England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
MANCHESTER DISTRICT REGISTRY
Sitting at Blackburn

		64 Victoria Street Blackburn
		27th November 2014

JUDGMENT
1. THE JUDGE: I am dealing today with an application under section 27 of the Matrimonial Causes Act 1973. That section of the act was recently described in the Supreme Court as "moribund". This case has demonstrated that that is not necessarily the case.
2. Mr Rowbotham has appeared for the applicant wife, and Mr Thompson has appeared for the respondent husband. They have both helpfully provided me with written submissions and have supplemented those with oral submissions. I have not heard any evidence; the case has been conducted on the documents filed so far. Counsel have taken every point that could sensibly be taken on behalf of their respective clients.
3. Let me just summarise the factual background. The applicant wife is 63 years of age. The respondent husband is 71 years of age. Both of them have been previously married. They met in or about June 2012. Their relationship progressed quickly and they began to spend time at each other's respective homes. By about September 2013, they were cohabiting. They became engaged at about that time and on 9^th November 2013 they entered into a prenuptial agreement.
4. There is a striking financial disparity between Mr and Mrs H. Mr H is a wealthy man. He has business interests, he receives pensions, and he has a monthly income of approximately £14,000. He has substantial capital assets. Mrs H has nothing of any consequence to speak of. She has some debts. At the time of their commencement of a relationship, she was living in rented accommodation. The purpose of the prenuptial agreement was plainly to protect Mr H's accumulated wealth.
5. They married on 15^th December 2013 but an incident is said to have occurred on 23^rd March 2014 which caused them to separate. Mrs H has alleged that Mr H raped her anally. She immediately complained to the police and Mr H is to be the subject of a criminal trial to be held in the Crown Court in January 2015.
6. Mrs H made this application to the court on 2^nd May 2014. The application first came before the court for directions before a District Judge on 22^nd August 2014. It was transferred to Manchester from Altrincham for the attention of His Honour Judge Wallwork, who was also presented with an application to transfer the case to the High Court. He transferred it to the High Court and to the Northern Circuit Money List on 7^th October and listed it for directions before me on 3^rd November. I gave directions on 3^rd November and further listed the case today for determination of the section 27 application and to decide a legal funding application that was being made by Mrs H in addition to the substantive application. That legal funding application was not pursued by Mr Rowbotham, he invited me to stay it, and for reasons I gave in an earlier judgment today, I have dismissed it. I have said that I will deal with the question of costs in the conclusion of this judgment.
7. Section 27 of the Matrimonial Causes Act 1973 (1) says:

"Either party to a marriage may apply to the court for an order under this section on the ground that the other party to the marriage (in this section referred to as the respondent)—

(a) has failed to provide reasonable maintenance for the applicant …

(3) Where an application under this section is made on the ground mentioned in (1)(a) above then in deciding—

1. whether the respondent has failed to provide reasonable maintenance for the applicant

2. what order, if any, to make under this section in favour of the applicant, the court shall have regard to all the circumstances of the case, including the matters mentioned in section 25 (2) above."

Subparagraph (5) provides for the court to make an emergency order - that is not what I am dealing with - and (6) sets out the menu of orders that the court can make.

In this instance, I am asked to make periodical payments for such terms as may be specified in the order. What I am being asked for is to backdate that to 2^nd May 2014 and continue it into the future until such time as the court makes a different order, likely to be within divorce proceedings.

That, then, is the scheme under the 1973 Act. Therefore, I have to have regard to all the circumstances but in particular, to take into account those matters set out in the familiar section 25 checklist. Going through that checklist will help me determine whether the provision that is currently made is reasonable.

8. There is no dispute is as to the current provision being made by Mr H to Mrs H. He is giving her no financial support.
9. The case run by Mrs H is that she has expenses that exceed her income, that she previously worked but is currently unable to do so and she has lost the financial support of Mr H following the breakdown in their relationship.
10. Mr H's case is that firstly there is, in reality, no financial deficit other than a minor one, which should be ignored. Secondly that, in any event, the prenuptial agreement precludes Mrs H making a claim against Mr H. Thirdly, Mrs H's financial information and disclosure is inherently unreliable and so, as a bottom line, she has failed to prove her case. In providing that very brief overview of the parties' positions, I hope both counsel will forgive me for condensing into a few sentences what they have included in their rather more extensive documentation before me and in their oral arguments.
11. It seems to me I should start with a brief assessment of the factors mentioned under section 25 (2). First of all, I must look at income earning capacity, property and other financial recourses which each of the parties has, or is likely to have in the foreseeable future. At the moment, Mrs H is not working. She has produced a medical report which spells out a significant reaction to the events that she claims happened on 23^rd March 2014. At 63, it is unrealistic to look to her to have an earning capacity that she could enhance, and she is likely to be dependant on benefits and her state pension for the foreseeable future. She lives in a rented house which was her home prior to the marriage and is where she wishes to stay. I have already indicated that Mr H has a very substantial income and capital resources. Given his age, he has no earning capacity beyond what he presently generates.
12. Next, I must look at the financial needs, obligations and responsibilities which each of the parties of the marriage has, or is likely to have in the foreseeable future. They both need a roof over their heads; they both need the ability to meet their bills. The only obligations they have are to themselves and to one another.
13. Next, I must look at the standard of living enjoyed by the family before the breakdown of the marriage. It is clear that during the course of their relationship, both before and after they married, they were able to have the benefits of access to Mr H's wealth, enjoying regular trips abroad to a home he maintains in Spain. For Mrs H, this was no doubt a significantly higher standard of living than that which she had enjoyed prior to the relationship and prior to the marriage.
14. Next, I must look at the age of the parties of the marriage and the duration of the marriage. I have dealt with their ages already. They married on 15^th December 2013, separated on 23^rd March 2014, but remain married. They cannot petition for divorce, either of them, until they have been married for twelve months.
15. Next, I must look at any physical or mental disability of either of the parties to the marriage. The only point relevant there is Mrs H's reaction to the break up of the marriage, otherwise her medical conditions, of which she has a number, remain as they were prior to the marriage. Next I must look at future contributions. Neither will be making any future contributions to this marriage.
16. I must look at the conduct of each of the parties, if that conduct is such that it would be, in the opinion of the court, inequitable to disregard it. Mrs H seeks to rely on the allegation of rape that she makes against Mr H. I have not investigated that at all. It seems to me it would be inappropriate for me to do so with a criminal trial pending as imminently as January of next year. The outcome of that criminal trial may be important for this case in the future. An allegation of that nature raises the stakes enormously. If it is true then it is a very serious matter, and no doubt the criminal court would deal with it appropriately in the event of Mr H being convicted. If it is a false allegation, then that too is equally serious and a matter that potentially is relevant within financial proceedings consequent upon the divorce. However, at this stage, without having the benefit of the information available to the police, nor having the benefit of that evidence being tested, it seems to me it would be wrong for me to take it into account.
17. The other matter that is relevant in all the circumstances of the case, and on Mr H's case is determinative of this application, is the prenuptial agreement. I have had cited to me all of the recent authorities on prenuptial agreements. They are, of course, helpful, but each case turns on its own particular facts. Each prenuptial agreement is likely to be unique to the parties. Anything on a standard form is unlikely to be as effective as something that is crafted to meet the particular circumstances of the particular couple involved. The terms of this prenuptial agreement are in some respects unsatisfactory and in some respects internally inconsistent. Some terms are clear, for example, 4.2:

"In the event of the dissolution or annulment of the marriage, or upon the death or either of them, neither party shall make any financial claim of any kind upon or upon the estate of the other."

Whilst that is clear, of course, it does not apply in the circumstances with which I am dealing because there has been no dissolution or annulment of the marriage, and both parties are still determinedly alive. Paragraph 4.1 states:

"The parties agree that in the event of dissolution or annulment of the marriage or the separation of the parties for a period in excess of six months …"

It then goes on to deal with distribution of property. That is the only reference throughout the prenuptial agreement to any separation period, whether in excess of six months or otherwise. Why a period of six months is chosen, and why it only relates to property distribution is unclear from the rest of the document. Again, it would not apply to the circumstances that I am dealing with, where the application was made before a period of six months had been reached post separation and I am not being asked to make any property distributions.

18. There is a reference to what should happen during the marriage, and it appears in paragraph 3.3:

"Neither party will make any claim during the marriage to the real property in the separate absolute beneficial ownership of the other."

Again, it is dealing with property matters and it is not clear to me what mischief that paragraph is aimed at.

At paragraph 1.8 there is a statement of the law:

"The parties acknowledge and agree that the terms of this agreement are not intended to limit or oust the jurisdiction of the court to make orders in relation to the marriage."

What is it that Mr Thompson asserts on Mr H's behalf that makes the prenuptial agreement determinative of this application in his favour? He relies on paragraph 1.2 and it reads as follows:

"The parties wish to enter into a binding agreement recording their wishes and intentions regarding their finances and property in the event their marriage breaks down and in the event of there being proceedings in the courts of England, Wales, or any other jurisdiction or the dissolution or annulment of the marriage, or for a decree of judicial separation or financial support of any kind, or in relation to any of their property or assets."

Mr Thompson asserts that the reference to financial support of any kind is a direct reference to the kind of application contemplated under section 27 of the Matrimonial Causes Act, and therefore the terms of the agreement apply to it. The essence of the agreement is that neither has any claims of any sort against the other, each retaining their own property.

19. Will the words in paragraph 1.2 bear the weight that Mr Thompson seeks to put upon them? I am not persuaded that they will. There has to be a breakdown in the marriage. There have to be proceedings in England, Wales or any other jurisdiction for dissolution or annulment of the marriage, or for a decree of judicial separation. None of that has happened. Can it be said that these proceedings relate to financial support of any kind which is thereby excluded from an agreement that deals with property? Can paragraph 4.2 make any financial claim of any kind upon the other that would be read in a way that deals with proceedings of the dissolution or annulment of the marriage, or for a decree of judicial separation or financial support of any kind?
20. I am not persuaded that this was intended to exclude a claim while the marriage subsisted absent proceedings for a decree of dissolution or annulment, or a judicial separation and where section 27 is available to regulate the arrangements within the marriage.
21. In my judgment, in order to exclude section 27 and the mutual obligations that a married couple have to support each other, that would have to be specifically set out with unambiguous words and it is not. Nor is the six month separation relevant because that only applies to property matters. I find therefore that the prenuptial agreement does not determine this application.
22. Given the known fact that Mr H is providing no financial support to Mrs H when he is plainly able to do so, the next question is whether Mrs H has a need that it would be reasonable for Mr H to meet, given all the circumstances of this marriage and all the matters I have considered under section 25 (2).
23. In his first statement to the court, Mr H conceded that Mrs H had a shortfall between her identified income and her identified outgoings of £200 plus per month. He anticipated that she could make up that shortfall by working. As Mrs H has filed statements with the court, the amount of her expenditure has increased and the amount of her shortfall has increased. Her position is complicated by the fact that she is in receipt of means tested benefits which mean that if she receives payments from Mr H, she will have to declare those payments, which will result in the loss of some or all of her means tested benefits.
24. I have been taken through the most recent list of expenditure provided by Mrs H. I am not going to go through it item by item. Mr Thompson was able to point out that a number of items appear separately, with figures against them, whereas previously, they had been included in compendious items. Whilst the amount claimed for the compendious items has not gone down, there have been added to it a number of specific items which appeared previously to have been included. The biggest item that Mrs H claims for are fees for counselling, which she says is a direct result of the trauma she alleges on 23^rd March 2014.
25. It seems to me that the detail of all of this is to rather miss the point. I have to assess this marriage in its context. I have to do my best to assess the standard of living. However, the outcome that the prenuptial agreement was plainly intended to achieve in the event of the marriage breaking down was to leave these parties independent of one another. Until the marriage is determined by divorce, as is likely to be the case, and the truth or otherwise of the accusations by Mrs H are investigated in the criminal court and potentially in this court subsequently, I must take an overview, bearing in mind Mr H's ability to pay and bearing in mind Mrs H's circumstances.
26. Bearing all of those matters in mind, I am satisfied that Mr H has failed to provide reasonable maintenance for Mrs H. He has failed to provide her with reasonable support. The evidence from Mrs H about her historical earnings is unsatisfactory, but it is clear to me that she is unlikely to have available to her the resources that she had prior to the development of her relationship with Mr H, and so she is left in a disadvantageous position whilst this marriage is untangled. Doing the best I can, and allowing for the fact that she will lose means tested benefits in the meantime, I assess the level of support at £1,500 per month. I am going to backdate it to May. Payments should be made on the 2^nd of each month, and I expect the first monthly payment and all the backdated arrears to be paid on 2^nd December. That order will run until further order of the court. That gives an incentive to both parties to bring the question of ancillary relief before the court at the earliest opportunity, once there are divorce proceedings underway. It may be that consideration of the prenuptial agreement in the context of divorce proceedings may have a very different outcome from today.
27. I have borne in mind the point that Mr H is unlikely to be able to recover any money that he has paid to Mrs H in the event that it were decided, when all the facts are out, that it was wrong for him to be ordered to pay. This is a very specific provision to deal with a very specific period whilst the marriage subsists. The only factor that is likely to influence a judgment on any of that is whether the allegations being pursued in the Crown Court are true or false. Of course, that will have to await the event.
28. Mr Thompson has asked for some clarification in relation to a submission he made, that as this was a discretionary and therefore equitable remedy, it was necessary for a party seeking to benefit from the discretion of the court to come to the court with clean hands. He sought to mount a case that Mrs H had defrauded the Inland Revenue, had defrauded those providing her with housing benefit, and in any event, had failed to declare her earnings for income tax purposes so that she may have an outstanding income tax liability. Any accusation of fraud is not to be made lightly. It is not to be made without prima facie proof that such a fraud has been committed. Mr Thompson got nowhere near establishing that there is fraud in this case. As far as Mrs H's earnings historically are concerned, the information is unsatisfactory. That was the conclusion I came to in my judgment, however, I am concerned with the here and now. It may, if it is necessary to litigate any of this within the divorce proceedings, be necessary to have some further investigation into Mrs H's financial background. It may well be that all that will reveal is that she has a debt to the Inland Revenue, which is likely to make the financial disparity between these parties even greater than it currently is. Therefore, the best Mr Thompson may score is an own goal.
29. I am not going to make any costs order in relation to the legal services application. It has not been considered on its merits. There was a concession by Mr Rowbotham at the beginning of today that he did not wish to pursue it. It might have been open to him to seek to persuade me to treat it as an application under case law rather than under stature. To maintain the application by a stay was pointless so I dismissed it. The question of the costs of the legal services application falls to be decided by application of the family procedure costs rules. Costs in respect of legal services are specifically excluded from the scheme of "no order as to costs" so I have a discretion to exercise. However, the financial effect on the parties of any costs order is an important factor to take into account here, and it seems to me if I make any adverse order in respect of this element of the case, that will disproportionately penalise Mrs H when I look at the matter in its overall context. Therefore, for that reason, I am not going to make any order for costs. Those costs will lie where they fall.
(End of judgment)