Harrison v Harrison [2008] EWHC 362 (QB)

Case No HQ07X00297

[2008] EWHC 362 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

Venue The Royal Courts of Justice

Date 31 st January 2008

Strand

London WC2A 2LL

Before

HIS HONOUR JUDGE SEYMOUR QC

B E T W E E N:

Between

MRS V HARRISON

MR HARRISON

Transcript from a recording by Ubiqus

Cliffords Inn, Fetter Lane, London EC4A 1LD

Tel: +44 2 7269 0370

Ms Harrison appeared in person for in person

Mr A Lennon QC (instructed by Manches LLP) appeared on behalf Mr Harrison

JUDGMENT

[1]The claimant, Mrs Vivien Harrison, and the defendant, Mr John Harrison, were married on the 16th of July 1988. They were divorced in 2002, the decree absolute being granted on the 14th of November 2002.

[2]The divorce proceedings between Mr and Mrs Harrison included ancillary financial relief proceedings, to which I shall refer in this judgment as ‘the ancillary relief proceedings’. The ancillary relief proceedings were tried by Mrs Justice Baron and then Ms Recorder Baron QC, between the 1st and 5th of July 2002. Mrs Justice Baron handed down judgment, (“the Baron judgment”) on those proceedings on the 30th of September 2002. The outcome of the proceedings was that Mrs Harrison retained the free-hold ownership of the former matrimonial home at Inglenook, 22 Roseacre Gardens, Chilworth, Surrey; Mr Harrison was ordered to pay her a lump sum of £600,000; Mr Harrison was ordered to make periodical payments to the children of the family at a rate of £10,000 per annum each in addition to school fees; Mr Harrison was ordered to make periodical payments to Mrs Harrison at a rate of £10,000 per annum; and Mrs Harrison was ordered to transfer to Mr Harrison her shares in a company called UA Importers Limited (“UAI”.) Mrs Justice Baron made no order for costs at the ancillary proceedings, so each of Mrs Harrison and Mr Harrison had to bear their own costs.

[3]In this judgment I shall refer to the order made by Mrs Justice Baron to give effect to the Baron judgment, the Baron Order. There has been no appeal against the Baron judgment or “the Baron Order”. Application was made to Mrs Justice Baron herself when the Baron judgment was handed down for permission on the part of Mrs Harrison to appeal the judgment, but it was recorded in the Baron Order that permission was refused. However, in this action Mrs Harrison seeks relief described in the prayer to the particulars of claim in this way:

“(1) that the judgment of Mrs Justice Baron dated the 30th of September 2002 be set aside; (2) that the defendant repay to the claimant her own and the defendant’s costs of the ancillary relief proceedings together with interest thereon to be assessed; (3) further or other relief.”

[4]The relief claimed at paragraph two of the prayer appears to make no sense. Mrs Harrison did not pay a sum to Mr Harrison by way of costs pursuant to the Baron Order, so the question of repayment could not possibly arise. The particulars of claim are a somewhat discursive document. In paragraph one are pleaded the marriage of Mr and Mrs Harrison, their separation, the fact of the hearing before Mrs Justice Baron and the delivery of the Baron judgment. Paragraph two is in these terms, “The claimant seeks an Order setting aside the [Baron] judgment on the ground that it was obtained by fraudulent misrepresentations and/or material non-disclosures made by or on behalf of the defendant during those proceedings and in particular, in relation to the financial affairs of the parties and/or the defendant’s companies, and in relation to the value or likely value of their joint assets.”

[5]There follows a lengthy section under the rubric “Factual Background”which includes paragraphs 3 to 28 inclusive. The so-called factual background is not, as it seems to me, material to any issue which I have to decide. The real issues in the action are dealt with at paragraphs 29 to 33 inclusive. Those paragraphs read as follows: ’29) In order to suppress the true value of the joint assets and to obtain a favourable judgment, the defendant made the following representations to the court and to the claimant in the ancillary relief proceedings. Particulars: 1) The defendant was required to disclose in the ancillary relief proceedings all bank accounts operated by Interchange. At a pre-trial review on the 27th of May 2002, the defendant’s counsel told the court that the claimant had been provided with “every single bank statement for my client and the businesses from separation”. 2) The claimant had in May 2002 received through the post from an anonymous source documents headed “Daily reconciliation statements” showing profits for Interchange during two periods in April 2002. a) Grant Thornton, forensic accountants, produced a report in the ancillary relief proceedings indicating that Interchange should be valued at £1.68 million based upon those daily reconciliation statements. The documents and Grant Thornton’s report were provided to the defendant on or about Friday the 24th of May 2002, immediately prior to a pre-trial review which took place on the 27th of May 2002. b) It was alleged by the defendant at trial that the premises of Interchange had been subject to a break in and that the daily reconciliation statements had been tampered with and were consequently unreliable. c) Hussein Radwan, an employee of Interchange and witness called on behalf of the defendant, told the court in his written evidence dated the 17th of June 2002 and in oral evidence on the 5th of July 2002, that a break-in had occurred on the evening of the 9th/10th of May 2002, that he had on the 10th of May 2002 suspected that Interchange’s computers had been accessed and that the incident had been reported to the police on the 19th or 20th of May 2002. d) Dean Stinton, also an employee of Interchange and witness called on behalf of the defendant, told the court in his written evidence dated the 18th of June 2002 and in oral evidence on the 5th of July 2002, that he had suspected prior to learning that the claimant had obtained documents from Interchange’s office, that someone had entered the office on the evening of the 9th of May 2002 without authorisation and that he had checked the computers on the 10th of May 2002 and discovered that one had been used by someone prior to his arrival at work that day. He represented to the court in his oral evidence that he had accessed one of Interchange’s daily reconciliation sheets on his office computer on the 10th of May 2002, and represented that he knew on that date that “numbers had been changed” so that “the figures on the reconciliation sheet that morning did not match”. 3) On the 5th of July 2002 the defendant was questioned as to an investigation being conducted by HM Inspector of Taxes and agreed that the Inland Revenue was “unhappy about the UA accounts”. When asked if there were other areas of his financial affairs that the Inland Revenue were investigating, the defendant said on oath “No, they investigated my personal situation alongside UA Importers. As soon as we replied to that letter, they were entirely content and said ‘that is all fine. Thank you for the time-being until we finish UA Importers”. 4) The defendant represented that his annual drawings were limited to £24,000 for personal expenses, rent of £18,000 plus £18,000 in respect of school fees. 5) The company accounts from UAI showed that it held stock which had been re-valued down from £106,742 to £20,000 between the 20th of June 1998 and the 29th of February 2000. In his oral evidence on the 5th of July 2002, the defendant agreed that he had signed a certificate indicating that the value of the stock was £20,000 and represented this low stock figure reflected the value of 15 opal panels which had been damaged. 6) The defendant, both through his counsel at a hearing in January 2002 seeking the release of monies subject to the Freezing Order, and in his own oral evidence on the 5th of July 2002, represented to the court that he was in dispute with Mr Cook in relation to Cash on Cars, that the business had ceased lending since about March 2001, and that its only activity was in trying to recover some outstanding loans. 30) The claimant has since discovered and the fact is that each of these representations was untrue. Particulars. 1) The defendant concealed from the court and from the claimant the existence of bank account number 10153726 held at The Royal Bank of Scotland plc Cavendish Square, which bank account contained approximately £25,000 during 2002. 2) The defendant and his employees fabricated a break-in at the premises of Interchange and made a false report to the Metropolitan Police so that they might claim that the daily reconciliation sheets produced by the claimant had been doctored and should be disregarded. a) Mr Stinton represented that he knew on the 10th of May 2002 that documents had been accessed and tampered with, and Mr Radwan swore that he had reported the incident on the 19th/20th of May 2002. b) However, the alleged crime was not reported until about 4pm on the 27th of May 2002. 1) Only after the defendant had received an expert’s report placing the value of Interchange at £1.6 million and 2) the very same day as the pre-trial review at which Mrs Justice Black had considered the daily reconciliation sheets produced by the claimant, and had ordered the defendant to disclose further documentation relating to the financial position of Interchange. 3) Contrary to the defendant’s representations under oath, the enquiry conducted by the Inland Revenue into his financial affairs was not limited to his personal situation alongside UA Importers and had not been satisfactorily resolved. The investigation was ongoing until at least the 28th of May 2003 when the defendant’s accountant, Ian Nunn, met with HM Inspector of Taxes and it extended to questions concerning Cash on Cars, monies loaned to the defendant by one Walter Iberti in order to inject finance into Fast Cash, directors loans in respect of Fast Cash and the sale of Fast Cash. 4) The defendant’s personal expenditure over a period of approximately 18 months from December 2000 to July 2002, in fact exceeded £220,000. 5) As confirmed in a letter from Walter Iberti dated the 8th of January 2003, the Opal panels were in fact in good condition and were worth in excess of £100,000 and UAI was substantially undervalued as a result. Mr Iberti was managing director of Walker and Zanger, the stone merchants in Los Angeles where the Opal panels had been kept in storage, and was well qualified to assess their condition and worth. Further, at a meeting between Mr Nunn and HM Inspector of Taxes on the 28th of May 2003, Mr Nunn stated that there were no indications that the panels were in any way damaged or unsaleable either at the date bought by the company or later. 9) Cash on Cars was not dissolved until June 2004 and it continued trading under the name Logbook Loans during 2002 and 2003. 31) These representations were either made by the defendant or on his behalf and with his knowledge and consent fraudulently, and either well-knowing that they were false and untrue or recklessly not caring whether they were true or false. 32) The learned judge reached her conclusions in the judgment relying upon these misrepresentations and material non-disclosures and assessing the credibility of the witnesses accordingly. The learned judge found that the defendant’s presentation of his assets had been “fundamentally correct throughout” and condemned the claimant in costs in the ancillary relief proceedings. 33) The claimant claims that the judgment should be set aside and that the defendant should repay to the claimant both her own and the defendant’s legal costs of the ancillary relief proceedings, together with interest thereon at such rate and for such period as the court shall think fit’.

[6]What is referred to in the passage quoted from the particulars of claim as Interchange was and is a trading style of the company called originally London Cash Exchange (Wholesale) Limited but now, I think, called The Interchange Organisation Limited. But it is convenient to refer to that company in this judgment as ‘Interchange’.

[7]Fast Cash and Cash on Cars were each, with the addition of the word ‘Limited’, the names of companies controlled by Mr Harrison. The claim form by which this action was commenced was issued on the 26th of January 2007. However, the claim form was re-issued on amendment on the 26th of July 2007. The particulars of claim are dated the 26th of July 2007.

[8]On the 26th of July 2007, application was made to Mr Justice Butterfield without notice for a Freezing Injunction against Mr Harrison in relation to the claim made in this action. It will be necessary later in this judgment to consider in what circumstances that application was made, and what the learned judge was told on the hearing of that application. However, the outcome of that application was that Mr Justice Butterfield was persuaded to grant a Freezing Injunction (to which I shall refer to in this judgment as the ‘Freezing Injunction’) restraining Mr Harrison from removing from England and Wales any of his assets up to the value of £2 million.

[9]By paragraph seven of the order, it was provided that “This prohibition includes the following assets in particular a) The property known as Pleasant View, The Platt, Amersham, Buckinghamshire, HP70HX or the net sale money after payment of any mortgages if it has been sold, and b) the property and assets of the respondent’s business known as The Interchange Organisation Limited (Company No. 4019832) or the sale money if it has been sold, and c) any share or security in The Interchange Organisation Limited as aforesaid or any other debt or liability owed by such company and any proceeds from any prior sale, assignment, exchange, transfer, encumbrance or other disposal or dealing with such share or security, debt or liability of the monies, investments or other property for the time being representing such proceeds”.

[10]The Freezing Injunction made no provision for the disposal by Interchange of its assets in the ordinary course of business. Thus the order effectively prevented Interchange from carrying on business. An application was consequently made to Mr Justice McCombe on the 31st of July 2007 for an order discharging paragraph 7(b) and (c) of the Freezing Injunction. Mr Justice McCombe made the order which was asked.

[11]The question then arose of whether the whole of the Freezing Injunction, as varied by the order of Mr Justice McCombe, should be discharged. Following discussion between the solicitors at that time acting on behalf of Mrs Harrison, Withers LLP, and Manches LLP, solicitors acting on behalf of Mr Harrison, the Freezing Injunction, as varied by the order of Mr Justice McCombe, was discharged by consent by order of Mr Justice Lloyd Jones made on the 17th of September 2007.

[12]By paragraph three of the order of Mr Justice Lloyd Jones, he directed that “The costs incurred by the defendant as a result of the Freezing Injunction including, but not limited to, the defendant’s costs of preparing an application to set aside the Freezing Injunction, and the costs of both parties reserved by Mr Justice McCombe by his order dated the 31st of July 2007, be reserved to the interim applications judge on a date to be fixed or alternatively, to the judge hearing the defendant’s intended application to strike out the proceedings”.

[13]While it was no doubt sensible for the parties to agree that the costs incurred by Mr Harrison in connection with the Freezing Injunction and the application to Mr Justice McCombe should be deferred to be dealt with at the same time as Mr Harrison’s intended application to strike-out the proceedings, in the ordinary course one would expect that Mrs Harrison, having sought and obtained the Freezing Injunction, it then having been varied at the instance of Mr Harrison, and subsequently it having been agreed that the whole injunction should be discharged, she should pay his costs of the whole enterprise.

[14]By an application issued on the 24th of September 2007 on behalf of Mr Harrison, he sought the following relief; “1) The claimant’s claim form and particulars of claim dated the 27th of July 2007 be struck out pursuant to CPR part 3.4(2)(a) on the ground that they disclose no cause of action, alternatively, pursuant to CPR 3.4(2)(b) on the ground that they are an abuse of the process of the court; 2) (Alternatively to the order sought in paragraph 1 above) summary judgment be entered against the claimant on the whole of her claim pursuant to CPR part 24.2 on the ground that the defendant believes that on the evidence, the claimant has no real prospect of succeeding on her claim and the defendant knows of no other reason why the disposal of the claim should await a trial. The respondent’s attention is drawn to CPR part 24.5(1). 3) The claimant do pay the defendant’s costs of these proceedings on the indemnity basis, to be the subject to a detailed assessment if not agreed. 4) The claimant to pay the defendant £50,000 on account of cots within 14 days. 5) There be an enquiry as to the damage suffered by the defendant as a result of the Freezing Order made by Mr Justice Butterfield on the 26th of July 2007 (and varied by Mr Justice McCombe on the 31st of July 2007) and further varied by agreement between the parties on the 3rd of August 2007. 6) (Alternatively to the order sought in paragraph 3 above) the claimant do pay on the indemnity basis the costs incurred by the defendant as a result of the Freezing Order including, but not limited to, the costs reserved by Mr Justice McCombe by his order dated the 31st of July 2007, and the defendant’s costs of preparing an application to set aside the Freezing Order”.

[15]The summary of the grounds upon which those forms of relief were sought which were set out in the application notice was; “1) The claimant’s claim to set aside the judgment of Mrs Justice Baron in the ancillary relief proceedings between the parties and to claim payment of costs of the ancillary relief proceedings is misconceived in law and unfounded in fact. 2) The Freezing Order should not have been made because there was no serious issue to be tried and/or because there was no real risk of dissipation of assets and/or because the case presented to Mr Justice Butterfield on the claimant’s without notice application on the 26th of July 2007 was misleading and failed to draw to Mr Justice Butterfield’s attention, all material facts and matters of which the claimant and her advisors knew or ought to have known. 3) The claimant gave undertakings in relation to the Freezing Order that, should the court find that the order caused loss to the defendant, she would comply with any order for compensation made by the court.

[16]The application made on behalf of Mr Harrison came before His Honour MacKie QC sitting as a judge in this division. On the 31st of October 2007 the hearing was adjourned by consent. So it was that it came on for hearing substantively before me. On the 25th of January 2008, less than two clear days before the commencement of the hearing of the application on behalf of Mr Harrison before me, Mrs Harrison, by now acting in person, issued two applications. Those applications were, first, an application for an order that this action be transferred to the Family Division and, second, an application for orders that “1) the Metropolitan Police does give disclosure to the claimant pursuant to CPR part 31.17 of the unredacted crime report prepared by Detective Constable Setter relating to an alleged burglary in May 2002 at Interchange, Marble Arch Tower, 55 Bryanston Street, London, W1H 7AH, (the “crime report”) and 2) upon being given seven days notice, the Metropolitan Police does provide a copy of the crime report to the claimant”.

[17]Those applications also came on for hearing before me. Mr Andrew Lenon, Queen’s Counsel, who appeared on behalf of Mr Harrison, submitted that the proper course would be for me to deal with those applications, if necessary, at the conclusion of the hearing of the application on behalf of Mr Harrison. He contended that it was neither necessary nor appropriate for me to order that the action be transferred to the Family Division before hearing Mr Harrison’s application.

[18]In a written supplementary skeleton argument he set out his principal grounds for his submission as follows; ‘8) First, this court is in a position to determine that the proceedings are hopeless and should be struck out. The strike out application does not involve difficult questions of family law. This court is well able to consider the evidence and apply the relevant legal principles. 9) Second, a transfer of the proceedings to the Family Division will inevitably lead to a protraction of the proceedings and in all likelihood to yet further adjournments, changes of representation and to further massive wastage of costs. 10) Third, this court is the appropriate court to determine the costs of the application for the Freezing Injunction. That application was made to a judge of the Queen’s Bench Division, and this court is familiar with the principles governing such applications. Liability for those costs is not properly a matter for the Family Division. 12) Fourth, Mrs Harrison’s proceedings, if transferred to the Family Division will have to be completely re-constituted and reformulated. As presently constituted, the proceedings would make no more sense in the Family Division than they do here. There are particulars of claim in which the only relief sought (apart from the setting aside of the order of Mrs Justice Baron) is for repayment of costs, despite the fact that Mrs Justice Baron did not order Mrs Harrison to pay Mr Harrison’s costs. The appropriate course if Mrs Harrison was still intent on bringing proceedings challenging Mrs Justice Baron’s order would be for her to bring fresh proceedings in the Family Division in the proper form, seeking the proper relief. Those Family Division proceedings should be in the form of an application for permission to appeal out of time. 13) Fifth, it was Mrs Harrison and her advisors who decided to bring proceedings in the Queen’s Bench Division in the first place, presumably because they perceived some tactical advantage in doing so. The court should be slow to accede to an application by her to remove the proceedings from her chosen division as a means of pre-empting the impending strike-out application’.

[19]I took the view that the convenient course was that suggested by Mr Lenon, that is to say, to consider the application on behalf of Mr Harrison first and then to consider the applications made on behalf of Mrs Harrison, if it were necessary to do so. It seemed to me that a judge in this division was the appropriate person to deal with the issues of the costs of and occasioned by the Freezing Injunction, as varied by the order of Mr Justice McCombe, and whether there should be an enquiry as to the damage suffered by Mr Harrison as a result of the making of the Freezing Injunction.

[20]Having read the Baron judgment and the witness statements of Mr Harrison and Mrs Harrison made for the purposes of the application of Mr Harrison, it seemed to me that I was as well placed to reach a conclusion on the issues whether the claim form and the particulars of claim should be struck out, or summary judgment should be entered in this action for Mr Harrison, as a judge in the Family Division.

[21]In the circumstances, it seemed to me convenient to consider first the questions of whether the particulars of claim disclosed a cause of action, or amounted to an abuse of the process of the court, or whether summary judgment should be entered in this action in favour of Mr Harrison. So far as those issues are concerned, it is appropriate to begin by considering the legal principles applicable to an action seeking to have a judgment in a previous action set aside.

[22]The law concerning setting aside a judgment for fraud. The relevant principles were conveniently set out by Mr Justice David Steele in Kuwait Airways Corporation -v- Iraq Airways Corporation

[2003] EWHC 31

at paragraph 146. “There was no dispute between the parties as to the legal principles to be applied in an application to set aside a judgment for fraud; a) A Judgment obtained by perjury is a judgment obtained by fraud for this purpose. b) The action seeking an order setting aside the earlier judgment must be based on new evidence which was not before the court that first heard the action and which the claimant could not with reasonable diligence have placed before that court. c) The new evidence must establish perjury in the sense that a person or persons sworn as a witness in the earlier action who could properly be treated as the successful party, itself wilfully made a statement in those proceedings which the person knew to be false or did not believe to be true. d) The burden is on the claimants to establish perjury as “distinctly more probable than not.” e) The disparity between the perjured evidence and the new evidence would be material if it “entirely changed the nature of the case”. See Hunter -v- Chief Constable of West Midlands [1982] Appeal Cases 529, Odyssey Re -v- OIC Runoff, Mr Justice Langley the 11th of February 1999, Odyssey Re -v- OIC Runoff Court of Appeal 13th of March 2000. Halsbury’s Laws of England, Fourth Edition Volume 26, paragraphs 560 to 561, Spencer Bower Res Judicata at paragraphs 372’.

[23]Mr Justice David Steele in that passage did not in terms say that the disparity between the perjured evidence and the new evidence had to be material, although that is plainly implicit. In Hunter -v- the Chief Constable of West Midlands, the issue was whether it was permissible to seek to mount a collateral attack upon a conviction following a criminal trial in subsequent civil proceedings. The case was not itself concerned with seeking by action to set aside a judgment in a previous civil case.

[24]However, Lord Diplock, who delivered the only substantive speech, dealt at page 545 with the quality of the evidence required, exceptionally, to justify the type of collateral attack with which he was concerned. “There remains to be considered the circumstances in which the existence at the commencement of the civil action of ‘fresh evidence’ obtained since the criminal trial, and the probative weight of such evidence justify making an exception to the general rule of the public policy, that the use of civil actions to initiate collateral attacks on final decisions against the intending plaintiff by criminal courts of competent jurisdiction should be treated as an abuse of process of the court. “I can deal with this very shortly for I find myself in full agreement with the judgment of Lord Justice Goff. He points out that on this aspect of the case Hunter and the other Birmingham bombers fail in limine because the so-called ‘fresh evidence’ on which they seek to rely on the civil action, was available at the trial or could by reasonable diligence have been obtained by then. He examines also the two suggested tests as to the character or fresh evidence which would justify departing from the general policy by permitting the plaintiff to challenge a previous final decision against him by a court of competent jurisdiction, and he adopts as the proper test that laid down by Earl Cairns, Lord Chancellor in Phosphate Sewage Company Limited -v- Morrison

(1989) 4 App Cas 801

, 814 namely that the new evidence must be such as ‘entirely changes the aspect of the case’. “This is perhaps a little stronger than that suggested by Lord Justice Denning in Ladd -v- Marshall

[1954] 1 WLR 1489

, 1491 as justifying the reception of fresh evidence by the Court of Appeal in a civil action viz., that the evidence ‘would probably have an important influence on the result of the case, though it need not be decisive’. The latter test, however, is applicable where the proper course to upset the decision of the court at first instance is being taken, that is to say, by appealing to a court with jurisdiction to hear appeals from the first instance court and whose procedure like that of the Court of Appeal (Civil Division) is by way of a re-hearing. “I agree with Lord Justice Goff that in the case of collateral attack in a court of co-ordinate jurisdiction, the more rigorous test laid down by Earl Cairns is appropriate”. In my judgment the test that Lord Diplock considered appropriate to be applied in the case of a collateral attack on an earlier decision is equally that which is applicable in a case in which it is sought by action to have the judgment in an earlier action set aside for fraud.

[25]Mr Lenon drew to my attention that in family cases there is a duty to make full and frank disclosure, and that it is possible to seek to have an order set aside by reason of lack of such disclosure. The mechanism for raising the issue seems to be either by seeking to appeal or by issuing a summons in the case. The former mechanism, appeal, was the subject of consideration by the House of Lords in Livesey -v- Jenkins

[1985] AC 424

. The principal speech in that case, with which the other members of the House of Lords agreed, was that of Lord Brandon of Oakbrook. In the final paragraph of his speech, at pages 445 to 446, he said; ‘I would end with an emphatic word of warning. It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it would only be in cases where the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place, that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed with costs against them or if they are legally aided, against the Legal Aid Fund’.

[26]It is, of course, the case that Mrs Harrison might have sought to appeal out of time against the Baron Order or sought by some application in the original divorce proceedings to have it set aside. That is not what she chose to do. Had she done, so it would seem that an aspect which could have been considered was whether Mr Harrison had failed to disclose for the purposes of the hearing which resulted in the Baron Order, some fact of relevance. However, in my judgment no issue of non-disclosure arises in a case in which it is sought to have a judgment set aside for fraud. In such a case what has to be demonstrated is that there has actually been fraud, which may include perjury, and that the evidence of that fraud or perjury is such as ‘entirely changes the aspect of the case’.

[27]I turn then to consider the evidence as to the matters complained of in the particulars of claim.

[28]The alleged non-disclosure of the existence of a bank account of Interchange. As it seems to me, it is appropriate to regard the complaint that Mr Harrison failed to disclose a bank account of Interchange not simply as a matter of non-disclosure, because it was alleged that Mr Harrison stated in terms for the purposes of the ancillary relief proceedings what bank accounts Interchange had and that all relevant bank statements had been disclosed. Potentially therefore, it could be that Mr Harrison had told an untruth.

[29]The alleged bank account which was not disclosed, was one numbered 10153726 held at the Cavendish Square branch of the Royal Bank of Scotland plc (“RBS”). In this judgment I shall refer to that account as ‘the RBS account’.

[30]There were put before me copies of statements relating to the RBS account in respect for the period from the date when it seems to have been opened, the 26th of March 2002, to the 29th of December 2006. The RBS account was described on the face of the bank statements relating to it as an account of “RBS Re Interchange Organisation”. Thus it did not seem to be an account of Interchange, but rather an account of RBS. The statements indicated that the account was opened when a sum of £25,000 was deposited in it from an account numbered 10132869, which was an account of Interchange. It appeared that there were no transactions on the RBS account until the 8th of September 2004, other than the periodic crediting of interest.

[31]In his third witness statement made for the purposes of this action, Mr Harrison explained that the RBS account was in fact an account of RBS into which Interchange was required to deposit the sum of £25,000, essentially as an insurance that Interchange would pay to RBS any foreign exchange differences which it became liable to pay in the course of the foreign exchange business which Interchange conducted through RBS. He also explained that, while the number of the RBS account was not identified to Mrs Harrison or her advisors during the course of the ancillary relief proceedings, its existence and the amount in the RBS account were disclosed.

[32]I think that in the end there was no dispute about the latter. Mrs Harrison herself produced as part of exhibit ‘VRH7’ to her first witness statement, two documents entitled ‘Interchange Organisation balance sheet’ relating to the months of March and April 2002 respectively. Each showed as an asset of Interchange an amount of £25,000 in an account designated ‘treasury account’. Those documents, as I understood, it had been disclosed by Mr Harrison during the course of the ancillary relief proceedings. Moreover, in the course of the ancillary relief proceedings he had also disclosed a statement relating to the bank account numbered 10132869 of Interchange for the period the 22nd of March until the 27th of March 2002, which showed a transfer of £25,000 on the 26th of March 2002 to “RBS Re account cheque representation”.

[33]At paragraph 54 of her third witness statement, Mrs Harrison commented in relation to the £25,000 in question; ‘It was not for me or the court to trawl through the fine print, we relied upon the defendant’s disclosure as being full and frank. The onus was on him to disclose not on me to give additional work to the forensic accountant whose remit of that time was to value COC and Interchange”.

[34]In the light of the evidence to which I have referred, it is quite unarguable, as it seems to me, that Mr Harrison perjured himself in relation to the RBS account. It was not an account of Interchange. The existence of the RBS account, albeit not with an account number identified for it, was disclosed in the course of the ancillary relief proceedings, as was the amount standing in the RBS account to the benefit of Interchange.

[35]It is also plain from the Baron judgment that, if the existence of the RBS account and the amount standing to the benefit of Interchange in it, had not been disclosed, it would have made no difference to the conclusion of Mrs Justice Baron as to the value of Interchange or the value of Mr Harrison’s interest in it. That is because of how she approached the valuation of Interchange.

[36]In the passage which follows, the documents referred to are those daily reconciliation sheets which it was pleaded at paragraph 29, particular (2) of the particulars of claim in this action Mrs Harrison received from an anonymous source. In this judgment I shall refer to those documents by the description which was given to them in the Baron Judgment, namely the ‘Hildebrand documents’. What Mrs Justice Baron said about valuation of Interchange at pages 23 to 25 of the Baron judgment was “The main use to which some of the documents were put, was to assist Miss Pincott in her final “valuation” of Interchange. She used the daily reconciliation sheets (which showed daily cash movements less the deduction of some office expenses) as a basis upon which to estimate the profitability of Interchange. She concluded that over the best four-month period (February to May 2002) the business had made a profit of £22,000 which annualised at £66,000. Miss Pincott then decided that “it was not unreasonable to expect a minimum of a doubling of profits over the next two years”. To this enhanced figure, she then applied a multiplier of four and concluded that Interchange “had a bottom line value of £648,000”. She decided to ignore the company management accounts which showed trading at a loss. “I heard oral evidence from Miss Pincott and Mr Lawrence for the husband. The accountants both agreed that, given its short period of trading and lack of track record, the business would not attract a buyer. In short it was not saleable. Mr Lawrence considered that the wife’s valuation was flawed because lack of marketability meant that the business was valueless. This was particularly true given its current loss-making position, and he confirmed that the management accounts were the best basis for establishing its real trading to date. “I have no hesitation in preferring Mr Lawrence’s evidence and approach. I consider that Miss Pincott’s “valuation” was wholly contrived and speculative. The business may do well and it may be able to be sold in the fullness of time. However, it is in a fledgling state and there is a great deal of future work to be done by the husband if the business is to survive. I do not consider that the business has any present value, and the attempt to give it a value was simply a waste of costs. “The husband has been criticised for failing to provide future projections for the business. It has been asserted that this was a deliberate attempt to prevent the wife’s accountant from being able to assess the true value of the business. Mr Lawrence said that future projections were irrelevant for the purposes of assessing the value of this business because it is/was in a start-up phase. Whilst I consider that projections would have helped me form a view as to the husband’s hopes/intentions for the business, I do not regard the lack of such documents as sinister. “The future prospects and investment to date. The husband has told me that he has hopes of success. He has invested some £318,000 of family money since December 2000 and I do not consider that he would have done so unless he had expectations of future worth. In fairness to the wife, I do not think that it would be proper to ignore the monies that he has invested to date. Accordingly, I propose to add this figure into the asset schedule. By so doing, I am very conscious that it is not real money and that it is not available to deploy. It is merely an investment to which risk attaches together with the possibility of a reward”.

[37]Thus it is plain that Mrs Justice Baron in fact had no regard whatever to the value of Interchange. What she did was to take into account as an asset of Mr Harrison the amount of his investment in Interchange, which she found was £318,000. On that approach the £25,000 in the RBS account was simply irrelevant. In the result, it is clear, in my judgment, that there is no possible ground upon which the Baron Order could be challenged on the basis that Mr Harrison misrepresented to Mrs Justice Baron or otherwise during the course of the ancillary relief proceedings, the existence of the RBS account or the assets of Interchange.

[38]The alleged fabrication of the break-in of the offices of Interchange. The next allegation which falls for consideration is the suggestion that Mr Harrison and his employees, Mr Radwan and Mr Stinton, fabricated a break-in at the offices of Interchange in order to cast aspersions on the reliability of the information contained in the Hildebrand documents. The allegation that there had been a break-in and that that was how Mrs Harrison came to have the Hildebrand documents was ventilated before Mrs Justice Baron. Mrs Harrison denied that she had obtained the Hildebrand documents unlawfully, and thus, by implication, averred that the allegation of a break-in was a fabrication. Mrs Justice Baron dealt with the allegations concerning the Hildebrand documents at pages 22 and 23 of the Baron Judgment. “In late May 2002 the wife obtained a large number of documents and a CD from an anonymous source. She informed me that she had telephoned some three people, one of whom was a current employee of the husband called Mr Hussain Radwan, and two others who were former employees. She asked each of these people for help, and soon after the phone calls, she received no less than seven brown envelopes (sent from different locations) containing documents and a CD. The CD contained current printouts from the office computer at Interchange and similar printouts from the husband’s personal computer which was kept in his rented home. A computer expert was able to establish that the information had been drawn from the office computer out-of-hours and from the husband’s computer on a date when he was away from his home. “The wife asserts that the items must have been sent by one of the gentlemen whom she telephoned to seek assistance or, as she told me in her oral evidence, by the husband himself in order to discredit her. I find her explanations very unlikely. The husband considers that the information must have been provided by a private detective. The wife admits to employing detectives in the Children Act proceedings, but denies their use in this financial case. “Clearly if the information was taken by an unauthorised person, it amounts to a criminal offence under the provisions of the Computer Misuse Act, 1990. I am conscious of the high burden of proof which is required if I am to find that the wife caused these papers to be removed. In an attempt to clarify matters in the course of this trial, I made an order for the discovery of documents pursuant to the principles set out in Dubai Aluminium -v- Al Alawi

[1999] 1WLR 1964

. This did not produce any documentation. Accordingly, I am not prepared to find any finding as to the source of this information which the wife obtained, save that I find it improbable that the documents were produced by the husband or his employee Mr Radwan who gave oral evidence denying any role, which I accept. “The documents did not show any undisclosed assets - in fact, they were in line with papers which the husband produced pursuant to a court order at about the same time. (He sent documents to the wife’s advisors on the 7th of June, they having been with his solicitor on the 5th of June, whilst the wife sent the Hildebrand documents on the 6th of June). Apart from causing a great deal of upset and adding to the costs of these proceedings, I do not consider that the Hildebrand documents added anything to the overall knowledge of the husband’s wealth.”

[39]Any reliance upon the alleged fabrication of the break-in in support of a claim that the Baron Order should be set aside for fraud is, in my judgment, bound to fail on the simple ground that the relevant alleged facts are not new and were actually considered by Mr Justice Baron. Moreover, in addition, it is plain from the passage from the Baron judgment at pages 23 to 25 which I have quoted above, that the contention advanced in this action by Mrs Harrison before me that the consequence of the allegation of the break-in was to discredit the evidence of Miss Antoinette Pincott, the accountant instructed on behalf of Mrs Harrison in the ancillary relief proceedings, is unsustainable. The reason Mrs Justice Baron rejected the evidence of Miss Pincott she set out in the passage quoted. Thus, even if this issue were open to be pursued in this action, it is clear that it would not entirely change the aspect of the ancillary relief proceedings. It would have had no conceivable affect on the outcome.

[40]I think that it was accepted by Mrs Harrison that the other matters sought to be raised in the particulars of claim were of less moment than the two which I have so far considered. But it is appropriate to indicate my findings concerning them.

[41]The alleged misstatement as to the status of the Inland Revenue investigation. It is undoubtedly true that Mr Harrison in evidence before Mrs Justice Baron did say in answer to a question about whether the Inland Revenue was investigating areas of his affairs other than UAI, ‘No, they investigated my personal situation alongside UA Importers. As soon as we replied to that letter, they were entirely content and said “that is all fine. Thank you for the time being until we finish UA Importers”’. The transcript of the relevant exchange was put before me and the accuracy of the transcript was not in issue.

[42]What was in issue was whether the statement made by Mr Harrison was correct when made. However, the only conceivable relevance of that so far as the Baron Order was concerned, was the credibility of Mr Harrison. Although in her oral submissions before me Mrs Harrison appeared at one stage to be asserting that not only was the statement of Mr Harrison untrue when made, but that in fact the Inland Revenue had required him to make some payment or payments following the investigation, no worthwhile evidence was put before me to suggest that that was so. All I was shown was a note of a report made, Mrs Harrison thought, by an investigative journalist. The name of the investigative journalist was not identified, nor was the source of the information contained in the note.

[43]Mrs Justice Baron made her assessments of both Mr Harrison and Mrs Harrison as witnesses. She set out her conclusions at pages 28 to 32 inclusive of the Baron Judgment. She had to consider, amongst other things, whether Mr Harrison was telling the truth about a number of matters. Her findings, at page 31, were: ‘The husband came across as a much less volatile individual than the wife. He was calm and more measured with an air of resignation about him. It is clear that he failed to inform the wife about the sale of Fast Cash. He says that he did not do so because he felt that she would have interfered with the sale. He certainly hid his affair from the wife and did not tell the truth about moving in with Mrs Watson when the parties separated in December 2000. Despite these points I find that his presentation of his assets has been fundamentally correct throughout, and I consider that he has done his best to make a success of his various business ventures. I note that until the sale of Fast Cash, this family did not have significant assets’.

[44]Mrs Justice Baron thus found that, in relation to some matters, Mr Harrison had hidden the truth from Mrs Harrison, and that in respect of one matter he had actually lied to her. I think that it is obvious that her assessment of Mr Harrison would not have been significantly affected by being told, if it was the case, that the status of the Inland Revenue investigation at the date of Mr Harrison’s evidence was not quite that which he said. Consequently, in my judgment, any suggestion that the fact that Mr Harrison may have taken an optimistic view in his evidence as to the status of the Inland Revenue investigation would have entirely changed the aspect of the ancillary relief proceedings verges on the absurd.

[45]The allegation that Mr Harrison misled Mrs Justice Baron as to the level of his drawings. The allegation that Mr Harrison misled Mrs Justice Baron as to the level of his drawings was based simply upon a schedule prepared by a Mr Michael Coussens, an accountant. The schedule was put in evidence. It had been sent to Mrs Harrison under cover of a letter dated the 27th of April 2005. It was not accompanied by any verbal explanation of how the schedule had been prepared or on what information it was based. However, the grand total of expenditure listed came to £221,698.63.

[46]Mr Harrison responded to the schedule of Mr Coussens at paragraph 15 of his fourth witness statement. The material part of that paragraph was to this effect; ‘The claimant was not deceived in any way in relation to my outgoings during the ancillary relief proceedings. I provided detailed and comprehensive disclosure down to the nearest pound on a monthly basis from December 2000 until May 2002. This disclosure was available to the claimant and her legal advisors during the ancillary relief proceedings, and no issues were raised on it that were not resolved during those proceedings. I will however use one simple example as to how the Coussens report (exhibited as part of exhibit ‘VRH2’ to Mrs Harrison’s witness statement) is misleading. The report fails to disclose any breakdown as to how figures have been arrived at. It is simply a total of monies drawn with no subtotals applied. If one takes November 2001 as the highest expenditure month as an example (page three tab 11) and compares this to the November 2001 at tab 4.1 updating disclosure, 23rd of May 2002, and attached to my third witness statement (pages 96 to 216) it will be seen that on the 12th of November 2001 I bought a car, my BMW (which I still drive) for £10,500 (page 98). This has been added to my personal expenditure without reference to the disclosure bundle. Anything that is not school fees or maintenance or credit cards (including legal fees, a bill for the psychiatric report in the child case, mortgage repayments) has been lumped together to produce a total with no disclosure or explanation as to how he came to it and no breakdown. Neither does he attempt to reconcile his figures with the evidence long since poured over by Mrs Harrison and her legal advisors. Further he then states that I spent £18,017.16 on credit cards and then somehow credits me with an adjust of £10,000 with no explanation. This case has been brought by Mrs Harrison, if she chooses to rely many years later on a patently partisan report, she has a duty to reconcile it in a comprehensive manner with evidence long since submitted’.

[47]There was no response by Mrs Harrison to those criticisms of the work of Mr Coussens. Instead, Mrs Harrison sought to rely on the fact that Mr Harrison had not sought to disclose information showing that Mr Coussens’s work was in error. It is not obvious from the material produced by Mr Coussens that it was based on material which was not put before Mrs Justice Baron. Clearly Mr Coussens undertook his exercise in about April 2005, but there was no suggestion that that work might not have been done earlier if it were thought to have any value.

[48]For the reasons which I have explained, in my judgment, Mr Coussens’s schedule is of almost no value without some explanation from him of how it was compiled or on what information it was based. If there were indeed evidence that Mr Harrison had misled Mrs Justice Baron as to the amounts of his drawings in the period December 2000 to May 2002, one would have expected something a great deal more definite and precise than an accountant’s unexplained schedule. If the work of Mr Coussens were sound, it could indeed change entirely the aspect of the ancillary relief proceedings. However, as it seems to me, there is no reason to suppose that it is sound and, in the light of the unanswered comments of Mr Harrison, every reason to suppose that it is not.

[49]The alleged undervaluation of the stock held by UAI. The alleged undervaluation by Mr Harrison of the stock held by UAI was canvassed before Mrs Justice Baron. She dealt with the issue in the Baron judgment at pages 27 and 28. What she said about it was; ‘UA, The American entity was jointly owned. It effectively ceased trading when the parties left Canada in 1996. However, it seemed that there was a transaction in 1998 relating to sale of some old stock which was sold for some £3,500 by a local agency. Some 15 warped Opal panels remained in storage. The value of these panels has been disputed. They have been written down in the accounts to about £20,000 in an attempt to minimise tax. The wife seeks to value the company at £94,883 being its net assets on the basis of the stock at cost. The wife does not want to retain her shares and wants her holding to be transferred to the husband with suitable, protective tax indemnities. At present, the tax authorities are disputing the write-down and there is a possibility of a tax liability of some £30,000. I consider that, if the wife considered there was real value in this company, she would have sought to retain her shares. Doing my best on the evidence available, I find that the remaining 15 Opal panels are worth about £20,000. On this basis there will be no tax to pay. Accordingly, I would include this company in the asset schedule at a value of £20,000.’

[50]The so-called new evidence which was relied upon by Mrs Harrison as showing that Mrs Justice Baron had been misled as to the value of the Opal panels which were the principal, if not sole, asset of UAI, was, first, a letter dated the 8th of January 2003 written by Mr Walter Iberti to Mr Harrison, and, second, a comment made by Mr Ian Nunn, an accountant acting on behalf of UAI, at a meeting with HM Inspector of Taxes, Mr PD Bevan, on the 28th of May 2003.

[51]It appeared that, prior to the commencement of this action, Mrs Harrison had not actually seen the letter from Mr Iberti and that the reference to it had been picked up from a letter dated the 15th of May 2003 written by Mr Bevan to Mr Nunn. In that letter Mr Iberti’s document was referred to as a letter, but in fact the document actually produced by him, and exhibited by Mr Harrison to his third witness statement, was a facsimile transmission. That may be a minor point. More significant were the terms of the facsimile transmission. Mr Iberti wrote as follows; ‘I understand that you have had an inquiry from the UK tax authorities with regard to some of the stone material that Walker and Zanger held on behalf of UA Importers and you and Vivien. As you know, I was President of Walker and Zanger until March 1999 when our family shareholding was sold. During my tenure I personally dealt with the consignment materials and specifically the Opal panels which I remember particularly well. We were your distributor and representative on a number of your products, and of course purchased container loads of stock as well as selling specific project orders. We had considerable interest in the Opal panels from time to time, and to make the marketing easier we had the panels shipped to our warehouse in Los Angeles so that potential customers could view them first hand. As I recall the panels were initially shipped to us in 1994 when the Cortima Marble company attempted a sale to Mr and Mrs Cargill MacMillan. At that time the price to the trade before the retail mark-up was US$8,900. At around that time and over the next year or two other consignment material was delivered to us in addition to our normal stock and job orders. As you may recall, there was no formal consignment agreement, we just held your stock for sale either by you or ourselves. Attached is a list of material we held on your behalf. In early 1996 I had a potential sale of the Opal panels and around that time one of the panels was shipped to our Las Vegas showroom for viewing by a prospective client who ultimately did not proceed with the purchase. The Bellagio Hotel Group was interested at one point in the panels for their executive offices in 1998 but in the end I think they chose your free-stone sandstone instead. Since then I have really been out of the Walker and Zanger loop and I understand that there has been little interest in the stock since. To my knowledge, the panels remain in the Walker and Zanger Los Angeles warehouse and are in good condition. If the UK tax authorities wish to contact me directly to confirm this letter, they may of course call or write me at the address on this stationery’.

[52]Mrs Harrison submitted that that facsimile transmission was evidence that at the time of the hearing before Mrs Justice Baron the Opal panels to the knowledge of Mr Harrison, had not been damaged and thus had the higher value for which her counsel at the hearing contended. However, it was in fact nothing of the kind. It was evidence only that Mr Eberti who had no personal knowledge of the state of the Opal panels after, at the latest, March 1999, had no reason to suppose that they did not remain in the warehouse of Walker and Zanger in Los Angeles and in good condition. It was certainly not evidence that in July 2002 Mr Harrison knew that the Opal panels were in good condition.

[53]The reliance upon the comment made by Mr Nunn to Mr Bevan was based upon notes of a meeting on the 28th of May 2003 which Mr Bevan prepared and which were provided to Mrs Harrison in her capacity as a director at the material time of UAI. In a paragraph numbered seven and entitled ‘Condition of Opal panels’ what was written was; ‘Mr Nunn stated that the audit requirements for this company had not required them to physically inspect stock but that the discussions with Mr Harrison and the comments obtained from Walter Iberti had provided them with sufficient evidence to justify the inclusion in the accounts. There were no indications present that the panels were in any way damaged or un-saleable, either at the date bought by the company or later.

[54]The latter passage needs to be put in its context. Immediately following it appeared in the notes this; ‘8) Saleability. Bevan stated that in his view if the product remained saleable as a viable prospect when the company acquired them off the directors eight years after they first acquired them, then despite the failure to complete on the sale to Bellagio it should remain that they were viable in the following year. If however they were in any way damaged at the time of purchase, then the price paid by the company would remain questionable’.

[55]From that passage, it seems that the focus of attention during the meeting insofar as it related to the Opal panels, was what was their condition at the time of purchase by UAI, not what was their condition at some subsequent stage. From the fact that Mr Bevan was envisaging that the panels might have been purchased in a damaged condition it seems to follow that Mr Nunn’s comment in paragraph seven should not be interpreted as meaning that the panels, so far as he knew, were not damaged full-stop, but merely that he could not say at what point they were damaged.

[56]At all events, it seems to me that it is plain that the matters relied on by Mrs Harrison go nowhere near demonstrating that the panels were in fact undamaged in July 2002 and that Mr Harrison knew that. In my judgment the evidence, such as it is, manifestly does not change entirely the aspect of the ancillary relief proceedings.

[57]The alleged continuation of trading after 2001 on the part of Cash on Cars. The remaining matter complained of by Mrs Harrison in the particulars of claim was that, contrary to what Mr Harrison had told Mrs Justice Baron, Cash on Cars did not cease trading in 2001, but continued to trade thereafter. There was in fact no evidence to that effect.

[58]As Mrs Harrison explained her case on this point, it seemed that she considered that a company called Logbook Loans Limited, which appeared to be controlled by a Mr Marcus Bamberg, was somehow a successor to the business of Cash on Cars. Why she thought that, as I understood it, was that Mr Bamberg was an associate of Mr Richard Cook, who had been an associate of Mr Harrison, and the nature of the business of Logbook Loans Limited was similar to that carried on by Cash on Cars. Thus, as it seems to me, it is unnecessary to consider further this alleged ground of challenge to the Baron Order. It has no substance.

[59]Conclusion in relation to the applications to strike out the particulars of claim or for summary judgment in favour of Mr Harrison, and Mrs Harrison’s applications. For the reasons which I have set out, in my judgment there is no proper foundation for the claims made on behalf of Mrs Harrison in the particulars of claim in this action. It cannot, I think, be said that the particulars of claim did not disclose a cause of action, because on its face the elements of a cause of action can be discerned.

[60]However, having considered the Baron judgment and the evidence which I have mentioned, it is obvious, as it seems to me, that Mrs Harrison has no real prospect of succeeding on her claim to set aside the Baron Order and thus it is appropriate to grant summary judgment in relation to the action to Mr Harrison.

[61]In my judgment it is right to say that to attempt to challenge a final judgment on grounds which lack substance also amounts to an abuse of the process of the court, but formally I think that it is probably more appropriate to enter summary judgment in favour of Mr Harrison, rather than simply to strike out the claim form and the particulars of claim in this action.

[62]As I have already commented, I have considered whether it was necessary or appropriate for me not to reach the conclusions which I have but to transfer this action to the Family Division as requested by Mrs Harrison. I have come to the firm conclusion that the issues to which the application on behalf of Mr Harrison gave rise do not depend in any way upon considerations falling within the specialist expertise of the judges of the Family Division, but rather upon well-established principles as to the circumstances in which a court will set aside an earlier judgment on the ground of fraud. Those principles fall fairly and squarely within the expertise of this division. In the circumstances, I dismiss the application of Mrs Harrison for a transfer of this action to the Family Division.

[63]It also follows that I dismiss the other application of Mrs Harrison. In the light of my conclusion on the application for summary judgment this action is at an end. No purpose will be served by making an order on Mrs Harrison’s application for disclosure by the Metropolitan Police that the unredacted copy which Mrs Harrison wanted be disclosed.

[64]I am bound to say that I should not have been inclined to make the order sought even if I had not dismissed this action. As it seemed to me, what Mrs Harrison was hoping from the disclosure of an unredacted copy of the police report was that in the parts redacted there would be some evidence adverse to Mr Harrison or his witnesses at the hearing of the ancillary relief proceedings, without being able to say a) that that was likely or b) what it was that was likely to be revealed.

[65]I considered the pages of the redacted report which were put before me. It seemed that one aspect of the redaction had simply been to remove all names other than that of Mrs Harrison and that of a Detective Constable Setter. The other aspect was to remove parts of the records of the police investigations. However, the investigations were in relation to a report of a burglary at the offices of Interchange, so there was no reason to suppose that any other possible misdeeds of Mr Harrison or anyone else would be revealed by the passages redacted.

[66]The circumstances in which the Freezing Injunction was made. The fact that I have come to the conclusion, after a hearing lasting a day-and-a-half, and having a considerable volume of evidence, that summary judgment should be entered in this action for Mr Harrison, does not of itself mean that it was inappropriate for an application for a Freezing Order to have been made on behalf of Mrs Harrison to Mr Justice Butterfield on the 26th of July 2007. However, the fact that the Freezing Injunction was discharged by consent points strongly in the direction of it being appropriate for Mrs Harrison to have to pay the costs of Mr Harrison incurred as a result of the making of that order, at least on the standard basis.

[67]As I have noted, Mr Harrison is seeking an order that his costs, both as a result of the making of the Freezing Injunction and of the action, be awarded on the indemnity basis. Mr Lennon relied strongly in support of his submission that the costs of the action should be awarded to Mr Harrison on the indemnity basis upon the conduct of Mrs Harrison in relation to the seeking of the Freezing Injunction.

[68]The application to Mr Justice Butterfield was made without notice to Mr Harrison by counsel, Ms Tiffany Scott, on behalf of Mrs Harrison. Ms Scott prepared a skeleton argument (“the skeleton argument”) in support of that application and a copy was put before me. The skeleton argument began in this way; ‘Suggested pre-reading. A small bundle of documents accompanies this skeleton argument containing suggested pre-reading of application notice, draft particulars of claim, supporting affidavits of the claimant and of her solicitor Andrew Paul Wass together with exhibits VRH10 and APW3, and draft Freezing Order. Estimated pre-reading time, 20 minutes’.

[69]The affidavit of Mrs Harrison ran to some 11 pages, whilst the exhibit to it contained 34 pages. The affidavit of Mr Wass comprised eight pages and the exhibit also 34 pages. It is, perhaps, a minor matter but the estimated pre-reading time stated was plainly insufficient. In the event, as Mr Justice Butterfield was recorded as having said at the commencement of the hearing before him in the note made by Mrs Harrison’s solicitors, he only read the draft order and the skeleton argument. Possibly that was due in part to the erroneous estimate of time for pre-reading included in the skeleton argument.

[70]The exhibits to the affidavits of Mrs Harrison and Mr Wass did not include a copy of the Baron judgment or a copy of the Baron Order. The exhibit to the affidavit of Mr Wass did include the bank statements relating to the RBS account. At paragraph three of the skeleton argument the nature of the claim of Mrs Harrison was explained as follows; ‘The claimant alleges that she has been the victim of a fraud perpetrated by her former husband. She is seeking to set aside a judgment in the defendant’s favour delivered in September 2002 in ancillary relief proceedings in the Family Division, on the grounds that it was obtained as a result of fraudulent misrepresentations and/or material non-disclosures made by or on behalf of the defendant in relation to the extent of the joint assets of the parties’.

[71]The skeleton argument did not contain any summary or elaboration of the ingredients needed to be demonstrated in law to justify the setting aside of a judgment on the ground of fraud. There was, for example, no mention of the summary of principles to be found in the judgment of Mr Justice David Steele in Kuwait Airways Corporation -v- Iraq Airways Corporation, which I have quoted earlier in this judgment. There was, however a statement of what was said to have been the key issues in the ancillary relief proceedings. One of these was said to have been the value of Interchange. The other was the remuneration which Mr Harrison was to receive under earn-out arrangements on the sale of Fast Cash. It is unclear why mention was made of the latter as none of the allegations in this action concerned those arrangements.

[72]It was explained in the skeleton argument that the bank statements relating to the RBS account had been obtained as a result of an order directed to RBS. Paragraph 13 of the skeleton argument was in these terms:

“Disclosure was given by RBS and copies of those bank statements relevant to this claim appear at pages 1-13 of APW3. It is submitted that these documents provide compelling evidence of fraud. [That sentence in bold in the original.] The defendant did not disclose the existence of a particular bank account in the name of Interchange Organisation which contained around £25,000 during 2002 (“the Interchange account”.)”

[73]The name of the account was thus not correctly specified. From the notes of Mrs Harrison’s solicitors of the hearing before Mr Justice Butterfield, it does not appear that Mr Justice Butterfield was shown the copies of the bank statements of the RBS account. Consequently, he was unaware of the correct name of the account. He was also unaware that the statements showed an inactive account with £25,000 in it on which interest was being paid, but in respect of which there were no other transactions in 2002.

[74]Mr Justice Butterfield was not told the basis on which Mrs Justice Baron had approached the assessment of the value of Interchange to Mr Harrison. He was thus given the impression that the alleged concealment of an amount of £25,000 was relevant to that assessment. The other major complaint against Mr Harrison identified in the skeleton argument concerned the alleged fabrication of the allegation of a break-in at the offices of Interchange in May 2002.

[75]At paragraphs 18 and 19 Ms Scott commented; ’18) It is beyond belief that the defendant and his employees knew on the 10th of May 2002 that a break-in had occurred and that financial information had not only been ‘stolen’ but also doctored, and yet did not think to report the incident to the police immediately. Contrary to the sworn testimony of the defendant’s witness, the report was not made on the 19th or the 20th of May 2002 but only after the pre-trial review when the defendant was faced with having to discredit the report of Grant Thornton and the documents received by the claimant. 19) By fabricating the break-in and alleging that the documents received by the claimant had been tampered with, the defendant managed to convince the court that it should not rely upon the report of Grant Thornton. This was crucial to the way the court approached the claimant’s case in the ancillary relief proceedings, and resulted in the court accepting the defendant’s assertion that Interchange was a business with negligible value’.

[76]Mr Justice Butterfield was not told that the question of the circumstances in which Mrs Harrison came to have the Hildebrand documents was investigated before Mrs Justice Baron and that she had commented on the issue. He was told, quite wrongly, that the allegation that there had been a break-in at the offices of Interchange had influenced Mrs Justice Baron in her assessment of the expert evidence of Miss Pincott. It would appear that Ms Scott cannot have read the Baron judgment, otherwise she could not possibly have written paragraph 19 in the terms she did. However, bearing in mind that the whole purpose of this action was to have the Baron Order set aside, it is difficult to understand how counsel could have prepared to make the application to Mr Justice Butterfield without reading the Baron Judgment.

[77]Paragraphs 22 to 23 inclusive of the skeleton argument were devoted to documents obtained on behalf of Mrs Harrison from the purchaser of Fast Cash. It is unclear why any reference at all was made to those documents because no allegation in relation to them was contained in the particulars of claim, and in paragraph 33 Ms Scott commented that; ‘It is important to be clear that the claimant does not say on this application that the documents show that the defendant fraudulently misrepresented the value of the earn-out he was to receive from Dollar’.

[78]The question of whether there was a real risk of dissipation of his assets by Mr Harrison unless a Freezing Order was made was dealt with at paragraph 34 to 38 inclusive of the skeleton argument. In summary, it was contended that the existence of a risk was demonstrated by the making of previous Freezing Orders against Mr Harrison in 1995 and in 2000.

[79]The quantum of the claim of Mrs Harrison and the extent of the Freezing Order were the subject of paragraphs 39 to 44 inclusive of the skeleton argument. Paragraphs 43 and 44 were concerned with what was said to be the worth of Mr Harrison’s assets in 2005 and 2006, not as at July 2002. The other paragraphs were in these terms; ’39) During their marriage the claimant and the defendant set up home and businesses in various countries. At present the claimant cannot say whether the defendant retains personal assets or business interests outside the jurisdiction, but it is a distinct possibility. 40) The claimant’s application is for an order freezing the defendant’s assets up to a value of £2- million. This figure is proposed taking into account 1) the substantial costs which the claimant paid in the ancillary relief proceedings and of which she claims repayment in this action, and 2) the possible award on further ancillary relief proceedings which she will bring in the event that the judgment of Mrs Justice Baron is set aside. 41) As to the costs element, Mrs Justice Baron records in her judgment that the costs estimates available at trial in July 2002, showed that the claimant had expended £425,000 on the litigation and the defendant £210,000. Those costs were in addition to £163,000 which the parties expended in relation to disputes concerning the children of the family. 42) The claimant was ordered to pay the defendant’s costs of the ancillary relief proceedings. In the event, taking into account her own costs, she paid substantially more than the estimated £630,000 since there were ongoing costs which she had to meet relating to the period between the trial in July 2002 and judgment in September 2002’.

[80]The statement that Mrs Harrison had been ordered to pay Mr Harrison’s costs of the ancillary relief proceedings was just plain wrong. It appears that Mr Justice Butterfield was seriously misled at the hearing before him, quite apart from the passages of the skeleton argument to which I have drawn attention. The notes of the hearing included this exchange; ‘TS [counsel]– yes and I should point out that the value of the order is £2 million, not £1 million as stated on the application. As for the rest of the order, at paragraph seven is the named property of the house in respect of which we have Land Registry documentation. Also we have named Interchange of which the defendant is a 100% shareholder. The CPR pro-forma for a Freezing Order contains an exception stating that the order does not prohibit the defendant from dealing with or disposing of assets in the ordinary and proper course of business, which I have removed in this context. J – [Mr Justice Butterfield] Yes, that is appropriate, else he may rely on that to dissipate the assets’.

[81]As it seems to me, Mr Justice Butterfield should not have been invited to freeze the assets of Interchange as it was not a party to the application, and it should not have been suggested to him that it was appropriate to omit the usual provision in a freezing order permitting the carrying on of ordinary business.

[82]For the reasons which I have set out, in my judgment an application for a Freezing Order should never have been sought because Mrs Harrison had no proper claim to have the Baron Order set aside. Moreover, the making of an application for a Freezing Order was accompanied by serious failures of frankness and disclosure on the part of Mrs Harrison. Indeed it is difficult to imagine more serious failures. Almost nothing was done which should have been done and Mr Justice Butterfield was given incorrect information on important matters, including what could be seen from the bank statements of the RBS account, the significance of the alleged break-in to the conclusions of Mrs Justice Baron and the order for costs which she made.

[83]Regrettably, the application made to Mr Justice Butterfield was a travesty of an application for a Freezing Order. The motivation for the making of the application is a matter of speculation. There was no evidence to justify the conclusion that there was a risk of dissipation by Mr Harrison of his assets, even assuming that Mrs Harrison had an arguable cause of action for the setting aside of the Baron Order. The way in which the figure of £2 million was arrived at seems to be, at best, casual, increasing by 100% between the drafting of the application and the hearing before Mr Justice Butterfield. The inclusion of the assets of Interchange and the deliberate decision not to include in the order the usual provision for transactions in the ordinary course of business, are suggestive of a desire to inflict at least pressure, if not actual damage, on Mr Harrison.

[84]However, it is not, I think, necessary for me to reach any conclusion as to what motivated the making of the application for the Freezing Injunction. It is enough that the making of that application was not justified and that the manner in which the application was made was seriously irregular.

[85]Conclusions. In the circumstances, I am satisfied that it is appropriate for me to order Mrs Harrison to pay Mr Harrison his costs of this action on the indemnity basis. In principle I am disposed to make the usual order for the payment of an amount on account of costs, but I have not heard Mrs Harrison on that issue, so for the moment I make no order about that. If I am persuaded to make an order for a payment on account, I will have to hear from both sides as to the amount to be ordered. I will direct that there should be an enquiry as to the damages suffered both by Mr Harrison and by Interchange. ----------------------------------------