Finance & Divorce Spring Update 2012
Joanna Grandfield, Associate (barrister), Anna Heenan, solicitor and David Salter, Joint Head of Family Law at Mills & Reeve LLP analyse the key financial remedies cases arising in the first quarter of 2012.
Joanna Grandfield, Anna Heenan and David Salter of Mills & Reeve LLP
The Spring Update deals with cases involving the severance of joint tenancies; modest assets; non-disclosure; pre- and post-nuptial agreements; pre-acquired wealth; piercing the corporate veil; guidance on procedure and dealing with third party claims.
Davis & Anor v Smith  EWCA Civ 1603 (Lord Neuberger, Maurice Kay LJ and Sullivan LJ) 23 November 2011
This decision provides a reminder of the importance of considering severing a joint tenancy on separation as well as being further authority for the proposition that a joint tenancy may be severed without written notice.
The husband and wife had jointly purchased the wife's council property in 1989, (the wife had been living there since 1974). The marriage broke down in 2008 and the husband moved out. The only assets were the former matrimonial home (worth around £130,000), some cash, and an endowment policy (worth around £12,500).
The husband and wife were both advised by their solicitors to sever the joint tenancy although no notice was ever served. Correspondence between solicitors concluded that the house would need to be sold and the policy should be surrendered. As the husband had found a new property it was agreed that he would have more of the proceeds of the endowment policy to provide a deposit. The wife would, in turn, receive more from the sale of the matrimonial home.
The house was put on the market and completion delayed whilst the wife looked for alternative accommodation. The husband's solicitors wrote in early September saying that matters needed to be resolved as soon as possible so that the proceeds of sale could be "divided by agreement." The wife died unexpectedly two weeks later on the day on which she had intended to visit her solicitors to sever the joint tenancy.
The court concluded that the joint tenancy had been severed. Severance of a joint tenancy can be effected in three ways: by a certain type of act of either party; by mutual agreement; or by a course of dealing.
It was accepted that the proposal to sell the house and divide the proceeds, the agreement to put the house of the market, and even the acceptance of a subject to contract offer could not have severed the joint tenancy alone. However, what passed between the parties went further:
1. The parties were proceeding on the basis of a "common and expressed expectation and intention" that the house would be sold and the sale proceeds divided equally;
2. The parties were both advised that this was a long marriage with modest, but significant, joint assets so a 50:50 split was inevitable; and
3. The policy was actually surrendered and the unequal division was made on the basis that the wife would receive a balancing payment.
A v L  EWHC 3150 (Fam) (Moor J) 7 December 2011
This case is a rare reported decision of the High Court dealing with the division of modest assets.
The wife was a housewife and mother. She had worked post-separation but was currently unemployed. The husband worked as a self-employed letting agent. The exact level of his income is was unclear, though it seems to have been in the region of £28,000. Even allowing for a medical condition his earning capacity was far greater than his wife's.
The total assets and liabilities were:
The Matrimonial Home £216,908
Egyptian properties £45,833
Wife's accounts £752
Husband's accounts £5,811
Husband's debts (£35,789)
The parties separated in 2000 and there was an issue as to whether they had reached a financial agreement. The wife had been living in the matrimonial home since separation and the husband had been renting.
At first instance, the judge held that:
1. The wife needed to remain in the matrimonial home for a short period to adjust. It should be sold after two years;
2. On sale, the proceeds should be divided 70:30 in the wife's favour;
3. The husband should pay periodical payments of £500 per month for 4 years without a s 28(1A) bar.
Moor J upheld three of the husband's criticisms of that judgment:
1. No sufficient justification was given for the very significant departure from equality;
2. In so far as the departure from equality was based on needs, there was no explanation of how the order would meet the needs of both parties as opposed to the wife alone; and
3. it did not adequately explain the interplay between the periodical payments order and the capital order.
Moor J concluded that the disparity in earning capacity combined with the parties' needs was a good reason to depart from equality, but only on a clean break basis. The primary justification for the departure was the income disparity between the parties but other reasons, such as the wife's continuing responsibility for the two (adult) children, were given.
The matrimonial home should be sold as soon as possible: the husband could not discharge his debts without this and it was doubtful whether the wife could meet the mortgage alone.
The sale proceeds would be divided 70:30 in favour of the wife. It was accepted that the wife would find it very difficult to buy anything other than a small flat and, once the husband had paid off his debts, he would struggle to do even that without a large mortgage.
NG v SG  EWHC 3270 (Fam) (Mostyn J) 9 December 2011
This case contains a useful summary of the approach to be adopted by the courts where there are allegations of non-disclosure.
The husband sought a downward variation of spousal and child maintenance and remission of the arrears. The wife cross-applied for variation and sought leave to enforce arrears of more than twelve months old.
The wife's evidence was only just being concluded by the end of the hearing. The judge allowed the parties to provide further disclosure after the hearing but did not set aside court time to deal with it. Counsel exchanged closing submissions by email and it was in those closing submissions that counsel for the wife suggested capitalisation of the payments for the first time.
The first instance judge concluded that the husband was a serious and serial non-discloser. The wife had a deficit of needs over income which the husband had the means to meet and the judge ordered that this be capitalised. Leave was given to enforce the arrears over twelve months old.
On appeal, Mostyn J reviewed the authorities and outlined the approach the court should take in such cases:
"i) The Court is duty bound to consider by the process of drawing adverse inferences whether funds have been hidden.
ii) But such inferences must be properly drawn and reasonable. It would be wrong to draw inferences that a party has assets which, on an assessment of the evidence, the Court is satisfied he has not got.
iii) If the Court concludes that funds have been hidden then it should attempt a realistic and reasonable quantification of those funds, even in the broadest terms.
iv) In making its judgment as to quantification the Court will first look to direct evidence such as documentation and observations made by the other party.
v) The Court will then look to the scale of business activities and at lifestyle.
vi) Vague evidence of reputation or the opinions or beliefs of third parties is inadmissible in the exercise.
vii) The Al-Khatib v Masry technique of concluding that the non-discloser must have assets of at least twice what the Claimant is seeking should not be used as the sole metric of quantification.
viii) The Court must be astute to ensure that a non-discloser should not be able to procure a result from his non-disclosure better than that which would be ordered if the truth were told. If the result is an order that is unfair to the non-discloser, it is better that than that the Court should be drawn into making an order that is unfair to the Claimant."
Although acknowledging that "Where the decision is a finding of facts then the ascent faced by the appellant is particularly steep" Mostyn J held that:
1. The decision to capitalise the award was "demonstrably wrong in principle and flawed". The husband should have been given notice of an application by the wife. In addition, the court's directions and the evidence should have specifically addressed the issue.
2. "Procedurally this case went right off the rails". It was wrong to have further disclosure after oral evidence that was only addressed in written submissions.
3. The judge's inferences were not reasonable. He had not worked through the steps above. In particular, he had not attempted to estimate the amount the husband had hidden away. His findings did not lead to the conclusion that the husband had hidden away a vast sum.
Mostyn J concluded he could exercise his discretion afresh and ordered a retrial.
NG v SG  EWHC 3270 (Fam) (Mostyn J) 9 December 2011
This lengthy decision of Charles J considers the impact of Radmacher.
The husband was Italian and the wife Swedish. When they married the husband, who was 33 and working as an investment banker, had amassed some wealth through both his own efforts and inheritance. The wife was 23, and taking her final exams at university. The parties entered into a pre-nuptial agreement under Swedish law at the husband's request and upon which neither took legal advice. It was a short document providing that:
1. All property owned by the husband prior to the marriage was his private property and the wife had no right to it;
2. All inherited property would remain the sole property of the recipient; and
3. All other property acquired during the marriage would be marital property.
The assets in the schedule to the pre-nuptial agreement were around £1.08m.
At the time of divorce, the total assets were around £1.28m, of which around £1.15m was in the husband's sole name. The husband also had a pension worth around £94,000.
The husband was an investment banker earning £55,000 a year net. He had previously been earning significantly more. The wife had not worked since she was 19 and received benefits of £6,849 per annum. The judge at first instance considered evidence about the husband's prospects of getting a better job, but made no findings.
At first instance, the wife was awarded £800,000 (around 58% of the total assets including pensions). There was also a periodical payments award of £30,000 with a recital that the wife's household income should equal £40,000 before there was any impact on the maintenance award. The judge placed limited weight on the pre-nuptial agreement, as it did not specify what would happen if the marriage broke down.
The appeal centred on whether there should have been a chargeback in favour of the husband. Charles J observed that the decision in Granatino v Radmacher  1 AC 534 resulted in a "significant change" in the approach to be adapted to pre-nuptial agreements. The weight given to an agreement will depend on the circumstances. Some factors may negate its effect altogether, whereas others will reduce or enhance its weight.
Charles J considered that there were no vitiating factors (duress, fraud or misrepresentation) and he disagreed that it should be given limited weight for the following reasons:
1. Whilst the parties did not receive legal advice there was nothing unfair or difficult to understand;
2. The wife was indifferent to the value of the husband's property so there was no material non-disclosure;
3. There was no finding that the wife felt under undue pressure to sign or that she was acting against her better judgment;
4. The inequality in bargaining power did not reduce the weight to be given to the agreement.
For these reasons he concluded that the agreement was a "good and powerful" reason for departing from an equal division and it was an important factor in assessing the overall award.
There was also a good reason to depart from equality because:
1. The husband's pre-acquired assets were an "unmatched" contribution of £1m;
2. Part of the husband's assets were inherited; and
3. This was a reasonably short marriage (5 and a half years including cohabitation).
Charles J therefore concluded that that the judge had erred in law by attributing little weight to the agreement and failing to explain how she had taken account of the other factors justifying a departure from equality. Therefore, he could exercise his discretion afresh.
Whilst the agreement and the other factors would support an award of 100% of the non-martial property to the husband, this would result in a 28:72 division in favour of the husband, which would not meet the housing needs of the wife and children.
There was no finding that the husband could build up capital by obtaining better paid employment. Therefore, failing to make a Mesher order did not fit with a non-discriminatory approach, did not allow for the possibility that the husband's income would not increase and placed all risk on the husband as the main income provider.
Charles J ordered a charge back of 33.3%, which was increased to 35.8% to include the wife's liability for the husband's costs of the appeal.
Kremen v Agrest (No. 11) (Financial remedy: non-disclosure: post nuptial agreement)  EWHC 45 (Fam) (Mostyn J) 19 January 2012
"This should, but will probably not, be the final chapter of this chronic and complex piece of matrimonial litigation" (Mostyn J).
Mostyn J considered whether the husband was guilty of material non-disclosure and, if he was, what conclusions he should draw about the scale of the husband's resources. He considered his own summary of the law in NG v SG (see above) and considered the husband's activities and lifestyle at length. He concluded that the husband's fortune was in the bracket of £20-30m.
Another key issue was the treatment of a post-nuptial agreement signed by the parties in Israel in 2001. Mostyn J found that:
i) For reasons to do with asset protection, H decided in 2001 to prevail on W to enter into a marital agreement that was highly disadvantageous to her. An agreement which gave W only about $1.5m out of a huge fortune accumulated during the marriage is likely to be unfair, whether viewed from a needs or sharing perspective.
ii) Although W would have had some idea of the scale of H's wealth, there was no prior disclosure by H.
iii) While W had some help from H's relative, Mrs. Damsky, she did not receive truly independent advice.
iv) While W would have understood the literal words of the agreement she did not know what rights under English law she was foregoing by the agreement. Her agreement was therefore not an informed one.
v) The exercise was in fact a charade, and was made doubly so by the parlour game divorce obtained in 2003.
vi) H had not complied with the agreement. He was not paying for the children. While he formally paid the $1m he almost immediately prevailed on W to give it back.
vii) H had repudiated the whole legal basis for the agreement in Israel.
Following a review of Granatino v Radmacher  AC 534, Mostyn J concluded that it would be an unusual case where a party would be taken to have freely entered into a marital agreement with full appreciation of its effects if there had been no legal advice and no full disclosure.
On the facts, the agreement was given no weight whatever for the following reasons:
i) W did not freely enter into the agreement with a full appreciation of its implications. It was the product of pressure from H and there was a material absence of independent legal advice and disclosure.
ii) Moreover, it was doubtful that the parties ever actually intended that the agreement should govern the financial consequences of the marriage coming to an end.
iii) It would be grossly unfair to hold W to an agreement which deprived her of her fair share of a fortune to the formation of which she had, in her own way, equally contributed.
iv) Moreover, the agreement did not then, nor did it now, remotely meet her reasonable needs.
v) And the agreement grossly prejudiced the needs of the children.
The wife was awarded £12.5m, of which £8.3m was classified as maintenance for the purposes of any enforcement action she might take under the Maintenance Regulation. The remainder of the award was based on the sharing principle.
B v B  EWHC 314 (Mr David Salter sitting as a deputy High Court Judge) 16 January 2012
This decision provides further guidance on the treatment of pre-marital wealth.
The husband was 61 and the wife 41. They had no children. They married in 1997, having cohabited since 1993 (shortly after the husband's company had been floated on the stock exchange), and separated in 2008. The parties were unable to agree asset values (or indeed a schedule of assets), or the husband's pre-marital wealth, leaving the judge to do so and conclude that the total value of the parties' assets and pensions was £4.3m.
The husband was a successful businessman. He had an income of £12,000 per annum gross from a SIPP which was supplemented by salary, dividends, benefits in kind and withdrawals from loan accounts from various companies. The wife left school with no qualifications and gave up work when the parties moved to Gibraltar in 1996. The wife planned to set up a business and the judge held that she had an earning capacity of £10,000.
The husband argued that the wife's award should be quantified on a needs basis on the grounds of pre-marital wealth. The judge considered Mostyn J's statement in N v F (Financial Orders: Pre-acquired Wealth)  2 FLR 533 that: "If a party is going to assert the existence of pre-marital assets then it is incumbent on him to prove the same by clear documentary evidence."
On the basis of the evidence available to him, the judge concluded that pre-marital wealth totalled £823,362 (rounded to £820,000). The husband's pension was not pre-marital as no evidence to support this was before the court. No adjustment was made for passive economic growth as the pre-marital wealth had not appreciated in real terms and, in any event, in the circumstances the judge considered such wealth to be matrimonial.
The judge concluded that it would be unfair not to exclude any of the husband's pre-marital wealth from sharing: "It underpinned the couple's future financial prosperity notwithstanding the wife's subsequent contributions." The remaining assets were sufficient to meet the wife's needs and were divided equally. The wife, therefore, received £550,000 for a property, a further £150,000 to meet stamp duty, furniture, car and capital costs and a Duxbury fund of £1.04m to meet income needs of £4,500 pcm after deduction of her earning capacity. All this equated to 40.45% of the total assets. The wife was awarded £147,560 to pay unpaid legal costs and an overdraft in addition.
Finally, the husband asserted the wife was living with Mr Z. The judge, having considered the factors set out in Kimber v Kimber  2 FLR 533, concluded that the wife was not cohabiting.
The judge made (para ) three obiter remarks in relation to pensions. First, pensions in payment (contrary to submissions made) are shareable. Secondly, if the parties wish a pension sharing order to be made by reference to levels of income at a stated age, expert evidence will be required. Thirdly, neither party had addressed evidence of the value of their additional State Pension entitlement despite the fact that this may now exceed £100,000.
Gowers v Gowers & City Docs Limited  EWHC 3485 (Holman J) 9 November 2011
The husband and wife were both aged 40. They began cohabiting in 1990, married in 1996 and separated in 2008. They had five children aged between 4 and 17. The husband founded City Docs Limited (the Company) during the marriage and was previously its Chairman. At the time of the hearing, he was personally bankrupt but still employed by the Company.
The Company ownership structure was found to be as follows:
- In 1998 the husband set up a discretionary trust in favour of himself and his children;
-The trust owned 100% of the shares in Peach Holdings Limited;
- Peach Holdings Limited owned 70% of the shares in the Company and the remaining 30% were owned by a director and a former director.
The husband had received considerable sums from the company by way of loan which at first instance was held to be the husband's alter ego.
The Company's most valuable asset was a shareholding in Trilantic, which was sold for $10m in October 2010, paid as to $6m in October 2010 and $2m in each of October 2011 and 2012. At first instance, having concluded that the Company was entitled to 67% of the net sale proceeds, proceedings were adjourned until the sale had taken place.
Following the sale, the wife applied for a freezing order. The Company, the trust and Peach Holdings Limited were joined as parties and £500,000 of the sale proceeds frozen. The order ceased to have effect if security was provided by paying £500,000 into court, which the company duly did.
When the first instance proceedings were resumed, the judge ordered the £500,000 paid into court to be paid out to the wife as part of a £900,000 lump sum payment. The Company applied for the order to be set aside and the £500,000 to be repaid.
Holman J observed that s 23(1)(c) of the Matrimonial Causes Act 1973 (MCA) allows the court to order "either party to the marriage" to pay a lump sum to the other and that the Company was not a party to the marriage. Similarly, whilst s 24A MCA could be applied to the proceeds of property that had been sold voluntarily, that property must be "Property in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest, either in possession or reversion."
Holman J decided the issue was what the Company intended and were agreeing to when they made the payment in to court. The Company had refused to give an undertaking to pay the money to the wife. Furthermore, the application for the freezing order made no suggestion that there might be a direct payment of funds to the wife. "The whole purpose was to keep £500,000 secure from dissipation so that it was available to be paid to the wife if – a big if – it properly could be."
Holman J also disagreed that this was a case for piercing the corporate veil. The husband was clearly not the owner of the company and significant third party interests might be prejudiced by the order made. If a finding of impropriety or dishonesty was required, there was none by the district judge.
Finally, Holman J held that Thomas v Thomas  2 FLR 1263 was not authority for making an order directly against a company or other entity with which the payer was closely connected. That line of authority dealt with the making of an order against the spouse so as to judicially encourage the third party to pay to the other spouse.
The money was released to the Company to do "whatever they lawfully wish with it". However, Holman J warned that the Company and the husband had maintained that the husband had no entitlement to the money. If he were to receive any part of it, except by legitimate means, it would be to cheat the wife and deceive the judge.
X v X  EWHC 538 (Fam) (Charles J) 16 March 2012
This case was adjourned at the end of day seven of the final hearing during which time the parties reached a settlement. Nevertheless, Charles J provided a judgment dealing with the "endemic failure in this field of litigation to prepare and present cases in such a way that, before the trial starts, the issues have been properly identified, and the evidence has been properly gathered and prepared." He invited counsel to make submissions on this issue.
Charles J cited the "general comments for consideration by the profession" he had made in paragraphs 475-484 of Jones v Jones  EWHC 2654 (Fam) (reported as J v J).
These stressed the needs for the parties to make clear the building blocks of their case.
After considering counsel's submissions he commented that "the law has got itself into a terrible tangle since White v White, particularly in respect of the sharing rationale." Charles J made clear that he was not seeking to criticize those involved, but commented on the central issue in the case of the application of the sharing principle to a hotel. The husband had been given a hotel by his father. The husband's case was that the non-matrimonial asset was the freehold of the hotel rather than the business of running it. Despite this, the hotel valuation before the court was based on the income and profit of the hotel business. Charles J commented that the basic preparation for the case should have included disclosure and inspection of various documents on this issue.
He observed that the sharing principle had introduced property and commercial issues into this field of litigation and which, historically, practitioners had not needed to deal with. This meant there was a need:
(a) to identify property interests by applying property, company, trust and tax law,
(b) to consider commercially and pragmatically viable options, particularly for private companies that are difficult to value, whose shares may not have a market, which it may be unfair to sell and which cannot provide funding to meet a clean break solution,
(c) to consider, on an asset and case specific basis, apportionment and division of assets and their value at various times and
(d) to identify relevant matrimonial choices.
This was very different from the pre White v White approach. There should now be a focus on the legal, commercial and evidential issues arising and forming the essential building blocks of the s 25 exercise at an early stage. Courts and practitioners should focus on:
i) the property and other issues referred to above,
ii) the application of the relevant substantive law to those issues,
iii) the law of evidence, and
iv) the range of practical and commercial options available to achieve a fair result.
Shortly after the exchange of Forms E each party could identify, in more detail than at present:
i) the relief he or she seeks, or is likely to seek, and why, and
ii) the property (in the sense of ownership) and commercial issues he or she asserts arise, or are likely to arise, and why.
Following this it should be considered whether a procedure other than questionnaires and affidavits should be used to identify the relevant factors and arguments.
Debra Ann Edgerton v (1) Thomas William Edgerton (2) Zaffirili Shaikh  EWCA Civ 181 (Master of the Rolls, Rafferty LJ and Sir Mark Potter) 24 February 2012
This decision provides guidance on the procedure for dealing with third party claims in financial remedy proceedings.
The husband and wife married each other for the second time in 2006. Their relationship had lasted more than 25 years and they had three adult children.
The husband pursued entrepreneurial activities through a BVI company (the Company).
In 2009, the wife was granted a s.37 injunction. The husband applied successfully to have this set aside by providing an undertaking to the court. The wife then agreed to the sale of former matrimonial home provided her solicitors held the net proceeds pending resolution of her claim.
The husband provided minimal disclosure in his Form E and made reference to a debt of £1.2m owed to Mr. Shaikh. Mr. Shaikh was ordered to file a statement describing his involvement with the parties, to identify any money he claimed to be owed and to attend an FDR hearing. Mr. Shaikh did not comply and the FDR did not take place. A hearing was listed for January 2010.
In October 2009, Mr. Shaikh brought a County Court action claiming £1.548m plus interests and costs from the husband in respect of a business loan. The claim did not refer to a partnership between Mr. Shaikh and the husband. Mr. Shaikh then successfully applied to intervene in the financial remedy proceedings and his loan action was consolidated within the financial remedy proceedings.
Mr. Shaikh discontinued his loan action and began an action against the husband in the Chancery Division for partnership dissolution and an account. It was ordered that the financial remedy proceedings and the partnership proceedings be transferred to the Family Division of the High Court. The wife was joined as a third party to the partnership action.
The husband conceded there was a partnership and admitted Mr. Shaikh was entitled to its dissolution. The wife contended the partnership was a sham, disputed Mr. Shaikh had invested monies in the partnership, asserted the assets said to be owed to the Company or the partnership were the property of the husband and wife and asserted the disputed properties were purchased for the benefit of the husband and the wife.
At a case management hearing, the partnership action was transferred back to the Chancery Division and a number of directions were given. Whilst the wife had legal aid for the family proceedings she had no funding for the Chancery Division proceedings so the directions were not progressed. The wife failed to reply on time to Mr. Shaikh's request for further information and she was debarred from defending the partnership action. The husband and Mr. Shaikh then agreed terms for disposing of the partnership action.
In the subsequent financial remedy proceedings, the court ordered that:
1. The order in the partnership proceedings did not bind the court in the financial remedy proceedings;
2. The Chancery order did not estop the wife from pursuing any issues relating to the legal and beneficial ownership of the disputed assets, any liability owed by the husband to Mr. Shaikh by reason of the Chancery Order; and
3. The husband's undertaking should continue until the completion of the financial remedy proceedings or further order.
The wife then successfully applied for a without notice s 37 injunction freezing some of the sale proceeds of the former matrimonial home which had been transferred into an account in Mr. Shaikh's name.
On appeal, the court considered two issues:
1. The Husband's appeal against the judge's order in financial remedy proceedings; and
2. Mr. Shaikh's appeal against the s 37 injunction.
The husband made submissions to the court by email immediately before the hearing but did not attend. Mr. Shaikh did not submit a skeleton argument or attend the hearing. The court decided to hear the appeals because it was sufficiently concerned by some aspects of history.
The court held that, on the face of it, the Chancery order was a regular final decision of the High Court which was binding on all three parties and conclusively determined the ownership of the assets referred to in it. The wife could not maintain a different case in the family proceedings as to the ownership of the disputed assets. As the Chancery order was a final determination it operated as an estoppel in the family proceedings. The wife could not ignore the Chancery order in the absence of a pleaded case that the order was obtained by fraud or collision and, ideally, an application to set the Chancery order aside.
The wife was granted the right to issue fresh proceedings in the Chancery Division to set aside the Chancery order on the ground that it was obtained by fraud or collusion. The new action would then be transferred to the Family Division where it should be listed for directions with the financial remedy proceedings. The reasons for the decision were as follows:
1. The wife had LSC funding for the family proceedings but not the partnership action if it was heard separately. It was unrealistic for her, as a self-represented litigant, to pursue her case effectively;
2. The decision to transfer the proceedings to the Chancery division was made 9 days after the partnership action was ordered to be heard with the financial remedy proceedings. The potentially serious consequences for the wife, in terms of legal advice and representation, were important and were not considered;
3. Generally speaking it was better for the Family division to determine preliminary issues of this type as continuity of judicial involvement promoted efficiency and consistency of decision-making. In this context the court approved the statement of Mr. Nicholas Mostyn QC sitting as a Deputy Judge in the Family Division (as he then was) in TL v ML (ancillary relief: claim against assets of extended family)  1 FLR 1263, paras 36-7;
4. If the husband had provided disclosure in the financial remedy proceedings, as he should done, and Mr. Shaikh had not abandoned the loan action and started a partnership action then the issue of disputed assets would have been dealt with in the Family Division;
5. The debarring order was made because the wife did not have funds and was out of her depth rather than because of the way she behaved;
6. Some curious facts needed to be investigated. For example, the husband had described the liability as a debt and Mr. Shaikh brought a loan action before bringing a partnership action and no partnership was mentioned in the original claim;
7. The wife was arguing collusion or fraud;
8. There was a powerful argument for saying that the husband had breached his undertaking by entering the agreement with Mr. Shaikh in the Chancery proceedings; and
9. It was relevant that the judge making the order in financial remedy proceedings thought further enquiries needed to be made.
As the wife was going to be making a fresh claim the husband's undertaking would continue.
Mr. Shaikh's appeal against the s 37 injunction failed. The judge was entitled to reach the conclusion that there was a sufficient risk of the money being dissipated. The wife's procedural failures did not justify a refusal of this relief.
It should be noted that the Family Procedure (Amendment) Rules 2012 insert a new FPR 2010 rule 9.26B, dealing with the procedure for the intervention of third parties.
- Financial Remedy
- Modest assets
- non disclosure
- piercing the corporate veil
- Post-Nuptial agreement
- pre-acquired wealth
- pre-nuptial agreements
- Third party claims