Hamilton v Hamilton
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Baron DBE,Lord Justice Kitchin,Lord Justice Thorpe |
| Judgment Date | 24 January 2013 |
| Neutral Citation | [2013] EWCA Civ 13 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B6/2012/1268 |
| Date | 24 January 2013 |
[2013] EWCA Civ 13
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROMTHE HIGH COURT
FAMILY DIVISION
Mrs Justice Parker
FD07D03058 / FD09P02620
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Thorpe
Lord Justice Kitchin
and
Mrs Justice Baron
Case No: B6/2012/1268
Michael Horton (instructed by Moss Beachley Mullem & Coleman) for the Appellant
Christopher Wagstaffe QC andAnthony Geadah (instructed by Cripps Harries Hall LLP) for the Respondent
Hearing dates: 6 th December 2012
This is an appeal by William John Hamilton ("the Husband") from a decision of Parker J given on the 9 th May 2012. The point of principle which falls to be determined by this appeal is whether the judge was entitled to vary the provision for the payment of capital by Tracey Elizabeth Hamilton ("the Wife") to the Husband given the terms of a consent order dated 18 th January 2008 (hereinafter referred to as the "original Order").
The relevant provisions of the original order, were approved by DJ Reid as a piece of box work, and were (insofar as relevant to this appeal) as follows:
1. "The Wife shall pay or cause to be paid to the husband the following lump sums [emphasis added];
(i) £150,000 within 7 days of the date of this order. [In fact this was in fact paid on the 26 th October 2007 prior to the date of the original order].
(ii) £150,000 by 30 th April 2008 [Some £90,000 of this sum was paid on the 15 th September 2008 i.e. 5 months late, and there remains £60,000 unpaid to date]
(iii) £50,000 by 30 th April 2009 [Unpaid]
(iv) £50,000 by 30 th April 2010 [Unpaid]
(v) £50,000 by 30 th April 2011 [Unpaid]
"2. The Husband shall transfer to the Wife simultaneously with the payment to him of the first lump sum referred to in paragraph 1 above all his legal and beneficial interest in the [former matrimonial home].
"4. Upon completion of the transfer of [the former matrimonial home] and the payment of the lump sum …..[the usual drafting dismissing all the parties' life and death claims against each other].
"6. There be liberty to apply as to the implementation and timing of the terms of this order"
In circumstances which we outline more fully below, whilst the Wife was able to pay a total of £240,000 to the Husband, she was unable to pay the full amount due as a result of a dramatic decline in her business (which went into administration) such that the Husband was (and still is) owed some £210,000 plus interest.
When the Wife failed to make the required payments the Husband took enforcement proceedings and also served a statutory demand on the Wife, being a necessary precursor to issuing bankruptcy proceedings. To counter this the Wife issued proceedings pursuant to Section 31 of the Matrimonial Causes Act 1973 (hereinafter referred to as "the Act") seeking a variation of the original order in respect of the remaining capital owing. She asserted that, howsoever the original order had been drafted, it was plainly an order for a lump sum payable by instalments. In addition by way of fallback, in the event that her primary application failed, she added a claim under Schedule 1 to the Children Act 1989 by which she sought the retention of the former matrimonial home until the children ceased fulltime education. It is apparent that the main purpose of her applications was to ensure that her current home with the children of the family was preserved. The Husband submitted that the original order could not be varied as it was, in reality, an order for a series of individual lump sums.
Parker J heard the case over 5 days and gave Judgment in May 2011. For reasons which do not concern us, her order was not made until May 2012.
The relevant provisions of Parker J's order for the purposes of this appeal are as follows:—
"5. It is hereby declared that the provisions of the order of the 18 th January 2008 which provide for lump sum payments to the [Husband] by the [Wife] constitute an order for the payment of a lump sum by instalments within section 23 (3) (c) of the Matrimonial Causes Act 1973..
7. Pursuant to s31 of the Act the lump sum provision of the order 18 th January 2008 be varied by their substitution as follows:
(1). the Wife shall pay or cause to be paid a lump sum amounting to the following sums:
(i) £64,537 plus interest thereon at 8% from 15 th September 2008 until 1 st December 2009 and thereafter at the rate of 4% until 1 st November 2015;
(ii) the sum of £50,000 plus interest thereon at 8% from 30 th April 2009 until 1 st December 2009, and thereafter at the rate of 4% until 1 st November 2012;
(iii) the sum of £50,000 plus interest thereon at the rate of 4% from 30 th April 2010 until 1 st November 2015; and
(iv) the sum of £50,000 plus interest at the rate of 4% from 30 th April 2011 until 1 st November 2015.
(2) The lump sum above shall be payable by the following instalments:
(i) the sum of £50,000 on or before 1 st November 2012;
(ii) the remaining principal (but not including interest thereon) by no later than 1 st November 2015;
(iii) all remaining sums of interest by 31 st May 2016.
(3) For the avoidance of doubt;
(i) the lump sum (excluding any interest due under the provisions of subparagraphs (1) (i) to (iv) above) shall carry normal judgment interest with effect from the dates set out in sub paragraph (2);
(ii) no interest shall accrue under subparagraph (1) once interest becomes due under subparagraph (2).
(iii) a payment made pursuant to subparagraphs (2) (i) and (ii) shall be treated as payment of principal and not interest, but any other payments shall be treated as payments first towards interest and thereafter reduction if any of the principal sum owing".
The Grounds of Appeal.
7. There are 5 Grounds of Appeal
a) The Judge was wrong in law in holding that any order for the payment of lump sums over time must be a "lump sum payable by instalments with Section 23 (3) (c)" and therefore variable under Section31.
b) Parker J was wrong in holding that paragraph 1 in the relevant order in this matter was a lump sum by instalments and thus variable
c) She was wrong in law in holding that Section 31 (2) (d) permits the Court to vary the quantum of the lump sum ordered as opposed to the timing of the same
d) In the alternative, if there was a power of variation, then the Judge was wrong in principle to vary the lump sum in this case given the facts as found. Furthermore complaint is made that the manner in which the variation was undertaken was "too complicated" and the extension of time permitted was excessive.
e) The last ground asserts that the Judge was plainly wrong and/or perverse in finding the Wife was not the true beneficial owner of the company for which she worked.
The Factual Matrix.
The Judge outlined the relevant facts as at the date of the hearing in paragraphs 5–9 of her Judgement as follows:
" The Parties
5. W is 42. H is 45. They were married on the 14 th July 2000. W is English. H is American. A decree nisi was pronounced on the 31 st January 2008 and the decree absolute on the 27 th March 2008. They have two children, O who is 8 and G is who is 7 in the primary care of W but they have contact with H. W lives with the children at the former matrimonial home in Wimbledon. She is a business woman who runs a recruitment agency through a company structure. The history of the company structure is complex….. W is funding this litigation which has so far cost her £57,000. She is presently earning £75,000 per annum which equates to £4,156 per calendar month net or just under £49,400 per annum net. The mortgage payments on the matrimonial home are presently £2000 per month.
6. H is obtaining benefits and litigates in these proceedings under a public funding certificate. W alleges a) that he is a lifetime alcoholic b) that he is in fact trading as a property developer under the counter and c) that he has other hidden assets. H lives in a flat in south west London, it is a former local authority property purchased by him in November 2007 for £260,000 with an initial advance of £236,340. H claims to have significant debts of £122,000 or thereabouts. I will deal with the extent of those debts and my findings in so far as I can make them later on in this judgment.
7. W also claims to have debts. A mortgage on the matrimonial home £447,579, a Lloyd's debt of £11,674,and credit card debts of £9,226. H disputes the extent of those debts. She also says that she owes her parents £230,000. She also claims to have a debt to her former solicitors of £18,700 or thereabouts — that debt is in dispute. In fact the only debts that H accepts are those which are documented in respect of bank loans and credit cards.
8. There are issues as to whether H has funds abroad held by a cousin. H is said not to have accounted for the receipt of funds from W to the tune of £140,000, even after taking into account his costs. There is an issue as to whether he is still running a business as a property developer. H is a graduate and a skilled carpenter and is plainly intelligent. He says he is sure he will be earning in the future.
9. The former matrimonial home has been valued at £675,000 subject to the mortgage which, taking sale costs at something just over £20,000, leaves a present equity of £205,000. H has charged it with some £65,000 being one payment of £50,000 plus interest under the lump sum order together with the costs of the W's failed set aside application."
When the parties' marriage came to grief they both sought legal advice from solicitors who...
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