(Court of Appeal; MR, Rafferty LJ, Sir Mark Potter; 24 February 2012)
The husband and wife had an on/off relationship for 25 years, married to each other twice and divorced, three adult children. The husband had been engaged in entrepreneurial activities world-wide. The wife instigated divorce proceedings. Two appeals against interlocutory decisions in financial proceedings. Order in Chancery Division that most of the husband's assets were beneficially owned by his business partner. The husband challenged the decisions that: (a) the wife could maintain the ancillary relief proceedings despite the Chancery order; and (b) the husband should not be released from an undertaking effectively freezing a sum of at least £485,000, the amount of the proceeds of the sale of a property transferred to an account in the name of the business partner. Estoppel should not bind the parties if it arose out of a judgment in an earlier action which was obtained by fraud or collusion. It could not be right that that simply entitled a party, against whom there was an apparently valid order of the HC to pursue an inconsistent case in later proceedings and merely contend in those proceedings that the earlier order was obtained by fraud: the party would have to apply to set aside the earlier judgment. The judge's decision that the wife could ignore the Chancery order could not stand, at least in the absence of fraud or collusion, and an application to set aside the Chancery order.
The judge was entitled to conclude that there was sufficient risk of the money in question being dissipated. The appeal of the husband on the question of whether the wife was bound by the orders in the partnership action was allowed, but the husband's appeal against the refusal to release him from the undertaking, and the business partner's appeal against the refusal to discharge the injunction were dismissed.