Taylor v Taylor

Where consent orders made in ancillary relief proceedings regulate the division of business assets, disputes about their implementation and alleged breach remain for the ancillary relief court. The investigation should not be transferred to company-law proceedings or another uncommenced forum. Evidence that a party may have exceeded an authorised income draw or diverted company assets requires investigation, supported by disclosure of relevant books and records. Summary dismissal is procedurally unfair where no application for summary dismissal has been issued, responsive evidence was served shortly before the hearing, and the opposing party had no opportunity to answer it.

Ancillary relief proceedings between the parties resulted in consent orders requiring the sale of three opticians’ businesses and equal division of the net proceeds. The wife later alleged that the husband had drawn more than the permitted £1,500 per month and had removed stock and other business assets. She applied for directions, disclosure and verification of the business accounts and sale proceeds.

The county court discharged an interim injunction and summarily dismissed the wife’s application, treating the dispute as a company-law matter. The wife appealed, raising the procedural fairness of that summary dismissal and whether implementation of the consent orders fell within the ancillary relief proceedings.

1. Appeal allowed. Lord Justice Thorpe granted permission to appeal and allowed the appeal. Lord Justice Clarke agreed. The order of the county court was set aside insofar as it purported to determine the wife’s application.
2. Procedural fairness. The summary dismissal was procedurally unfair. No application for summary dismissal had been issued. The husband’s responsive evidence and skeleton argument were served only shortly before the hearing, leaving the wife without a fair opportunity to reply. There was also an existing date for determination of the substantive application.
3. Ancillary relief jurisdiction. The consent orders controlled the division of assets between the parties. Their implementation remained the responsibility of the ancillary relief court. The judge was wrong to reallocate the dispute to company-law proceedings or another forum that had not been commenced.
4. Disclosure and investigation. Allegations that the husband had drawn more than £1,500 per month, or had appropriated stock and chattels for his own benefit, raised issues requiring investigation in the ancillary relief proceedings. The wife was entitled to have those issues determined and to obtain full discovery of relevant books, accounts and supporting documents in advance.
5. The application was remitted to the county court for proper determination at the earliest possible date. The appeal was allowed with the costs of the appeal.

1. Court of Appeal (Civil Division) — In [2004] EWCA Civ 1022, permission to appeal was granted, the appeal was allowed, and the wife’s application was remitted for proper determination.
2. Blackburn County Court — Judge Smith discharged the interim injunction and summarily dismissed the wife’s application for directions and disclosure.