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Finance & Divorce Update April 2015

Claire Molyneux, senior solicitor and Rebecca Lang solicitor, both of Mills & Reeve LLP analyse the financial remedies and divorce news and cases from March 2015

Clare Molyneux, senior solicitor, Mills & Reeve LLPRebecca Lang, solicitor, Mills & Reeve LLP

Claire Molyneux, senior solicitor and Rebecca Lang solicitor, both of Mills & Reeve LLP 
This update is divided into two parts:

1 News in brief
2 Case law update

News update

Law Commission opens consultation on how best to enforce financial orders 

The Law Commission is seeking views on options for reform to simplify and clarify the law on enforcement and make it easier for the court, practitioners and the public to use.  The consultation will be open until July 2015 and it is hoped that the report will be published in summer 2017.

'No evidence' of risk from online divorce services
Research carried out into online divorce has found no evidence of regulatory risks arising from this service. Surveys were jointly commissioned by the Legal Services Board and Legal Services Consumer and sought opinion from clients using online providers. The survey found that 83% of users were satisfied with the service they received and were three times more likely to recommend the service than clients of high-street firms.

Home Secretary announces review of application of Shari'a law
Theresa May, the Home Secretary, has announced that there will be an independent investigation into the application of Shari'a law in England and Wales.

In a speech in London focusing on Islamic extremism, Ms May referred to problems concerning the divorce of Muslim women.  She said:
"There are some areas where – like in the application of Shari'a law – we know enough to know we have a problem, but we do not yet know the full extent of the problem. For example, there is evidence of women being "divorced" under Shari'a law and left in penury, wives who are forced to return to abusive relationships because Shari'a councils say a husband has a right to "chastise", and Shari'a councils giving the testimony of a woman only half the weight of the testimony of a man. We will therefore commission an independent figure to complete an investigation into the application of Shari'a law in England and Wales."

The Home Secretary also said that there is to be commissioned an all-force inspection by Her Majesty's Inspectorate of Constabulary of the police response to 'honour' crimes, female genital mutilation and forced marriage.

Justice Select Committee reports of Civil Legal Aid Cuts
Resolution has welcomed the publication of the Justice Select Committee report on the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Bill on 12 March.

Resolution provided evidence on the impact of the legal aid cuts during the Select Committee hearing, and has called on the next Government to take action on the points raised in the report, particularly around the evidence requirements for domestic violence victims trying to access legal aid.
A summary of the findings are available via the Parliament UK website: click here

Family Court Quarterly Statistics released
The latest Family Court statistics for October 2014 to December 2014 were published on 26 March 2015. The figures show that the number of cases brought in the family courts in England and Wales dropped by 3% to 59,000 compared with the same period in 2013. This is in line with the previous 2014 quarterly figures but lower than the average 66,700 cases per quarter in 2011-2013 and is mainly due to the fall in matrimonial and private children law matters.

A link to the report can be found here

Review of marriage law underway
The Law Commission has announced that the scoping phase of its review of the law of marriage has begun and that it expects to publish a report towards the end of 2015. The aim is to identify and provide an initial analysis of the issues that need to be addressed in order to develop proposals for the reform of marriage law.

The question underlying the review would be whether the current law, which has evolved over a long period of time, provides a fair and coherent legal framework for enabling people to marry. Does the law allow people to marry in a way which meets their needs and wishes while recognising the interests of society and the state in protecting the status of marriage? You can read more here

Case law update

Wright v Wright [2015] EWCA Civ 201

This was an application before the Court of Appeal for permission to appeal the decision of Her Honour Judge Roberts.  Pursuant to section 31(7) MCA 1973, Judge Roberts ordered that a joint lives spousal maintenance order be varied to a six year term during which there would be a graduated reduction of spousal maintenance.  The principal ground of appeal was that Judge Roberts failed to pay adequate regard to the fact the original order by District Judge Cushing was a joint lives order.  W's permission to appeal was dismissed.

In original financial remedy proceedings heard before District Judge Penelope Cushing in April 2008, the District Judge made a joint lives maintenance order that H should pay to W £33,200 per annum.  In addition, H was ordered to pay £10,400 per annum in respect of his two daughters until they respectively reached the age of 17.  He was also ordered to pay school fees. 

Prior to their marriage, W had worked as a legal secretary and administrator.  She had not worked since the birth of the parties' first daughter.  At the date of the appeal, H was aged 59 and an equine surgeon in Newmarket shortly to become a partner in an equine hospital to which his partnership was about to move.  W was aged 51 and was not working.

On 14 November 2012, H made an application in the Principal Registry for a variation of the original order on two grounds.  He argued that his financial circumstances had changed for the worse, and that the District Judge had made plain in her judgment that W would be expected within the following 2 years to begin to make a working contribution towards her own household expenditure.  The application reached final hearing and Judge Roberts gave reserved judgment on 26 June 2013.  Under the terms of the original order, H was paying 22 percent of his net income in spousal and child maintenance.  At the time of hearing the variation application, there had been a downturn of H's income and the global maintenance equated to 34 percent.

Having considered the evidence, Judge Roberts preferred H's evidence.  She found H was a man of integrity.  She found that he had had to postpone his retirement from 60 to 65 and that he had not been in a position to make any investment towards his retirement pension since the order.  She accepted his case that W had been put on notice by the District Judge to make a financial contribution towards her own maintenance.  Judge Roberts found W's evidence to be unsatisfactory and found she was evasive in cross examination in questions put to her about her earning capacity. She found W had done nothing since 2008 to look for work or to retrain or prepare herself for work. 

She placed W's annual income needs at £36,000 – W had claimed £64,000. 
Judge Roberts found that District  Judge Cushing had made a joint lives order because at that time it was not possible to predict how things would develop, in particular because the younger daughter was then aged only 3 years.  The judge said at paragraph 24 of her judgment: "However, District Judge Cushing made it very clear that within a couple of years [W] would be expected to start to contribute financially and that it was important that this happened whilst fitting in with her childcare responsibilities."

The judge applied section 31(7) MCA 1973 and concluded that a variation of the maintenance was appropriate.  She ordered a graduated reduction over 6 years to enable W to improve her earning capacity through experience and training as her childcare responsibilities reduced.

Having considered the evidence, Judge Roberts ordered that the petitioner's periodical payments to the respondent should be varied such that from 1 November 2013 to 31 October 2014, H should pay to W £32,000 at the rate of £2,667 per month.  From 1 November 2014 to 31 October 2015, H would pay £24,000 at the rate of £2,000 per month.  From 1 November 2015 to 31 May 2016, H would pay £1,500 per month.  From 1 June 2016 to 31 December 2019, H should pay £12,000 per annum at the rate of £1,000 per month, at the conclusion of which the payments would cease.

On permission to appeal, Lord Justice Pitchford scrutinised the findings of both judges and found that Judge Roberts had applied a proper consideration of section 31(7).  He determined that the principal question arising in the application was "whether there is a real prospect of establishing before the full court that Judge Roberts gave inadequate justification for her conclusion that [the H] should no longer be expected to make any provision for [the W] during his postponed retirement."  Having found that Judge Roberts was entitled to order a variation in H's favour, he questioned whether W "has a real prospect of undermining the judge's scaled reduction in spousal maintenance."  He concluded there was no such prospect.

Lord Justice Pritchard accepted Judge Roberts' findings as follows:

• "Judge Cushing did not embark on a consideration of the W's earning capacity. Judge Roberts did.  Over the course of a 2 day hearing, W was questioned closely about her working experience and missed opportunities since the original order of 2008. In effect, the judge accepted the propositions being advanced on behalf of H."
• "If W earned £20,000 gross in an administrative or clerical capacity, her net income would be £16,555 per annum. With tax credits, child benefit and the continuing payments in respect of the children, W would have a household income of over £46,000 without depending on spousal maintenance" and
• she gave sufficient reasons for departing from the provisional view of Judge Cushing.

On the terms of the order of Judge Roberts, W could manage for two years without generating her own earnings.  It was open to her to make a further application if, despite her best efforts, she failed to produce a significant financial contribution.  Application for appeal dismissed.

This case has generated a lot of media commentary and has brought the often contentious issue of joint lives spousal maintenance under the spotlight.  It is clear that both judges considered W's financial contribution – even if significantly lower – to be encouraged not only to relieve the burden on the paying spouse, but because W should be contributing financially to the family and making provision for her retirement.  If W utilised her earning capacity, she would also become eligible for child and working tax credits, all of which would assist her towards financial independence.  At paragraph 38 of her judgment, District Judge Cushing stated:

"There is a general expectation in these courts that once a child is in year 2, most mothers can consider part time work consistent with their obligation to their children. By September 2009/2010, the wife should be able to work. She will be 46 or 47 years old. I do not anticipate her having a significant earning capacity nor would it be reasonable to expect her to muck out stables for the minimum wage. However, she should make some financial contribution."

Of course the judgment of first instance was some years ago, but this judge's findings were supported by Judge Roberts.  The court has to strike a balance, but is this judgment reflective of a sea change towards term orders with the consequence of passing the onus onto the recipient should they require a variation to the term, rather than the payer to seek a reduction or to bring the term to an end. 

MAP and MFP [2015] EWHC 627

This was a long marriage case where there were four adult children and a very successful family run business.  Issues of add back and application of the sharing principle.

The parties separated after 40 years and had been childhood sweethearts.  H was 62 and W 61.  H had left school aged 15 and commenced a four year apprenticeship as a property maintenance engineer.  Thereafter he had been extremely successful and was Managing Director of a property maintenance company.  H was a 95% shareholder and W held the remaining 5%.  There were four adult children of the marriage.

At the time of the hearing, W remained in the former matrimonial home valued at £2.3million and mortgage free.  H was living in rented accommodation in London.  Several of the parties' children or their spouses, and three grandchildren were employed in some capacity by the business. 

The business was a family affair.  The judge found that while the H was the driving force behind the business, W had worked in the business and performed the role of homemaker and child-carer.  The judge had no doubt that he should "treat their contributions to the marriage as equal."
At the time of the hearing, the business' annual turnover was £19.5 million, the gross profit was £7.1 million and the net profit, after tax, £1.3 million.  The business' performance was improving year after year.

The parties started life with a modest standard of living.  However, the judge found the standard of living had been very high for ten years, and that there had been "significant 'wasted' expenditure."  He found an average spend of £1.3million per annum in the four year period between 1 June 2010 and 31 May 2014.  W also provided a spreadsheet showing spending on the Director's Loan Account from 1 January 2013 to 29 December 2014 in the sum of £3,444,402.

In addition to their matrimonial home, each party owned a Spanish Villa, W's being worth £611,019 and H's £591,698 with a mortgage of £232,755. There was also a mobile home, some savings, motorcars, and some contextually modest pension policies.  There were tax liabilities and H owed the company £1,800,000.  The parties appointed a Single Joint Expert to value the business and they agree to his valuation of £23.1 million net after payment of a dividend of £3 million valued on the basis of its future maintainable earnings after tax and depreciation.  By the time the SJE updated his report on 23 January 2015, H's shares were calculated to be worth £28,850,000.  After tax and repayment of his loan to the company, the net value to H was £20,625,200.  The net value of W's shares was found to be £1,087,200.  Net maintainable income was in the region of £1.1 to £1.2 million and it was accepted H could borrow £3,185,000 personally to be secured against the business premises with interest of £228,000.

The marriage had broken down principally as a result of W becoming aware that H had been using cocaine and abusing alcohol.  W alleged H was spending £6,000 per week on his drug addiction as well as large sums on prostitution.  Despite periods in rehabilitation, H could not clear himself of these addictions.  The judge was concerned for H's life.

It was agreed in principle that the parties should share the assets of the marriage.  However, W sought add back of £1.5 million to reflect the H's "reckless and wanton expenditure over the last seven years."  This included seeking compensation for tax charges to be incurred by the W as a result – on her case – of being wrongfully dismissed as an employee of the business.

Add back
The judge reviewed the authorities on add back and state that "I am going to have to determine whether or not there was dissipation with a wanton element." He went on to stated that "a spouse cannot take advantage of all the good characteristics of his or her partner whilst disavowing the bad characteristics."  He was clear to point out (at paragraph 87) that post Calderbank days, he was quite entitled to disregard W's open offer to settle matters made prior to the final hearing, which had not included any element of add back.  He stated: "I will have no hesitation in a suitable case in awarding an applicant more than an open offer he or she has made if that is justified."
In respect of overspending on lifestyle, property refurbishment, and even cocaine use and prostitution, the judge could not make out a "deliberate or a wanton dissipation".  He found that the behaviour was "irresponsible" and "may have been morally culpable." However, it would be wrong to add it back and "a spouse must take his or her partner as he finds him." 

The judge added back onto the schedules the sum the W would have to pay in tax given her dismissal from the company as well as the sum incurred because of the loss of Entrepreneur's Relief - in the sum of £271,000.  While the judge made no findings about the reasons for W's dismissal, he found that H could have found a means of dismissing W that would not resulted in a loss of this tax relief and consequently the W should not be penalised.

After a long marriage of joint endeavour, H and W were to receive £12,355,222 each (subject to adjustments set out at paragraph 99).  Wife would receive the former matrimonial home, her villa and mobile home, bank accounts of £369,040, personalised number plates worth £200,000, the pension policies (£362,640) and initial lump sum of £3,000,000 (payable within 42 days) and a subsequent lump sum of £5,567,347.  As to the timing of the second lump sum, W sought a two year deadline and H sought five.  The judge weighed up H's ability to pay, his established pattern of overspending and the fact the company continued to be profitable despite H having periods of incapacity as a result of his addiction.  He found the company to be "readily sellable given that it does not appear to be tied nearly so closely to the skills of its owners as many companies that are considered by these courts."  The judge decided three years was sufficient and tied the deadline to H's 65th birthday.  At that stage the judge said he would have to decide whether to raise the money, sell up or float.  The judge did not apply an order for sale at the three year deadline (13.2.18) as W was to have an equitable charge over H's shareholding and if necessary could apply for an order for sale pursuant to section 24A MCA 1973.  He also felt that an order for sale might "interfere with legitimate attempts to float the company."  Until discharge of the second lump sum, he ordered that W receive maintenance at 3% being £164,770 net with a section 28(1A) bar.  W's shares were to be transferred to H immediately.

W sought an order placing a cap on H's spending but the judge found this unnecessary and said it would need policing and so was essentially impractical.

Wyatt v Vince [2015] UKSC 14

The parties were divorced 22 years ago, decree absolute being granted on 22 October 1992.  The court file was lost and so the only record was the decree absolute held by both parties.  Proceedings were originally issued in Sunderland County Court.  Shortly after the grant of decree absolute, the court file was transferred to Gloucester and Cheltenham County Court and it was at this stage that the file was lost.

In 1991, there had been proceedings between the parties issued by H at the Sunderland FPC.  He had sought a residence order in respect of the children.  The justices determined the children should reside with W and also ordered H to pay nominal periodical payments to W for the benefit of the children.
In 2011, W issued an application for financial orders.  In her application, W sought:

• a lump sum in satisfaction of all her claims, comprising £500,000 for a housing fund and £1,350,000 in the form of a fund to maintain her for the rest of her life
• an order that H should make interim periodical payments to her in sums equal to her estimated costs of the substantive application pursuant to the decision of the Court of Appeal in Currey v Currey (No 2) [2006] EWCA Civ 1338.

H cross applied and sought an order that W's substantive application be struck out pursuant to Rule 4.4 of the FPR 2010. 

As the court file had been lost, the court had to consider whether it had jurisdiction to consider W's application at all.  The issue was whether the court had previously made a nominal order that H make periodical payments to W, whether there had been "no order", or whether it had previously dismissed W's financial applications.  Both the Court of Appeal and Supreme Court found it likely that "no order" had been made, and so as a matter of law the court had jurisdiction to consider W's application.

At the time of her application, W was aged 55 and in poor health.  She owned a four bedroom property in Monmouth, which she bought for £60,000 from the Local Authority in 2010 on a discounted basis under the "Right to Buy" scheme with a mortgage in that amount.

H was aged 53 and had achieved brilliant success.  Following the breakdown of the marriage he was a new age traveller who protested about nuclear weapons and was in favour of green solutions.  The court noted that "His longstanding interest in green-energy, together with his innate scientific ingenuity, led him in due course, and from the smallest beginnings, to develop a commercial supply of wind power.  He is now the sole shareholder of Ecotricity Group Ltd, a company which, through others, provides green electricity to at least 70,000 homes and businesses in the UK from its fleet of turbines.  The value of his company is at least £57m.  He lives with his second W, their small son and Dane in a Georgian hill fort in Stroud." 

W has four children – all adult.  The first, Emily, was a child of the family although born prior to W's marriage to H.  Dane (31) lived with W until age 18 when he moved to live with the H.  Robin (21) and Jessie (18) were born after the breakdown of the marriage and live with W in the Monmouth property although their own father has never maintained them.  It is stated that W subsists partly on wages, and partly on state benefits.  The three adult children are found to make no more than modest contributions to the running expenses of the house.

In very brief summary, W and the children moved around to live in various locations (including rental accommodation, at travellers' sites, and at one stage a shelter for the homeless).  It is accepted they lived hand to mouth.  H saw the children sporadically, and there was a period when Emily lived with him for a short spell.  However, for the most part, he made no financial contribution towards their upbringing.

In bringing her application, W relied on H's lack of financial support for Dane until 2001 and his failure to support Emily from 1984 onwards.  It was stated that it was "virtually common ground that during all those years H did not provide W with any substantial payments of maintenance for either of the two children; and that she struggled to maintain a home for them in circumstances of real privation bordering on poverty."  There had been historical attempts by W to secure financial support.  In 1992, the Justices of Sunderland FPC had ordered nominal maintenance in favour of the children, and in 1997 the CSA assessed H as having nil liability.  W stated she had twice approached solicitors (in 1994 and 1996) in what turned out to be unsuccessful attempts to secure maintenance for her and the children.  H's first profits were generated in 1997 and therefore it was only in the final years of Dane's minority that H was in a position to pay substantial maintenance for him.

At first instance, Mr Nicholas Francis QC dismissed H's cross application and on W's application ordered H to pay to W (in fact directly to her solicitors) £31,250 per month for four months (a costs allowance order).  H appealed to the Court of Appeal against both orders.  The CA ( [2013] EWCA Civ 495) set aside the orders of the deputy judge, struck out W's substantive application, and ordered that, of the £125,000 which by then H had paid in full, W should repay to him such sum as exceeded the state of her account with her solicitors on 17 January 2013, which amounted to an order for repayment of £36,667.

The W's appeal
Before the SC, W sought a reinstatement of the orders of the deputy judge.  W's appeal raised the following questions:

• (a) What is the extent of the jurisdiction to strike out a spouse's application for a financial order under Rule 4.4 of the family rules?
• (b) In the light of the factors relevant to the determination of W's application did the Court of Appeal err in striking it out? 
• (c) If the answer to question (b) was yes, what case management directions would be proportionate to the unusual circumstances of W's application? 
• Irrespective of the answer to (b), did it err in setting aside the costs allowance and/or in making a repayment order?

Lord Wilson was first concerned with the scope of the strike out provision contained at Rule 4.4 FPR 2010, and its corresponding Practice Direction.  He reviewed the findings of the Court of Appeal and notes Thorpe LJ struck out W's application on Rule 4.4(a) as having no reasonable grounds to bring it.  He then considered the alternative basis on which the Court of Appeal saw fit to strike out the application, namely that an application with no real prospect of success was an abuse of the court's process.  He compared the family rule with the equivalent rule contained in the Civil Procedure Rules (Rule 24.2) and found that Jackson LJ was wrong to suggest that the absence of a family rule to strike out an application which has no prospect of success was accidental. "It was deliberate."  Lord Wilson then referred to the court's duty pursuant to s25 MCA to have regard to all the circumstances and in particular the eight matters sets out at s25(2). 

"The determination of an application by a court which has failed to have regard to them is unlawful: Livesey (formerly Jenkins) v Livesey [1985] AC 424 at p 437, Lord Brandon of Oakbrook. The meticulous duty cast upon family courts by section 25(2) is inconsistent with any summary power to determine either that an ex-wife has no real prospect of successfully prosecuting her claim or that an ex-husband has no real prospect of successfully defending it." (paragraph 27)  

He concluded that "Rule 4.4(1) of the family rules has to be construed without reference to real prospects of success."  The real test is whether an application is "legally recognisable" and so, for example, an application could be struck out if it had already been finally determined.  Lord Wilson was also clear in determining that his analysis is consistent with the court's obligations to give effect to the overriding objective. (paragraph 28)

Lord Wilson then turned his attentions to a provisional evaluation of the issues which he considered consistent with the court's duty to actively manage the case (Rule 1.4(1) FPR).  He recognised the significant weaknesses in W's case given the length of cohabitation lasting only two years, the marriage ending over 30 years ago, the very low standard of living, the point in time at which H created his wealth, no contribution by W and her delay in bringing proceedings.  He acknowledged that pursuant to s23(1) and 24(1) MCA, there is no time bar to seeking financial relief.  Despite this, he stated the court will look critically at any delay "and, even irrespective of its effect upon the respondent, will be likely, by reason of it and subject to the potency of other factors, to reduce or even eliminate its provision for the applicant."  He was also clear that the effect of any delay on a respondent is a consideration, but that in the case of H the only effect of the delay is to deprive him of the chance of establishing that in 1992 W's financial claims were dismissed.
W set out a case based on need.  She argued that she lost the opportunity to obtain degree qualifications and maximise her earning capacity.  She sought a total of £1.9m which Lord Justice Wilson dismissed as "an award approaching a size that is out of the question."  He was clear that a rich H is not obligated to meet the needs of an ex-wife, and also that needs must exist and have been generated by her relationship with her H (Miller v Miller, McFarlane v McFarlane [2006] UKHL 24, [2006] 2 AC 618).  Lord Wilson stated that it is unclear whether W would sustain her claim on the basis of need. 

Lord Wilson was more sympathetic to the argument put forward by W pursuant to s25(2)(f) MCA 1973 i.e. the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family.  She referred to her care of Dane and Emily, the absence of any financial support from H and the conditions of poverty in which she was constrained to provide such care to Dane and Emily during those years.  He referred to the case of Pearce (1980) 1 FLR 261 in which Ormrod LJ awarded a W £12,000 from H's inheritance of £34,000 received 9 years after their separation.  She had raised their three daughters without any form of financial support and the Court of Appeal considered that justice required the award despite the lapse of time.

Ultimately he suggested the swift referral of W's application to a Financial Dispute Resolution Hearing and suggested that the two "magnetic factors" were W's delay and H's disparate contributions to the care of the children.  He stated that he considered W's case to have a "real prospect of comparatively modest success, perhaps of an order which would enable her, like the wife in the Pearce case, to purchase a somewhat more comfortable, and mortgage-free, home for herself and her remaining dependants."

The costs allowance order
Lord Wilson restored the deputy judge's costs allowance order having found W met the criteria set out in Currey.  That order was found to be for the direct benefit of W, not her solicitors, and it would have been for W to enforce it.  The monies paid into W's solicitor's account were for W's benefit, albeit held subject to the terms of the deputy judge's order.

Graham-York v York [2015] EWCA Civ 72

This is a case concerning the beneficial interests in a property held in the sole name of one cohabitee.

Miss Graham-York lived with the late Mr York from 1976 until his death in 2009. From 1985, they lived together in a property bought by Mr York in his sole name in 1982. Following Mr York's death, Miss Graham-York continued to live in the property, which remained in the late Mr York's name. Miss Graham-York and Mr York had two children together who were adults at the time of proceedings.

Beneficial interest in the property
The property was purchased with a mortgage. Miss Graham-York had no or no significant income and so mortgage arrears of approximately £58,000 accrued following Mr York's death. Mr York's son from a previous relationship was his personal representative. The mortgage company sought judgment in respect of the entire indebtedness secured by the property of £450,000 and possession of the property from Mr York junior. Mr York junior, who was on bad terms with both his father and Miss Graham-York, did not contest the claim. An order was made in favour of the Building Society for the full amount of the indebtedness and Mr York junior was ordered to give them possession on or before 9 March 2011. Miss Graham-York was joined to the proceedings and resisted the claim for possession, bringing a counter-claim against Mr York junior for a beneficial interest in the property.

Miss Graham-York claimed there was a constructive trust based on common intention and that she had an overriding interest which took priority as she was living in the property by the time Mr York secured a remortgage to which she was not a party in 1990.

At first instance, the judge found that Miss Graham-York had a 25% beneficial interest in the property, that she should give possession to the mortgagee on or before 8 March 2014 and that she should receive 25% of the balance remaining once the mortgage had been discharged in full and the costs of sale had been met. Although her financial contribution "did not amount to much" (she had made some money working as a singer between 1976 and 1985) she had made domestic contributions. The judge found that although there was no express agreement as to the beneficial interests, Miss Graham-York's income contributed to the family income before and at the time of purchase and so a common intention could be inferred (per paragraph 61 of Stack v Dowden). A fair figure for Miss Graham-York's interest to reflect her contributions both financial and non-financial was 25%.

Miss Graham-York appealed on two issues:
i) the judge erred in finding that her interest was not equal to that of the late Mr York and her share should be 50%; and
ii) the judge erred in finding that her 25% share should be paid to her only after repayment of the mortgage.

The Court of Appeal held that in the case of sole ownership, they should have regard to the whole course of dealings between the parties, per Oxley v Hiscock. Where a property is held in one party's sole name and there is no common intention in relation to the proportions in which the beneficial interest should be held, there is no starting point of equality. The Court of Appeal therefore rejected Miss Graham-York's claim that her beneficial interest in the property was 50%. They held that 25% was within the ambit of reasonable decision making and so there was no need to interfere. Interestingly, they commented that, had the figure been evaluated at 33%, this too would have been unassailable. 

Equity of exoneration
It was only after the judge's first judgment was made available to the parties on 24 January 2014 that Miss Graham-York raised a reliance on equity of exoneration. There was argument on 19 February 2014, when the judgment was handed down, but by that time it was far too late to raise this further issue. 

The only outstanding issue was whether Miss Graham-York's 25% interest should have been paid to her before, rather than after, the mortgage was discharged.  It would be unconscionable for Miss Graham-York to share in the benefit of Mr York's business interests without sharing the burden of the mortgage. When considering the whole course of dealings, it having been concluded that Miss Graham-York was entitled to a 25% beneficial interest, it would have been artificial and illogical not to acknowledge that that must in the circumstances be a 25% interest subject to the mortgage indebtedness from which both parties derived benefit.

Miss Graham-York's appeal was therefore dismissed on both issues.

Joy v Joy [2015] EWHC 455 (Fam)

This case concerned an interim hearing in long-running financial remedy proceedings. W's primary objective was to secure the position in relation to H's 1928 4.5 litre racing Bentley, located in the south of France and worth between £472,000 (according to H) and £1 million (according to W).

Many orders had been made in the course of this long-running litigation, including substantive freezing orders and maintenance orders. This hearing was a return date for consideration of whether or not without notice orders made by Mr Justice Cobb should be continued, varied or allowed to lapse. W's applications for leave to restore her applications which had been adjourned were also to be considered. H had also made applications for the order of Mr Justice Cobb to be discharged and to vary/discharge the maintenance orders.

The parties were married from February 2006 to December 2011, with cohabitation commencing in 2001 (W) or 2003 (H). There were three children aged between 3 and 8 years old. H remained in the chateau in the south of France, their last matrimonial home, whilst W lived in rented accommodation nearby. The children spent time with both parties.

The parties' wealth derived from H's business activities, commenced and continued during cohabitation and marriage. H placed the bulk of the wealth into trust in the BVI in December 2002, for the benefit of him and the children. The trust was worth in the region of £70million with potential contingent liabilities of £21million. When the family moved to France, H and the children were excluded as beneficiaries for tax reasons.

An order was made on 12 June 2013 for H to pay €14,700 per month to W for herself and the children, including a French child maintenance order of  €3,600 per month. H was also ordered to pay W £120,000 over 8 months for legal fees. 

H did not comply with these orders. There was a further hearing on 12 November 2013. H had complied with the French child maintenance order and had paid W's rent but he had paid only two monthly instalments totalling £30,000 for W's legal fees.  H had made no further payments by the time of this hearing in February 2014. The outstanding liabilities for maintenance and legal fees stood at €60,000 and £90,000 respectively.

After the 12 November hearing, H's facility with the overseas bank ceased and the bank chose to enforce its security; supposedly on the basis that the facility had been placed into default as a result of a previous High Court freezing order. On 28 November, W was informed that H had been excluded from being a beneficiary of the trust on a permanent and irreversible basis. The trust incurred significant loss and the trustees sought to implement the trust's security charge over H's assets. Sir Peter Singer recorded that "H appeared on the face of it to be 'equally indigent in cash flow terms' as W." 

The applications
H sought relief by way of discharge, suspension, variation and remission of the June 2013 order. W sought enforcement and a Hadkinson order debarring H from defending her claims for financial remedy. W particularly sought delivery up of the Bentley to her agents in order that it may be transported to England, marketed and sold with the proceeds to be held by the court.

H had pledged his Bentley to EFG to secure a loan facility. However, EFG had called in the charge and repaid itself from the trust assets which meant that the Bentley was free. On 13 December 2014, H executed a deed which pledged the Bentley to his solicitors. W's solicitors did not become aware of this development until January 2014.

W's application was based on FPR 20.2. No mention was made of the Bentley in the prayer in W's petition so it was necessary to consider whether the vehicle qualified as 'relevant property' under FPR 20.2(2) and whether it was property 'as to which any question may arise on an application'.

It was held that there was 'no reason in logic or principle why for this purpose the W's restored application for enforcement of maintenance pension suit and legal services provision orders hitherto made is not "an application" within which questions as to the Bentley may arise.' Whilst any decision would be subject to the outcome of H's variation application, Sir Peter Singer's view was to 'regard the sale of the Bentley in appropriate circumstances as desirable quickly if, for instance, that sale would provide W with some urgent relief from the parlous risk she runs of finding herself unrepresented in these proceedings because of H's asserted inability to comply even in part with past orders without recourse to those proceeds.'

Directions were given for the Bentley to be placed in the custody of W's agents for transportation to England and to be kept here pending further determinations.

H was refused permission to appeal and refused a stay pending a proposed appeal but the date for delivery up of the Bentley was deferred to enable any renewed stay application to be made to the Court of Appeal.

D v D [2015] EWCA Civ 181

Here the Court of Appeal set aside the decision to strike out H's appeal in financial remedy proceedings on the basis that it was wrong in principle and on the facts of the case.

In July 2013, financial remedy proceedings were determined before a Deputy District Judge at Romford County Court but his order was not handed down until December 2013.  H was granted permission by the Deputy Judge orally on the day of the hearing to appeal.  As part of the permission, H asked for and was given a direction for a transcript of the judgment at public expense and a short extension of time to file his notice of appeal.

H then applied for a further extension of time and made attempts to obtain the transcript, which was never forthcoming.  Neither was a hearing listed to consider his application for an extension of time to file grounds of appeal.  His attempts to obtain the transcript were recorded in a statement and demonstrated he made telephone enquiries, attended at the court counter at Romford County Court and sought permission to inspect the court file.
In June 2014, Judge Hughes heard H's appeal, and at the same time W's request to strike out H's appeal.  The W's ground for strike out was that H had not provided any grounds for his appeal.  Judge Hughes struck out the appeal and the matter came before the CA to determine whether "the judge was wrong to have struck out the appeal."

Lord Justice Ryder gave judgment, with which Lord Justices Longmore and Briggs agreed.

In this matter the matrimonial home, based in Essex, had been transferred from the parties' joint names to an entity called Miller Group Limited for tax reasons.  MGL was a trust which was registered in Lichtenstein.  The family trust, the D trust, is the Newhaven Trust Company Limited (Newhaven), which is an entity registered in the BVI, and the family trust holds the shares in MGL.  W was neither a director of shareholder of MGL.

The Deputy District Judge's order was found to be flawed in certain respects:

• He had adjourned consideration of the parties' income needs to a further hearing, which did not appear to have taken place.  This raised concerns over the application of the s25(2) criteria;
• His judgment was clear on its face that the process of determination of financial remedy application was incomplete;
• He ordered that all available assets i.e. the matrimonial home and a property in Turkey be transferred to W.  In relation to that order, the s25 analysis was missing;
• The court was not able to order a third party to transfer ownership of the matrimonial home and there was no argument successfully identifying a resulting or constructive trust.

In relation to the appeal before Judge Hughes, Lord Justice Ryder found that the time estimate for that hearing was inadequate.  From exchanges between H and the judge, it was clear the judge's attention was not drawn to the appeal notice containing H's application or H's witness statement which set out his attempts to obtain the transcript and which also explained why he wanted to inspect the court file.  The judge found that H had failed to plead his grounds and that he had had ample opportunity to obtain the transcript.  She did not accept H's assertions in that regard.  "She concluded that he had pursued an intention to inspect the file which was irrelevant and had not pursued his intention to obtain a transcript."  As a determination of fact, Lord Justice Ryder found that was plainly wrong.  The judge relied on FamilyMan which had not taken note of the fact H had requested the transcript.

Ultimately, Lord Justice Ryder was unhappy about many flaws in the entire process to date.  She concluded that:

"It is undeniable that Judge Hughes misconstrued the prima facie facts and accordingly, could not have struck out this appeal in accordance with the rules.  Her primary reason for doing so was not that there had been non compliance with the rules and practice direction, but that the husband had not made any or any sufficient attempts to obtain the transcript.  That was wrong."

Appeal allowed.

Dickson v Rennie [2014] EWHC 4306 (Fam)

This case concerns a mother's application under Schedule 1 to the Children Act 1989 and whether or not it is necessary for there to be a maximum Child Maintenance Service assessment in order for a "top-up" order for child periodical payments to be made by the court.

At the time of the hearing, the child was 9 ¾  years old. The Father (F), who had moved to Jersey in 1994, was 57 and the Mother (M) was 44. Some 7 years earlier, shortly after separation, M had brought proceedings under Schedule 1 to the Children Act 1989. Both parties accepted that the court had jurisdiction to make the order sought by the M. Mr Justice Holman commented that at no point had F's legal advisors taken the point that the court's jurisdiction had been excluded by the Child Support Act 1991.
At the final hearing in June 2007, District Judge Walker had taken a global view of F's worldwide assets and income and made findings that F was a "person of significant wealth" although not "fabulously rich" with global assets of £8.5million and a net income assessed at £130,000 per year. DJ Walker ordered F to put a house in trust for the child with child maintenance payments to be made of £3,433 per month index linked. F promptly discharged all payments.

In December 2010, F applied for a downward variation of the maintenance payments but consented to a dismissal of the application and paid M's costs. In April 2011, M had another child with a new partner. In March 2014, F applied to the CMS who assessed his income at £20,000 per year, a substantially lower figure than that assessed by DJ Walker 7 years earlier. Taking into account overnight stays, F's child maintenance obligation was £1375 per year- a "stark and startling" reduction from the amount fixed 7 years earlier by DJ Walker. Despite this, F had been voluntarily paying £12,000 per year.

The Mother's application
The precise content of the application was unknown as both the court and M (who was at that time acting in person) lost the paperwork.  However, she subsequently instructed Counsel who applied for enforcement of periodical payments and a lump sum- a "full restoration" of DJ Walker's order. Holman J inferred that this must be an application under section 8(6) of the Child Support Act 1991. M then issued an application for a judgment summons for the enforcement of claimed arrears. The arrears arose from a dispute between the parties as to the date on which F's obligation to make payments pursuant to DJ Walker's order ceased and his obligations under the Child Maintenance Service commence, in spite of the fact that F had been overpaying his obligation under the CMS.

M also sought a lump sum. The application had three limbs. The first limb related to building works which were required to the house placed on trust by F. This was agreed subject to provision of receipts. The second limb was in relation to alleged maintenance arrears and M's debts incurred as a result of the drop in maintenance and the third was in relation to the costs of appeal in the First Tier Tribunal.

CMS jurisdiction
F lived in Jersey and was therefore not habitually resident in the UK. He claimed that he was "employed by a company of a prescribed description registered under the Companies Act 2006" which would fall within section 44 (2A) (c) of the Child Support Act 1991. It was on that basis that the CMS concluded that they had jurisdiction. M did not accept that the company was 'of a prescribed description' as F was a 99.8% shareholder and sole direction. She appealed to the First Tier Tribunal.

Holman J referred to comments made by Charles J in CF v KM (Financial Provision for Child: Costs of Legal Proceedings) [2010] EWHC 1754 (Fam), [2011] 1 FLR 208. Charles J himself had referred to various authorities in relation to whether or not a maximum CMS assessment was required to invoke the court's jurisdiction. Holman J noted that Charles J was of the view that the matter was arguable but that Charles J's comments were "plainly entirely obiter". He concluded that "there is simply nothing at all in the legislation which enables or permits any kind of challenge or appeal (absent judicial review) into the court system from the calculation or assessment that has been made by the Child Maintenance Service in any case or situation in which it is not arguable that the gross weekly income does, or may, exceed £3,000" and that it was "manifestly not the purpose of section 8(6) of the Children Act 1989" to provide "an avenue of challenge or appeal".

Holman J held that "the top up jurisdiction under section 8(6) of the Child Support Act 1991 is not available unless the Child Maintenance Service have themselves assessed the gross weekly income as being or exceeding £3,000 per week, or (which comes to the same thing) have made a maximum maintenance calculation, currently in the sum of £294 a week or £15,288 per annum. Accordingly, for so long as the asserted jurisdiction of the Child Maintenance Service remains in force, it is simply not open to the mother to seek, as Mr McGhee said she was seeking: "a full restoration of the previous order."

In relation to the lump sums, Holman J took care not to make provision for what would effectively be maintenance disguised as a lump sum. He found that there was a striking correlation between the amount put forward by M as her debts and the amount she claimed F owed in arrears, being the difference between the amount as ordered by DJ Walker at its current indexed level, and the amounts actually paid by F since he ceased paying at the full rate under that order. Holman J said that to entertain this limb of the application "would be very blatantly to flout the barrier or shutter erected by Parliament between the function of the CMS and the court".

The costs of the First Tier Tribunal were estimated by M's solicitors at £14,700 including VAT. Some of the figures were exaggerated or not applicable (such as preparation of a schedule of costs as the First Tier Tribunal is not able to award costs) and so £10,000 would have been a reasonable figure. Holman J referred to the decision of the Court of Appeal in Re S (Child: Financial Provision) [2004] EWCA (Civ) 1685, [2005] 2FLR 94 and to the decision of Charles J in CF v KM.

Holman J made a lump sum order in the sum of £10,000 that F was to pay within a very short period of time to M, expressly for the purpose of her funding her lawyers in the proposed appeal to the First Tier Tribunal and which M had to pay in its entirety to her solicitors as an upfront payment. She was ordered to produce the final itemised bill to F and to refund any overpayment. 
M's solicitors had made reference in correspondence to capitalising maintenance between now and the child ceasing tertiary education. This application was rejected as, even if it was appropriate to do so otherwise, "there was such a lack of clarity as to what the ultimate legal levels of maintenance are".

JL v SL (No 3) [2015] EWHC 555 (Fam)

This is the third judgment in this case relating to the distinction between matrimonial and non-matrimonial property and how to effect the division of assets to reflect non-matrimonial property. Mostyn J rejected W's application for post-judgment relief.

Mostyn J's judgment was finalised and handed down on 18 February 2015 (JL v SL (No 2) [2015] EWHC 555 (Fam)). Prior to this, Counsel had been given a short time to notify Mostyn J of any typographical or other corrections of a serious nature. Neither Counsel sought any corrections. However, on 25 February 2015, W's Counsel raised 13 points under two headings and requested amplification of Mostyn J's calculations and reasons for his judgment. Mostyn J found this to be "totally unacceptable." However, he decided not to summarily reject the application but to deal with it if only to dispel some "serious misconceptions".

Mostyn J used the Duxbury formula in his original judgment. W's counsel asserted that the Duxbury formula, " is a tool but not an accurate reflection of real rates of return." W's counsel had not adduced any evidence at the hearing or in this application to support this view and Mostyn J "unhesitatingly rejected" the assertion.

Prompted by W's Counsel, Mostyn J did consider an alternative approach to calculating W's needs but came to the same conclusion, namely that W could adjust to independence without suffering undue hardship.
W's application was rejected.

Hopkins v Hopkins [2015] EWHC 812 (Fam)

This case deals with W's application for financial remedy despite the existence of a post-nuptial agreement. W sought £2million in addition to the provision made for her in the post-nuptial agreement, signed in August 2011, which had been implemented save for the pension sharing order. H offered W an additional £200,000. W argued that the post-nuptial agreement was "vitiated by duress;  alternatively unconscionable conduct such as undue pressure (falling short of duress); alternatively other unworthy conduct such as exploitation of a dominant position to secure unfair advantage".

Bill (H) and Caroline (W) Hopkins had known each other since H was 25 and W was 28. Although both married to other people and with young children, they embarked upon a 'clandestine affair' which produced one child, William, in 1981. At the time of this hearing, H was 66 and W was 62. The parties' marriage lasted just over 2 years, from April 2009 to August or September 2011.

The parties did not cohabit during their initial relationship in the 1980s, although H bought a house for W in his sole name (Brook Street) and provided for some work to be done on the property. The parties' relationship ended in 1982 or 1983 and H continued to live with his wife. W married a man called Peter Griffiths. Mr Griffiths moved in to Brook Street with W. That marriage lasted 13 years during which time W and Mr Griffiths had a child together. In January 1989, title to Brook Street passed from H to W and Mr Griffiths although the circumstances in which that happened were in dispute in the proceedings. W signed a document acknowledging that H had sold her the property for £15,000, some £50,000 below market value, in full and final settlement of any claim she or their son had against him. H argued that this was the entire agreement between them whilst W claimed that a further cash payment was made to her by H.

In 2000, W made contact again with H, seeking assistance with the cost of their son's tertiary education. H had by now separated from his wife of 29 years. H and W went on holiday together at the end of the year and moved in together in 2001, into a house owned by one of H's business concerns. Following the dissolution of both parties' marriages, in November 2003, the parties moved in to H's former matrimonial home.

In 2006, W visited a matrimonial solicitor (Mr Stokes), for advice on her position were H to die, according to her, or, according to H, for advice on her rights in the event of separation. In November 2008, the parties separated for 1-2 weeks but reconciled and married in April 2009. W then gifted her share in a property to her daughter from her first marriage and provided £285,000 to William to assist him with buying a property in north London. W said that this was a gift and H said it was a loan.

In July 2010, W returned to see Mr Stokes and received a 21 page letter of advice covering her broad entitlement. The letter described W's 'only significant' asset as 'the loan which you have made to William of £300,000….William is expected to make arrangements soon… repay about 2/3 of the loan with the balance being forgiven as part of a family arrangement, which you have made with Mr Hopkins' concurrence'. H accepted that he knew of the loan but not of this arrangement.

By March 2011 (5 months after the decision in Radmacher v Granatino), W was instructing a Mr Martin of Poole & Co and H was consulting Payne Hicks Beach. The events of March 2011 were summarised the judgment as follows:

* On 4th March, PHB wrote to Poole & Co in the following terms: 'We understand that following some recent difficulties within the marriage, the parties have decided that it would be helpful to enter into a Post-Nuptial Agreement to regulate their financial affairs. Our instructions are that our client has agreed to transfer two properties and a car into your client's sole name in full and final settlement of any claims she may have against our client in the future'. The listed properties have remained as the principal provision contained within the agreement which was eventually completed, with the addition of a pension share.

* On 7th March, the wife went back to see Mr Martin, and on 8th he wrote to confirm that no financial agreement had in fact been reached. He indicated that the husband's proposal would be considered in the light of the parties respective financial positions, following disclosure.

* On 15th March, Mr Martin telephoned the wife, and recorded that she was 'at a somewhat low ebb' and 'still recovering from the effects of flu'. 'She said that her husband had been trying to persuade her to accept the terms of the original offer' which she was inclined to do. Mr Martin advised her to seek disclosure first. He records that he 'discussed the matter in full and Mrs Hopkins was pleased that we had spoken about this'. She agreed that he should speak further to PHB.

* At 4.47pm on the same day, she sent an email in which she said that she had 'thought long and hard, and really want to go with her original wishes, to agree to the settlement…' The deal proposed now includes the two properties, the car and 'seventy five thousand'. She continued: 'I appreciate you would have wanted to realize more for me, but signing the post-nuptial settlement this way will be almost instantly achievable, and this is very important to me. Although I would not want to go into battle with Bill, I also do have a vested interest in staying 'friends', for my son's sake if nothing else…'

* On 16th March, the parties attended a counselling session with a new pair of counsellors, one male and one female.

* On 17th March, the wife emailed Mr Martin and said: 'I am sure you think I am so weak in agreeing to Bill's post-nuptial settlement. But I am absolutely sure that this is the right thing to do now.'

* On 18th March, Mr Martin wrote to the wife, setting out the factual instructions which she has received from her, including that the husband was a very wealthy man with assets probably exceeding £30m. He also recorded what the wife has told him of the advice which she understood the husband has received from PHB, and disagreed with that advice, questioning whether what was relayed was accurate. He stated his belief that 'on a divorce a court would award you a lump sum equating to a significant proportion of Mr Hopkins' assets, and maintenance…' He told her that she should not make any decision until there had been proper financial disclosure. He said: 'I fear that you may be being bullied by Mr Hopkins'. He concluded that he would proceed if so instructed but would ask the wife to acknowledge that this was against his advice.

* On 21st March, the wife responded by email, saying: 'You are completely right in what you say, I am still being intimidated. I also feel quite ill with flu and all this upset. Part of me just wants to get (out) or should I say run away, and feels fairly content with what he is offering me. The other side is saddened by his offer, and being advised by yourself and loved ones not to agree, and as you say neither you nor they are suggesting taking him to the cleaners. Bill puts such a plausible case of what his solicitor has advised, and saying if I'm expecting more, and he has to reveal his assets, he threatens court.'

* On the same day she telephoned Mr Martin, and told him that there was no chance of a reconciliation. Mr Martin recorded that she also added that 'there was no doubt… that she was being bullied. In fact Mr Hopkins, when they were discussing the finances on the last occasion, he got her by the throat physically.' They agreed to proceed with a divorce. W had been staying with her brother in Gloucester since 18th March, and on this day she travelled to the parties' son Will's home in London.

* On the following day, 22nd, Mr Martin wrote to PHB that as there had now been irretrievable marital breakdown, financial issues would need to be resolved as ancillary relief. This letter apparently crossed with one from PHB serving the husband's divorce petition, and stating that the clients have now agreed that the marriage has broken down. They indicated that they were in the process of collating financial disclosure.

* Both parties however attended a further counselling session on 24th March, 2 days later, with the joint team that they had attended on 16th, and on 28th March the wife telephoned her solicitors again to say that 'there had been a number of discussions over the weekend, and as a result, they had agreed that the divorce was not proceeding and they would be proceeding along the Post Nuptial Agreement route'. The wife accepted that Mr Martin would be asking her to sign a disclaimer in this event. PHB confirmed to Mr Martin that their instructions were the same.

On 6 April 2011, PHB wrote to Poole & Co setting out H's proposals, being that W would receive the 2 properties, a car and a lump sum of £350,000 payable in the event of a subsequent divorce. W responded to Mr Martin to agree these terms. There then followed a number of emails from W to her solicitor which W asserted were dictated to her by H. H denied this.
It was agreed that on about 5 May 2011, the parties agreed to vary the agreement so that the lump sum was replaced by a pension share. The first draft of the agreement was sent to W on 7 June 2011. On 27 June 2011 an updated version was sent through which included H's disclosure. Mr Martin made it clear to W that he did not approve the terms of the agreement and that he had advised W about this. W replied to say that she was happy for the draft to remain as drafted but she asserted that H had dictated this email to her. H denied that this was the case. Mr Martin made it clear to W that he could not leave unamended an agreement which said that he was satisfied with its terms when he was not. He told W that if she signed the agreement then it would be watertight.

In August 2011, the parties returned from separate holidays. W contacted her solicitor to arrange to execute the post-nuptial agreement despite his advice and a Deed of Disclaimer was prepared. The disclaimer was clear and unequivocal and she acknowledged that she had read the agreement and believed she fully understood it and that she had been advised that it was not in her interests to sign it.

In June 2012, W signed but did not send a copy of a consent order prepared to reflect the terms of the post-nuptial agreement. On 24 October 2012, W instructed her solicitor to complete the minutes of agreement and the consent order but in December 2012, she dispensed with Mr Martin's services and returned to Mr Stokes.

W filed Form A in January 2013 and H made an application 6 days later for notice to show cause why an order should not be made in the terms of the agreement. Over £750,000 had been spent in costs in bringing the case to trial.

The Law
Consideration was given to the factors set out in Radmacher and the authorities referred to by Counsel. The couple's age, maturity and experience would count in favour of the agreement being upheld, together with the fact that W had received legal advice.

Mr Cusworth QC sitting as a High Court Judge held that W was not acting under any undue influence, duress or improper pressure when she entered into the post-nuptial agreement and that he should give it due weight in the section 25 exercise. The evidence from Mr Martin was that at the time of entering into the agreement, W was 'entirely comfortable' and 'cool, calm and collected'.

Following the property transfers provided for by the agreement, W had her present home with a net equity of £533,000, a small investment property with a net equity of £91,455, £307 in bank accounts and £12,745 in her pension fund.  The pension share offered by H was an additional £214,500. Without consideration of W's liabilities or the loan to her son, she had cash/property of £625,262 and a pension of £227,245- a total of £852,507. H contended that the £285,000 loan to William should be added to this sum. W deducted from her assets a loan from William of £86,000, her legal fees of £85,738 and other debts of £2,461. Her case was therefore that she had cash/property of £428,312 plus pension.

It was held that W was not under any duress or undue influence when she entered into the post-nuptial agreement and that the document was not a dishonest document. She had entered into the agreement freely and with a full understanding of its implications.

Finally, Mr Cusworth QC had to consider whether or not the agreement would 'leave W in a predicament of real need.' A relevant point in this case was that the terms of the post-nuptial agreement were largely based on express requests from W, such as the transfer of a property to her even thought it was owned by one of H's businesses rather than H personally. It was also H rather than W who proposed payment of a further lump sum, which then became a pension share.

A Duxbury sum to provide £36,000 pa inflated at 3% would require £500,000. The post-nuptial agreement would provide W with £91,455 in the investment property and £227,245 in pensions, leaving a shortfall of £181,300. The court had to consider W's alleged other debts and the £285,000 provided to William. W's account of whether this was a gift or a loan shifted over time and it was found to be a loan. The £86,000 which W claimed to have been a loan from William was taken to be part-repayment of the £285,000. The £85,738 in outstanding legal fees was clearly due.

It was held that the appropriate figure for the loan to William was 2/3 of £285,000, being £190,000 of which William had repaid £86,000 leaving £104,000 owing. This amount would cover W's outstanding legal fees and her other debts and leave a £15,000 surplus. Mr Cusworth QC stated that "the wife's shortfall, apart from that surplus, and if she is not to be placed in a situation of real need, has been quantified over and above what the PNA provided for her in the sum of £181,300. In addition to indicating through Mr Todd QC that no costs would be sought in the event that the PNA was upheld, the husband offers an additional payment to the wife of £200,000. It can be seen that this is almost exactly sufficient to meet the wife's needs as I have quantified them, adopting the housing needs she herself has expressed at the time of the agreement, and allowing her to maintain her unvarnished Form E budget. The further surplus of £18,700 may leave the wife with total additional funds of £34,500 which she should retain."

Gray v Work [2015] EWHC 834 (Fam)

This case concerns a W's application for financial remedy where the assets were worth around £144million. There was a post-nuptial agreement in existence and the Judge had to consider whether H had made a special contribution. The parties had been encouraged to reach a settlement so that they could divide assets as they wished and preserve their dignity. Instead, the hearing had been one of 'unedifying and destructive pugilism'. The assets were split equally.

The parties began a relationship when they were in their early-mid twenties. At that time, they both had modest incomes and no capital. The relationship and marriage lasted about 20 years. H built up his entire wealth of around £144million during the marriage and there was more than enough to go round. A post-nuptial agreement was signed about 5 years into the marriage. At the time of the hearing, H was almost 48 and W almost 46.

H was offered a job at private equity fund Lone Star in Dallas, Texas in 1997. After a short time, he was offered and accepted a role in Tokyo. W joined him about 6 months later.

The parties had a son in January 2000. He attended a boarding school in England. Their daughter was born in 2003 and was also a boarder at a school in England.

In 2000, although the parties had no continuing link with Texas, they negotiated and signed a post-nuptial agreement there and W flew to Texas to sign it. A clear purpose of the agreement was to 'partition' the parties' separate property i.e. to terminate any community of property under Texan or American law and to provide that property including future earnings was to remain the property of H or W alone.

In 2005, the family moved to Hong Kong. H had made a considerable fortune and thought that they could enjoy a better lifestyle in low tax Hong Kong. He found it more difficult than he anticipated to continue to manage Lone Star in Japan and his success diminished.

In 2007, H bought the house in Kensington and the family moved there in 2008, when H's employment with Lone Star terminated.  At the time of these proceedings, H remained living in the property. He became an Irish citizen in 2012 to minimise worldwide exposure to tax. Both H and W had expatriated from America with the aim of saving tax.

W had an affair with a Mr H in early 2013 and the parties had not lived together since March 2013. W had lived in a rented flat in Kensington with Mr H since then.

In July 2013, H sent W documents to support his assertion that his net worth for the purpose of a post-nuptial agreement was $216 million, or $176 million with a discount for illiquidity. He offered to pay her $71million by 5 instalments which she rejected. She said that she did not accept the figure for his net worth, he was offering her 40% when she considered that she was entitled to half and his proposal to pay by instalments was unacceptable when he had considerable liquidity.

H issued a petition in May 2013. W issued Form A and it was served on H in January 2014. H's counsel said that H's offer of $71million should be treated as withdrawn from then.

The Parties' Positions
H made an open offer which did not increase during the hearing. He would not agree to pay W anything from his own assets or separate property. He offered to pay her $5million being the value he attributed to her separate property which was in his possession or control. He said that she must pay her debts of $1,630,000 and from the balance, she must house herself provide herself with an income. He would keep their £30 million house in Kensington and their £18 million holiday home in Aspen.

H claimed that by coming to court, W had not complied with the terms of the post-nuptial agreement which meant that she was not entitled to claim any more money or anything other than her own $5million of assets. Holman J held that W was fully entitled under the terms of the post-nuptial agreement to pursue a claim for a range of statutory remedies against all of H's assets and that the agreements did not limit or impact upon the powers and discretion of the court. Holman J went on to say that if he was wrong in his conclusions, he considered that in this case, no weight or effect should be given to the post-nuptial agreement.

Consideration was given to the section 25 factors. In relation to the 'special contribution' argument, Counsel were only able to find three reported cases in the twelve years since the case of Lambert v Lambert [2002] EWCA (Civ) 1685, in which the Court of Appeal intended to close down the Pandora's Box of special contribution claims, in which the court has made a reduction or unequal award to reflect special contribution. There was no doubt in this case that H was very successful and performed very well in his job but it is necessary for the contribution to be unmatched and, in this case, W made a contribution by agreeing to move with H to Japan and to bringing up the children there. Holman J was not satisfied that H had established an unmatched contribution of the kind and to the extent required by the authorities. Holman J was also not persuaded that H displayed the exceptional and individual quality that the authorities required. Although good at his job and hard-working, he did not attract the funds from investors and his role in the company was not unique. Holman J did not therefore reduce the amount payable to W to reflect any special contribution.

Holman J's view was that the section 25 factors required an equal division of the assets. He was not prepared, however, to order the transfer of either the Kensington or the Aspen property to W, although they were free to agree between them that she should have one or the other and adjust the lump sum accordingly.

This case attracted media attention as a result of Holman J's comment to H - "I am not sure you and I are on the same planet." Holman J expressed disbelief that after a marriage of 20 years with assets of at least £150million built up over the course of the marriage, a wife could be expected to end up with net assets of just over £3million.

B v B [2015] EWHC 210 (Fam)

In this case, H appealed part of a financial remedy order. His appeal was dismissed.

The parties had been married for 14 years. They were in their early 40s and had 3 children aged between 3 and 10.

At first instance, the parties agreed an equal division of most assets, providing each with £770,000 in liquid assets and £326,000 of pension. H held loan notes and shares in the pharmaceutical company for which he worked and which had been acquired during the marriage. These shares and loan notes were non-transferable so it was ordered that W should share in their value as and when they were realised by receiving a lump sum or sums when H sold them. 

The value of the loan notes were to be shared equally as they would not be affected by H's endeavour but the shares were to be shared 60/40 in H's favour as his future endeavour could influence their value. The shares were valued at their subscription price of £99,000 and the court found that they could be very valuable in the future.

H appealed the element of the order providing for him to pay a lump sum or sums to W as and when his shares were realised. He would have preferred to pay W a lump sum of £25,000 (taken from his share of the proceeds of the sale of the family home) in return for him retaining ownership of all the shares. He argued that the finality of a clean break should be preferred to the more open-ended approach taken by the judge in the lower court. However, there was not a clean break in other respects as the District Judge had ordered payments of spousal and child maintenance and there was a school fees fund.

Bodey J held that the District Judge had sought to achieve fairness between the parties. He had referred to the guidance of Mostyn J in FZ v SZ and Another (Ancillary Relief: Conduct: Valuations) [2010] EWHC 1630, [2011] 1 FLR 64 and had also applied the reasoning in Evans v. Evans [2013] EWHC 506, [2013]2 FLR 999 properly. The decision had not been shown to be wrong and H's appeal was dismissed.

S v S [2014] EWHC 4732 (Fam)

In this case, questions were raised as to how to deal fairly with the fact that the husband brought substantial wealth into the marriage. Although the court applied the approach in  Jones v Jones [2011] EWCA  Civ 41 and N v F (Financial Orders: Pre-Acquired Wealth) [2011]EWHC 586 (Fam), it noted that such cases are "notoriously fact specific" and that there may be cases where the better approach is based on a general exercise of discretion (K v L [2011] EWCA Civ 550 and AR v AR [2011] EWHC 2717).

There was a complex history to this matter.  In short, the parties married in 2003 and separated in 2012. At the time of the hearing, H was 71 and had two children from a previous marriage, aged 42 and 37. W was 47 and had no children, despite IVF attempts. The current assets in this case totalled approximately £25million and H had brought £13million into the marriage.

H's case was that the entirety of the assets for division derived from the £13million and that W's claims should be based on needs alone. W's case was that the assets should be shared and that she should receive between 33% and 40%, equivalent to a lump sum of £9,150,000.  H sought to pay W £3.5million.

The court's job was to distinguish between passive growth on the £13million which would accrue to H and enhanced growth due to H's business activities which would be shared equally.  A heavily disputed issue was the length of pre-marriage cohabitation which W says commenced at the end of October 1995 and H says commenced at the end of 1997. Crucially, in that disputed period, H received a payment of £9million for a business transaction which enabled his business to grow. Bodey J found that the most likely date was "the mid to latter part of 1996" (para 57).

Bodey J stated the issues to be as follows:

• the duration of the parties' pre-marriage cohabitation;
• Was this essentially a 'sharing' case?  If so, at what percentage? 
• Or was this essentially a needs case?  If so, what were the wife's needs?  Should any such needs award, if it seems inadequate, be enhanced to take account of the 'sharing' principle? 
• What award would be a fair outcome in all the circumstances of the case having regard to section 25 of the Matrimonial Causes Act 1973? 

Bodey J accepted that H had brought £13million into the marriage. He was persuaded that this was a needs case. Guided by the accountants and erring in W's favour, he concluded that £6million was an appropriate figure for matrimonial property. Sharing that equally would provide W with £3million which H and Bodey J agreed would not meet W's needs. Applying Jones, he therefore awarded W 22% of the overall assets, being £5,600,000, comprising a housing fund of £1.75m plus £180,000 moving costs, £803,000 funding for a London property, £65,000 for a new car, a Duxbury sum based on income needs of £100,000 per annum and totalling £2,500,000, and a lump sum to meet legal costs of £410,000. Whilst H introduced the wealth, there was no mingling and it was not transferred into the parties' joint names. Bodey J ultimately concluded that H's huge financial contribution was a "magnetic factor" which must be "substantially reflected in the outcome" and whilst neither party would be happy with the award, it was fair by both parties.

N v N [2015] EWHC 514

Here, we have the extempore judgment of Mr J Bodey on the appeal by W for enforcement of alleged arrears of child maintenance and for variation of a previous child maintenance order with a consideration of the principle of res judicata.

This appeal is brought by W (H being the respondent) with the permission of Mr. Justice Coleridge, granted in April 2014 against an order of District Judge Marin in February 2014.

At first instance, the District Judge dismissed W's applications for the determination and enforcement of alleged arrears of child maintenance and for variation of a previous child maintenance order.  The basis for the dismissal was that this issue had been decided against W in the Courts of Illinois, USA, and that for W to seek to re-litigate them in this jurisdiction offended the principal of res judicata and/or amounted to an abuse of the process of this court.  The dismissal of the application for a variation of child maintenance was on the basis that the application was an abuse and should be struck out under Part 4 of the Family Procedure Rules 2010.

Bodey J was clear that before he allowed any appeal, he had to be satisfied that the decision of the lower court was "wrong or unjust because of a serious procedural or other irregularity in the proceedings in the lower court" (Rule 30.12.3 FPR 2010).

The parties were married in 1996 and separated in or before December 2004. Divorce proceedings followed in this jurisdiction.  At the time of the hearing, both parties were in or about their late forties.  There were two children of the family (17 and 12).  W lived with the children in this country and H lived in the US.  W was working part time as a teacher.  H was a computer software engineer whose income was said to fluctuate a good deal from year to year. 
In original financial remedy proceedings, W had been heavily criticised.  She had brought proceedings in both this jurisdiction, and the US, and the District Judge was critical of her "forum shopping".  The District Judge dismissed her capital claims and awarded her nominal maintenance (with specific conditions placed upon her in respect of any subsequent application to vary).  The District Judge also awarded child maintenance at a percentage rate of H's income – 20% while paying for two children, reducing to 15% when paying for one.

W applied for permission to appeal the order, and permission was refused, first by Her Honour Judge Pearl, and subsequently in the Court of Appeal by Lord Justice Wilson.  And so W tried in the US – first in Georgia and then in Illinois.  Once again, her appeal was before the Georgia Superior Court was dismissed.  In Illinois, the Judge struck out her application for enforcement of child maintenance, and found the English courts had ordered H to pay a fixed monthly sum of £160 for child maintenance.  The Judge accepted that if the order was on a percentage basis, there were arrears of $10,000.  There was also a direction in the order that H file certified tax returns.  By later hearing, the court held that H could not obtain tax returns in the way ordered and so denied W's application to be provided, annually, with certified tax returns.
Within a month of the Illinois proceedings, W issued an application to enforce child maintenance arrears out of Barnet County Court and to seek a variation of the nominal spousal maintenance order.  At first instance, W's applications were dismissed because the District Judge found she had not sought leave to apply to vary the nominal spousal maintenance order (as stipulated in the original order), and that the enforcement application was an abuse of the court process pursuant to Part 4 Family Procedure Rules 2010/offended the principle of res judicata.  He found that W had had a fair trial in the US and the judge had found the child maintenance order to be a percentage order based on "proper and fair reasoning".

Before Bodey J
Bodey J set out the scope of the principle of res judicata as follows:
"It is established that a foreign judgment will give rise to an issue estoppel, i.e. will prevent a party from denying any matter of fact or law necessarily decided by the foreign court, if these three requirements are satisfied: (1) the judgment of the foreign court must be of a court of competent jurisdiction in relation to the party who is to be estopped and it must be final and conclusive and on the merits; (2) the parties to the English litigation must be the same parties; (3) the issue must be identical in the two sets of proceedings. However it makes sense to say that caution needs to be exercised when considering the application of a foreign judgment, as per Lord Reid in Carl Zeiss Stiftung v Rayner and Keeler Ltd No 2 [1967] IAC 853 at 918C, where he spoke of "… at least three reasons for being cautious".

Whilst being very cautious not to offend the principle, Bodey J considered there was "a highly unusual set of facts" in this case.  The issue was one of misinterpretation in the US of the English child maintenance order, and H admitted to a minimum of £11,500 of child maintenance arrears in any event.  Bodey J considered that US judge's decision to interpret the child maintenance order as a percentage had the effect of "unintentionally reducing the value of the 2007 order."  While he accepted the W should have appealed in Illinois, he said that not doing so should not be fatal to her resisting the full rigours of res judicata.  He was persuaded that the case fell into an "exceptional category" and that by allowing the first instance decision to stand, the W and children would be faced with an "unacceptable injustice". 
Appeal granted for W's claim to enforce and permission also granted for W to proceed with her own application to vary maintenance.  The District Judge was in error to strike out W's application pursuant to Rule 4, FPR 2010.