Olu-Williams v Olu-Williams

CourtFamily Division
Judgment Date21 September 2018
Neutral Citation[2018] EWHC 2464 (Fam)

Financial remedies – Enforcement – Money orders – Undertakings – Committal application instead of judgment summons – Strategic applications and potential abuse of process – Dispute of substance as to amount owed – Nature of warning to be given in relation to undertakings – Husband’s ability to pay – Disclosure breaches.

The couple had married in 1998 and had three children together. The husband specialised in raising finance for businesses in emerging markets. In September 2013 the wife petitioned for divorce. Following an FDR in November 2014, the couple agreed that the family home, believed to be worth £4 million, was to be sold, on the basis that £1 million would be available for the wife, after repayment of legal expenses, loans and school fees. In addition, the husband gave various undertakings providing for the wife to receive sums of money on completion of two deals he was working on. A nominal periodical payments order was made in the wife’s favour; no child maintenance was provided for, but the husband also undertook to be solely responsible for the children’s educational costs and to indemnify the wife in relation to such costs. No penal notice was included in this order but it did include a warning notice in more detailed form than that specified in the rules, which plainly related to the undertakings given by the husband.

Unfortunately, the family home did not sell. Eventually it was rented out and the rental income was used to pay the mortgage, the wife’s rent and the husband’s rent. However, an unpaid bridging loan on the property eventually led to the property being repossessed and sold. The wife received less than £100,000 from the sale. Further, neither of the husband’s two deals came to fruition in the way that had been hoped, producing only relatively modest sums. In relation to the school fees, the school eventually obtained a county court judgment against both parents and bailiffs seized the wife’s car.

In July 2016, the wife restored the matter to court. A consent order provided that until the wife received the sum she had been due to receive on sale of the family home, the husband would continue to discharge the rent on the property that the wife and children were living in. In June 2017 the husband sought to vary this order, proposing that the wife use the sums she had in fact received from the sale of the family home to pay her own rent. At a directions hearing in August 2017, which the husband did not attend, the judge ordered him to pay £11,800 within the week. The judge also extended the time for the husband to comply with an existing disclosure order, provided for further disclosure by the husband and required him to pay the wife’s costs. Penal notices were attached to these orders. Solicitors acting for the husband filed a notice of appeal within the Central Family Court, rather than the Civil Appeals Office; because the appeal had been filed in the wrong court, no action was taken. By the time the problem emerged, the husband had concluded that he could not afford to pursue it further.

On 17 October 2017, the wife issued an application for enforcement of the orders and an application for committal, alleging 12 breaches, some of which related to the original 2014 order (failure to pay her half the sums received in respect of one of the two deals, a related issue concerning certain shares, and a failure to be responsible for the children’s education costs and to indemnify her for any relevant liabilities); others of which related to the orders made in 2016 and 2017 (failure to pay her £11,800, failure to pay her rent, failure to comply with specific disclosure orders, failure to pay her costs).

By the time the case was eventually heard in September 2018, the wife was asking, among other things, for permission to withdraw the grounds concerning payment of her rent and failure to pay her costs, accepting that the original orders had not included a penal notice. After the wife had given oral evidence, she also sought permission to withdraw the ground concerning the unpaid sum and some other grounds concerning disclosure. She also made an application to treat the ground relating to the ‘deal’ as a judgment summons. The husband filed formal admissions in relation to certain of the remaining disclosure grounds but argued that in relation to the school fees, it was his inability to pay which had led to the county court judgment and that the wife had suffered no financial loss. Generally he argued that there was no case to answer and abuse of process.

Held – (1) Family Procedure Rules 2010 PD 37A paragraph 13.3 provided that a committal application could not be discontinued without the court’s permission. Taking this together with the power to grant permission to amend an application notice, permission was required to amend an application notice to delete a ground. There was no injustice in doing so in this case, indeed quite the reverse, given that under FPR 37.9(1) an order could not be enforced by committal unless a penal notice had been prominently displayed on the front of the border. This was mandatory in respect of enforcement by committal. It was not mandatory in respect of judgment summonses but the wife had not issued a judgment summons (see [7], below).

(2) The wife had not established on the evidence so that the court was sure (beyond reasonable doubt) that the husband had the means to pay the school fees and that he had wilfully refused to pay. The ground relating to school fees was therefore dismissed. Equally, it was not the case that the husband could be in breach only if the wife incurred a financial liability. The wife had been entitled to amend her notice to rely on the failure of the husband to pay the school fees in good time and on the subsequent entry of a judgment against the wife and the seizure of her car as evidencing a breach of that undertaking to indemnify (see [12], [58], below).

(3) The husband had admitted he was in contempt of court in relation to disclosure. However, these breaches were not sufficiently serious to warrant immediate committal to prison or suspended committal. They were sufficiently serious to warrant a financial penalty but the court was unable to determine whether the respondent was in a position to pay such a penalty. By November, a financial remedy application was due to be heard, and a clearer picture as to the husband’s finances might emerge then. Sentence was therefore adjourned to await developments in that hearing (see [1], [13], below).

(4) Taken together, FPR 37.92 and PD 37A 2.1 and 2.2 did not impose a mandatory obligation in respect of an undertaking contained in an order to include a warning as to consequences or a statement signed by the person giving the undertaking that they understood the terms of the undertaking and the penal consequences of non-compliance. (No doubt as a matter of good practice and certainly if the new standard family orders were used, any order would contain both the penal notice as to orders and the warning as to undertakings.) (see [46], below).

(5) The court did not accept the husband’s argument that the evidence made it clear that the issuing of the enforcement application alongside the committal had been entirely strategic and thus potentially an abuse of process. In any event, the court did not consider that Mohan v Mohan [2014] 1 FLR 717 was authority for the proposition that, if an application was entirely strategic, the consequences were strikeout. Even if a court concluded that an enforcement application had been a purely strategic move, the consequences were to be dealt with on a case-by-case basis, applying the overriding objective and in particular doing justice and achieving fairness between the parties. In this case none of the remaining grounds were affected by any evidence that might have arisen as a result of the tandem process and no unfairness arose out of the tandem approach adopted in this case. Nor did the court accept the premise of the husband’s argument concerning the hearing of non-disclosure and non-payment allegations alongside each other. There was an allegation in this case of a failure to disclose material prior to September 2017. The fact that the husband had subsequently produced the evidence in relation to that order, which might go to mitigation if the breach was proved, did not make that evidence inadmissible. Applying Mohan, evidence which was produced in answer to orders which predated the committal application was admissible in any event, as was documentary evidence in the form of bank statements or other documents which had an independent existence, even if produced as a result of the enforcement and committal tandem processes. It appeared relatively common from the authorities for applications for committal for non-payment and applications for committal for failure to disclose to be heard in tandem. The husband had not substantiated his abuse of process argument (see [47]–[49], below).

(6) However, the combined effect of the statute and the procedure identified a clear route for enforcing money orders, which was by judgment summons rather than committal. Although the court had the general power to waive defects in compliance with the procedural rules if no injustice was caused, in respect of a wholesale failure to comply, based on a deliberate choice not to pursue the correct course, it would be unjust to treat a committal application as a judgment summons application. In particular there was a difference between the six-week penalty available in respect of a judgment summons and the two-year penalty which arose in committal. As a matter not only of justice between the parties, but also to uphold the need for compliance with the procedural code and the statutes, the court would not permit the wife to treat the committal application concerning the ‘deal’ as a judgment summons (see [50], below).

(7) In any event the 2014 undertaking concerning the ‘deal’ was...

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