N v N
| Jurisdiction | England & Wales |
| Judge | Lord Justice McFarlane,Sir Stephen Sedley,Lord Justice Patten |
| Judgment Date | 26 March 2014 |
| Neutral Citation | [2014] EWCA Civ 314 |
| Date | 26 March 2014 |
| Docket Number | Case No: B6/2013/2214 |
| Court | Court of Appeal (Civil Division) |
[2014] EWCA Civ 314
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM GUILDFORD COUNTY COURT
HHJ Raeside
MK03D00837
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Patten
Lord Justice McFarlane
and
Sir Stephen Sedley
Case No: B6/2013/2214
Mr Michael Glaser and Mr Phillip Blatchly (instructed by Gans and Co Solicitors Llp) for the Appellant
Mr Malcolm Hay (direct access) for the Respondent
Hearing date: 31 st January 2014
The issue in this appeal relates to the circumstances in which a court may, on the grounds of material non-disclosure, set aside an order for financial provision following divorce.
The issue in the case relates to an order for periodical payments to be paid by a former husband to his former wife. The order was made on 24 th November 2009 and provided for periodical payments at the rate of £1,000 per month until 1 st April 2012. The order included a bar under Matrimonial Causes Act 1973, s 31 (7B)(c)(i) ["MCA 1973"] preventing the wife making any further application to extend the requirement to make payments beyond that final date.
The husband had, in the past, commanded a high salary in employment in various institutions in the City. He had, however, ceased work in September 2008 citing depression and stress consequent upon the continued litigation between these former spouses over money and arrangements for the children. A key finding in the judgment supporting the periodical payments order of November 2009 was the judge's acceptance that the husband was unable to work due to depression and that, at that time, he had a minimal earning capacity. However the judge contemplated that he might choose to work in the near future and that it was likely that he would return to well paid employment when the litigation was completed.
On 28 th November 2011 the wife issued an application to set aside the 2009 order on the basis of the husband's material non-disclosure. That application was determined some 18 months or so later by the judge who had made the original order. Having reviewed evidence of the husband's remuneration from business activities and work during the first half of the three and a half years following her original order, the judge concluded that there had indeed been material non-disclosure to her in 2009, and to two appellate courts subsequently, sufficient to justify setting aside the original November 2009 order. She therefore gave consequential directions for a subsequent hearing to re-determine the wife's periodical payments application. The husband now appeals to this court against the judge's determination of July 2013 setting the original order aside for material non-disclosure.
Detailed history
Having set the scene, it is necessary now to descend to a lower level of detail to explain the background circumstances. The couple met in l986 and subsequently married in 1993. There are two children, a boy, now aged 19 and a girl, now aged 16. The precise date of separation is contentious, but it had apparently been achieved by the year 2002. The husband petitioned for divorce in June 2003 with decree nisi being pronounced in January 2005.
So far as financial matters are concerned, a consent order was made on 11 th January 2005 which, so far as maintenance is concerned, included a provision for periodical payments in the wife's favour at £1,000 per month for a fixed five year term. At the time was husband was earning in the region of £125,000 gross per annum and was paying maintenance for the children via the Child Support Agency.
In February 2008 the wife applied to extend the term of the periodical payments order so that it would become a "joint lives" order and to increase the quantum from £1,000 to £1,800 per month. Six months later the husband left his then employment in the City citing depression. Subsequently he too applied to vary the periodical payments order. The hearing of these two cross applications took place before District Judge Raeside in September 2009 over the course of three days. The judge's draft judgment was sent to the parties on 15 th October 2009 but the order encapsulating the terms determined by the judge was not drawn up until 24 th November 2009. As I have said, the judge maintained the level of periodical payments at £1,000 per month, but extended the term of the order to 1 st April 2012 however, imposing thereafter, a bar to any further extension under MCA 1973, s 31(7B)(c)(i).
I pause there in the historical summary in order to record the observations and decisions made by District Judge Raeside with respect to the husband's earning potential as at the autumn of 2009. Early in her judgment she summarised her impression of the husband as a witness in these terms:
"The husband, in the end, impressed me. This court is well used to husbands who lose their jobs and dissipate their assets in order to defeat the financial claims of their former wife. I do not consider that this is such a man. I have watched the husband (and his mother who was allowed into court to support him) and heard him give evidence over almost two days. I accept that he is genuinely distraught over the lack of contact with his children; I accept that the behaviour of his former wife has had a major effect on his mental health. I find him fundamentally honest, although in a couple of serious instances he has failed before the court and the CSA to be honest about his financial situation. He is an able and clever man, and if [the wife] would leave him alone, he would be able to contribute both in financial and emotional terms towards his children."
Later, under a heading "The husband's health and financial conduct" the judge said this:
"I accept the evidence of the two doctors that the husband is suffering from depression and unable to work. I accept that this is probably triggered by the litigation and proceedings conducted by his former wife. However, he has, by his conduct, contributed to the situation he finds himself in."
The judge then gave four examples of the husband's failure to co-operate in an open and transparent way with the CSA on three occasions and, on a fourth occasion, failing to declare his interest in a particular fund on his Form E. The judge then goes on to say:
"So, whilst the husband puts the blame for his poor health on the wife, his lack of transparency as to his financial situation has contributed to the proceedings and therefore to his poor health. It was probably not until the wife heard the husband's evidence that she was able to understand his slightly complicated financial situation and the employment packages that he has had over the years. This is a very unsatisfactory situation, and has ratcheted up the costs of these proceedings and the level of mistrust from the wife."
Finally, when setting out her conclusions, the judge said this about the husbands' earning capacity:
"In good health, the husband can earn over £100,000 pa. At the moment, he has a minimal earning capacity. What he will choose to do in the near future is impossible to predict; but I have the impression that he wishes to work and to continue to support his children as he has in the past. I have come to the conclusion that it is likely that when the litigation is completed, he will be able to return to a well-paid employment…if he is involved in further litigation or CSA wrangles he will not be able to work."
The judge then set out her decision and in doing so she grounded her analysis not upon the husband's earning capacity, but upon the wife's needs for the next two and a half years, and her developing capacity to earn. In the light of those findings she set a final date for the end of periodical payments liability at April 2012. The judge then said this:
"I dismiss the wife's claims for an increase in her own maintenance from the date of her application; in the light of her failure to take any realistic steps towards financial independence I do not see why the husband should pay any more than that sum. I accept that the husband was in receipt of a good salary, and had access to greater sums through the Flex account, but the wife should have been taking steps to increase her own earning capacity and has done nothing serious about it. In those circumstances, I can see no reason for an increase in the sum. I also reject the husband's application to dismiss her claims earlier; I am satisfied that the wife needs the ongoing support for herself and there is no justification in an earlier dismissal of her claims."
When I come, in due course, to identifying the alleged material non-disclosure, the dates of the three day hearing (September 2009), the date on which the judgment was circulated (15 th October 2009) and the date upon which it was formally handed down and the order made (24 th November 2009) will be important.
Almost immediately the wife issued an application to appeal the November 2009 order. The appeal was heard by HHJ Rylance on 14 th May 2010. He allowed the wife's appeal and extended the term for the payments to 31 st August 2015, following which date spousal periodical payments would continue on a nominal basis for the parties' joint lives.
In June 2010 the husband applied to appeal HHJ Rylance's order to the Court of Appeal. He was successful and on 30 th June 2011 the Court of Appeal (Thorpe, Longmore and Stanley Burnton LJJ) set aside the order of HHJ Rylance re-instating DJ Raeside's original September 2009 order.
Following a failed application to the Supreme Court for permission to appeal, the wife...
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