username

password

Coram Chambers1 Garden CourtAlpha BiolabsFamily Law Week Email Subscription

Home > Judgments

Kliers v Kliers [2020] EWHC 1026 (Fam)

Throughout their marriage the husband and wife had been members of an Hasidic Jewish community. The wife had subsequently left the community, which had caused a significant rift. Nicholas Cusworth QC considered both the wife’s claim for an order for sale of the former family home under TOLATA, and the husband’s claim for a financial remedy.

Background
Shlomo Kliers ("H") and Miriam Kliers ("W") had married in 1995. They had four children, all of whom had left or were about to leave home, apart from the youngest, M, who was 12. Throughout the marriage both parties had been members of the Slonim Community of the Jewish faith, an Hasidic group based predominantly (in the UK) in Stamford Hill in North London. They separated in 2012 and a Get was pronounced in May 2013.

W had subsequently left the community, which had caused a significant rift. By the time of the hearing, she was engaged to her new partner, Peter Walters. The couple had suffered considerable abuse and harassment from the Hasidic community and indeed had moved to a rented cottage in York to avoid the harassment they had suffered while living in London, where Mr Walters continued to work. W was diagnosed with post-traumatic stress disorder in December 2018, partly as a result of the harassment aimed at her by the community.

H had had a religious marriage ceremony with his new wife, Malka, in May 2016. Malka had two children from a previous marriage. She and H also had a child, J, who was eight months old at the time of the hearing.

W had previously brought TOLATA proceedings in the Chancery Division of the High Court to assert a beneficial interest in the former family home ("the FMH") in Stamford Hill. At a hearing in April 2018, Mr Murray Rosen QC (sitting as a Deputy High Court Judge) found that W's brother, Mordechai Schmerler, held the FMH on bare trust for the parties in proportion to their initial contributions to the purchase price in 2004. He declared these to be 75% from W and 25% from H. Mr Rosen found that Mordechai had made no financial contribution to the purchase and had made a false declaration that the property was being purchased for his sole occupation. The parties then entered into a purported tenancy agreement with Mordechai in order to fraudulently obtain housing benefit. As a result, the parties owed hundreds of thousands of pounds to the London Borough of Hackney and to HMRC for housing benefit, tax credits, and Council Tax benefits they had received but to which they were not entitled, although some of the debt had been repaid by H's solicitors.

H then petitioned for divorce in July 2018 (strikingly, five years after obtaining a Get and two years after his religious remarriage) and made an application for a financial remedy. In December 2018, he successfully sought to have W's application for possession and for sale of the FMH transferred to the Family Division. This hearing was concerned with both H's claim for a financial remedy and with W's claim for an order for sale of the FMH, to conclude the TOLATA proceedings.

Claim for order for sale of the FMH
W argued that an order for sale must be made because the parties illegally obtained a mortgage with the Bank of Scotland in the sum of £300,399 by fraud. However, the bank had taken no steps to call in their loan since being told by W of the deception. They were regularly receiving their interest payments from an undisclosed source, their debt was secured, and it was recoverable in the event of default. Nicholas Cusworth QC, sitting as a Deputy High Court Judge, therefore found that there was no public policy consideration significant enough to compel him to order a sale on the single ground that the original mortgage loan was applied for under a false declaration and absent any further exacerbating factors. He also bore in mind the fact that there was a minor child of the family, M, living at the property, whose welfare was the court's first consideration.

Financial remedy application
W's position

W asserted that her needs included a £400,000 property in York for her and Mr Walters. She had been made redundant from an administrative job in November 2018 and had not been in employment since. She planned to embark upon a training course for a qualification in geology. Before that she had reconciled herself to looking for another administrative job. Mr Walters had provided considerable financial assistance to W since her separation from her family, which she felt a moral obligation to repay. Since their relationship began in 2013 he had drawn down his NHS pension at a significant loss to provide a rental fund. He had no remaining capital and was due to retire in December 2020.

H's position

H asserted M's needs required him to retain the FMH, but that if he had to rehouse he would need £900,000. He said he received a modest income of £10,600 pa gross working in assorted roles in a catering company, but listed his necessary outgoings (excluding mortgage payments) as £36,704 pa. He offered no suggestion that his income could be increased in any way. Malka had no income or apparent earning capacity, no capital, and only intermittent and modest financial support for her children from their father.

W said that H in fact earned over £100,000 pa, and explained that during the marriage much of her income was paid to her notionally as a charity donation to reduce her tax liability and to enable any benefit entitlements to be maximised. Mr Cusworth found that on the balance of probabilities H did generate more income for himself than that which he readily disclosed to HMRC and in his Form E.

Outcome

Mr Cusworth treated the debts accrued during the marriage as being joint debts which should be taken from the marital assets before division, but found that there was no good reason why W should bear the burden of debt accrued by H post-separation.

Weighing the s. 25 factors, Mr Cusworth was satisfied that an equal division of the net equity in the property of £571,207 (after deducting the marital debts, mortgage and costs of sale) would be a fair outcome for both parties. He was satisfied that W would be able to buy somewhere suitable in York with Mr Walters with the sum she would receive.

Mr Cusworth bore in mind that H had received funds, from both a Jewish charitable organisation called Ezer Leyoldos and other sources, in the sum of at least £1,055,725, and very possibly considerably more. Additionally, the mortgage interest on the FMH was paid somehow, but H claimed not to know by whom. It was clear that very significant resources had been and were continuing to be made available to H by his community, and that H may have the prospect of further accessing the seemingly deep pockets of his community.

Although evidence from the Managing Director of Ezer Leyoldos showed that some of the money received by H was by way of a loan and was expected to be repaid, it was confirmed that there was no expectation that any of the loaned money would be called back within the next 6 to 8 years. It therefore seemed that this level of benefit and forbearance would be available to H at least until M's majority, and, on the balance of probabilities, until J's majority as well (i.e. for the next 18 years). It seemed likely that goodwill from the community would be sufficiently forthcoming to ensure that M's welfare would be protected. Therefore, although H's outright receipt of the net equity, once his debts had been deducted, would only be £54,519, Mr Cusworth found that the money H had been loaned would not be withdrawn from his use while he needed it as part of his housing fund, which would probably be at the earliest upon J's majority, and that it was unlikely that H would have to sell the property unless the bank took action, which did not seem probable.

Mr Cusworth also found that if H were ordered to pay W a lump sum to represent her interest in the FMH, that sum would be provided by H's community, and a forced sale would be avoided. He therefore ordered H to pay W a lump sum of £290,000 within 3 months, in default of which the FMH would be sold and W's lump sum expressed as a percentage of gross sale price to be paid to her from the net proceeds of sale.

Summary by Henrietta Boyle, Pupil at 1 Hare Court

You can read the full judgment of Kliers v Kliers [2020] EWHC 1026 (Fam)  on BAILII