England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL FAMILY COURT
His Honour Judge Brasse
FD10D01663

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/01/2017

Sir Ernest Ryder, Senior President:

1. On 13 December 2010 District Judge Roberts made an interim financial remedy order in divorce proceedings between Mr Jawal Iqbal and Mrs Marie Iqbal who for the purposes of this judgment I shall refer to as husband and wife. She ordered the husband to pay to the wife periodical payments in the sum of £10,000 per calendar month.
2. On 25 March 2015 His Honour Judge Brasse made a final financial remedy order between the parties whereby the husband was ordered to pay to the wife a lump sum of £3,220,000 by 1 May 2015, arrears of periodical payments of £530,000 by the same date and future periodical payments in the sum of £10,000 per calendar month in advance by standing order.
3. The parties are now in their early 40s. They met as university students in the United States. They were married in a religious ceremony in 1993 and in a civil ceremony in New York in 1996. There are three children of the marriage, one of whom is under 18. The youngest child lives with his mother and the elder two children are at university in the USA.
4. The parties lived with the husband's wealthy extended family in Pakistan until the summer of 2007 when they moved to New York. They were supported while living in Pakistan by the husband's family to the extent that the husband described that part of their life as a 'grace and favour existence'. In 2009 the couple moved to London. It is common ground that by the time of the move to New York, the husband and wife were estranged from the extended family in Pakistan and from their financial support. The marriage came to an end in 2009 and the wife filed her petition for divorce on 17 March 2010 and her Form A on 26 July 2010. Decree absolute was pronounced on 12 August 2010.
5. From the time of the move to New York the parties lived on borrowed funds. There was apparently no evidence before the court of the husband's access to the wealth of the extended family in Pakistan after July 2011 save that the husband's mother allowed him to live in her flat in London. The husband returned to Pakistan in 2011. He has not attended any hearings of the courts in England and Wales since the hearing before King J on 25 July 2011. The extent to which the husband is participating in rather than actively or passively avoiding the proceedings in this jurisdiction is an issue in the proceedings.
6. The chronology of relevant orders for the purposes of this appeal is as follows:

a. Interim periodical payments order made by DJ Roberts on 13 December 2010;

b. Order on a judgment summons made by Her Honour Judge Hughes QC on 8 April 2011;

c. Order made by King J on 25 July 2011 dismissing the husband's appeal against the order made by DJ Roberts;

d. Order on a judgment summons made by Mr Recorder Cusworth QC on 28 February 2014;

e. Orders on judgment summonses made by HHJ Brasse on 31 October 2014 and 1 December 2014

f. Order on a final hearing made by HHJ Brasse on 27 March 2015.

7. The husband appeals as of right (under section 13 of the Administration of Justice Act 1960) against the orders made on the judgment summonses and with the permission of the court in respect of the second appeal against DJ Roberts' order, the appeal against the dismissal of the first appeal by King J and the final order made by Judge Brasse. In each case McFarlane LJ extended time to appeal when permission to appeal was granted and granted a stay of the committal orders pending this court's determination.
8. The key issue on the facts at the interim and final hearings was whether the husband had and has the ability to make the payments ordered including, if appropriate, by reliance on the bounty of an outsider (ie his extended family if the court is satisfied that such a person would provide the money). I record the fact that in this judgment no observations are made about the evidence that relates to the section 25 factors in this case including the nature and extent of the parties assets, resources, needs or earning capacities because this court has not had the benefit of all of the evidence filed nor that which should be filed before any final determination is made.
9. There was significant challenge to the nature and extent of the direct evidence and the inferences to be drawn from the same in relation to the key issue at the time of the hearings before DJ Roberts and King J. That said, it was always the case that DJ Roberts drew the provisional inferences that she did on a prima facie rather than a concluded basis and in the following context:

"[19] This is an interim order designed to hold the line and provide for the wife and these three children pending the final hearing. If it turns out after trial that the order was either too generous or was insufficient, that can in due course be reflected within the terms of the final order."

10. In another case where the matter can be fully argued, it might be appropriate to test the limits of that approach. There are of course limits to the same, not least as respects what is a reasonable inference to be drawn from the prima facie material submitted by each party. In most interim hearings findings of fact are not made because it is not necessary to do so on necessarily incomplete material with the consequence that the court addresses the statutory factors and the test for the interim order for which application is made having regard to the balance of persuasion between the prima facie cases and that is an appropriate methodology.
11. Given the necessary evidential limitations of the exercise conducted by DJ Roberts and for the same reason the first appeal heard by King J, if this court were to conclude that the determination at the final hearing had to be set aside, it would remain open to the husband to argue on fully contested evidence for different findings of fact which would render the inferences drawn by DJ Roberts irrelevant to the final determination. Furthermore, if as a consequence of such findings the inferences that led to the interim order are wrong or materially different that would have the consequence that the court undertaking the final hearing would have to consider remission of some or all of the sums due under the interim order as part of its final determination. Accordingly, this court concentrated its scrutiny on the final hearing to decide that question. The court then moved on to look at the way the enforcement proceedings were conducted between the interim hearing and the final hearing.
12. It should be noted that the husband was excused attendance at the hearing before DJ Roberts and that he had filed his evidence in accordance with the court's directions. The wife was then a litigant in person. She attended before the court and made submissions based upon a signed letter that she relied upon that had no statement of truth on its face. She was not sworn to give evidence. It is said that in her submissions she informed the court about matters about which the husband had no advance notice and, putting it at its lowest, with which he would disagree. One of those issues concerns the existence of an alleged trust fund. It will therefore not be a surprise to anyone that there will be significant factual issues at the final hearing and that it is highly likely that no reliance can be placed on interim conclusions in respect of those issues which will need to be determined from first principles on the evidence available.
13. It might have been better, given what transpired, for the judge at the interim hearing to confine the wife to the evidence in writing that had been properly attested to, filed and served given that the husband's attendance had been excused. That might have necessitated an adjournment with or without an interim financial remedy order to ensure fairness to both parties, until the evidence of both parties on notice was available. In any event, the wife should have been sworn so that on a subsequent occasion her submissions could be effectively relied upon if necessary or challenged should they be found to be untrue.
14. Having heard the appeal, this court concluded that elementary procedural protections that the husband had a right to expect would be observed were not. The consequence is that the final hearing was procedurally unfair and the order made at the end of it must be set aside and the matter remitted for final hearing before a new judge. My reasons for concurring in that decision follow. For the reasons I give above, it is not necessary in that circumstance to consider any further the interim orders of DJ Roberts and King J save to reiterate the fact that no reliance can be placed on the interim conclusions reached in judgment on either occasion. The subsequent enforcement hearings were wholly irregular in that no procedural protections were provided at all. The consequence is that all of those orders were set aside.

The Final Hearing:

15. Directions for the final hearing were made on 31 October 2014. Given the excusal of the husband from the interim hearing, his attendance at the first appeal, his subsequent absence and the nature and extent of the documents which he had filed with the court in purported compliance with its directions, it would have been appropriate for the court at the directions hearing to consider how his evidence was going to be received. The options might have included, for example, a video hearing: allowing him to cross examine the wife and for him to be cross examined by her. Directions of this kind were not considered, with the consequence that a less than optimal circumstance arose when the final hearing began.
16. Had the court made directions to abide the event of the husband's continuing absence, they could and should have included a warning that inferences of fact might be drawn from his absence. That would have anticipated any deliberate or tactical absence and set the scene for the court to act proportionately: ie to undertake the final hearing in his absence without adjournment and drawing such inferences as might be reasonable. No real attempt at active case management by reference to the Family Procedure Rules and Practice Directions was attempted. It is hardly surprising, therefore, that good practice was not a feature of the management of this case.
17. The one attempt at case management that did occur was the judge's direction on 31 October 2014 that the wife file a section 25 statement setting out her narrative evidence about the factors that are to be found in section 25 of the Matrimonial Causes Act 1973. This was intended to be evidence of all facts and matters upon which she intended to rely at the final hearing, including her resources and those available to the husband and their respective assets in list form cross referenced to the evidence filed. It was to be filed by 28 November 2014. The husband had five weeks to reply. The wife filed her statement only eight days before the final hearing and she did not serve it on the husband. The content can reasonably be argued to be insufficient to establish her case against the husband but in any event the husband had no notice of it and the wife was never given leave to rely on it out of time.
18. A core bundle was also directed to be filed by the wife. This court has been told that a bundle did exist at the final hearing but the wife refused the husband's request made before this appeal began to disclose the same. No other copy now exists on the court file. Given that there is no way of reliably establishing what was in the bundle that was in fact used and given that the judge makes no reference to any document filed by the husband between 2010 and 2015, this court has declined to speculate about the contents of the same. There are at least 17 important documents that were in fact filed by the husband including an unlisted and unresolved application for a review of the interim order made by DJ Roberts, a legal opinion filled for an earlier hearing about the nature of 'Benami transactions' in Pakistan, a statement of evidence from the husband's father (made at the direction of the court in 2011), affidavits, statements and replies to questionnaires. The husband's case is that his documents were omitted in whole or in part.
19. It can be ascertained from the brief transcript of the final hearing before the judge which this court has read with care that the judge made no reference to the husband's documents or the contents of the same during the hearing. The recital to the order made at the conclusion of the hearing states that the husband had failed to comply with the court's orders for financial disclosure. Whether the documents filed by the husband did or did not fail to comply with the orders of the court required an analysis if that was going to be held against him. There was no analysis. Furthermore, the husband could not reply to a witness statement filed late by the wife of which he had no notice.
20. Financial remedy proceedings in the Family Court are in part inquisitorial, however hotly contested the issues may be between the parties. The court has an obligation to satisfy itself about the statutory factors that are relevant to the decision it makes or the settlement it approves given that the parties have an obligation of full and frank disclosure. At any stage during the final hearing the judge could have asked about the existence and content of the basic evidential materials, for example the husband's Form E. He did not. The manner in which assumptions were made by the judge can be ascertained from this exchange on the transcript between the judge and the wife:

"Judge Brasse: He has not provided any information in this case at all.

Ms Iqbal: Yes"

21. In like manner to the interim hearing, the wife was not sworn and relied upon her submissions and signed documents which contained no truth recital. There was no real attempt by the court to test anything that the wife said. The process of determining that the husband had assets of £6,440,000 was little more than an inadequate (and it appears incorrect) computational exercise based upon what the wife said to the judge in court. In one exchange the judge says "What is the evidence? (And) you have not got it" and in another he comments: "I appreciate that you do not have any actual original documents to support these, but you assert that…". The judge was on notice of the evidential failings inherent in the process that was being conducted and yet he failed to act upon his own warnings.
22. The judge failed to give a formal judgment with the consequence that this court has had to analyse the transcript to ascertain whether there is a clear thread within the discussion which identifies the conclusions to which the judge came and sufficient reasoning for the same. This court embarked on that task because it would have been unfair to the parties to condemn the decision for a failing of process which could have been easily redressed by asking the judge to collect together that which he had already decided into the form of a determination with adequate reasons. It should not be taken as read that this court will undertake that process lightly given the clear strictures of this court which apply as much to family proceedings as any other civil process: see English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605. Parties are entitled to a determination, no matter how short, that is capable of being scrutinised so that it can be understood and so that advice can be given about it and ultimately an appeal court can ascertain whether it was sufficient in law and on the facts.
23. In this case it is not possible to deduce what findings of fact were made by the court and what evidence was accepted or rejected in that process. There are major questions that are unexplained and which needed determination, for example: who had the legal and beneficial ownership of certain assets in Pakistan; what, if any, resources were available to the husband from his extended family; and what was an inherited pre-marital asset and what was part of the marital acquest. It is impossible to know whether the concept of sharing which the judge used in respect of all of the alleged assets, without distinction, was appropriate. Given the importance of ascertaining the wife's needs in the context of pre-marital assets, and both parties needs having regard to the responsibilities they each have for the children, the absence of any analysis of the parties' needs and the husband's ability to make the payments ordered was a fatal absence of reasoning on the facts of this case.
24. I have highlighted only the most glaring omissions that characterise the decision making process in this case. Counsel who now appears for the husband, Mr Michael Glaser, has highlighted others and the court is grateful to him for the care with which he has forensically examined what has occurred.
25. On any numbers of bases, therefore, the decision made at the conclusion of the final hearing is procedurally unfair to the extent that this court set it aside and directed that the application for a financial remedy order be re-heard by a specialist family judge at the Central Family Court allocated by the Family Division Liaison Judge for London who would be able to give directions in preparation for the same. For the reasons that I have canvassed, no order was made on the appeals relating to the orders of DJ Roberts and King J save that the stays on their enforcement remain in place pending the new determination.

The enforcement hearings:

26. I can take the enforcement hearings more shortly although the procedural defects are just as serious and the consequences for the husband in terms of committal and the inferences to be drawn from his absence were potentially grave. It is a regrettable feature of each of the enforcement hearings that no judgment was given setting out the findings made, the reasons for the same having regard to the evidence filed and the basis of the order.
27. The essence of the husband's appeal against each of the orders made on the judgment summonses is that the procedural protections that exist in support of the power to commit to prison a person who makes a default in a payment that is due pursuant to an order of a court were not observed. The principal protection is that contained in the legislation, namely section 5(2) of the Debtors Act 1869 which is in these terms:

"(2). That such jurisdiction shall only be exercised where it is proved to the satisfaction of the court that the person making default either has or has had since the date of the order or judgment the means to pay the sum in respect of which he has made default, and has refused or neglected, or refuses or neglects, to pay the same."

28. That protection is supported by the provisions of the Family Procedure Rules 2010 at part 33, for example rules 33.13 and 33.14. The provisions that are relevant to this appeal were recently considered by this court in Prest v Prest [2015] EWCA Civ 714 per McFarlane LJ at [55] and [62]:

"[55]…at the end of the day this is a process which may result in the respondent serving a term of imprisonment and the court must be clear as to the following requirements, namely that:

a) The fact that the respondent has had, since the date of the order or judgment, the means to pay the sum due must be proved to the criminal standard of proof;

b) The fact that the respondent has refused or neglected, or refuses or neglects, to pay the sum due must also be proved to the criminal standard;

c) The burden of proof is at all times on the applicant; and

d) The respondent cannot be compelled to give evidence.

[…]

[62]…It is, indeed, necessary for a judge who is required, at a subsequent stage in proceedings, to make findings on the higher criminal standard of proof, to ensure that earlier findings made on the lower civil standard are not, even inadvertently, relied upon as substantive findings in the subsequent quasi criminal process."

29. Mr Taylor, counsel for the wife, urged on us to a limited extent what was said to be a different approach to the law. He cited the decision of Migliaccio v Migliaccio [2016] EWHC 1055 (Fam), [2016] 4 WLR 90, a first instance decision of Mostyn J which itself relies on an earlier decision of Mostyn J in Bhura v Bhura [2012] EWHC 3633 (Fam), [2013] 2 FLR 44. Aside from the fact that the learned judge's observations and criticisms are not binding on this court, the only principle which it could be said might be relevant to the appeal before this court is whether once a prima facie case on the evidence has been raised against a respondent to a judgment summons, an evidential burden shifts to the respondent which he must discharge if he is not to have the issues found against him to the criminal standard. That question does not arise on the facts of this case and accordingly it would be unwise to develop the point. The husband in this case was never presented with a prima facie case in respect of each of the issues to be proved to the criminal standard.
30. I shall take each of the enforcement hearings in turn. The first was that undertaken by Judge Hughes QC on 8 April 2011. The husband was ordered to pay £20,145 by noon on 15 April 2011 in default of which he was committed to prison for the maximum period of six weeks. He did not pay and the order of commitment remains in place subject to this court's stay. No evidence was filed in support of the application by the wife. The transcript discloses that she was not sworn to give evidence. There was no evidence to the criminal standard that the husband has or has had since the interim order of 13 December 2010 the means to pay or that he had refused or neglected or was refusing or neglecting to pay the sum due.
31. The second was undertaken by Mr Recorder Cusworth QC on 28 February 2014. In fairness to the judge, he stopped short of making any order on the judgment summons other than to declare that the husband was liable to pay the arrears ie a judgment debt in the sum of £360,125. He did not make findings that the husband had the means to pay the sum or was neglecting or refusing to pay the same. That is not surprising given that no evidence was filed in support of the application by the wife. The wife submitted a signed unsworn letter relying on the evidence that she filed for the interim order made by DJ Roberts. That could not satisfy the burden of proof to the higher standard as to either of the two elements that the wife had to prove. The transcript reveals that the judge was alive to the evidential and procedural requirements that faced the wife and although he was wise not to have gone further, in the context of the application that was made, it was not appropriate to fix the judgment debt in the sum asked without setting out in judgment the basis for the same.
32. The third was undertaken by Judge Brasse. At a directions hearing on 31 October 2014 the judge decided to deal with the judgment summons as a substantive issue. He found the husband to be liable for arrears in the sum of £500,125. He committed the husband to prison for six weeks in default of payment. On 1 December 2014 the judge issued a warrant of committal against the husband. These orders remain in place subject to this court's stay. For the hearing on 31 October 2014 there was evidence filed relevant to the enforcement issues but the transcript discloses that the wife, again acting in person, misled the judge by saying that there had been no disclosure on the husband's part.
33. It was not appropriate to have dealt with the merits of a judgment summons at a directions hearing: ie without notice of the purpose of the hearing to the husband. The judge was not taken to the evidence that had been filed in 2014. He indicated the the wife should be sworn to give oral evidence but there is no record on the transcript that she was. The judge accepted the wife's unsworn oral submissions as to the amount she was owed but there was no evidence considered by the court about the husband's means to pay or his refusal or neglect to pay the sum allegedly due. The submissions and orders to which the judge was taken could not in themselves satisfy the burden of proof in respect of each of the issues to be determined. Yet again no judgment was given explaining the basis of the orders made.
34. At the end of the hearing before this court, it was decided that each of the enforcement orders made as described in the chronology at [6] of this judgment must be set aside in their entirety for the reasons described above.

Lord Justice Simon:

35. I agree.

Lord Justice Patten:

36. I also agree.