Cohen J. Application by H to strike out W’s application to set aside a final order in financial remedies proceedings on the ground of H’s misrepresentation.

Background

For a full summary of the facts and background, please see FRJ summaries of Mostyn J's judgment following final hearing (A v M [2021] EWFC 89) and Cohen J's judgment on the construction of the final order (A v M (No 2) [2024] EWFC 214).

Facts

At final hearing Mostyn J had granted W an interest in two private equity funds established by H, such interest then rolled into one fund (‘Fund 1’) in order to limit Wells sharing. Fund 1 was later closed (two years earlier than the anticipated closing date stated by H at trial) and W’s share of the sale proceeds paid to her in accordance with the terms of the order. W subsequently brought an application for a ruling on the construction of the final order, on the basis that she believed H had wrongly construed the order by effectively forcing her to cash out her investments rather than giving her the option to roll her interest into a continuation fund, as H had done with part of his investments in the original fund.

At the FDA in W’s construction application in December 2023, Cohen J made an order compelling H to provide certain disclosure, and setting out that if W was in fact seeking to set aside or vary the final order, she was to state her intention to do so by 1 February 2024. Following receipt of H’s disclosure, W’s deadline was put back by consent to allow her more time to consider the documents. W then put a number of additional questions to H. At the same time she sought a further extension of the deadline, to which H did not agree. When the matter was brought before Cohen J on paper, he stated that W must elect whether she intended to apply to set aside as ordered. W did not seek any further extension or order, and the matter was not raised at PTR.

On 30 July 2024–2 August 2024 Cohen J heard and considered W’s construction application, which he ultimately dismissed. On 7 August 2024 W applied to set aside the order of Mostyn J on the basis of H’s misrepresentation regarding the closing date of the fund, as a result of which her share in the funds had been under-calculated at trial. H subsequently applied for W’s application to be struck out, on the basis of:

a) W’s failure to comply with the unless order of December 2023, in relation to which she had not sought relief from sanctions;

b) W’s application being an abuse of process of the court; and

c) W’s application having no real prospect of success and/or disclosing no reasonable grounds.

Discussion

Cohen J acknowledged the importance of finality of litigation as a matter of public policy; [23]. He also rejected H’s assertion that within the ‘mound of documents’ produced in the case W could have discovered the correct 2023 closing date. H’s presentation to the court, both orally and in writing, was that the correct date was 2025; further, there were numerous other documents which stated a closing date of 2025. H could not put on W the burden of discovering his error; [25].

Held

Cohen J considered each of H’s arguments in turn.

Unless order

There was nothing in the December 2023 order barring W from pursing a subsequent application to set aside; [30]. This was not therefore a matter to which the Denton criteria applied; [31].

Abuse of process

Cohen J highlighted the relevant authorities in this area at [33]–[36]. He concluded that, whilst there was no good reason for W’s failure to bring her claim earlier ([37]), it was common ground that W’s award was smaller than it would have been had H not provided false information to the court; [38]. There was therefore a need to balance the prejudice that W’s inaction had caused H with the prejudice that would be caused to W by a strike out of her claim, notwithstanding H’s conduct and the judicial error which flowed from it; [39]. On balance, W’s application should not be struck out as an abuse of process. There was no reason here why an admitted wrong should not be able to be corrected; [40]. Insofar as there had been an avoidable duplication of costs, this could be dealt with at a later stage.

No real prospect of success

H’s arguments on this ground had no merit. Whilst W’s pleadings of dishonesty were deficient, her argument, inter alia, that H must have been aware of his false presentation, bearing in mind the steps taken to establish a continuation fund within months of the conclusion of the original proceedings, did give rise to an arguable case; [41].

H’s strike-out application was therefore dismissed.

Mediation

Finally, Cohen J described the case as one which ‘cries out’ for mediation, and stated his intention to adjourn proceedings for mediation to take place; [43]–[44].