY DIVISION(MR JUSTICE MOSTYN)Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Friday 13th August 2010
Before
LORD JUSTICE MUMMERYLORD JUSTICE HUGHES
Between
Satya Narayan GourisariaApplicantshaheda aslam GourisariaRespondent
( DAR Transcript ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court )
Mr Valentine Le Grice QC and Mr Michael Horton (instructed by Morgan Walker) appeared for Applicant.Mr J Turner QC and Mr Gavin Smith (instructed by Minaides) appeared for Respondent.
Judgment
[1]This is an application by the husband in ancillary relief matrimonial proceedings, for permission to appeal a case management decision of Mostyn J. The judge refused to adjourn the then imminent and final ancillary relief hearing to await the outcome of litigation that had been begun in India. He took the view that the Indian litigation was a transparent attempt to stymie the ancillary relief proceedings but in any event that the ancillary relief proceedings should not be made to wait. One might have thought that that statement of the issue would almost by itself be enough to dispose of the application.[2]However, the argument before us has ranged widely and over issues which were not canvassed before the judge. That is not a criticism of those who appeared below. In part it has happened as a result of some observations pertinently made by Munby LJ when he considered this application on the papers, and those observations led him with understandable reluctance to adjourn the application for permission into open court, with the appeal to follow immediately if permission were granted. I would accept that the wider issues now addressed, even though not before the judge in any recognisable form, do justify permission to appeal. It ought not to be thought to follow from that that this is the occasion for a detailed excursus on all the numerous questions of procedure and indeed of conflict of laws which have been touched upon before us, interesting as that discussion has certainly been.[3]The husband and wife are now 81 and nearly 64 respectively. They are both of Indian origin but have been in England all their married lives. They were married in London and have lived here together since at least 1976. The husband, for his part, has been here much longer than that. He came in 1952, initially as a student of law. He then joined an old family carpet firm and plainly, en route to finishing as its chairman, amassed significant assets. The couple parted in 2008 and the ancillary relief proceedings have been afoot since then. The husband is a Hindu and the wife is a Muslim.[4]The assets which are likely to be in question in due course before the family judge are still subject to a number of areas of dispute. A certain amount is known about them. They include, but are not necessarily limited to the following: 1) a substantial house in London held in the husband's sole name and valued at something like £1.75 million; 2) deposits at the State Bank of India in London and also some other bank accounts, almost all in the husband's name and between them worth about the same again; 3) deposits in the UBS Bank in Switzerland held in the husband's name and worth something like £3 million to £3.5 million; 4) some shares in two English companies held in the husband's name worth about £100,000; 5) a residential property in Mumbai held in the wife's name worth about £50,000; and 6) a commercial property in Kolkata about which nothing more seems to be known as to value or ownership at the moment.[5]In addition to those assets, the wife at least claims that there were substantial withdrawals from the two principal banks, the State Bank of India and the UBS Bank in Switzerland, at about the time that the marriage was falling into difficulties, which she seeks to have added back. There may be other assets, but it looks overall as if there is something in the very general region between about £7 million and a maximum of about £11 million or £12 million.[6]Of these assets the husband has always contended in the ancillary relief proceedings that the Swiss bank accounts plus the two English equities are held by him on behalf of his extended family under the arrangement which is known as the Hindu Undivided Family (“HUF”), which is to say (in very broad terms) a form of co-ownership or, as English lawyers might call it, a form of trust. The numbers and identity of those for whom he says those assets are held by him are both far from clear. They seem to include his brother, who lives in India, and perhaps other relatives including the representatives of a deceased other brother. So far as the argument before us has proceeded, no doubt of a provisional nature, it appears to be assumed that the husband's interests in any property subject to the HUF would be in any event either a third or a half, but that remains to be explored in the future.[7]The ancillary relief application is well advanced. The affidavits of both spouses forming the basis of the case were exchanged in the summer and autumn of 2008 and there was a financial dispute resolution hearing in May 2009 which did not lead to settlement. In due course a substantial hearing was fixed for four days in the Principal Registry, to begin on 11 January 2010. We have not been given the exact date when it was fixed, but if it was a four-day hearing it would have had to be fixed some little time before then.[8]At the end of September 2009, about three months before the hearing was due, the husband left England and went back to India, where -- at least until yesterday -- he appears to have remained. On 23 October 2009 proceedings were begun in Kolkata, brought by the husband's Indian brother against both the husband and the wife. In them, the brother claims that substantially all the assets which are apparently in the name of the husband are in fact held in the HUF and, says the brother, not only for him, the brother, and his immediate family alone but for a number of other family members as well.[9]That having happened at the end of October, two months later on 18 December and distinctly late, the husband issued an application to vacate the trial date of 11 January in the Principal Registry. It is important that he explicitly sought deferment only until the Easter term of this year, that is to say until April or May. It is also important that he sought that adjournment on three different grounds. The first was that he was not ready, because there were some documents that he had not obtained. The second was that he said the application should await the outcome of the Indian proceedings and the third was that he contended that he was without funds because of the freezing order which had been made at an early stage of the proceedings.[10]That application came before the District Judge on 22 December. The District Judge acceded to the application for adjournment but explicitly only on the first ground, that is to say the absence of documents, which was a problem which was entirely the fault of the husband himself and indeed which resulted in an order against him for the costs of the adjournment thrown away. The District Judge explicitly refused to grant adjournment on the basis that the proceedings should await the outcome in Kolkata.[11]The trial date was re-fixed for 26 July. In the meantime the husband appealed to the District Judge's order, and it was that appeal which principally came before Mostyn J on 7 May 2010. He dismissed the appeal, holding that the District Judge had clearly been right and, in the course of so holding, expressly held that the District Judge had been right to refuse to adjourn for the additional Kolkata proceedings reason. However, also before Mostyn J on that same day was a fresh application from the husband to adjourn the new trial date of 26 July. This time it was put squarely on the basis that it should be indefinite and should await the outcome of the Indian litigation. That application was of course essentially the same application that had been made to the District Judge, although it was, in form, a fresh application. The judge considered it separately and he refused it. He said explicitly that he refused it for precisely the same reasons that he had concluded that the District Judge had been right to refuse adjournment on that ground when the matter had been before her. He said this:
"I do not take the view that the steps taken by the husband's brother in India in any way justified an adjournment. I take the view that this is a demonstrable strategy by the husband's brother, in all probability in collusion with the husband, to ‘hijack’ the English proceedings ... If the husband's brother wanted to make a claim of co-ownership of assets actively subject to the dispositive powers of the court in ancillary relief proceedings, then the only appropriate procedure, in my view, for him to have adopted, is to have intervened in the ancillary relief proceedings, as stated in numerous cases, including, I think, two decisions of my own TL v ML and Rossi v Rossi. The husband's brother has recently been invited to do precisely that…"
It appears that an invitation to the brother to intervene in the ancillary relief proceedings has indeed been made and that he has declined, or at any rate omitted to take it up.[12]The husband now contends through Mr Le Grice QC that the judge was wrong. First, he says there was no sufficient basis for the judge to say that this was a deliberate strategy. Second, he says that the judge was wrong to say that the ancillary relief proceedings ought not to wait. The general principle ought to be, says Mr Le Grice, that the ownership of assets should be determined first or, in common parlance, the size of the cake should be ascertained before the knife is applied to it. Thirdly, he says that is particularly so in this case where the question as to the quantum of available assets depends upon the application of a concept which is entirely foreign to English law and for which the natural forum is India. Fourthly, he says the judge was wrong to say that the only (my emphasis) course available to the brother was to intervene. Says Mr Le Grice, the brother was perfectly entitled to sue in India and could hardly be blamed for doing so since he lives there and he is asserting an Indian concept. Says Mr Le Grice, the brother would not be bound by any determination made in the ancillary relief proceedings unless he did intervene and it was perfectly reasonable for him not to do so.[13]The last submission reflects the concerns expressed by Munby LJ when considering the case on paper. Says Mr Le Grice, a mere invitation to intervene will not produce an order in the ancillary relief proceedings which binds a third party who has not taken up the invitation.[14]The present appeal before us, I am bound to say, looks at first sight very like a second appeal. In fact it is not. There was a fresh application made to Mostyn J and he refused it, and this accordingly is a first appeal rather than what it at first might have looked like. What it is, however, is on any view a case management decision and what it called for was the exercise of the judge's discretion. He had, in exercising it, to balance a number of competing considerations.[15]For my part I accept that there is force in the considerations on which the husband relies and which have been very clearly enunciated by Mr Le Grice. They amount to these. First, he says if the Kolkata proceedings go first, there is no risk of inconsistent decisions, because the English court would accept the ruling on a matter of Indian law made in India. Conversely, he says, there is a risk of inconsistent decisions if the English proceedings go first. Secondly, he invites our attention to some observations of Thorpe LJ in this court in George v George [2003] EWCA Civ 202; [2004] 1 FLR 421 at paragraph 14. There Thorpe LJ observed that it is not right for the judge in ancillary relief proceedings to anticipate or forecast the outcome of related proceedings in another division or within another justice system when the risk of false assumption can be eliminated either by adjourning the ancillary relief application to await the outcome of the proceedings elsewhere or by ensuring that both sets of proceedings are dealt with together. That was a case in which it was not at all difficult to deal with the problem in the manner suggested, because there were parallel proceedings in the High Court in England which could perfectly well have been consolidated with, or ordered to be heard immediately before, the ancillary relief proceedings. Thirdly, says Mr Le Grice, the judge's refusal to adjourn raises the inevitable possibility that an order might be made in the ancillary relief proceedings which has to be revisited afterwards in the light of a decision in Kolkata which falsifies assumptions or findings made in England. Lastly, he emphasises that the obviously convenient forum for the HUF question, taken by itself, would appear to be India.[16]On behalf of the wife, Mr Turner QC's response is that the risks there foreshadowed can in fact be much reduced. First, he says that never mind a mere invitation to the brother to intervene, the brother should be joined to the proceedings under the provisions still found in the Rules of the Supreme Court Order 15 Rule 6(2)(b), either because there exists a question or issue connected to the remedy claimed in the ancillary relief proceedings which it is just and convenient to determine not only between each of the spouses but also between them and the third-party brother or, alternatively, because the third-party brother's presence before the court is necessary to ensure that all matters in dispute are effectually and completely determined and adjudicated upon.[17]Secondly, says Mr Turner, it is not inevitable that the ancillary relief judge will be unable to deal with the HUF question. First, he says there is nothing either difficult or unusual about an English ancillary relief judge having to deal with questions of foreign law on evidence in the usual way. That often happens. Secondly, the English judge will certainly be able to resolve any facts that are relevant, for example as to the source of the assets. Thirdly, the judge might decide to make a partial order, thus providing some form of ancillary relief whilst deferring others, for example making a property transfer order in relation to some assets but deferring the residual question of a lump sum. Fourthly, he says that the judge might make a conditional order, for example an order for ancillary relief subject to a provision for mutual indemnity, in the event that the outcome of the Indian proceedings affected the available assets in a manner different from what had been anticipated. And lastly, says Mr Turner, the judge would retain the power once the matter had been properly investigated to conclude at that stage rather than now that it was indeed impossible to make any useful order, but if that were to happen, whilst adjournment would follow, it would be made in the knowledge acquired through a full investigation which has not at present occurred and, secondly, could be coupled with suitable terms which might, for example, make provision for the wife's accommodation and/or support if either were justified.[18]It is plain that no application for joinder had yet been made when this case was before either the District Judge or Mostyn J. Mr Turner reminded us of the powers of the court to act of its own motion. For my part I would not think that that would be appropriate for this court at this stage in this case, nor for that matter am I at all clear how far joinder would be effective if any of the non-UK residents whom it was sought to join were to stand on the absence of jurisdiction of the English court over them. I would, however, agree that the power to apply for joinder certainly exists and, indeed, there are other potential means of bringing the issue before this court if the problem of jurisdiction can be overcome. One might be separate actions consolidated or directed to be tried consecutively by the same judge. That might in some cases be preferable to intervention or joinder in the ancillary relief proceedings, for example if it was wished to preserve the possibility of interlocutory applications for the third party which would not be available within ancillary relief, such as summary judgment or striking out.[19]I have no doubt that, ordinarily, intervention, if it is accepted, is much the best means of achieving a decision on all material matters in a manner which binds not only the spouses but also any third party. If that can be achieved and if it is truly necessary, rather than simply an exercise in finding out whether there is a claim elsewhere, I am sure that that ought to be undertaken and that is what the cases to which the judge referred, including TL v ML (Ancillary Relief: Claim against assets of extended family) [2006] 1 FLR 1263 and Rossi v Rossi [2007] 1 FLR 790, say.[20]I also agree that a simple invitation to intervene is not by itself sufficient to produce an order which binds a third party who does not accept the invitation. That was the point which troubled Munby LJ. For my part, I respectfully agree with him and I particularly agree that neither TL v ML or Rossi v Rossi or any of the other cases go anywhere near suggesting otherwise. On the other hand, of course if an invitation to intervene is given and not taken up, that is undoubtedly something that the English court can and should take into account in deciding whether to proceed or not. There was in this case a plain means available to the brother to make his voice heard on the issue before the court, which was well advanced in considering the case.[21]As Mummery LJ observed in the course of argument, the problem which arises in this case is in no sense confined to ancillary relief proceedings. It arises very often in other cases of distribution of estates, for example on insolvency or after death. I do not read George v George and the short observations of Thorpe LJ at paragraph 14 as giving any direction that, in every case where a claim is made in other proceedings, the matrimonial proceedings, however far advanced, are ipso facto to be brought to an abrupt halt. He was, I am quite satisfied, dealing with the desirable way of coping with a third-party claim where it could properly be done and consistently with justice all round.[22]It is plain to my mind, equally, that Mostyn J, in the passage which I have cited, in his reference to "the only appropriate procedure" was not to be taken as having meant any universal proposition for every case. He undoubtedly meant that it was the only proper course, as he saw it, in this case, given the advanced stage of the proceedings.[23]Accepting as I do the general proposition that it is highly desirable that issues between a third party and spouses should be resolved at the same time as the issue between the spouses, there will be some cases in which it simply cannot be done and there will be others where it could be done only at the cost of a price which ought not to have to be paid.[24]In all those cases, indeed in every case, the question is a case management one, it is a case specific one and it calls for the exercise of the judge's discretion. For my part, I agree with Mr Le Grice that it is at least foreseeable that, first, there may be difficulties for the English ancillary relief judge in resolving an unfamiliar concept and, secondly, that there is at least the possibility that conflicting decisions might (my emphasis) arise. I agree with him that the case is not as straightforward from the point of view of a possible conditional order as was presented to Coleridge J in Charman v Charman [2006] EWHC 1879 (Fam), where there was a considerable surplus of assets and a very much more cut and dried single question than there is in this case. All that said, however, that does not, as it seems to me, resolve the question of how the discretion should have been exercised in this case. There were in this case very powerful reasons not to adjourn the English proceedings. First, the adjournment sought was general and entirely open-ended. I accept that it was not quite the equivalent of the complete stay on the English proceedings because, as Mr Le Grice properly said, no-one would suggest that the wife should be prevented from pursuing an interlocutory application such as an application for an occupation order or for interim periodical payments, but the length of the adjournment which was sought is a completely unknown quantity.[25]Secondly, there is no hint of evidence at all as to the likely future course of the Indian proceedings. We were told that the wife has applied to strike out the claim so far as it affects her. It is suggested, but probably not conceded, that the husband and his brother are in breach of directions as to the giving of evidence on that issue, but, whether that is so or not, that interlocutory application by the wife has, it would appear, been directed to appear in the monthly list on two occasions but has not resulted in any hearing and that is only the interlocutory application. What really matters in this case is when the substantive suit can reasonably be expected to be finally resolved. It was for the husband, who was seeking an adjournment, to put evidence on that question before the court. He has wholly failed to do so with no possible reason. In addition it has been suggested to us that in the last three months or so the proceedings in India have been on hold pending this appeal. For my part I am utterly unable to see why this appeal should have any possible bearing on the husband or the brother's case on proceedings in India. If indeed it is truly the case that the brother and the husband are at loggerheads as to the extent of the HUF, then all the more reason why it needs getting on in India at the suit of the brother, but nothing appears to have happened at all.[26]Thirdly, on the other hand, the ancillary relief proceedings are well advanced, as the dates which I outlined earlier on in this judgment demonstrate. Now two final hearing dates have been lost. The Kolkata proceedings came extremely late in the course of the ancillary relief proceedings. They came even later in the context of the overall history since, as I understand it, although the husband does contend that he has always made the income from the Swiss investments available to his family, there is no hint of evidence that the brother has ever advanced his claims under the HUF to the wider assets, including the English ones, from 1952 until 2009.[27]Fourth, the wife's position is precarious. The husband sadly is not only of advanced years but he is also in very poor health. If sadly he should not survive, then the following consequences appear to follow. First her ancillary relief proceedings would lapse: see Harb v. King Fahd Bin Abdul Aziz[2006] 1 FLR 825. Secondly, if, as the husband asserts, he is domiciled in India, and he might be, then she would not be able to pursue any claim under the Inheritance (Provision for Family and Dependants) Act 1975. Thirdly, on any view she has no claim under the HUF because she is a Muslim. Fifthly, the wife asserts that her current financial position is strained. It certainly must be true that the Bombay flat is not an immediate source of funds, and she is said to be living in unsatisfactory rented accommodation, having been separated now for some little time. Sixthly, to my mind there is at the very least a strong prima facie case that the Kolkata action is indeed a strategy designed to stymie the English proceedings. No claim was made until very late. Even when the ancillary proceedings began, there is no sign of any despatch being attempted in the Indian proceedings and the invitation to intervene and to have his voice heard in the English proceedings has been declined by the brother. He was not, of course, obliged to take it up but he very readily could have done. Lastly, I agree to this extent with Mr Turner that the ancillary relief judge does have the battery of powers available to him which he has outlined, and indeed that may not be an exhaustive list of what might be possible to achieve. For my part, I take the view that it is simply wholly undesirable that, at the stage of a late application to adjourn, the court should attempt to chart every possible variation that may occur in the ancillary relief proceedings.[28]That being the position, I am brought back to the place at which I started. This was a case management decision. It called for the exercise of the judge's discretion and the judge was not, as it seems to me, wrong or in any way flawed in the exercise of his discretion. Whilst I agree, on the wider material which has now been put before us, that there are potential complications and difficulties, which are not to be underestimated, in continuing, the alternative of open-ended adjournment is to my mind much worse and for those reasons, having granted leave, I would for my part dismiss the appeal.[29]I agree. First, I do not think it has been established on behalf of the appellant that there was any error of principle in the judge's exercise of discretion, and it certainly cannot be said that the decision he made was plainly wrong. This is not a case in which the Court of Appeal would be entitled to interfere with the judge's discretion. Secondly, I am not persuaded that it is just or convenient for this court to make the order which the appellant asks it to make on the appeal. The court is asked to make an order that the trial of the ancillary relief proceedings be adjourned pending conclusion of the proceedings brought by the appellant's brother in the High Court of Calcutta to be beneficially entitled to assets held in the appellant's name. Those proceedings raise what has been explained in the evidence to be the Hindu Undivided Family principle, and questions arise as to whether that principle applies to assets which are held in the name of the husband in this country and in Switzerland. It may take a very long time for any conclusion to be reached in those proceedings. One can say with certainty that one does not know at this stage how long it will take, and in those circumstances it would be premature, in my view, to adjourn indefinitely the proceedings for ancillary relief pending the outcome of the Indian proceedings.[30]In those circumstances, for the reasons given by my Lord, I agree with him that, although we grant permission for this appeal, we should dismiss it.

Order

Application granted; appeal dismissed

Cited in 1 later judgment