Whig v Whig
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE MUNBY,Mr Justice Munby |
| Judgment Date | 23 July 2007 |
| Neutral Citation | [2007] EWHC 1856 (Fam) |
| Court | Family Division |
| Docket Number | Case No: BF02D01818 |
| Date | 23 July 2007 |
In the matter of Manohar Whig (A Bankrupt)
[2007] EWHC 1856 (Fam)
Mr Justice Munby
Case No: BF02D01818
Case No: 8891 of 2003
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
IN THE HIGH COURT OF JUSTICE
IN BANKRUPTCY
Ms Tahmina Rahman (instructed by Law Partnership) for Renu Whig (the wife) Mr Matthew Brett (instructed by Karina Leapman & Co) for Manohar Whig (the husband, a bankrupt)
Mr Shaiba Ilyas (instructed by Turner Parkinson LLP) for the husband's trustee in bankruptcy
Hearing dates: 23–25 April 2007
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down in private but the judge hereby gives leave for it to be published
These are ancillary relief and bankruptcy proceedings which I have heard together. The litigation is in the High Court only because that is where the bankruptcy petition was issued. The assets are, on any view, modest. On their own the ancillary relief proceedings would never have found their way to the High Court.
The costs which have been incurred in these proceedings are grotesquely disproportionate to the amounts at stake.
An agreed schedule (see below) shows the identified matrimonial assets to be worth only some £211,551. (The wife alleges that the husband has additional undisclosed funds.) Net of debts which according to the husband amount to £67,375, the identified matrimonial assets amount to only £144,176. Even on the wife's case they amount to no more than £177,843.
The wife's costs of the ancillary relief proceedings are estimated at £36,239.75 and of the bankruptcy proceedings at £15,490.75 – a total of no less than £51,730.50. (I might add that her costs of certain ongoing proceedings in relation to the children amount to £21,922.33 – so her total costs of all the litigation total no less than £73,652.83.) The husband's costs of the ancillary relief proceedings are estimated at £32,551.55 (he has no additional costs of the bankruptcy proceedings). The trustee in bankruptcy's expenses of the bankruptcy (excluding legal fees) amount to £43,859.72; his legal costs of the proceedings come to a further £29,851.46 – a total of £73,711.18. The aggregate of all these sums (excluding the wife's costs of the children proceedings) comes to no less than a staggering £157,993.23 –more, on the husband's view, than the net aggregate value of the identified family assets and not far short of what the wife says they are worth.
Even if one has regard only to the costs of the ancillary relief proceedings they amount to no less than £68,791.30 – 32 1/2% of the gross identified family assets and, even on the wife's view, almost 39% of the net assets. One wonders with astonishment at what has been going on. One only speculate as to what anyone thinks they could possibly hope to salvage from this expensive and utterly futile fiasco.
I might add that neither party works. Each is reliant on state benefits.
The background
The husband was born in 1962 and the wife in 1967. They married in July 1991. There are two children, one born in May 1993 and the other in October 1999. They separated in July 2002. So it was an eleven year marriage. There are ongoing proceedings in the Brentford County Court in relation to the children. At present they are living with the wife. The husband does not have contact.
In June 2002 the husband, who was an accountant, had pleaded guilty to various offences of dishonesty against his employer. On his own admission, as set out in a statement in mitigation prepared for the subsequent confiscation proceedings, the offences had started in September 1996 when he stole £1,000:
"I committed the first offence…to show myself that I was cleverer than they were and that they were foolish. I did it several more times for the same reasons but slowly became addicted to stealing the money. I had adopted a more lavish and extravagant lifestyle and by December 1997 I had large credit card debts and stole £9,500 to pay them off."
He added, "My wife is hard to please." On 8 July 2002 he was sentenced to two years' imprisonment. Later that year a confiscation order was made in the sum of £12,703.82 to be paid by 1 July 2003 with a further six months' imprisonment in default. He was released from prison on 10 April 2003.
The matrimonial assets
The matrimonial assets, as I have said, are modest.
The former matrimonial home, still occupied by the wife and the children, has an agreed value of £280,000 and is subject to a mortgage debt of £131,965. So the net equity, after allowing for notional sale costs of 3%, is £139,635. In May 2003 the mortgagee had issued possession proceedings in the Willesden County Court. A possession order was made on 18 August 2003. The husband applied to have the possession order set aside on the ground that he had not had proper notice of the proceedings. That application was struck out by the District Judge on 4 December 2003 and on the next day, 5 December 2003, the building society wrote to the wife announcing its intention to obtain a warrant for possession. Eventually, however, in February 2004, the wife was able on the basis of the income support she was receiving, and with some help from her relatives, to reach an accommodation with the mortgagee (I need not go into the details. The negotiations can be followed though correspondence which for present purposes began with a letter from the building society to the wife's solicitors dated 13 June 2003 and ended with another letter from the building society dated 11 February 2004.) So the home was saved, at least for the time being.
The only other identified matrimonial assets are the wife's car, worth £1,000, some jewellery, said to be worth £16,000, an endowment policy worth £6,722.58 and the husband's pension worth £48,193.89.
Various other assets have already been realised and spent. In January 2003 various policies with Friends Provident were surrendered and realised £12,907.23. That was applied in discharging on 10 March 2003 the amount outstanding under the confiscation order. In September 2003 the wife surrendered some policies with Legal & General and received £2,601.05. The same month the husband surrendered his policies with Legal & General and received £2,676.38 (using the money, it would seem, to fund a university course on which he had enrolled). In total the remaining identified assets are, as I have said, worth only £211,551.
There are various liabilities in addition to the mortgage debt. The husband owes a total of £24,167.15 to various banks and credit card companies. Together with statutory interest totalling £7,391.37 the debts amount in all to £33,708. Those debts are agreed by the wife. The husband asserts, though the wife disputes, that he is also indebted to various members of his family in sums amounting in all to £26,289.33. Together with statutory interest totalling £7,378.56 those debts amount in all, according to the husband, to £33,667.
On the wife's case the identified matrimonial assets are worth £177,843 net; on the husband's case £144,176 net.
I can summarise the position in tabular form:
The litigation
| Assets | Joint | Husband | Wife | Total |
| Matrimonial home | 139,635 | 139,635 | ||
| Car | 1,000 | 1,000 | ||
| Jewellery | 16,000 | 16,000 | ||
| Policy | 6,722 | 6,722 | ||
| Pension | 48,194 | 48,194 | ||
| Total | 211,551 | |||
| Debts | ||||
| Creditors | 2,149 | 31,558 | 33,708 | |
| Family loans | 33,667 | * 33,667 | ||
| Total | 67,375 | |||
| Net assets (H) | 144,176 | |||
| Net assets (W) | 177,843 |
The wife petitioned for divorce in the Brentford County Court on 18 October 2002. She issued her Form A on 14 July 2003. A decree nisi was granted on 8 August 2003. The wife swore her Form E on 27 August 2003, the husband his Form E on 26 September 2003. The first appointment was fixed for 23 October 2003.
Three days earlier, on 20 October 2003, the husband presented his own petition in bankruptcy to the High Court. He was adjudged bankrupt the same day. On 23 October 2003 the Deputy District Judge adjourned the ancillary relief proceedings generally with liberty to restore.
On 19 November 2004 the wife applied to annul the bankruptcy on the ground that the bankruptcy order "ought not to have been made": see section 282(1)(a) of the Insolvency Act 1986. On 28 January 2005 she applied to restore the ancillary relief proceedings. On 4 February 2005 the Bankruptcy Registrar transferred her application to annul to the Principal Registry, with a view to it being heard together with the ancillary relief proceedings. On 1 March 2005 the District Judge directed that the ancillary relief proceedings be restored and transferred to the Principal Registry to be heard with the application to annul.
Further directions were given in the Principal Registry on 21 June 2005, on 1 December 2005, on 13 March 2006, and, following what had been intended to be the final hearing (which had to be aborted for want of jurisdiction), on 24 July 2006. More directions were given in the Principal Registry on 18 August 2006. On 23 October 2006 Charles J consolidated the ancillary relief and annulment applications and gave directions with a view to a final hearing before me on 23 April 2007.
On 21 March 2007 the husband's trustee in bankruptcy applied for an order pursuant to section...
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