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Finance and Divorce Update April 2017

Sue Brookes, Senior Associate with Mills & Reeve LLP analyses the news and case law relating to financial remedies and divorce during March 2017.

Sue Brookes, Senior Associate with Mills & Reeve LLP.

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

A. News in brief
B. Case Law Update

A. News in brief

Ministry of Justice YouTube video on digital courts
The video, Justice Matters, details how the HMCTS change programme will be implemented. It can be viewed here.

Family Justice Bill receives First Reading
The Bill, sponsored by Suella Fernandes MP, has received a First Reading in the House of Commons under the Ten Minute Rule and is due to have a Second Reading on 12 May 2017.  Whilst the Bill itself is still being prepared for publication, it will include provisions about the enforcement of child arrangement orders and a presumption in favour of shared parenting.  To follow progress of the Bill, click here.

Finding Fault? Interim findings published
In the wake of the Owens v Owens judgment, Professor Liz Trinder (University of Exeter) has published the interim findings from the "Finding Fault?" research project which is exploring the need for divorce law reform. It represents the first major research study since the 1980s. Some of the key findings are:

• The majority of divorces are based on 'fault' i.e. blaming one spouse for the marriage breakdown.

• Divorce petitions are not necessarily accurate records of who or what caused the breakdown of the marriage.

• Petitions can be based on compromise statements (a 'fudge') designed to minimise conflict and upset, or can be just one person's view of what went wrong with the marriage.

• The court cannot test whether allegations are true or not and petitions are taken at face value and "rebuttals" written on the form by respondents are ignored unless a formal 'Answer' to defend the petition is filed.

• The threshold for behaviour petitions appears to be lower than 30 years ago. Very few petitions appear to be rejected on substantive legal grounds, whether 'true' or not.

For the interim report, click here.

Lord Wilson supports binding PNAs
In an extra-judicial speech to the University of Bristol Law Club, Lord Wilson said "My own view is that we have now reached the stage in which, if acting with appropriate care and understanding, parties should be allowed to elect the sort of marriage which they want." He discussed the rulings in Radmacher in both the Court of Appeal and Supreme Court as well as joint lives maintenance.  For the full text of Lord Wilson's speech, click here

Brexit and family law
The recommendation of a new report of the House of Commons Justice Committee is that the government should prioritise retaining efficient means of resolving family law cases when negotiating its Brexit deal.  Whilst the Committee recognises that Brussels IIa and the Maintenance Regulation are not without fault, in the view of the Committee, they are improvements over their default alternatives, and mutual recognition and enforcement of judgments in family cases is of demonstrable value in resolving cross-border instances of child abduction and non-payment of maintenance. For a summary of the report, click here. The full report is here.

B. Case Law Update

B v G [2017] EWHC 223 (Fam)
Husband (H) and wife (W) were married and lived together for around 12 years and had one son, now 12 years old. Neither W or H worked. H, having inherited significant sums from his father, was a wealthy man and had never worked. At 65, he was deemed to be incapable of earning any worthwhile income. W qualified as a mathematician and, although she claimed she would like to, had not worked for some time. As such her earning capacity was purely speculative.

In 2013, Blair J, ordered that a £6M house, beneficially owned by H, should be sold and a lump sum of £1.6M paid to W. In the meantime, W was permitted to continue to live at the house and was to receive periodical payments for herself of £55,000 per annum and £10,000 per annum for the child. It was clear from the order and judgment that Blair J contemplated the house would be sold within a short space of time. However, that had not happened.

H, wanting W to vacate the property, secured a loan against the house and paid W £1.6m, so she moved to rented accommodation. However, H could not afford to pay both the interest on the loan (£64,000 per annum) and W's periodical payments.

At an earlier hearing on 31 August 2016, when W had tried to recover the arrears which were beginning to accrue, the court held that the arrears should not be paid to W, whilst she still had the £1.6m from which to support herself. By the date of the hearing (17 January 2017), the arrears were up to £37,919.

Between the August 2016 hearing and the January 2017 hearing, W purchased a £1.4M flat. Taking into account stamp duty, legal fees, £80,000 spent on a failed business venture and various other expenses, most of the £1.6M had been spent.

Holman J found that W had £78,000 of liquid capital available, and that she should not have to exhaust this to support herself. Accordingly, he would not "remit for all time" any of the arrears owing. Instead, he suspended the need for the H to pay the arrears until the date on which the property was sold. In the meantime, the maintenance was reduced by just less than £2,000 a month, until the completion of the sale. 

K v K [2016] EWHC 3380 (Fam)
The issue before the court was whether, when faced with a purported marriage ceremony which the parties intended and believed was valid, but which did not give rise to a valid marriage because a) the husband was probably still married, and b) it was not registered, Francis J should grant a certificate to a decree of nullity, thereby allowing the petitioner to pursue a claim for financial remedy.

Both the husband (H) and the wife (W) had been married previously. W was divorced from her first husband in 1994. The parties met in the UK and were married in a Shia marriage ceremony in 1999 in South London. W believed that H was divorced from his first wife. It was common ground that this 1999 marriage was not recognisable as a valid marriage in England and Wales. 

Francis J accepted W's evidence that, realising the marriage was invalid, she ceased having sexual contact with H, and they led separate lives until after 28 August 2003. W claimed that on this date a formal ceremony took place at H's property, WH, in Pakistan, where the parties were given a marriage deed, which she adduced as evidence. The ceremony followed an earlier telephone conversation with an Imam and two witnesses (whose names were also on the marriage deed from 28 August) in Pakistan, during which the formalities of a Nikkah (Islamic marriage) were completed.

W had originally petitioned for divorce from H, however, when real doubts surfaced as to whether or not H was in fact divorced from his first wife, she amended her pleadings, to state that given the events of August 2003 did not give rise to a valid marriage, she instead required a decree of nullity.

H argued that W was lying. He claimed that the marriage deed was a forgery. However, despite being given the opportunity to make a s25 application for expert evidence on the point, he failed to do so.  H also claimed that the telephone call and the ceremony never took place, and that W had never been to WH. Francis J found that H was "caught out in his lies" on these and other points and preferred W's evidence.

However, finding that there was serious doubt as to whether H was divorced from his first wife, Francis J considered whether a bigamist marriage was a bar to the relief W sought. Applying Rampal v Rampal (no. 2) [2001] 2 FLR 1179, he found it was not: Rampal, he held, provides clear authority that an actual bigamist marriage, with the potential to be, but not in fact, polygamous, is to be resolved with a nullity.

When deciding whether to grant a nullity or declare there was nothing capable of being considered a marriage, Dukali v Lamrani [2012] EWHC 1748 provides authority that, where a ceremony which has the characteristics or appearance of marriage has taken place, each case is fact specific and should be decided on a case by case basis. 

On the facts of this case, Francis J relied on the parties' intentions and beliefs that it was to be a valid marriage ceremony and was satisfied that W was entitled to the decree of nullity that she sought.

Lachaux v Lachaux [2017] EWHC 385 (Fam)
The mother (M) was a British Citizen, the father (F) a French citizen. The parties were married in England in 2010 and moved to Dubai shortly after, where their son was born. F applied for a divorce from the Dubai non-Muslim court in April 2011, which he obtained in August 2012 (the "Dubai divorce"). M subsequently filed for divorce in England and was granted decree absolute in April 2016 (the "English divorce").

F had sought to have the Dubai divorce recognised in France, but his application had been refused on the grounds of public policy due to findings by the Dubai court that M had failed to obey him.

By 2017, there were applications from both M and F before the English court:

- M's had applied under s 8 Children Act 1989, for an order for contact with the parties' son, whom she had not seen since 2013; and

- F had applied for recognition of the Dubai divorce as valid, an order setting aside the English divorce and an order dismissing M's application for contact on the grounds that the court had no jurisdiction to hear it.

M argued that the court had jurisdiction under section 2 (1) (b)(i) of the Family Law Act (FLA) to hear her Children Act claim as it was linked to her English divorce, which would be valid if the Dubai divorce was invalid. 

There was no dispute between the parties that the Dubai divorce was effective and that at the date of the commencement of the proceedings, both parties were habitually resident in Dubai. Therefore, the divorce was entitled to be recognised under the Part II of the FLA 1986 (which re-enacts the repealed Recognition of Divorces and Legal Separations Act 1971) unless M could prove that one of the exceptions set out in s 51 (3) of the 1986 Act applied.

Mostyn J (MJ) found M had failed to satisfy any of the grounds set out in s 51 because she had had knowledge of the proceedings and had been given the opportunity to participate in them.  Further, the exception in s 51(3) (c) did not apply, as the divorce was found not to be contrary to the public policy of England and Wales. In fact, the divorce procedure used in this case was not dissimilar to that found in s 1(2) (b) of the MCA 1973. Although the wording "obey" was objectionable, the finding could equally have been expressed as a refusal by M to comply with F's reasonable requests.   As the Dubai divorce was valid, the parties were already divorced when M applied for the English divorce.

On the matter of construing section 2 (1)(b)(i) of the Family Law Act, MJ ruled that the residual jurisdiction provided by it had become redundant with the repeal of ss. 41 and 42 of the Matrimonial Causes Act 1973. The processes of child cases and divorce cases have been completely delinked and that there are "now no imaginable circumstances where it can be said that a child issue arises in connection with "matrimonial proceedings". Even if the Dubai divorce was not recognised, the jurisdictional requirement in section 2 (1)(b)(i) of the FLA was not satisfied, as W's Children Act Proceedings were not linked to her divorce proceedings.

M's applications were therefore dismissed. However, MJ made it clear that, whilst he did not have jurisdiction to hear the application for contact, he did have residual inherent power to be exercised in exceptional circumstances, to protect the welfare of a British citizen abroad who is a minor. That power includes bringing a child into the jurisdiction, which MJ warned he was prepared to do, should F break his promise to allow M contact with the child.

Mills & Mills [2017] EWCA Civ 192
Under a 2002 order, the wife (W) received periodical payments for herself of £1,100 per calendar month and the majority of the liquid capital from the marital assets, leaving the husband (H) with a small capital sum, his pensions and the business from which he earned his income.

In the years following, W made a series of bad financial decisions, buying a string of properties with increasingly larger mortgages, the eventual consequence of which left her in rented accommodation, having spent all of her capital from the divorce settlement. W made an application for increased spousal maintenance and/or a capitalisation of the same so as to achieve a clean break. H made an application for a decrease in payments and either a term order or capitalisation of a short-term order to lead to a clean break.

H argued that W had already had the lion's share of the capital and that his maintenance obligations had already extended beyond the length of the marriage, and would, with the absence of a term order, extend beyond the time that the parties' son finished his tertiary education.

HHJ Everall QC (JE) found that H was reliable, truthful and frank. He had remarried, and supported his new wife, his wife's daughter, his child with her, his son with W and W. JE analysed H's financial position, including his income and that of his capital interest in housing and in his business and found that he had could afford to pay the increased payments W was requesting.

JE found that W's monthly income needs were £2,982 and her net monthly income was £1,541 per month. This left her with a shortfall of £1,441 per month which was only partly met by H's £1,100 monthly maintenance payments.

JE dismissed both parties' applications, leaving H to continue his payments of £1,100 per month under the 2002 order.

W appealed, arguing that JE had found no basis on which to reduce her basic needs budget. Having found that W could not increase her earning capacity, JE made no findings as to how she was expected to reduce her income needs, or why she should live below the basic needs budget that he himself had approved.  

H argued that it could be construed that the basis for JE's order was W's financial mismanagement, and/or that JE did not have close enough regard for W's earning capacity and/or although JE had not reasoned why he had reduced W's budget, he was still entitled to do so.

The Court of Appeal (CoA) held that JE's findings were clear: whilst W had made a series of unwise investments she had not been financially profligate or wanton and there had not been financial mismanagement on her part.  JE also made specific findings that W had no greater earning capacity in her existing or any other employment.

The CoA found JE had made an error in principle in deciding that because W could not meet her needs, she would have to adjust her expenditure to reduce those needs, without explaining how. Such a conclusion would require reasoning but there was no reasoning in JE's judgment and accordingly it was not a conclusion open to JE on the facts that he had found.

H could afford to pay the increased maintenance payments and W was left with a shortfall but could not adjust her spending to reduce that shortfall, or increase her earning capacity to meet her needs. H was therefore ordered to pay increased periodical payments of £1,441 per calendar month. 

Permission to appeal was refused.

Norman v Norman [2017] EWCA Civ 120
A 2005 order provided that the wife (W) would receive spousal maintenance from the husband (H) at the rate of £1,000 per calendar month for 5 years, and contained a recital stating "It is both parties' intention that the wife will become financially independent from the husband within five years of the date of this order".

The order contained no bar and accordingly W was entitled to apply to extend the term, which she did successfully in 2009. Payments were extended to 1 April 2012, with a bar against extending the payments further. W appealed this order and the bar was removed.

The husband (H) then successfully appealed and the 2009 order was reinstated, with W's application to appeal to the Supreme Court refused.

In February 2010, W sought to have the 2005 order set aside in its entirety, alleging material non-disclosure by H. HHJ Raeside held that whilst there had been limited non-disclosure, it had not been material, so W's application was struck out. W was unsuccessful in her permission to appeal this strike out.

W brought a further application for set aside in 2015. This application was again heard by HHJ Raeside, who, citing the case of Henderson v Henderson [1843] 3 Hare 100 (which prohibits the same parties from litigating on the same facts, except in special circumstances) and applying the principle of res adjudicate, dismissed it on the basis that it was presented on exactly the same basis as the previous application, she had heard and struck out in 2010. 

W sought permission to appeal submitting that the judge had incorrectly treated the application as one to set aside the 2005 order, when in fact it was an application to set aside the order of 2010 which struck out W's application to set aside the 2005 order.  She argued that:

1) At the 2015 hearing, the judge had made an error of law, failing to apply the newly established rule in Sharland v Sharland [2015] UKSC 60.

At the 2010 hearing the burden of proof had been on W to show that H's non-disclosure was material to her case. At the 2010 hearing she had been unable to do so and had consequently lost her appeal. However, had HHJ Raeside conducted proper analysis of the non-disclosure in 2015, she would have found deceit amounting to fraud which, once established, applying the rule in Sharland, would have shifted the burden of proof to H to prove that his failure to disclose was not material to the outcome of proceedings.

This, W argued (following Arnold v National Westminster Bank plc [1991] 2 AC 93 and Virgin Atlantic Airways Ltd v Zodiac Seats (UK) Ltd [2013] UK SC46: [2014] AC 160), represented a material change in circumstances which would have allowed the court to go behind the principle in Henderson so that W's application was not barred from being heard.

2)  Section 31F(6) of the Matrimonial and rule 4.1(6) of the Family Proceedings Act 1984 allows the Family Court unlimited powers to vary, suspend, rescind or revise any order made by it and, given these far reaching powers, the court should not be constrained by the fact that the information upon which W relied at the 2015 hearing was the same as that on which her application in 2010 was based.

H argued that the court had no power to set aside an order refusing to set aside an order and that instead of the current appeal, W should instead seek to appeal out of time the 2010 order refusing her permission to appeal or, alternatively, make an application to set aside the 2005 order based on fresh evidence or a material change of circumstances.

The Court of Appeal held that s.31F(6) MFPA and rule 4.1(6) do not convey unlimited powers on the court to change or rescind previous orders.  Instead, the 2010 Rules are aligned with those of the CPR 1998 (Rule 4.16(6) being almost identically worded CPR3.1 (7)) and therefore the criteria in Tibbles v SIG plc (trading as Asphaltic Roofing Supplies) [2012] I WLR 2591 would apply to claims to vary orders under the FPR in the family courts, as well as to those claims subject to the CPR.

The considerations of finality, the undesirability of allowing litigants to have "two bites at the cherry" and the need to avoid undermining the concept of appeal, all required the curtailment of the otherwise open discretion of rule 4.1(6). Therefore, an application to set aside a consent order pursuant to this rule must be made promptly and will only be successful:

(i) where there has been a material change of circumstances since the order was made;

(ii) where the facts on which the original decision had been misstated; or

(iii) where there had been a manifest mistake on the part of the judge in formulating the order.

To allow an application under rule 4.1 (6), in this case, would be contrary to the Tibbles criteria as no adequate explanation had been given of the delay between the 2010 strike out and the application before the court in 2015. This was her third "bite at the cherry" and the course sought by W undermined the concept of appeal.

Without manifest mistake or misstatement of facts, the only ground available for allowing the appeal would be a material change in circumstances.  The rule in Sharland did not present a material change, as it was of no relevance to W's case. It mattered not whether the burden of proof had shifted to H. The issue was whether there was any change in the material circumstances that would allow W to set aside the 2005 order. W had already presented all her evidence of non-disclosure to the court, twice, and had not been able to dislodge the 2005 order. There was no new evidence upon which W sought to rely and therefore no material change of circumstances.

The principle in Henderson whilst concerned with abuse of process, formed part of the law of res judicata, a rule of substantive law.   Distinguishing Arnold and Virgin, neither of which were Henderson cases, the change in circumstances which W sought to rely on in this case were wholly different to the "highly relevant events" in Arnold and Virgin that would allow a "modern approach" to the rule of res judicata.

The application before the court was a Henderson case which would require "special circumstances" to be established if permission to appeal was to be allowed. The change in the law following Sharland, upon which W sought to rely, did not constitute a "special circumstance" as it was not relevant to establishing the fact or extent of any alleged non-disclosure. The rule would only come into play if W could establish more extensive non-disclosure, so as to prove deceit amounting to fraud. There being no new information or evidence available to W with which to do so, she could only attempt to do this by deploying the information already available to her at the 2010 hearing in a more effective way, which, the rule in Henderson did not allow.  As the change in circumstances did not relate to the issue which was being litigated, there was no basis on which to challenge the order.

W's overarching submission that permission to appeal be allowed so as to "work justice" between the parties, and that this represented a "special circumstance" for the purposes of Henderson was also rejected.

Owens v Owens [2017] EWCA Civ 182
The Wife (W) had petitioned for divorce on the ground of unreasonable behaviour, pleading the following particulars in support:

"1.  The Respondent prioritised his work over home life and was often inflexible in making time available for the family, often missing family holidays and family events. This has caused the Petitioner much unhappiness and made her feel unloved.

2.  During the latter years of the marriage the Respondent has not provided the Petitioner with love, attention or affection and was not supporting of her role as a homemaker and mother which has made the Petitioner feel unappreciated.

3.  The Respondent suffers from mood swings which caused frequent arguments between the parties which were very distressing and hurtful for the Petitioner who has concluded that she can no longer continue to live with the Respondent.

4.  The Respondent has been unpleasant and disparaging about the Petitioner both to her and to their family and friends.  He speaks to her and about her in an unfortunate and critical and undermining manner. The Petitioner has felt upset and/or embarrassed by the Respondent's behaviour towards her as well as in front of family and friends.

5.  As a result of the Respondent's behaviour towards her, the Petitioner and the Respondent have until recently lived separate lives under the same roof for many years and have not shared a bedroom for several years. On 10 February 2015 the Petitioner moved into rented accommodation and the parties have been living separate and apart since that date."

The Husband (H) filed an answer to the petition. W therefore applied for directions for trial and the court ordered her to amend her petition to expand upon paragraphs 3 and 4 of the particulars. H filed a further answer responding to each of her additional 27 allegations and there was a full day's hearing at which His Honour Judge Tolson QC (the judge) heard evidence from both parties.

The judge found that the marriage had broken down and W could not go on living with H. However, he dismissed W's petition on the basis that she had failed to prove, within the meaning of section 1(2)(b) of the Matrimonial Causes Act 1973 (MCA), that H had behaved in such a way that W could not reasonably be expected to live with him. He described W's allegations as, amongst other things, "hopeless", "at best flimsy" and "scraping the barrel".

W appealed on the basis that the original judgment was seriously flawed and, secondly, that her rights under Articles 8 and 12 of ECHR were engaged. 

The question for the Court of Appeal (CoA) was whether the judge was plainly wrong in his decision. The CoA concluded he was not and so the appeal had to be dismissed.

The judge had considered all 27 allegations (although the oral evidence focussed on W's top 3) and he had found that W's allegations were not examples of more widespread behaviour as she now sought to argue. Where the parties had disputed events, the judge had preferred H's evidence. He had clearly considered the subjective as well as the objective test required with an unreasonable behaviour petition. There was therefore no error of law, principle or approach.

The CoA confirmed that there is no Convention right to be divorced or to a favourable outcome in divorce proceedings.

The CoA clearly understands any frustration with the current law and its impact in a case such as this. However, even allowing for the changes in society since the MCA came into force, the court's job is to state the law not make it.

In his judgment, the President highlights what he calls the "hypocrisy" and "lack of intellectual honesty" of W remaining locked in a loveless marriage because H chose to defend and W failed to prove her case, when in the vast majority of cases W's petition would have resulted in a divorce under the special procedure. Only 0.67% of petitions filed at court result in answers being filed in response and even less (the President estimates only 0.015% of all petitions) result in a final contested hearing. W was therefore incredibly unlucky that H chose to defend.

The question is, where does this case leave those drafting unreasonable behaviour petitions? As we do not have "no-fault" divorce in this country, the challenge for parties over the last 40 years has been to draft particulars as mildly as possible, so as to avoid creating unnecessary tensions between parties and the risk of a defended divorce whilst at the same time ensuring that there is enough in them to satisfy a judge that the divorce should be granted.

Does the fact that this wife failed to prove her case mean that the judges will now look closer at the petitions and dismiss more, so the drafting has to become harsher as a result? Or will it be business as usual? The outcome in this case can only strengthen the ongoing calls for no-fault divorce to be introduced.

Assoun v Assoun [No 1] [2017] EWCA Civ 21
This is a two part case.

The husband (H) had applied to reduce or discharge a periodical payments order made by Judge Brasse (the judge) in November 2013 and to remit any arrears. H had not paid significant sums due to the wife (W) pursuant to order made in both England and Texas and he acknowledged that he was in breach of the 2013 order.

The judge made a without notice Hadkinson order that H should not be permitted to proceed with his application until he had paid his debt under the existing court order.  H appealed.

The Court of Appeal (CoA) judgment was delayed as a result of H applying, upon receipt of a draft judgment, to reopen the appeal in order to amend its grounds and rely upon new evidence.  The determination of that application is reported as Assoun v Assoun [No 2].

The substantive CoA judgment confirmed that a Hadkinson order is draconian because it goes directly to a litigant's right of access to a court.  It is not and should not be a commonplace.  It is a case management order of last resort in substantive proceedings where a litigant is in wilful contempt.

H had argued that order was procedurally unfair and an error of law because it was disproportionate to make such an order in circumstances where he did not have sufficient resources to discharge his obligations under the original court order and more proportionate conditions could have been imposed. The issue was whether the order had been appropriate in this case.

Prior to H being given permission to appeal by the CoA, H had been ordered to file a statement setting out his financial position. H filed his evidence and permission to appeal was granted on the basis of a lack of due process in circumstances where a Hadkinson order should only be used as a last resort. Although the permission was subject to H paying a sum into the Texan Court and paying a further sum into the English court.

Although H paid the money to the English Court, he had paid money to his US lawyers to hold to his order, which had not strictly complied with the first condition. Notwithstanding this, the CoA still heard the appeal to satisfy itself that H's access to justice had not been improperly restricted.

Before a Hadkinson order should be made, there are six considerations:

(a) Is H in contempt?

(b) Is there an impediment to the course of justice?

(c) Is there any other effective means of securing compliance with the court's orders?

(d) Should the court exercise its discretion to impose conditions having regard to the question:

(e) Is the contempt wilful?

(f) If so, what conditions would be appropriate?

It is not appropriate for a case management hearing in the family court to determine substantive issues that are not on notice to a respondent. There is no summary judgment procedure in the Family Procedure Rules. A rigorous application of the rules to an application whose effect is as draconian as a Hadkinson application is necessary to protect the essence of the right to a fair trial.

An application for a Hadkinson order should have been made under part 18 FPR.  Generally, there needs to be meticulous attention to the appropriate inter-partes procedure unless W has grounds to establish the need for an expedited and/or without notice application.  Applicants should expect the court to scrutinise adherence to the rules and practice directions and refuse or adjourn an application that does not comply with them. W had not complied with the rules and there was no justification for a without notice procedure. The application could therefore be regarded as procedurally irregular.

However, H was in wilful default, had not given full and frank disclosure and had used every tactical device possible to frustrate W and the court.

The judge's inferences in the absence of evidence and full and frank disclosure were appropriate given the court's previous findings on contested evidence to the civil standard of proof.  Findings relevant to a Hadkinson order are to be made to the civil not the criminal standard of proof.

Although H had subsequently filed a statement prior to being granted permission to appeal, it raised more questions than it answered and it did not comply with the requirement for full and frank disclosure.

It could reasonably be inferred that, had the judge adjourned the Hadkinson application to allow H to file evidence in reply to the same, he would have achieved no more than the CoA had obtained. 

A Hadkinson order was the only one remaining that might secure compliance with the earlier orders and was accordingly the least restrictive and hence most proportionate.

Assoun v Assoun [No 2] [2017] EWCA Civ 179
The Court of Appeal (CoA) was listed to hand down judgment in the appeal by the husband (H) against the making of a Hadkinson order by His Honour Judge Brasse on 16 November 2015.

After the judgment had been circulated but before the date on which it was to be handed down, H sought permission to re-open the appeal before judgment was entered, to amend his grounds of appeal and to rely upon further evidence.  The wife (W) opposed that application. The court gave directions adjourning the substantive appeal and granting permission to the parties to file further written submissions.

H had argued: the court was relying on mistaken factual material; the court's analysis of the Hadkinson principles in the context of the facts would be erroneous if based upon mistakes as to fact; the court's analysis of H's financial disclosure would be wrong so that its conclusions as to the procedural regularity of the process and its own procedural integrity would be flawed; the court's construction of the intention and/or effect of an order of Gloster LJ of 19 May 2016 was wrong; and there was a breach of natural justice.

The Court of Appeal considered the documents in the court bundle that had been scrutinised during the appeal hearing.  The factual conclusions of Judge Brasse in the Hadkinson proceedings had been based on his earlier conclusions in the substantive first instance proceedings, which had not been successfully appealed.  The Court of Appeal had been referred to those materials in the appeal hearing and it was therefore not mistaken in its conclusion that Judge Brasse did not make an error of fact. 

There was no basis upon which H could ask the court to conduct a further analysis of the application of the Hadkinson principles by the judge.

On any basis, the hearing before the Court of Appeal had provided the opportunity for scrutiny, for full and frank disclosure and for the opportunity to respond to any issues about which the parties disagreed, which was sufficient for there to be a conclusion on a Hadkinson application.  Any criticism of the process undertaken by the judge had been addressed by the Court of Appeal and the judge was not wrong. There was therefore no basis to re-open the appeal and permit the husband to amend his grounds and/or adduce further evidence.

J v U; U v J (No.2) (Domicile) [2017] EWHC 449 (Fam)
The wife (W) was born in England but her domicile of origin was Irish. The husband (H) was born in India and his domicile of origin was India, but he moved to England at the age of 15.

W filed a divorce petition in England, initially based on her being domiciled in England and the parties' joint habitual residence being in England. She subsequently dropped her claims based on habitual residence and proceeded on her domicile alone. Although the petition itself did not refer to H's domicile, his domicile became an issue which was also determined by the court.

At the time of the hearing, W was living in Serbia and H was living in Sarajevo with their children.

H had applied for a stay under para 9 of schedule 1 to the DMPA 1973 and/or at common law and he had filed his own petition in Sarajevo.

The questions for Cobb J were as follows:

i) Had W had acquired a domicile of choice in England, and if so, did that domicile of choice subsist?

ii) Had H had acquired a domicile of choice in England, and if so, did that domicile of choice subsist?

iii) If either party had domicile here, whether it has been demonstrated that there is another court with competent jurisdiction which is clearly or distinctly more appropriate than England for the trial of the action (forum non conveniens)?

The judge provided a helpful summary of the law on domicile and detailed the parties' history, including their peripatetic lifestyles, and their ongoing connections with each jurisdiction involved.

With reference to Drevon v Drevon (1864) 34 L.J. Ch 129 at 133 (Dicey 6-048), "there is no act, no circumstance in a man's life, however trivial it may be in itself, which ought to be left out of consideration in trying the question whether there was an intention to change the domicile". There was also no one feature of the case which clinched the outcome for which each party contended.  The judge had to stand back and review the scene as a whole.

Although the judge treated each party's evidence with a degree of caution, he preferred W's evidence about past events. He was satisfied that W had maintained strong practical, financial and fiscal links to the UK. Despite her surprising lack of enthusiasm about this country, he found that London was her "base", her "adopted home" and her "centre of gravity". She had therefore acquired a domicile of choice in England and Wales, notwithstanding her various postings abroad. 

The judge found that H had acquired a domicile of choice here in England from early adulthood to his early 50s because his connections here were during that time strong. However, since 1995 and more particularly in the last 10 years, he did not see England as the place where he would ultimately retire and he ceased viewing it as his home. He had more of an emotional connection with Italy or Bosnia, but his links in either country were not strong enough to create a new domicile of choice so his domicile of origin in India had therefore revived.

The judge went on to summarise the test to be applied in a forum conveniens case, as set out in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 46. As the English jurisdiction was based on W's domicile, it was for H to demonstrate that the divorce would be more suitably tried, in the interests of all the parties and the ends of justice, in Sarajevo. There were some factors in favour of Sarajevo and others pointing against it. Crucially, the Bosnian court had only limited jurisdiction to make orders in relation to matrimonial property outside its jurisdiction, and even then only with the consent of both parties. W had avowed that she would not consent and H's consent was in question as he had asserted that the Bosnian judiciary were corrupt.

On balance therefore, H had failed to demonstrate that the case may be tried more suitably in Sarajevo and the divorce and financial remedy proceedings would therefore proceed in England.

DW and Another v CG [2016] EWHC 2965 (Fam)
In 2009, District Judge Waller (as he then was) made an order which included, amongst other provisions, that the Husband (H) should pay to the wife (W) a lump sum in three instalments and, in default of any instalments being paid, H granted to W irrevocable authority to sell three properties (including the property occupied by W (the Property) and a second property occupied by H and his new wife) and for W to receive the outstanding balance of her lump sum and any interest accrued. 

H paid the first two instalments but defaulted on the final payment of £175,000 which was due to be paid in 2010.

Bankruptcy proceedings were started against H in March 2011. W applied for a restriction to be registered against the title of the Property in June 2011 on the basis that she had a beneficial interest in the property because of H's default. H and his new wife were each declared bankrupt in March 2012. W was involved in the bankruptcy proceedings as a creditor of H, represented by her cousin, without legal advice, and there was a dispute between her and the trustees in bankruptcy over whether W was a secured or unsecured creditor. H and his new wife eventually entered into a settlement agreement with their trustees in bankruptcy in April 2014, by which H agreed to pay the trustees in bankruptcy for any interest they may have in the properties. At the same time, H entered into a declaration of trust purporting to give his new wife the benefit of 100% of the equity in the Property and the house they occupied.

W obtained an order for sale of the Property on 3 November 2014. H tried to appeal that order but permission was not granted.

W then applied to set aside H's declaration of trust in favour of his new wife pursuant to s37 Matrimonial Causes Act 1973.

In February 2016, DDJ Simpson, found that the original 2009 order gave W an equitable interest in the Property; her interest was not affected by H's subsequent bankruptcy; and it was not waived or otherwise lost as a result of W's involvement in the bankruptcy proceedings. W's interest was therefore enforceable against H and his new wife and the declaration of trust was set aside. The judge also went on to set aside the declaration of trust as W requested.

H appealed this order, with the judge's permission, on both substantive and procedural grounds. There were concerns that the judge had dealt with the case on submissions alone and that the judgment was extremely brief.

Moylan J, (as he then was) hearing the appeal, ensured that he remedied any inadequacies there may have been. Dismissing H's appeal, he found:

1. The order for sale made to secure payment of a lump sum within the 2009 order gave W an equitable interest in the properties.

2. H's subsequent bankruptcy did not affect W's interest because the trustee in bankruptcy had acquired the properties subject to W's beneficial interest.

3. Although W could "give up" her rights to the properties within the rules set out in section 283(5) of the Insolvency Act 1986, she did not do so in this case.

4. The trustee in bankruptcy did not make a decision in respect of W's interest in the properties as H had sought to argue.

5. There was no evidence that the new wife had any interest in the properties. There had not been any registrable disposition of the properties under the settlement agreement reached with the trustees in bankruptcy and, even if there had been, W's interests in the Property remained enforceable because she had in occupation of the Property throughout.

6. For completeness, Moylan J set aside the order under section 37 as the judge has not given the new wife any opportunity to adduce evidence in response to the section 37 application. However, this did not affect the outcome for W as it was not necessary for the declaration of trust to be set aside in order for W to be able to enforce her interest, based on the other findings made above.

DJ v Secretary of State for Work and Pensions and TJ (CSM) (Child support - receipt of benefit) [2017] UKUT 83 (AAC)
The Child Support Agency (CSA) had decided to close a case with effect from 3 September 2015. The father (F) had argued that the child had been working full time since September 2014 and, if child benefit was being paid, it was in error. The First -Tier tribunal upheld the CSA's decision on the basis that child support was payable with reference to the payment of child benefit and the commencement of employment was not therefore relevant.

Judge Gray in the Upper Tribunal had granted the father permission to appeal. F continued to argue that the child's employment in the family firm should bring the child maintenance to an end. The Secretary of State supported his appeal, accepting that an error of law had been made. The mother did not partake in the appeal, although she had been invited to do so.

Judge Gray allowed the appeal and remitted the case to the First -Tier Tribunal for rehearing, directing that the judge was to give consideration to joining HMRC and to consider the further evidence supplied by F on the appeal.

The tribunal had fallen into an error of law in failing to investigate F's contention that the child was working. Under the Child Benefit regulations, working is relevant to entitlement for a person over 16, although the regulations themselves are complex and the matter is not necessarily as straightforward as F maintains. The Child Benefit (General) Regulations 2006 (SI 2006/2 to 3) set out prescribed conditions, and detailed fact-finding would therefore be required. As this was a factual matter, it was appropriate for the evidential issues to be dealt with by the First -Tier tribunal.

The matter could go back before the same judge because, although he had erred in law, it was a somewhat unusual provision which had only recently been clarified. There was no reason why he should not sit again to decide the facts and the listing should be done with an appropriate use of judicial resources.

The author would like to acknowledge the assistance of Holly Hill of Mills & Reeve LLP in the preparation of this article.