Tl v Ml and Others (Ancillary Relief: Claim Against Assets of Extended Family)
| Jurisdiction | England & Wales |
| Judgment Date | 2006 |
| Date | 2006 |
| Year | 2006 |
| Court | Family Division |
Ancillary relief – Financial provision – Property division – Beneficial ownership of property and off-shore companies – Whether husband’s parents resources should be taken into account in assessing award – Whether court should judicially encourage parents to make resources available.
The wife had become pregnant in 1997, the same year in which the parties’ relationship had begun. In total, their relationship lasted for approximately seven years. They had married shortly after the birth of their first child, who was now aged seven. Their second child was now four years’ old. The husband’s family operated a shipping business through a number of off-shore companies. The husband worked in the family business and although he did not appear to be formally employed, he received money for his services as required. The husband’s parents had overall control of the family’s business and personal assets, save where they had specifically donated property. During the marriage the couple had lived at a property which had been registered in the husband’s brother’s name. Other members of the husband’s family had previously resided at the property. After the parties began their occupation of the property approximately £50,000 was spent on renovations. That sum was supplied partly by the husband’s family and partly by the wife’s father, who was a successful businessman. The parties enjoyed a high standard of living, which was largely funded by payments made through the bank accounts of one of the offshore companies. Following the parties’ separation, the wife filed a petition for divorce and sought ancillary relief. She contended that the husband was the beneficial owner of the property and of two of the off-shore companies. Alternatively, she submitted that if neither the property nor the companies belonged to the husband, then the court should include the husband’s parents’ resources in its assessment of his resources and, further, the court should judicially encourage his parents to make funds available to meet the ancillary relief award. The husband, his brother (the second respondent) and the father (the third respondent) resisted her claim.
Held – If the court was satisfied on the balance of probabilities that a third party would provide money to meet an award that a party could not meet from his absolute property, then the court could, if it was fair to do so, make an
award on that basis. But if it was clear that the outsider, being a person who had only historically supplied bounty would not, reasonably or unreasonably, come to the aid of the paying party then there was little that the court could do. A clear distinction could be drawn between cases where the person being encouraged was a donor and those where that person was a trustee in a fiduciary relationship with the paying party. In the former situation, the paying party had no more than a mere spes of bounty which might be withheld, whereas in the latter situation the provider was under a legal obligation to consider the beneficiary’s interests. If the court made a reasonable request of trustees to make funds available to meet an ancillary relief award then it could assume that ordinarily the trustees would accede to such a request. The same could not be assumed of a request of a donor, as it was his prerogative to be unreasonable if that was his inclination. The instant case could be distinguished from previous cases where the award had ranged over assets and income which were those of the paying party as of right, or where the beneficiary of a trust had effective control over that trust, in that the trustees historically had been responsive to the beneficiary’s wishes. On the evidence before the court, the husband was not the beneficial owner of the property or the two companies. It would be wrong in principle to make an award which ranged outside assets and income which were the husband’s as of right. Further, to appropriate the entirety of the husband’s assets and income on the basis that his parents would provide for his support from their resources would be to put improper pressure upon them.
Cases referred to in judgmentA v A (maintenance pending suit: provision for legal costs) [2001] 1 FCR 226, [2001] 1 WLR 605, [2001] 1 FLR 377.
Abacus (CI) Ltd v Al-Sabah, Re Esteem Settlement [2004] JRC 92, [2004] WTLR 1, Jersey RC.
B v B (financial provision) (1982) 3 FLR 298, CA.
Barr’s Settlement Trusts, Re, Abacus Trust Co (Isle of Man) v Barr [2003] EWHC 114 (Ch), [2003] 1 All ER 763, [2003] Ch 409, [2003] 2 WLR 1362.
Browne v Browne [1989] FCR 275, [1989] 1 FLR 291, CA.
Dean v Dean [1978] 3 All ER 758, [1978] Fam 161, [1978] 3 WLR 288.
Edgar v Edgar [1980] 3 All ER 887, [1980] 1 WLR 1410, (1981) 2 FLR 19, CA.
F v F (ancillary relief: substantial assets) [1996] 2 FCR 397, [1995] 2 FLR 45.
G v G (maintenance pending suit: legal costs) [2002] EWHC 306 (Fam), [2002] 3 FCR 339, [2003] 2 FLR 71.
Letterstedt v Broers (1884) 9 App Cas 371, [1881–5] All ER Rep 882, PC.
M v M (maintenance pending suit) [2002] EWHC 317 (Fam), [2002] 2 FLR 123.
McFarlane v McFarlane, Parlour v Parlour[2004] EWCA Civ 872, [2004] 2 FCR 657, [2004] 3 All ER 921, [2005] Fam 171, [2004] 3 WLR 1480, [2004] 2 FLR 893.
Moses-Taiga v Taiga[2005] EWCA Civ 1013, [2005] All ER (D) 57 (Jul).
N v N [1928] All ER Rep 462, (1928) 44 TLR 324, DC.
O’Donnell v O’Donnell [1975] 2 All ER 993, [1976] Fam 83, [1975] 3 WLR 308, CA.
Rochefoucauld v Boustead [1897] 1 Ch 196, [1895–9] AIl ER Rep Ext 1911, CA.
Sears Tooth (a firm) v Payne Hicks Beach (a firm) [1998] 1 FCR 231, [1997] 2 FLR 116.
T, Re (27 March 1987, unreported), CA.
Tebbutt v Haynes [1981] 2 All ER 238, CA.
Thomas v Thomas[1996] 2 FCR 544, [1995] 2 FLR 668, CA.
X v X (Y intervening) [2002] 1 FLR 508.
ClaimThe wife made a claim for ancillary relief. The husband resisted her claim and also appealed against the order for maintenance pending suit made by District Judge Maple on 7 July 2004. The facts are set out in the judgment.
Tim Amos (instructed by Miles Preston & Co) for the petitioner.
Nicholas Cusworth (instructed by Sears Tooth) for the respondent.
Matthew Brett (instructed by Shaw Lloyd & Co) for the second respondent.
Gavin Smith (instructed by Constant and Constant) for the third respondent.
Cur adv vult
9 December 2005. The following judgment was delivered.
NICHOLAS MOSTYN QC[1] This is the hearing of the claim of TL (W) for ancillary relief. I also have to deal with the appeal of ML (H) against the order for maintenance pending suit made by District Judge Maple on 7 July 2004.
[2] I will explain below that I find the total assets of H and W to amount to about £560,000, before liabilities for costs are taken into account. W’s costs amount to £209,713, and have been funded by her father. H’s costs amount to £209,533, and have been funded by his father. The costs of the second respondent (H’s brother (MCL)) amount to about £21,000. The costs of the third respondent (H’s father (CL)) amount to £34,032. The total costs are £474,278.
[3] The reason that so much money has been invested in this case is, first, that W asserts that other assets, held either by H’s brother, or in off-shore companies, are beneficially the property of H. These assets amount to about £2m in value. Her claims have been strenuously resisted by H, his brother and his father.
[4] W’s secondary position is that the assets of H’s father and mother amount to ‘resources’ within the extended meaning of that word supplied by Thomas v Thomas [1995] 2 FLR 668 which I should ‘judicially encourage’ them to provide to meet her claim. This is for £2·3m on the clean break basis (alternatively, for £815,000 capital provision, and £126,000 p.a. maintenance for herself and the two children, including school fees).
[5] On 8 February 2005 Singer J described this case as a ‘power struggle’ between the two families. I agree. These families have preferred to spend nearly half a million pounds in legal fees in pursuit of their respective grievances rather than to enter into a peaceable compromise. That is their undoubted right. But I wonder whether at the end of the day anyone (apart from the lawyers) will have really profited from that expenditure.
THE BACKGROUND[6] W was born on 17 July 1972 and is therefore 33-years-old. She is of Serbian origin. In 1980 her parents emigrated from what was then Yugoslavia to Austria. By that stage her father had already established a successful building company. In order to satisfy Austrian immigration requirements the shares of that business were put in W’s mother’s name while her father was presented as an employee of the business.
[7] At some point W’s parents bought 66% of a substantial building in Vienna at Hedwigasse. This ownership is in part held directly, and in part through a company the shares of which are in W’s mother’s name. Within this building is a big flat which was W’s childhood home, and it remains the home of her parents. She lives there now with the two children of the marriage.
[8] In 1991, aged 19, W came to live in London. In 1997 she met H and began a relationship with him. In that year she conceived their first child Maria who was born on 12 February 1998 and who is now seven-years-old. The parties were married in the Chelsea Register Office on 24 April 1998. This was followed by an Orthodox religious marriage in Vienna in May 1998. On 9 May 2001 their second child Alexander was born. He is now four-years-old. During their marriage the parties lived in London. They separated on 27 March 2004, and so their relationship lasted about seven years. In August 2005, with the permission of Wilson J (as he then was), W and the children returned to live in Vienna.
[9] H was born on 25 February 1969 and is now 36 years old. He is his parents’ third child of four. He has a sister Maria aged 41, a brother MCL aged 40 (the second respondent), and a sister Angela aged 31. His parents are CL aged 68 and Mary aged 61. H’s parents are cousins...
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