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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Arif v Zar & Anor [2012] EWCA Civ 986 (18 July 2012) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2012/986.html Cite as: [2012] EWCA Civ 986, [2012] WLR(D) 239 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
AND ON APPEAL FROM THE HIGH COURT OF JUSTICE
IN BANKRUPTCY
MOSTYN J.
FD 11 D 03106
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE RIMER
and
LORD JUSTICE PATTEN
____________________
SOFIA ARIF |
Petitioner |
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- and - |
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ARIF ANWAR ZAR |
First Respondent |
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- and - |
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RAZIZ REHAN |
Second Respondent |
____________________
Peter Shaw (instructed by Speechly Bircham LLP) for David Thurgood and Richard Hicken, the trustees-in-bankruptcy of Arif Anwar Zar
James Ewins (instructed by Hughes Fowler Carruthers Ltd) for the Petitioner/Respondent, Sofia Arif
Hearing date : 3rd July 2012
____________________
Crown Copyright ©
Lord Justice Patten :
"I am not deciding whether to annul the bankruptcy order today. The issue to be decided is whether to transfer the matter to the Family Division, or to allow the annulment application to be determined as a discrete issue in the Chancery Division. This is the normal venue for such decisions but I acknowledge [the] Applicant counsel's citing of s.49 Senior Courts Act 1981. He has argued that this is clear authority for the transfer to be made. However, there is an equally valid argument that the matter should be decided sooner rather than later and that it is a discrete and separate issue in the bankruptcy. I am told that the matter could be accommodated in the Chancery Division for hearing within 4-6 weeks.
The concern of this court is to ensure the proportionate administration of justice, and despite the submissions of counsel for the Applicant, the matters which should properly be addressed on an annulment application under s.282(1)(a) would be dealt with in a more cost effective manner in the Chancery Division, without disrespect to the Family Court.
In my view the issues are straightforward.
In my view if the annulment application is disposed of, the trustees in bankruptcy can properly act and should be allowed to get on with the realisation of assets and administer the bankruptcy estate, which will ultimately be to the benefit of the wife. If [the annulment application] is wrapped up in a lengthy hearing, it will cause problems in the bankruptcy and generate expenses which could be avoided. Therefore, despite the clear direction of Mr Justice Mostyn, and again with no discourtesy meant to the Family court, I am not moved to transfer proceedings to the Family Division. I am not persuaded that the transfer of the proceedings will be of benefit to the Applicant."
"9. One can see that on the hearing of any annulment application, there is likely to be an extensive dispute of fact requiring oral evidence and the pitiless exposure of truth or falsehood by the process of cross-examination. It was in that context that I made my request to the Bankruptcy Court, anticipating that in order to avoid a multiplicity of proceedings which is the imperative duty of all courts pursuant to Section 49(2) Senior Courts Act 1981, the annulment application would be heard at the same time and by the same judge hearing the wife's financial remedy application. There is obviously a demonstrable overlap or congruence between the evidence relevant to the annulment application and the evidence relevant to the wife's claim for ancillary relief. For it is accepted and it is established law that there is nothing to prevent the court making a lump sum award against a bankrupt, provided that the court exercising the powers to award a financial remedy following divorce has a 'clear picture of the assets and liabilities of the bankrupt'; according to Lord Justice Peter Gibson in the case of Hellyer v Hellyer.
10. There is a plain congruence between the evidence that would be needed to be heard in order to make that assessment and the evidence that has to be heard in order to make the assessment, whether, in truth and having regard to the realities of his commercial life, the husband had no tangible prospect of paying the third party debts to which I have referred.
11. I fully expected that the Bankruptcy Registrar would make the transfer. It is to be observed that the making of such a transfer in order that the cases can be heard together, not only, as I have said, gives effect to Section 49(2) of the Senior Courts Act, but also corresponds to the almost invariable practice in these cases. I refer for example to the decision of F v F (Divorce: Insolvency: Annulment of Bankruptcy Order) [1994] 1 FLR 359, a decision of Mr Justice Thorpe as he then was, where the annulment application was in fact issued in the Family Division and where the annulment application was heard concurrently with the application for ancillary relief."
"16. It is plain from the note of the judgment which I have, that whilst she must have been referred to Paulin, the Registrar was probably not referred to Whig v Whig or the other cases I have mentioned. Nor was she, as Mr Ewins has confirmed, referred to the recent decision of the Court of Appeal, the Master of the Rolls presiding, in Edgerton v Edgerton [2012] EWCA Civ 181. In that case, there have been parallel partnership proceedings which had been issued in the Chancery Division which had led to a degree of case-management anarchy and a plethora of different hearings in different courts in Liverpool. In his judgment the Master of the Rolls said this at paragraph 52:
'While there will of course be cases where the Family Court judge will direct that a preliminary issue as to ownership of assets involving a third party be heard in another division as a preliminary issue, the better course is normally for the Family Court to determine the issues. see TL v ML [2005] EWHC 2860 (Fam), [2006] 1 FLR 1263, paras 33-36, A v A [2007] EWHC 99 (Fam), [2007] 2 FLR 467, and Goldstone v Goldstone [2011] EWCA Civ 39. Continuity of judicial involvement is desirable both for efficiency and for consistency of decision-making'.
By virtue of Rule 3.1, CPR 3.1(7) it is stated that a power of the court under the rules to make an order includes a power to vary or revoke the order. It is true that I am not hearing an appeal from Registrar Derrett and Mr Le Grice has cautioned me not to in a disguised way to exercise appeal powers in the absence of a notice of appeal having been issued; even if it is the case I think that Registrar Derrett was plainly wrong. However, the variation and revocation power is unbounded and it is open for me to exercise them if I think it is appropriate, having regard to the further material which is before me which does not appear to have been fully argued before Registrar Derrett and particularly and in relation to the failure to cite what I regard as the authority of key importance namely Edgerton v Edgerton."
Lord Justice Rimer :
Lord Justice Thorpe :