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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Prest v Prest [2015] EWCA Civ 714 (07 July 2015) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2015/714.html Cite as: [2015] EWCA Civ 714 |
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ON APPEAL FROM FAMILY DIVISION, HIGH COURT
Mr Justice Moylan
FD08D01163
Strand, London, WC2A 2LL |
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B e f o r e :
LADY JUSTICE GLOSTER
and
MR JUSTICE BLAKE
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Prest |
Appellant |
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- and - |
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Prest |
Respondent |
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WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
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Mr Jeremy Posnansky QC (of Farrer & Co) for the Respondent
Hearing date: 19th March 2015
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Crown Copyright ©
Lord Justice McFarlane:
Background
The wife's judgment summons
"Subject to the provisions herein-after mentioned, and to the prescribed rules, any court may commit to prison for a term not exceeding six weeks, or until payment of the sum due, any person who makes default in payment of any debt or instalment of any debt due from him in pursuance of any order or judgment of that or any other competent court."
"(2) That such jurisdiction shall only be exercised where it is proved to the satisfaction of the court that the person making default either has or has had since the date of the order or judgment the means to pay the sum in respect of which he has made default, and has refused or neglected, or refuses or neglects, to pay the same."
"(1) No person may be committed on an application for a judgment summons unless –
… (c) the judgment creditor proves that the debtor –
(i) has, or has had, since the date of the order the means to pay the sum in respect of which the debtor has made default; and
(ii) has refused or neglected, or refuses or neglects, to pay that sum.
(2) The debtor may not be compelled to give evidence."
"The husband did not attend that hearing. He communicated with the court by, if I recall correctly, email and requested that the application be adjourned. In a statement dated 4th June 2013 the husband said that he had to be in Nigeria, as a result of an emergency, and that he might have malaria, as a result of which he might not be able to return to London for the hearing on 5th June."
As a result of that non-attendance the case was adjourned to 11th July 2013. The husband was directed to attend that hearing and a penal notice was attached to that requirement.
Judgment summons: final hearing July 2014
"AND UPON the father informing the court that he intends to attend the hearing listed before Mr Justice Moylan on 28th and 29th July 2014."
"I have been under a great deal of stress for the past 2 years and this has taken its toll on me and unfortunately my health has deteriorated significantly over the past 2 months. I have seen my General Practitioner for the best part of a year and he has referred me to three specialists who have advised me to undertake a course of treatment which has commenced and will continue over the next 6 to 12 months. I am sorry that I am just not well enough to attend court on 27th July. Having seen the last of the three specialists on 10th July this year, the extent of the deterioration in my health is apparent and I am not able to attend. I take the court proceedings very seriously but I am simply not sufficiently well to come."
"Michael Prest has been a patient of mine for the past five years. He has become increasingly unwell over the past year and, having examined him and carried out investigations, it became clear that the emotional pressures of the past few years have taken their toll on his physical and mental health and led to his current clinical state. I have subsequently arranged for him to see several specialists who have concurred with the diagnosis and have advised a course of treatment which will be of 6 to 12 months' duration. He has been advised to dramatically reduce his commitments for the foreseeable future and to remove himself from any situations that may cause him emotional or mental stress and focus on getting himself back to good health."
"The medical evidence does not satisfy me that the husband is not able to attend today. It is, as Mr Posnansky [counsel for the wife] submits, extremely vague. It does not indicate what the nature is of his current clinical state. It does not indicate the diagnosis as given or identified either by the general practitioner or other specialists and it does not state in terms, in my view by implication even, that the husband is not able to attend court today.
In my view, especially having regard to the history of this application and the number of occasions on which it has been adjourned, it would not be right for me to adjourn it further today."
"Further to my report, dated 21 July 2014, I would like to add that I am of the opinion that Michael Prest is not fit to attend a two day court hearing on 28 and 29 July 2014 due to his continuing medical and stress related problems."
"I dismissed the earlier application in part on the basis that the evidence then being relied upon was insufficiently specific and did not make clear why it was being said that Mr Prest was not able to attend court because of health problems.
In my view, the current addition does not remedy the deficiencies in the earlier report. There is again no detail as to the nature and extent of Mr Prest's health problems. It does not state what his medical and other problems are save to the say that they are stress related. I do not propose to accede to the application. In my view the evidence does not justify my adjourning this hearing.
The husband is not in the jurisdiction. He is abroad on holiday with the children. If he had been insufficiently well to attend court, I would have thought he might also not have been well enough to go on holiday to the USA for upwards of three weeks."
a) Although the husband had not made any of the formal periodical payments due under the order in the period of 13 months from February 2012 to March 2013 covered by the judgment summons, the wife accepted that the husband had made payments for the benefit of herself and the children with respect to specific bills and other outgoings connected with the running of the former matrimonial home;
b) The husband referred to himself as a "tax exile" in a statement made in January 2013 and the wife asserted that his income must be such as to justify such a stance, notwithstanding his continued interest in the children who live in the UK;
c) The wife asserted that the husband had not altered his lifestyle or reduced his standard of living in any way since Moylan J had given his substantive judgment;
d) In particular, she asserted that the husband had taken the children on a number of holidays in 2012 and 2013. He hired a ski chalet in both of those two years at a cost, calculated by the wife, of approximately £100,000 per week. She also produced evidence of the cost of villas in Tuscany which she says he rented for five weeks in 2012 for over £70,000. The wife also pointed to the fact that the husband continued to employ a full time driver and personal assistant;
e) In his statement in response to the wife's claim, the husband referred to "the total collapse of the trading business I was involved in and which had provided my salary, bonus and means upon which I (and my family) lived on during the marriage". The husband also referred to "the demise of the Petrodel trading business";
f) The husband claimed to have been paying approximately £317 per week for food and that he was making other payments for the benefit of the wife and children, including the payment of school fees;
g) He claimed that the provision of the ski chalet for two years, villas in Tuscany and flights arose out of the generosity of friends;
h) He claimed that he was only able to pay the children's school fees with the support of friends and a former brother-in-law;
i) The judge records that the only reference in the husband's statement to his resources, either capital or income, was a bare assertion that "the income I earned in 2012 and 2013 has been from advisor work…and averages approximately…$312,000…per year". He expressed the hope that "business can improve or that I can secure employment". There were, however, as the judge records, "no significant details about his financial resources, nor any corroborative documentary evidence beyond statements from third parties attached to his statement which contained, largely, very generalised assertions".
j) The husband produced a schedule setting out the payments that he claimed to have made for the benefit of the wife and children, excluding school fees, in the period February 2012 to May 2013 which displayed a total of just over £228,000.
"77. In my judgment of 4th October 2011, I found the husband to be worth conservatively at least £37.5 million. In her evidence for this application, the wife has stated the husband has not altered his lifestyle or reduced his standard of living. She points to specific expenditure which she asserts has been incurred by the husband to provide himself and the children with holidays. These include between £65,000 and £100,000 on a week's skiing holiday in February 2012 and February 2013 and in excess of £70,000 for the rental of two villas in Italy for five weeks in the summer of 2012 and the summer of 2013.
78. If the husband has incurred expenditure at that level, it would demonstrate the availability to him of those resources, namely in the region of £270,000 to £340,000. Further, if he has incurred expenditure at that level on holidays alone, it demonstrates that he must have had access to considerably greater resources in order to meet even part of his other expenditure which, as referred to above, he calculated in the summer of 2012 was or should be running at the rate of $63,000 a month and in May/June 2013 at the rate of $42,000 per month.
79. As referred to earlier in this judgment, the husband has given no detailed evidence as to his financial resources. He did not, of course, have to give any evidence but he has chosen to do so. He has produced no corroborative evidence beyond the generalised assertions made in some statements exhibited to his second statement.
80. The husband relies specifically on "the demise of the Petrodel trading business" caused, he says, by BNP Paribas and Ahli Bank "cutting off all future meaningful relations with Petrodel" which "killed the underlying trading business".
81. I had to address the husband's case on this in my judgment of 12th July 2013 in which I determined his variation applications. That judgment sets out my assessment of the husband's case. The further evidence produced by the husband since that judgment has not changed my assessment. In paragraph 35 of my judgment I said:
"The next event relied on is the assertion that the husband's business has collapsed because of the transfer of property orders. The immediate difficulty with this part of the husband's case is that he expressly asserted during the course of the hearing in June 2011 that Petrodel had effectively already ceased trading by then and that the companies had no continuing relationship with BNP. I quote again from paragraph 78:
"When the husband was asked during the course of his evidence whether there would be any documentary credits since 1st January 2011 involving any of the companies referred to in this case, the husband replied, 'Not with BNP'.
It was the husband's case … that Petrodel had effectively ceased trading and that BNP was no longer providing any support."
82. In paragraph 7 of that judgment I referred to the following (including a fuller quotation of para 78 of my October 2011 judgment):
"7. During the course of the substantive hearing, as set out in paragraph 76 of my judgment, the husband said that Petrodel Resources Limited ("PRL") was still trading in gasoline but had not in fact undertaken a trade since early 2010. He also said that PRL was no longer trading in crude oil. In his section 25 statement, he said …:
'In September 2010, Petrodel lost its NNPC crude oil lifting contract. As a result I have had no regular income from PRL since that time. This is causing me to suffer financial problems and so I have been interviewing for a full-time position with other trading companies. At present I have yet to secure a position.'
... When the husband was asked during the course of his evidence whether there would be any documentary credits since 1st January 2011 involving any of the companies referred to in this case, the husband replied "not with BNP" but he would have to check whether there had been with any other banks. This is an example of a deliberately evasive answer. I have no doubt the husband is aware of all the trades being conducted by all the companies. It later emerged from documents produced during the course of the hearing that substantial trades continued to be made by companies within the group being probably either Vermont Petroleum and/or Nevis. It follows that the suggestion in the husband's statement that his source of income has dried up, is clearly also false.
8. I have referred to these paragraphs from my earlier judgment because, first, it was the husband's case during the substantive hearing that, effectively, the companies were no longer trading in oil and in particular, PRL was no longer trading. In addition, it was the husband's case that there would be no credit or documentary credit with BNP since 1st January 2011. Among the documents produced by the husband during the course of the hearing were Credit Suisse bank statements in the name of PRL Nevis."
83. I am satisfied so that I am sure that the husband has or has had since 10th February 2012 the means to pay the sum of £360,200. First, the husband has in fact paid sums totally just under £215,000 as set out in his schedule. Secondly, the husband applied in April 2012 for an extension of time to the Court of Appeal to enable him to pay the sum of £600,000 in order to enable him to pursue his appeal. I am satisfied that he would not have made that application if he had not had the funds available to make the required payment.
84. Thirdly, although the husband has given evidence in three statements, he has failed to provide any proper exposition of his financial circumstances. He has made generalised assertions, unsupported by any documentary evidence to which any weight could be properly applied. During the course of the hearing on 11th July 2013, the husband applied for an adjournment because he said he was "eager to be able to produce further documents addressing his current financial position. It was submitted that only a short adjournment would be required because he is committed to producing whatever might be required for this purpose." It is notable that no such documents have, even now, been produced.
85. Fourth, the case advanced by the husband as to the collapse of his trading business, as set out in his first statement in answer to the judgment summons, is inconsistent with his case as advanced in 2011.
86. Fifth, I accept the wife's evidence as to the holiday expenditure incurred by the husband in 2012 and 2013. The husband mounts no significant challenge to the wife's case. In respect of the ski chalet, the husband merely requests that the wife produce a receipt showing that "I have rented the chalet". I do not accept that the husband was permitted to use the villa in Italy for five weeks rent free. These holidays would, as I have referred to earlier in this judgment, have cost at last £270,000."
"I am satisfied so that I am sure that the husband has refused or neglected to pay the sum due. He has had the resources to enable him to do so and he has willfully failed to do so. The same matters referred to above lead me inexorably to this conclusion."
The appeal
1) The decision to refuse an adjournment, and to pursue the hearing in the absence of further investigation of the husband's medical position and in the absence of properly informed findings as to the husband's competence and fitness to participate fully, was not a fair trial process;
2) The husband was not afforded a fair trial because of the real risk, or at least a legitimate perception of risk, that the same judge who had previously conducted a fact finding process as to the husband's finances based upon the civil standard of proof would take improper account of those findings when determining matters within the judgment summons under the stricter criminal standard of proof;
3) Further, the judge did in fact wrongly take account of material that was not properly admissible before him on the judgment summons and/or he applied an incorrect burden and/or standard of proof in making his findings;
4) There was insufficient admissible evidence before the court at the judgment summons hearing properly to justify the findings and orders made, in particular the judge failed to investigate and take account of:
a) all of the various payments that the wife conceded that the husband had paid either directly to her or for the satisfaction of debts that she would otherwise have been liable for; and
b) the net value of such properties as had been transferred to the wife (or which it was within her power to have transferred to her) by the time of the judgment summons hearing.
5) It was inappropriate to proceed with the committal proceedings at a time when there was an extant (albeit stayed) application by the husband for a variation of the very periodical payment order which was the subject of the judgment summons;
6) In any event, in all the circumstances:
a) the suspended order for committal was defective (a point which is no longer pursued);
b) the period of imprisonment was too long;
c) the terms of suspension were inappropriate because the judge did not find, and/or there was no proper basis on which he could have found, that those terms were capable of fulfillment within the specified period.
"He has continued to pay the school fees for the children and also that he has made substantial payments for the benefit of the wife and the children as set out in the schedule produced by him. But those are payments that he made at his election; they are not payments which go towards meeting his obligation to pay periodical payments as required by the order."
a) properties transferred to the wife in satisfaction of the overall lump sum payment will have an impact on the value of the monthly periodical payments order to her from time to time, given that the periodical payments order is calculated as being 2 per cent of the amount of lump sum outstanding at any particular time. The husband therefore asserts that the level of periodical payments used in calculating the sum due under the judgment summons should be reduced to reflect any part satisfaction of the lump sum; and
b) as a result of an order made by Moylan J on 12th July 2013 some nine properties were transferred to the wife. The husband asserts that the overall capital value of these properties, taken together with an earlier property at "E Mews", exceeds the total lump sum figure of £13.5 million and that therefore the husband was entitled to set off that excess against the sum found due under the judgment summons.
Discussion: the legal context
"19. However, all that said, where the order which the creditor seeks to enforce is a lump sum order, the judgment creditor starts from the strong position that the order itself establishes, either expressly or implicitly, that the payer had the means to pay at the date the order was made. As my Lord, Patten LJ, put it in argument, perhaps at that stage the evidential burden passes to the debtor, whilst not of course undermining the obligation on the creditor to discharge the burden of proof. Plainly in a case where there has been some major and unforeseen financial development which removes from the payer the ability to pay which he had at the date of order, the ordinary expectation is that he would be the applicant to the court seeking the variation of the order either under the limited powers of the court to revisit in the light of some volcanic development or perhaps simply to seek some relief by way of deferment of the date of payment or perhaps future payment by instalments. So although of course the rule is and must remain that the burden of proof rests on the applicant, I think in a case such as this that burden is lightly discharged and an evidential burden may switch to the debtor."
In Bhura at paragraph 13, where Mostyn J said:
"Stated shortly it seems to me that the applicable principles are these:
(i) …
(ii) …
(iii) …
(iv) It is essential that the applicant adduces sufficient evidence to establish at least a case to answer. Generally speaking, this need not be an elaborate exercise. Proof of the order and of non-payment will likely give rise to an inference which establishes the case to answer.
(v) …
(vi) If the applicant establishes a case to answer an evidential burden shifts to the respondent to answer it. If he fails to discharge that evidential burden then the terms of s 5 will be found proved against him or her to the requisite standard."
And in Mohan, at paragraph 45 where Thorpe LJ said:
"… the wife's advisers might have … concluded that … the only effective remedy was the immediate issue of a summons under the Debtors Act. Very little evidence would have been necessary from the wife in support. … The reality is that if he attended [the summons hearing], although not compellable, he would have been obliged to proffer explanation and excuse."
a) The fact that the respondent has or has had, since the date of the order or judgment, the means to pay the sum due must be proved to the criminal standard of proof;
b) The fact that the respondent has refused or neglected, or refuses or neglects, to pay the sum due must also be proved to the criminal standard;
c) The burden of proof is at all times on the applicant; and
d) The respondent cannot be compelled to give evidence.
Discussion: the appeal
a) The wife's evidence of non payment of maintenance;
b) Other payments made directly or indirectly for the benefit of the wife;
c) The wife's evidence as to the husband's expenditure after the date of the substantive order on holidays and general lifestyle;
d) The husband's, limited, evidence as to the "total collapse" of his trading business;
e) The husband's assertion as to his own monthly outgoings and his earnings.
Conclusion
'2. Paragraph 1 [the committal order] shall not be executed and the warrant for arrest shall not be issued if Michael Jenseabla Prest pays to the Applicant the sum of £360,200 by 4 pm on Monday 28th September 2015.'
Lady Justice Gloster:
Mr Justice Blake: