Susan Nancy Baker v Andrew Hartill Baker
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mostyn |
| Judgment Date | 11 August 2023 |
| Neutral Citation | [2023] EWFC 136 |
| Court | Family Court |
| Docket Number | Case No: ZZ21D44117 |
[2023] EWFC 136
Mr Justice Mostyn
Case No: ZZ21D44117
IN THE FAMILY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Tim Bishop KC and Tom Harvey (instructed by Stewarts) for the Applicant
Andrzej Bojarski (instructed by Penningtons Manches Cooper) for the Respondent
Hearing dates: 17 – 21, 24 July 2023
Approved Judgment
This judgment was delivered in public. There are no reporting restrictions attaching to this judgment.
In this judgment I shall refer to the applicant as ‘the wife’ and to the respondent as ‘the husband’. This is my judgment on the wife's claim for financial remedies following divorce.
The wife was at the time of the hearing 75 years of age and is American. The husband is 74 and is English.
The husband is in poor health physically and mentally. He is wheelchair-bound. A report of exceptionally high quality dated 26 January 2023 from Dr Marcus Rogers, Consultant Clinical Neuropsychologist, established that the husband lacked capacity to conduct these proceedings. My order of 27 February 2023 recorded that Mr Colin McPhee had agreed to act as, and was, his litigation friend in these proceedings, pursuant to FPR 15.3.
Dr Rogers's report stated:
“As regards Mr Baker's mental capacity in relation to both his finances and his capacity to represent himself in Court, I am inclined, with the benefit of the additional information now made available, to draw his broader mental capacity into greater question. It is evident from these records that when he becomes physically ill, Mr Baker's state of mind renders him very clearly incapacitous in respect to all his responsibilities, suggesting that at best he should now be viewed as being at risk of having only “fluctuating capacity”.
Given the evolution of his medical conditions over the past year and its impact on his mental functioning, I am now of the opinion it would be unsafe to assume that Mr Baker's cognitive abilities are sufficiently intact and stable at any given time for it to be assumed he is able to retain sole responsibility for his complex financial and legal affairs, to litigate current proceedings in person or as a party represented by solicitors and counsel or himself, or to give evidence in these proceedings.
Mr Baker has clearly retained the ability to communicate verbally, but even though he is now relatively physically well, given the dramatic fluctuations that can occur in his cognitive abilities if he becomes ill, I think it would be in his best interest for it to be assumed he requires some oversight in respect to both his finances and his legal affairs. Such precautions, I think, are made particularly essential given the fact that Mr Baker had, two months prior to my initial assessment in December 2022, been referred to a memory clinic for diagnosis of a suspected dementia process. This, combined with his hospitalisation and associated episode of delirium less than one month prior to my initial assessment, serves to illustrate the likely trajectory.
The periods of ill-health are unpredictable in terms of exact timing, but reflect systemic, dynamic problems that compromise his cognitive functioning. There is also no strong evidence he is choosing to modify life-style behaviours, such as his use of alcohol, that render him more vulnerable to mind-altering conditions such hyponatremia. As such, one could predict that the frequency and duration of incapacitous periods are likely to increase, rendering the practicalities of managing his position at any given point in the future very challenging. Whilst I cannot conclude he lacks capacity at the present time, I do believe he falls in that difficult category of individuals who have “fluctuating capacity.” This is particularly relevant if he is expected to represent himself in Court on any particular day. Such a “discrete demand” at any given time necessitates a “continuity of capacity,” as effective preparation might require several weeks of clarity prior to the event. There can be no guarantee that his thinking abilities would not fluctuate during the period in which such continuity would be essential.”
The finding of fluctuating capacity meant that when looking at the matter “longitudinally” the husband could not be said to have capacity to conduct these proceedings, as that requires continuous capacity over a prolonged period. Whether he had the capacity to give oral evidence would depend on his state at the time. In the event, it was not suggested that he lacked capacity to give oral evidence before me, and he did so. However, when assessing his evidence I must keep in mind the findings of Dr Rogers.
Core facts
The parties were married in 1986. There are no children of the marriage. The husband says that they separated and the marriage was over by 2000. The wife says that it endured on an intermittent basis until 2013. The parties executed a separation agreement in New York in November 2015. The wife petitioned for divorce here in May 2021, and Decree Nisi was pronounced on 27 January 2022. It has not been made absolute. Her Form A seeking financial remedies following divorce was issued on 4 June 2021.
Attributing to the husband the value of the property in Somerset in which he lives, as well as the value of the property in Docklands (they were both paid for by him but the former is in his partner's name and the latter in the joint names of him and his partner), the net value of his visible assets is about £5.6 million 1. The net value of the wife's assets is about £5.8 million.
These figures are after deducting all the costs of these proceedings, both paid and unpaid. The wife's total costs amount to £1,377,827; the husband's to £426,458. A total of about £1.8 million.
The wife's claim and the main issue
The wife seeks the award of a lump sum of £9.34 million. That is the sum she calculates is due to her under the separation agreement executed by the parties, following full legal advice, in New York in November 2015. The husband's stance is that the parties' mutual claims should all be dismissed, but that there should be no repayment to him of the maintenance pending suit paid by him.
Were such a lump sum to be awarded in favour of the wife, and were the husband to have no other assets, the result would be to leave him insolvent to the tune of £3.8m. But Mr Bishop KC says that such an award would not have that effect as the husband has at least $35 million secreted. Mr Bishop KC does not pull his punches. He does not argue that the husband should be “treated” as having $35 million (£27.4 million) which he has recklessly dissipated. While such a judicial add-back finding is not unknown, it is essentially fictive as it is not real money. Lady Justice King, when a puisne judge, once memorably referred to such money as “pixie money” – i.e. money that is at the bottom of the garden with the pixies.
Mr Bishop KC strenuously rejects any suggestion that the $35 million he says should be brought into account is pixie money. He asks the court to find that it definitely exists. Where it is held, and by whom, in what shape and in what currency, may be unknown, but, he says, it definitely exists.
If that be so, then the total assets would be £39 million and the award to the wife would leave her with £15.2 million or 39% of the total, which is fair enough, argues Mr Bishop KC.
There are no real issues of law in this case. The wife's case stands and falls on the primary issue of fact, namely whether the husband has squirrelled away at least $35 million. If he has not, then the issue is simply what award should justly be made to the wife from the husband's visible assets having regard to the terms of the separation agreement. That is a very straightforward exercise, and I did not hear much evidence or argument about it. The evidence and argument almost entirely revolved around the primary issue of fact. This judgment is dominated by my findings of fact on the primary issue.
Non-disclosure: outline of the evidence on the primary issue
The evidence supporting the wife's case includes some contemporaneous documents, extracted compulsorily from third parties both here and in the USA, which are at variance with the husband's case about what assets he held, and at what values, at various historical points in time. In addition, the wife can rely on the abysmal quality of the husband's written and oral evidence which was a combination of bluster, avoidance and dishonesty. Further, she can rely on the failure by the husband to call a key witness, Mr Neal Rotenberg, who acted as the husband's accountant for years. If there were skeletons buried, he would have known where they were.
As against that, the husband relies on the extensive, very carefully prepared, and highly credible sworn written and oral evidence of Mr Andrew Fink, which went to the very heart of the wife's case of non-disclosure. Mr Fink is a qualified attorney but has worked for years as an investment financier. While I do not generally place much emphasis on the quality, in terms of demeanour, of oral evidence, Mr Fink's testimony was not only forthright, but indignantly so. It was obvious that he has no allegiance to the husband. More importantly, Mr Fink, a qualified legal professional and practising financier, had absolutely no motive to lie and to expose himself to the consequences of perjury. His evidence is in a number of respects irreconcilable with some of the key contemporaneous documents, making the court's task when determining the primary issue of fact less than straightforward.
Demeanour
In terms of demeanour the wife was by far the better witness. She answered questions directly and unemotionally. Her body language was not aggressive or avoidant. In contrast, the...
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Costs And Conduct In Financial Remedy Cases
...breached multiple orders and failed to attend hearings. In Mostyn J's final judgment, Susan Nancy Baker v Andrew Hartill Baker [2023] EWFC 136, he made a costs order of '200,000 against the husband, to "reflect [his] misconduct" which "represents a significant sanction". In the context of t......