U. K. Privy Counsel reviews judgment of Bahamas Court of
Appeal and disapproves failure of Florida bankruptcy judge to observe
international comity when it entered orders that purported to cancel orders of
Bahamas court pertaining to sale of Bahamas real estate
This unnecessarily complicated case before the Privy Council
deals with a sale of Bahamas real property under a court order. The property in
question is a one‑story residence on a plot of land known as Lot 32, North Cat
Cay. Though in a desirable location, the house is in a poor state of repair and
seems to have been empty for long periods.
Part of the difficulty is that although the litigation has
so far produced seven orders (some interlocutory and some final) made by
Bahamas first instance Judge Lyons, it was only at the hearing leading up to
Order (6) that the judge heard oral evidence from deponents followed by cross‑examination.
Another complication has been the concurrent Florida
bankruptcy litigation involving Mr. James F. Walker, one of the Petitioners,
initially with questionable regard to the principles of international comity.
The first 5 orders include Order (1) of September 3, 2002
for the sale of Lot 32 (then owned by the bankrupt and his wife) to Susan
Lundborg (Respondent); Order (2) of July 7, 2003 that the parties complete the
sale within 14 days; Order (3) of July 21, 2003 (not in the record) embodying
an undertaking that Respondent would not proceed pending an application for a
stay of the order for sale made by Mr. Walker’s Florida trustee in bankruptcy;
Order (4) of March 23, 2004 allowing Respondent’s intervention and rejecting
the trustee’s application for a stay; and Order (5) dated July 26, 2004 and
applied for by Mrs. Walker which stayed the order for sale until the court
could resolve the disputed issues by cross‑examining the deponents.
Two more orders need consideration: Order (6) of December 7,
2004 (after the lower court had heard some oral evidence) setting aside the
order for sale; and Order (7) dated February 28, 2005 setting aside a money
judgment which a bankruptcy Plaintiff, Eleanor C. Cole, had obtained against
Mr. Walker in the Supreme Court of the Bahamas on December 3, 1996, which
purported to enforce an earlier Florida judgment against the bankrupt.
The Petitioners’ appeal to the Judicial Board of the Privy
Council is from a November 15, 2005 order of the Bahamas’ Court of Appeal It
set aside Orders (6) and (7). The Board has to resolve the appeal based on the
points at issue, and, incomplete as they are, on Judge Lyons findings of fact.
Plaintiff, the Petitioners and the Respondent are all U.S.
citizens living in Florida. The Petitioners, however, at one time did reside in
the Bahamas. In 1983, they bought Lot 32 as joint tenants. They immediately
mortgaged it back to the previous owners and have since paid off that mortgage.
In October 1990, Plaintiff sued Mr. Walker in the Bahamas’
court to enforce a November 1989 Florida judgment for about $300,000 which she
had gotten against him. Mr. Walker had entered an unconditional appearance and
the court had given summary judgment against him in April 1991. A month later,
however, he got 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 technically remained in effect. On December 3, 1996, Plaintiff again
obtained summary judgment in her enforcement proceedings in the Bahamas.
Under Section 63 of the Supreme Court Act, this judgment
placed an enforceable equitable charge on Mr. Walker’s interest in Lot 32. The
charge did not affect Mrs. Walker’s interest, but it did enable Plaintiff to
apply to the court under Order 31 of the Supreme Court Rules for an order to
sell all the interests in Lot 32. This charging order severed the joint
tenancy. Half the net proceeds would go to Mrs. Walker and the court would have
applied the other half to satisfy Plaintiff’s judgment debt.
There was then a further delay before Plaintiff’s attorneys,
Callenders & Co. of Nassau, took steps to enforce the equitable charge.
Plaintiff’s attorneys obtained a professional appraisal in June 1997 that
valued Lot 32 at $326,250. On June 18, 1999 they finally sought an order for
sale. Those are the proceedings in which the lower court made all but the last
of the seven orders; the court issued Order (7) in Proceedings 1355 of 1990.
When the Court exercises its power to order a sale, the
usual course 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 (e.g. by public auction or private treaty), the minimum price, and so
on. That was the relief Plaintiff sought by the originating summons with
Petitioners as the original defendants, and former owner Mrs. Krafft Keims, now
a widow, added as a third defendant in June 1999.
On August 18, 1999, Sidney Collie, a Nassau attorney,
entered an appearance for Petitioners through Gary Rotella, a Florida attorney,
whom Mr. Walker had instructed; the three of them met at Rotella’s office in
Fort Lauderdale on August 14, 1999. Mr. Walker asked Collie to act for both
Petitioners. Collie’s evidence, which the judge accepted, was that his only
contact was with Mr. Walker (and not his wife) and even those contacts were few
and far between.
The rest of 1999, the whole of 2000 and most of 2001 went by
without any progress. Plaintiff’s Nassau attorney, a Mr. Turnquest of the
Callenders firm, wrote to her on July 31, 2001 apologising for the delay. His
letter stated that he did not think that another appraisal of the property was
necessary.
Plaintiff (who was by this time an elderly lady in poor
health) finally swore her first affidavit in support of the originating summons
on January 9, 2002. Plaintiff’s affidavit averred that Respondent, who lived in
Florida, had gotten in touch with her and said she was interested in buying Lot
32. On January 27, 2002, Respondent sent Plaintiff a document described as a
“letter of intent” for the sale and purchase of the property for $400,000.
Plaintiff seemed, initially at least, to have been grateful to Respondent for
her intervention.
During the summer of 2002, there was renewed contact between
the bankrupt and Collie. The bankrupt seems to have found out about
Respondent’s interest in the property and about the prospect of the originating
summons eventually coming before the court. The trial court heard the
originating summons on the afternoon of September 3, 2002. That morning,
Saunders, a Nassau attorney, swore out an affidavit exhibiting the five‑year‑old
appraisal. In his first affidavit, he asked the court to set a reserve price of
$326,250.
Mr. Saunders then swore to a second affidavit, the text of
which in part was as follows: “1. I am authorised by the Plaintiff ... [to
present] to this Honourable Court ... a bona fide offer to purchase [Lot 32 by
“private contract”], the Plaintiff being resident out of the Bahamas in the
State of Florida. There is now produced and shown to be marked ‘JMS 1’ a true
copy of a written offer dated September 3, 2002 made by [Respondent] a U.S.
Citizen, to buy Lot 32 for $400,000. ... In the premises I pray that this
Honourable Court authorise a sale of the subject property to the said
[Respondent] at the price indicated.”
Neither Saunders nor Turnquest has since explained how this
offer had providentially arrived at their firm’s office on the very morning of
the hearing, or how he had obtained Plaintiff’s authority to present the offer
to the Court. Respondent swore an affidavit on May 22, 2003 deposing that
Turnquest “represents Plaintiff generally but myself as well for the purposes
of this transaction.”
Against that, Plaintiff’s daughter, Caroline, deposed on
July 26, 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.”
Judge Lyons (as to Order (6)) accepted Petitioners’ and
Collie’s evidence about this: “ ... I have had the opportunity of observing
Petitioners. What they both said was that they never gave Collie express
instruction to accept the $400,000 offer from Respondent.”
“It seems therefore that ... Collie came to court full of
good intentions. On November 3, he had ... general instructions to do what he
could to help Bankrupt’s predicament. But he accepts he never had express
instructions to bind the Petitioners to Respondent’s $400,000 offer ...” Judge
Lyons then ordered the sale of Lot 32 ... to Respondent within the terms of her
offer.
Turnquest, whose evidence in Florida was that he had started
to act for Respondent at Plaintiff’s express request but found himself in the
awkward position of having two clients with sharply conflicting interests.
Mr. Walker’s bankruptcy in Florida had a great influence on
the U.S. parties’ conduct in the Bahamas litigation. In retrospect, it had only
a 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.
“In the Bahamas, there are no statutory provisions for cross‑border
assistance in insolvency with an international element involving the U.S. 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 to
immoveable) property situated in the recognising country.”
“Mr. Walker’s interest constituted immoveable property. Even
if, under Florida bankruptcy law, Mr. Walker’s world‑wide estate, moveable and
immoveable, vested in his bankruptcy trustee, courts in the Bahamas would not
recognise the trustee’s title to immoveable property within its jurisdiction.”
[¶ 25]
On January 10, 2003 a Florida bankruptcy judge (FBJ)
appointed Linda Walden as receiver for Plaintiff to get hold of Mr. Walker’s
assets. During February, the FBJ subpoenaed Respondent to produce documents for
the purposes of the receivership. On April 25, 2003, Mr. Walker (through his
Florida attorney, Rotella) filed for Chapter 7 bankruptcy.
Plaintiff proved in the bankruptcy and proposed Ms. Walden
as trustee, an appointment the FBJ confirmed on July 9, 2003. On July 17, (as a
direct result of the Walkers finally finding out about the sale order), the FBJ
held an emergency hearing at which he took it upon himself to declare that “the
orders issued on or about July 7 2003 by the Commonwealth of the Bahamas” were
null and void. The FBJ ordered that there should be no sale of the property
without his authority.
Ms. Walden faxed a copy of the Florida order directly to
Judge Lyons, who was “understandably affronted.” On May 5, 2004, the FBJ
withdrew his declaratory order after a hearing.
Although Plaintiff had proved in the bankruptcy, she seems
to have become increasingly disillusioned about legal processes both in the
Bahamas and in Florida. At some point, the Florida court removed Ms. Walden
from office. Plaintiff herself ceased to take part (either personally or by a
legal representative) in either branch of the litigations.
The FBJ discharged Mr. Walker from bankruptcy on September
21, 2005. On November 20, 2007, there was a further order setting aside the
original Florida judgment of November 14, 1989.
Meanwhile, back in the Bahamas, Turnquest found himself with
two clients, Plaintiff and Respondent with conflicting interests. Plaintiff was
telling him (through Ms. Gwynn, her Florida attorney,) not to deal with
Respondent. Her later evidence to Judge Lyons (which he accepted) was that, in
the course of giving the deposition, she became aware of a sale of the
property, to which she was not a party. Petitioners both claimed persuasively
that they only became aware of the full facts on July 25, 2003, when an
associate of Collie passed the information to Rotella.
Shortly before this, Turnquest had obtained Order (2) of
July 7, 2003. This order raised a number of puzzling questions. It still listed
Turnquest as appearing on behalf of Plaintiff although the relief he applied
for was contrary to her instructions. Petitioners knew nothing about it either.
On or about July 11, 2003, Respondent deposited $402,000
with the Callenders firm. According to Turnquest’s evidence to the FBJ on May
5, 2004, the above sum about equaled the full purchase price. Turnquest
deducted about $44,000 for professional fees due to him from Plaintiff – but
without telling her. He ceased to act for her on July 21, 2003. Mr. Knox, QC
for Petitioners, told the Board that the balance of the $402,000 has since been
repaid to Respondent.
The Florida bankruptcy now began to directly impact the
Bahamas litigation. Ms. Walden, the then trustee, faxed the nullifying
declaratory order to Judge Lyons on July 17, 2003. Ms. Walden arrived in Nassau
soon after. She hoped to have the local court vacate the Lot 32 sale order. On
July 21, 2003, there was a hearing before Judge Lyons attended by Turnquest
(for Respondent), Moxey (for the trustee), Collie (for the Petitioners) and Ms.
Gwynn and another Florida attorney (for Plaintiff).
Turnquest agreed on behalf of Respondent not to go ahead
with the sale pending resolution of Ms. Walden’s formal application to
intervene and seek a stay. On the same day, the Callenders firm gave notice of
their appointment as attorneys for Respondent, although she was not yet a party
to the proceedings. She moved to intervene on January 14. 2004.
In March 2004, Respondent deposed that she was fairly
experienced in, and knowledgeable about, business matters, including property
values, and she did not look upon Lot 32 as worth even $326,000.
Plaintiff’s daughter Caroline (who lived with her), however,
contradicted this evidence. She deposed that her mother was not willing to sell
for $400,000 and that Respondent “persisted in harassing my mother by calling
at our house until I obtained a restraining order prohibiting her from
contacting my mother.”
Only Petitioners and Collie have been cross‑examined on
their affidavits in these proceedings. On March 23, 2004, Judge Lyons heard the
applications by Ms. Walden and Respondent together, Order (4). Turnquest, Moxey
and Collie were present. Judge Lyons gave a short judgment which suggests that
he was still annoyed about the FBJ having purported to nullify his sale order.
He concluded that there was “absolutely no doubt in my mind that there is a
binding contract for purchase/sale between Respondent and Petitioners.”
On April 27, 2004, Plaintiff made an affidavit in the
bankruptcy proceedings averring that she had never met Saunders and had never
given him authority to make his affidavit dated September 3, 2002. She also
made an affidavit sworn on June 15, 2004 in the Board’s proceedings. It deposed
that Turnquest had been acting contrary to Plaintiff’s instructions when the
first and second orders were made.
In June of 2004, Mrs. Walker, acting through new attorneys,
Lockhart & Munroe of Nassau, applied for an order staying the sale to
Respondent under Orders (1) and (2) on the grounds (1) that the attorneys’
representations to the court on her behalf lacked her knowledge or authority;
(2) that the orders had first come to her attention long after they were made;
and (3) that Respondent’s offer was far below the true value of the property.
She added that she would rely on affidavits by herself, her husband and Rotella.
There were also affidavits from Collie, Miss Cole, and the local appraiser, a
Mr. Lowe of HG Christie Real Estate.
Mr. Lowe valued Lot 32 at $950,000 as of June 16, 2004, with
a retrospective valuation of $640,000 as of September 3, 2002. Mrs. Walker made
her application eleven months after she had learned the full facts and just
under three months after the rejection of the trustee in bankruptcy’s
application.
Finally, on February 28, 2005, Judge Lyons set aside Order
(7) dated December 3, 1996 made in the proceedings 1355 of 1990. The judge
based his decision on the fact that Mr. Walker was not a resident in the
Bahamas at the time of service but Plaintiff had not obtained leave to serve
him out of the jurisdiction.
At the hearing on Order (6), Mr. Lockhart’s skeleton
arguments relied on two main points: first, that Plaintiff 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 occurrence” within Order 45 rule
11; second, that Mr. Collie 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 not impeachable, as against Respondent under
Section 57 of the Conveyancing and Law of Property Act.
“... [T]he only oral evidence was from Collie, Mr. Walker
and Mrs. Walker. The judge accepted their evidence. In his heavily edited
“extempore” judgment , the judge held that he must set aside Order (1) because
Collie had no authority to bind Mrs. Walker to it. That was effectively the
only surviving ground of Mr. Lockhart’s application. Mr. Turnquest clung to the
four main points in his skeleton argument. The judge ... seems to have
forgotten, or not to have accepted, Mr. Lockhart’s concession about Order 31.
...” That was an error because, although Plaintiff’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. ...”
“Their Lordships consider that the judge made a further
error in his analysis ... of Order (1) 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 contradictory findings: that
Turnquest initialled the order ... on behalf of Respondent as well as Plaintiff
and later that he was acting for Respondent and not Plaintiff. ... [T]hey were
simply not an issue before the judge.”
“Judge Lyons did consider the issue of delay, but he did so
... 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 ... He concluded that Mr. Walker’s delay in coming
to his court was ‘explainable’.”
Respondent lodged separate appeals against Orders (6) and
(7). The Court of Appeal allowed both appeals.
“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. Petitioners had retained Collie to represent both Petitioners. He
entered an appearance on behalf of both. His instruction was to agree on 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. 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 Collie’s representation
that the offer of the Respondent was acceptable to Petitioners; 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 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.”
“ ... 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 ...and other credible
evidence. 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 Turnquest as Respondent’s attorney
since he apparently repaid most of it to her without the authority of the
court. Turnquest was plainly not an appropriate person to have conduct of the
sale. On the occasion of Order (3), Respondent had, through Turnquest, given an
undertaking not to proceed with the sale, and that undertaking remained in
force until it was overtaken by Order (5).”
The Court of Appeal pointed out that, in making Order (7),
Judge Lyons had been wrong in supposing that, in the proceedings 1355 of 1990,
Plaintiff 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 jurisdiction. The judge fell into error in setting aside a
regularly obtained summary judgment to which Plaintiff was entitled on the
pleadings.”
Counsel agreed that there are two main issues in the appeal
to the Board relating to Order (6): (1) did the judge have jurisdiction to make
the order? 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.
“Mr. Dingemans QC (for Respondent) contended that there was
no jurisdiction to set aside Order (6). He pointed out that neither Petitioner
had appealed against Orders (1), (2) or (4). In reply, Mr. Knox contended that
an appeal would have been inappropriate in a case like this.”
Order (1) was based on consent. ... “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.”
“Their Lordships are satisfied that Judge Lyons did have
jurisdiction, at common law, to set aside the first order on the ground of a
mistake, ... as to Collie’s authority to act for Mrs. Walker. None of [the
precedents] permits a first‑instance judge to set aside a final order, ...
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.”
“As a separate and ... conclusive point, Mr. Dingemans
relied on Section 57 of the Conveyancing and Law of Property Act . ...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. ...”
“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.’”
“In all the English authorities, ... there was
unquestionably a contract, sometimes completed by conveyance, sometimes still
uncompleted (hence the reference to .. 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 ...”
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.
“In the present case, there is real doubt about Respondent’s
status as a purchaser. It is the central issue in the case. Respondent 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.”
“Mr. Dingemans’ strongest resistance to the appeal was on
the issue of discretion. He relied on seven [overlapping] points ...: [1] the
need for finality in litigation; [2] the submission that Collie had ostensible
authority to agree to a compromise on behalf of Mrs. Walker; [3] the
Respondent’s failure to appeal against any of the Orders (1), (2) or (4); [4]
Mrs. Walker’s delay in making her application to set aside Orders (1) and (2);
[5] the prejudice to third‑party rights (those of Respondent), [6] the part‑performance
of the transaction by Respondent and [7] the absence of notice to Respondent of
the alleged deficiencies in the sale order.”
“The need for finality in litigation is an important general
principle. [Cite]. 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.”
“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.”
“The failure of Petitioners to appeal Orders (1) and (2) 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. Order (4) is more problematical, because by
then Petitioners did know the facts but were still apparently represented ...
by Collie.”
“As to delay, their Lordships have already noted that in
dealing with the issue of delay the judge focussed on Mr. Walker to the
exclusion of his wife. That was an error ... His share was subject to the
charging order but hers was not. He was made bankrupt but she was not. He
instructed Collie ... but she never actually instructed him. The application
made by Mr. Lockhart on June 15, 2004 was her application, and it is Mrs.
Walker who had the burden of explaining and excusing her delay. ... [T]here is
still a period of eleven months’ delay to be accounted for.”
“The only explanation given by Mrs. Walker was in her
affidavit sworn on June 15, 2004. Almost the whole of that affidavit is
concerned with emphasising the absence of instructions and communications
between herself and Collie. By contrast she said little about the period after
she learned about the sale order. ... 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. Walkers U.S. attorney, was also acting for Mrs.
Walker. But in her affidavit she gave no explanation for her inactivity after
July 2003.”
“Mrs. Walker seems to have done nothing for eight months
after learning the facts to stop 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.” 75 “... [I]t 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.”
“Mr. Dingemans’ last three points all concern aspects of
prejudice to Respondent’s third‑party rights. They are another factor to be
taken into account, .... Respondent was not cross‑examined and the judge’s
findings about Mr. Turnquest acting for Respondent (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 Respondent.”
“Nevertheless it seems likely that [Respondent] as an
experienced business woman, must have realised from an early stage that this
was an unconventional transaction. She was on notice from July 21, 2003 at the
latest, and probably a good deal sooner, that it was being seriously
challenged. On or before July 11, 2003, she had paid $402,000 to Turnquest, but
... he must have received it as her attorney, and he has since, it seems,
repaid most of it. Nevertheless Respondent has certainly suffered some
prejudice by the disruption of her financial affairs during this protracted
litigation.”
“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 [Respondent]. 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 [Order (6)] 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).”
The Court of Appeal was also right, for the reasons which it gave, in setting
aside the seventh order.
“The judicial sale to [Respondent ] 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 April 12, 2005 and November 29, 2007. Their Lordships express no
opinion whatever on that matter. For these reasons, their Lordships will humbly
advise Her Majesty that both appeals should be dismissed.” [¶¶ 41‑80].
Citation: Walker v. Lundborg, 2008 WL 576820 (Privy
Council No. 79, 2008).
