Watson & Ors v O'Driscoll

Permission for a second appeal requires an important point of principle or practice, or another compelling reason for the appeal to be heard. A refusal to adjourn will not justify permission where the judge properly exercised the case-management discretion and no arguable error arises.

Where a freezing order specifically identifies property and prohibits its disposal, a disposition made deliberately in breach of that order is illegal. This remains so irrespective of any claimed legal or beneficial interest in the property. The recipient cannot rely on the benefit of the illegal transaction, and the court may order restoration of the property to give full effect to its order.

The claimants sought re-transfer of a leasehold flat transferred by Angelo Perotti to his daughter, Ellen Patricia O'Driscoll, after a freezing order had expressly prohibited him from disposing of it. Master Price ordered re-transfer under Insolvency Act 1986 provisions. Mr Justice Rimer dismissed Miss O'Driscoll's appeal on two grounds: she had no real prospect of establishing a beneficial interest under an alleged secret trust, and the transfer was illegal because it breached the freezing order.

Miss O'Driscoll applied to the Court of Appeal for permission to appeal. The central questions were whether the refusal of an adjournment, the summary decision on the secret-trust issue, or the consequences of breaching the freezing order raised an important point of principle or practice or provided another compelling reason for a second appeal.

1. Application dismissed. Chadwick LJ delivered the principal judgment and Ward LJ agreed, adding brief reasons. Permission to appeal was refused under CPR 52.13 and section 55(1) of the Access to Justice Act 1999.
2. The refusal to adjourn did not raise an important point of principle or practice. The judge had a discretion, gave reasons for proceeding, and there was no basis for concluding that the discretion had been exercised wrongly.
3. The summary judgment on the alleged secret trust was also unassailable. Although the findings in the earlier contempt proceedings were not binding on Miss O'Driscoll, the judge was entitled to assess the evidence independently and conclude that her prospects of establishing a beneficial interest at trial were no better than negligible or fanciful.
4. The freezing order expressly prohibited disposal of the identified flat. Its operation did not depend on whether Mr Perotti in fact had the beneficial interest. His execution of the assent was therefore a deliberate breach and an illegal disposition. Miss O'Driscoll could not take the benefit of the transaction, even assuming that she was personally innocent and beneficially entitled under the alleged secret trust.
5. Chadwick LJ treated the reasoning in Clarke v Chadburn [1985] 1 WLR 78 as supporting the court's power to set aside the transaction and secure re-vesting of the flat. Ward LJ described this breach-based ground as conclusive.
6. The application for a transcript at public expense was also refused.

• Court of Appeal (Civil Division): Permission for a second appeal refused; the application for a transcript at public expense was refused.
• High Court, Chancery Division: Mr Justice Rimer dismissed Miss O'Driscoll's appeal from Master Price's order for re-transfer.
• Master Price: Ordered re-transfer under Part XVI, particularly sections 423 and 425, of the Insolvency Act 1986.