England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice
		12th June 2014

MR. JUSTICE MOSTYN:

1. This matter first came before me on 26^th February 2014, and I refer to the judgment which I gave on that date which sets out the background to this case. Anybody reading this judgment should now at this point refer to my judgment following the hearing on 26^th February, which in fact is dated 5^th March, [2014] EWHC 537 (Fam). The relevant background is set out there.
2. The matter returned before me on 12^th May 2014, [2014] EWHC 1801 (Fam). Again on that occasion, I gave a judgment, which is in bundle 4, p.47A. Anyone reading this judgment should, again, refer to the judgment I gave on that day. On that day I concluded that, on clear evidence, the husband had the means to alleviate the desperate situation in which the wife finds herself, where the arrears of rent on her property had aggregated to a sum then of £42,000.
3. In order to meet the mounting emergency I made an order which was framed as an interim periodical payments order. I expressly asked the husband's counsel, Mr. Warshaw, if there was jurisdiction to make an interim periodical payments order and he conceded that the court had such jurisdiction. However, notwithstanding the terms of that order, the husband has failed almost entirely to comply with it, and the emergency continues.
4. The matter was restored to me on 23^rd May, when I indicated that the time had come for the respondent to answer for his defaults, and I directed that on 4^th June he should attend before me to be examined as to his means as to show cause why he should not be committed to prison pursuant to s.5 of the Debtors Act 1869, which expressly provides for an examination of means and, if default is proved, for sentence to take place on the same occasion.
5. On that occasion Mr. Warshaw produced a note. He sought to argue in it that my recent decision of Bhura v. Bhura [2012] EWHC 3633 (Fam) was wrong. In that decision of Bhura, I endeavoured to follow faithfully the very clear and lucid judgment of Richards LJ in the recent case of Karoonian v. CMEC [2012] 3 FCR 491. Today Mr. Warshaw, who has told me that is instructed to take every technical point in his client's favour, argues that the relevant parts of the decision in Karoonian are obiter dicta. I unhesitatingly reject that submission. It is plain that paras.56 to 58 of the judgment of Richards LJ provide the core ratio of the decision in question.
6. In the note to which I have referred, produced by Mr. Warshaw on 23^rd May, he did not argue, notwithstanding that he had had plenty of time to reflect, that the order that I made on 12^th May was made without jurisdiction.
7. In his note at para.26 he stated this:

"The periodical payments order made on the last occasion was plainly not made in addition to the lump sum provision. To avoid any future argument, it should be recorded that any liability under that periodical payments order will be credited against any liability under the lump sum order, if there be any."

I should say that for reasons which I have been defeated in trying to understand, the respondent appears to be suggesting that he does not owe any general arrears of lump sum when it is perfectly plain that he owes a vast amount to the wife.

8. On 23^rd May, para.26 of Mr. Warshaw's note was discussed in these terms:

"MR. WARSHAW: My Lord, there is a lingering issue that I wanted to ventilate in para.26 of my document, just to clarify in case there is any future argument about this. The order that you made ----

MR. JUSTICE MOSTYN: If he makes any payments under the emergency order, then they are to be subtracted from the overall lump sum that he owes you."

I am of the view that that exchange altered the character of the order of 12^th May.

9. An order for periodical payments obviously cannot count as payments towards a lump sum. Therefore, in acceding to Mr. Warshaw's submission, I agreed to a re-characterisation of the order of 12^th May so that it was not interim periodical payments pursuant to s.23(1)(a) of the Matrimonial Causes Act, but rather was a scheduled court directed part payment of the outstanding lump sum.
10. I make this finding in order to deal with the latest technical point taken by the husband through Mr. Warshaw in order to try and avoid his obligations, which is this: notwithstanding that Mr. Warshaw was before me on 12^th May and 23^rd May, and on neither occasion did he suggest that I did not have power to make an interim periodical payments order, in an appellant's notice filed on 30^th May 2014 in the Court of Appeal, it says in section D beginning at para.37, that in fact I had no power to make an order under s.23(1)(a) of the Matrimonial Causes Act because the right of the wife to receive such a payment had been discharged with effect from 8^th June 2005. If that is right it is incomprehensible to me why legal counsel of such experience did not take the point before me. However, I do not need to decide the arguments that Mr. Warshaw now advances as to whether the court in fact had jurisdiction to make an order under s.23(1)(a) of the Matrimonial Causes Act 1973 on 12^th May because, in the light of my ruling which I have just made, the effect of the application made by Mr. Warshaw to which I agreed on 23^rd May was to re-characterise the order as a court directed scheduled part payment of the arrears under the lump sum.
11. The appellant's notice to which I have referred was placed before Gloster LJ. She issued an order on 3^rd June in these terms:

"Order that there be a stay of enforcement of 12^th May order by means of a judgment summons under s.5 of the Debtors Act 1869 (but not otherwise) pending the determination of the appellant's application for permission to appeal the 12^th May order. It will be for the Lord or Lady Justice dealing with such an application to decide whether such stay should be continued pending appeal if permission is granted.

Reasons: An appeal could be rendered nugatory if a stay is not granted."

12. It is obvious to me that Gloster LJ was ordering that there should be a stay on any warrant of execution of a prison sentence, should one be ordered in judgment summons proceedings. Only that interpretation is consistent with her reason, because a stay of the judgment summons procedure generally would not render the appeal nugatory. The only thing that would render the appeal nugatory would be if a prison sentence were executed. I, therefore, take the view that is within this court's power to hear the judgment summons to determine if the respondent is guilty, and to deal with the question of sentence, but must, in fidelity to the order of Gloster LJ of 3^rd June 2014, if a prison sentence is imposed, stay execution of the warrant pending consideration of the permission application. I am clear that the interpretation which Mr. Warshaw seeks to put on that order, namely that the judgment summons proceedings as a whole are stayed, is erroneous.
13. I am, therefore, directing that the judgment summons should be heard, but that, if a prison sentence is awarded, no execution of that sentence can take place until the permission application is determined in the Court of Appeal.
14. However, I agree with Mr. Warshaw that, in view that I had earlier stated on 3^rd June that the hearing today would be for consideration of other means of enforcement only, it would be unfair to spring, so to speak, the judgment summons back on the husband today. I should also say that the reason the case is being heard today, on 12^th June, rather than on 4^th June, as my previous order provided, is because I acceded to a request that the case on 4^th June should be adjourned to today in order that the respondent could engage in religious rituals.
15. Therefore, I direct that the hearing under the Debtors Act, as provided for in my order of 23^rd May, will be heard on 30^th June, but I reiterate that if I find the husband guilty and if I award a prison sentence there will be a stay of execution of the warrant pending the determination of the permission application in the Court of Appeal if it has not by then already been dealt with.
16. On 30^th June I will also consider, and give the husband due notice now, whether a writ of sequestration should be issued against him in the light of the continued default. The husband, who is listening to this judgment and anybody who reads it, should be under no illusions as to the scale of crisis that is faced by the wife today. She has just received a letter dated 5^th June from Boodle Hatfield, who are instructed by the Grosvenor Estate in Belgravia, who assert that there are rent arrears totalling £49,572.94, and who state that they have on that day sent a claim form to the Northampton County Court in the sum of £50,282.94, inclusive of court fee and solicitors' costs. As things stand, it is hard to see what defence the wife could have, and so the legal process has now been put in train which has a foreseeable consequence of bankruptcy and eviction for her.
17. Notwithstanding this, the husband continues to be in gross default. He has paid only £3,000 in respect of my order of 12^th May. He has paid an almost corresponding amount on 10^th June to his solicitors, and in February and March paid his solicitors a total of £5,500. It is an affront to the court's sense of justice that he should be paying his lawyers significant sums to seek to escape his responsibilities.
18. In those circumstances, I reach for the well known decision of Bodey J in Mubarak v. Mubarik [2007] 1 FLR 722, where he ordered in para.89 that for every £1 that the husband in default there paid to his lawyer, he must now pay £1 into a fund for the benefit of the wife. That seems to me to be a perfectly appropriate order to make in this case, and so an additional order I make today is that the husband is only permitted to pay monies to his solicitors if he pays a corresponding amount on each occasion to the wife in partial discharge of his debt to her.

L A T E R :

19. There is an application for permission to appeal all three limbs of my order. Permission can only be granted if the court considers that the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard. I am completely satisfied that any appeal would have no prospect of success, let alone a real prospect of success. I am equally satisfied that there is no other compelling reason why the appeal should be heard.
20. That application is dismissed.

Later:

[2014] EWHC 3818 (Fam)

Friday 19^th September 2014