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England and Wales High Court (Family Division) Decisions
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G v A & Ors (No 3) [2011] EWHC 2377 (Fam) (19 September 2011)
URL: http://www.bailii.org/ew/cases/EWHC/Fam/2011/2377_1.html
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IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
IN THE MATTER OF THE CHILDREN ACT 1989, SCHEDULE 1
AND IN THE MATTER OF N (A CHILD)
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Royal Courts of Justice Strand, London, WC2A 2LL |
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B e f o r e :
THE HONOURABLE MR JUSTICE PETER JACKSON
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Between:
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G (mother)
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- and -
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A (father) - and - Dr Michael Pelling (trustee) -and - Mr Ian Swycher (trustee)
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Mr David Holden appeared with the permission of the court under the Legal Services Act 2007) for the Applicant
The Respondent father was not present but made written submissions
Dr Michael Pelling appeared in person
Mr Ian Swycher appeared in person
Hearing date: 15 September 2011 Judgment date: 19 and 22 September 2011
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HTML VERSION OF JUDGMENT: (NO 3)
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Crown Copyright ©
Mr Justice Peter Jackson:
- This judgment, given on 19 September 2011, is the sequel to a judgment given on 23 March 2011 under reference [2011] EWHC 968 (Fam). The second judgment is in effect a continuation of the first and they should be read together.
- I accede to the unopposed request of Dr Pelling for the judgments to be made publicly available, having refused his application for the hearings to be held in open court. It has therefore been possible to anonymise the judgments to protect the identity of N and his parents.
- I will also, with the permission of HHJ Horowitz QC, put into the public domain an anonymised copy of his judgment of 14 February 2011, to which I referred extensively in my judgment of 23 March 2011.
- Since 23 March 2011 there have been the following limited developments in this matter:
(1) On 13 April 2011, following further enforcement orders, the father paid the sum of £220,000 into the trustees' bank account.
(2) On about 13 April 2011 the mother paid the sum of £40,000, provided by her family, into the account.
(3) On 11 May 2011 the mother's mortgage funds of £90,000 were paid into the account, which now contains the sum of £350,000 plus a small amount of interest.
(4) On 11 May 2011 the trust deed was executed, fixing the father's interest at 22/35 and the mother's interest at 13/35.
(5) The mother's choice of property, described as "No.38" in my previous judgment, is not after all immediately available. The vendors have not found a property to move to, and in the meantime another buyer has made a higher offer than the mother.
(6) The mother has identified a property two doors down ("No. 36") as a suitable alternative. The trustees have been aware of her interest in this property since early May. It is currently on the market at an asking price of about £328,000, but the mother believes that a somewhat lower offer may be accepted on the basis that an earlier offer by her in May had been accepted. Stamp duty of approaching £10,000 would be payable. No. 36 is an identical property to No. 38, except that it lacks a kitchen extension. The mother would like to construct a new kitchen extension once she is in occupation.
(7) The parents were unable to agree about the division of N's summer holidays. Despite the prohibition on applications of this kind, I was obliged to hear an application by the father relating to that matter. He was accompanied by Dr Pelling, then acting as his McKenzie friend, and the mother was represented by Mr Holden. I made the necessary orders and directed that the father should pay the mother's costs. When I enquired about the progress of the property purchase, Dr Pelling withdrew from court with almost comic haste so that I should not be able to question him about it.
(8) The matter came before me again on 8 July 2011 on the mother's application for directions relating to housing. At that stage the mother's efforts were still focused on the purchase of No. 38. I joined the trustees as parties and gave directions for the filing of evidence. I fixed the hearing on 15 September for the making of final orders.
(9) The mother's current tenancy expires on 25 October 2011. If it is renewed, it must be for at least six months. She is currently paying rent and the repayments on the mortgage loan, which she says are unaffordable.
- The terms of the trust deed naturally require the trustees to use the fund "at the earliest opportunity" to purchase a property for N and his mother. Its further provisions provide for the father and the trustees to have the opportunity to satisfy themselves as to the suitability of the proposed purchase. The sequence of events contemplated by clauses 2(ii) and (iii) provides for the trustees to give notice to the father of the property under consideration, whereby he has a minimum of 14 days (and possibly double that if he is abroad or if N is with him) within which to make observations; the trustees then have an indefinite period to verify that the property is a sound investment and suitable for occupation by N; they shall then take all reasonable steps to purchase it.
The parties' positions
- The mother's application is that the court should give directions to ensure that a property for her and N (the current target being No. 36) can be purchased immediately, so that they can move there when her tenancy expires next month. She argues that there is no possibility of this happening without the court's intervention. She proposes an abbreviated timetable designed to ensure that an effective purchase is made. She severely questions Dr Pelling's suitability as a trustee.
- Mr Swycher, the mother's appointed trustee, attended the hearing in person. He is an accountant, acting without payment. In the politest of terms, he expressed dismay at the difficulties that have been encountered. He said that as a trustee, he feels embarrassed that a property has not been delivered for N. He cannot see why the mother should not be allowed to pick a home, particularly as she will have an investment of about 37% -- why would she not ensure that it is a sound property? He holds no personal animosity towards Dr Pelling, but finds the relationship with him "very challenging". He remarked that they appear to be coming from totally different directions. While he is keen to progress the purchase of property, Dr Pelling is concerned with legal matters. He says that this combination might be no bad thing, but it seemed to him that the law has been a stumbling block in this case.
- The father did not attend the hearing but sent a written submission. A significant reason for his non-attendance is stated as a desire to protect his peace of mind from "any more of this exhausting, time wasting, and totally unnecessary litigation". He says that he cannot cope any more. He presents these arguments:
(1) He has fulfilled his funding duty and now requires both trustees to act "strictly in unison and strictly according to their professional duty and strictly in accordance with the Settlement Trust and its terms, and strictly without any shortcuts whatsoever": – e-mail 19 May 2011. Referring to the hearing on 11 February 2011, when HHJ Horowitz QC adjourned the mother's application for directions as to the execution of the trust, the father says that he told the judge "that unless he made no order on the mother's requests ... we would all be in the Appeal Court in two seconds, strict adherence to the terms of the Trust Deed being a matter of everyone's sanity given the very lengthy and highly contested s.8 and Schedule 1 history of the case".
(2) The mother has given misleading information about the course of her prospective purchases. She is now seeking to buy No. 36 instead of No. 38 and has only revealed this through the court process.
(3) Mr Holden, who he describes as "a shadow trustee", is advising the mother and Mr Swycher not to cooperate with trustees.
(4) Mr Swycher does not seem to understand the duties of the trustee, and is Mr Holden's "puppet".
(5) Unjustified criticism of Dr Pelling will lead to him standing down: "If he is not to be allowed to manage the trust in a reasonable way and with a firm hand then I have no doubt he will resign."
(6) The mother should not be applying to the court for orders, but should be putting her case to the trustees. However, he notes that the trustees are not acting together, which is of serious concern now and in the future.
(7) In the event that the mother's application is not dismissed, he seeks leave to appeal, an extension of time for doing so to 35 days, and a stay of this court's order.
- Dr Pelling, the father's appointed trustee in the financial proceedings and his advocate and McKenzie friend in the welfare proceedings, attended the hearing in person. He too acts as trustee without payment. As I have stated, he invited the court to sit in open court and give judgment publicly. He refers to the legal interest of the case and continues: "Further, I have been constantly criticised in the secret courts of the Family Division and consider I am entitled to the protection of that elementary principle that says that not only should justice be done but that it should be seen to be done. I am genuinely concerned about what could happen if these proceedings continue without public scrutiny." I have dealt with this application as indicated above. I note that any effect on N of holding public hearings is not referred to in Dr Pelling's submission.
- Dr Pelling then raises a jurisdictional matter. He seeks to set aside the order joining him as a party, and further seeks the striking out of the mother's application. He submits that the role of this court came to an end with the execution of the Trust Deed on 11 May 2011 and that by virtue of CPR Pt 64 applications relating to the execution or variation of a trust must brought in the Chancery Division. For the mother to bring her application within these proceedings is "a contumelious flouting of the Rules of Court". She should be required to file in the Chancery Division: "The Trustees are entitled to the protection of the provisions of CPR Parts 8 & 64".
- Dr Pelling properly refers to the order granting liberty to apply as to both implementation and timing of the original order in this case, but argues that the order was finally fulfilled with the execution of the deed. He further properly refers to s.61(6) Senior Courts Act 1981, which provides that "Subject to rules of court, the fact that a cause or matter commenced in the High Court falls within a class of business assigned by or under this Act to a particular Division does not make it obligatory for it to be allocated or transferred to that Division." However, he argues that the rules of court referred to above in fact compel the matter to be issued in the Chancery Division.
- Dr Pelling then refers to the sequence of events during the course of this year and submits that the mother's application should be struck out as an abuse of process as she has seriously misled the court and does not have "clean hands". She has claimed at various stages that orders have been required as a matter of urgency. "What was the evidence for this urgency?" asks Dr Pelling, He states that the mother is "the author of her own misfortune" in seeking to buy a property (No. 38) when there were insufficient funds, and in providing her own mortgage money late.
- He strongly criticises Mr Holden's "busybody interfering behaviour" which led to him refusing to have anything more to do with him. He further criticises Mr Swycher as being in his words incompetent and unfit to act as trustee.
- Dr Pelling "fundamentally objects" to learning about the selection of No. 36 in the course of the court application. He objects to the mother asking the court to control and direct the Trustees in their functions: "I know of no case where the Court has done this, even before the Trustees have had a chance to consider the relevant party's or beneficiary's request and respond to it or act upon it in the exercise of their discretion or duty. I think it would be intolerable to self-respecting Trustees to permit this, and if the Court goes down this route then it is very likely that the matter will have to be referred to the Court of Appeal. I trust that wiser counsels will prevail."
- As to the suggestion that his own position as trustee should be questioned: "if [the mother] considers she would be justified in applying for my removal as a Trustee then the doors of the Chancery Division are open to her ..." Later, he contends that the court has no power to remove a trustee short of a full scale administration action.
- As to the merits, Dr Pelling says that the Court should not investigate them. These matters "are all matters for the Trustees to decide at the appropriate time and in an appropriate manner, not for the Courts to dictate or participate in as if it were a 3rd trustee. Essentially [the mother] is abusing the process of the Court by trying to get it to micromanage the Trust in the exact way she prefers, and she is seeking to enlist the Court's aid in order to control the Trustees in the way she wants, even before they have actually come to a decision on what she wants ... As such I decline to go into the merits ... if the Court were to take the option at this time of dictating the management of the Trust then I would feel I had no choice but to resign as Trustee or else refer the matter to the Court of Appeal."
- In the course of his oral submissions, I asked Dr Pelling to explain why, as trustee of trust of which N is the beneficiary, he felt it appropriate to press the argument that this court had lost its jurisdiction, bearing in mind the obvious disadvantages to everyone of starting afresh in the Chancery Division. His answer was: "Because it's the law."
- I further asked him what was wrong with the expedited timetable proposed by the mother and Mr Swycher. When, in his opinion, would a home for N be in existence? He said that he was respectfully not prepared to answer as this was "not a court matter".
Discussion and findings
- I turn firstly to the question of jurisdiction, since a lack of jurisdiction would be an end of the matter, regardless of any view of the merits.
- In this case the court made an order on 10 May 2005 under the power contained in the Children Act 1989, Schedule 1, paragraphs (2)(c)(d). That entitles the court to make an order requiring a parent to make a settlement of property "for the benefit of the child and to the satisfaction of the court".
- The original order itself simply provides for the father to settle the sum of £220,000 on the mother for the benefit of N within about 10 weeks, which the mother shall use to purchase a property to house herself and N until he reaches the age of 21 or completes tertiary education, whichever is later. The father's interest in the property will be whatever percentage of the gross purchase price the sum of £220,000 represents.
- The purpose of the legislation in general and of the district judge in particular was to provide a secure home for N during his youth. That purpose is not, in my judgement, satisfied until the home has been provided.
- I reject the submission that the jurisdiction of the family court ends when the trust deed is executed. The settlement may exist but the property does not. The settlement of property will not have been made for the benefit of the child, nor to the satisfaction of the court.
- The existence of a "liberty to apply" provision, as in this case, is evidence for the jurisdiction, but is not its foundation.
- Dr Pelling's vision of the law would mean that it was unjust and impractical. In almost every case it is quite unrealistic for a party with the benefit of a Schedule 1 order, normally the weaker party financially, to have to resort to fresh proceedings in the Chancery Division to enforce the family court's order. It would be a sheer waste of time and money, and would no doubt lead to the matter being transferred straight back to the family court. It is of significance that Dr Pelling feels able to make a submission that is so unmindful of the purpose of the trust.
- I find that the family court has not only the jurisdiction but the duty to consider any proper applications relating to the fulfilment of its order and to give whatever directions appear appropriate to give effect to it. Such directions may override the trust deed, which exists as an expression of the court's will and not as an obstruction to it.
- I next turn to consider what directions are appropriate. The following factors are in my view relevant, and represent my findings:
(1) The litigation history of this matter is, as I have previously said, a scandal. The mother approached the court when N was two years old. He is now 10. The mother calculates that the proceedings concerning his welfare and housing have come before over 25 judges. I am sure that the continuing high level of animosity between the parents many years after the end of their brief relationship is fuelled by the failure of the court to enforce its order effectively. To echo Mr Swycher, who has far less reason to feel so, it is profoundly embarrassing. I have real concern about the protracted approach that the court has taken to such a standard case. Dr Pelling refers in passing, and for a different reason, to the overriding objective now incorporated into the Family Procedure Rules 2010. That requires the court to deal with cases justly, which includes dealing with them expeditiously, proportionately to the nature and complexity of the issues, and economically in terms of expense and court time. This case is a textbook failure on all counts, and the need for corrective action is long overdue.
(2) I have observed both parents over a number of hearings. They are at the end of their emotional tethers. For the sake of their own welfare, which necessarily affects N's welfare, decisive steps need to be taken.
(3) It does not require the expiry of the mother's current tenancy in little over a month to justify urgent action. She and N have been waiting long enough already, regardless of immediate problems of that kind. Nevertheless, the mother's current financial position in having to pay rent and mortgage at the same time is an additional spur to action.
(4) The transaction in question, whether it is purchase of No. 36, or No. 38, or some similar property, is a perfectly standard domestic transaction. I have already found that No. 38 was perfectly suitable home for N. I have seen the estate agent particulars for No. 36 and I find that the same can be said for that modest property, unless a survey reveals unexpected findings.
(5) I find that there is no real risk to the father in his funds being invested in any property chosen by the mother and approved by Mr Swycher. In the first place, the mother has been looking at sensible properties. Secondly, as already noted, she has a significant financial interest herself.
(6) The father and Dr Pelling have known since early May that No. 36 was a possible property. Even though the mother's attention then turned back to No. 38, they have already had an opportunity to form a view about No. 36. Moreover, the mother renewed her interest in No. 36 in August, and the opportunity to make enquiries has once again been there since then.
(7) I have unfortunately had an excellent opportunity to assess the relationships between all the significant players since the matter first came before me six months ago. The relationship between the parents is exceptionally hostile on both sides, and the relationship between their advocates (present and former), Mr Holden and Dr Pelling, has completely broken down. The relationship between the mother, Mr Holden and Mr Swycher is harmonious, if not always effective. The relationship between the father and Dr Pelling is closely aligned, though somewhat fractious at times. Most significantly, there is no effective working relationship between the trustees, Mr Swycher and Dr Pelling. Nor, having taken account of all the circumstances, do I foresee any possibility of this changing.
(8) My conclusion from the above is that a home for N will not be achieved at any given future date without the intervention of the court. The dynamics that exist between these four adults will ensure that this is so. In many cases, such difficulties can be overcome through the influence of professional advisers, but not here. Anyone who has bought a house knows that there are enough difficulties in securing the right property at the right price without having to contend with self-inflicted obstructions that prevent the quick decisions that the market requires. The submission that it will be easy for a suitable property to be secured if only everyone follows the trust deed ignores years of compelling evidence of the total incapacity of these parents and their advisers to co-operate for N's sake. It also overlooks the fact that the limited progress that has been made during 2011 has had to be policed every step of the way by the court.
- I would prefer my decision to rest on the conclusion that these parties cannot work together, regardless of where responsibility lies. However, in further support of my conclusion and in fairness to individuals, I rely if necessary on the following assessments. I acquit Mr Swycher of any blame for the current situation. He has done his best to assist in acutely difficult circumstances, and he would be the first to admit that he is no match for Dr Pelling, particularly when they are in disagreement. Likewise, Mr Holden has been doing no more than his best in representing the mother in the face of formidable difficulties. As between the mother and the father, there may be little to choose in terms of their level of mutual antipathy, but in this context it is the father who bears the main responsibility for difficulties which arise from him withholding the money he was ordered to pay for so many years and from his demanding strict adherence to the trust deed, regardless of the consequences. The truth is that the father does not want a property to be purchased at all.
- As for Dr Pelling, my reservations about the appropriateness of his position as the father's trustee when he has for so long acted as the father's advocate have been borne out by events. He has a punctilious preoccupation with strict procedural propriety, accompanied by long-standing forensic animosity towards the mother and her advisers. In this case his considerable talents manifest themselves in inexhaustible pedantic ingenuity. The correspondence shows him cavilling at the mother's choice of property, the condition of the property, the amount she wishes to pay, the impossibility of changing the trust deed to allow her to contribute extra money for the kitchen, Mr Swycher's shortcomings as fellow trustee, and so on. There is always logic to the individual arguments he makes, but collectively they show an excessive lack of common sense in relation to advancing N's interests. However seriously Dr Pelling takes his responsibilities as trustee, his approach is in truth only serves the interests of the father, and I see no prospect of this changing.
- I do not regard the possibility of Dr Pelling retiring as a trustee as a reason for accepting his submissions.
- Any doubt about my overall conclusions is removed by a rereading of HHJ Horowitz QC's judgment, given seven months ago, and his warning at paragraph 67 that "radical surgery" would be required if there were to be further delay or obstruction.
- I conclude with these observations about the practice followed in this case.
- It is obvious that far too much time has been spent in litigating peripheral issues in a manner that is disproportionate to the issues in a case of this kind. For example, in 2007/8 the court heard submissions from the parties as to the appointment of trustees. The mother submitted that she should be one trustee and an independent professional should be the other, alternatively that there should be two professional trustees. The father submitted that each parent should nominate one trustee, and the court so ordered. I cannot help thinking that a great deal of difficulty would have been avoided had the simple task of carrying out the court's order been placed in the hands of one or more independent persons, at least until the property had been obtained; thereafter cost could be saved by replacing the professional trustees by lay people.
- Where the court makes an order for a settlement of property under Schedule 1, the message from this case is that it should give simple, effective directions for putting the order into effect.
- I wish to endorse strongly the observation of HHJ Horowitz QC at paragraph 42 of his judgment:
"I venture to suggest that an Order properly drawn by the Court is sufficient and indeed preferable method to define a Trust in a case of this simplicity and in most s1 cases where modest provision for a small house or flat is made. I note that the well established and respected Resolution Precedents Handbook now in its 8th edition in 2009 has precedent no 48 along just such lines."
Order
- I make the following directions, which shall supersede the trust deed where it conflicts:
(1) Within three days of the date this order the trustees shall
(a) advise the agents that they are interested in purchasing No. 36 for the trust, subject to contract;
(b) instruct a surveyor to carry out a survey;
(c) instruct a solicitor to act for the trust in connection with the purchase.
(2) Upon receipt of a satisfactory survey (being a survey that does not show the property to be an unsuitable purchase in the opinion of the trustees) they shall proceed to an exchange of contracts with completion within 28 days thereafter.
(3) In the event that the trustees do not for any reason jointly carry out any of the above steps:
(a) Mr Swycher is empowered to carry them out alone on behalf of the trust;
(b) Mr Swycher, acting alone, is empowered to take any other necessary step (whether in accordance with or outside the above timetable) to ensure that a trust property is purchased.
(c) This order authorises any third party (including, in particular, an estate agent, surveyor, solicitor or bank) to accept and act upon instructions from Mr Swycher alone, as if they were instructions from the trustees jointly, and notwithstanding any observation or objection from any other person.
(4) In the event that the mother wishes to build a kitchen extension at No. 36:
(a) Following the exchange of contracts she shall obtain two estimates for the proposed extension and shall send them to the trustees for information.
(b) The works shall then be carried out by reputable builders who shall be selected by the mother and monitored by a surveyor.
(c) The cost of the works shall be borne by the mother.
(d) The mother shall obtain two valuations estimating any increase in the value of the property as a result of the kitchen extension.
(e) The parents' interests in the trust deed shall be amended to take account of any such increase in the value of the property.
(f) In the event that agreement cannot be reached about amendment of interests, there be liberty to apply.
(5) Mr Swycher is to be indemnified by the trust against any step taken in good faith and with proper care in carrying out this order.
(6) The father shall pay the costs incurred by the mother and by Mr Swycher in respect of this application, such costs to be summarily assessed on presentation of costs schedules within 7 days of this order.
(7) Permission to appeal refused.
(8) The time for seeking permission to appeal from the Court of Appeal is reduced to 7 days from distribution of this judgment.
(9) The application for a stay of this order pending appeal is refused.
- In relation to costs, it is appropriate that they follow the event. I note that the father and Dr Pelling both prospectively asked for their costs (amounting collectively to something over £400) to be paid by the mother if her application failed.
- I refuse permission to appeal, and the father's application for an extension of time within which to seek permission from the Court of Appeal. Instead, in view of the overall circumstances and the present urgency, an order reducing the time for appeal is warranted. The father and Dr Pelling generally threaten to appeal any order that they oppose and I shall not grant a stay.
Additional paragraphs (22 September 2011)
- Following the hearing on 15 September, the above judgment was sent to the parties on 20 September and formally handed down on 21 September. Later on 21 September, Mr Swycher informed the court that the vendor of No. 36 had accepted another offer on 20 September. He sought a variation of the order so that it applies to any suitable property that is identified.
- I have today issued a further order varying the order of 19 September as requested by Mr Swycher. The apparent loss of No. 36 illustrates why this is necessary. I have not sought further comments from the parties before making the further order as I am fully aware of their underlying positions and the determination of this application is already overdue.
- I am grateful to Dr Pelling for suggesting certain minor corrections to the judgment, some of which I have incorporated above.
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