SM v Dam
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mostyn |
| Judgment Date | 05 March 2014 |
| Neutral Citation | [2014] EWHC 537 (Fam) |
| Docket Number | Case No: FD98D03022 |
| Court | Family Division |
| Date | 05 March 2014 |
[2014] EWHC 537 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Mostyn
Case No: FD98D03022
Mr Max Lewis (instructed by Bross Bennett) for the Applicant
Mr Justin Warshaw (instructed by Sears Tooth) for the Respondent
Hearing date: 26 February 2014
In this case the original consent order for ancillary relief was made as long ago as 8 April 1999. Each party applied to vary it, and in the case of the wife she applied for the maintenance order to be capitalised. On 11 May 2005 Charles J handed down a full judgment disposing of the cross-applications. He ordered the husband to pay a lump sum of £1.3m on a clean break basis; to pay child support; and, together with a company owned and controlled by him, to pay costs of £324,000. The husband sought leave to appeal. Permission was granted on 13 October 2005 on terms that the husband provided security for costs. Thorpe LJ invited the parties to participate in the Court of Appeal mediation scheme. A mediation took place led by His Honour Clive Callman. An agreement was reached which substituted a new figure of £926,000 for the lump sum of £1.3m. The agreement was incorporated in a consent order made by Wall LJ on 21 January 2006. The new figure was to be paid in instalments. The first instalment was £700,000 and was to be paid by 31 December 2006. If an instalment was missed the mediated agreement and consent order of Wall LJ dissolved and the original order of Charles J revived in full. By 31 December 2006 the husband had paid only £315,000. Therefore the agreement and order of 21 January 2006 dissolved and the order of Charles J of 11 May 2005 revived.
On 21 April 2010 the wife issued a Statutory Demand for payment claiming that the husband owed her, with interest, just under £2m. The husband applied to set the demand aside. There were a number of hearings. Eventually the parties entered into an agreement on 2 November 2011 by which, inter alia, the wife withdrew the Statutory Demand. On that same day an order was made in the Court of Appeal discontinuing the husband's appeal.
The agreement of 2 November 2011 ran to 3 1/2 pages. It states on its face that each party had received legal advice. It was obviously drawn up by a lawyer. It was signed by each party and their signatures were witnessed by solicitors.
The first recital to the agreement states that:-
The Parties by the Agreement intend to set out their intention to use reasonable endeavours to attempt to compromise all existing legal disputes between them and to provide for the present and future maintenance of [the wife].
In the definition section "the Mediation" is defined as "a mediation in which the parties intend to participate by the 31 January 2012, on the terms set out below." "The Balance" is defined as "such sum as represents the outstanding balance of monies due under the lump sum award together with interest accrued or accruing, if any, as the parties shall attempt to agree under clause 4."
Clause 1 of the agreement recorded that the parties intended the agreement to be binding. By Clauses 2 and 3 the husband agreed to make certain financial payments to or for the wife. Specifically he agreed to pay:-
i) a monthly sum of not less than £4,000 until a binding agreement had been reached in mediation;
ii) a lump sum of £20,000; and
iii) the deposit and rent on a property which the wife would rent at 35 B Gardens London. Further, he would personally guarantee the rent on that property.
Clauses 4 to 10 of the agreement provided as follows:
4. The Parties shall use reasonable endeavours to refer to the Mediation the following matters:
i. The determination of the Balance
ii. The amount and frequency of instalment payments to be made by [the husband] to [the wife] in full discharge of the Balance
5. The Parties agree that a mediator ("the Mediator") shall be chosen and appointed by the Chartered Institute of Arbitrators ("the Institute") in accordance with the Institute's Mediation Rules and Practice Guidance ("the Rules") and the Mediation thereafter conducted under the Rules.
6. The Parties agree that they will each contribute 50% of the Mediator's fees and expenses.
7. In consideration of [the husband] entering into the Agreement [the wife] irrevocably agrees and undertakes not to rely upon the Statutory Demand in support of any bankruptcy petition presented by her now or in the future.
8. [The wife] further undertakes not to make any further statutory demand and/or present any petition for [the husband's] bankruptcy prior to the conclusion of the Mediation except in respect of any of the ascertained sums set out above which are overdue by more than 28 days (excluding the day upon which any such sum was due to be paid)
9. [The wife] further agrees that she will not seek or require any clause to be inserted or included in the Binding Mediation Agreement which would have the effect (in whatever form) of entitling her to treat as due and payable any part of the balance not the subject of an overdue instalment.
10. The parties agree to discontinue all subsisting applications and appeals in relation to the Action and Appeal [to set aside the statutory demand] with each side bearing their own costs save as is provided for in the consent order [of the Court of Appeal of 2 November 2011].
Following that agreement attempts were made to set up the mediation. Unfortunately they were unsuccessful. I have seen a chronology which sets out the exchanges between the solicitors between 17 January 2012 and 2 May 2013. Each party blames the other.
In October 2012 the wife moved from the property 35 B Gardens to a slightly cheaper rented property at 4 St B Mews, London. The husband paid the rent there until October 2013 when he stopped, claiming that he had run out of money. Arrears of rent of £24,000 have arisen. The husband has paid the lump sum of £20,000 and the monthly sum of £4,000.
The wife claims that it was an implied term of the agreement that the husband would pay the rent on a substitute property and that in circumstances where he has breached that implied term he cannot reply on the agreement to mediate. The husband denies that there is any such implied term and claims that he has complied in full with his financial obligations under the agreement. If there is such an implied term the husband claims that it is itself subject to an implied term that his obligations would not stretch ahead indefinitely. He relies, with some force, on the stated intention of the parties to enter into mediation by 31 January 2012.
On 16 December 2013 the wife issued an application for general enforcement under FPR 2010 rule 33.3(2)(b). The schedule attached to the application states that the husband owes the wife £831,252 plus interest of £1,111,408, a total of £1,942,660. On 30 January 2014 Bodey J gave directions. The husband says that the wife is debarred from proceeding to enforce by virtue of the agreement to mediate on 2 November 2011. The wife strongly disputes this. She says that the court cannot force or coerce her to mediate, whatever she might have agreed.
In order to determine this issue it is necessary to conduct a short survey of the role of ADR in both the civil and family spheres.
ADR in the civil sphere
I give here the barest summary of the role of ADR in the context of the CPR. Sir Anthony Clarke MR stated in a speech in May 2008 that ADR "must become an integral part of our litigation culture." Many high authorities have emphasised this.
The starting point is CPR rule 1.4(2)(e) which imposes a positive duty on the court to encourage the parties to use ADR if the court considers that to be appropriate. Further, by CPR rule 26.4(2A) the court may, on its own initiative, and whether or not the parties agree, impose a stay on proceedings for a specified period to "allow for settlement of the case." It is tolerably clear (at least to me) that the power under rule 26.4(2A) may be exercised by the court at any time and not just when a party files the completed allocation questionnaire. Curiously, and in contrast to the FPR 2010, the CPR does not contain a Part devoted to ADR.
As things stand, the court cannot impose a mandatory order on the parties that they must participate in ADR. This much is clear from Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002. There Dyson LJ stated at para 9 "It seems to us that to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court." However, the court can robustly encourage and coerce participation in ADR, specifically by making clear that costs sanctions might await parties who unreasonably refuse to do so. In para 30 Dyson LJ referred to an order commonly made in the Admiralty and Commercial Court which requires the parties to take "such serious steps as they may be advised to resolve their disputes by ADR procedures" and that if the case is not settled "the parties shall inform the court what steps towards ADR have been taken and (without prejudice to matters of privilege) why such steps have failed." Obviously, the second part of the order is there to enable the court to make an order for costs if it formed the view that a party had unreasonably refused to engage in ADR. But as Dyson LJ makes clear the order "stops short of actually compelling the parties to undertake an ADR," although it might be thought that the nature of the coercion amounts to much the same thing. Similarly, in paras 33 and 34 Dyson LJ refers to and approves the eponymous Ungley Order which requires the parties to consider whether the case is suitable for ADR, and the terms of which are designed to bring home to them that, if they...
To continue reading
Request your trial
-
Shelley Mann v David Anthony Mann
...5 March 2014, Mostyn J delivered a judgment in this case in respect of one of the mediation agreements. It is reported as Mann v Mann [2014] EWHC 537 (Fam), [2014] 2 FLR 928. In that judgment he set out at some length the relevant facts, including the precise terms of the mediation agreeme......
-
AK v TK
...encourage the parties to do so, and its encouragement had been ignored.” 18 I was also provided with the decision in SM v DAM [2014] EWHC 537 (Fam) which confirms that, while the court cannot force the parties into mediation in family proceedings, an unreasonable refusal may well attract a ......
-
Persuasion and Compulsion
...the failure to mediate can be partly blamed on the party seeking to use the clause to prevent further litigation (see Mann v Mann [2014] EWHC 537 (Fam)). However, even in this case the court strongly urged the parties to use ADR by making an Ungley order. An Ungley order is an order requiri......