Charman v Charman

Under CPR rule 52.9, the Court of Appeal may strike out an appeal notice, set aside permission, or impose conditions only where there is a compelling reason. Once permission has been granted, the court should avoid satellite litigation and should intervene only for an overlooked decisive authority or statutory provision, material misleading of the granting judge, or a comparable case in which post-judgment conduct justifies protection. Pre-judgment conduct is generally background. The central considerations are post-judgment non-compliance, a real risk that the judgment will not be paid if the appeal fails, and the amenability of the judgment to enforcement. Security for costs may nevertheless be ordered where the appellant is resident outside the jurisdiction and outside the Brussels or Lugano Contracting States.

The wife applied in the husband’s appeal from orders made by Mr Justice Coleridge in ancillary relief proceedings. The underlying order required the husband to pay a lump sum of £40 million, with a balance payable later, and included related directions concerning interest, tax documentation and a freezing injunction. The husband had obtained permission to appeal on issues concerning the treatment of trust assets, family and non-family assets, general approach, special contribution, valuation, tax, timing, interest and the freezing order.

The wife sought to strike out additional grounds, impose security for the outstanding lump sum as a condition of the appeal, and obtain security for appeal costs. The central questions were whether a compelling reason justified intervention under CPR rule 52.9 and whether security for costs should be ordered.

1. Applications under CPR rule 52.9. The wife’s application to strike out grounds and impose security for the outstanding lump sum was refused. The rule is reserved for cases presenting a compelling reason. Its purpose is to prevent tactical satellite litigation after permission has been granted. The relevant examples include material misleading of the judge who granted permission, or the overlooking of plainly and unarguably decisive authority or statutory provision.
2. The grounds concerning the Dragon trust, family and non-family assets were sufficiently connected with the granted appeal to remain. Although grounds concerning timing, interest and the freezing injunction appeared weak, and grounds concerning valuation and tax appeared little stronger, their arguability should not be determined on this interlocutory application. The challenge to the freezing order was unlikely to succeed but was not unarguable.
3. Security for the substantive award. The court focused on post-judgment events. Relevant considerations were whether the husband had failed to comply, whether there was reason to suppose that the judgment would not be paid if the appeal failed, and whether the judgment could be enforced in the relevant jurisdiction. His earlier non-payment was later remedied. His present position did not establish a breach, and the prospect of difficulty in paying the balance, or the need to realise assets which might later prove unnecessary to realise, did not amount to a compelling reason. Nor was there sufficient evidence that enforcement in Bermuda would fail. The application under paragraph 1 was therefore refused.
4. Security for costs. Security was ordered under CPR rule 25.13(2)(a), because the husband was resident outside the jurisdiction and outside a Brussels or Lugano Contracting State. The alternative ground under rule 25.13(2)(g), concerning steps affecting enforceability, need not be decided. The husband was ordered to provide £225,000, with an alternative form of security acceptable to the wife’s solicitors.
5. Lord Justice Thorpe and Lord Justice Wilson agreed with the President. The formal order was that the applications were refused and security for costs was to be provided in the sum of £225,000.

• Court of Appeal (Civil Division): Lord Justice Wilson had granted unlimited permission to appeal and a conditional stay. The Court of Appeal refused the wife’s applications to strike out grounds and require security for the substantive award, but ordered security for the husband’s appeal costs in the sum of £225,000.
• High Court, Family Division: Mr Justice Coleridge made orders on 27 July 2006 requiring payment of a £40 million lump sum and related directions. On 23 October 2006 he extended time for payment of £4 million, ordered payment of the £28 million balance by 1 March 2007 with interest, renewed the freezing injunction and refused permission to appeal.