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England and Wales High Court (Family Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> Barclay v Barclay [2022] EWHC 2026 (Fam) (28 July 2022) URL: https://www.bailii.org/ew/cases/EWHC/Fam/2022/2026.html Cite as: [2022] EWHC 2026 (Fam) |
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FAMILY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
Between :
____________________
Lady Hiroko Barclay |
Applicant Wife |
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- and - |
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Sir Frederick Barclay |
Respondent Husband |
____________________
Mr C Howard QC and Mr M Turnell (instructed by Miles Preston) for the Respondent
Ms H Rogers QC and Mr J Price and Ms J Palmer and (instructed by Signature Litigation LLP) for the Respondent's nephews
Mr J Bunting QC and Ms B Grossman (instructed by GNM) for Guardian News and Media
Hearing dates: 25 – 28 July 2022
____________________
Crown Copyright ©
Sir Jonathan Cohen:
Background
Loan notes
i) there was insufficient liquidity within the family companies to permit the flow of funds into Amelia to redeem the loan notes (his initial case at trial) and/or
ii) there had been a further deterioration in family relations, this time between H/Amanda and the nephews about the operation of the businesses. That reached its peak with the institution of QBD proceedings following the nephews bugging conversations between H and others (his final case at trial). In consequence, the nephews turned off the tap.
The law
On a hearing of an application for a judgment summons the debtor may be committed for making default on payment of a debt if the judgment creditor proves that the debtor—
(a) 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
(b) has refused or neglected, or refuses or neglects, to pay that sum.
55. […] The court must be clear as to the following requirements, namely that:
a) the fact that the respondent has or 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.
12. The authorities to which I was referred do not in terms decide who bears the burden of proof on the question of impossibility. Mr Saoul submitted that impossibility is in the nature of a defence and should be proved by a defendant to the civil standard. He draws attention to the language used by Males J in the Addbins case ('defendants… are not in a strong position to persuade the court'), which he says is consistent with the burden of proof being on the defendant. He refers in addition to Reynolds v Long [2018] EWHC 3535 (Ch), in which Rose J at [50]-[55] examined the evidence put forward by a defendant alleged to be in contempt before rejecting the suggestion that compliance was impossible.
13. Mr Zaman, for his part, submits that, as a matter of principle, the fact that it is possible to comply with the order should be regarded as an essential ingredient of contempt. That being so, the position is similar to that which applies in criminal law: the respondent bears an evidential burden; but once this is satisfied the burden of proving that compliance was possible passes to the applicant and the standard of proof is the criminal standard: see by analogy Phipson on Evidence (19th ed.), §§6-09 and 6-16, setting out the general rule in criminal law. One of the cases mentioned there is R v Bennett (1979) 68 Cr App R 168, where the Court of Appeal applied the general rule to impossibility in cases of common law conspiracy.
14. In my judgment, Mr Zaman is correct on this point. Contempt of court, whether criminal or civil, was at common law a misdemeanour: see Dean v Dean [1987] 1 FLR 517, per Neill LJ, cited in Arlidge, Eady & Smith on Contempt (5th ed.), §12-51. That, together with the fact that its potential consequences include imprisonment and other penal sanctions, is why its elements must be proved to the criminal standard. In Sectorguard, Briggs J reasoned that a person who has no choice, because compliance with the order is impossible, does not have even the modest mens rea required for contempt. It is for the applicant to prove to the criminal standard that the respondent had the necessary mens rea. In a case where the respondent says that compliance was impossible, and there is some evidence to that effect, mens rea is in issue and it should be for the applicant to prove to the criminal standard that compliance was possible, in the sense that the respondent had a choice about what to do. That result is consistent with the general rule in criminal law. (emphasis added)
The first judgment summons
Mr Dearle's efforts
Brecqhou
Judgment summonses 2 and 3
"The availability of unidentified resources may, for example, be inferred from a spouse's expenditure or style of living, or from his inability or unwillingness to allow the complexity of his affairs to be penetrated with the precision necessary to ascertain his actual wealth or the degree of liquidity of his assets. Another is that where a spouse enjoys access to wealth but no absolute entitlement to it (as in the case, for example, of a beneficiary under a discretionary trust or someone who is dependent on the generosity of a relative), the court will not act in direct invasion of the rights of, or usurp the discretion exercisable by, a third party. Nor will it put upon a third party undue pressure to act in a way which will enhance the means of the maintaining spouse. This does not, however, mean that the court acts in total disregard of the potential availability of wealth from sources owned or administered by others. There will be occasions when it becomes permissible for a judge deliberately to frame his orders in a form which affords judicious encouragement to third parties to provide the maintaining spouse with the means to comply with the court's view of the justice of the case. There are bound to be instances where the boundary between improper pressure and judicious encouragement proves to be a fine one, and it will require attention to the particular circumstances of each case to see whether it has been crossed."
"If it is said that the width of the words in Thomas clearly permit what is sought here, then that gives rise to a conundrum that I find myself unable to resolve. What happens if the person being encouraged says very politely "Thank you for your encouragement, but I have decided not to assist"? Or, as here, "I am only prepared to assist to such and such an extent". Is the court supposed to ignore that stance and simply make an award on the basis that the assistance will be given? What happens if and when it is not? How is the court supposed to enforce its order? It could hardly be said that the payer is in wilful default justifying a penalty under the Debtors Act 1869. It is for this reason that I expressed the view during argument that often the so called "judicious encouragement" can turn out to be no more than mere empty rhetoric."
(1) H is the primary beneficiary of Co-Ed.
(2) So far as I am aware, Co-Ed has never paid out to any other beneficiary.
(3) Co-Ed has never refused to provide H with funds when it had them.
(4) The sums of £185k and £60k are relatively modest when set against the deposit money received.
(5) H has, in the past, used Co-Ed in effect as his bank account.
Some general points