Joy v Joy

CourtFamily Division
JudgeCOHEN J
Judgment Date12 June 2019
Neutral Citation[2019] EWHC 2152 (Fam)

Financial remedies – Practice and procedure – Part-heard application – Judge died before giving judgment – Not appropriate for new judge to speculate as to opinion of original judge or to draw conclusions from email correspondence – Whether statement in financial remedies proceedings could be admitted into French criminal proceedings.

The couple married in 2006, having started to cohabit in 2003; they separated in December 2011. They had three children. When the financial remedy proceedings initially came before a High Court judge in 2015, the wife was seeking a lump sum of £27 million, in the hope that she could prove that assets which the husband had placed, or caused to be placed, in a trust called NHT were a resource available to him. The husband claimed that he was unable to pay the wife anything by way of capital award, and was offering only modest periodical payments to the wife and the children. The husband argued that the trust could not be treated as his resource because he had been permanently excluded from it since November 2013; he stated that the trustees were now ruthlessly pursuing him and all the assets to which he could lay claim, and that his debts exceeded any assets available or likely to become available to him. Neither the trust nor key individuals previously involved in the husband’s various arrangements participated in the proceedings as parties or witnesses.

The husband had retained his Swiss resident status, acquired before the proceedings began, which involved spending about £16,000 annually on rent; he visited the rented apartment only occasionally. Otherwise, the many expensive assets that the husband made use of, including the property he lived in and the majority of the very valuable cars he had use of, were owned by others, in such a way as to minimise tax. No or only small sums of money would be made available by forcing a sale. The husband was still living in the former matrimonial home (a chateau), the wife was living nearby in rented accommodation, and the children spent time with both of them, under French court orders.

The High Court judge concluded that the husband had settled NHT with a very large sum of money, that he and the children had been the sole beneficiaries until he was irrevocably excluded in November 2013; and that although the children were not currently beneficiaries, they could be restored as beneficiaries because they had not been excluded. There were no other beneficiaries at the moment. The judge found the husband’s evidence to be blatantly dishonest, designed to obscure the past, present and future. The judge was confident that in some manner, and at some time which he could only surmise, the husband would benefit again from the trust. In the judge’s view, the wife had nothing and was destitute, or near to it, while the husband, through the assistance of his friends, continued to enjoy a comfortable life.

The judge adjourned the wife’s claims for a lump sum and for any adjustment of property order (although he made an order dismissing her claims to vary the trust on the basis that it was a nuptial trust, and her claim to the transfer to her of certain cars). In the judge’s view it was certainly foreseeable that an accommodation would be made to give the husband access to part of the millions held within the trust. In the meantime, he ordered the husband to pay the wife periodical payments of £120,000 pa following decree absolute, on the basis that he would be able to find well-paid employment. In the judge’s view, the considerations that appeared to be preventing the father from obtaining employment were fiscal and in reality he had the faculty to earn substantial sums. The judge formally adjourned the applications the wife had made for English orders for the children’s benefit. Finally, he ordered the husband to pay £334,263 towards the wife’s costs.

The judge explained that he was mindful of the cases in which it had been said that capital claims should not be left indeterminately unresolved, but suggested that there were hard cases (a category within which this case fell) in which fairness and justice had to prevail over the normal desirability of finality in litigation. In his view any further application by the wife for capital provision should not be constrained by Pearce v Pearce[2003] EWCA Civ 1054 and it should be open for the tribunal hearing it to make whatever lump sum award it might appear appropriate to impose in exchange for a clean break, without limiting the exercise by reference to the periodical payments order which might be in force, either then or after appropriate variation.

Three months after the order was finalised, the husband applied to vary the periodical payments order downwards. The proceedings took until July 2017 to come on. In them, the husband claimed that he was living hand-to-mouth, reliant on loans from his supporters. In a judgment given in August 2017, the same High Court judge dismissed the husband’s application, repeating his view that the husband’s apparent difficulties would be resolved at some point. The judge ordered that the wife’s capital claim be restored for hearing in 2017 and it came before him in December 2017. The costs element of the 2015 order remained unpaid. Following the illness and death of the judge before his judgment was delivered, the case was allocated to another High Court judge, who ordered each party to file an updating statement, including the provision of documentary evidence in support of their alleged debts.

The wife’s statement established that the husband was substantially in arrears with the periodical payments. The husband claimed to have lost his employment in November 2017. Since December 2017, the eldest child had been living in the husband’s care, but was now at boarding school in England (apparently paid for by a close friend of the husband, who was also the protector of the trust) while the younger two children continued to alternate between their parents’ homes in France on a weekly basis. The husband still had the use of two comfortable homes in England and France and despite apparently massive loans appeared not to have been deprived of any elements of his original lifestyle. The wife owed very large sums, principally to her lawyers. Her financial position was described as dire and for much of the last winter, the wife’s home, in which the two children spent half their time, had been without water and heating.

The wife was seeking to have her capital claims further adjourned until July 2022; the husband argued that a continued adjournment offended against the clean break principle and the overriding objective.

Held – (1) It was not appropriate for the court to speculate as to how the original judge might have determined the matter if his judgment had been produced following the hearing in December 2017. The court refused the wife’s invitation to draw conclusions from an email that the original judge had sent to the parties. In the light of his conclusion in the 2017 judgment in the maintenance proceedings, it might be thought unlikely that he would not have granted a further adjournment, but the court was looking at it now in 2019, nearly 4 years after the original adjournment of the wife’s capital claims (see [24], below).

(2) The court acknowledged the statutory requirement to seek to achieve a clean break, but, as the husband did not seek to challenge the order that he continue to pay periodical payments at the rate of £120,000 pa, that goal was unachievable (see [25], below).

(3) The husband had argued that the wife’s claim to capital could be maintained by her ability to apply to capitalise the maintenance award as and when she chose, and when the husband had means. However, that ran the risk of constraining her claims in accordance with Pearce v Pearce[2003] EWCA Civ 1054. Her lump sum should be at large and not limited to a capitalisation of what might, by then, be a modest periodical payments order (see [26], below).

(4) The husband had human rights but it should be remembered that the wife had rights too, including the right to have her claims properly determined (see [27], below).

(5) Given the husband’s serious misconduct, dismissing the wife’s claim was a matter of last resort. The court was not so pessimistic about the future ability or likelihood of the husband receiving funds that it was prepared to take that step. The court therefore adjourned the wife’s capital claims, although they were to be dismissed unless an application to restore them was made by 31 July 2022. For the avoidance of any doubt, what was required was that an application was made, not that it be heard, by that date (see [28], [33], below).

(6) Legal...

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