Walker v Lundborg by welcomegong2

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									                   Privy Council Appeal No 79 of 2006

James F Walker                                                       Appellant

                                         v.

Susan Lundborg                                                     Respondent


                                     FROM

                      THE COURT OF APPEAL OF
                               THE BAHAMAS

                              -----------------

                 JUDGMENT OF THE LORDS OF THE JUDICIAL
                    COMMITTEE OF THE PRIVY COUNCIL

                            Delivered the 6th March 2008

                              -----------------

                            Present at the hearing:-

                      Lord Hope of Craighead
                      Lord Rodger of Earlsferry
                      Lord Walker of Gestingthorpe
                      Lord Mance
                      Sir Christopher Rose

                             ----------------

                [Delivered by Lord Walker of Gestingthorpe]



Introduction

1.      This appeal is concerned with a sale of real property under an order of
the court. The property in question is a one-storey residence on a plot of land
known as Lot 32, North Cat Cay. It is in a fairly poor state of repair and seems
to have been vacant for long periods. But it is described as being in a sought-
after location and as having some pleasant features. Differing views have been
expressed as to its value, as will appear.

[2008] UKPC 17
                                        2


2.      The unusual terms of the order and the unusual circumstances in which
it was made have given rise to much controversy. It is necessary to set out the
facts, so far as they can be established, in some detail. That is not an easy task
because there were many conflicts of evidence, some not resolved at first
instance and incapable of being resolved by the Board.

3.     Part of the difficulty is that although the litigation has so far produced
seven orders (interlocutory or final) made by Lyons J, it was only at the hearing
leading up to the sixth order that the judge heard oral evidence (in the form of
cross-examination of some, but by no means all, of the deponents). Another
feature of the case has been concurrent bankruptcy litigation conducted in
Florida, initially with little regard to the principles of international comity.
Some affidavits sworn in the Florida litigation have been exhibited to affidavits
made by other deponents in these proceedings, which is not a satisfactory way
of adducing controversial evidence.

4.     The seven orders made by Lyons J were:

       (1)    an order made on 3 September 2002 for the sale of the property,
       then owned by the appellants James F Walker and Carol Ann Walker, to
       the respondent Susan Lundborg;

       (2)   an order made on 7 July 2003 directing that the sale should be
       completed within 14 days;

       (3)    an order made on 21 July 2003 (not in the record, and possibly
       never drawn up) embodying an undertaking that Mrs Lundborg would
       not proceed pending an application for a stay of the order for sale made
       by Mr Walker’s Florida trustee in bankruptcy;

       (4)   an order made on 23 March 2004 permitting an intervention by
       Mrs Lundborg and refusing the trustee’s application for a stay;

       (5)    an order made on 26 July 2004 on the application of Mrs Walker
       granting a stay of the order for sale until the disputed issues could be
       resolved by cross-examination of the deponents;

       (6)    an order made on 7 December 2004, after oral evidence had been
       heard, setting aside the order for sale; and

       (7)   an order made on 28 February 2005 setting aside a money
       judgment which the plaintiff Eleanor C Cole had obtained against Mr
       Walker in the Supreme Court of the Bahamas on 3 December 1996, by
       way of enforcement of an earlier Florida judgment against him.

5.    The appeal to the Board is from an order of the Court of Appeal
(Ganpatsingh Ag P, Ibrahim and Longley JJA) made on 15 November 2005.
                                       3

This set aside the sixth and seventh of the above orders. The seven orders of
Lyons J provide milestones along the weary path of the litigation, and the
points at issue before him, and his findings of fact (incomplete though they are)
provide the basis on which the issues raised on this appeal must be resolved.

The facts down to Mr Walker’s bankruptcy

6.      Mrs Cole, Mr and Mrs Walker and Mrs Lundborg are all United States
citizens resident in Florida. Mr and Mrs Walker were, however, at one time
resident in the Bahamas. In 1983 they purchased the property as joint tenants.
They then immediately mortgaged it back to the previous owners, Mr and Mrs
Krafft. That mortgage has now been paid off, although at one stage in the
litigation that was in dispute.

7.     In October 1990 Mrs Cole brought proceedings (1355 of 1990) in the
Bahamas to enforce a judgment for about $300,000 which she had in
November 1989 obtained against Mr Walker in Florida. Mr Walker entered an
unconditional appearance and summary judgment was given against him in
April 1991. But a month later he obtained an order setting aside the judgment
on the ground that he was challenging the original Florida judgment. Five
years went by but the Florida judgment was not set aside. On 3 December
1996 Mrs Cole again obtained summary judgment in her enforcement
proceedings in the Bahamas.

8.     Under section 63 of the Supreme Court Act the judgment operated as an
equitable charge on Mr Walker’s interest in the property, and was enforceable
in the same way as an equitable charge. The charge did not affect Mrs
Walker’s interest, but it enabled Mrs Cole to apply to the court under Order 31
of the Supreme Court Rules for an order for the sale of the property as a whole.
The making of the charging order effected a severance of the joint tenancy.
Half of the net proceeds would go to Mrs Walker and the other half would be
applied in or towards satisfaction of Mrs Cole’s judgment debt.

9.     There was then a further delay before Mrs Cole’s attorneys, Callenders
& Co of Nassau, took steps to enforce the equitable charge. They obtained a
professional appraisal, dated 3 June 1997 and made by Sir Andrell Laville,
valuing the property at $326,250. On 18 June 1999 they finally issued an
originating summons (286 of 1999) seeking an order for sale. Those are the
proceedings in which all but the last of the seven orders were made. The
seventh order was made in the proceedings 1355 of 1990.

10.   When the Court exercises its power to order a sale the usual course,
provided for in Order 31, is to make an order in general terms, entrusting the
conduct of the sale to a specified party, and giving general directions as to the
manner of sale (by public auction or private treaty), the minimum price, and so
on. That was the relief originally sought by the originating summons issued by
Mrs Cole, with Mr and Mrs Walker as the original defendants, and Mrs Krafft
                                       4

Keims (then the sole mortgagee, since her husband had died) added as a third
defendant in June 1999 since the legal estate was still vested in her.

11.    Mr Sidney Collie, a Nassau attorney, entered an appearance for Mr and
Mrs Walker on 18 August 1999. He had been instructed by Mr Walker through
Mr Gary Rotella, a Florida attorney, and the three of them had a meeting at Mr
Rotella’s office at Fort Lauderdale on 14 August 1999. Mr Walker asked Mr
Collie to act for himself and Mrs Walker. Mr Collie’s evidence, which the
judge accepted, was that he had never met Mrs Walker face to face, had never
spoken to her on the telephone, and had never received any instructions from
her. His only contact was with Mr Walker (and even that contact was limited
and intermittent).

12.    There was then a further period of inactivity. The rest of 1999, the
whole of 2000 and most of 2001 went by without any progress. Mrs Cole’s
attorney, Mr Stephen Turnquest of Callenders, wrote to her on 31 July 2001
apologising for delay in obtaining certified copies of documents. In his letter
he stated that he did not think that another appraisal of the property was
necessary. Mrs Cole (who was by this stage an elderly lady in poor health)
finally swore her first affidavit in support of the originating summons on 9
January 2002. It had three formal exhibits which did not include the 1997
appraisal of the property.

13.     In early January 2002 (according to an affidavit sworn by Mrs Cole) she
was approached by Mrs Lundborg, who expressed an interest in buying the
property. Mrs Lundborg resided at West Palm Beach, Florida, but she owned
another property at Cat Cay and was a member of the Cat Cay Club. On 27
January 2002 Mrs Lundborg sent Mrs Cole a document described as a letter of
intent for the sale and purchase of the property for $400,000 (with some further
sums for attorney’s fees). Mrs Cole seems, initially, to have been grateful to
Mrs Lundborg for her intervention.

14.     In the summer of 2002 there was renewed contact between Mr Walker
and Mr Collie. Mr Walker seems to have become aware of Mrs Lundborg’s
interest in the property and of the prospect of the originating summons
eventually coming before the court. Mr Collie passed on to Mr Turnquest an
offer from Mr Walker to settle for $40,000, said to be based on an appraisal of
the property at $100,000 (in fact, Mr Walker later explained, a colleague had
been trying to “low-ball” him). This offer seems to have been an obvious try-
on but Mrs Lundborg has relied on it as evidence of Mr Walker’s true view as
to the value of the property. Apart from the “low-ball” offer there was a
conflict of evidence between Mr Walker and Mr Collie about what instructions
were given.

15.    The originating summons was heard by Lyons J on 3 September 2002.
The hearing was set for 2.30 pm. A lot seems to have happened that morning.
Mr J Michael Saunders, an attorney with Callenders, swore an affidavit
exhibiting the appraisal. He gave no explanation of why this document, then
                                       5

more than five years old, was put in evidence only on the day of the hearing. In
his first affidavit he asked for a reserve price of $326,250 to be set.

16.    Mr Saunders then swore a second affidavit, the text of which (in its
entirety) was as follows:

      “1.     I am authorised by the Plaintiff to swear this Affidavit for
      the purpose of presenting to this Honourable Court on behalf of
      the Plaintiff a bona fide offer to purchase the property the subject
      of this Action, the Plaintiff being resident out of the Bahamas in
      the State of Florida, the USA. There is now produced and shown
      to be marked “JMS 1” a true copy of a written offer dated
      September 3, 2002 made by Susan Lundborg, US Citizen, to
      purchase the subject property for the sum of $400,000 with an
      agreement to defray the Plaintiff’s legal costs up to a maximum
      of $19,000.

      2.     I verily believe that a sale to Mrs Lundborg on the terms
      specified would be at least as advantageous as a sale by any other
      method.

      3.      In the premises I pray that this Honourable Court authorise
      a sale of the subject property to the said Susan Lundborg at the
      price indicated.”


17.   The text of Mrs Lundborg’s e-mailed offer (in its entirety) was as
follows:

      “OFFER TO PURCHASE
      This offer to purchase represents an offer to purchase via “Private
      Contract” the property located in Cat Cay, Bahamas, Lot 32,
      known as “Carim” as described more precisely in various
      documents.
      The offer is for $400,000 plus up to $16,000 of attorney fees
      which may be due to her attorney in the Bahamas and up $3,000
      of attorney fees which may be due to Mrs Cole’s attorneys in the
      United States.
      Payment will be made upon satisfactory completion of any and
      all necessary legal documents executed in both or either of the
      United States or the Bahamas which will lead to the clear and
      unclouded title to the above-mentioned property which allows the
      legal transfer of the title of the said property into the name of
      Susan Lundborg or an entity named by her.
                                      6

      Payment will be allocated at the time of the closing in a manner
      satisfactory to both parties.”

The e-mail was signed by Mrs Lundborg and dated.

18.    Mr Saunders gave no explanation in his affidavit, and neither he nor Mr
Turnquest has since given any explanation, of the circumstances in which this
offer had providentially arrived at Callenders’ office on the morning of the
hearing, or of how he had obtained authority from Mrs Cole to present the offer
to the Court. Mrs Lundborg swore an affidavit on 22 May 2003 deposing that
Mr Turnquest “represents [Mrs Cole] generally but myself as well for the
purposes of this transaction.” Against that, Mrs Cole’s daughter Caroline
deposed in an affidavit sworn on 26 July 2004:

      “I also assisted my mother in communicating with her then
      lawyer, Stephen Turnquest. Mr Turnquest was not authorised to
      represent to this Court on September 3, 2002, that my mother
      consented to the $400,000 offer, which she had rejected on
      numerous occasions over the course of the previous eight
      months.”

19.   So the matter came before Lyons J in the afternoon. The order records
that Mr Turnquest was appearing for Mrs Cole and Mr Collie for Mr and Mrs
Walker. None of the parties was present in person. Mr Collie did not see Mr
Saunders’ second affidavit until he got to court.

20.  The judge (in his judgment leading to the sixth order) accepted Mr and
Mrs Walker’s and Mr Collie’s evidence about this:

              “I have heard from Mr and Mrs Walker. I have many
      affidavits here. I do not nead to list them. I have had the
      opportunity of observing Mr and Mrs Walker. What they both
      said was that they never gave Mr Collie express instruction to
      accept the $400,000 offer from Mrs Lundborg.
              I have heard from Mr Collie. Mr Collie’s evidence was
      that he had general instructions to get a sale of the property (at
      least of Mr Walker’s interest), if it would help Mr Walker’s
      position. He had never met Mrs Walker and had never received
      any instruction from her. As I have said, Mr and Mrs Walker
      both told me it was not until June/July of 2003 that they received
      notice of this particular court order (3 September 2002) and
      realised its implication. I accept that evidence. I accept Mr
      Collie’s evidence.
              It seems therefore that what has happened was that Mr
      Collie came to court full of good intentions. On 3 November he
      had instructions in the round shall I say, non-specific, but
      general instructions to do what he could to help Mr Walker’s
                                       7

       predicament. He followed those instructions. But he accepts he
       never had express instructions to bind the Walkers to this
       $400,000 offer of Mrs Lundborg. Literally as he was walking
       through the doors coming to court he had no opportunity to get
       those specific instructions as to the terms of the offer. That is
       accepted by me without any question.”

21.    The judge made an order for the property to be sold to Mrs Lundborg on
the terms of her offer. By paragraph 1 it was ordered that her offer (identified
by its date and exhibit number) “be and is hereby accepted”. The rest of the
order was in a form appropriate to a sale by order of the court (rather than an
order staying proceedings because a sale out of court had been agreed). Mrs
Cole’s attorneys were given conduct of the sale. They were to receive the
purchase money and pay half the net proceeds to Mr Collie on behalf of Mrs
Walker. The order gave liberty to apply on two clear days’ notice to anyone
affected by the order.

22.    On 28 September 2002 Mrs Cole e-mailed Mrs Lundborg with “a
profound apology for my stupidity over this entire transaction”. She referred to
Mrs Lundborg as “my hero”. This and the e-mail to which it was responding
remain unexplained. They are something of a mystery because within a month
Mrs Cole decided to appoint a United States attorney, Mary Alice Gwynn, to
investigate what was going on. Ms Gwynn came to Nassau in November 2002
and reviewed Mr Turnquest’s file. On 29 November 2002 Mr Collie sent a
formal notice to complete to Mrs Lundborg care of Callenders. There was no
cross-examination about this but on the judge’s findings as to their state of
knowledge Mr and Mrs Walker cannot have authorised it.

23.     The e-mails between Mrs Lundborg and Mrs Cole, and Mr Collie’s
service of a notice to complete, apparently without instructions, are
symptomatic of a general obscurity, during the period between the first and
third orders of Lyons J, as to the true motives and objectives of the parties and
their lawyers. Everyone seems to have had his or her own agenda, and only a
small part of the story has been explored in cross-examination. But it is
impossible for the Board to make findings about those matters, and it is
unnecessary to do so in order to dispose of this appeal. It is sufficient to say
that during this period the brief friendship between Mrs Cole and Mrs
Lundborg came to an end, being replaced by mistrust on the part of Mrs Cole
and an inclination to retaliate on the part of Mrs Lundborg. Mr Turnquest,
whose evidence in Florida was that he had started to act for Mrs Lundborg at
the express request of Mrs Cole, found himself in the difficult position of
having two clients with sharply conflicting interests. He also had a personal
interest since (as he candidly stated to Ms Gwynn) it was only by a sale of the
property that he was going to get his fees. Meanwhile Mr Walker was sliding
inexorably into bankruptcy in Florida.
                                        8

The Florida bankruptcy

24.    Mr Walker’s bankruptcy in Florida had a great influence on the parties’
conduct in the litigation in the Bahamas, especially as all involved are United
States citizens. In retrospect it can be seen to have been of marginal relevance
to the issues that the Board has to decide. Nor has the Board heard any
argument about any issues of private international law. But because the
bankruptcy litigation occupies so much space in the documentary evidence it
will be useful to give a brief summary of (first) some uncontroversial points of
private international law and (second) the salient events in the bankruptcy.

25.      In the Bahamas there are no statutory provisions for cross-border
assistance in insolvency with an international element involving the United
States. Under general principles of private international law one country will
usually recognise the status of a trustee in bankruptcy (or similar officer)
appointed by another country, and will also recognise his title to moveable (but
not immoveable) property situated in the recognising country. Mr Walker’s
interest in the property was immoveable property. Even if under Florida
bankruptcy law Mr Walker’s world-wide estate, moveable and immoveable,
vested in his trustee, courts in the Bahamas would not recognise the trustee’s
title to immoveable property within its jurisdiction.

26.    On 10 January 2003 a judge in Florida appointed Linda Walden as
receiver for Mrs Cole to get in Mr Walker’s assets. During February Mrs
Lundborg was subpoenaed to produce documents for the purposes of the
receivership. On 25 April 2003 Mr Walker (through his Florida attorney, Mr
Rotella) filed for Chapter 7 bankruptcy. Mrs Cole proved in the bankruptcy
and proposed Ms Walden as trustee, an appointment which was confirmed on 9
July 2003. On 17 July (as a direct result of the Walkers finally finding out
about the sale order) there was an emergency hearing at which the bankruptcy
judge took it upon himself to declare that “the orders [sic] issued on or about
July 7 2003 by the Commonwealth of the Bahamas” were null and void. He
ordered that there should be no sale of the property without the authority of the
Florida bankruptcy judge.

27.     The reference to orders of 7 July 2003 (the date of the second order)
rather than to the first order and the second order was the result of an error in a
fax transmission from Mr Collie to Mr Rotella. The error made it appear that
the sale had been ordered after the bankruptcy. Ms Walden faxed a copy of
the Florida order direct to Lyons J, who was understandably affronted. On 5
May 2004 the bankruptcy judge withdrew his declaratory order after a hearing
at which several witnesses, including Mr Turnquest, were cross-examined.

28.    Although Mrs Cole had proved in the bankruptcy she seems to have
become increasingly disillusioned about legal processes both in the Bahamas
and in Florida. At some stage the trustee in bankruptcy, Ms Walden, was
removed from office. Mrs Cole herself ceased to participate (either personally
or by a legal representative) in either set of litigation. Indeed in Florida she
                                       9

repeatedly failed to respond to subpoenas and on 12 April 2005 her proof of
debt was cancelled and heavy costs were awarded against her. Mr Walker was
discharged from bankruptcy on 21 September 2005. Very recently on 29
November 2007, there was a further order setting aside the original Florida
judgment dated 14 November 1989.

The litigation in the Bahamas after the start of the bankruptcy

29.    It is now necessary to go back in time to events in the Bahamas. At the
beginning of 2003 Mr Turnquest found himself with two clients, Mrs Cole and
Mrs Lundborg, with conflicting interests. Mrs Cole was telling him (through
her Florida attorney, Ms Gwynn) not to deal with Mrs Lundborg. In February
2003 Mrs Walker gave a deposition in the bankruptcy proceedings. Her later
evidence to Lyons J (which he accepted) was that in the course of giving the
deposition she became aware of a sale of the property, but not that she was a
party to it. The evidence of herself and her husband (which was accepted) was
that they only became aware of the full facts on 15 July 2003, when an
associate of Mr Collie passed the information to Mr Walker’s attorney, Mr
Rotella.

30.     Shortly before this Mr Turnquest had made another application to Lyons
J, leading to an order made on 7 July 2003 (the second order) in the following
terms:

      “It is ordered that:
      (1) The sale of the property the subject of this action which was
      ordered on the 3rd September 2002 to take place to Susan
      Lundborg proceed on terms previously approved by this Court
      (2) Completion shall take place no later than 2 weeks from the
      date of this order
              And the Registrar is directed to execute on behalf of the
      Third Defendant [Mrs Krafft Keims] a conveyance of the
      property to the said Susan Lundborg or her nominee in form
      approved by the purchaser.”

Only Mr Turnquest appeared. The order recited that the judge was satisfied, on
the representation of Mr Turnquest, that Mr Collie had been notified and had
communicated that he did not object to the relief sought.

31.     This order raises a number of puzzling questions. Mr Turnquest was
still expressed as appearing on behalf of Mrs Cole, but she had given no
instructions for the application to be made.       Indeed it was contrary to
instructions she had given. Mr and Mrs Walker knew nothing of it either. In
an affidavit made in the Florida proceedings Mr Turnquest deposed:

      “I placed the facts squarely before the Court.”
                                       10

The Board is not in a position to make any finding about that. The affidavits
in support of the application (one sworn by Mrs Lundborg and the other, in
draft at the time of the hearing, by Mr Turnquest) did, if carefully considered,
disclose the material facts. But it would be very surprising, if the increasingly
contentious circumstances had been fully explained and brought home to the
judge, that he should have left the conduct of the sale in the hands of an
attorney who was on the record for the judgment creditor (but receiving no
instructions from her) and was also acting for Mrs Lundborg as prospective
purchaser.

32.    On or about 11 July 2003 Mrs Lundborg paid $402,000 to Callenders.
This, according to Mr Turnquest’s evidence to the Florida court on 5 May
2004, when taken together with some outstanding property taxes paid by Mrs
Lundborg, amounted or at least approximated to the full purchase price. Mr
Turnquest deducted about $44,000 for professional fees due to him from Mrs
Cole. He did not inform Mrs Cole of this. He ceased to act for her, according
to his evidence, on 21 July 2003. The Board was told on instructions by Mr
Knox QC (for the appellants), without contradiction, that the balance of the
$402,000 has been repaid at some unspecified time to Mrs Lundborg.

33.     The Florida bankruptcy now began to have a direct impact on the
litigation in the Bahamas. Ms Walden, the trustee in bankruptcy, faxed the
declaratory nullifying order to Lyons J on 17 July 2003. Ms Walden (who was
then working closely with Mrs Cole and Ms Gwynn) arrived in Nassau soon
after. She was seeking to have the sale order set aside. On 21 July 2003 (the
date of expiration of the 14-day period fixed by the second order) there was a
hearing before Lyons J attended by Mr Turnquest (for Mrs Lundborg), Mr
Moxey (for the trustee), Mr Collie (for the Walkers) and Ms Gwynn and
another Florida attorney (for Mrs Cole). There is no copy of any formal order
in the record, and no transcript or note of the proceedings, but it is common
ground that Mr Turnquest undertook on behalf of Mrs Lundborg not to proceed
with the sale pending resolution of a formal application to intervene, and for a
stay, to be made by Ms Walden. On the same day Callenders gave notice of
their appointment as attorneys for Mrs Lundborg, although she was not yet a
party to the proceedings. She made an application to intervene on 14 January
2004.

34.    On 10 October 2003 Mr Moxey made an affidavit in support of the
trustee’s application for a stay. He deposed that Mr Turnquest had been acting
for Mrs Lundborg as well as Mrs Cole; that (so far as he was aware) the
property had not been advertised so as to attract the highest bidder; that the
valuation exhibited to Mr Saunders’ affidavit was about five years out of date;
and that the property had been valued by H G Christie Real Estate at $625,000
as at 18 August 2003. This was the first time that the issue of sale at an
undervalue was explicitly raised in the proceedings. Later on, for reasons that
are not apparent, it ceased to be a live issue.
                                       11

35.    Mrs Lundborg made an affidavit on 23 March 2004 in support of her
application to intervene. She deposed that the property had been advertised in
the front office of the Cat Cay Club (where she was a member) at an asking
price of $375,000, but that there had been no close offer. She stated that she
was fairly experienced in and knowledgeable about business matters, including
property values, and she did not regard the property as worth even $326,000:

      “However, as [Mrs Cole] was (and to the best of my knowledge
      still is) not in good health, I increased my offer purely as an act of
      charity.”

36.     This evidence was however contradicted by Mrs Cole’s daughter
Caroline, who lived with her. Miss Cole deposed that Mrs Cole was not
willing to sell for $400,000 and that Mrs Lundborg “persisted in harassing my
mother by calling at our house until I obtained a restraining order prohibiting
her from contacting my mother.” Miss Cole’s affidavit did not specify the date
of the restraining order and did not exhibit a copy of it.

37.    The evidence of Mrs Lundborg and Miss Cole (like that of Mrs Cole and
Mr Turnquest) has not been tested by cross-examination in these proceedings
(Mr Turnquest was cross-examined in the Florida bankruptcy proceedings).
Only Mr and Mrs Walker and Mr Collie have been cross-examined on their
affidavits in these proceedings.

38.    The applications by Ms Walden and Mrs Lundborg were heard together
by Lyons J on 23 March 2004 (the fourth order). Mr Turnquest, Mr Moxey
and Mr Collie were present. Mr Collie seems to have told the judge that Mr
Walker no longer supported the sale. Lyons J gave a short judgment which
suggests that he was still vexed about the Florida bankruptcy judge having
purported to nullify his sale order. He spoke highly of the valuer who made
the $326,250 valuation in 1997 and made no comment on its date. He did not
refer to the valuation exhibited by Mr Moxey. He said that Mr Walker’s
change of mind was too late, and if persisted in might be a contempt of court.
He concluded that there was “absolutely no doubt in my mind that there is a
binding contract for purchase/sale between Mrs Lundborg and Mr and Mrs
Walker”. He allowed Mrs Lundborg’s intervention and dismissed Ms Walden’s
application for a stay.

39.   On 27 April 2004 Mrs Cole made an affidavit in the bankruptcy
proceedings deposing that she had never met Mr Saunders and had never given
him authority to make his affidavit dated 3 September 2002 (presumably the
second of his two affidavits of that date). She also made an affidavit sworn on
15 June 2004 in these proceedings. Three or four paragraphs of that affidavit
were struck out as containing unsubstantiated allegations of fraud against Mrs
Lundborg and Mr Turnquest. But paras 17-19 (not, it seems, struck out)
deposed that Mr Turnquest had been acting contrary to Mrs Cole’s instructions
when the first and second orders were made.
                                      12

40.     On 14 June 2004 Mrs Walker, acting through new attorneys, Lockhart &
Munroe of Nassau, applied by notice of motion under Order 45 rule 11 for an
order staying the sale to Mrs Lundborg under the first and second orders on the
grounds (1) that the representations made to the court on her behalf were made
without her knowledge or authority; (2) that the orders had first come to her
attention long after they were made; and (3) that Mrs Lundborg’s offer was far
below the true value of the property. She gave notice that she would rely on
affidavits by herself, her husband and Mr Rotella. In the event there were also
affidavits from Mr Collie, Miss Cole, and the valuer, Mr Lowe of HG Christie
Real Estate (exhibiting a valuation of the property at $950,000 as at 16 June
2004 and making a retrospective valuation of $640,000 as at 3 September
2002). Mrs Walker’s application was made eleven months after she had
learned the full facts and just under three months after the rejection of the
trustee in bankruptcy’s application.

41.   On 26 July 2004 Lyons J ordered a stay (the fifth order). In his written
reasons for his oral decision he stated:

      “18. I have no hesitation in staying the order until the court gets
      to the bottom of this. To do anything else would be perverse.
      19.     So as to avoid any confusion, I shall set out what I see is
      the issue here.
      20.     On 3 September 2002 an offer, partly oral and partly
      written, was made on the Cat Cay land. It was orally accepted
      by the purported agent of the vendor (Mr & Mrs Walker). This
      partly oral/partly written agreement was, in part, then
      incorporated into a Court Order.
      21.     Two questions arise:
      (i) As a matter of fact, was the purported acceptance a valid
      acceptance in that it accurately reflected the principal’s
      instructions to their agent?
      (ii) If so, does the court order arguably being part of the
      “writings” satisfy the requirement of the Statute of Frauds?
      22.     The question of the validity of the judgment in Ch 1355/90
      is an important, but peripheral, issue. If Mr Walker’s Chapter 7
      application is satisfactorily resolved, it may become a moot point.
      23.     Returning now to Mr Lockhart’s application, it appears
      that evidence will need to be taken in trial format, if the matter
      proceeds that far.”

Earlier the judge had said that he would give some case management directions
but he did not give any detailed directions as to what he meant by “trial
format”. There were no directions about points of claim and defence or the
giving of notices to cross-examine deponents. The issues as stated by the judge
were at best imprecise and incomplete. They may be thought to have prejudged
                                       13

the main issue, that is the nature and meaning of the judge’s first order; they
also ignored any question of sale at an undervalue.

42.    Mr Turnquest made an affidavit on 6 December 2004. Its only purpose
was to depose to an equitable assignment by way of security made by Mrs
Walker in favour of Mr Rotella. Mr Turnquest did not respond to any of the
points raised in relation to his instructions, or the valuation of the property.

43.    The making of the sixth order is dealt with in the next section of this
advice.

44.     Finally on 28 February 2005 (the seventh order) Lyons J set aside the
order dated 3 December 1996 made in the proceedings 1355 of 1990. Mr
Lockhart represented Mr Walker. Mrs Cole did not appear and was not
represented. The judge reached his decision on the basis that Mr Walker was
not resident in the Bahamas at the time of service and that leave to serve out of
the jurisdiction had not been obtained.

The making of the sixth order

45.    At the hearing leading up to the sixth order the issues were, in the
absence of any case management directions, defined by what Lyons J said
when he made the fifth order, and by the two rounds of skeleton arguments put
in by Mr Lockhart (for Mrs Walker) and Mr Turnquest (for Mrs Lundborg). It
is important to notice that these issues were much narrower than the wide range
of matters that had been ventilated in some of the affidavits. In particular, sale
at an undervalue was not an issue. Mr Lockhart’s skeleton arguments relied on
two main points: first, that Mrs Cole had no cause of action against Mrs
Walker, since the charging order did not bind her share; and second, that Mr
Collie had no authority, actual or ostensible, to agree or consent to the sale
order on behalf of Mrs Walker. Mr Turnquest’s skeleton arguments relied on
four main points: first, that the court had no jurisdiction to set aside the first
and second orders because there had been no “new occurence” within Order 45
rule 11; second, that Mr Collie had had implied or ostensible authority to bind
Mrs Walker; third, that the first order had been perfected for more than two
years; and fourth, that the order was unimpeachable, as against Mrs Lundborg,
under section 57 of the Conveyancing and Law of Property Act.

46.    There is a transcript of the single-day hearing which led up to the sixth
order, made on 7 December 2004. Mr Lockhart appeared for Mrs Walker and
Mr Turnquest for Mrs Lundborg. Mrs Cole did not appear and was not
represented. Mr Lockhart had issued the notice of motion on behalf of Mrs
Walker alone, and his skeleton arguments concentrated on her position. But
Mr Lockhart had come on the record for both Mr and Mrs Walker, a fact which
he mentioned at the beginning of the hearing. Nevertheless the application
remained an application on behalf of Mrs Walker alone. Lyons J seems to
have lost sight of that point at times in his judgment.
                                        14

47.    In opening the application Mr Lockhart referred to Mr Turnquest’s
having sworn an affidavit as “highly unusual” and that he was on notice that he
had exposed himself to cross-examination. The judge commented that it was
“risky”. But in the event the only oral evidence was from Mr Collie, Mr Walker
and Mrs Walker. The judge accepted their evidence as already mentioned. In
his extempore judgment (which he later edited fairly extensively) the judge
held that the first order must be set aside because Mr Collie had no authority to
bind Mrs Walker to it.

48.    That was effectively the only surviving ground of Mr Lockhart’s
application, since at the beginning of his closing submissions he abandoned his
point about the court having no power under Order 31 to order a sale of the
property as a whole. Mr Turnquest maintained the four main points in his
skeleton argument. The judge (who, as the transcript shows, intervened a great
deal in the course of both the evidence and the submissions) seems to have
forgotten, or not to have accepted, Mr Lockhart’s concession about Order 31,
because at an early stage in his judgment he said that Mrs Cole had no right to
involve Mrs Walker in the proceedings, and that she could easily have had the
action against her struck out.

49.    That was an error because, although Mrs Cole’s security extended only
to Mr Walker’s share in the property, Order 31 enabled the court to authorise a
sale of the property as a whole. An undivided share of a residential property is
not a marketable asset. If authority is needed for these propositions it is
provided by Midland Bank Ltd v Pike [1988] 2 All E R 434. The Court of
Appeal referred to that case but seems, with respect, to have misunderstood it.
The important difference between Bahamian and English real property law
mentioned by the Court of Appeal (that is, that under English law since 1925 an
undivided share takes effect only in equity, under a trust for sale) was
effectively the only point relied on by the losing party in Midland Bank v Pike:
absent that point the court’s jurisdiction to order a sale of the whole property
was indisputable.

50.    Their Lordships consider that the judge made a further error in his
analysis of the meaning and effect of the first order. He treated the order not
as a judicial exercise of the court’s inherent and statutory jurisdiction, but
essentially as a contractual document. This led to his making the contradictory
findings (in para 10 of his judgment) that Mr Turnquest initialled the order (as
he did on or before 12 September 2002) on behalf of Mrs Lundborg as well as
Mrs Cole; and later (para 40) that he was acting for Mrs Lundborg and not Mrs
Cole (the latter finding appears in the edited judgment but not in the original
transcript). Whatever doubts and suspicions there may be on these matters,
they were simply not an issue before the judge. Mr Lockhart did not rely on
them, nor did Mr Knox seek to rely on them before the Board. Although para
1 of the first order referred to Mrs Lundborg’s offer being accepted, paras 2-7
(most of which the judge described as irrelevant) are consistent only with an
intention to follow the procedure for a judicial sale under Order 31. In
particular, para 6 provided for the registrar to execute the transfer if necessary,
                                      15

a provision also included in the second order. In the circumstances it was
unnecessary for the judge to consider the Statute of Frauds.

51.    Having settled on his view that the order must be analysed as a
contractual document the judge held, relying on the principles in Waugh v H B
Clifford & Sons Ltd [1982] Ch 374, that Mr Collie did not have ostensible
authority to bind Mrs Walker. He also seems to have held that Mr Turnquest
did not have actual or ostensible authority to bind Mrs Cole but (as just
mentioned) it was common ground before the Board that in the absence of oral
evidence from them this finding should be disregarded.

52.    Lyons J did consider the issue of delay, but he did so (in paras 10 to 13
of his judgment) exclusively on behalf of Mr Walker. He referred to Mr
Walker’s bankruptcy and to his having taken the “reasonable step” of
approaching the Florida court for a stay of the sale order (the judge was here
much more indulgent towards the Florida court than he had been a year before).
He concluded that Mr Walker’s delay in coming to his court was “explainable”.

The Court of Appeal’s judgment

53.    Mrs Lundborg launched separate appeals against the sixth and seventh
orders of Lyons J. The appeals were heard together. The Court of Appeal
allowed both appeals in a single reserved judgment delivered by Ganpatsingh
Ag P. As regards the sixth order, the heart of the judgment is in para 14 (after
a reference to the grounds of Mrs Walker’s application):

      “We pause here to comment briefly on these grounds in the
      context of Order 31 which gives the court an unqualified power
      to order a sale of land. Mr Collie had been retained to represent
      both Mr and Mrs Walker. He entered an appearance on behalf of
      both. His instruction was to agree a sale of the property. He
      now says he had no specific instruction from Mrs Walker to
      accept a sale to the intervener with whom he had no dealings.
      As Order 31 makes clear there is no need for there to be a
      contract of sale or a consent by the owners to a sale. Once a
      buyer has been identified who is prepared to pay the best price to
      the satisfaction of the Court, the procedural provisions for the
      sale can be invoked. Mr Collie’s attempt to resile from the terms
      of the order which he consented to, and in which the purchaser’s
      name is mentioned, cannot be a ground for setting the order aside.
      Relying on Mr Collie’s representation that the offer of the
      appellant was acceptable to Mr and Mrs Walker, the Court was
      satisfied that the price offered was the best one in the
      circumstances, so as to properly make an order of sale disposing
      of Mr Walker’s beneficial half interest, which must necessarily
      involve a sale of the property. Furthermore, the purchaser had
      partly conformed or complied with the order by paying over the
      purchase price to the persons appointed to conduct the judicial
                                        16

       sale. Liberty to apply could not in our view give the Court a
       jurisdiction to set aside the order in the circumstances of this case
       when all the requirements of a judicial sale had been satisfied.”

54.     The Court of Appeal was, in their Lordships’ opinion, correct in viewing
the first order as directing a judicial sale (with approval of the particular offer
made by Mrs Lundborg) rather than as a private-treaty contract which
happened to be made before the Court and to be embodied in a court order.
But in concluding that all the requirements of a judicial sale had been complied
with the Court of Appeal was paying insufficient regard to the judge’s findings
of fact (which were not challenged except in so far as Mr Turnquest’s
authority) and other credible evidence. Mr Collie had gone beyond his
instructions from Mr Walker, and had no instructions whatsoever from Mrs
Walker. The sale had not been completed either by a conveyance or by
payment of half of the net proceeds to Mrs Walker. The $402,000 must have
been held by Mr Turnquest as Mrs Lundborg’s attorney since he apparently
repaid most of it to her without the authority of the court. Mr Turnquest was
plainly not an appropriate person to have conduct of the sale. On the occasion
of the third order Mrs Lundborg had, through Mr Turnquest, given an
undertaking not to proceed with the sale, and that undertaking remained in
force until it was overtaken by the fifth order. Sale at an undervalue was not
an issue before the Court of Appeal, and it was unnecessary for the Court to
refer to it. But if the Court was going to address that issue (as it did in para 16)
it should not have omitted to mention that the 1997 valuation was five years out
of date, and that Mr Lowe’s retrospective valuation was at a much higher
figure.

55.    In paras 18 and 19 of the judgment the Court pointed out that in making
his seventh order Lyons J had been wrong in supposing that in the proceedings
1355 of 1990 Mrs Cole needed leave to serve process out of the jurisdiction.
At the material time Mr Walker had a residence in the Bahamas and voluntarily
submitted to the jurisdicition. The judge fell into error in setting aside a
regularly obtained summary judgment to which Mrs Cole was entitled on the
pleadings.

The issues in the appeal against the sixth order

56.    Counsel agreed that there are two main issues in the appeal to the Board
relating to the sixth order: (1) did the judge have jurisdiction to make the order
that he made? and (2) if so, was he right to exercise his discretion in favour of
Mrs Walker? The first issue raises, apart from common law and procedural
issues as to jurisdiction, a point of statutory construction on section 57 of the
Conveyancing and Law of Property Act which was raised, but not dealt with,
below.
                                      17

Jurisdiction

57.    Mr Knox submitted that the first order was a consent order and that it
reflected an underlying agreement (or rather the appearance of an underlying
agreement) between Mrs Cole, Mr and Mrs Walker, and Mrs Lundborg. If the
underlying agreement was flawed by mistake and lack of authority the court
had a discretionary jurisdiction to set it aside.   This jurisdiction did not
disappear simply because the agreement was reflected in a final order of the
court. Mr Knox invoked the metaphor used by Vaughan Williams J in
Huddersfield Banking Co. Ltd. v Henry Lister & Son Ltd [1895] 2 Ch 273, 276:

       “To say that the Court can set aside the agreement – and it was
       not disputed that this could be done if a common mistake were
       proved – but that it cannot set aside an order which was the
       creature of that agreement, seems to me to be giving the branch
       an existence which is independent of the tree.”

58.     Mr Dingemans QC (for Mrs Lundborg) contended that there was no
jurisdiction to set aside the sixth order. He pointed out that neither of the
Walkers had appealed against the first order, or the second order, or the fourth
order.     In reply Mr Knox contended that an appeal would have been
inappropriate in a case like this.

59.     Mr Dingemans also submitted that neither Order 31A rule 18(7), which
came into operation on 1 July 2004, nor Order 45 rule 11, nor the express
liberty to apply, was wide enough to enable the judge to set aside (as opposed
to giving directions for working out) the first order – a final order which had
been reinforced by the second and fourth orders. There had been no sufficient
change of circumstances, he submitted, to justify the court in overturning its
own decision.

60.     The first order was not expressed as made “by consent”, but it is clear
that that was its basis. Had Mr Collie not concurred in the order it would have
been the judge’s duty to consider the evidence more carefully and to reach a
reasoned conclusion. An order made by consent can be set aside at common
law if sufficient grounds are shown, subject to the well-known principles which
always constrain the court in granting discretionary relief. The Huddersfield
Banking case (above) is in point; see also Ainsworth v Wilding [1896] 1 Ch
673.
.
61.     Their Lordships are satisfied that Lyons J did have jurisdiction, at
common law, to set aside the first order on the ground of a mistake, shared by
both attorneys and the judge himself, as to Mr Collie’s authority to act for Mrs
Walker. Their Lordships consider that any possible procedural objection to the
judge doing so in the same proceedings was waived, since this point was not
taken in either court below. It is not necessary to go far into the subsidiary
issues as to Order 31A, Order 45 and the liberty to apply. None of those
procedural provisions makes any dramatic enlargement of the court’s inherent
                                        18

powers: see Collier v Williams [2006] 1 WLR 1945, para 39 and Cristel v
Cristel [1951] 2 KB 725, 728. None of them permits a first-instance judge to
set aside a final order, whether made by that judge or by another judge of
coordinate jurisdiction, without some special reason, usually involving a
material change of circumstances. But a change of circumstances is not, in
this context, to be interpreted narrowly. It can include the discovery of new
information, even if that information was, in a sense, always available (see for
instance Jordan v Norfolk County Council [1994] 4 All ER 218, 223-224).
Their Lordships consider that the court’s power under Order 31A rule 18(7)
was in principle exercisable in relation to an order made before 1 July 2004, but
that it largely confirms and replicates the court’s inherent powers. So do Order
45 rule 11 and the liberty to apply.

The Conveyancing Act point
62.    As a separate (and in his submission conclusive) point Mr Dingemans
relied on section 57 of the Conveyancing and Law of Property Act. This point
was raised below but was not referred to in the judgments. The judge’s
omission to refer to it was probably because he analysed the order for sale as
essentially a contract which happened to be embodied in an order. The Court
of Appeal must have thought it unnecessary to refer to the section since it
concluded that there had been a judicial sale without any irregularity.

63.    Section 57(1) is in the following terms:

       “An order of the Court under any statutory or other jurisdiction
       shall not, as against a purchaser, be invalidated on the ground of
       want of jurisdiction, or of want of any concurrence, consent,
       notice, or service, whether the purchaser has notice of any such
       want or not.”

By section 2 “purchaser” is defined as including (unless the context otherwise
requires) “a lessee or mortgagee, and an intending purchaser, lessee or
mortgagee or other person who, for valuable consideration, takes or deals for
any property.” Section 57 is based on section 70 of the English Conveyancing
and Law of Property Act 1882, since replaced by section 204 of the Law of
Property Act 1925. Section 70(1) was in the same terms as section 57(1).
Section 70(2) was as follows:

       “This section has effect with respect to any lease, sale or other act
       under the authority of the Court, and purporting to be in
       pursuance of the Settled Estates Act 1877, notwithstanding the
       exception in section forty of that Act, or in pursuance of any
       former Act repealed by that Act, notwithstanding any exception
       in such former Act.”

Section 204(2) was in similar but more general terms.
                                        19

64.     Section 57, like section 204 and its predecessor, is expressed in wide
terms which have in England been held to cover a variety of court orders,
including a grant of probate (re Bridgett and Hayes’ contracts [1928] 1 Ch
163) and an order authorising a sale by a receiver appointed under the Mental
Health Act 1959 (Pritchard v Briggs [1980] Ch 338). But (as section 70(2) of
the 1882 Act suggests) the main function of these provisions, when originally
enacted in England, was to ease the burden of investigating title for persons
wishing to acquire land which had (until sale) been settled land. In England it
is now becoming a matter of legal history, that before the great reforms of
property law in 1925, estates for life and in tail could exist as legal estates, and
before the Settled Land Act 1882 a legal tenant for life had no power to sell or
mortgage the fee simple in the settled land, except with the concurrence of
every remainderman, or with their concurrence being dispensed with by the
court under the complicated provisions of the Settled Estates Act 1877 or its
predecessors. A tenant for life might contract to sell under the protection of
such an order and then find objections raised (after the terms of the order had
been included in the abstract of title delivered to the purchaser’s solicitors) that
some procedural error or omission had been made. Re Hall Dare’s contract
(1882) 21 Ch D 41 and Mostyn v Mostyn [1893] 3 Ch 376 are striking
illustrations of how selling settled land during the 19th century was beset with
problems, which were a cause of real damage to the rural economy (the
administration action in Mostyn v Mostyn had begun in 1861, about ten years
after the publication of Charles Dickens’ Bleak House.) In each of these cases
there was no dispute about the existence of a binding contract. The question
was whether the vendors were able to perform their obligation to show a good
title.

65.    In other English cases it has been held that the provisions of section 70
or section 204 do not enable the court, by ordering or authorising a sale, to turn
a bad title into a good title: Jones v Barnett [1900] 1 Ch 370; Pritchard v
Briggs [1980] Ch 338, 406-409 (a valuable review of the authorities by Goff
LJ, with whom the other members of the court agreed on this point).

66.     In all the English authorities, diverse though they are, there was
unquestionably a contract, sometimes completed by conveyance, sometimes
still uncompleted (hence the reference to purchaser or intending purchaser).
Where the contract remained uncompleted the purchaser was questioning
whether the statutory provisions were wide enough to ensure that he would get
a good title (he might be questioning it either because he wanted to get out of
the contract, or simply for reassurance as to the title). If on the other hand the
contract had been completed, the purchaser or his successor in title would be
relying on the statutory provisions to defend his title. Whether they did provide
protection depended, in short, on whether the alleged defect in title was in the
court order (or the way in which it was obtained) on the one hand or was
anterior to the order, on the other hand. But in either case there was no doubt
about the party’s status as a purchaser.
                                       20

67.    In the present case, by contrast, there is real doubt about Mrs
Lundborg’s status as a purchaser. It is the central issue in the case. Mrs
Lundborg is seeking to use section 57 to confer on herself the status of
purchaser or intending purchaser which is the precondition of obtaining
protection under section 57. That is a circular and question-begging process of
reasoning which their Lordships do not accept.

The exercise of discretion

68.    Mr Dingemans’ strongest resistance to the appeal was on the issue of
discretion. He relied on seven points which to some extent overlap: the need
for finality in litigation; the submission that Mr Collie had ostensible authority
to agree to a compromise on behalf of Mrs Walker; the Walkers’ failure to
appeal against any of the first, second and fourth orders; Mrs Walker’s delay in
making her application to set aside the first and second orders; the prejudice to
third-party rights (those of Mrs Lundborg); the part-performance of the
transaction by Mrs Lundborg; and the absence of notice to Mrs Lundborg of the
alleged deficiencies in the sale order.

69.    The need for finality in litigation is an important general principle: on
this Mr Dingemans referred to the decision of the House of Lords in the
Ampthill Peerage Case [1977] AC 547. But it has to be balanced against the
need to remedy injustice wherever possible. The need for finality means that
the court starts with a disinclination to reopen concluded transactions. But it
cannot by itself be decisive. There is a balancing exercise to be performed.

70.     As to the issue of ostensible authority, their Lordships doubt whether it
can be decisive to the exercise of the court’s discretion to set aside its order.
Lyons J approached the first order as a contractual arrangement which owed
little or nothing to the court’s judicial function (in the course of the argument
on 7 December 2004 he is reported as having said, “Nonsense, it was not an
order of the court. I have said this several times, I didn’t order anything”). It
was therefore natural that he should concentrate on the issue of Mr Collie’s
ostensible authority.     But once the Court of Appeal recognised that the
transaction was essentially a judicial sale, albeit under a consent order, the
crucial questions were whether a mistake had been made, and whether (as a
matter of discretion) the mistake should be put right. An attorney’s consent
given with ostensible but not actual authority would still be a mistaken consent,
although one which the court would be less ready to correct at the expense of
third-party rights.

71.     The failure of Mr and Mrs Walker to appeal against the first and second
orders was excusable, since (as the judge found) they knew nothing about them
until long after the time for appealing had expired. In any event it is doubtful
whether an appeal against those orders would have been more appropriate than
the course that Mrs Walker eventually took. The fourth order is more
problematical, because by then Mr and Mrs Walker did know the facts but were
still apparently represented (at least so far as Mr Walker and Mr Collie were
                                      21

concerned) by Mr Collie.    This point is addressed further in connection with
delay.

72.      As to delay, their Lordships have already noted (para 52 above) that in
dealing with the issue of delay the judge focussed on Mr Walker to the
exclusion of his wife. That was an error because it is of central importance to
her case that her interest and her claim were distinct from her husband’s. His
share was subject to the charging order but hers was not. He was made
bankrupt but she was not. He instructed Mr Collie (and purported to give
instructions on behalf of Mrs Walker also) but she never actually instructed
him.      The application made by Mr Lockhart on 15 June 2004 was her
application, and it is Mrs Walker who had the burden of explaining and
excusing her delay. The judge found that she was aware of the facts in June
2003. Even if this is corrected (as it probably should be) to July 2003 there is
still a period of eleven months’ delay to be accounted for.

73.    The only explanation given by Mrs Walker was in her affidavit sworn
on 15 June 2004.        Almost the whole of that affidavit is concerned with
emphasising the absence of instructions and communications between herself
and Mr Collie. By contrast she said little about the period after she learned
about the sale order. She said that she was “aware of the March 2004 order”
(the fourth order) but she did not say when she became aware of it. The fourth
order included the dismissal of the application for a stay made by her husband’s
trustee in bankruptcy. That application had been made in July 2003. It would
be remarkable if her husband had not kept her informed about his financial
problems, including his bankruptcy and the steps which his trustee in
bankruptcy was taking in the Bahamas. Mr Rotella, who was acting as Mr
Walker’s United States attorney, was also acting for Mrs Walker. But in her
affidavit she gave no explanation for her inactivity after July 2003.

74.   Mrs Walker was briefly cross-examined on her affidavit. She was
asked by Mr Turnquest what she did when she learned the facts in June or July
2003. Her reply was:

      “Well, I believe I hired, we contacted Mr Lockhart, and he started
      to represent me shortly thereafter. I am not sure if I have the
      sequence of the dates correct, but ...”

Mr Turnquest did not press the point. It seems doubtful that Mrs Walker can
have got the sequence correct, since the fourth judgment (a copy of which she
exhibited to her affidavit) shows that she and Mr Walker were still represented
by Mr Collie on 23 March 2004. Mrs Walker seems to have done nothing, for
eight months after learning the facts, to stop Mr Collie from continuing to
claim to act for her. The most likely inference is that Mrs Walker stood back,
from July 2003 until March 2004, to see whether the trustee in bankruptcy
would be successful in her application, and that when it failed, Mrs Walker
decided to launch her own application through Mr Lockhart.
                                        22

75.    Whether or not that is what happened, it was for Mrs Walker to satisfy
the court, by a full and detailed explanation, that it should show exceptional
indulgence to her. Her affidavit did not do that. No doubt Mr Lockhart took
some time to brief himself about the complexities of the situation, but Mrs
Walker did not provide even an outline chronology. Her affidavit left many
questions unanswered. Mr Turnquest’s decision not to press this matter in
cross-examination cannot supply an explanation which Mrs Walker failed to
provide.

76.    Mr Dingemans’ last three points all concern aspects of prejudice to Mrs
Lundborg’s third-party rights. They are another factor to be taken into account,
but they carry rather less weight than they might have done in other
circumstances. Mrs Lundborg was not cross-examined and the judge’s findings
about Mr Turnquest acting for Mrs Lundborg (rather than Mrs Cole) are not
supported by either side. It would not be right for their Lordships to draw any
serious adverse inferences against Mrs Lundborg. Nevertheless it seems likely
that Mrs Lundborg, as an experienced business woman, must have realised
from an early stage that this was an unconventional transaction. She was on
notice from 21 July 2003 at the latest, and probably a good deal sooner, that it
was being seriously challenged. On or before 11 July 2003 she had paid
$402,000 to Mr Turnquest, but (for reasons already mentioned) he must have
received it as her attorney, and he has since, it seems, repaid most of it.
Nevertheless Mrs Lundborg has certainly suffered some prejudice by the
disruption of her financial affairs during this protracted litigation.

77.    The judge considered the issue of delay but his analysis was flawed
because he concentrated on Mr Walker. Moreover he did not pay sufficient
regard to the prejudice to Mrs Lundborg. He misdirected himself in exercising
his discretion. In their Lordships’ opinion Mrs Walker, as a litigant asking for
an extraordinary exercise of discretion in her favour, failed to act sufficiently
promptly and failed to provide the court with a full and frank explanation of her
delay. On those grounds the judge should have declined to make the sixth
order, and the Court of Appeal were right to set it aside (although their
Lordships do not concur in all the Court of Appeal’s reasons).

78.    The Court of Appeal was also right, for the reasons which it gave, in
setting aside the seventh order.

79.     The judicial sale to Mrs Lundborg has still to be completed. Even at
this late stage it may be appropriate for a wholly independent attorney to be
appointed to have conduct of the sale and see it through to completion. That
course may be particularly desirable if there is to be yet more litigation as to the
effect on the charging order of the Florida orders of 12 April 2005 and 29
November 2007 mentioned in para 28 above. Their Lordships express no
opinion whatever on that matter.
                                     23

80.    For these reasons their Lordships will humbly advise Her Majesty that
both appeals should be dismissed. The parties should make written submissions
as to costs within fourteen days.

								
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