![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales High Court (Family Division) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> Kliers v Kliers [2020] EWHC 1026 (Fam) (07 April 2020) URL: https://www.bailii.org/ew/cases/EWHC/Fam/2020/1026.html Cite as: [2020] EWHC 1026 (Fam) |
[New search] [View without highlighting] [Printable PDF version] [Help]
FAMILY DIVISION
Strand, London, WC2A 2LL |
||
B e f o r e :
(SITTING AS A DEPUTY HIGH COURT JUDGE)
____________________
SHLOMO ZALMAN KLIERS |
Applicant |
|
- and - |
||
MIRIAM KLIERS |
Respondent |
____________________
JOSEPH RAINER (acting pro bono) for the Respondent
Hearing dates: 11th – 13th March and 7th April 2020
____________________
Crown Copyright ©
Covid-19 Protocol: This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to Bailii. The date and time for hand-down is deemed to be 10.30am on 7 April 2020.
Mr CUSWORTH QC:
Background
The Judgment of Mr Rosen QC
a. At the time of the purchase of the property the wife gave evidence that she had provided £103,800 toward the purchase price, her husband £32,900.
b. The husband was largely unemployed as a student in Israel and London, whilst she was the principal homemaker, as well as working in a series of jobs to make a financial contribution to the family.
c. The parties' fathers, and their community leaders, set out to structure the purchase of their family home in a 'particular and unfortunate manner'. The parties would not otherwise have been in a position to buy the property which cost £418,000 in 2004.
d. The property was bought, as indicated, in the name of the wife's brother Mordechai, subject to an interest only mortgage with Bank of Scotland for £300,000. Mordechai provided no funds for the purchase, and made a false declaration at the time that the property was being purchased for his sole occupation.
e. The parties entered into a purported tenancy agreement with Mordechai, in order to obtain housing benefit. They made payments to Mordechai to cover the mortgage interest, but received a significant amount in housing benefit at the same time from the local authority – the London Borough of Hackney.
f. Mordechai was at all times a bare trustee, acting as nominee for the parties in their purchase of the property, and his taking on the mortgage as a nominee did not fall to be treated as a contribution to the purchase price. The family and community leaders upon whose directions and requests the parties relied and obeyed had an agreement that the property would be the parties' family home for which they would make all the necessary payments.
g. The parties' respective contributions were the best evidence of their common intention. The way matters proceeded was very heavily reliant on the wife to put everything into the purchase as both breadwinner and homemaker.
h. Some of the moneys were provided by community loans or other joint payments; and the parties made joint payments to Mordechai to cover the mortgage, but those factors did not outweigh the court's inferences about the division of interests.
i. The purpose of putting the property into Mordechai's name, and the creation of the tenancy, were to obtain funds from the mortgage, from housing benefit from the London Borough of Hackney, and from the Department of Work and Pensions.
j. The court had to consider the question of illegality of its own motion and volition; and that a plan of this nature is common practice amongst respected religious and community leaders is a cause of very great concern.
k. This arrangement resulted from the exercise of undue influence on the wife; being the pressure exerted on her by her father and others, which purported to have the backing of religious leadership; pressure exercised by dominant males within the community.
l. This is not a case where the parties involved were on anything like an equal basis when formulating or implementing the plan. The wife's interests were being put at risk, although she had concerns both about her and the family's wellbeing and about illegality.
m. The public policy against fraud is strong; but did not militate against the wife's remedy in this case as regards to declaration. The illegal activities had to be undone and remedied, which was assisted by the grant of declaratory relief.
n. The orders and judgments of the court would be referred to the tax authorities.
The Current Position
a. £129,123.62 in housing benefit claimed for the period before the parties' separation in the name of the wife from Hackney.
b. £91,721.14 in housing benefit claimed by the husband for the period after the parties' separation, also to Hackney. Both of these sums were in fact repaid by the husband's solicitors on 4th March 2020.
c. The husband's solicitors retain £96,188, towards £97,300 which is owing to HMRC in relation to overpaid tax credits dating back to the time of the marriage.
'…it is right for a court which is considering the application of the common law doctrine of illegality to have regard to the policy factors involved and to the nature and circumstances of the illegal conduct in determining whether the public interest in preserving the integrity of the justice system should result in denial of the relief claimed.'
'In assessing whether the public interest would be harmed…, it is necessary a) to consider the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim, b) to consider any other relevant public policy on which the denial of the claim may have an impact and c) to consider whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts. Within that framework, various factors may be relevant…'
The Parties' respective positions
a. In his recent Form E, the husband lists his necessary outgoings as £3,058.64pcm, excluding mortgage payments - £36,704pa.
b. He is living in a house now valued at £1,130,000, into the purchase of which Mr Rosen QC found that he made a contribution of around £32,900 in 2004.
a. He claims always to have had a modest income – no more currently than £10,600 pa gross (£10,121 net) - working in assorted roles in a catering company. He offered no suggestion that this could be increased in any way.
b. The mortgage interest on the £300,000 mortgage on his home is paid somehow – he claims not to know by whom. He said that he assumed that Mordechai was responsible, but I find that he knows that to be untrue.
c. His current wife Malka came to their marriage with 2 children, no income or apparent earning capacity, no capital and only intermittent and modest financial support for her children from their father in New York.
d. The husband and Malka have now undertaken the responsibility of another child together, so that they live in a household of 7 – soon reducing to 6 on T's marriage.
a. The loan through Ezer Loyoldos for the discharge of the debts to Hackney Borough Council and HMRC, said by counsel and in the husband's Form E dated 5 March 2020, to be in the total amount of £375,000, although the evidence suggests 2 loans: £323,500 for the above debts, and £25,000 to enable the husband to pay some solicitors bills.
b. A sum of £71,725.15 paid to the husband's solicitors, which Mr Lichtman told me was owed in relation to the costs of the children's proceedings, and as such was a bill that the charity was prepared to discharge outright, and not seek to recover as a loan.
c. A sum of £100,000 paid toward the financial proceedings, to include some of the costs of the chancery proceedings, which may (but may not) include the above figure of £25,000, and which would be a loan rather than a donation as with costs relating to the children proceedings.
d. Further sums already paid toward the children proceedings and not recoverable in the sum of, at least, £400,000.
e. A further £20,000 or £30,000 to pay in relation to the financial proceedings, which Mr Lichtman said would be on a loan basis.
f. Mr Lichtman took no responsibility for the payment of Mordechai Schmerler's legal costs in the Chancery proceedings, which must therefore have been met elsewhere, principally for the husband's benefit.
g. Since the parties' separation, mortgage interest payments under the Bank of Scotland mortgage have been maintained.
h. An additional sum of £105,500 was spent on renovation works to Kyverdale Road
i. Ezer Leyoldos have also paid for extensive family therapy for the family, which has not been costed.
'…Mordechai' s solicitor also drew repeated attention to the fact that some of the funds utilised for the purchase of the property were received by Mr and Mrs Kliers as purported charity when in fact it was some part of remuneration in particular, Mrs Kliers remuneration, which again it is said is a habit in this community to disguise this charity in order to avoid tax on such remuneration.
'Ezer Leyoldos is a charity which amongst other things assists members of the Orthodox Jewish Community. Donations are received from members of the community and when a need arises in the community assistance is given. We rarely turn anyone away. On occasions, when funding is required for a specific need individual benefactors are asked to assist and they will donate large sums. This has been the case with Mr Kliers although because of the purpose of the assistance, the money given to him is by way of a loan rather than a gift. There is no loan agreement. I told the benefactors that the money was required to assist Mr Kliers and his children to keep their home. On this basis various members of the community loaned him large sums. As the sums were so large, the money was loaned on the understanding that it would be repaid on Mr Kliers selling his home or re-mortgaging. In the community we operate on trust. There is no written agreements and no specific terms for repayment. The benefactors are all aware that the sum will be repaid at some point and the money is therefore a loan rather than a gift or general donation.'
Authority
"It is very important in these ancillary relief cases, where the court exercises a very broad discretion, that the judge should carry out the s.25 exercise rigorously, in an attempt to inject some sort of clear rationality and principle to what otherwise could be said to be palm tree adjudication".
This decision, and specifically the need for the exercise to be conducted rigorously, was cited with approval by the Privy Council in Ramnarine v Ramnarine [2014] 1 FLR 594, at [10].
"Section 25(2) of the Act of 1973, while listing the various matters to which particular regard should be had, does not rank them in any kind of hierarchy. Which of them will carry the most weight must depend on the particular facts of the case."
This is the essence of what has been called the bespoke approach to the determination of financial claims. The tension that this creates, between the need for a sufficient degree of certainty and clarity in the exercise by the courts of their discretionary powers and the need for sufficient flexibility to meet the justice of the individual case, has been the subject of debate over the years. The breadth of the discretion also impacts on the well-established principle that a judgment must be sufficiently reasoned to explain the court's decision.
"In all these cases it is one of the paramount considerations, in applying the section 25 criteria, to endeavour to stretch what is available to cover the need of each for a home, particularly where there are young children involved. Obviously the primary carer needs whatever is available to make the main home for the children, but it is of importance, albeit it is of lesser importance, that the other parent should have a home of his own where the children can enjoy their contact time with him. Of course there are cases where there is not enough to provide a home for either. Of course there are cases where there is only enough to provide one. But in any case where there is, by stretch and a degree of risk-taking, the possibility of a division to enable both to rehouse themselves, that is an exceptionally important consideration and one which will almost invariably have a decisive impact on outcome."
"This is a useful guideline to judges dealing with cases of a similar kind. But to cite the case as if it laid down some rule that both spouses invariably have a right to purchased accommodation is a misuse of authority. It is perhaps of some interest that Thorpe L.J., who would have refused leave to appeal in this case, must have taken the same view. Here the children were adult. There was no question of the husband needing a home to receive them. His needs related entirely to himself and his new Polish family."
So, every case will ultimately turn on its own specific facts.
'this is not a case where the parties involved were on anything like an equal basis when it came to formulating documenting or implementing the plan. On the contrary, it was Mrs Kliers' interests which were being put at risk by the manner in which she was being required to proceed…',
I cannot adopt the husband's proposed course. To do so, and then to prioritise M's position in a way which allows the husband to continue to enjoy the benefit of those loans, together with all of the wife's interest in the property for a further 6 to 8 years, would be very unjust to her and would not meet her needs as I find them.
a. Under s.25(2)(a) the parties' respective disclosed incomes and their earning capacity as discussed above, and the resources available to them in the future, which includes the prospects of future financial support support flowing to the husband from his community, and the availability to him of the continuing benefit of their previous loans and gifts.
b. Under s.25(2)(b) the parties' respective needs, and especially their housing needs as discussed above, and their respective obligations to their children, in particular M. It is very much to be hoped that her relationship with her mother can be restored as soon as possible, and that the father will seek to promote that outcome as being in her best interest.
c. I have taken into account under s.25(2)(e) the evidence I have heard about the wife's diagnosed PTSD, and the impact upon her that leaving the marriage, the community and for the moment her children must have had.
d. Under s.25(2)(f) I have considered both the wife's contributions in the marriage both as principal homemaker and breadwinner, and the husband's contributions in the future as primary carer for M.
e. I have not, as indicated, relied on any findings of conduct under s.25(2)(g), notwithstanding the various findings about the husband's approach to this litigation discussed above.
f. I have referred to above and considered the parties' respective ages and the standard of living in the marriage, which was significantly higher than the parties' respective incomes as disclosed would have allowed.
g. Nothing additionally arises under s,25(2)(h).