Wife cannot make claim against property after previously failing to pursue claim

Divorce|June 12th 2019

I have written here previously (for example here) that financial remedy orders are intended to be final, and that therefore a party is not usually entitled to have a ‘second bite of the cherry’. Once a claim against property has been determined, no further claim can be made against that property. In the recent case Chaudhri (Shafi) v Shafi & Another, however, the situation was slightly different: here, the wife had declined to take that first bite. She did not actually pursue a first claim against the property. However, as we shall see, the end result was still the same.

The case, heard by Mr Justice Mostyn in the High Court in April, concerned the wife’s application for a freezing injunction against a property in London (the injunction had been made earlier by Mr Justice Cobb, and Mr Justice Mostyn was reconsidering it). The injunction was sought in relation to the enforcement of a lump sum order requiring the husband to pay to the wife £686,000. The husband had failed to comply with the order, and the wife sought the freezing injunction to prevent the property being sold or mortgaged, thereby protecting the wife’s claim against the property, which she no doubt hoped would be sold, so that she could recover all or part of the lump sum.

The complication was that the property was held in the name of a third party. The wife claimed, however, that she and the husband had funded its purchase, and were the true (’beneficial’) owners. The wife had made a claim against the property within the financial remedy proceedings. However, she stated that she “did not pursue it due to stress and ill-health.”

Whilst it was true that the wife had suffered stress and ill-health around the time of the final financial remedies hearing, Mr Justice Mostyn found that she was not incapacitated, and was in a position to give instructions to her solicitor. A lawyer for the third party had written to her solicitor stating that her claim against the property had no substance, and asking whether the wife would oppose an application by the third party to have the claim struck out. The wife’s solicitor replied, confirming that she would not resist the strike-out application.

In addition to this, when the matter later went before the court the judge specifically recorded that the wife did not pursue a claim against the property.

Turning to the wife’s freezing injunction application, it was suggested by counsel for the third party that it would be an abuse for the wife now to be allowed to pursue a claim in relation to the property. Mr Justice Mostyn agreed, citing the following words of Lord Bingham in a 2002 House of Lords case:

“The underlying public interest is … that there should be finality in litigation and that a party should not be twice vexed in the same matter … The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all.”

Mr Justice Mostyn said that not once, but twice, had the wife failed to pursue her claim in relation to the property. In his judgment, it would be a manifest abuse were a claim now to be allowed to be mounted and protected by a freezing injunction. Accordingly, the injunction was discharged.

(It should be noted that the wife also had the protection of an earlier worldwide freezing order, presumably freezing any property held by the husband, anywhere in the world. Sadly, it can be very difficult to enforce against assets held abroad, which was no doubt why the wife was eager to enforce against an asset in this country.)

You can read the full judgment here.

John Bolch often wonders how he ever became a family lawyer. He no longer practises, but has instead earned a reputation as one of the UK's best-known family law bloggers.

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