29 January 2018

December 2017 - Private Law

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Judgment of Cobb J in an unusual financial remedies case involving a Wife without litigation capacity and a Husband who did not consistently engage in proceedings

HC v FW [2017] EWHC 3162 (Fam)

29/11/2017

  • The Husband (‘H’) and Wife (‘W’) were married for 8 years of a 12 year relationship.
  • The parties had a very high standard of living. There was no matrimonial home. The parties had lived in a series of suites in luxury hotels around the world.  
  • At the end of the parties’ marriage W was diagnosed with a brain tumour. Following medical complications with treatment, W suffered neurological and neuropsychological impairments.
  • The Court relied upon a report of a clinical psychologist which found that W lacked capacity to conduct litigation. Litigation was conducted through her litigation friend.
  • H engaged with proceedings up until the FDR but, following this, H stopped engaging completely. H failed to attend any subsequent hearings and provided no explanation for his non-attendance. At the final hearing Cobb J did not even know H’s precise location.
  • The Court granted W’s application to bring forward the trial date because it was believed that H may be arranging to move assets out of W’s reach. This was granted on the condition that all proper efforts should be taken to notify H. Attempts were made to notify H by email, text, via H’s friend and his son amongst other methods.
  • Cobb J proceeded to hearing the final hearing in H’s absence.
  • Most of the parties’ wealth came from H’s long-established business and a substantial inheritance from his mother. It was agreed by W’s representatives that this was a case based on needs.
  • As a result of H’s non-disclosure, Cobb J had to place a value on the assets as a whole using evidence provided by H when he engaged and other pieces of evidence provided by W. Cobb J did not accept W’s proposal of a notional value of £5m of undisclosed assets but was also not persuaded that H owed his son £7m.
  • Cobb J valued the parties’ assets at £40m (£38m rounded up because of his lack of transparency and failure to co-operate with disclosure).
  • Cobb J considered W’s needs in two categories: her general reasonable needs and specific needs arising out of her medical condition.
  • W’s general needs were valued at £298,648 p.a. having considered H’s comparative needs, the opulent standard of living and the parties’ financial resources.
  • The Court heard evidence from two care consultants about W’s future medical needs. W’s specific medical needs were likely to last for the rest of her life and the amount for the next year was £250,745 and the year after £238,150.
  • Cobb J heard arguments from W’s representative that the method of computation should be by using the Ogden tables rather than the Duxbury method. Cobb J decided to adopt the Duxbury method of computation which was accepted by W’s representative.
  • Total needs were valued at £15.25m and it was considered that these could be met from £11.7m worth of assets and a balancing payment of £3.5m.
  • Following judgment, W invited the Court to make a freezing injunction.
  • Cobb J decided that it was necessary and proportionate to make a freezing injunction given H’s lack of honesty and transparency and that he liquidated one of his businesses after the commencement of proceedings. Cobb J considered it appropriate to make this freezing injunction ex parte because of H’s lack of cooperation and Cobb J was satisfied that notice would likely lead to H taking steps to defeat the purpose of the injunction.

 

 

Appeal by a Husband against HHJ Everall QC’s final order in financial remedies proceedings

AB v CD (Jurisdiction Global Maintenance Orders) [2017] EWHC 3164 (Fam)

6/12/2017

  • The Husband (‘H’) and Wife (‘W’) began their relationship in 1999 and married in 2005. They have three children. The parties separated in April 2015.
  • Both parties were qualified lawyers but W has not worked since the birth of their first son.
  • Total net assets were £1.83m and H’s pensions were valued at £350,000 and W’s at £67,200.
  • On 2 November 2016 HHJ Everall QC made a final order after a four-day final hearing. This order provided for the equity in the FMH to be paid to W as well as two lump sums at a total sum of £240,000. There would also be a global maintenance order at £39,000 p.a. for the benefit of W and the children which would be reduced by any Child Maintenance Service (‘CMS’) calculation for a ten-year extendable term.
  • H appealed the final order on the following grounds:
  • 1) there was no jurisdiction to make a periodical payments order in respect of the children;
  • 2) the level of periodical payments was too high; and
  • 3) HHJ Everall QC erred in departing from equality of capital to such an extent.
  • The first ground of appeal was that there was no jurisdiction to make a periodical payments order in respect of the two younger children of the family because of the jurisdiction of the CMS.
  • HHJ Everall QC was aware that he lacked jurisdiction to make an order benefitting exclusively one or more of the children.
  • The periodical payments order made at first instance was in the form of a global order to include spousal maintenance which would reduce by any amount required by the CMS.
  • Roberts J found that the order at first instance did not seek to oust the jurisdiction of the CMS because it had a substantial ingredient of spousal support which engaged the jurisdiction of s23 of the 1973 Act. Also, the order left it open to W to make an application to the CMS and for the global maintenance amount to be reduced accordingly.
  • HHJ Everall QC set out clearly his assessment of W’s needs and did not need to apportion what was for W and what was for the children because H’s income would inevitably cross the threshold for a maximum CMS assessment and require a top up in any event.
  • The second ground of appeal was that the level of periodical payments was too high leaving W with a higher level of disposable income than H.
  • Roberts J found that the amount ordered by HHJ Everall QC was not wrong. The figure was decided by HHJ Everall QC exercising a broad discretion where he considered W’s weaker earning capacity and what would be a fair proportion of H’s current and future income.
  • The third ground of appeal was that HHJ Everall QC erred in the exercise of his discretion by departing from equality of capital to such an extent. Of the available capital of £1.8m, W received £1.1m and H received £703,157.
  • HHJ Everall QC considered extensive evidence of the family’s circumstances including evidence that W’s employment position was weaker than H’s.
  • HHJ Everall QC assessed W’s housing needs at £1m and, as he declined to make a pension sharing order, W’s housing fund was larger than H’s so that she could downsize in the future to provide for her retirement. This amount also provided W with a contingency fund. Roberts J found this to be reasonable and entirely justified on a needs footing.
  • The appeal was dismissed on all grounds.

 

 

Mother’s unsuccessful application for permission to take her two sons to China for a holiday

Re DO and BO [2017] EWHC 858 (Fam)

12/4/17

  • The Mother (‘M’) and Father (‘F’) have two sons aged 8 and 6 at the time of this hearing.
  • F has dual UK and Australian nationality. M is a Chinese national who acquired a British passport shortly before the final hearing.
  • The parties had a volatile relationship with ongoing allegations of domestic violence and the involvement of Children’s Services. At the beginning of 2015, the parties’ relationship broke down and at that point the children were living with F.
  • On 8 May 2015, F filed an application for a child arrangements order asking for permission to remove the children to Australia permanently and also to take them there for a holiday for one month during the summer holidays.
  • On 18 June 2015, the Court refused the application for permission to take the children on holiday to Australia and made an order setting out contact between M and the children.
  • On 5 November 2015 M filed an application seeking permission to remove the children for 21 days each year for a holiday to China. In her notice she indicated that in return she would agree to F taking the children to Australia for 21 days each year.
  • At a subsequent hearing in May, Baker J made an interim child arrangements order setting out that the children would live with M and spend time with F. F also indicated that he did not intend to proceed with his application to take the children to Australia. A further hearing to decide M’s application was listed for February 2017.
  • At the hearing in February 2017 the parties agreed the final child arrangements order but the remaining issue was whether M could take the children on holiday to China. The Children’s r16.4 Guardian also applied for a s.91(14) order.
  • Baker J helpfully sets out the law at paragraphs 16–21 in relation to temporary relocation, particularly to non-Convention countries (the leading authority being Re R (A Child) [2013] EWCA Civ 115), and in relation to s.91(14) orders.
  • Baker J looked at the three factors set out in Re R:
  • 1) The magnitude of the risk of breach of the order – Baker J found there was a moderate risk that M would not return the children to England after a holiday in China. This was a different conclusion to the Children’s Guardian but Baker J reaffirmed that the Judge was the one in the best position to carry out this assessment.
  • 2) The consequences for the children if the breach occurs – Baker J accepted the Children’s Guardian’s evidence that this would be devastating.
  • 3) Level of security that may be achieved - Baker J held that there were no effective safeguards which could be put in place to prevent the children being retained in China. An expert in Chinese law set out that there is no legal basis for unconditional recognition and enforcement of an English court order in relation to children. Any applications to recover the children would amount to a de novo assessment of child arrangements. 
  • Baker J then applied the welfare checklist and weighed the benefits of travelling to China and meeting family members and exploring their background alongside the risk they may not return to the UK.
  • Baker J refused M’s application to take the children to China on holiday.
  • Baker J refused the Guardian’s application for a s.91(14) order because there had been no history of unmeritorious applications and the hearing had not focused on this so the Court did not have an evidential basis to decide on such an order at this stage.

 

 


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