Jersey Unreported Judgments

[2006]JRC180A

royal court

(Family Division)

5th December 2006 

Advocate C. E. M. Sandercombe for the Petitioner.

Advocate S. E. Fitz for the Respondent.

Advocate D. S. Steenson for the Intervener.

judgment

Return of Funds to husband's Father before distribution of joint assets to the parties.

REGISTRAR:

1.        The Decree nisi of divorce in this case was pronounced on 6^th April 2006 on the grounds of the respondent's (wife's) adultery with the co-respondent.

2.        Prior to hearing an application for the resolution of ancillary matters, I have been asked to settle a dispute between the wife on the one side, and the husband and his father (the intervener) on the other side, about reimbursement to the father of certain monies from the parties' joint funds.

3.        On 4^th October, 2006, I gave leave for Mr S senior to intervene.  This direction was agreed between the parties as a pre-requisite to resolving ancillary matters.  I was not aware at that time, however, of the bitterly opposing views held by the parties about whether or not certain funds, variously estimated at £43,322.74, £39,183.68, or £41,234.82, should be repaid to Mr S senior.

4.        The particular situation here is complicated by the fact that Mr S junior has failed in his business venture as a builder, because it is not always clear whether the intention was to support the family or to support the ailing business.  In the event, I took the view that I do not need to distinguish between the two.  If the husband could not pay his debts, he could not support the family either. 

5.        It is the wife's case:-

(i)        that it was never made clear to her that the funds were a loan, rather than a gift to the family;

(ii)       that although she discussed financial matters with her husband she was not aware of any terms under which any loans were to be repaid;

(iii)      some of the funds were spent on items for which the family had no need.  Indeed, the family received no benefit from some of the funds.

6.        It was also argued by Advocate Landick that, since part of the intervener's instructions on this matter had been revealed to the other parties and to the Court, the Court should lift professional privilege and order the release of all correspondence between the intervener and his lawyers. I rejected this argument on the basis that it would only serve to prolong any decision being made in this relatively simple matter.

7.        It is the intervener's case that he made it clear from the beginning that the monies were intended as a loan to help keep the family afloat only until such time as the monies could be repaid.  He is asking for repayment now.

8.        The Court should be alert to the danger that, in order to minimise financial loss to his or her family caused by a divorce, one party can claim repayment to his family of a debt before the family assets are distributed between the parties in divorce proceedings.  It might even be an attempt by an unscrupulous family to make some financial gain for themselves in the guise of debt repayment, though I am by no means make that accusation in this case.

9.        However, the "debt" might consist of any manner of financial contribution made to the parties during the marriage.  So, before giving leave for a family member to intervene in divorce proceedings for the recovery of a debt (or perceived debt), the Court should be alert to this danger and be cautious in giving leave automatically on request.

10.      In this case, the husband and his father are united in their intention to stop at nothing to have the family money returned.  Hindsight is a wonderful thing.  I wonder if the father would have been so keen to help the parties, if he had had any suspicion of the impending divorce?

11.      In some instances, the Court can be guided by the circumstances of how the "debt" arose.  For example, the payment by a family member to buy a ferry ticket or have a car fixed, seems to me to be a "one off" and relatively small payment which does not imply any obligation to repay.

12.      In other instances in this case, it is agreed that the intervener paid debts owed by the parties to other people.  In these cases, I am not prepared to order that their monies be repaid to him, despite the evidence that the amounts paid were intended to support the family.  There is little detail now available.  There is no, or very little, evidence that there was any acceptance on the part of the parties that the monies had to be repaid.  The evidence amounts to the identical word of the intervener and the husband, against the word of the wife that the monies had to be repaid.

13.      However, I am prepared to sanction the repayment to the intervener of certain funds amounting to £10,000.00, borrowed by him in March 2000 to support the family.  The loan is clearly shown on his bank statement.  In this instance I think the Court should exercise its discretion in the intervener's favour.  It is my order that this money should be repaid.

14.      I do not wish to hear argument about Legal Aid Costs which have been incurred or written off in pursuing or resisting the intervener's argument.  In all instances, the money would have been better preserved in support of the family.  There must be no order as to costs.

No Authorities