22 October 2018

September 2018 - Private Law

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Mr Justice Holman made a pound-for-pound order and gave guidance on such orders

LKH v TQA AL Z (Interim maintenance and pound for pound costs funding)
[2018] EWHC 2436 (Fam)

24 July 2018

  • At the interim stage of the financial proceedings a number of orders had been made in this case. The applicant wife was awarded interim maintenance in an earlier judgment on the 19th of April 2018 at £29,000 per month and £40,000 costs allowance per month. The interim maintenance sum included a payment of £3,500 per month for the family’s driver. The reason for this was to enable the wife to enable to employ the driver directly and avoid the control that the husband was exerting over her by instructing the driver not to drive the wife in the vehicle if the children were not present.
  • The husband did not pay the wife interim maintenance. He continued to pay the driver directly, rather than providing the funds to the wife. The arrears came to £100,000 maintenance, £120,000 costs allowance and £10,000 in actual costs, namely, £230,000. 
  • Disclosure of the husband’s financial means in a Form E had also been ordered. He failed to file and serve this in the two months following the order. The husband claimed to have had problems with assembling various information required for him to file and serve his Form E.
  • The husband had also undertaken to make various household payments. All but one of those obligations were discharged – the husband stopped paying the governess who had been employed for the children.
  • The husband stated in his statement that he could not make the payments ordered by the court. He gave two reasons for this. The first was that his net worth of £34,000,000 was based on illiquid and unrealisable assets. The second was that his company upon which his net worth was founded had recently suffered a considerable reverse as a result of the well-publicised collapse in this country of the public company Carillion plc.
  • During the time that the husband was stating that he was impecunious, he had been paying his solicitors, Stewarts. The total that he had paid out since the interim judgment had been made was £95,000.
  • At the date of the judgment of 19 April 2018, the wife owed her solicitors, Payne Hicks Beach about £200,000. This figure had risen since the date of that judgment.
  • The wife applied for a pound-for-pound order, based on the judgment of Bodey J in the case of Mubarak v Mubarik [2007] 1 FLR 722. The wife’s counsel asked the court to make a “pound for pound” order. in the sum of £100 payable to the wife for every £1 paid to the husband's own solicitors and lawyers. Mr Justice Holman stated that the husband was still liable for the outstanding payments, but declined to make a pound-for pound order in those terms, making the following remarks:
  1. Any so-called pound for pound order in no way derogates from the underlying liability upon the husband under the underlying substantive order;
  2. The rationale of such a pound-for-pound order was that of an equal or level playing field, that the Mubarak jurisdiction could not properly be applied to require a payer to pay substantially more to the other party than to his own solicitors. 
  • Mr Justice Holman declined to give a debarring order. He stated that a court always wishes to give maximum encouragement to both parties being fully engaged and heard so that the court has the maximum opportunity of arriving at the correct and fair overall outcome. The learned judge stated that a debarring order would be an extreme course of action.
  • The learned judge injuncted the husband from paying any further money to any solicitors or counsel, unless he pays an equal amount to the wife's solicitors towards satisfaction and discharge of her arrears and current instalments of legal services.

 

 

 

Mr Justice Keehan dismissed a father’s application for the return of his child from Russia

AW v KJ [2018] EWHC 2229 (Fam)

25 June 2018

  • The application was brought by the father for the return of his two-and-a-half-year-old child from Russia. The father was born in the United States of America and the mother was born in Latvia.
  • The mother opposed the application for a return order and invited the court to list the matter for a substantive determination of where the child should live and who the child should spend time with.
  • The parties met in 2012, the child was born on 5 October 2015 and their relationship ended in early 2016. The mother stated that the child lived with her in Russia since February 2016.
  • During the proceedings, he mother made allegations of domestic abuse against the father, which he denied.
  • The father suspected that the mother was going to remove the child from the jurisdiction because, as the mother asserted, the father knew that she wished to return to Latvia with the child. The father obtained an order from the Family Court at Exeter prohibiting the mother from removing the child from the jurisdiction on the 9th of February 2026. An order in similar terms and a vacation order were made on 26 February 2016.
  • In breach of the court order, the mother removed the child from the jurisdiction on the 16th of February 2016. The mother had intended to return with the child to Latvia, where she had a property.
  • The mother told the court that days before her departure she had been living in destitute circumstances and allegedly in fear of the father. She sought assistance from the Russian Embassy and a Russian passport was provided to her. She then went to live with her parents in Russia with the child. The child attended a local nursery and was appropriately registered in accordance with Russian Federation law.
  • The child had one short Skype contact with the father on 5 October 2017 and did not otherwise remain in contact with the father.
  • Mr Justice Keehan considered Re J (A Child), Re (Child returned abroad: Convention Rights) UKHL 40 and also to the case of Re G DHR [2017] EWCA (Civ)1675. The learned judge reminded himself that child’s welfare and best interests were the paramount consideration. Mr Justice Keehan also had regard to the welfare checklist.
  • The learned judge considered the mother had appropriately cared for the child over the previous two years. He found that the father had been focussed on his own right of parental responsibility, rather than the child’s welfare. During proceedings, the father stated  “It wouldn’t be in her best interests to return the child to me but put her in social services care.”
  • The learned judge did not consider that it would be in the interests, let alone welfare best interests to order the child’s return to the UK. The application was therefore dismissed
  • Mr Justice Keehan considered the child’s relationship with her father important, and listed the matter for consideration of substantive welfare matters relating to the child

 

 

HHJ Booth gave guidance on “needs” cases where there are limited assets

 

 

A v A [2018] EWFC B42

6th July 2018

  • The case involved parties in a long marriage of 21 years. Both parties were 50 years old. There were three children, X, who was 20 and at university; Y, who is 18 and taking her A-levels and who was expected to go to university in September; and Z, who was 8 years of age and at school.
  • The wife worked as a pharmaceutical technician and then worked in property management until 2003, when she moved to taking care of the children on a full-time basis. The husband worked as a qualified accountant, until 2003 when he took over the management of the parties’ property business. Thus, the husband had a higher earning capacity to the wife by virtue of his qualifications.
  • Everything that the couple have has been acquired during the course of their marriage. They have been very successful in developing a property portfolio of rental properties, primarily servicing the student market, with a number of their properties being houses in multiple occupation. Since separation, and at the moment, they had a property portfolio of some 30 properties. As a result, they enjoyed a high standard of living.
  • Since the parties separated, the portfolio of properties had been split between them and W had the majority. Although the value was agreed in 2016, the husband sought to contest this figure, submitting that the figure should have been higher. The court did not consider this to be of importance since this was a needs case and even with the properties sold, the wife would still have a limited earning capacity.
  • The former matrimonial home had a large mortgage on it. The wife had no pension and the husband had two pensions. The husband disclosed the value of one pension but not the other.
  • At paragraph 20, the court reminded itself of the factors that were applicable to needs cases, notably the following “In considering s.25, there are three main distributive principles: needs, compensation and sharing, shaped by the overarching requirement of fairness – Miller v Miller; Macfarlane v Macfarlane [2006] 1 FLR 1186 HL.”
  • HHJ Booth considered the correct approach to add-backs in circumstances of non-disclosure. Conduct could reduce a party’s share of the marital pot, even where the share is based on the party’s need.  It was reiterated that add-backs could be ordered in needs cases. The learned judge drew a number of adverse inferences in respect of the husband, making a finding that he had hidden assets beyond the reach of the court, with his friends and family and that his investments were substantial. His gambling debts included money with a criminal origin were discounted.
  • The court determined that a clean break would be unrealistic in the circumstances. The court made the following orders:
  1. Transferring the former matrimonial home to the wife
  2. Allowing the wife to retain 18 out of 30 rental properties

 


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