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Migliaccio v Migliaccio [2016] EWHC 1055 (Fam)

Wife’s application for a judgment summons in respect of arrears of child periodical payments and an unpaid costs order. Judgment of Mostyn J includes consideration of the evidential burden in judgment summons hearings.

The Husband ("H") fell into arrears of £64,000 in respect of spousal and child periodical payments. A consent order was reached at the FDR and provided that H would pay a lump sum of £19,000 in satisfaction of both the arrears (£13,500) and costs (£5,500). He paid the figure in relation to the arrears but failed to pay the costs. Further child maintenance arrears accrued after this point. H did not attend the enforcement hearing before Mostyn J.

In the course of his judgment, Mostyn J considered two particular elements of judgment summons hearings:

(1) the applicable law on the evidential burden in a judgment summons hearing;
(2) whether, or in what circumstance, s.5 of the Debtors Act 1869 may be used to recover costs.

(1) Principles for judgment summons hearings and the evidential burden

Under s.5 of the Debtors Act, the creditor has to prove to the criminal standard that (a) the debtor has or has had the means to pay the sum in default; and
(b) the debtor has refused or neglected, or refuses or neglects, to pay that sum.

Mostyn J referred to his decision in Bhura v Bhura [2013] 2 FLR 44 (relying on the binding authority of the Court of Appeal in Karoonian v CMEC [2012] EWCA Civ 1379) in stating two principles. Firstly, that it is essential that the applicant adduces sufficient evidence to at least establish a case to answer. Proof of the order and of non-payment is likely to achieve this.  Secondly, that if a case to answer is established, the evidential burden then shifts to the respondent to answer it. If he fails to discharge the evidential burden, then the terms of s.5 will be found proved against him to the requisite (criminal) standard.

Mostyn J took issue with McFarlane LJ's obiter remarks in the recent case of Prest v Prest [2016] 1 FLR 773 in which McFarlane LJ had advised caution in respect of some of the principles set out in Mostyn J's analysis and raised concerns that reliance on findings of wealth in the original proceedings, made out to the civil standard, was not sufficient. He also made clear that the burden of proof remains on the applicant at all times and that the respondent can't be compelled to give evidence.

Mostyn J indicated that "intelligence" had reached him that McFarlane LJ's obiter dicta remarks, "have caused considerable difficulty in routine enforcement proceedings, particularly under the Child Support Act, inasmuch as they suggest that everything must be proved de novo."
Mostyn J considered that the Court of Appeal's judgment in Karoonian was clear and binding. At [57] Richards LJ had said "If there is a case to answer, there will be an evidential burden on [the respondent] to answer it". This was not considered an infringement of the respondent's Article 6 rights. Mostyn J considered this formulation "should be regarded as definitive and must be followed".

(2) Whether costs can be enforced by means of a judgment summons

Only "orders for periodical or other payments made, or having effect as if made, under Part 2 of the MCA 1973" can be enforced by way of a judgment summons under s.5 Debtors Act. It may seem therefore that the order for costs falls outside this scope. However, Mostyn J pointed to authorities that supported a wide definition of "having effect as if made". Paying money into court to abide W's claim for ancillary relief had been held to fall within this definition (Graham v Graham [1992] 2 FLR 406) as the court "should be given the teeth to deal with a recalcitrant party". Further, an undertaking to pay school fees was also encompassed (Symmons v Symmons [1993] 1 FLR 317). 

In this case, the consent order provided for a total sum (£19,000) repayable from a much larger sum of arrears (£64,000). Mostyn J therefore felt that the entire sum was enforceable by way of a judgment summons.

In any event, the question was academic. The costs could also be recovered as a term of a suspended committal order, indeed the pro forma provided for this.

As a final aside, Mostyn J noted that 'conduct money' (funds to ensure the debtor can get to court) is not recoverable if the debtor attends court. There is an obligation on the creditor to tender conduct monies to enable the debtor's attendance. However, if the debtor does not attend (as in this case), it is reasonable to recover this sum.

Summary by Hannah Gomersall, barrister, Coram Chambers

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IN THE HIGH COURT OF JUSTICE No. FD10D05091
FAMILY DIVISION

[2016] EWHC 1055 (Fam)

Royal Courts of Justice
Strand, WC2A 2LL

Tuesday, 26th April 2016


Before:

MR. JUSTICE MOSTYN
Sitting in public

B E T W E E N :

LOUISE ANNE MIGLIACCIO
 Applicant
-  and  -
NICOLAS RAPHAEL MIGLIACCIO Respondent
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Transcribed by BEVERLEY F. NUNNERY & CO.
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MR. J. PULLEN (instructed by Warners Solicitors) appeared on behalf of the Applicant.
THE RESPONDENT did not attend and was not represented.
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J U D G M E N T
(As approved by the Judge)

MR. JUSTICE MOSTYN:

1. In this judgment I shall refer to the parties as "the wife" and "the husband."

2. This is my judgment on the wife's application for a judgment summons against the husband in respect of £2,200 of arrears of child periodical payments and £5,500 in respect of an unpaid costs order. 

3. These sums fell due pursuant to an order made by consent on 18th August 2015.  That order concluded enforcement proceedings brought by the wife and downward variation proceedings brought by the husband.  The child periodical payments relate to the parties' daughter, who is aged eight years. 

4. The husband, who lives in Dubai, was served, by email, with the wife's application for a judgment summons on 8th April 2016 in accordance with the order of District Judge Robinson dated 7th March 2016.  This order provided that the husband was to be served no fewer than fourteen days prior to the hearing and that service could be effected via email.

5. This period of fourteen days was slightly less than the twenty-two days allowed in the table appended to FPR Practice Direction 6B for the United Arab Emirates.  However, para.6.2 of the practice direction only requires the court "to have regard" to this period.  I assume that the district judge did have regard to this period, and it is clear that the husband had been properly served and has had ample opportunity to prepare a defence.

6. This much is apparent from his email that he wrote to the court on 19th April 2016.  In that email he said this:

"I'm writing to advise that I'm unable to attend the scheduled enforcement hearing on Tuesday, 26th April 2016.  I was served the court papers, via email, only on Friday night, 8th April 2016. 

Providing eighteen days' notice for an important enforcement hearing is unreasonable and unfair, given that I live abroad, in Dubai, UAE.
Eighteen days' notice does not give me sufficient time to prepare an adequate defence as a litigant in person. 

Additionally, the hearing was ordered on 7th March, yet it took over one month for Warners Solicitors to serve me notice via email.  I don't think this is reasonable, and I would therefore request an adjournment."

7. It is true that the wife's solicitors delayed for one month before serving the papers on the husband, whilst still, of course, complying with the fourteen day period referred to in the order.  The reason for this was that the child was on holiday with the father until 8th April and the wife did not feel it would be reasonable in such circumstances to have served him with enforcement proceedings during that holiday.
 
8. The parties' divorce was concluded by a consent order made on 4th August 2011.  This provided for substantive periodical payments, both spousal and for child maintenance.  However, the husband fell into arrears and the wife brought enforcement proceedings in early 2015.  By that time, a total of £64,000 of arrears had accumulated.

9. As has already been made clear, the husband lives and works in Dubai.  He is presently employed as a senior business manager for Deutsche Bank.  In his Form E made in the enforcement proceedings dated 30th June 2015 he disclosed a net salary of £140,728 per annum.

10. In his email to the court dated 19th April 2016 he stated:

"Please note I have recently resigned from my job, due to personal and health reasons, and my last contractual day is 30th April.  My responsibilities and handover will continue until the end of that working week, and hence travel to England is not possible." 

11. Although the husband has signified that he is shortly to leave his employment, it is clear from what he has written that he has, during the period that default has arisen, continued to be employed lucratively by Deutsche Bank.

12. The order reached at the Financial Dispute Resolution Appointment on 18th August 2015 provided that the spousal periodical payments would be reduced to a nominal amount and that the husband would pay child periodical payments of £1,150 a month.  Further, the husband agreed to pay a lump sum of £13,500 in satisfaction of the arrears and a further £5,500 towards the wife's costs.  The husband, therefore, agreed to pay a total of £19,000 to the wife.

13. I observe that the husband could equally have agreed to have paid £19,000 in satisfaction of arrears and nothing towards the wife's costs.  The fact that the payment of £19,000 was partitioned as to £13,500 towards arrears and £5,500 towards costs may have significance, for reasons which will become apparent later.

14. The husband paid the figure of £13,500 for arrears, but he has failed to pay the £5,500 amount referable to costs.  In relation to child periodical payments, the husband paid the £1,150 per month for three months before abruptly reducing the amount substantially for every month thereafter.  The wife's application notice puts the level of arrears at £2,250.  The current arrears as at today's hearing are £4,100.

15. In his email to the court the husband – and it is important to emphasise that he has filed no evidence in resistance to the application – says only this in relation to his default:

"I would like the court to be aware that while funds have been depleted I have continued to pay £400 per month in child support payments, which, according to the applicant's own budget submission at the August 2015 financial hearing, more than covers all of [our daughter's] clothes monthly requirements.  Therefore the intent to pay and support [our daughter] is clearly evident. 

I attach for the court's reference a supporting document written by the applicant which highlights [our daughter's] monthly needs calculated at £383 per calendar month. 

Please be advised that only the April payment was not made as [our daughter] spent the entire month with me [9th March to 8th April], and therefore all costs incurred during this period were borne by me and not her mother. 
      
In addition, I recently married, in February 2016.  I did not have a proper wedding ceremony, nor did I have a honeymoon, due to financial limitations.  I continue to represent myself at all court hearings relating to financials and children matters due to financial limitations.  This will continue in the light of my current unemployment status. 

I believe that both my new marital status, financially supporting my wife, plus unemployment, provides material grounds for a downward variation application.  I would like the opportunity to either discuss this with the applicant's solicitor directly or submit an application to the court to be heard alongside the applicant's claim for arrears and judgment summons."

16. In an email which he sent to the wife on 24th September 2015 he argued in much the same vein.  He said this:

"Furthermore, as [our daughter] only requires £383 per calendar month per your own disclosure (which is inflated with costs such as sports, miscellaneous and school shoes/uniform at £35 per calendar month, I wasn't aware that she receives new school shoes every month and wears a Gucci uniform), this leaves a surplus of £767 per calendar month which is for [our daughter's] sole benefit.  If it is not being put aside in an account of [our daughter], either for her future or ad hoc monthly requirements, then you are stealing from her.  Your entitlement is £1 per annum."  

17. These writings show a profound misunderstanding of obligations under an order of a court of law.  An order of a court of law which provides for child periodical payments is not some indicative suggestion; it is a judgment which must be complied with. 

18. By the husband's writings he seems to believe that because he has in mind that there are circumstances which might justify a variation application that he is entitled unilaterally to reduce the payments to what he thinks is just; not what the court has determined to be just.  This is completely unacceptable, and if such behaviour were to be tolerated it would strike at the very heart of the rule of law.

19.I now need to deal with the law referable to this application.

20. Pursuant to s.5 of the Debtors Act 1869, a debtor may only be punished by imprisonment in relation to certain specified debts.  The judgment creditor has to prove to the criminal standard, first, that the debtor has, or has had since the date of the order, the means to pay the sum in default and, second, that the debtor has refused or neglected, or refuses or neglects, to pay that sum. 

21. By virtue of para.2A of Sch.8 of the Administration of Justice Act 1970 only an order for periodical or other payments made, or having effect as if made under Part 2 of the Matrimonial Causes Act 1973, are enforceable by way of judgment summons in the family field.  Indeed, apart from taxes, I believe that such orders are the only orders that remain capable of being enforced under the Debtors Act.  Other types of debts can be enforced by imprisonment; for example under the Child Support Act 1991. I will refer to enforcement by committal under that Act later.

22. In my decision of Bhura v Bhura [2013] 2 FLR 44 I endeavoured to summarise the legal principles applicable to a hearing for a judgment summons.  In para.13 in nine propositions I summarised what I believed to be the applicable principles.  In formulating those principles I had regard to binding authority emanating from the Court of Appeal, most recently the decision of a strong Court of Appeal in Karoonian v CMEC [2012] EWCA Civ 1379, [2012] All ER (D) 316, [2012] 3 FCR 491.

23. In the fourth principle I stated this:

"It is essential that the applicant adduces sufficient evidence to establish at least a case to answer.  Generally speaking, this need not be an elaborate exercise.  Proof of the order and of non-payment will likely give rise to an inference which establishes the case to answer."

Then in the sixth principle I said this:

"If the applicant establishes a case to answer, an evidential burden shifts to the respondent to answer it.  If he fails to discharge that evidential burden then the terms of s.5 will be found proved against him or her to the requisite standard." 

24. These principles, which are derived from binding authority, as I will show, are very necessary not only in the field of enforcement of orders for periodical payments under the Matrimonial Causes Act but also in respect of the enforcement of assessments or calculations of the Child Support Agency or the Child Maintenance and Enforcement Commission. 

25.  However, in a recent decision called Prest v Prest [2016] 1 FLR 773, McFarlane LJ, in remarks which are obiter dicta, casts doubt on the principles which I had stated.  He referred to the fourth and sixth principles which I had set out and, further, to the decision of the Court of Appeal in Mohan v Mohan [2014] 1 FLR 717 (per Thorpe LJ) and said this at para.55:

"The collective professional experience of Thorpe LJ and Mostyn J in these matters makes me most hesitant to express a contrary view, but my reason for advising caution concerning this set of observations is that they each suggest that, in the course of the criminal process that is the hearing of a judgment summons, it is simply sufficient to rely upon findings as to wealth made on the civil standard of proof in the original proceedings and that those findings, coupled with proof of non-payment, is sufficient to establish a 'burden' on the respondent which can only be discharged if he or she enters the witness box and proffers a credible explanation.  The facts of each case will differ, and the aim of Thorpe LJ and Mostyn J in envisaging a process which is straightforward and not onerous to the applicant is laudable, but at the end of the day this is a process which may result in the respondent serving a term of imprisonment and the court must be clear as to the following requirements, namely that: 

a) The fact that the respondent has or has had, since the date of the order or judgment, the means to pay the sum due must be proved to the criminal standard of proof;

b) The fact that the respondent has refused or neglected, or refuses or neglects, to pay the sum due must also be proved to the criminal standard;

c) The burden of proof is at all times on the applicant; and

d) The respondent cannot be compelled to give evidence."

26. Intelligence has reached me that these remarks – which, as I say, are obiter dicta because in that case the appeal against the order of Moylan J awarding a suspended prison sentence against the husband was dismissed – have caused considerable difficulty in routine enforcement proceedings, particularly under the Child Support Act, inasmuch as they suggest that everything must be proved de novo.

27. With all due respect to McFarlane LJ, I have to express my disagreement with his observations.  The fourth and sixth principles that I set out in Bhura v Bhura were not inventions by me, but were a summary of the judgment of Richards LJ in Karoonian v CMEC

28. In that judgment, with which Patten LJ agreed and which was, I respectfully suggest, binding on McFarlane LJ, Richards LJ said this at para.57:       

"It follows that in practice the Commission must adduce sufficient evidence to establish at least a case to answer. In the generality of cases the exercise may not need to be a particularly elaborate one, since there will be a history of default from which inferences can properly be drawn. But the exercise is an essential one: the defendant is not required to give evidence or to incriminate himself, and in the absence of a case to answer he is entitled to have the application against him dismissed without more. If the Commission establishes a case to answer, there will be an evidential burden on the defendant to answer it, but that is unobjectionable in Art.6 terms. I would add that there is no requirement under article 6 for the Commission to serve evidence in advance of the hearing, but if it chooses to wait for evidence to be given by the presenting officer at the hearing, the court must be astute to ensure that the defendant is not taken by surprise and that the matter can proceed at that hearing without unfairness to him."

29. In my judgment that is the principle and those are the standards that should be applied on a judgment summons.  I have no hesitation in preferring that formulation to the far more restrictive approach suggested by McFarlane LJ.  I would also suggest that in any future case, whether under the Debtors Act or under the Child Support Act, the judgment of Richards LJ should be regarded as definitive and must be followed.

30. The second legal point relates to the question of whether the sum of £5,500 which was consensually awarded in respect of costs can be enforced by means of a judgment summons.

31. I have already mentioned that the only matrimonial or family orders that can be enforced by judgment summons are "orders for periodical or other payments made, or having effect as if made, under Part 2 of the Matrimonial Causes Act 1973."

32. At first glance one might think that an order for costs could not fall within that extended definition because an order for costs is made pursuant to s.51 of the Senior Courts Act 1981, which provides that:

"(1) Subject to the provisions of this or any other enactment and to the rules of the court, the costs of and incidental to all proceedings in:

a) the civil division of the Court of Appeal;

b) the High Court;
 
ba) the Family Court; and
 
c) the County Court,

shall be in the discretion of the court." 

33. However, it is clear from the authorities under s.5 of the Debtors Act 1869, as confined by para.2A of Sch. 8 to the Administration of Justice Act 1970, that a wide, flexible definition is given to the phrase "or having effect as if  made." 

34. In the decision of Graham v Graham [1992] 2 FLR 406 it was held that an order requiring a husband to pay a sum of money into a court which was taken to have been made under s.37 of the Matrimonial Causes Act 1973 to abide the wife's claim for ancillary relief did fall within the definition in para.2A. 

35. Similarly in the decision of Symmons v Symmons [1993] 1 FLR 317 it was held that an undertaking to pay school fees fell within the definition. 

36. In the former case Purchas LJ stated:

"The interpretation of that paragraph … must be carried out bearing in mind the overall intention which is clear from the terms of the Act that the court should be given the teeth with which to deal with the recalcitrant party to a matrimonial suit."

37. If in this case the substantive order for periodical payments had been determined following a contest and after judgment had been given on that there had been an ancillary (almost satellite) hearing concerning costs which had resulted in a separate judgment, then I would have had no hesitation in determining that such an order for costs could not, on any view, be construed to take effect as if made under Part 2 of the Matrimonial Causes Act 1973. 

38. However, in this case there was a consent order.  That consent order incorporated an agreement that the husband would pay a total of £19,000 to the wife to meet arrears and maintenance and the costs that she had incurred in enforcing those arrears.  As I have said earlier, the order could equally have been for £19,000 in relation to arrears and nothing towards costs.

39. I regard the fact that this payment of £19,000 has been labelled in a certain way as being immaterial to my basic decision, which is that the entire sum of £19,000 should be treated as having effect as if made under Part 2 of the Matrimonial Causes Act 1973.  Therefore, I am satisfied that that entire sum is properly enforceable by way of judgment summons.

40. If I am determined to be wrong in that conclusion, I would say this.  On any view, the arrears of child periodical payments are enforceable under the Debtors Act.  If the order for costs is not capable of being captured by the process, then I suppose that that would perhaps go to what the punishment should be (if it is imprisonment, perhaps as to the length of the sentence).  But what the order for costs does not prevent me from doing is from bringing it into account, if I were to award a suspended sentence, as a term of suspension. 

41. It is perfectly clear to me that sums which are not enforceable under s.5 of the Debtors Act can nonetheless be made terms of suspension.  This much is clear from the pro forma order for a suspended committal order under the Debtors Act which provides for "any order for costs which is made on the judgment summons also to be included in the terms of suspension." 

42. If that is right, then it seems to me equally proper that a prior order for costs (the order for costs that was incurred in making the substantive order which is being enforced) can equally be made a term of suspension.  And so the question of whether the costs order is, strictly speaking, captured by the terms of s.5 of the Debtors Act is perhaps to be regarded as slightly academic.  At all events, my primary decision is that I am satisfied that the order for costs is directly enforceable under s.5 of the Debtors Act.

43. As I have said, at the time that the proceedings were instituted the arrears of child maintenance amounted to £2,200.  That has now expanded to £4,100.  Whilst only £2,200 is directly enforceable under s.5 of the 1869 Act, I am satisfied that the further £1,900 can be deployed as a term of suspension (were I to make a suspended prison sentence).

44. In contrast, I do not believe that the £500 that the wife has had to tender as conduct money is enforceable either directly under s.5 or is recoverable indirectly by a term of suspension, provided that it has actually been spent on travel to court.  Conduct money is to be paid without strings to the respondent and is irrecoverable, in my judgment. The obligation to tender conduct monies so that the debtor can get to court is not recoverable if the debtor comes to court.  If, however, the debtor does not come to court, then in my judgment it would be reasonable for that sum to be recoverable.  Therefore I include as a term of suspension this sum of £500 that has been paid in circumstances where he has not come to court. 

45. I am applying the principle in Karooonian v CMEC.  I am satisfied that the wife, by having proved the existence of the order and the default, has raised a case to answer which the husband has comprehensively failed to answer. 

46. However, I would go on to say, in addition, that I am satisfied, so that I am sure, from further evidence that the husband has at all times had the means to pay this order and it is only out of pure wilfulness that he does not.

47. First, it is a truism that he would not have signed up to a consent order for child periodical payments and costs a mere eight months ago if he had any doubts about his ability to pay.  Second, at the time that he did sign up to the consent order his Form E disclosed total assets of £444,553 and a total annual net income of just over £140,000.  Therefore, at the time that the order was made, and thereafter, he manifestly had the means to pay.  And so, irrespective of his failure to satisfy the evidential burden, I am satisfied, so that I am sure, that he has had the means to pay and that he has neglected to do so.

48. In these circumstances I find him culpable for the purposes of s.5.

49. The question is then: what sentence should be imposed on him? 

50. I impose a sentence on him of fourteen days' imprisonment, the warrant in respect of which will be suspended provided that within twenty-eight days he pays the following sums: £4,100 of arrears of child periodical payments; £5,500 in relation to the agreed prior costs; £100 court fee; £500 unused conduct money; and the wife's costs of this application, which I summarily assess in the sum of £3,613. A total of £13,813.
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