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Finance and Divorce Update, February 2017

Sue Brookes, and Rose-Marie Drury, both Senior Associates with Mills & Reeve LLP analyse the news and case law relating to financial remedies and divorce during January 2017.











Sue Brookes, and Rose-Marie Drury, both Senior Associates with Mills & Reeve LLP.

As usual, this month's update is divided into two parts:

A. News in brief and
B. Case Law Update

A. News in brief

President's 16th View and a review of PD12J
The President of the Family Division, Sir James Munby has published his 16th View from the President's Chambers. He sets out in detail the efforts made by him and others since 2014, in relation to various issues concerning the needs of children and vulnerable witnesses and parties in the family justice system, and the government's responses on each occasion. He provides an update of the current position, which includes urgent government action to introduce primary legislation to protect alleged victims from cross-examination by alleged abusers, in line with the protection already afforded in the criminal law jurisdiction and given recent media coverage of this issue.

He also berates the state of equipment in family courts, including his own court.  He says that video links in too many family courts are a disgrace prone to failing, with poor sound and picture quality.  He said his own court - court 33 - at the Royal Courts of Justice had no video-link facilities.

Following the serious issues raised in reports by Women's Aid and the All Party Parliamentary Group, and the subsequent Parliamentary debate in September 2016, Munby P commissioned a review by Mr Justice Cobb of Practice Direction 12J about the impact of allegations of domestic violence on child arrangements orders. This review has now been published and all the revisions to PD 12J have been accepted by Munby P, except the prohibition against an alleged abuser cross-examining an alleged victim, which requires primary legislation.


e-Filing in the Rolls Building 
The use of the court e-filing system (CE-File) will become compulsory in the Rolls Building in London from 25 April 2017. This applies to the Chancery Division of the High Court, Commercial Court, Technology and Construction Court (TCC), Mercantile Court and Admiralty Court, which are based within the Rolls Building. From 25 April 2017, it will no longer be possible to issue claims or applications or to file documents on paper in the Rolls Building. All issuing and filings will have to be made via the CE-File.


East Midlands Divorce Centre to host online divorce pilot
The East Midlands Divorce Centre in Nottingham will host the pilot scheme allowing certain applications for divorce to be completed online. 

The new practice direction 36D of the Family Procedure Rules 2010 was finalised and published on 25 January 2017. This provides for online completion of Form D8 for cases covered by the pilot scheme. It only applies, at this stage, to parties married in England and Wales and where the original marriage certificate or certified copy is available.

The pilot scheme is being introduced in phases with incremental developments in scope and functions. During the first stage, the online process will enable completion of Form D8 online, which will have to be printed and submitted to the divorce centre in paper format. It is intended that the second stage will include online submission of the completed Form D8: A further practice direction will be issued for the second stage and, as far as necessary, for each stage beyond that. The purpose of this gradual development is to ensure that each stage is sufficiently robust and reliable before moving to the next.


LASPO review timetable outlined
Sir Oliver Heald QC has set out the government's timetable for a review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. The justice minister has confirmed that a post-legislative memorandum on LASPO will be sent to the justice select committee before May, ahead of a full post-implementation review of the Act to be conducted by April 2018.

Ministry of Justice publishes report on implementation of Law Commission proposals

Of particular interest are three proposals that have not yet been implemented and are awaiting government decision:

• Marriage law - the previous Government consulted on whether the law should be changed to allow non-religious belief organisations, including humanists, to conduct legal marriages. They concluded that there were broader implications for marriage law and the Law Commission conducted a preliminary scoping study and reported in December 2016.

• Matrimonial Property, Needs and Agreements - The Law Commission published its final report on Matrimonial Property, Needs and Agreements in February 2014.  The Government has accepted and taken action on the two main proposals in the report which do not require legislative reform – financial guidance for separating couples and unrepresented litigants and the development of an online tool (supported by formulae) to assist separating couples in making private financial arrangements.  The government is considering the Law Commission's recommendation on qualifying nuptial agreements as part of a wider consideration of private family law. 

• Property Rights for Cohabitants - The Law Commission published its report Cohabitation: the Financial Consequences of Relationship Breakdown in July 2007. This report recommended the creation of a statutory scheme giving property rights to qualifying cohabiting partners against each other on relationship breakdown. The Law Commission's report Intestacy and Family Provision Claims on Death, published in December 2011, also included recommendations relating to cohabiting partners.  The Government is still considering the proposals.


Civil Partnership Act 2004 (Amendment) Bill
The Civil Partnership Act 2004 (Amendment) Bill, sponsored by Tim Loughton MP had its second reading debate on Friday 13 January 2017 but the debate was adjourned and will resume on Friday 24 March 2017.


Charges to use the Child Maintenance Service hand the Government almost £1m a month, says SNP
Figures obtained by the party show that the charges have earned the Government more than £11m across the UK since they were introduced in 2014.  However, they also show the sums involved are on the rise – bringing in around £950,000 in March, the most recent month for which figures are available.  A spokesman for the Department for Work and Pensions said the charges made only a "very modest contribution" to the costs of running the service.


Divorce (Finance Provision) Bill receives second reading
The second reading – a general debate on all aspects of the Bill (sponsored by Baroness Deech) - took place on 27 January 2017.  The next stage – the Committee stage where the Bill will be examined line by line – is yet to be scheduled. 


Arbitration and Mediation Services (Equality) Bill receives second reading
The second reading – a general debate on all aspects of the Bill (sponsored by Baroness Cox) - took place on 27 January 2017.  The next stage – the Committee stage where the Bill will be examined line by line – is yet to be scheduled.  The Bill seeks to prevent providers of arbitration services from doing anything that constitutes discrimination, harassment or victimisation on the grounds of sex.  There would also be an amendment to the Family Law Act 1996 to allow courts to set aside any order based on a mediation agreement or similar if the court believes that one party's consent was not genuine. 


B. Case Law Update

Iqbal v Iqbal [2017] EWCA Civ 19
This case provides a clear reminder of the need for cases to be managed properly, by reference to the Family Procedure Rules, and the problems and injustice that can arise when this does not happen.

The wife (W) filed a divorce petition in March 2010 and form A in July 2010. In December 2010, DJ Roberts ordered the husband (H) to pay W maintenance pending suit (MPS) of £10,000 per calendar month. He defaulted and W applied for judgment summons before HHJ Hughes QC in April 2011. H's appeal of the MPS order was heard and dismissed by King J in July 2011. W's application for judgment summons was then heard by Mr Recorder Cusworth QC in February 2014 and HHJ Brasse in October and December 2014. The final hearing was before HHJ Brasse in March 2015.

The key issue throughout was whether H could make the payments ordered including, if appropriate, by reliance upon a third party if the court were satisfied that such a person would provide the money.

Throughout the majority of their relationship H and W had lived with and were supported by H's wealthy extended family in Pakistan, until they became estranged from his family and their financial support in 2007, at which point they moved to New York. They subsequently moved to London in 2009 when the marriage broke down. From 2007 they had lived on borrowed funds. The only evidence before the court of any ongoing support from H's family was that his mother allowed him to live in her flat in London. He returned to Pakistan in 2011.

DJ Roberts' interim order had necessarily been based on provisional inferences on a prima facie basis. Interim orders are only ever intended to hold the line pending the final hearing. "If it turns out after trial that the order was either too generous or was insufficient, that can in due course be reflected within the terms of the final order."

HHJ Brasse's final order required H to pay W a lump sum of £3,220,000 and MPS arrears of £530,000 by 1 May 2015 and future periodical payments of £10,000 per calendar month by standing order. 

The Court of Appeal allowed H's appeal because the elementary procedural protections that H had a right to expect throughout the proceedings had not been observed. The final order made by HHJ Brasse was therefore set aside with the matter remitted for final hearing before a new judge and the enforcement orders were stayed pending the new determination.

All of the hearings since December 2014 had been procedurally unfair. The problems initially arose because H had been excused attendance at the MPS hearing, although he had filed his evidence in accordance with the court's directions. W was acting in person. She attended the hearing and made submissions based only on a signed letter, without any statement of truth or sworn evidence. The letter contained submissions about matters, including an alleged trust, on which H had been given no advance notice, and which he would dispute. H was not afforded the necessary opportunity to argue on fully contested evidence for different findings of fact and for the court to remit some or all of the stated arrears as part of its final determination.

There had been no case management and good practice had not been followed. H's evidence had not been properly analysed. W had filed evidence late, without serving it on H, so he had no opportunity to respond. The court had not tested anything W said. The judge at the final hearing failed to give a formal judgment. Major questions remained unexplained and needed determination.

The procedural defects in the enforcement hearings were just as serious. HHJ Hughes QC had made an order without any evidence from W. Although Mr Recorder Cusworth QC was alive to the evidential and procedural requirements not having been met, he had fixed the judgment debt without setting out in judgment his basis for doing so. HHJ Brasse should not have dealt with the merits of a judgments summons at a directions hearing without notice to H and he should not have made the order he did without any sworn evidence from W and with no consideration of H's means to pay.


Briers v Briers [2017] EWCA Civ 15
H had begun a sportswear trading business during the marriage, in which he held 99 shares and W held 1 share. W was a teacher, but she also helped in the business and looked after the parties' three children. The parties separated in 2002, at which point H moved out and W took no further part in the business.

Decree absolute was granted in 2005 following "protracted negotiations" between the parties. In 2006 H paid W £150,000. In 2007, he transferred the family home to her sole name. In 2008, she transferred her share in the business to H.

Following the breakdown of her subsequent relationship, W issued form A in 2013. The court had to decide whether the parties had reached a full and final settlement of their financial affairs and, if not, what the fair distribution would now be.

In May 2015, HHJ Rogers found that there had not been a full and final settlement because H had not given W the full disclosure which she had expressly required, H had driven all of the negotiations and W had not signed the deed of settlement which had been drafted.

He therefore ordered H to pay W a lump sum of £1.6m in four instalments over two and a half years and to transfer to her 25% of his Standard Life pension, the Standard Life Policy and his Standard Life shares.

H appealed and submitted that the order should be substituted for a single lump sum of £500,000. The Court of Appeal concluded that the judge's findings of fact were reasonable and the appeal therefore lost.

In response to H's submissions that the judge was plainly wrong in his conclusions, the Court of Appeal re-emphasised the importance of the first instance judge's assessment of the oral and written evidence and his impression of the witnesses. The judge had formed a robust view of the parties and their relationship. It was reasonable for him to conclude that W had not entered into a full and final settlement, having regard to the emphasis placed by the Supreme Court on each party having all of the information that is material to their decision (Radmacher v Granatino [2010] UKSC 42).

Although H argued that there was insufficient regard to the delay in W's application, it was beyond argument that W had a valid claim (Wyatt v Vince [2015] UKSC 14,). The judge's approach to this issue had been "textbook". The court must carry out an inquisitorial exercise using judgment. Delay may reduce the fairness of an entitlement or affect any share that a party received. However, even severe delay does not curtail the court's function on an application for financial remedy; it is merely an additional factor.

H argued that the judge had wrongly based his determination on entitlement rather than need. The judge accepted that this was not a needs case and all that was left was the question of post-separation accrual and he discounted W's share in an equal division of the assets because of her delay. She received between 27% and 30% of the overall assets as a result. No case law goes so far as to suggest that the question of whether a non-matrimonial post-separation accrual can be shared is excluded by delay. Each case is dependent on its facts.

Following H's arguments that the judge failed to have sufficient regard to H's contribution to the business post-separation, the Court of Appeal noted the judge's conclusions that W made an important contribution to the business during its infancy and her compared her contribution as primary carer of the children to H's contribution to the business after separation, which was entirely reasonable.

H also argued the judge should have focussed on the value of the assets at the time of separation. However, such an approach would be incorrect as it would give no real effect to W's entitlement (however discounted) in the business as an undivided matrimonial asset and it would devalue W's overall contribution.

H submitted that the judge should have reflected that the business would not be sold as H would pass it to the children. The Court of Appeal made clear that what each party does with his re-distributed share of the assets is a matter for him. The order for a lump sum by instalments reflected H's ability to raise the necessary lump sum without the business being sold. Again this was reasonable.

Finally, H argued that the judge did not reflect the risk of tax liabilities connected with the business. However, the judge was clearly aware of these risks but concluded that the liabilities may not arise and in any event cross-checked the risks with his overall judgment and found W's share was still appropriate.


DB v PB [2016] EWHC 3431 (Fam)
This case highlights how the EU Maintenance Regulation can tie the court's hands and the potential impact of a nuptial agreement.

The parties were Swedish. They began living together in 1994 and were married in 2000.They have two young children. The marriage broke down in 2014. All of the wealth (almost £11million) had accrued during the relationship.
Both parties issued proceedings on the same day: the husband (H) in Sweden and the wife (W) in England. W was first in time so the matter proceeded here.

The parties had signed three pre-nuptial agreements, all of which contained a prorogation clause conferring exclusive jurisdiction on the City of Stockholm, Sweden and a separate property clause whereby each retained their separate property on divorce meaning W would not receive any capital from H.

W argued that the terms of the agreements should not bind her as H had misrepresented the position by telling her that the agreements would never be implemented in the event of a divorce and because they were now so unfair that the court should not give any effect to them. W wanted half of all the assets. By contrast, H argued that W was entitled to no more than her half share of the family home (approximately £1.5million).

Francis J concluded that, although H's approach was mean, he was honest in his recollections of how the agreements were signed. W would not have signed three separate agreements believing them to be irrelevant and their provisions to be of no impact. There was no misrepresentation on this basis.

Referring to the Maintenance Regulation (EC No. 4/2009) Article 4(1) and (2), the parties had agreed to the prorogation clause and their agreement had been recorded in writing, so the prorogation clause was valid. Article 4 was engaged and the English court had no jurisdiction to make orders for maintenance. It could only deal with rights in property arising out of a matrimonial relationship. W's maintenance claims were therefore stayed so they could be determined in Sweden.

H had argued that the effect of the EU maintenance Regulation was to debar W from pursuing any claim for financial remedy, including "sharing claims". However, case law is clear that a spouse asserting claims for financial remedy in a marriage where the parties have made a broadly equal contribution is not the assertion of a supplicant but a claim to share in the fruits of a marriage. These are clearly rights in property arising out of a matrimonial relationship and would not therefore be caught by the Maintenance Regulation.

On the facts of this case, the terms of the agreement were so unfair that the parties should not be held to them in accordance with the proposition advanced in Radmacher v Granatino [2011] AC 534. W would only be left with approximately £600,000, which was only 5% or 6% of the family assets. Such provision would leave W and the children in a real predicament of need.

W argued that the court should completely disregard the agreements if they were found to be unfair. However, Francis J concluded that he should not disregard them altogether. W understood what she was signing and this case could be differentiated from Kremen v Agrest (No.11) [2012] EWHC 45 (Fam). In the absence of a vitiating factor such as fraud, duress or undue influence rendering the agreement void ab initio, it would be wrong to disregard the agreement altogether. It is the court's duty to step in to alleviate any unfairness. However, this will not just restore the parties to the position they would have been in without the agreement. Where there are assets available to meet a party's needs, the court would make the appropriate order, and the extent to which the needs are interpreted (i.e. generously or otherwise) will vary from case to case.

W's difficulty was that, because of the terms of the pre-nuptial agreements, her claims would be limited to needs. However, meeting her needs would require an element of maintenance and the prorogation agreement meant that the English court could not make such an order. Although it may be an unintended or accidental consequence of the Maintenance Regulation, the judge could not order H to make a lump sum payment to W for the purpose of purchasing a property for herself and the children.

W's only claims (before Sweden had considered her maintenance claims) were under Schedule 1 to the Children Act 1989. Francis J ordered H to make £2m available to W for the purchase of a property to provide a home for the children until at least 12 months after both have finished full time education to the end of first degree or training and to include a gap year, together with a carer's allowance for herself and periodical payments for the children in the global sum of £95,000 per year Index linked to CPI as this was a needs based award. This was in addition to W's share of the family home, which the judge found she should be able to invest and save for when the settlement of property had ended.


Goyal v Goyal (No.3) [2017] EWFC 1
This is the latest instalment of this long running litigation. Mostyn J's latest judgment follows his judgment in November 2016 (Goyal v Goyal [2016] EWHC 2758), in which he confirmed that pension sharing pursuant to s.24B MCA 1973 is not available in relation to any foreign pension. W could not therefore receive the benefit of the husband (H)'s Indian annuity by way of a pension share.

Mostyn J now had to consider the ownership of the Indian annuity, W's application for all the benefits arising from the annuity by way of a variation of her existing periodical payments order and H's application to vary the periodical payments.

HHJ Brasse had originally found that the Indian pension belonged to H and not to a third party as H had argued and those findings were accepted by the Court of Appeal. However, at the previous hearing, Mostyn J had found that the Court of Appeal had set aside Judge Brasse's order in its entirety, including the key declarations as to beneficial ownership, and he therefore had to re-determine the question of ownership before he could consider the cross-applications for variation.

Mostyn J now reflected on his previous position, having heard further submissions from W. Although findings of fact formally incorporated as a declaration within a court order can be set aside on appeal, the Court of Appeal could not have done so in this case as permission to appeal them had not been granted or sought. The Court of Appeal order purporting to set aside the original order in its entirety was therefore mistaken and the original declaration of Judge Brasse that H owns the annuity remained intact.

The judge considered whether H was estopped from now challenging the issue of ownership. As the parties were the same but the subject matter of the litigation was different (W had been seeking a pension sharing order and was now seeking varied periodical payments), the bar to him doing so was not absolute. Quoting from his own judgment in R (on the application of Mandic-Bozic) v British Association for Counselling and Psychotherapy & Anor [2016] EWHC 3134 (Admin), he said "It is in principle possible to challenge the previous decision on the relevant issue not just by taking a new point which could not reasonably have been taken on the earlier occasion, but even to reargue in materially altered circumstances an old point which had previously been rejected". 

He heard further evidence from H on the ownership issue before concluding that H had not established any good reason why the principle of issue estoppel should not be applied here. He also made clear that if he were trying the issue anew he would still conclude H beneficially owns the annuity.

In relation to W's application to vary the maintenance, although there were powerful reasons for giving W 100% of the annuity income, it was likely that such an order would encourage H to take whatever steps he could to prevent her from receiving it. Mostyn J therefore ordered that W would receive 2/3 of the annuity income so H had the incentive of receiving the remaining 1/3, backdated to W's application.

As he could not order the annuity provider to make the payments to W directly, he made a further injunction to ensure H procured these payments to W. He also encouraged the third party to make the payments directly once they receive a copy of his order, the injunction and his judgment.

Judge Brasse had ordered H to pay to W periodical payments of £500 per month from 1 March 2016 on the expectation that H would have obtained work by that date. However, H had been unable to earn at the level previously envisaged, he argued because of the adverse publicity he has received in relation to this case. Mostyn J agreed that W should receive maintenance in additional to her 2/3 of the annuity but as £500 was unaffordable and he therefore reduced it to £100 per month from February 2017 with arrears being remitted.


Bezeliansky v Bezeliansky [2016] EWCA Civ 76
The husband ("H") and wife ("W") married in 2000 and moved to England in 2004. They divorced in 2009 and W remained living in England whilst H lived abroad.  The parties had a daughter age 9.

The financial remedy proceedings were concluded by a consent order in January 2013 approved by Holman J ("the 2013 order"). The 2013 order provided for a property in Monaco and a property in Moscow to be transferred to W with W to transfer shares in a company which owned a property in Paris to H. The order also provided for H to pay child support at the rate of £270,000 pa with payment to be made annually in advance. Upon transfer of the properties and the division of other less significant capital there was to be a clean break.

The transfers did not take place. In July 2014 H issued an application for downward variation of the child maintenance (that application was stayed in December 2014 by Moylan J).  In September 2014 H filed a Form E which disclosed a judgment debt against him in the Lichtenstein courts which together with interest amounted to more than $70 million. In October 2014 W applied for orders requiring H to comply with the property transfers.

H raised various reasons  for the non-compliance including that the transfers had to take place simultaneously, W had suggested a transfer of the Russian property at an under value, his Russian passport had expired and he could not travel to Moscow to make the relevant declaration as he had foreign passports he had not declared to the authorities, the transfer could be completed by a power of attorney within a month using his Israeli passport by a transfer to the daughter then a gift from her to W which would need the consent of the custody and guardianship agency in Moscow and W had changed her name which caused difficulties. 

Upon W investigating matters she discovered that in June 2010 H had agreed a pre-purchase contract for the Moscow property to Mr Boussu for 30.5 million Russian Roubles. Half the price was paid up front and a completion date of 30 March 2014. H had not disclosed this in his Form E in the original financial proceedings.

In June 2010 Mr Boussu then loaned H a further €3 million which had not been repaid. In August 2014 H agreed a set off with Mr Boussu that he was entitled to take the full value of the Moscow property without further payment. This was not disclosed to W.  Mr Boussu then started proceedings in Moscow. It was unclear precisely what had happened but at first instance Moor J found H had instructed Russian lawyers who had filed an acknowledgement of service. Mr Boussu had secured an order from the Russian Court on 25 September 2014 for transfer of the Moscow property to his name and his title was registered at the Moscow Land Registry on 11 November 2014. W then applied to set aside the 2013 order. H stated that the transfer of the Moscow could still take place as Mr Boussu agreed to transfer the property to W on the condition that W became liable for the $3.5 million owed by H to him (with H suggesting payment of that sum would come from the proceeds of sale of the Paris flat). 
At first instance Moor J concluded he had jurisdiction to set aside the order as:

1) The clean break only took place once there was compliance with all orders made so there was jurisdiction under s24(a) MCA 1973.

2) Pursuant to Thwaite v Thwaite [1982] Fam 1 an executory order could be varied in the way that W invited the court to do.

3) Butler-Sloss LJ's comments in Middleton v Middleton [1998] 2 FLR 821 were authority that there are two ways in which a party could gain a remedy – 1) to go back to the court and say this was not a genuine consent order, 2) to come back to court and ask the court to set the order aside.

Moor J therefore varied the 2013 order so that the Moscow property would remain in H's control and the shares in the company owning the Paris property would be transferred to W on the basis that:

•  The property was to be sold forthwith for the best price reasonably obtainable;

• The mortgage liability should be discharged from the company's own bank account and from the net proceeds of sale;

• The remaining net proceeds of sale were to be held by W's solicitors to order of the court save for:

o £1,951,854 to be paid to W in respect of H's failure to transfer the Moscow property to her;

o £260,000 in arrears of child maintenance.

o £125,000 to be paid to W for H's liability for costs;

o £75,000 to be paid to W for H's liability for further costs.

Once H had transferred his interest in the Monaco property and the shares to W the stay on H's application to vary child maintenance was to be lifted. W provided an undertaking she would reimburse any amount remitted or varied if H's application to vary subsequently succeeded.

At the hearing before Moor J, W served a judgement summons on H for the child maintenance arrears. On 18 March 2015 Hayden J imposed a six week prison sentence suspended on terms that H complied with Moor J's amended order by 23 March 2015. On 23 March 2015 by agreement the committal was further suspended with H to take various steps by 27 March 2015 to transfer the shares to W.

H appealed the variation and the committal orders. 

Giving the lead judgment for the Court of Appeal McFarlane LJ dismissed H's permission to appeal the variation and committal orders on the basis that:

Variation

1) Thwaite v Thwaite provided authority for an executory order to be varied in the way W had sought before Moor J.

2) There are 5 types of circumstances which may trigger a review of a final consent order (per Munby J in L v L [2006] EWHC 956 (Fam)) -  fraud/mistake, material non-disclosure, a new event which invalids the basis/fundamental assumption on which the order was made, if and insofar as the order contains undertakings and if the terms of an order remain executory. The test for determining whether these circumstances exist differ.  Where an order contained undertakings or the terms of the order remained executory the approach to determining whether or not to set aside or vary the order was, would it be inequitable to hold a party to the terms of the original order? That test was likely to be met where an order remained executory as a result of one party frustrating its implementation.

3) The circumstances in the case were not fundamentally different from earlier authorities. In particular:

a. Moor J had made findings regarding the sale of the property and subsequent Russian court proceedings that made it hard to comprehend H's suggestion there was no finding that he had deliberately frustrated the implementation of the original order.

b. The defect caused by the apparent sale of the Moscow property had not been 'cured' as claimed by H. Moor J accepted W could not trust H to transfer the property with Mr Boussu receiving $3.5 million from the sale of the Paris property. 

c. In the circumstances of the case there was no requirement for a judge to establish a more extensive investigation or hear oral evidence. H had ample opportunity to complete his written affidavit.

d. W had been disadvantaged by H's failure to disclose the sale agreement in 2010 and the Russian order transferring the Moscow property to Mr Boussu. 

e. The facts established non-disclosure by H of a material fact that the Moscow property had been sold at the time of the 2013 order.

Committal

1) Hayden J was entitled to hold that there was evidence H had the means to pay the sum due. H's wealth was into the millions of pounds. The suspended sentence took into account that Moor J's order provided security for the arrears to be paid on the basis that H did all he could to facilitate that.

2) The use of committal to enforce the arrears by achieving a capital transfer of a property worth many times the amount in arrears was justified and proportionate in the circumstances.



X v X [2016] EWHC 3512 (Fam)
The application before Bodey J dealt with anonymization of a financial remedy judgment.  The Husband ("H") strongly opposed any reporting of the parties' names.

Prior to the financial remedy hearing there had been extensive media coverage regarding H's business, the possibility of his having to sell part of his shareholding as a result of the divorce and H's relationship with another woman. Both H and the Wife were photographed arriving and leaving court. The media were present during the hearing and no application was made for the media to leave court.

It was agreed during the proceedings that the press could report that the financial remedy case had started and concluded, including naming the parties and Bodey J.

The media argued that the fact there was a case between the parties was already in the public domain and there was ample opportunity for jigsaw identification in any case.

H argued against anonymization on the basis that pursuant to FPR Rule 27.10 privacy is generally preserved unless exceptional circumstances apply and publication would cause intrusion and harassment to the parties and their children.  H produced letters from the children with his statement setting out the distress that had been caused to them.

Bodey J applied the proportionality test in Re S [2004] UKHL 47 as affirmed by the Supreme Court in PJS [2016] 2 WLR 1253 and applied the question posed by Lord Neuberger in JIH [2011] EWCA Civ as to whether there was sufficient general public interest in identifying the parties to justify any interference with the family's right to respect for their private and family life.  He concluded that the balance was in favour of anonymity in the judgment. This protected the public's right to know the processes and computations leading to the order and the various arguments without including enough information to identify the family. 


Johnson v Takieddine v Warwick Estates Limited [2016] EWHC 1895 (Fam)
The Husband ("H") was age 65. The Wife ("W") was age 55. H and W married in 1985. The marriage ended in 2006. There were two children of the family age 19 and 26. The parties spent the majority of their marriage living in France and in 2007 W and the children moved to live in London.

W lived in WH. WH was owned by WEL (a BVI company) which was in turn owned by Arcos Assets Inc which was owned by Alveston International SA both Panamanian companies. By the time of the proceedings before Moylan J, H accepted he was the sole beneficial owner of the corporate structures and he effectively controlled them.

H had worked for a number of years as an intermediary negotiating contracts between the French government and other governments. In 2011 H was placed under formal investigation by the French authorities on charges of corruption and fraud and his French assets were frozen.

H commenced divorce proceeding in France in October 2006. In February 2009 a divorce was granted with an order for liquidation and division of assets by a notary with a provision for child maintenance.  On W's appeal of that order the Court of Appeal or Paris made further orders providing capitalised maintenance to W of €3 million. The court determined that French law should apply to the consequences of the divorce with the effect that each party was entitled to an equal share of the marital assets determined at June 2007.  The parties were unable to agree an amicable settlement with a notary by December 2014 but neither party made any further application for a judicially determined liquidation of the marital assets. Moylan J took the view that was likely to be because H's assets were frozen pending the outcome of the French criminal investigation.

Evidence from French experts was presented that the judicial liquidation process and divorce were distinct. There were therefore no current proceedings in France. The French court had determined that the parties were entitled to an equal share of the martial wealth as at 5 June 2007 and the French court would have jurisdiction over moveable property located outside France but there was a significant question whether it would have jurisdiction over immovable property located outside France.

In July 2010 W was granted an occupation order for WH. In October 2010 WEL then started possession proceedings against W.  Those proceedings were discontinued but during the course of the proceedings WEL claimed that the shares in Alveston had been sold in 2009. Dealing with those proceedings Moylan J made declarations that the alleged share sale agreement was not genuine and H remained the beneficial owner of Alveston. 

In October 2014 W's applied under Part III MFPA 1984. She was granted leave in October 2014 and H was served with the proceedings in November 2014. In February 2015 WEL was joined as a party to the proceedings. In April 2015 H then sought to set aside the grant of leave.

Moylan J was satisfied that the English court had jurisdiction under Part III and leave had been properly granted.

Moylan J found that W's application was for a share of the marital wealth not maintenance and there were no pending proceedings in France. There were no Regulations, other instruments or principles of EU law which excluded the court's jurisdiction.

Whilst H had argued that W was estopped from applying and that Henderson v Henderson applied Moylan J was satisfied there was no issue which had been decided relevant to the Part III claim that W was seeking to reopen. W's claim that H was the beneficial owner of WH was not a claim which could/should have been raised in previous proceedings.

It was appropriate for the English court to deal with W's claim for beneficial ownership of WH as the issue involved application of English trust principles, all relevant persons were parties to the current proceedings and there was a significant question whether the French court would even have jurisdiction over WH.

H was the only source of funds used to purchase WH and there was no evidence that the funds were provided by way of loan, capital subscription or shareholder's advance. As WEL was owned and controlled by H, Moylan J concluded that it was a fair inference that WEL's failure to participate in the proceedings or provide disclosure was at H's direction because proper disclosure would reveal WH was held beneficially for him. It was a "particularly clear case" H was using WEL to hold the legal title on trust for himself.

Dealing with W's claim under Part III Moylan J noted that he could not determine the wealth available to H. To do so would create a significant and unnecessary risk of improper conflict as that issue would be likely to be subject to determination in France. It was not necessary or fair to delay determination of W's claim under Part III until the French process had concluded and there was no real prospect W would receive less than half of WH in the French liquidation process.

He awarded W and H a notional half share in the equity of WH and permitted W to enforce against H's notional half share costs orders obtained against him in England and also potentially the costs orders obtained against WEL and enforcement of the outstanding amount due in respect of the French court's award of capitalised maintenance.


Babiarz v Poland 1955/10 
B, a polish National, married R in 1997. In autumn 2004 he met AH and by January 2005 had moved out of the flat he shared with R to live with AH. They had a child together in 2005.

In September 2006 B applied in Poland for a no-fault divorce. R would not consent and B therefore applied on fault based grounds. R continued to refuse to agree to the divorce.

In 2009 B's application for divorce was refused on the basis that he was responsible for the breakdown of the marriage. Whilst it was acknowledged that there had been an irretrievable breakdown of the marriage and reconciliation was unlikely a divorce could not be granted under Polish law where the person at fault petitioned for divorce and the other party did not unreasonably withhold their consent. The Polish court had found that B was at fault for the breakdown of the marriage and there was no evidence R had acted out of hatred or vengeance in refusing to agree to a divorce. She had repeatedly stated throughout proceedings she was ready to reconcile with B.

B appealed on the basis that the Polish court had breached his ECHR Article 8 and Article 12 rights and that his right to marry and found a family had been breached by the refusal to grant him a divorce. This interfered with his plans for his private and family life and those of his daughter and partner. 

The court held by 5 votes to 2 that there was no violation of Articles 8 and 12. Applying Johnston and Others v Ireland 18 December 1986 neither Article 8 or 12 could be interpreted as conferring a right to divorce.

Polish law provided detailed substantive and procedural rules for a divorce to be granted. During the course of the Polish divorce proceedings comprehensive evidence had been gathered. B had an opportunity to present his position and put questions to witnesses. While under Article 8 families and relationships are protected that did not mean that particular legal recognition had to be accorded to them and in any case B's paternity of his child with AH was recognised.

The positive obligations arising under Article 8 did not impose a duty on the Polish authorities to accept B's application for divorce.