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Moher v Moher: Non-disclosure leads to closure

Alexandra Goldrein, a solicitor with Irwin Mitchell, considers a recent Court of Appeal judgment concerning non-disclosure and the award of spousal maintenance to a wife pending the husband’s grant of a Jewish divorce.

Alexandra Goldrein, solicitor, Irwin Mitchell.


In Moher v Moher [2019] EWCA Civ 1482 a husband failed in his appeal against the judge's decision to award the wife spousal maintenance until he provided her with a Get (a Jewish bill of divorce). The judge emphasised to the uncooperative husband that by not providing a Get, he was choosing to remain married and therefore obligated to pay maintenance to his wife pending a Jewish divorce. Additionally, given his failure to provide full and frank disclosure, the judge determined that the court is entitled in appropriate cases, to infer that the resources are sufficient or are such that the proposed award does represent a fair outcome.


Background

The husband appealed a financial remedy order dated 4 May 2018 made by His Honour Judge Wallwork. At the date of the hearing, the husband was aged 53 and the wife 45. They married in 1995 and separated in 2016. They had three children together aged between 10 and 21, all of whom remained financially dependent. During the marriage, the husband was a businessman. The wife was a homemaker, looking after the children. She had some part-time employment during the marriage. Since separation, she has obtained more substantive employment.

The proceedings concluded with a final order. During those proceedings, the husband proposed that the wife should receive £960,000 whilst the wife sought a lump sum of £1.5 million. The wife's case was that "what the husband disclosed and the values disclosed are likely to represent a significant undervalue of the true extent of the assets".

The husband was ordered to pay the wife a lump sum of £1.4 million by 25 May 2018. It was additionally provided that, if the husband failed to pay all or any part of the lump sum by that date, interest would accrue at the usual judgment debt rate.

The husband was ordered to pay the wife maintenance pending suit until decree absolute and thereafter periodical payments at the rate of £22,000 per annum until the later of "the grant of a get" or "the payment in full of the lump sum together with any interest accrued thereon". 

An order was also made under section 10A of the Matrimonial Causes Act 1973 ("the 1973 Act") prohibiting the husband from applying for decree absolute until a declaration had been filed by the parties that they had taken such steps as were required to dissolve the marriage by means of a Get. 

Finally, the husband was ordered to pay just over £52,000 towards the wife's costs.

During the financial proceedings before HHJ Wallwork, the judge stated that they were far more complex than they need have been, largely due to the failure of the husband to provide adequate disclosure, together with his lack of compliance with court orders. The judge accepted the wife's case that the husband had failed to disclose assets. The judge also rejected the husband's case that he was "unable to generate the same income as hitherto".

The judge found that, despite his denials, the husband was "both involved and intends to become more active in" another business to which he had transferred "stock and money". He also found that, even if the husband was currently earning only what he alleged, "he will undoubtedly be able to significantly increase his earnings should he choose to do so and generate higher income in the future". The judge stated that the wife had not set the bar "too high" in seeking a settlement of £1.5 million. He was satisfied that there were resources available to meet that payment.

The appeal

In summary, the husband's grounds of appeal were as follows:

(a) The judge failed to quantify the extent of the husband's financial resources and as a result failed to undertake a necessary element of every financial remedy judgment;

(b) The judge's calculation of the award of £1.4 million was not properly reasoned and, in any event, was flawed, in that it was more than was properly justified by the wife's needs;

(c) The judge was wrong to award interest on the lump sum and periodical payments;

(d) The judge was wrong to order that periodical payments for the wife should continue until the grant of a Get by the husband; and

(e) The costs order was wrong.


Addressing each point in turn on appeal:

a. Counsel for the husband, Brent Molyneux QC, submitted that where one party has not given proper disclosure, a judge must quantify the scale of the undisclosed financial resources by either giving a figure or a bracket. Otherwise, he submitted, the judgment will not provide a sufficiently reasoned explanation for the ultimate award. Sally Harrison QC, for the wife, argued that the judge had made findings as to non-disclosure by the husband and the judge was entitled to conclude that there were sufficient resources both to meet the wife's needs at the level of the proposed award and to meet the husband's needs.

b. Mr Molyneux QC challenged the award to the wife of £1.4 million submitting that there was no reasonable explanation as to how the judge had calculated the amount. Counsel specifically challenged what he characterised as the judge's determination that capitalisation of the wife's income needs would require just over £1 million. This was substantially in excess of the income fund sought by the wife in her closing submissions of £570,000. Ms Harrison QC submitted that the judge did not award the wife more than her needs and that the elements comprised in the award of £1.4 million could easily be detailed. The judge determined that the wife's housing need was £700,000 to £750,000. He also took into account debts of just under £59,000 and an unquantified sum in respect of school fees. The remaining monies would be the wife's income fund moving forwards.

c. In respect of interest and periodical payments, Mr Molyneux QC's first submission was that the order appeared to make the lump sum payable on 25 May 2018. This is because, even though the order states that it is "with effect from Decree Absolute", the lump sum provision does not expressly state that payment is due on 25 May 2018 or the date of decree absolute, whichever is the later. Ms Harrison QC accepted that interest was not intended to accrue on the lump sum until it was payable, namely from the date of decree absolute. She also accepted that it is implicit that the date for payment of the lump sum was 25 May 2018 (the date in the order) or the date of decree absolute whichever is the later.

d. Mr Molyneux QC submitted that it was not a proper use of the power to order periodical payments to make them payable until the grant of a Get. Upon payment of the lump sum, the wife's income needs will have been met and the continuation of periodical payments after this would mean that she would be "recovering twice". It wrongly imposes a "financial sanction" on the husband if he does not grant the wife a Get. The court's powers "to compel a party" to grant a Get are limited to those set out in section 10A of the 1973 Act. Ms Harrison QC considered whether the court has power to order continuing periodical payments to the wife until the grant of the Jewish Get. She submitted that the court does have the power given the compelling need for the wife to be free from the husband and the marriage.

e. Mr Molyneux QC did not seem to wish to continue with the husband's appeal in relation to the costs order. Ms Harrison QC submitted that the judge was entitled to order the husband to pay £52,000 towards the wife's costs.

Determination
1. Lord Justice Moylan, with whom Lady Justices King and Rose concurred, explained the circumstances in which one party might fail to comply with their disclosure obligations. A party may wholly fail to engage with proceedings. Another situation is when there is a dispute as to the ownership of a specific asset or as to whether a party has disposed of or still retains a specific asset. The issue is the manner in which a court undertakes this exercise when a party has failed to comply with their preceding obligation to give full and frank disclosure. The judge determined that, when faced with uncertainty consequent on one party's non-disclosure. the court is entitled in appropriate cases, to infer that the resources are sufficient or are such that the proposed award does represent a fair outcome. Moylan LJ found that HHJ Wallwork was entitled to conclude that there were sufficient resources both to meet the wife's needs at the level of the proposed award and to meet the husband's needs.

2. The Court of Appeal stated that a financial remedy order under the 1973 Act cannot be made until on or after the grant of a decree. The Court did not accept the submission that a lump sum cannot "carry interest" prior to the date for its payment and found that the award received by the wife was based on a sound assessment of her needs and was an award which was not outside the bracket of permissible awards.

3. The Court of Appeal stated that the court must be aware of the potential for double counting when  considering whether to award periodical payments when the applicant's future income needs have been capitalised by a lump sum award. However, when considering the relationship between the two, the judge "can use his broad brush".


The Court stated that difficulties created for a wife when she is not granted a Get have long been recognised. Under section 10A of the 1973 Act, a husband is not being compelled or required to obtain a Get; the court is simply providing that unless and until he grants a Get he cannot obtain a civil divorce. In the same way in this case, the husband is not being compelled to grant a Get. How he responds to the order is a matter for him. In the same way as provided by section 10A, the structure of the order in the present case does not compel the husband to act in a certain way. The court order provides only that until he grants a Get he has to pay periodical payments to the wife. Accordingly, as a matter of principle, the judge did not consider that the structure of the order in this case conflicts with section 10A or otherwise can be assumed to prevent the husband from granting a Get. The Court accepted that the periodical payments awarded were to provide the wife with funds to meet her additional income needs pending receipt of the lump sum. There is, therefore, no double counting.

4. The Court decided that there was a compelling need for a "clean break" between the parties so that they would be able to make, what Moylan LJ termed, "new lives". This was significantly based on the manner in which the husband had behaved, including that he had been convicted for assault and harassment of the wife. The Court of Appeal  considered that HHJ Wallwork is likely to have had regard to the likely impact on the wife if there was not a religious divorce and that he was entitled to give effect to his determination by making a financial award. As to the submission as to the effect of the order on the husband's ability to obtain a Get, the Court had no evidence on this issue. It was not, therefore, a point which  was open to the husband in this appeal.

5. In respect of the costs order, this was made in accordance with the original order.


Comment

Failure to provide a Get

A Get is the Hebrew word for a divorce document. Since a Jewish marriage is entered into by a legal contract between a man and woman, it can only be terminated by a legal document ending that original contract. In Jewish practice, only a rabbinical court can dissolve a marriage between a married couple. Should a woman wish to remarry under Jewish law, it is obligatory that she first receives a Get. Furthermore, a man cannot be forced to give a Get – it must be given of free will. Some ex-husbands attempt to extort money or make other demands from their ex-wife's family in exchange for a Get. It can be considered as a further form of domestic abuse and control for a husband to refuse a wife a Get.

In order to provide Jewish wives with a degree of leverage, s10A was inserted into the 1973 Act by the Divorce (Religious Marriages) Act 2002. The court can order that a decree nisi should not be made absolute until the parties have made a declaration that they have taken such steps as are required to dissolve the marriage in accordance with those usages.

The stay of a decree absolute will continue until the court is satisfied by a declaration of both parties that the marriage is also dissolved in accordance with Jewish usages. Once a valid religious divorce has been granted an English court will pronounce a decree absolute and the parties will be divorced according to both religious law and English law.

This decision to allow periodical payments to continue until a decree absolute is granted (which will not be granted until a Get is given) provides wives with further protection against recalcitrant men.

Financial non-disclosure
As regards the husband's non-disclosure in relation to the finances, this case is a further reminder that those who engage in litigation misconduct, who fail to provide  full and frank disclosure during financial proceedings, may ultimately suffer the consequences. The court has a broad discretion to achieve fairness and will make findings against those who seek to frustrate that fairness.

To quote a family law partner, Sarah Balfour, at Irwin Mitchell Private Wealth who acted for Mrs Hart in the case of Hart v Hart [2017] EWCA Civ 1306:

"It is right that the court has once again sent out a clear message that, once made, orders must be complied with."