An Ancillary Relief Updating Lecture by ki47AR


									 An Ancillary Relief Updating Lecture
  for the Family Law Bar Association
           2 December 2010

              By Bruce Blair QC
           Notes by Katharine Davidson

Both of 1 Hare Court, Temple, London EC4Y 7BE


1.1   To what extent can you rely on documents that have been obtained illegally?

      This recent Court of Appeal decision has provoked considerable debate both within
      and beyond the profession: is the decision going to turn out to be a ‘cheat’s
      charter’, as many practitioners fear, or is it a commendable tightening of the law in
      the Family Division? And more particularly, what do you advise the client?

      Imerman v Tchenguiz and Others [2010] EWCA Civ 908; [2010] 2 FLR 814.

      In the QBD, Eady J QBD had restrained the wife’s brother from disclosing to the wife
      irregularly obtained confidential information for her to use in the ancillary relief
      proceedings, whereas Moylan J had, in the interests of justice, ruled that the wife
      should be able to use the information in the ancillary relief proceedings.

      The CA upheld Eady J’s order and varied Moylan J’s, requiring the wife to deliver the
      files to H’s solicitors and not to retain any copies. W and her solicitors were also
      restrained, at least for the time being, from using any information they might have
      gained from reading the files.

      It held that it is an actionable breach of confidence for a person, without the
      authority of another to whom a document is confidential, to examine, or to make,
      retain or supply to a third party a copy of, or to use the information contained in,
      such a document. Confidence in principle exists between a husband and a wife. It
      might be lost in relation to a bank account statement left lying open in the
      matrimonial home, or in relation to information shared between particular spouses.
      However, if information is confidential, it is entitled to protection.

      Hildebrand does not assist a spouse. Illegal “self-help disclosure” of this sort is not
      be condoned. A spouse whose confidential information has been purloined is
      entitled to the same relief as a non-spouse would be, namely (subject to any specific
      defence): an injunction preventing the further examination or use of the
      information; an order for the return of the documents; and an order for the return
      or destruction of any copies. Indeed, if the information or documents have been
      passed to a spouse’s matrimonial solicitor, the court might enjoin that spouse from
      continuing to instruct that solicitor.

      If W believes that H is going to conceal or dispose of assets, she can resort to search
      orders (Anton Pillar), preservation orders and freezing orders.

1.2   When do you join third parties?

      The case of KSO v MJO [2008] EWHC 3031; [2009] 1 FLR 1036 (Munby J) is a
      reminder that there are (or should be) clear limits to the joinder of 3 rd parties. Only
      when there is a clear question/issue between them and a party to the proceedings
      should they be joined.

Munby J stated that joinder of a third party is not justified to “find out” if there is a
claim nor “to get the full picture”. In claiming that the husband was a joint principal
with the father in various property deals, the wife had failed to focus on who was
actually funding or procuring the funding for the business transactions.

Munby J went on to make it clear that it is essential that points of claim are served in
such cases to ensure that the applicant for joinder’s case is properly understood.
The judge felt that this was the most likely way of stopping in their tracks cases
which, even if not devoid of all merit, were unlikely to be ‘of any real profit to those
tempted to pursue them’.

      [48] I should add that in his oral submissions Mr Turner went even further,
     asserting, as I understood his submissions, that joinder was justified to ‘find out’
     if there was a claim against the father-in-law or in order to ‘get the full picture’.
     I do not accept this. It seems to me, with all respect to Mr Turner, to confuse a
     person’s involvement as a potential witness or source of disclosure (discovery in
     old-fashioned terminology) with his involvement because there is, within the
     meaning of r 6(2)(b)(ii), some ‘question or issue’ existing between him and
     some other party to the proceedings. RSC Ord 15 r 6(2)(b) applies in the latter
     but not, as it seems to me, in the former case. And, I might add, Mr Turner’s
     proposition goes beyond anything to be derived from T v T and Others (Joinder
     of Third Parties) [1996] 2 FLR 357...

     [54] Before I pass from his topic there is one other point to be made. Mr Turner
     was justified in observing that all his client had ever been ordered to do by the
     court was to set out the nature of her case, but he was not, in my judgment,
     justified in his further submission that it was not at present appropriate, in the
     circumstances of the case, for the wife to serve points of claim of the kind
     referred to in TL v ML (Ancillary Relief: Claim Against Assets of Extended Family)
     [2005] EWHC 2860 (Fam), [2006] 1 FLR 1263, at paras [35]–[36]. I do not agree.
     This is yet another case where, to adopt the words I used in A v A [2007] EWHC
     99 (Fam), [2007] 2 FLR 467, at para [24], what in my judgment were the
     manifold difficulties in the wife’s case:
     ‘would have been more pitilessly exposed, and at a much earlier stage in the
     proceedings, had the presentation of her case been exposed to the intellectual
     discipline which is one of the advantages of any system of pleading. Moreover,
     if the wife had been required to plead her case everyone would have had a
     much clearer idea, and at a much earlier stage, as to exactly what she was or
     was not asserting and as to exactly what the husband and the interveners were
     or were not saying by way of defence.’

     [55] This is not, I emphasise, a call for formality for the sake of formality. It is
     not a call for a return to a system of the arid technicality which, at least in legal
     folklore, will always be associated with the name of Parke B. It is, on the
     contrary, a suggestion for the wider adoption of a sensible and appropriate
     practice that might do something to stop, in their tracks and before ruinous

           costs are incurred, cases which, even if not, as sometimes, devoid of all merit,
           are unlikely to be of any real profit to those tempted to pursue them.

1.3   When should a case be transferred to the High Court?

      This is a useful decision in those cases where a judge is taking the ‘what’s wrong with
      us in the county court?’ line.

      P v P [2008] EWHC 2953; [2009] 1 FLR 696 (Baron J)

      In cases in which both parties consider the case merits a High Court Judge, the DJ
      should be slow to retain the case. If the DJ does decide to retain it, the parties
      should be more ready to appeal the direction.

           “ [4] In cases where parties consider that the case merits a High Court judge, it
           would seem to me that a district judge should be slow to retain the case.
           Moreover, if a district judge decides to retain the case, parties should appeal
           that direction if they consider it to be wrong. I am quite sure that if this case
           had been placed before me, I would have transferred this case up immediately.
           Ultimately it would have saved costs and the chronology would have been
           shortened. I consider this to be a point of practical importance for those in the
           profession and so I think this short judgment should be reported on an
           anonymised basis.”

      Listing Guidance

      Effective from 1 December 2009

      See Annex 1 (attached)

      “2. In considering whether to apply for the transfer of proceedings to the High Court,
      the parties must have regard to the provisions of the Practice Direction: Allocation
      and Transfer of Proceedings, issued on 3rd November 2008. An application for
      ancillary relief will normally only be considered suitable for hearing in the High Court
      if it is exceptionally complex or there is another substantial ground for the case being
      heard in the High Court.

      3. An application for the transfer of proceedings to the High Court should normally
      be made to a circuit or district judge at or after the First Appointment in the Principal
      Registry. Where an order for transfer is then made, the case will be referred to the
      Clerk of the Rules and allocated to a Judge of the Family Division in accordance with
      paragraph 8.

      4. Where, exceptionally, the parties seek the transfer of the proceedings to the High
      Court before the date fixed for the First Appointment both Counsel or, if Counsel are
      not instructed, solicitor(s) for the parties must complete and file a certificate in the

      form annexed to this Guidance, stating concisely the reasons for certifying that the
      application is suitable for determination by a Judge of the Family Division. The
      completed certificate must be filed with the Clerk of the Rules not less than 21 days
      before the date fixed for the First Appointment in the Principal Registry.”

1.4   Following the Supreme Court decision in Radmacher v Granatino [2010] UKSC 42,
      what is the status of ante and post nuptial agreements?

      This case was discussed in detail at the FLBA lecture given by Geoffrey Kingscote on
      18 November 2010. It will therefore be mentioned here only briefly.

      At the core of the Supreme Court decision is paragraph 75 of the judgment which
      states: -

             [75.] White v White and Miller v Miller establish that the overriding criterion
             to be applied in ancillary relief proceedings is that of fairness and identify the
             three strands of need, compensation and sharing that are relevant to the
             question of what is fair. If an ante-nuptial agreement deals with those
             matters in a way that the court might adopt absent such an agreement, there
             is no problem about giving effect to the agreement. The problem arises
             where the agreement makes provisions which conflict with what the court
             would otherwise consider to be the requirements of fairness. The fact of the
             agreement is capable of altering what is fair. It is an important factor to be
             weighed in the balance. We would advance the following proposition, to be
             applied in the case of both ante- and post-nuptial agreements, in preference
             to that suggested by the Board in MacLeod: -

                    “The court should give effect to a nuptial agreement that is freely
                    entered into by each party with a full appreciation of its implications
                    unless in the circumstances prevailing it would not be fair to hold the
                    parties to their agreement.”

      So, in other words, if the parties knew what they were doing, they should be held
      to their agreement unless it would be unfair to do so. However, this does not
      make ante- and post-nuptial agreements automatically binding: the court still has
      to carry out the discretionary s25 exercise, with the fact of the agreement as one
      of the circumstances of the case.

1.5   Should the enforceability of an agreement be dealt with as a preliminary issue?

      Radmacher v Granatino [2010] UKSC 42

      See Lady Hale at paragraph 170: -

“As Lord Nicholls emphasised in Miller, at paras 26 to 29, there can be no inflexible
rule about how a judge should approach the task. It may be that a judge, if called
upon to decide matters, will find it convenient to conduct the usual section 25
exercise before deciding what weight to give to the agreement. He or she will then
have a view of how the usual principles would apply to the particular facts of the
case. It may be, on the other hand, that the case is so clear cut, as in Crossley v
Crossley [2007] EWCA Civ 1491, [2008] 1 FLR 1467, that it is more convenient to
begin with the agreement. If, for example, all the agreement seeks to do is to
preserve property acquired before the marriage for the benefit of the spouse to
whom it belongs, the court would be most unlikely to interfere unless the outcome
would put a spouse or children in real need. It is not for this Court to be prescriptive
about how a trial judge should conduct the statutory exercise.”

Blooman v Blooman [2009] EWCA Civ 109

At the FDR, Heads of Agreement were not signed on the day and the alleged
agreement did not take into account the contents of the matrimonial home.
Nevertheless, the husband was held to the agreement reached.

Any complaint that the husband had about the way in which the wife had dealt with
the contents gave rise to a claim for negligence against his solicitors. It did not vitiate
the agreement otherwise reached.

Rothwell v Rothwell [2009] EWCA Civ 1600; [2009] 2 FLR 96

The Court of Appeal reiterated that, once the parties had arrived at a compromise of
litigation, the Court would uphold and enforce that compromise, absent some
vitiating element.

      [7] Before leaving this short point, I would only add by way of generalisation
     that Mr Rothwell has very wisely made the concession which he signified on
     5 December. As a matter of general law there is no doubt at all that once the
     parties have arrived at a compromise of litigation, the court will uphold and
     enforce that compromise, absent some vitiating element; see Marsden v
     Marsden [1972] Fam 280, [1972] 3 WLR 136. Precisely the same principle
     should, in my judgment, apply in the Court of Appeal, if the parties arrive at a
     contractual compromise of pending appellate proceedings, provided that that
     contract is not in any way vitiated.

     [8] The Court of Appeal ADR scheme has a relatively low take up from family
     appeals but an encouragingly high success rate; and as a matter of policy it is
     important that this court should signify that if the parties arrive at a
     compromise, a clear compromise, within the mediation process, then that
     compromise will be robustly upheld by this court.


2.1   Has there been any change of approach to sharing pre-acquired, post acquired or
      inherited assets?

      J v J [2010] EWHC 2654; [2010] Fam Law 329 (Charles J) – after a nine year childless
      marriage, the wife was awarded £5 million (plus costs), namely 21% of the price
      obtained by the husband on selling his company that he had owned before the
      marriage. The court could consider the “springboard effect” of assets acquired prior
      to marriage and/or assets that have increased in value since separation. In assessing
      a departure from equality, the court had to exercise a broad discretion. A
      mathematical or formulaic solution was not practicable. The award represented a
      fair result, taking into account both sharing and needs.

      Note: the wife’s appeal to the Court of Appeal against this decision was heard a
      few weeks ago; the CA decision is awaited.

      Charles J again in R v R [2009] EWHC 1267 – a twenty two year marriage where the husband
      had inherited an estate bought by his father in 1954. Charles J was not impressed by the
      husband’s case that he was merely the custodian of a dynastic estate, being influenced by
      the husband’s “woeful management” of the estate, his irresponsible approach to the estate
      and his “extravagant expenditure”. The award would primarily be dictated by needs. The
      wife was awarded £8 million, made up of £5 million for housing (with some scope to release
      capital at a later stage) and capitalisation of an appropriate budget of £100,000 pa plus
      £35,000 pa for horses. Although such a sum might amount to half the assets on the least
      favourable calculation, the judge rejected this presentation and held the assets to be higher.
      The award did therefore provide a proper departure from equality to reflect the inherited
      nature of the assets whilst paying proper regard to the length of the marriage.

      The husband appealed to the Court of Appeal (Robson v Robson [2010] EWCA Civ 1171).
      The Court of Appeal reduced the award to £7 million in total (skimming something off both
      the housing fund and the Duxbury fund. Hughes LJ stated as follows: -

      “95. That the origin of assets in inheritance [cases] is a relevant factor in no sense
      means that the approach to inherited assets ought always to be the same. What is
      fair will depend on all the circumstances; those cannot exhaustively be stated but will
      often include the nature of the assets, the time of inheritance, the use made of them
      by the parties and the needs of the parties at the time of trial. In the present case,
      although the assets were inherited from the husband’s family, the parties had jointly
      elected to live off them and, in effect, to use them as a substitute for earned income.
      There can be no possible complaint about an order which treated the capital in this
      case in the way the parties themselves had jointly treated it…”

      See also Charles J in D v D [2010] EWHC 138, which was a case involving an inherited
      farming business. The judge concluded that the company would be unable to raise
      sufficient capital to pay an appropriate amount to the wife for a clean break and that
      it would not be fair to force the husband to sell his shares or liquidate the business.
      The wife was therefore awarded the matrimonial home, a lump sum of £1.5 million

(which the husband could raise) and periodical payments of £44,000 pa to make up
the remainder of her needs.

See also Charles H in N v N (Ancillary Relief) [2010] EWHC 717 (Fam); [2010] 2 FLR
1093 in which he held that when a good reason for departing from equality applied
to some assets, the court should consider the extent of that departure in respect of
those particular assets: an approach that was ased only on a percentage of a sum
based on valuations of all the assets would in many cases fail to have regard to all
the circumstances. The issues in this case were inherited assets and the husband’s
bonuses. In the particular circumstances of this case, the court decided that the
husbands shareholding in his family company should be shared 75/25 and that his
bonuses, earned after separation, were to be divided 70/30.

B v B (Ancillary Relief: Post-separation Income) [2010] EWHC 193 (Fam); [2010] 2
FLR 1214 (Moylan J)

The issue was whether the husband’s post-separation income should be divided
equally between the parties. The case involved a 15 year relationship and 3 children
aged 11, 6 and 5. The youngest child had special needs. By the time of the hearing,
the assets were £12.3 m with an additional £2.7m due to be received within a few
months. Deferred annual bonuses could amount to a further £3.5 m, subject to a
number of caveats.

The court awarded the wife £7m plus 15% of certain additional sums if these were
subsequently received by the husband, finding that an equal division of wealth was
not justified in this case as it would give insufficient weight to the fact that a
substantial part of the wealth had accrued as a result of the husband’s endeavours
post-separation. That said, the sharing principle was not confined to matrimonial
property but extended to all the parties’ resources and the wife’s needs dictated
that £7m would provide her with a fair share of the current resources.

H v H (Financial Relief) [2010] EWHC 158; [2010] 1 FLR 1864 (Munby J) This was a
case in which the assets were £70 million, plus the husband’s business, which was
very difficult to value. It had been extremely profitable in the last years of the
marriage and since the separation but was on a downward curve that would only be
halted if it managed to find an entirely new way to make money.

In 2008, one year after the separation, the husband had unilaterally implemented a
division of the assets, which the judge found gave the parties, at the time,
approximate equality, save that the division did not include the capital value of the
husband’s business and any share of future profits. Munby J:-

Rejected any suggestion that this was a special contribution case. The mere size of
the recently generated wealth could not itself be a reason for finding special
contribution. The husband was not a “genius” as he had not invented the trading
system that made the money as the business was a collegiate enterprise. The facts
did not demonstrate the necessary “exceptional circumstances”.

      Rejected the contention that the wife was entitled to any future profits (income)
      generated by the business.

      Accepted that the wife was entitled to a share of the capital value of the business at
      the time of the division and, in consequence, some part of the money generated
      thereafter which was referable to her share of the capital assets.

      He awarded her a further lump sum of £7.5 million referable to (iii) above, to bring
      her assets up to £32 million, leaving H with £37.5 million plus his share of the

      Interestingly, the figure for child periodical payments was a staggering £50,000 pa
      per child plus school fees!

      In K v L [2010] EWHC 1234, Bodey J heard an application by a husband for ancillary
      relief in circumstances where the wife was very wealthy by virtue of pre-marriage
      inheritances (c.£50m in shares in a family company). The circumstances of the case
      were particularly unique insofar as the couple and their children had lived an
      extremely modest lifestyle despite the wife’s wealth, living in a FMH worth
      £225,000, and indeed the wealth had hardly been touched during the marriage save
      to assist with income. The husband sought £18 million; the wife offered him £5
      million plus the matrimonial home. In awarding the husband £5.3 million in total,
      Bodey J found that there were good reasons for departing from equality and that the
      parties’ lifestyle meant that there should be no sharing beyond an assessment of the
      husband’s reasonable requirements fully and generously assessed.

      N.B. The Court of Appeal has just granted the husband permission to appeal on the
      basis that “arguable issues arise as to the proper treatment of inherited wealth, the
      impact of the “sharing” principle, and the degree to which (subliminal)
      discrimination may have played a part.”.

2.2   Can future earning capacity justify departure from equality?

      Murphy v Murphy [2010] EWCA Civ 1258 – the husband appealed against an award
      to the wife of 65% of the assets. The Court of Appeal allowed the appeal and held
      that the judge had been wrong to allow departure from equality for the reasons she
      gave. In particular, a deferred Merrill Lynch scheme had been wrongly treated as
      though it was liquid capital. The husband’s expenditure had been overstated by a
      factor of three and the wife’s needs had been given undue importance.
      Nevertheless, a modest departure from equality was justified to reflect the
      husband’s greater earning capacity and ability to generate capital. The judge had
      rejected the husband’s case that he had no great prospects for the future as having
      been contrived for the purposes of the litigation. He was an exceptionally able man
      with very bright prospects for the future whereas the wife had sacrificed her career
      in the human resources field and, although she had retrained, it was for employment
      in a field where earnings were much lower.

2.3   Do needs always trump inheritance arguments?


      H v H [2009] EWHC 494; [2009] 2 FLR 795 (Singer J)

      [78] In my view, the approach I should take in this case must be to attempt to
      evaluate the available assets as at the date of the hearing and then to consider their
      nature and provenance. If they derive from pre-marriage acquisition or gift, or from
      intra-marriage gift or inheritance, then (subject to needs requirements) fairness may
      dictate that they should be wholly or partially left out of the dividing exercise. Here
      too the circumstances may differ widely: there is a world of difference between the
      approach to be adopted to (for instance) a pre-marriage property which has been the
      parties’ matrimonial home; and a gifted or inherited fund kept separate from and
      never mingled with the matrimonial budget; and a gift or inheritance fully deployed
      and utilised for family purposes and needs.

2.4   Is a party entitled to exclude a bonus he received post-separation?

      See N v N (ibid) (see above – Charles J) and B v B (ibid) (see above – Moylan J)

      H v H [2009] 2 FLR 795 (Singer J) (also above)

      Although there was to be equal sharing of capital assets worth in total £2 million
      after a 7 year marriage, it was not fair to expect a husband to share an investment
      fund that contained bonuses earned more than 12 months after separation, worth a
      further £1m, nor a loyalty bonus, earned through service after separation.

      [81]…with the exception of those £155,000 of bonuses actually due and owing at the
      date of entry into these arrangements one year after the effective end of the
      marriage as a partnership, the £845,000 balance represents bonuses earned over the
      period stretching between 12 months and 33 months after that effective end.

      [82] The resultant product is indeed a valuable asset, but on the evidence before me
      cannot be touched before 2023. I do not subscribe to the view that it would be fair to
      require H to share, in whatever proportion, the value of this fund with W. During the
      period of its accumulation W, of course, continued to care for their child but H was
      supporting W from his income…”

      And a helpful (or not) nugget regarding maintenance pending suit

      “[83] Maintenance pending suit is retrospectively variable if it transpires at the
      substantive hearing that the amount ordered was excessive or inadequate. I see no
      reason in principle why that should apply any the less in the case of an agreed
      maintenance pending suit order.”

2.5   What if there is an allegation of cohabitation?

      Grey v Grey [2009] EWCA Civ 1424 - the Court of Appeal overrules Singer J (the case
      was previously reported as H v H [2009] EWHC 494; [2009] 2 FLR 795) as to the
      approach to maintenance when a party is cohabiting. The judge had asked himself
      the wrong question. The issue was not what the cohabitee was contributing to the
      wife’s finances but what he should be contributing. Thorpe LJ approved the
      approach in Fleming v Fleming [2003] EWCA Civ 1841; [2004] 1 FLR 667 saying that
      only Parliament can change the law as to how the courts should treat cohabitation
      but he adds that Fleming is sufficiently flexible to discount the periodical payments
      “to enable the court to do justice and to reflect social and moral shifts within our
      society.” The case was remitted to Singer J to reconsider the correct level of

      So no longer possible to rely on K v K…should one feel sorry for those wives who
      have had K v K order made against them (i.e. maintenance to stop on
      cohabitation)? Or was that the right decision and one should feel sorry for the
      husbands who see themselves (arguably correctly) as supporting another man’s

      See also W v W at 5.1 below (Variation of Periodical Payments)

3.    TRUSTS

3.1   Have we finally decided how to approach the issues of trusts in ancillary relief

      B v B (Ancillary Relief) [2009] EWHC 3422 (Fam; [2010] 2 FLR 887 (Moylan J)
      When considering whether to have regard to trust assets, the ancillary relief court
      could often have to conduct a two-stage exercise: (i) determining whether the trust
      assets were resources in which a party had an interest or potential interest at all;
      and (ii) if such an interest were established, determining what, if any, legitimate
      expectation the party had, and, accordingly the extent to which the assets were
      resources available to the party, or likely to be available in the future, taking into
      account the interests of the other beneficiaries.

      Given that in this case the evidence demonstrated that for some time the relevant
      trust funds had been resources which the husband considered to be resources
      available to him as and when he needed them, the question for the court was: how
      would the trustees be likely to respond to a request from the husband to make trust
      funds available to him: (a) to assist him to meet any award to the wife; and (b) to
      meet his needs consequent upon such an award?

Applying Thomas v Thomas [1995] 2 FLR 668, if, on the balance of probability the
evidence showed that if the trustees exercised their discretion to advance capital
and/or pay income to the husband, the interests of the trust and other beneficiaries
would not be appreciably damaged, the court was entitled to assume that a genuine
request for the exercise of such discretion would probably be met by a favourable

Per curiam: trustees must consider whether co-operation with the ancillary relief
court was in the interests of their trusts. It was to be hoped that trustees would
decide that it was not in the interests of the trust or the trust beneficiaries to take a
risk that the court would, in the absence of all the information, obtain an inaccurate

C v C (also described as RJC v ADC) [2009] EWHC 1491; [2010] 1 FLR 337 (Munby J) –
a trust fund valued between £4 and £6.2 million would eventually be split four ways
but the husband’s mother was the life tenant. She had a life expectancy of 15 years
and there was no power to pay anything to the husband during her lifetime without
her consent. The judge concluded, “without much enthusiasm”, that the fund was a
resource to be considered but it was at “the outer extremity of what can properly be
considered”. Having made this finding, he directed a final hearing but it is clear that
he did not think much of the wife’s prospects at that hearing.

NB – the judge did not permit further detailed consideration of the value of the trust
fund. Expensive valuation exercises are regularly criticised by the courts (see also
Moylan J in H v H [2008] 2 FLR 2092).

M v W (Ancillary Relief) [2010] EWHC 1155 (Fam); [2010] 2 FLR 1484 (Macur J)
The wife applied for ancillary relief following divorce, explicitly on a needs basis.
There was one child now aged 4. The wife sought a lump sum of £1m plus pps for
herself of £37,000 pa and £12,000 pa for the child. The husband, whose assets were
now all in two trusts, offered £400,000 plus pps of £12,000 pa for 5 years for the
wife and £7,500 pa for the child.

In awarding the wife £800,000 plus pps of £20,000 pa for herself and £10,000 for the
child, the court held that although judicial encouragement of trustees was improper
if it amounted to undue pressure, A v A (St George Trustees Ltd, Interveners) [2007]
EWCA 99 (Fam) did not support the proposition that a finding of the bona fides of
the trustees ought to deter “judicial encouragement”: it merely re-stated the well-
known principles set out in Thomas v Thomas [1995] 2 FLR 668 and assimilated
thereafter in the more recent decisions of the Court of Appeal, particularly Charman
v Charman [2005] EWCA Civ 1606.

See also de Bruyne v de Bruyne [2010] EWCA Civ 519; [2010] 2 FLR 1240 (Court of
Appeal), - a complicated, fact specific trusts case.


4.1   Can you express a pension sharing order as “whatever sum will give the wife a
      specific percentage”?


      In H v H (Financial Relief: Pensions) [2009] EWHC 3739; [2010] 2 FLR 173, Baron J
      found that the wording of s21A of the MCA 1973 was clear (and not trumped by s29
      of the Welfare Reform and Pensions Act 1999): the court could calculate the
      percentage of the pension to be transferred by taking the precise capital sum that
      seemed appropriate and undertaking a calculation to determine the relevant
      percentage but the result contained in the order could only be specified in
      percentage terms and not as “such sum as will give such percentage”.


5.1   How are applications to vary periodical payments quantified?

      W v W (Periodical Payments: Variation) [2009] EWHC 3076 (Fam); [2010] 2 FLR 985
      (Moylan J)

      This case involved the capitalisation of a wife’s periodical payments, upon sale of the
      husband’s business some years after the divorce. The relationship itself had been
      relatively short (4-5 years) but had produced a child. By the time the husband sold
      his company, the wife was cohabiting with a man of relatively modest means.

      The court must take into account and give due weight to the overall circumstances
      of the wife’s 6 year cohabitation when exercising its powers under s31 of the MCA
      1973 including its financial consequences. On the particular facts of this case, the
      court found that the wife was not to any significant extent subsidising her cohabitee
      or his children, that both an increase in the rate of pps, and capitalisation, were
      appropriate but that there would be a discount from a “straight Duxbury” because
      the court needed to take into account the length of the marriage, the wife’s future
      earning capacity, the manner in which the husband’s wealth had accrued and the
      wife’s cohabitation. Against this, the wife’s contributions as a mother entitled her to
      a measure of financial independence, and had to be given significant weight, in
      contrast to her relatively short-lived contributions as a wife.

      Hvorostovsky v Hvorostovsky [2009] EWCA 791; [2009] 2 FLR 1574

      The husband was an opera singer. The original order in 2001 provided that he pay
      £113,000 pa for the wife and children out of a gross income of £552,000 pa. By the
      time of the variation application, his income had grown to £1.36 million gross. The
      judge awarded an increase to £120,000 pa for the wife, £12,500 pa per child and
      school fees (£25,000 pa).

      The Court of Appeal allowed the wife’s appeal saying that the order had “failed to
      clip the target’s outer ring” and that the uncertainty of the husband’s life as a
      performing artist should not affect quantification. The order was increased to
      £140,000 pa plus £15,000 pa per child. The court was not impressed by convoluted
      arguments as to “relationship generated disadvantage” and said that the profession
      should return to Paragraphs 105 and 106 of Cornick v Cornick (No 3) [2001] 2 FLR
      1240 – namely that the payee can share in the increased prosperity of the payer and
      is not restricted to reasonable requirements or the standard of living during the

      McFarlane v McFarlane [2009] EWHC 891; [2009] 2 FLR 1322

      The wife applied for an increase in her maintenance based on a substantial increase
      in the husband’s income (£750,000 net to £1.1 million net). Charles J comments that
      the House of Lords provided no guidance as to how the issue of compensation
      should be quantified. He considered that it was incorrect to isolate compensation
      and treat it like a damages claim. He said:-

           “the plans and expectations of the parties when deciding that the wife should
           give up her career point strongly towards the conclusion that the relevant
           provision should be made for the wife from the husband’s earnings on or before
           his retirement if this is practical and can be fairly done”

      He ordered that the wife receive 40% of the husband’s net income to £750,000
      (£300,000); 20% to £1 million (£50,000) and 10% over £1 million. He ordered that
      the maintenance should continue until 31st May 2015 (by which time the husband
      would be aged 55 and probably retired) and that, if at that point, the wife had
      sufficient capital for a Duxbury income of at least £120,000 pa, it would be “a strong
      pointer in favour of no extension being ordered”.

5.2   How do you approach the claims of second wives?

      Vaughan v Vaughan [2010] EWCA Civ 349

      A couple married in 1967 and separated in 1981. The husband was paying
      maintenance of £27,000 pa but succeeded at first instance in having the order
      discharged without a capital payment to the wife, relying on his forthcoming
      retirement. The Court of Appeal allowed the wife’s appeal, notionally varied the
      order to £14,000 pa and then capitalised it at £215,000. The deputy judge had made
      two errors. First, he should not have allocated half of the husband’s pension to his
      second wife.     Priority cannot be given to a second wife who marries in the
      knowledge of the claims of the first wife. Second, it was wrong to amortise an
      inheritance received by the first wife. The husband argued that it should be
      amortised as the wife had no children. Wilson LJ said it was “invidious for the court
      to try to analyse a person’s relationships in order to seek to measure the extent of
      reasonable expectations of benefit under her or his estate.”


6.1   In what circumstances can an ancillary relief order be set aside due to a change in

      Myerson v Myerson (No 2) [2009] EWCA Civ 282; [2009] 2 FLR 147

      Anyone seeking to set aside an order on Barder v Caluori grounds would be very well
      advised to heed the warning that very few successful applications have been made.
      Natural processes of price fluctuation do not satisfy the Barder test (see Cornick v
      Cornick (No 1) [1994] 2 FLR 530). In Myerson, the husband had wished to keep his
      business (rather than share it with his wife). He had taken the conscious decision to
      do so on the basis that he would be “captain of the ship certain to keep for himself
      whatever profits or gains his enterprise and experience would achieve in the years
      ahead”. He therefore had to accept any losses as well.

      Part of the lump sum (£2.5 million) was, however, payable by instalments and the
      Court of Appeal noted the ability of the husband to apply to vary that part of the
      order which related to instalments yet to be paid.

      This is all repeated in Horne v Horne [2009] EWCA Civ 487; [2009] 2 FLR 1031 where
      it was held that trading losses of a business incurred after the original order had
      been made could not amount to a Barder event as they were “within the range of
      the foreseeable”. The Court of Appeal disapproves the decision of Heard v Heard
      [1995] 1 FLR 970 which had held that a dramatic reduction in the value of a
      matrimonial home was a Barder event. The Court of Appeal again says that the
      appropriate course that the husband should have adopted was to apply to vary the
      lump sum by instalments in relation to money not yet paid. Even then, the Court of
      Appeal reminds us that the test remains almost as stringent as when determining a
      Barder appeal (see Westbury v Sampson [2002] EWCA Civ 407; [2002] 1 FLR 166).

      The same outcome occurred in Walkden v Walkden [2009] EWCA Civ 627; [2010] 1
      FLR 174 although this was a case in which the wife attempted to set aside an order
      on the basis of a subsequent huge increase in the value of a private company. The
      wife could not rely on the sale of the shareholding as, throughout the ancillary relief
      negotiations, the focus had been upon the prospects of such a sale. In reaching
      agreement with her husband, the wife must have been satisfied that the highly
      speculative value of the shareholding had been duly reflected in the compromise.

      S v S (No 2) [2009] EWHC 2377; [2010] Fam Law 129 – Singer J. At the original trial,
      it had been decided that it would not be fair to award the wife a share of the
      husband’s company. The sale price had thereafter been fuelled by refinancing and
      new contracts. The company’s transformation since the original order was not
      outside the range of foreseeability, even though the increase in value was enormous.

      It can therefore be said with confidence that the obstacles to applications to set
      aside on the grounds of an enhanced (or reduced) valuation of an asset are now
      virtually insurmountable.

6.2   Is it any different if the appeal is in time?

      P v P [2010] Fam Law 229 – Moylan J. The SJE valued the company at £730,000. The
      wife was ordered to transfer her half shareholding in exchange for a lump sum
      payment of £328,500. Before the order was made, an offer was made to buy the
      shares for £2.8 million. The DJ refused to alter his decision notwithstanding evidence
      of further offers and a clear timetable for payment. Moylan J allowed the wife’s
      appeal and ordered that she should retain her shareholding and therefore benefit
      from any sale at an enhanced value. The DJ should have looked at the matter again
      (see Re Barrell Enterprises [1973] 1 WLR 19) given that the offers indicated that it
      was likely that the shares were worth very substantially more than the value
      ascribed at trial.

      See also Francis v Francis [2010] EWCA Civ 182, where Wilson LJ gives permission for
      a second appeal on the ground that it is arguable that the restrictions in Barder as to
      price fluctuations do not apply to an appeal made in time. He postulates that it is
      permissible for a judge conducting such an appeal to “re-hear” a specific point such
      as a change in the value of properties without conducting a general rehearing of the

6.3   What if a mistake was made at trial?

      Fallon v Fallon [2008] EWCA Civ 1653; [2010] Fam Law 13

      The DJ made an order for a lump sum of £75,000 in the mistaken belief that the wife
      would be able to purchase her council property with this sum. This mistake was
      sufficient for the Court of Appeal to intervene. It was a short marriage. The wife
      was a secure council tenant. The husband had only acquired his capital (£300,000)
      since separation (although it originated from his purchase of a council property he
      had before the marriage). The wife was entitled to a modest amount, after payment
      of her debts of £13,700 and costs of £9,500. An appropriate lump sum was £40,000.

      Brisset v Brisset [2009] EWCA Civ 679 – [2009] 2 FLR 1451

      After a 40 year marriage, a couple agreed that their capital should be divided equally
      but the husband appealed on the basis that there had been double counting of the
      amount he had to pay to his wife by way of lump sum. The lump sum had been
      increased by £15,000 to reflect the disparity between their respective incomes
      during the period of separation. This was wrong as the disparity in income since
      separation was already reflected in the fact that the wife had had to spend part of
      her capital since separation to make up for her lower income. If she had not done

      so, she would have retained more capital leading to a lower lump sum. Sharing the
      assets held at trial would, generally speaking, always take such income disparity into
      account so the court should not perform such an accounting exercise.

      The Court of Appeal is critical of the fact that the Circuit Judge referred the papers to
      the District Judge for his comments and the DJ replied giving background
      information and disputing many of the husband’s grounds of appeal. Although this
      was disclosed to the parties by the CJ, the Court of Appeal took the view that what
      had occurred was improper. In effect, the DJ had been allowed to participate in an
      appeal from himself. A judge below had no right to be heard on an appeal. Lawyers
      are reminded, however, that if a judgment does not deal with an important aspect,
      the parties should invite the judge to deal with the matter before an appeal is
      launched (repeated in Lyons v Lyons - see below).

6.4   Can you appeal if there is a finding of non-disclosure?

      Bokor-Ingram v Bokor-Ingram [2009] EWCA Civ 412; [2009] 2 FLR 922, overturning,
      on appeal, the first instance decision of Charles J (I v I [2008] EWHC 1167; [2009] 1
      FLR 201). A husband’s failure to disclose that he was in negotiations to move to a
      much better paid job at the time of an FDR did amount to material non-disclosure.
      The appeal was compromised but the Court of Appeal decided to give a judgment to
      prevent reliance being placed on the first instance decision to the contrary. Thorpe
      LJ said:-

      “Had there been full and frank disclosure of the imminence of the new contract of
      employment it is inconceivable that the wife would not have raised her sights. It is
      also inconceivable that the District Judge would have rejected the information as

      The Court of Appeal reiterates their view that the duty of disclosure is ongoing after
      a compromise has been reached saying “duty to disclose extends beyond what is
      certain on the date that the order is made to any fact relevant to the court’s review in
      the foreseeable future.”

      It is suggested that this gives rise to considerable difficulties – when does this duty

      Behzadi v Bezhadi [2008] EWCA Civ 1070; [2009] 2 FLR 649

      A division of the assets 53% to the wife and 47% to the husband might have
      appeared unreasonable on the basis that it failed to give sufficient weight to the fact
      that a significant part of the wealth had been inherited by the wife. In the
      circumstances, however, the division was justified due to the judge’s finding of non-
      disclosure of assets held by the wife in Iran. Non-disclosure places substantial
      obstacles in the path of an appeal as it renders the court unable to quantify the

      extent of the assets. NB the Court of Appeal makes it clear that a judge must always
      produce a schedule of assets (“a balance sheet”) as part of the judgment.

6.5   What if there have been large fluctuations in asset values in the months up to the
      final hearing?

      In Marano v Marano [2010] EWCA Civ 119, the value of the husband’s property
      portfolio dropped from £80 million at the time of his Form E to a paper loss of £10
      million at trial, including a potential US tax liability of £10 million if the business was
      wound up. The wife was the beneficiary of trusts from her wealthy parents. The
      judge ordered the wife to pay the husband a lump sum of £5 million (which left the
      wife with 84% of the assets). The wife appealed on the basis that it was wrong to
      base the order on a snap shot value when prices were fluctuating so wildly. The
      Court of Appeal dismissed the appeal. The judge was exercising “a broad and
      general discretion to achieve fairness”. Whilst the judge might have imposed a
      contingent rather than an immediate obligation on the wife, she was not obliged by
      authority to do so. No appealable error had been demonstrated.

6.6   Should the court keep a wife out of her lump sum for three years due to the credit

      In Milton v Milton [2008] EWCA Civ 926; [2009] 1 FLR 661 the judge ordered the
      wife to pay the husband £60,000 but, taking judicial notice of the fact that
      mortgages were now more difficult to obtain, allowed the wife three years to raise
      the money with no provision for interest.

      The Court of Appeal held that difficulties in the mortgage market were insufficient
      justification for keeping the husband out of his entitlement for such a long period.
      The time for payment was shortened to one year.

      If there were unforeseen circumstances, the wife could apply to the court for an
      extension of time.

6.7   Can a spouse secure his or her borrowings against the property of the other spouse
      indefinitely following a divorce?

      Lyons v Lyons [2010] EWCA Civ 290

      The husband had given an undertaking to use his best endeavours to remove a
      charge on properties awarded to the wife, which secured his borrowings. The Court
      of Appeal allowed the wife’s appeal and gave the husband two years to remove the
      borrowings. Thorpe LJ said that “it is undesirable that either spouse should have the
      use of the other’s property as security for borrowings after the resolution of their
      financial dispute”.


7.1   Following the decision in Agbaje, how easy is it to make applications pursuant to
      Part III?

      Agbaje v Akinnoye-Agbaje [2010] UKSC 13 – Lord Collins:-

      Applications under Part III do not require a statutory forum non conveniens test. The
      whole basis of Part III is that it may be appropriate for two jurisdictions to be
      involved, one for the divorce and one for ancillary relief. There is nothing
      objectionable in this provided there is an appropriate connection here with the
      parties or their property.

      Although one of the purposes of Part III is to remit hardships caused by the failure of
      the foreign jurisdiction to afford appropriate financial relief, hardship or injustice are
      not pre-conditions of the exercise of jurisdiction here although they will be relevant

      In a big money talaq case, where almost all the relevant connecting factors are with
      England, there would be no reason not to apply English law so as to give the same
      provision for the wife as she would have obtained had there been a divorce in
      England. But, equally, it is not the intention of the legislation to allow a simple “top-
      up” of the foreign award so as to equate with an English award. There will, for
      example, be cases where the connection with England is not strong and a spouse has
      received adequate provision from the foreign court. It would not then be
      appropriate to “top-up” the award.

      Although the eventual award will depend on all the circumstances of the case, there
      is no rule that it should be the minimum amount required to overcome injustice.
      There is a broad discretion but, where possible, the order should have the result that
      provision is made for the reasonable needs of each spouse. But where the English
      connections are very strong there may be no reason why the application should not
      be treated as if it were made in purely English proceedings.

      The appeal would be allowed as there was a very large disparity between what the
      husband received and what the wife received such as to create real hardship and a
      serious injustice. There was no basis for the Court of Appeal to interfere with the
      exercise of discretion of the trial judge.

      This is broadly what the profession always thought Part III was designed to
      achieve. There was not a rush of cases pre- Agbaje and there probably won’t be a
      huge rush now.

      N.B. The Court of Appeal decision in Traversa v Freddi [2009] EWHC 2101; [2010] 1
      FLR 324 is awaited with interest (the case was heard a couple of weeks ago). The
      case involved an Italian divorce and the issue is, essentially, can Part III be used to

      trump the Italian separation of property regime entered into by the parties pre-
      marriage and which would deny the husband any relief in Italy? As Bodey J said
      “Italy does not lack a system of meaningful family finance law and does not apply
      that law in a discriminatory way; it is a neighbouring EU jurisdiction deserving of no
      less respect than our own.” It will be interesting to hear what the Court of Appeal

      In S v S (Hemain Injunction) [2009] EWHC 3224; [2010] 2 FLR 502, Baker J stated
      that a Hemain injunction (i.e. an injunction preventing one party pursuing
      proceedings in another jurisdiction pending a decision in the English proceedings)
      should only be granted if it had been demonstrated that the respondent to the
      action had acted unconscionably, oppressively or vexatiously in stealing a forensic
      advantage by disputing that England was the appropriate forum (and this holding up
      the English proceedings) whilst at the same time pursuing his own proceedings
      abroad. Whilst each case must turn on its own facts, it would manifestly be much
      harder for a litigant to demonstrate that the other party was acting unconscionably
      when the English proceedings had been started significantly later than the foreign
      proceedings. Although the court would try to ensure that the playing field was level,
      the decision when to start the race was for the parties not the court; if one party
      chose to start the race several months after the other party, the court was under no
      duty to call the leader back and make him start again.

      In that particular case, Baker J found that an order obliging the husband to take
      active steps to stay the Lebanese proceedings would offend principles of comity and
      infringe the principles and policy underpinning the Hemain injunction procedure. It
      had not been unconscionable for the husband to pronounce the Talaq, nor to apply
      to register the Talaq, nor to pursue that registration through a series of court
      hearings in Lebanon; he had simply been pursing his legal remedy in a legitimate
      fashion. The fact that his motive had been, at least in part, to obtain a financially
      more advantageous outcome for himself did not render his conduct vexatious,
      oppressive or unconscionable (R v R (Divorce: Hemain Injunction)[2003] EWHC 2113

      In Golubovich v Golubovich [2010] EWCA Civ 810, the Court of Appeal overturned
      Singer J’s refusal to recognise a Russian divorce on the grounds of public policy (the
      husband having flouted an order prohibiting him from taking any further steps the
      Russian proceedings) on the basis that in that particular case the issue was not at
      ‘inter-state’ level but rather between the parties (neither having made an application
      in either country for determination of the more appropriate jurisdiction) and in any
      event it would be open to the wife to make an application under Part III.

7.2   What is the inter-relationship between Pt III of the MFPA 1984 and the Lugano

      CG v IF [2010] EWHC 1062 (Fam) (Mostyn J)
      The parties were British but permanently resident in Switzerland. They owned a flat
      in London and in 2006 when they decided to divorce, the husband transferred his

      share of the equity to the wife. The TR1 did not indicate that any kind of trust
      arrangement was intended. The couple subsequently obtained a divorce in
      Switzerland and filed a financial agreement under which each retained the assets in
      their sole name. Subsequently the husband sought to apply under Pt III, saying that
      he did not realise that the Swiss agreement extended to the London flat and had
      been advised that he was unlikely to obtain rectification of the Swiss order.

      Moylan J dismissed the husband’s application stating that the husband had to
      establish that the English court had jurisdiction, at least prima facie, and that there
      was a substantial ground for making the application i.e. a ground where the court
      can confidently say that the probability is greater than or equal to 50% that the
      applicant will receive a substantive order were the matter to be tried. On the facts
      of the case, the husband’s claim, were it allowed to proceed, would be founded on
      need. This was forbidden territory under the Lugano Convention and so prevented
      his claim from proceeding.

8.    COSTS

8.1   Can you apply for an “issue-based” costs order?


      M v M [2010] 1 FLR 256

      Eleanor King J stated that the husband’s application for issued-based costs orders in
      relation to the wife’s application to have certain company shares transferred to her
      was to be considered against the backdrop of the wife’s approach to the litigation as
      a whole. In this case, the transfer application ought never to have been made and
      the husband ought not to suffer the consequences of the decision to make it: an
      issue-based costs order would be made.

      The judge also noted that although the party intending to seek a costs order should
      ordinarily indicate their intention to do so in open correspondence or in a skeleton
      argument before the date of the hearing, in this case the issue had been raised at
      the conclusion of the ancillary relief hearing, and had come as no surprise to the
      wife’s advisors.

8.2   What is the position regarding costs of interveners?

      In Baker v Rowe [2009] EWCA Civ 1162; [2010] 1 FLR 761, the Court of Appeal
      decided that for the purposes of appealing an order made by a DJ, the relevant rule
      was r.8.1 (1) of the FPR which provided that a party could, without permission,
      appeal from an order or decision made in family proceedings in a county court to a
      circuit judge on notice. The important point was that the order was made within
      “family proceedings”.

      Secondly, the general rule as to costs in ancillary relief proceedings, set out in r2.71
      (4)(a) of the FPR did not apply to the issue of costs between the interveners, because
      the proceedings were not “ancillary relief” proceedings for the purposes of that rule.
      The rule that “costs follow the event” did not apply either as these were family
      proceedings and under r10.27(1)(b) the general rule was disapplied. That said, even
      in cases to which no general rule applies, the fact that one party had been
      unsuccessful and must, therefore, usually be regarded as responsible for the
      generation of costs, would often be a decisive factor in the exercise of the judge’s
      discretion (as it was in this case).

8.3   Can you include legal costs in an interim pps application under Sch 1 of the CA


      See G v G (Child Maintenance: Interim Costs Provision) [2009] EWHC 2080 (Civ);
      [2010] 2 FLR 1264 (Moylan J)

      The court had jurisdiction to make an award of interim maintenance directed
      towards providing the mother with funds to enable her to meet her legal costs of Sch
      1 proceedings, if the court considered it appropriate to do so for the benefit of the
      children in the case. The jurisdiction to make an interim award was a very broad
      jurisdiction, only to be exercised when, on a broad assessment, the court’s
      intervention was manifestly justified – which would include an assessment of
      whether the mother could procure legal advice and representation by any other

      In this particular case, the court awarded the mother a sum of £40,000 by way of
      interim pps to cover legal costs but did not consider it appropriate to increase the
      level of the general maintenance paid to the mother on an interim basis.

8.4   Wasted Costs Orders

      Harrison v Harrison (No 2) [2009] EWHC 428; [2009] 1 FLR 1434

      The wasted costs jurisdiction is not a punitive or regulatory jurisdiction but a
      compensatory one. It is therefore a prerequisite that the conduct complained of had
      caused the applicant to suffer loss. The procedure is a summary remedy of last
      resort for cases that are “plain and obvious”. Moreover, even if impropriety is
      demonstrated, there has to be proportionality.

      This is a case where the husband had obtained an order for indemnity costs against
      the wife, so he could not then proceed against her junior counsel for alleged failings
      in an application for a freezing injunction.


9.1   Can HMRC rely on a Form E and answers to questionnaire in criminal proceedings
      against a party?

      R v K [2009] EWCA Crim 1640

      In ancillary relief proceedings, a party is compelled by rules of court to disclose
      information and documents and is obliged to give full and frank disclosure. The use
      of information obtained in such circumstances in a criminal trial would deprive the
      defendant of a fair trial to which he is entitled under Article 6 of the Convention and
      must therefore be excluded under section 78 of PACE.

      However, the Court of Appeal makes it clear that there is no privilege against self-
      incrimination in ancillary relief proceedings.

9.2   Can you obtain an interim order for sale of a matrimonial home?

      Miller-Smith v Miller-Smith [2009] EWCA Civ 1297; [2010] Fam Law 142

      The judge made an order for sale of the matrimonial home before the ancillary relief
      hearing pursuant to the husband’s TOLATA application. The wife’s appeal was
      dismissed as there was no measurable chance that the wife would be able to resist a
      sale in the ancillary relief proceedings. In general, it is clear that an order for sale
      would not be made if there was any realistic chance that the wife would be able to
      obtain an outright transfer or a deferred sale in the ancillary relief. It is thus clear
      that TOLATA applications should be used only sparingly in the run up to an ancillary
      relief hearing.

9.3   Transfers of property orders where one party is in occupation

      Fisher-Aziz v Aziz [2010] EWCA Civ 673; [2010] 2 FLR 1053 (Court of Appeal)

      As a matter of general principle, if a wife in occupation of the matrimonial home
      (having primary regard to the interests of the children), sought a transfer of the
      property in preference to the proceeds of sale, she should ordinarily succeed,
      providing she could secure the release of the co-owner from the mortgage or
      charges attached to the property. In this particular case, the Court found that the
      wife should have been allowed to run the risk associated with retaining the property
      as she was keen to do so and the sale or retention of the FMH would have made no
      difference to the scarcity of resources.

9.4   Is outstanding maintenance pending suit enforceable if the wife’s petition here is
      subsequently dismissed?

      Moore v Moore [2009] EWCA Civ 1427 (Court of Appeal) approving Bodey J’s
      decision at [2009] 1 FLR 790 – if a divorce eventually proceeds in a foreign
      jurisdiction, the court has no power to order the refund of maintenance pending suit
      already paid. By parity of reasoning, if the maintenance was unpaid in breach of the
      order, it would not become unenforceable nor would it be right to discharge the
      order ab initio in the absence of some special circumstance. To deny the wife
      enforcement would be to reward the party who had been in wilful breach of the
      court order. Moreover, maintenance pending suit could be enforced by a charging
      order over the (non) payer’s property.

9.5   Has conduct made a return?

      L v K [04/06/09] (Moylan J); an application for permission to appeal has subsequently
      been dismissed (K v L [2010] EWCA Civ 125) – the husband had sexually abused his
      step-granddaughters. The wife was worth £4.3 million, which she had inherited
      from her father. The husband’s application for ancillary relief was dismissed. He did
      receive £100,000 as his half share of a property in France but had to pay £50,000 in
      costs to the wife. It is clear that conduct played a part in the decision but Wilson LJ
      in the Court of Appeal said that “the husband’s grave sexual misconduct within the
      family was far from the only factor which generated so small an award for him”. In
      1993, during an earlier separation, the husband had promised that he would make
      no claim on the wife’s assets if the parties reconciled and this precluded the husband
      from relying on the length of the marriage thereafter. These considerations
      trumped the husband’s needs.

9.6   If there has been negligence in an ancillary relief case, how do you quantify loss?

      Di Matteo v Marcus Lee [2010] EWHC 312 (QB)

      Slade J – the solicitors did not tell the husband that the wife had sent a Calderbank
      letter saying she would accept £60,000; when he later discovered this (after the
      eventual trial), the husband said that he believed that he could have negotiated her
      down to £40,000 if he had known about the offer. In fact, he was ordered by the DJ
      to pay the equivalent of £100,000. Slade J finds that, if he had known of the offer,
      there was a 25% chance that the husband would have offered £40,000 and a 20%
      chance that the wife would have accepted. The damages were assessed at 25% of
      the difference between £100,000 and £40,000, namely £15,000.

9.7   To what extent can you rely on admissions made in “without prejudice”

      Ofulue v Bossert [2009] UKHL 16; [2010] 1 FLR 475

      A statement in “without prejudice” negotiations should not be admissible in
      evidence, save perhaps where it was wholly unconnected with the issues between
      the parties to the proceedings, other than in exceptional circumstances such as
      those mentioned in Unilever plc v Procter & Gamble [2000] 1 WLR 2436. The
      essence of the rule against admissibility was to enable parties to speak freely. It was
      in the public interest to encourage negotiated compromise by removing the
      inhibiting effect of worrying that there might be unseen dangers lurking behind
      things said or written during such negotiations. This applied even if the admission
      had been made in previous proceedings relating to the same land as the issues in the
      earlier proceedings were not sufficiently remote from the current possession
      proceedings as to be outside the “without prejudice” rule. Even if the admission had
      not been in issue in the previous proceedings, it would still not be admissible in the
      new proceedings if the passage contained an offer to settle the earlier proceedings.

      One of the exceptions noted in the Unilever case is if the exclusion of the evidence
      would act as a cloak for perjury, blackmail or other “unambiguous impropriety”. It is
      suggested that this exception would cover a without prejudice admission as to the
      existence of assets later denied openly.

9.8   Is a solicitor debarred from acting in circumstances where he acted for the other
      side many years earlier and has no recollection of the case?


      Re Z [2010] 2 FLR 132

      This was a case in which the husband had instructed a solicitor, Mrs F, to act for him
      whilst she was a partner at G & Co. About a year later they had had a disagreement
      and parted company and the husband and wife had reconciled. Some 7 years later,
      Mrs F left G & Co and became a partner at F & Co. A couple of years after that, the
      husband and the wife decided to get divorced and the wife consulted F & Co. After
      some pre-varication, the husband objected.

      Bodey J found that the fact that this was a family law “money” case did not involve
      some special ‘family gloss’ on the law as set out in Bolkiah (Prince Jefri) v KPMG (a
      Firm) [1999] 2 AC 222; family law was not a special category in this respect. As set
      out in Bolkiah, a plaintiff who sought to restrain a former solicitor from acting in a
      matter for another client had first to establish: (i) that the solicitor was in possession
      of information that was confidential to him, to the disclosure of which he had not
      consented; (ii) that the information was or might be relevant to the new matter in
      which the interest of the other client was or might be adverse to his own. If this
      burden, which was not a heavy one, was discharged, the evidential burden then
      shifted to the defendant firm of solicitors to show that there was no risk that the
      information in question would come into the possession of those now acting for the
      other party; this burden was a heavy one and the starting point was that unless
      special measures were taken, information moved within a firm.

      In this particular case, the husband was granted an injunction restraining F & Co
      from acting for the wife on terms that he pay the wife £32,500 to cover any costs

9.9   Can you insist on the decree absolute being adjourned until after determination of
      the wife’s ancillary relief application?

      In Miller-Smith v Miller-Smith (No 2) [2009] EWHC 3623; [2010] 2 FLR 351, Baker J
      confirmed that although the court had a discretionary power under the inherent
      jurisdiction to delay or stay an application to make a decree absolute, it could
      exercise this jurisdiction only if the respondent was able to establish special or
      exceptional circumstances - see England v England (1979) Fam Law 86 and Dart v
      Dart (unreported) 27 October 1995.

      Special circumstances could not be established in this case because the husband had
      offered a comprehensive package to protect the wife in terms of her pension rights
      and health insurance cover – and in any event she would have a claim under the
      I(PFD)A 1975 if the husband died before the ancillary relief was hear.

      With thanks to Philip Moor QC, Nicholas Cusworth QC and Nicholas Yates, all of 1 Hare Court

                                   Financial Proceedings: High Court Cases.

    1. This Guidance takes effect from 1 December 2009 and applies, as far as practicable, to cases
    commenced before, as well as those commenced on or after, that date.

A. Financial ancillary relief applications pending in the PRFD where notice in Form A or B has been
issued and the parties seek transfer to the High Court.

    2. In considering whether to apply for the transfer of proceedings to the High Court, the parties must
    have regard to the provisions of the Practice Direction: Allocation and Transfer of Proceedings,
    issued on 3rd November 2008. An application for ancillary relief will normally only be considered
    suitable for hearing in the High Court if it is exceptionally complex or there is another substantial
    ground for the case being heard in the High Court.

    3. An application for the transfer of proceedings to the High Court should normally be made to a
    circuit or district judge at or after the First Appointment in the Principal Registry. Where an order for
    transfer is then made, the case will be referred to the Clerk of the Rules and allocated to a Judge of
    the Family Division in accordance with paragraph 8.

    4. Where, exceptionally, the parties seek the transfer of the proceedings to the High Court before
    the date fixed for the First Appointment both Counsel or, if Counsel are not instructed, solicitor(s)
    for the parties must complete and file a certificate in the form annexed to this Guidance, stating
    concisely the reasons for certifying that the application is suitable for determination by a Judge of
    the Family Division. The completed certificate must be filed with the Clerk of the Rules not less than
    21 days before the date fixed for the First Appointment in the Principal Registry.

    5. The completed certificate will be referred to and considered by a Judge of the Family Division who
    will determine whether the certificate indicates that prima facie the case is suitable for hearing in
    the High Court. If so determined, the case will be transferred to the High Court and allocated by the
    Clerk of the Rules to a Judge of the Family Division in accordance with paragraph 8. A date will be
    fixed for the First Appointment before the allocated Judge and the merits of the certification will be
    considered at that appointment.

    6. If, at the First Appointment, the allocated Judge considers that the certification was not
    appropriate, the proceedings will be transferred back to be heard at county court level and the
    allocated Judge may give directions as to case management, including the level of judiciary before
    whom the case should be listed. The allocated Judge may make such orders as to costs as considered

    7. Where proceedings are transferred to the High Court under paragraph 4, it is the responsibility of
    the solicitor for the applicant to ensure that the First Appointment fixed in the Principal Registry is

B Financial ancillary relief applications proceeding in the High Court

    8. An application for financial ancillary relief considered suitable for hearing in the High Court will be
    allocated to one Judge (“the allocated Judge”). The allocated Judge will, so far as practicable,

manage the case from First Appointment through to final hearing, except that the financial dispute
resolution hearing (“FDR”) will be listed in an FDR week before a Judge of the Family Division other
than the allocated Judge.

9. If the allocated Judge deems it appropriate, the date for the final hearing may be fixed at the First

10. The FDR will be listed with a time estimate of 1 day unless (i) the parties certify, giving written
reasons, that a lesser period is sufficient and (ii) obtain the written permission of the FDR Judge
(before whom the case is listed for hearing) for the reduced time estimate.

11. Any application in the course of the proceedings should be made to the allocated Judge, unless
to do so would be impracticable or would cause undue delay.

                                           FORM A

                                    FAMILY DIVISION

Before The Honourable Mr(s). Justice in private



                                    Outline Factual matrix:
                               a.    The parties married on [complete].
                               b.    The parties separated on [complete].
                               c.    There are …… children of the family [complete].
                               d.    The Petition/Answer was issued [complete]
                               e.    The Decree Nisi was pronounced on [complete]
                               f.    The Decree Absolute was granted on [complete]
                               g.    There is / there is not a dispute about the jurisdiction of the
                                     High Court of England and Wales. The reason for the dispute
                                     is [complete giving short reasons]

               ……… being Counsel/solicitor for the Applicant (Wife/Husband)

             ……… being Counsel/solicitor for the Respondent (Wife/Husband)

        We certify that this application should be heard in the High Court because:-
                                Delete/complete as appropriate
        (1) The assets in this case are currently estimated to be in the order of:-
            (a) £10 - £15 million.

    (b) £15- £25 million.

    (c) £25- £50 million.

    (d) £50 million plus (state the figure £……..).

    (e) Other (state the figure £……..).

         If the assets are less than the figures set out in (a) – (d) above state the reasons
                                 why the case is fit for the High Court.

            Potential allegations/issues may arise which include:
(2) Non disclosure of assets.                       Yes/No

(3) Assets are/were held through the medium of offshore trusts/settlements.

(4) Assets are/were held through the medium of family/unquoted corporate entities.

(5) The value of family assets, trust and/or corporate entities.
(6) Expert accountancy evidence will be required.
(7) Assets are held offshore.
(8) The parties’ respective contributions.

                  Give brief details of the potential dispute

(9) There are/may be disputed allegations of “obvious and gross” conduct. Give a brief
    outline of the potential matters that may be in dispute.

(10)There are substantial arguments concerning the illiquidity of assets. Give brief
    details of the potential matters that may be in dispute.

(11)There may be substantial arguments about:-
    (a) which assets are “matrimonial assets” or
               ”non matrimonial assets”                                  Yes/No
    (b) assets that were owned prior to the marriage          Yes/No
    (c) assets that were acquired after the parties’
                   separated                                             Yes/No
    (d) other – give brief details of matters that may be in dispute.

(12)The application involves a novel point of law. Specifically…(set out in outline the
    proposition of Law that may be involved)

           (13)The current estimate of the length of trial is …… days [complete].

           (14)Set out any other reason why the application is fit for hearing in the High Court.

           (15)This case is assessed as complex because [complete]

I/We understand that if, following transfer to the High Court, the court considers that the case is
not appropriate for hearing before a Judge of the Family Division, the court may give directions for
the case to be heard by a Deputy High Court Judge or for the case to be transferred back to be
heard at county court level before either a Circuit Judge allocated to hear such cases or a District
Judge of the PRFD, as appropriate. The court may also make such orders as to costs as it considers

                              Signed                                        Signed

                    Counsel/Solicitor for the                  Counsel/Solicitor for the
                          Applicant                                  Respondent
             No other documents are to be lodged by the parties with this certificate


                                         NAME OF CASE:

                                       NUMBER OF CASE;

The gatekeeper Judge deems this case suitable/unsuitable to be heard in the High Court because
                                    [state brief reasons]

                         This case is, prima facie [delete as appropriate]
              (a) Very complex
              (b) Of medium complexity
              (c) Complex
                                  because [state brief reasons]

This case is/is not suitable for hearing before a Deputy High Court Judge with financial expertise.

               [To be completed where the case is unsuitable for the High Court]

              This case is transferred to county court level at the PRFD for hearing

                                       Add if appropriate:

             before a circuit judge allocated to hear financial ancillary relief cases


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