Goyal v Goyal
| Jurisdiction | England & Wales |
| Judge | Lord Justice McFarlane,Lady Justice Macur |
| Judgment Date | 29 July 2016 |
| Neutral Citation | [2016] EWCA Civ 792 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B6/2016/0511 |
| Date | 29 July 2016 |
[2016] EWCA Civ 792
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL FAMILY COURT
HHJ Glenn Brasse
FD12D02732
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice McFarlane
and
Lady Justice Macur
Case No: B6/2016/0511
Mr James Turner QC and Mr Byron James (instructed by Hunters Solicitors) for the Appellant
Miss Joanna Toch (instructed by Thomas Dunton Solicitors) for the Respondent
Hearing date: 14 th July 2016
Approved Judgment
This appeal, which concerns an application for a pension sharing order within financial remedy proceedings following a divorce, raises the question of what jurisdiction, if any, the Family Court may have to make an order transferring or assigning one spouse's interest in a pension annuity policy to the other spouse outside the statutory scheme established by the Matrimonial Causes Act l973 ("MCA 1973").
Background
As the point which falls for determination is a strict matter of law, it is not necessary to rehearse the very substantial factual history in any detail at all. The parties married in September 2003. They have one child, a daughter, born in April 2007. The couple separated in June 2011. Since that time they have been locked in acrimonious proceedings and, we were told, there have been no fewer than 65 separate orders made in relation to either the validity of the divorce, or child arrangements or finances since that time. A decree nisi was pronounced in August 2013, but, as yet, there has been no decree absolute.
The couple are still both under the age of 40 years. The husband, who is said to be highly intelligent, developed a career in banking. However, he also developed, as the judge found, an addiction to spread betting, the scale of which is described in findings made by the judge, HHJ Glenn Brasse, in the main judgment given at the conclusion of the financial remedy proceedings on 9 th October 2015 at paragraphs 31 and 32:
"31. He made his bet by using his skills to try to predict uncertain future events, whether in the financial world or even in sport. In the first three years of his spread betting, he did well. In 2003, he made £15,000 which funded holidays and high living. In 2004, he made £20,000 to £30,000. By 2005, he had moved to London and was working in banking. From then on, however, his profits consistently turned into accumulating losses. In 2005, he lost £5,000. In 2006, he lost between £5,000 and £10,000. In 2007, disaster struck. He lost £100,000.
32. However, he persisted and disaster turned into catastrophe. In 2008, he lost £250,000 to £300,000. Even now, he is not entirely sure of the exact figure. In 2009, he lost £45,000 to £50,000. In 2010, he lost between £50,000 and £100,000. In 2011, he lost around £50,000. In 2012, he lost between £40,000 and £50,000 and in 2013, he told the court, he lost between £10,000 and £20,000. By 2013, he had run out of the means to engage in any further spread betting but, as his bank accounts show, his spread betting in fact continued, as I shall later mention, in 2014."
As the judge found, by the time of separation the husband had lost, conservatively, over £500,000 which had been funded by his earnings and, latterly, by borrowing.
The financial remedy proceedings were hotly contested. The wife was represented by counsel (not Ms Toch) but the husband was, for the main part, a litigant in person, having counsel acting for him on only one day. The issue in the present appeal relates to a single pension annuity and it is not necessary to describe the other aspects of the couple's finances which were in contention. It is, however, necessary to describe the judge's overall view of the husband and of the merits of the case. The judge formed a very adverse impression of the husband as a witness. At paragraph 47 he said:
"47. I listened very carefully to Mr G's evidence over many hours. Having heard Mr G give evidence in the witness box, I found him to be digressive, evasive, argumentative and, hence, unreliable as a witness. I found him to be highly manipulative. He sought to control the proceedings in various ways. He constantly evaded difficult questions. He digressed to avoid a direct answer more often than I can recall. He continuously deflected questions by complaining of unfairness or by making allegations against the wife and the wife's counsel."
The judge went on to make a number of findings to the effect that the husband had deliberately withheld disclosure of documents and information within the financial remedy proceedings.
The judge's overall conclusion was that the husband's addiction to spread betting had led him to dissipate the entirety of the family finances almost to the point of their extinction. He therefore concluded, at paragraph 113, in these terms:
"113. In my judgment, it would be unconscionable for this court to consider any other kind of order than to acknowledge that, in fairness, what is left should be used for the benefit of the wife and child if possible. If he retained these shares or the proceeds of these shares, his history of dissipation of assets makes it very likely that he would dissipate this money too on spread betting."
In the court order reflecting the October 2015 judgment the judge ordered, to take effect "forthwith upon decree absolute", the payment of a lump sum representing the proceeds of sale of certain shares, together with an order for maintenance pending suit and, following decree absolute, periodical payments for the wife at the rate of £6,000 per annum until the first to occur of death, her re-marriage or further order. Save for the issue of the wife's application for a pension sharing order, the claims of each of the spouses, the one against the other, were expressly dismissed.
The pension issue
At the time the divorce proceedings commenced the husband had two pension policies, one with UBS and the other with Standard Life. In a consent order made in February 2014, which has subsequently been set aside, the husband agreed to a pension sharing order whereby the wife would receive fifty per cent of these two pensions. Subsequently the husband initially claimed that he had encashed these two pensions in January 2014, therefore prior to that consent order, and received a payment of around £33,000 which he had then used to pay off debts. Subsequently it transpired that the policies had been converted into an annuity policy with a cash equivalent transfer value worth over £87,000 in September 2014. The husband made no disclosure of that fact at that time, nor in response to a specific questionnaire on the topic did he disclose that fact in his reply of March 2015.
The husband's account to the judge during the 2015 proceedings was that he had made an agreement with a Mr D, who was resident in India, that he would assign the benefits under these policies to Mr D in return for Mr D discharging certain of the husband's debts. He told the judge that he had entered into this agreement in January 2014, but it was not until September 2014 that he was in a position to give effect to it by converting the policies into the annuity. The husband and wife have at all times been resident in England and the two pension policies had been English policies administered in England. The annuity policy which was the recipient of the proceeds of the two pension policies was, however, in India.
The judge held that the "secret transfer of these pensions without the wife's knowledge or consent or without disclosing the fact to the court was, in my judgment, a manifestly deceitful course of action which must have been designed to defeat the wife's legitimate claims". The judge had no hesitation in dismissing the husband's claim to the effect that the wife knew all about this transaction at all times.
In the light of the unsatisfactory nature of the husband's evidence on the issue of pensions, the judge concluded, understandably, that he required further evidence before being able to conclude the wife's application for a pension sharing order. That aspect of the wife's case was therefore adjourned to a further two hour hearing before HHJ Brasse and directions were made requiring the husband to provide certain documentary evidence.
That further hearing took place on 6 th January 2016. The wife was represented by counsel. During the period between the two hearings the wife had, in fact, gone to India herself and obtained certain documentation with respect to the pension annuity and had discovered a bank account in the husband's name into which the regular income from the annuity was being paid.
It remained the husband's case that the benefit of the annuity had been assigned formally by him to Mr D. The judge heard oral evidence and considered documentation before concluding that the husband's case, at its height, was that there was an agreement to assign the policy and nothing more. No document formally assigning the benefit of the policy to Mr D had been produced and the judge held that the husband's case to the effect that he no longer had any interest in the policy himself and that Mr D was the sole beneficiary was, in the judge's words, "a bare faced lie from beginning to end". The judge went on to find as a fact that "this policy is still beneficially owned by Mr Goyal" and, secondly, the bank account into which the regular proceeds were paid was "still operated by Mr Goyal for his own benefit".
The focus of this appeal is not upon the judge's findings of fact but upon the order that he made in the light of those findings. In this regard the final four paragraphs of the judge's judgment are crucial:
"29. As I explained in my [October] judgment, Mr. Goyal over the years helped himself to the bulk of the family's wealth. The consequence...
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