IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Claim No: FD06D05076
5TH AUGUST 2010
B e f o r e:
THE HONOURABLE MRS JUSTICE ELEANOR KING
- - - - - -
JOHN DRAGONAS
CLAIMANT
V
PANAYOTA LYMBERAKOU
DEFENDANT
__________
Tape transcription by Exigent Group Limited
44 Carnaby Street, London W1F 9PP
__________
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SUBMISSIONS MADE BY MR ALEXANDER THORPE
MRS JUSTICE ELEANOR KING: Yes, Mr Thorpe?
MR ALEXANDER THORPE: My Lady, I am going to take matters fairly briefly
because I appreciate it would be better if I finished by 1.00 and that will give
everybody an opportunity – or it will give you an opportunity to consider your
judgment.
Mr Dragonas’ position has been crystal clear from the outset and if I could take
you to page 138 of the supplemental bundle, this is at B, five lines down.
Primarily he says that Greek properties are to be determined under the jurisdiction
of Greek Courts and I say that that on his behalf do not back it up with any legal
arguments. It is also said throughout the correspondence. The difficulty that the
wife faces is not just in this jurisdiction. The husband issued a petition in Greece
that he pursues and he defends his position in Greece vigorously so that
enforcement is not easy for my client and success here today is not the end of the
story.
The extent of the difficulties of disclosure was not limited, however, to property.
If I can ask you to take the first bundle, My Lady, and turn to page 123 at question
4: “Please explain why the address of HSBC bank statement as of May 2007 is
166 … High Street. What is the Applicant’s attachment to this address? Please
provide an office copy for this address. The Applicant had a lease from
December 1991 until 2011. The Applicant, however, assigned the lease in March
2007, copy completion statement enclosed herewith.” This money was put into
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[unclear] International account, which is his brother’s company. This money was
money the Applicant owed to his brother for paying his debts.
If I can turn you on to 138: “Please provide documentary evidence” – sorry, this
is at paragraph 48: “Please provide documentary evidence, including copies of
loan agreements for the sums allegedly owed to the following: M. Dragonas,
I. Dragonas, P. Dragonas.” In fact, the money was paid to A. Dragonas so he is
not even cited as the debt but over the page you will see that, even were he cited
as a debt, we are given no documentary evidence of any debts from those
individuals and you will see that the relationship of the individuals to
Mr Dragonas – sister, brother-in-law, brother, friend and friend.
Then if I can turn you to page 169, this is another reply: “The Applicant does not
have any documentary evidence. The Applicant cannot remember the sources of
funds, probably personal funds and funds from his brothers and sisters. With
reference to the Abbey account in the name of A. Dragonas (that is his sister this
time), please [allocate] each payment over £500 as requested in the original
questionnaire and provide documentary evidence. This is the Applicant’s sister’s
account and therefore the Applicant does not know the transactions.” This is an
account registered to his address upon which he was and is a signatory.
At 175, at question 32: “Please confirm the account into which the sum of
£17,978 from FC Investments was deposited. Please provide documentary
evidence of that bank statement. The Applicant’s sister’s account, A. Dragonas,
(off mic)… already provided.”
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It was also part of our case that the husband had transferred large sums of money
to his brother, who he described as being in the agricultural police and it is right
that his brother has considerable influence over land and land purchases in
Zakynthos. Our case was that the sums of money transferred to his brother were
way beyond anything that his brother could pay back and that, as a result of that,
his brother purchased lands such that the lands notionally held by his brother
were, in fact, we would have said held for him. So if I could just take you to 144
– sorry, starting at 143.
MRS JUSTICE ELEANOR KING: And, in fact, you asked, didn’t you, at first instance
to have those added back but the learned District Judge declined to do so?
MR ALEXANDER THORPE: Declined to do so.
MRS JUSTICE ELEANOR KING: So in that respect, you did not get everything that
you were asking for.
MR ALEXANDER THORPE: Yes. In fairness to the District Judge, we accepted that it
were better that her judgment were, as I described it in my submissions, [bond]-
proof, that she acceded to the submissions. This is the agreement with Peter
Dragonas: “Enclosed herewith, it is H’s case that the copy of the 15th September
1995 … is supplied as a true copy of the original document and the signatures
appearing at the bottom are those of the various parties.” The sums involved
equated to £210,000 on the dates that they were transferred. When we asked, the
husband said that this money was paid back by his brother-
MRS JUSTICE ELEANOR KING: To him?
MR ALEXANDER THORPE: -to him and at 41-44: “With regards to this agreement,
please provide documentary evidence of the various payments totalling £70,000
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made to Peter Dragonas. The Applicant does not have any documentary
evidence.” Then if I could turn you to the second bundle at 467.
MRS JUSTICE ELEANOR KING: 467?
MR ALEXANDER THORPE: I think I may have taken you to a wrong – sorry, yes,
these are the agreements with the brother for €35,000 – sorry, forgive me,
35 million drachma and at 468 you will see 4 million drachma in 1982; in 1985
20 million drachma; in 1988 11 million drachma.
Then if you turn on to 473, you will see a translation of the document that
precedes it showing that the brother then bought land and you will see the amount
or the cost of the land was only 550,000 drachmas, which gives you an indication
of the purchasing power of the Dragonas brothers in 1993, and you will see that
he bought it in the name of his wife at 473. At 480 you will see that again it is
bought in the name of his – sorry, Peter’s wife. When I say “his wife”, I do not
mean Mr Dragonas’ wife. And if you turn on to 484, you will see that he buys –
sorry, I took you to 483. At 487 he buys in the name of his son. On the other
hand – sorry, this is in the name of his brother, the son of Pavlos and Penelope.
At 491 he again buys in the name of his wife.
So large sums went across and his brother, a major player in real estate, is buying
up land left, right and centre. It is said that he paid back the debt by rebuilding
the house. So we asked for receipts. We were provided with none. We
demonstrated, in my submission, clearly that brother, sister, Mr Dragonas himself,
all interplay between themselves and therefore the extent to which even now we
have got to the heart of what Mr Dragonas’ true holdings on the island of
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Zakynthos are is debatable because he did not present himself for cross-
examination.
MRS JUSTICE ELEANOR KING: Well, there was a certificate of incapacity.
MR ALEXANDER THORPE: Yes, I accept that. I have asked you to read his replies
and frequently in his replies he says this is a matter for cross-examination.
Therefore the Judge could not make any findings on one of our central issues but,
in my submission, the web that we have demonstrated was clear, but I accept it
was entirely appropriate for her to make no findings without having heard
evidence from Mr Dragonas. With regard to the issue of valuations, if I could ask
you please to turn to page 233 of the first bundle-
MRS JUSTICE ELEANOR KING: Yes, thank you.
MR ALEXANDER THORPE: -this is obtained by a lawyer, as you can see at the top, on
Zakynthos who has undertaken a search of the register and this demonstrates
every piece of land registered in the husband’s name.
MRS JUSTICE ELEANOR KING: Is this the 2006?
MR ALEXANDER THORPE: This is 2006. Then over the page at 234 is a search of the
debts and again these are debts registered by the husband on his land. Ironically,
the purpose of his doing so was in order to defeat American Express in his own
bankruptcy and how ironic that it should be that which actually defeats his
attempt to defeat his wife’s claim in these proceedings. But at 235 it is clear that
in 2007 he amended those charges to enable him to sell the properties at Volimes.
And we see over the page at 236 that the lawyer has put a PS, and the PS is: “I
am aware he is selling for 140,000 and 125,000”.
MRS JUSTICE ELEANOR KING: Which plots were those?
MR ALEXANDER THORPE: They are the Volimes plots.
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MRS JUSTICE ELEANOR KING: They are the Volimes, that is 413 and 509.
MR ALEXANDER THORPE: It is the plots that he complained bitterly how could they
say 36,000 and 100,000.
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: That shows how wrong they are he says. We say no, it
shows how imperfect the process has been by reason of the fact that you would
not engage with the valuer and assess with the valuer, so that we have an
imperfect valuation but it is what we have. So we prefer to proceed on that which
is within the realms of reality rather than continue to flap about in the dark.
MRS JUSTICE ELEANOR KING: So I am clear, the note I have got, Mr Thorpe, about
those two properties is that the husband originally valued them at 4,000 and
6,000.
MR ALEXANDER THORPE: That is correct.
MRS JUSTICE ELEANOR KING: The joint valuer then had them in at 22,000.
MR ALEXANDER THORPE: The joint valuer had them in at – that is correct, 22,000.
MRS JUSTICE ELEANOR KING: Then in April 2008 the husband had them on the
market at a total of 265,000, which was 125 and 140.
MR ALEXANDER THORPE: Yes.
MRS JUSTICE ELEANOR KING: He had them advertised on the internet at 600,000.
MR ALEXANDER THORPE: Yes.
MRS JUSTICE ELEANOR KING: And the final joint valuation – sorry, the final
valuation that the court adhered to-
MR ALEXANDER THORPE: -was 136.
MRS JUSTICE ELEANOR KING: -was 136.
MR ALEXANDER THORPE: It is 36 plus 100.
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MRS JUSTICE ELEANOR KING: Euros?
MR ALEXANDER THORPE: Euros.
MRS JUSTICE ELEANOR KING: So have I got that right?
MR ALEXANDER THORPE: That is correct, My Lady.
MRS JUSTICE ELEANOR KING: Okay.
MR ALEXANDER THORPE: In relation to…
MRS JUSTICE ELEANOR KING: Sorry, the internet advert?
MR ALEXANDER THORPE: Would you like me to take you to that?
MRS JUSTICE ELEANOR KING: Please.
MR ALEXANDER THORPE: Sorry, forgive me…
MRS JUSTICE ELEANOR KING: No, sorry, it is my fault. I have taken it out.
MR ALEXANDER THORPE: 455 – My Lady, at 455-
MRS JUSTICE ELEANOR KING: Yes?
MR ALEXANDER THORPE: -you will see that: “Little [island spots] are set on a
panoramic hillside facing the sea. The beach and fishing bay are less than 1 km
away. Sea view all around from the plots. This is an ideal spot for a holiday
home with the village and its shops just a couple of minutes away.” Could I
pause there to read you what the joint valuer said about those plots?
MRS JUSTICE ELEANOR KING: Was this the joint valuer that was replaced?
MR ALEXANDER THORPE: That was replaced.
MRS JUSTICE ELEANOR KING: Right.
MR ALEXANDER THORPE: “Regarding two abandoned, unexploited building plots in
the same sparsely populated area in”…
MRS JUSTICE ELEANOR KING: Sorry, what page is that?
MR ALEXANDER THORPE: Sorry, 268.
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MRS JUSTICE ELEANOR KING: Thank you.
MR ALEXANDER THORPE: I was just going to read it to Your Ladyship.
MRS JUSTICE ELEANOR KING: No, no, do. I was just putting it in for my notes.
MR ALEXANDER THORPE: “Regarding two abandoned, unexploited building plots in
the same sparsely populated area in the remotest edge of the island, one hour
drive from the town of Zakynthos on a road with constant turns and bends in the
mountains which present no particular interested buyers. Furthermore, both the
building plots are intersected in the middle by a private asphalt paved road, a fact
which makes them even more [disdainable]. According to the contracts of
purchase, the abovementioned building plots are nearly valueless at 22,000.”
Mr Dragonas sings their praises. He says: “The plot area is 4,000 square metres,
subdivided into smaller plots of 500 square metres, each being one-eighth of the
plot. Four plots are now available for sale. Build density is 50 square metres for
each plot, making a nice two-bedroomed villa with verandas all around. The
price per plot is 29,000, including the building provision for your house. The
price of construction of the building is approximately 69,000.” If you look to the
right-hand side, you will see the contact details – [Yanis] website
[www.aaronsinternational.com]. That is the company with the EFT private bank
account which is registered to the husband’s address, which he says is his
brother’s but into which he paid £60,000 of his money which he says was owed
further back for a debt which he did not approve and did not appear in his Form E.
I accept that the husband is taking the best possible price for the land in his
internet advertisement because he is subdividing the plots up but what it
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demonstrates clearly is that the valuers are wrong, that this is valuable land. It is
overlooking the beach, it is a short ride from the local town and it is sought after.
In relation to [Xylokastro], if I could turn you to 242 of bundle 1, My Lady.
MRS JUSTICE ELEANOR KING: So which contract number is this one?
MR ALEXANDER THORPE: [Xylokastro] is not one of the contracts because it is the
mainland property.
MRS JUSTICE ELEANOR KING: Oh, I beg your pardon, of course it is.
MR ALEXANDER THORPE: And you will see this is a valuation provided by the
husband in May 2008, valuing it at €125,000.
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: If you turn over the page – sorry, two pages to 244 you
will see a real estate agency in Zakynthos – sorry, in [Xylokastro] has set out:
“Following our phone conversation regarding the building plot located in the
municipality of [Xylokastro] (reads off mic) … of your property and concerning
… in 2007 to John Dragonas … amounted to €300,000 by a customer who is
willing to pay in cash but this was considered too low a price and the sale was not
integrated”. The Form E is dated 17th March ’08 and clearly that is a disclosable
fact and clearly it was a suppressed fact.
If, My Lady, I could then turn you on to 251 – just for your interest, you will see
at 246 whilst we were trying to get him to agree valuations re the nomination of a
valuer, at 246, rather than assist us by nominating one of the three we put to him
as per the order, he was busy obtaining further valuations and this further
valuation came in at between 69 and €95,000. The joint valuer, when it came in,
is at 251 and nobody has challenged this valuation because we did not need to
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because it was not on the Island of Zakynthos and you will see there he says the
size of the plot is 422 and 152, making it 574. He says 400,000, not in demand,
not easy to find. “We found this when we [searched] both parties and, taking into
consideration the current economic crisis, please note that our office is currently
undertaking the sale of a similar plot of land of 1,000 square metres belonging to
Mr Skouras worth €1 million.”
Complaint is made of the valuation obtained by the wife. The black-out is only
that we black out her name. Nothing else is blacked out and we give a complete
run of correspondence, which you will find at 321.
MRS JUSTICE ELEANOR KING: Sorry, I am just making a note, I beg your pardon-
black-out?
MR ALEXANDER THORPE: It is at 321, My Lady. In my submission, when reading
through the correspondence, it is clear that this valuer has actually done a jolly
good job because you see that we give her the contract numbers at the bottom of
321. She replies at the top saying: “I will make arrangements this week with the
notary that we cooperate in order to assess the objective values and together will
provide you next week with both the objective and the market value. Realistically,
spots of land can be difficult to find without them showing individual areas. It
may, unfortunately, not be possible to get pictures.”
Then at 323 you will see we chase a little and they say that there are problems in
the Land Registry in Greece and so there has been a delay. At 325 the valuer says
– we chased again and the valuer says: “Please could you provide me with the
following: the full name of the owner; full name of owner’s mother; full name of
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owner’s father; notary who passed this information or to get the copies of the
contracts.” At 327 we chase again. The lady says that she – sorry, lady or man
says that she has been to the registration office to check the contracts (reads off
mic)… “in Greece the notaries and most offices stop work between 2 and 6.
Regarding the particulars (reads quickly off mic)… and hope to send it to you”.
At 328 she says: “Please find attached finally the valuations that you requested
on behalf of your client. Unfortunately, the contracts did not provide the
information of whether the properties were inside or outside town planning so we
will need to do a further search”… But the next paragraph: “We would be
obliged, as the island is relatively small, if during the proceedings if our company
name details, other than Zakynthos Real Estate, were not disclosed if not
necessary. We feel this may be best as the locals can be strange regarding
divorce proceedings, especially when it comes to claims against their property.”
Then at 333 they explain that, because it has taken more work, they will need an
extra €200 and that gives you an indication of the cost of the valuation: “In order
to provide further assistance and information, we must at this point … request the
payment as we wish to pay the … here for their work. Also, when we quoted
€200 fee – I know it says 200,000 but it is 200 – we were not aware that there
would be so many contracts or pieces of land and hence we have charged more
than had been predicated by the notary … so we hope you will appreciate … this
request for a further €100 should further information be required.”
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At 336 there is: “I have dealt in part 1 and 2 with your email below. I sense from
the conversation there was no evidence or information provided of the two
properties no longer in your client’s ex-husband’s name. I will ask the notary
and lawyer tomorrow if they can do a further search on these.” It is again
indicative of the objective way in which they went about it. If you look to the
final valuation at 340, those that are not in his name are 29544, that which the
husband claims is not in his name, and 20698, sold or no longer in Mr Dragonas’
name. If I could turn you to 358 in the second bundle, just in relation to 20698.
MRS JUSTICE ELEANOR KING: 398?
MR ALEXANDER THORPE: Sorry, 358. If you look at number 3 on the list, this is
another of Mr Dragonas’ valuations, again … in August when we were trying to
agree the nomination of a valuer. At 3 he is providing us with a value for 20698.
MRS JUSTICE ELEANOR KING: And indeed he is not suggesting today in front of me
that he does (off mic)…
MR ALEXANDER THORPE: But the suggestion that our valuer was, as it were, eating
out of our hand is undone by the fact that she is perfectly – he or she is perfectly
upfront in saying ‘I don’t think he owns these two properties’. It is said that our
valuation was way over the top. If you look at the bottom of 340, it is €836,000 –
340. That is broadly in line – it is slightly less, in fact, but it is broadly in line
with the Official Solicitor’s valuer.
At 344 we ask for her to comment on the joint valuation. She had not yet seen – I
keep on saying “she”. I do not know whether it is a he or she but what she says
is: “I can see this agent is clearly and vastly” – this is the last line of the first
paragraph – “understating the value of the land today in Zakynthos”. Then she
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goes on to say: “Although the property may not have a full correct building
licence, having only a licence for 56 of the 150 square metres, it seems slightly
unlikely to be honest (off mic)… This is not unusual and the price of the
properties is still, nonetheless, calculated on the full square metres and not only
on the legal square metres. The illegality of not having the correct building
licence may make a sale difficult but not less valuable and hence the seller can
still at this stage apply for a building licence for the new extended square metres,
if he wishes to make the whole property legally correct.”
MRS JUSTICE ELEANOR KING: So is the position then, Mr Thorpe, just so I am
absolutely clear in my mind, that what had happened was that there is the joint –
Mr [Kalamakis’] valuations which the wife felt will be contaminated.
MR ALEXANDER THORPE: Yes.
MRS JUSTICE ELEANOR KING: And she then went and unilaterally got the wiped out
valuation-
MR ALEXANDER THORPE: Yes.
MRS JUSTICE ELEANOR KING: -if I might call it that. The Official Solicitor then
took the view – the Judge and the Official Solicitor together took the view that,
because those were one-sided so to speak, there should be a final neutral
valuation-
MR ALEXANDER THORPE: Exactly.
MRS JUSTICE ELEANOR KING: -which was the valuation that then came before the
court.
MR ALEXANDER THORPE: Exactly, and that was a valuer chosen by the Official
Solicitor. We also agreed to the – we agreed to that. We also agreed to it but it
was proposed and agreed. They are a specific specialist body and you will see at
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the front of their report they are the Hellenic Republic Body of Sworn-in Valuers
because they are so bona fide that that is how they sell themselves.
MRS JUSTICE ELEANOR KING: What page is that?
MR ALEXANDER THORPE: That is at page 1. It is on the front page of every report.
It is on the front page of every report.
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: The reason I took you to our valuer is also to cost-
reference with what the joint valuer says about the building. He says: “The
abovementioned plot, a residence was built … according to licence” blah, blah,
blah “of the Town Planning Department of Zakynthos. The building, according to
the abovementioned licence, is 56 square metres but during my visit there I
realised that more than 150 square metres were built. A great transgression of
irregularity in the construction of the building renders it highly unmarketable due
to the fact that the seller would have to be accountable to pull down the off-
licensed extensions or legalise them by paying a very high fine.” And what our
valuer says is (off mic)…
When it came therefore to – sorry, My Lady, I have to look at my notes. When it
came to the valuation by the official valuer, if I could turn you to page 392 of
bundle 2 – I need to start at 393 in order for you to make sense of it.
MRS JUSTICE ELEANOR KING: Thank you.
MR ALEXANDER THORPE: “Dearest Franklin, Regarding the valuations in
Zakynthos, I would like to inform you that during the checking of the contracts
and the rest of the information made available after visiting the areas (so they
were visited) of where the properties are located, it was made clear that most of
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the actual properties belonging to Mr Dragonas were not able to be located.”
And my instructions are that attempts were made to contact Mr Dragonas but no
contact was accepted. “In addition, we will not be able to provide you with
information about changes and developments that have been made regarding the
properties, such as buildings built after the contracts were signed, because the
available information is not enough. This will be made clear in the valuation
reports.”
My instructing solicitor, over the page at 392, says: “Following our above
conversations, we understand that you will be providing market values for the
lands as per the details of the contracts provided but are not able to confirm
whether or not any buildings, etc., have been added to the lands and what impact
such alterations would have on the valuations. Obviously, any such building …
would only increase the value.”
My Lady, if I could turn you to – sorry, I need to look at my note – I think it is
455, My Lady. I am just going to find it first to make sure. If I could turn you on
to 460, you will see the building that the husband has built on his land and I think
that is the best picture that I have of it.
MRS JUSTICE ELEANOR KING: Which contract number is that built on?
MR ALEXANDER THORPE: That is built on 317-
MRS JUSTICE ELEANOR KING: -3174?
MR ALEXANDER THORPE: 31174 and no account has been taken of that build. Self-
evidently, the valuations are imperfect but, in my submission, the imperfection is
actually to the husband’s advantage because he has not engaged and because the
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valuer is so (off mic), she/he does not allow themselves to overset the mark and
when we look to the valuations themselves, you will see in relation to [Tridado] –
if you could turn to page 8, My Lady-
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: -you will see at the top of the page, in particular,
announcements published in the newspaper and internet refer to a 5,000 square
metre plot and you will see that going for €50 per square metre, a 1,000 square
metre plot which sold for €50 per square metre and a 4,500 square metre plot
which sold for €64 – 14 per square metre. And then if you look further down to
the final valuation, that which has been used is the figure of €14 and €12 per
square metre. Do you have that, My Lady?
MRS JUSTICE ELEANOR KING: I have seen it.
MR ALEXANDER THORPE: Based on this unit price – 14 square metres in relation to
5145 and 12 square metres in relation to the 2177. In relation to – if you turn
please, My Lady, to page 15, you will see the real estate market details, prices for
plots within the settlement and on the (off mic)… vary from €70 to €100 per
square metre depending on their special features. The prices [will integrate to] the
building plots within the settlement with easy access or a view of the sea may
reach prices exceeding €200 per square metre. In respect of the sale prices of
plots (reads off mic)… vary from 20 to €80 per square metre. And then over the
page you will see that she ascribes a value of €15 per square metre, way below
that which her comparables suggest.
If I could turn you to page 24, you will see that real estate market details, the
valuer says: “The information accumulated (reads off mic)… systematic research
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of the local estate agents’ market leads us to the conclusion that the sale prices
for plots within the settlement and on the central road … vary from €70-100 per
square metre depending on their special features. The prices integrated in the
building plots within the settlement and with easy access or a view to the sea may
reach €200 per square metre.” And then a final valuation; this particular plot she
finds an appropriate valuation is €100 per square metre.
At 3174, at the top of the page – sorry, page 35, forgive me: “In particular,
pronouncements, approximate distance 3 km from the sea, offset … a six studio
apartment, view to sea, sold for €250,000, i.e. €50 per square metre. Plots 1,000
square metres within settlement … sold for €50,000, i.e. €50 per square metre and
plot 4,500 … sold for €65,000. We judge market real estate details – we judge the
suitable unit price … taking into account the details of real estate market and the
special features, is €50 per square metre for the property under details of area
762 and €35 per square metre for the property under details of area 4704. Based
on the above, we come to the following, €202,000.”
And finally the last two are Volimes but I am not going to take you to Volimes
because I do not, in my submission, need to because the husband’s own evidence
down to him on that in that he is selling it for a far higher price than the valuer has
valued the land.
But we come to the nub of his appeal, which is that the finding of the District
Judge was plainly wrong because he does not own two of the plots. This was an
issue that was raised by his counsel, Ms [Giz], at page 139. This is at B just
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above C: “There remains a question mark as to what it is that Mr Dragonas
actually owns and I do not mean that in the wider sense that Mr Thorpe will be
submitting in the senses that he will be submitting there are properties you do not
yet know about.” My Lady, forgive me, it is indicative of the camouflage of
deception that was raised by the husband but here we are at final hearing and his
own counsel says we do not actually know what he owns.
Then she goes on to say: “I mean in terms of the properties we do know that he
has owned, for example the wife’s valuation previously … two of those contract
numbers were no longer actually in Mr Dragonas’ name. There seems to be
support for that in the translation that has been provided by the employee. This is
referred to in my position statement. Looking through those, Madam, first of all,
the 260,000 – I am not taking that in order (reads off mic)… first of all, contract
29544, there is at the second page the translation the Official Solicitor has
provided” And the District Judge says “29544, yes, it is the one on €280,000 on
the front sheet.”
Ms [Giz] makes her submissions in relation to that and then in relation to 3234 –
sorry, 33234 at page 140, the District Judge says at G: “[unclear] except that in
1988, was it, did not Mr Dragonas purport to charge both those properties? It
looks like … that that is what has happened. So how could he have divested
himself of that if he is calling a charge against it? It does not seem to make sense,
does it?”
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Now Mr Dragonas made submissions to you that the registry would not state that
those charges are there. I have taken you to the lawyer. I am not going to take
you back to the lawyer but he clearly says they are there, but also each of the
valuations obtained by the valuer, the OS’ valuer, also records the fact that they
are there. What he says is ‘I transferred 29544 into the name of my nephews in a
land swap’. My instructions are that in 1991 his nephews would have been ten
years old. But our whole case was whether it had been Mr Dragonas,
Mr Alexander Dragonas, Mr Peter Dragonas – I am afraid I do not know his
sister’s name, but his sister as well – they are all used as a camouflage for the
truth for their various reasons, whether it be AmEx or whether it be my client, and
that that is a proven methodology of behaviour that the husband accepts he
undertook in relation to AmEx and we say it was self-evident.
MRS JUSTICE ELEANOR KING: That the husband accepted that…
MR ALEXANDER THORPE: I will take you to where he does that in his replies. It is at
145 of the first bundle; page 145, it is question 69: “During the bankruptcy
proceedings issued against the Applicant by American Express … the Applicant
declared his United Kingdom assets to be 7,000. Please explain the basis of this
calculation. The Applicant cannot remember what was declared or how it was
calculated and the Applicant does not seem to have any paperwork in relation to
the bankruptcy. What sanctions were taken against the Applicant when it was
discovered that he failed to disclose his Greek assets as required during the
bankruptcy proceedings? The Applicant was asked to pay a further £30,000.”
Had the mortgages not been there, no doubt American Express would have asked
for the entirety of the sum owing.
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MRS JUSTICE ELEANOR KING: But, of course, these were not real mortgages, were
they? They were the ability to draw down and it is accepted by the husband that
nothing was ever drawn down.
MR ALEXANDER THORPE: Nothing was ever drawn down. They are a ruse. My
Lady, in relation to the Civil Aviation-
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: -if I could – sorry, if I could take you to bundle 1 and ask
you to turn please to page 149 of that bundle, this is question 82: “Please provide
a narrative plan supported by documentary evidence, including the outcome, of
all litigation, pending litigation, the Applicant has been involved in since the
1st March 2003. No pending litigation. However, the Applicant has started
ancillary relief proceedings in Greece after receiving advice from a lawyer in
Greece and the hearing is on the 2nd February.”
This document is dated the 12th day of June 2008. The husband’s appeal was
submitted in March 2007 and that appeal is very informative because what it
reveals is that the husband is saying ‘you have used the tax value’, the very value
that he had impressed upon this court and indeed continues to impress upon this
court as being the appropriate value, whereas the real value is €350,000 but that is
for 2,000 square metres. I believe it is in Volimes as well. I may be wrong about
that but my recollection of that – I will take you to the valuation so I can see if I
am right about that. It is 3234 (off mic)… In any event, it gives a very clear
indication of the husband’s own view of what he thinks the land is worth on the
Island of Zakynthos.
MRS JUSTICE ELEANOR KING: The valuation is 260 and he says it is worth 350.
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MR ALEXANDER THORPE: It also demonstrates that he had an action – it shows an
action which he hoped was going to produce a very large sum of money and that
he was under a duty to disclose. Not only does he not disclose it in his Form E,
but when it comes to our asking a specific question about it, he denies that there is
any such action. And what he now says to this court is ‘I have just discovered in
the back end of 2009, well I have lost my case and I will now have to transfer the
land from my name into that of the Civil Aviation Authority and, in light of that,
there has been some terrible error because you have taken account of a piece of
land that was shown to be in my name in the Land Registry (we will accept that it
was) and that the valuers had found it but you did not know that, in fact, I had
faced a compulsory purchase order; I was appealing against it and the reason it
was still in my name was because of my appeal and that in my appeal I sought
€350,000. So undo this injustice.’ My Lady, the law is clear. I have given you –
before I go to the law, I am going to deal with the Judge’s judgment if I may. My
Lady, I will not be much longer.
MRS JUSTICE ELEANOR KING: No, it is just that do you want to resume at 2?
MR ALEXANDER THORPE: No, I was going to suggest I carry on for 10 minutes.
MRS JUSTICE ELEANOR KING: Is that alright?
MR ALEXANDER THORPE: My Lady, the judgment is at page 156.
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: And there the Judge says, paragraph 23: “However,
there are two properties in which there is a remaining issue. Those are a plot of
land at Volimes of 542 square metres, valued at €100,000, and the register
appears to show that what is referred to as a virtual transfer” – in fact, that is not
one of them. It was raised by Ms Gill – Ms [Giz], forgive me – but, in fact, I
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demonstrated the husband was showing himself as owning it but, in fact, Ms [Giz]
did raise both properties even though the Judge has only actually referred to two
of them, which is why I say it becomes a little confusing as to what is argued.
Then contract number 92954 for the land at Kalipadhon valued at €280,000 refers
to an exchange of other land in 1992. If I can pause there, the reason why the
Judge only focused on those two is because those are the only two that were
raised by our valuer. On the face of the documents, it was clear that the Civil
Aviation Authority land, namely contract 33234, was in his name.
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: So was the Judge plainly wrong to focus on the two that
seemed to be objectively there may be an issue about? And, in my submission,
she was not objectively wrong because the valuation showed that it was in his
name. He never at any point had said ‘that is not my land’. He only raises it in
submissions. He does not raise the fact of the Civil Aviation Authority in
submissions and it is all because he is keeping a very big secret, and the very big
secret is about his appeal. And what the Judge had to go on was what was before
her, and that was good valuation evidence showing that he did own that property.
MRS JUSTICE ELEANOR KING: We now do know about Civil Aviation, which, as
you know, this is the property that I am bothered about.
MR ALEXANDER THORPE: Yes.
MRS JUSTICE ELEANOR KING: And I am bothered about it.
MR ALEXANDER THORPE: Okay. I am sorry, forgive my, My Lady, can I address
you on that when I come to them all?
MRS JUSTICE ELEANOR KING: Yes.
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MR ALEXANDER THORPE: Because at this stage I am just going to deal with how the
Judge approached her decision.
MRS JUSTICE ELEANOR KING: Well, I mean I quite accept that it showed it to be in
his name. He was not saying it was not in his name. He did not flag up the
litigation. In fact, he denied there was any litigation. So how could the Judge be
said to have got it wrong? All the evidence was not just one way; it would seem
to be agreed evidence and [there was a] valuation.
MR ALEXANDER THORPE: Yes.
MRS JUSTICE ELEANOR KING: I perfectly accept that.
MR ALEXANDER THORPE: She goes on to say: “In respect of both these properties,
I note that the joint valuation carried out by Mr {Kalamakis] in 2008 with the
cooperation of the husband’s brother includes both these properties without any
comment on ownership. It appears to be the case that a charge registered by
Mr Dragonas in 2006” – and for that you should read 1999. I think where the
2006 may have come in is that it was in 2007 that he amended his charges and the
District Judge would have been taken to that amendment of the charges, as I have
taken you to it, My Lady. (Continues): “against all the Zakynthos properties held
in his name, is still registered against these two pieces of land”. And to that you
can add the Civil Aviation Authority land as well because it was also that charges
were registered against the Civil Aviation Authority land.
At paragraph 25 she says: “Having considered the valuation evidence and the
representations made by Ms [Giz], I am satisfied that, although it is unfortunate
that no full translation is available, I can rely on these valuations and further that
I should find that all these properties are registered in the husband’s name or
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remain under his control.” If I can pause there, I include in that 29544 which was
transferred to his infant nephews at that time. That is supported by the way of the
Dragonas [leaching] across UK assets which were transferred into their name as
well as the history of money going across to the Dragonas to effect land
purchases…
The decision for you therefore, My Lady, is: was the Judge plainly wrong to have
come to that conclusion? In light of her finding that the husband was clearly non-
disclosing – this is at paragraph 33: “I have been asked to find that there has
been non-disclosure of assets on the part of the husband in this case. Looking at
the totality of the evidence and the history of this matter since divorce
proceedings have begun, I have no difficulty in doing so.”
MRS JUSTICE ELEANOR KING: Sorry, what paragraph?
MR ALEXANDER THORPE: Sorry, paragraph 33.
MRS JUSTICE ELEANOR KING: Thank you.
MR ALEXANDER THORPE: And at the end of the paragraph she goes on to say: “It is
also clear from the evidence before me that he has transferred assets out of the
jurisdiction of this court.” Therefore, when faced the argument put forward by
Ms [Giz] that the contracts do not appear to be in his name, the District Judge said
well, hang on a minute, he is still using those to provide security for mortgages
well after the dates of transfer and that is an insight into his mind. It shows how
he regarded properties and he regarded them as his, otherwise he would have (off
mic)… and that applies, as I said, to the Civil Aviation Authority land. In relation
to the law, I have provided you wish a copy of Baker v Baker, which is old but
[unclear] law, as it were. This in my-
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MRS JUSTICE ELEANOR KING: -in your bundle.
MR ALEXANDER THORPE: -in my bundle. I am actually going to take you to my
note because my note gives you the quotes that I wish to refer you to. If I could
turn you to paragraph 34 of my note – sorry, it should be paginated but it is not.
MRS JUSTICE ELEANOR KING: Yes.
MR ALEXANDER THORPE: Particular problems arise in cases – I have put Butler v
Butler but that is an error. It is Baker v Baker.
MRS JUSTICE ELEANOR KING: I was just slightly – thinking I was unfamiliar with
it…
MR ALEXANDER THORPE: “Particular problems arise in cases where one party has
deliberately failed or refused to provide the material facts and has concealed
from the other party and the court his true financial position. In such a case, J v
J, Sacks J said: ‘In cases of this kind, where the duty of disclosure comes to lie
upon the husband where a husband has and his wife has not detailed knowledge
of his complex affairs, where a husband is fully capable of explaining and has the
opportunity to explain those affairs and where he seeks to minimise the wife’s
claim, the husband can hardly complain if, when he leaves gaps in the court’s
knowledge, the court does not draw inferences in his favour. On the contrary,
when he leaves gaps in such an extent that two alternative inferences may be
drawn, the court will normally draw the less favourable inference, especially
where it seems that his able legal advisors would have hastened to put forward
affirmatively any facts had they existed, establishing the more favourable
alternative.”
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And at 229: “It is as well to state expressly which underlies the procedures by
which husbands are required in such proceedings to disclose their means to the
court. Whether that disclosure is by affidavit of facts, by affidavit of documents or
by evidence on oath, not least when that evidence is led by those representing the
husband, the obligation of the husband is to be full, frank and clear in his
disclosure. Any shortcomings of the husband from the requisite standard can and
normally should be visited at least by the court drawing inferences against the
husband on matters that are the subject of the shortcomings, insofar as such
inferences can be properly drawn. Those passages set out the principles … upon
which the courts have for over 40 years approached cases in which a spouse, not
nowadays necessarily the husband, has been found to have lied and to have been
guilty of material non-disclosure of relevant financial information in an ancillary
relief application by the other spouse. In many decisions, reported and
unreported, judges and district judges have applied those principles and drawn,
where appropriate, adverse inferences.”
My Lady, because of the Civil Aviation Authority point, I have not brought a case
but there is a case in which a husband was facing an investigation by the tax
authorities and the court took account of that and he came back at a later date and
said ‘hang on a minute, it has all gone wrong for me with the investigation by the
tax authorities’. I can bring it to you after lunch and, indeed, I can get my clerks
to email it to you.
MRS JUSTICE ELEANOR KING: That would be good.
MR ALEXANDER THORPE: I will obviously provide it to my learned friend. The
investigation by the tax authorities has gone complete pear-shaped. I am now
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faced with a far larger bill and that is entirely unfair. And what the court said was
hang on a minute, it was all in your hands. This was an investigation into your
affairs. You could have ensured that they were properly informed so that you
knew what the potential liability was. Instead, what you have done is to obfuscate
so that the cause of this is you. So now we will not re-open this.
In my submission, the husband falls exactly into that category of case. His case is
effectively ‘I know I lied and I did not tell you the truth but it has all gone pear-
shaped and so, in light of that, would you re-open this case and would you take
account of the facts as I now choose to present them to you?’ In my submission,
he says that his final appeal has been refused but you would not have known
about the appeal if we had not done our research and we have – if I can hand – I
am not sure if my learned friend has these because they are additions to the
bundle but it is later correspondence. Mr Dragonas would have seen it and I
appreciate that my learned friend will not have. My Lady, if I can ask for that to
be added at the end of your bundle 2?
MRS JUSTICE ELEANOR KING: This is to my Civil Aviation bundle bit?
MR ALEXANDER THORPE: This is – it goes to the back of your bundle 2. It is further
correspondence after the bundles were submitted.
MRS JUSTICE ELEANOR KING: Yes, thank you.
MR ALEXANDER THORPE: And at 823 we say halfway down the page: (reads
quickly off mic)… It is not he who tells you of the appeal; it is my client finding
the papers in the loft. That is how – when he raised the Civil Aviation Authority
letter, she went into her loft to see what she could find and that is what she found.
But we still do not actually know that the appeal has failed or at which level of
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court or, indeed, whether the husband is intent on taking the matter to Europe,
which is, of course, his final call of appeal.
So, My Lady, I shall provide the case to which I have referred you to the facts but
not the authority. In my submission, it is not acceptable in this court to say on
appeal ‘I have misled the court and my deceit has now turned round and caused
an injustice to me’. I am afraid, if you are prepared to be deceitful with this court,
this court will say to you in rather more intelligent language ‘if you live by the
sword, you die by the sword’, and that is what Mr Dragonas faces but only in
relation to Civil Aviation Authority land. In relation to 29544 the Judge was fully
entitled to come to the conclusion she did in light of the fact that it was (off mic)…
My Lady, if there is something I have not addressed you on and you would like
me to?
MRS JUSTICE ELEANOR KING: No. I have got your … note, which I have read and
will read again.
MR ALEXANDER THORPE: Thank you very much, My Lady.
***
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JUDGMENT
MRS JUSTICE ELEANOR KING:
1. This is an extempore judgment in an appeal by the husband against an
Order made by District Judge Aitken on the 9th October 2009 in relation to
ancillary relief proceedings following the breakdown of his marriage with
the wife. The Order that was made by the learned District Judge provided,
inter alia:
(i) that the wife retains the former matrimonial home at 297 Cannon
Hill Lane in London and it is recorded that the husband had no
legal or beneficial interest in that property;
(ii) that the husband should retain various properties situated in Greece
and similarly that that the wife would have no legal or beneficial
interest in those properties;
(iii) that the husband should pay to the wife a capitalised maintenance
fund of £600,000, such sum to be paid by the 20th November 2009;
(iv) for there to be a pension sharing order of the modest pension;
(v) the husband was to pay 80% of the wife’s costs up until a date in
February 2009.
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2. The husband subsequently filed a Notice of Appeal out of time. The
complaints he raised are essentially two-fold:
(i) that the valuation evidence relied upon by the court included two
pieces of land which the husband did not own and therefore should
not have been included in any schedule of assets for subsequent
division; and
(ii) that the valuation evidence itself was flawed and gave grossly
inflated values of the properties.
The Law
3. The law governing appeal is well-established and uncontroversial. This is
not a retrial. In the well-known case of G v G [1985] 1 WLR 647, the
House of Lords rehearsed the whole of the law relating to appeals. That
portion of their judgments which is quoted and regarded as the law on this
says as follows:
“It is only where the decision exceeds the generous ambit within
which reasonable disagreement is possible and is, in fact, plainly
wrong that an appellate body is entitled to interfere.”
4. I bear that in mind when I consider this appeal. The court has also
considered the well-known case of Ladd v Marshall during the course of
submissions in considering issues of fresh evidence.
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5. During the course of the hearing the husband has represented himself as a
litigant in person. Circumstances have been somewhat unusual in that
counsel, Ms Poppet, was instructed at a very late stage and at a time when
all parties were agreed it would have been wholly impossible for her to
have been able to master the extensive papers prior to the start of the
hearing.
6. I am extremely grateful to her, as I am sure the Appellant is, that she
agreed to stay in court and has for the last two days provided the husband
with invaluable assistance as to the law and the management of the various
documents. The court would like to express its gratitude to her, given
what must have been the difficult position she found herself in and the
professional and competent way in which she has dealt with the matter.
Background
7. The parties were married in 1987 and they have one daughter born in
1997. The parties are both I think now 54 years of age. (I suspect they
have birthdays since the hearing). Both parties are Greek although they
have lived in the United Kingdom for most, if not all, of their married life.
8. The husband comes from a close-knit family from the Island of Zakynthos
in Greece. It is apparent that he, his brother and sister have been involved
separately and together in numerous property transactions on that island
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over the years and that they are important and integrated members of the
island community.
9. In 1999 the husband was made bankrupt by American Express. The
husband came to a settlement with them on the basis of fraudulent
disclosure in that he did not disclose his Greek properties. American
Express subsequently discovered this to be the case and undertook
significant enquiries in Greece. What they discovered was that the
properties, which they now knew were owned by the husband, were
heavily charged. In truth, these charges were in favour of family and
friends and were, it is now accepted by the husband, a sham as in relation
to none of the charges on any of the properties had the sums allegedly
charged, in fact, been drawn down. American Express, on the basis of this
sham, settled their action against the husband on an additional payment by
him of some £30,000.
10. The wife issued a divorce petition in September 2006 and a decree nisi
was pronounced on the 19th March 2007. On the 27th April 2007 the
husband applied for the decree nisi to be set aside on the basis that, despite
having lived in the United Kingdom for over 25 years, he did not
understand the proceedings. That application was dismissed with costs.
11. Progress in the ancillary relief litigation was tortuous despite the fact that
it was the husband who had issued the Form A and therefore was pursuing
the application. There were hearings where the husband failed to attend
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and he did not comply with court orders. Despite having issued these
proceedings, some four months later after he had launched ancillary relief
proceedings in the United Kingdom, the husband issued similar
proceedings in Greece.
12. The matter finally came on for a first appointment on the 20th June 2008.
That marked the start of the court’s attempts to obtain satisfactory
valuation in respect of the following property:
(i) the matrimonial home;
(ii) land near Corinth which had formerly been in the wife’s family;
and
(iii) a number of properties and pieces of land on the Island of
Zakynthos.
13. By December 2008 the husband’s then counsel was having difficulty in
obtaining instructions from the husband. There arose an issue as to
husband’s capacity and the possibility of his being represented by the
Official Solicitor. On the 4th February 2009 a Certificate of Capacity was
received. It seems, from looking at the medical reports that are in the
bundles put before me today, that the husband suffered from serious and
chronic depression and this manifested itself in no doubt the well-
recognised ways but he had, in particular, difficulties in concentration.
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His medical advisors in Greece did not feel it appropriate for him to take
part in the proceedings.
14. In June 2009 the Official Solicitor consented to act but, fortunately for the
husband, the Official Solicitor continued to instruct the same solicitor and
so he had the benefit of continuity of representation.
15. The judgment of District Judge Aitken sets out in summary form the
considerable difficulties which arose in obtaining the valuations. I have
been taken through documents contained in four leverarch files over the
course of two days dealing with issues of valuation. This is an appeal I
remind myself and not a rehearing, and it is neither necessary nor
appropriate therefore for me to rehearse in detail the difficulties
encountered in obtaining valuations, although I will use one or two
examples when considering the husband’s submissions.
16. What is clear is that the Official Solicitor, on behalf of the husband, very
properly made an application for fresh valuations by independent valuers
from Athens. In my judgment, the District Judge was plainly right in
allowing such an application. The husband’s complaint therefore can be
distilled as follows:
(i) The valuations were not translated in their entirety, having been
written and delivered in Greek. Had they been so, he says, the
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District Judge would have appreciated their inadequacies and
would not have relied upon them.
(ii) Two plots of land are not owned by the husband and should not be
in the schedule of assets.
The Valuations
17. Valuations have their limitations. It was undoubtedly unfortunate they
were not translated in full but only the crucial first page and in one case I
think two pages. The fact remains, however, that, whilst the husband had
paid promptly and in full for his legal representation up until the time the
Official Solicitor took over his representation, thereafter his family and/or
he declined to pay the Official Solicitor.
18. The wife therefore, in order to get the matter on, was driven to having to
pay the Official Solicitor herself. Not surprisingly therefore, given the
husband’s conduct in relation to the valuation evidence to date, a view was
taken that it was not a proportionate approach to require the whole of these
lengthy valuations to be translated from Greek.
19. The husband has raised a number of points when looking at the complete
translations that are now available to all the parties:
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(i) The restrictions noted in each of the valuations
Each of the valuations of the property contains the following
restriction: “The autopsy was implemented on 21/09/2009 and
restricted on the definition and the study of the real estate’s direct
area because the detection of the specific real estate was not
plausible based on the existing available details at that time. We
consider that the non-exact detection of the specific real estate
does not affect the rating of the valuated real estate.”
The husband, in my view brought this on himself. He had been in
continuous breach of court orders which required him to provide
the full address of the land which had to be valued and the order
for valuation made by the District Judge specifically allowed a
representative of each party to be present. Indeed, when joint
valuations had been undertaken at an earlier stage in the
proceedings, the husband’s brother had shown the valuer around
all the properties and, indeed, was praised by the valuer for his
assistance and the generosity of his behaviour. Indeed, the brother
was showing the valuer, in addition, properties the husband now
says he does not own.
Whilst the husband did not have the capacity to litigate at the time
of the hearing, there was no suggestion that he was not capable of
making such an arrangement, in other words of asking his brother
one more time to show a valuer around the land. Counsel had very
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clear instructions as to the disposal of the case, which she put
before the court at first instance.
The husband submitted to me today that some effort should have
been made by the valuers: they should have knocked on doors; it
was only a small village; and any enquiries could have rapidly led
them to a clearer picture of what pieces of land were specifically to
be valued. It is not for the valuer to go trying to identify land and,
as I have already indicated, it was in the husband’s own hands. It
would have been a matter of moments for him to have been clear
right from the beginning of this litigation in identifying precisely
what land the court had to deal with.
(ii) The husband’s next complaint about the valuations is that again, in
respect of each of these properties, the valuation to the valuer’s
note quotes: “The [finding] in Greece and comparative details by
the informative (off mic)…
Mr Thorpe, on behalf of the wife, does draw my attention to the
fact that an analysis of research of the local real estate market was
undertaken by the valuers, including references to the newspapers
and the internet, to assist the valuers in placing a value on the
properties concerned.
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(iii) The Actual Values
The values used are low in each case. This was analysed by
Mr Thorpe, who showed me in relation to each of the properties
how, by looking at the information available to the valuer in
newspapers, the internet and local knowledge, that in each case the
valuer had gone to the lower end of an assessment of what was an
appropriate value per square metre of the properties in hand.
20. It should be noted also that the valuations do not include any value for the
buildings which may be on the land and it therefore excludes, for example,
consideration of the husband’s most attractive villa, a photograph of which
appears in the papers before me. That is not to say that I do not accept that
these valuations have their limitations but they were the best that could be
achieved after many attempts and a considerable amount of money having
been spent in circumstances where the court had met with nothing but
obstruction from the husband and his family.
21. Turning then to the two plots of land which the husband says the court
should not have been included in the schedule of assets:
(i) Plot 29554, property at Trago
The husband says that he no longer owns this property. The
valuation (now translated in full) shows that the property appears
to have been exchanged with another property and the land at
Trago put into the name of his infant nephews. Even though the
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valuation was not fully translated at the hearing, the learned Judge
was well aware of that contention. He was, unsurprisingly,
considerably occupied during the course of submissions by the fact
that the husband had charged this property years after he was
supposed to have disposed of it and that those charges were still to
be seen as recently as 2008. It is hard to see, therefore, how the
learned Judge could have come to any other conclusion than that
which she did, namely that the property remained under the control
of the husband and, accordingly, included it in the schedule of
assets.
The husband asked me to adjourn this part of the appeal as he told
me that he could obtain a document showing that the charge had
now been removed as it should never have been on the property as
he did not, in fact, own it. I did not allow the application. The
husband has had since October 2009 to obtain such information
and to disclose it to the other side and has known since an order as
long ago as February 2010 that any applications to adduce the
evidence will be considered by the court today. In any event, it is
hard to see how such a document could, in fact, assist this court.
The husband has already been shown to put ‘sham’ charges on
properties when it suits his purposes and, equally, in 2007 he had
no difficulty in removing charges from two properties that he
wished to put on the market.
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(ii) Contract 33234 [Limionas]
The other property which the husband says that he does not own is
contract 33234/11. This is a piece of land which he tells the court
was the subject of a compulsory purchase in 2000. It remains,
however, in his name. He does not deny that this is the case. It is
not his he says and he has a document to prove it. I therefore was
most concerned about this and under the rule in Ladd v Marshall
and with the acquiescence of Mr Thorpe, who very properly did
not oppose the application, I allowed the husband to adduce the
document. I also allowed the wife to produce a document which
Mr Thorpe told me would counter the document that was to be
produced by the husband.
It is necessary to consider a little of the background in order to
understand the importance of these two documents. In a reply to
the questionnaire filed in the ancillary relief proceedings and dated
the 9th October 2008, the husband was asked to provide details of
all litigation and pending litigation in which he had been involved
since the 1st March 2003. The reply was unequivocally there was
no pending litigation although, he told the court, he had started
divorce proceedings in Greece in 2007. The document (disclosed
by the husband under the rule in Ladd v Marshall for this appeal)
is dated the 23rd December 2009 and is a request for the transfer of
the property in the light of the property having been “expropriated
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and compensated in accordance with the decision of the Appeal
Court of Patras in 2000”.
What the husband did not disclose, and the court would have been
unaware of had it not been for the wife’s diligence, was that in
March 2009 the husband had in fact launched an appeal against the
level of compensation, i.e. not only was it not disclosed to this
court but had not been disclosed in response to a specific question
in the questionnaire. In that appeal the husband argues that, rather
than the €33,401 he received as compensation for the land when it
was appropriated (on the basis of it having been agricultural land
only), he should have received some €370,996 because the land
was valuable building land. It is worthy of note that the valuation
to which I have already referred and which the husband suggests is
grossly inflated was, in fact, for €260,000, some €110,000 less
than the husband would appear now to value the property.
Mr Thorpe submits that the court has no evidence before it that the
appeal launched in 2007 has been dismissed as the husband
suggests. The husband now says that his appeal has been
dismissed by the Supreme Court in Athens. No documentary
evidence has been produced to this court to show that the appeal
has been dealt with at all, let alone dismissed.
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In effect, Mr Thorpe says the husband has gambled and lost. He
failed to disclose the land in his Form E, he denied the litigation in
his questionnaire and he has now lost his case. For the first time,
he says the land should be excluded even though it is in his name
and he subjected it to a charge a considerable period of time after
he says it was appropriated by the airport.
The question is was the Judge plainly wrong in concluding on the
evidence before her that the husband owned or controlled that
land? Clearly, she was not. The question is therefore, in the
circumstances where the court would not even have known about
the appeal had the wife not done her research and the husband has
absolutely no evidence that the appeal was dismissed, should this
court now succumb to the blandishments of the husband that,
although he lied throughout about this property, it has all now gone
wrong and would the court please discount it?
The learned Judge found at paragraph 33 of her judgment:
“I have been asked to find that there has been non-disclosure
of assets on the part of the husband in this case and, looking at
the totality of the evidence and the history of this matter since
divorce proceedings were begun in 2006, I have no difficulty in
doing so. The husband’s disclosure has fallen woefully short
of the obligation to be full, frank and clear. Whether this
should have a significant effect on the assets available for
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distribution is, of course, a different question but it is clear that
the proceedings have been unnecessarily prolonged by the
position taken by Mr Dragonas. In saying this, I give due
consideration to the report from his psychiatrist that he may
have been suffering to some degree from depression. It is also
clear from the evidence before me that he has transferred
assets out of the jurisdiction of this court.”
At paragraph 25 she said:
“Having considered the valuation evidence and the
representations made by Ms [Giz], I am satisfied that although
it is unfortunate that no full translation is available, I can rely
on those valuations and further that I should find that all these
properties are registered in the husband’s name or remain
under his control. I bear in mind the husband’s clear
incapacity as certified by a psychiatrist since the 4th February
but it appears to me that any blame for the difficulty in
establishing the true extent of these interests prior to that date
must lie with him and his non-compliance with the orders of
the court. He had been asked to provide details of the
properties with full addresses. He had then been ordered to do
so and had not complied with those orders.”
22. This court is in no better position than DJ Aitken to know the true extent
and value of the husband’s land and properties. The husband has
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recovered capacity and has represented himself most skilfully with the
very able assistance of Ms Poppet over the last two days. He has had ten
months to produce evidence. He has, in fact, produced reams of
documents but on the two key issues he has failed to produce any evidence
which would establish his case and might, in certain circumstances, have
led the court to go behind the Judge’s Order even though she was not
plainly wrong.
23. In my judgment, if ever a case merited a rehearsal of the judgment in the
case of Baker v Baker, it is this. I quote from Baker v Baker [1995] 2 FLR
829 at 832 per Butler-Sloss LJ:
“Particular problems arise in cases where one party has
deliberately failed or refused to provide the material facts and has
concealed from the other party and the court his true financial
position. In such a case J v J [1995] P 215 Sacks J said at page
227: ‘In cases of this kind where the duty of disclosure comes to lie
upon the husband where husband has and his wife has not detailed
knowledge of his complex affairs, where a husband is fully capable
of explaining and has the opportunity to explain those affairs and
where he seeks to minimise the wife’s claim, that husband can hardly
complain if, when he leaves gaps in the court’s knowledge, the court
does not draw inferences in his favour. On the contrary, when he
leaves a gap in such a state that two alternative inferences may be
drawn, the court would normally draw the less favourable inference,
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especially where it seems likely that his able legal advisors would
hasten to put forward affirmatively any facts had they existed,
establishing a more favour alternative’.
And at page 229: ‘It is as well to state expressly something which
underlines the procedure by which husbands are required in such
proceedings to disclose their means to the court. Whether that
disclosure is by affidavits of facts, by affidavits of documents or by
affidavits on oath, not least when the evidence is led by those
representing the husband, the obligation of the husband is to be full,
frank and clear in that disclosure. Any shortcomings of the husband
from the requisite standard can and normally should be visited at
least by the court drawing inferences against the husband on matters
the subject of the shortcomings insofar as such inferences can be
properly drawn’.
Those passages set out the principles upon which the courts have for
over 40 years approached the cases in which a spouse, not
nowadays necessarily a husband, has been found to have lied and to
have been guilty of material non-disclosure of relevant financial
information in an ancillary relief application by the other spouse. In
many decisions, reported and unreported, judges and district judges
have applied those principles and drawn, where appropriate,
adverse inferences from the deliberate failure of a party to give the
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court an accurate and complete picture of his true financial
position.”
24. If I needed any support in my conclusion that the court did not fall into
error in this respect, I need to consider only two examples of the
husband’s approach to the litigation and valuation in particular:
(i) The land near Corinth on the Greek Mainland
This was a property owned by the wife’s father and which had
been transferred to the husband in 1994, I presume as part of a
marriage settlement. In his Form E dated the 18th March 2008 the
husband valued this property at €125,000 (that is £86,700).
Pursuant to a Court Order dated the 2nd October 2008 a valuation
was obtained on the joint instructions whereby it was valued at
€400,000. That is a valuation which has not been challenged. In
fact, the husband undoubtedly knew when he filed his Form E that
the valuation he had put forward in that document was a gross
under-valuation as it transpired that in 2007 the husband had been
offered €300,000 cash for the property and had (unsurprisingly, in
the light of the joint valuation) turned it down as too low.
(ii) A second example is the properties at Volimes
These are two properties which the husband initially valued at
some €4,000 and €6,000 respectively. The joint valuer was shown
around these properties by the husband’s brother. They were
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subsequently described as follows: “Regarding two abandoned,
unexploited building plots in the same sparsely populated area in
the remotest edge of the island; one hour drive from the town of
Zakynthos on a road with constant turns and bends in the
mountain which present no particular interest to buyers.
Furthermore, both of the building plots are intersected in the
middle by a private asphalt paved road, a fact which made them
even more disdainable according to the contracts of purchase of
the abovementioned building plots.” It comes as no surprise that
such unattractive properties were valued at €22,000.
However, in April 2008 it was discovered that the husband had
them on the market for respectively €125,000 and €140,000, a
matter which only came to the wife’s attention through the attorney
who was commissioned to make enquiries about charges which
were held on the properties.
The matter goes further than that, however, because it has
subsequently discovered that the husband, through various family
members, has subsequently sought to sell these properties at what
would be a total of some €600,000. What is interesting is the way
that the same properties are now described: “The plots are set on
a panoramic hillside facing the sea. The beach and the fishing bay
are less than a kilometre away. Sea views all around from the
plots. This is an ideal spot for a holiday home with the village and
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its shops just a couple of minutes away. Zakynthos airport and
Zakynthos town are approximately 30 minutes drive with
approximately 100 weekly flights from all UK airports”, etcetera.
25. Perhaps the most unusual feature of this case is that the husband was
incapacitated at the time of the trial and represented by the Official
Solicitor. I have thought carefully about that and as to how, if at all, that
should affect the appeal. The court must always bear in mind when
someone is suffering from mental health problems, no matter how
transient. I have concluded, however, that in the particular circumstances
of this case it has no effect and I agree with the analysis of the learned
District Judge that the issues of litigation misconduct all took place at a
time when the husband had capacity.
26. I am also satisfied that he has had capacity for many months and that he
was in a position to be frank with this court and to produce pertinent
evidence. Indeed, he put together a substantial bundle for consideration of
the wife. Other than that, the court was faced with behaviour very similar
to that which had been observed throughout the proceedings in the manner
in which he produced evidence in relation to the land which he says has
been subject to compulsory purchase and his failure to make full and
proper disclosure of all relevant documents that would have given the
court a true and accurate picture of that piece of land.
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27. In all the circumstances therefore, I am satisfied that the learned Judge
was not plainly wrong to take into account the value of those two pieces of
land. I am satisfied that she was not plainly wrong in using the valuations
in the manner that she did. Having admitted the evidence under Ladd v
Marshall, I have considered carefully whether or not I should interfere in
the decision in the light of the fresh evidence and I have been driven to the
conclusion that I should not. I therefore dismiss the appeal.
***
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