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||Neutral Citation Number:  EWCA Civ 714
||Case No: B6/2014/2752
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM FAMILY DIVISION, HIGH COURT
Mr Justice Moylan
||Royal Courts of Justice
Strand, London, WC2A 2LL
||7th July 2015
B e f o r e :
LORD JUSTICE McFARLANE
LADY JUSTICE GLOSTER
MR JUSTICE BLAKE
||- and -
(Transcript of the Handed Down Judgment of
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Mr James Turner QC and Mr Peter Mitchell (instructed by Collyer Bristow LLP) for the Appellant
Mr Jeremy Posnansky QC (of Farrer & Co) for the Respondent
Hearing date: 19th March 2015
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lord Justice McFarlane:
- On 29th July 2014, in the course of extended proceedings between a former husband and wife, Mr Justice Moylan granted a judgment summons brought by the wife under the Debtors Act 1869, s 5. He held that the husband was wilfully in default of a maintenance order in the sum of £360,200. The judge imposed a penalty of 4 weeks imprisonment, but suspended that term provided that the husband paid the total amount found to be in default within a period of 3 months, ending on 28th October 2014. It is against that determination that the husband now appeals to this court. The appeal is brought as of right under the Administration of Justice Act l960, s 13, without the need for permission to appeal.
- The background to these proceedings is extensive and, indeed, is well known to those who practise family law, in consequence of an earlier sequence of appeals which brought the case before the Supreme Court (Prest v Petrodel Resources Ltd.  UKSC 34;  2 AC 415). However, as the point in this appeal relates, narrowly, to the enforcement of the ultimate judgment, it is not necessary to do more than sketch out the basic background chronology.
- The couple were married in l993 and have four children who are now aged between 13 and 18 years. The children spend time with both parents, but are predominantly based in the mother's care.
- The marriage came to an end in 2008 and a decree nisi of divorce was pronounced on 12th December 2008 upon the wife's petition.
- The financial remedy proceedings were complicated by the need to consider whether or not the husband owned, or otherwise had a valuable interest in, a group of petroleum companies, five of which were parties to the proceedings. At the conclusion of the financial remedy proceedings Moylan J found as a fact, on the civil standard of proof, that the husband was, conservatively, worth approximately £37.5 million. The substantive final order, made on 16th November 2011, required the husband to make capital provision to the wife by way of a lump sum payment of £17.5 million. As a matter of mechanics, however, although the order was couched in terms of payment of a "lump sum", the capital provision was to be achieved by the transfer of a number of properties into the wife's name. The order was designed eventually to achieve a clean break between the couple, with no continuing payment of periodical payments for the wife. Separate provision for periodical payments was made with respect to the children. The order provided for the wife to receive periodical payments calculated at the rate of 2 per cent per annum on the amount outstanding in relation to the lump sum/transfer of property. The principal property to be transferred was the former matrimonial home which was valued in the sum of £4 million. As the wife was already living in the former matrimonial home, and has continued to live there, that figure (£4 million) was excluded from the 2 per cent periodical payments calculation which was therefore based upon a starting figure of £13.5 million (representing the balance of the £17.5 million overall capital provision).
- The starting figure for periodical payments for the wife was, therefore, £270,000 per year (2 per cent of £13.5 million), together with £24,000 per year for each of the four children, being £96,000 per annum in all for child periodical payments. The total sum for periodical payments per year was therefore £366,000, or £30,500 per month.
- Although the judge's order was appealed to the Court of Appeal and the Supreme Court, these figures for periodical payments remained intact at the conclusion of the appellate process.
The wife's judgment summons
- On 11th April 2013 the wife issued a judgment summons under The Debtors Act l869, ("the 1869 Act") s 5, alleging arrears of periodical payments unpaid by the husband in a total sum (including interest) of £428,220. In the event the judge granted the wife's summons 15 months later in a lower sum, as I shall explain, of £360,200.
- Under the 1869 Act, s 5, a judgment creditor can apply to the court for the committal to prison of a judgment debtor, for a maximum period of 6 weeks, in respect of, among other things, a maintenance order. Section 5 provides:
"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."
- S 5 (2) of the 1869 Act adds a proviso in these terms:
"(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."
- The relevant rules are to be found in the Family Procedure Rules 2010, Part 33, Chapter 2. Rule 33.14 provides:
"(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 wife's judgment summons was listed for hearing on no fewer than three previous occasions prior to the final hearing in July 2014. The first hearing date was 5th June 2013. That hearing was adjourned. In a judgment given on 28th July 2014 Moylan J summarised the circumstances of that adjournment in these terms:
"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.
- The husband did attend the hearing on 11th July 2013. However other matters, including an application by the husband to vary the lump sum order and the maintenance orders of 16th November 2011, were also listed. In the event the topic of the wife's judgment summons was not reached on that day. The judge did, however, dismiss the husband's application to vary the lump sum and stayed the application to vary the maintenance order until the lump sum payment provision order had been satisfied in full.
- On 24th July 2013 Moylan J issued an order directing that the judgment summons be listed for hearing on 18th and 19th November 2013. On the first day of that hearing, 18th November 2013, the husband sought a further adjournment on this occasion on the basis that he was required to have a surgical operation on his foot under general anaesthetic that very afternoon. Moylan J reluctantly acceded to the request for adjournment and, as a result, the judgment summons finally came on for hearing on 28th and 29th July 2014.
Judgment summons: final hearing July 2014
- On the first day of the final hearing, 28th July 2014, the husband did not attend, but applied, through junior counsel, for a further adjournment on the ground that he was simply not well enough to attend. The husband was in fact on vacation in America with the children of the family at that time in accordance with arrangements made at a hearing before a district judge relating to the children on 10th June 2014. A recital to the order made at that hearing was in the following terms:
"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."
- In a short judgment given by Moylan J on 28th July 2014 refusing the application for an adjournment the judge records that his clerk received an email direct from the husband on 24th July raising, for the first time, an adjournment of the hearing four days later. The judge quotes the following from that email:
"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."
- In addition to the husband's email the judge was provided with a short letter from the husband's General Practitioner dated 21st July. It is headed "To whom it may concern" and reads as follows:
"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."
- Junior counsel on behalf of the husband submitted that the judge could rely upon the husband's email and the GP's letter and should grant the application for an adjournment. Alternatively she submitted that there should be a shorter adjournment to enable the GP to attend to give oral evidence on the basis that, brief though the medical report may be, there was sufficient detail within it to cause concern and require the court to hold back from continuing with a hearing which may result in the husband receiving a sentence of imprisonment.
- In rejecting the application for an adjournment Moylan J expressed his conclusion as follows:
"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."
- Later on the same day junior counsel on behalf of the husband renewed her application for an adjournment. She did so, in part, on the basis of a further note provided that day by the husband's GP, which stated as follows:
"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."
- Moylan J rejected this further application for an adjournment on the following grounds:
"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."
- The judge therefore conducted the hearing of the wife's judgment summons. He had before him statements on behalf of the wife and the husband with respect to finances. He heard brief oral evidence from the wife and heard submissions from Mr Posnansky QC, representing the wife, and from junior counsel on behalf of the husband. However, it is plain that junior counsel's position was significantly compromised by the fact that her instructions were effectively limited to applying for an adjournment, rather than arguing the full merits of the case.
- On the morning of the second day, when the judge was apparently in a position to proceed to give judgment, the husband's counsel sought to re-open the application for an adjournment. She provided the court with two further medical reports, one, again, from the husband's GP and one from a consultant psychiatrist. The judge did not permit counsel to make further submissions on the basis that he had, by that stage, heard the application, and it was simply too late to contemplate an adjournment.
- Having described the judge's approach to the various applications for adjournment, I will now turn to the substance of the application under the 1869 Act and, in particular, the judge's judgment in that respect. A substantial section in the early part of the judge's judgment is headed "Background". Under that heading the judge gives a brief description of the overall conclusions to which he came regarding the husband's credibility and his overall net worth, which, as I have indicated, he fixed at at least £37.5 million. The judge then moves on, under a heading of "Judgment Summons" to describe the litigation chronology to which I have already made some reference.
- Those early sections of the judgment are followed by a substantial passage under the heading of "Evidence". The following matters are of particular note under this heading:
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.
- The judge then describes his approach to the "Law", a topic to which I will return in due course, before giving a brief description of the parties' submissions and, finally, turning to his "Determination".
- Under the heading "Determination" the judge moved on to announce his conclusions. Having reminded himself that the burden of proof was on the wife and that before he could make a committal order he must be satisfied "so that I am sure" of the requisite elements as set out in Debtors Act 1869, s 5, and Rule 33.14, he turned to the first question: "Is the husband in default?".
- The total amount due under the order for periodical payments for the wife and for the children within the period covered by the judgment summons was £396,500. The judge deducted from that figure a sum of £5,000 paid by the husband to the wife in cash and a cheque for £20,000, again paid by the husband to the wife. He treated both those sums as payments towards the judgment summons claim. In addition the judge accepted the husband's figures for food and household items paid directly to the wife at an average of £867 per month. For the 13 months covered by the judgment summons this produced a (rounded up) figure of £11,300. The total, therefore, of the three elements that the judge deducted from the total sum due was £36,300 leaving a balance remaining due in relation to the judgment summons period of £360,200 and the judge held that the husband was in default in that sum.
- The next matter to be considered under the Debtors Act was whether the wife had proved "that the husband has or has had since 16th February 2012 the means to pay the sums due in respect of maintenance?". In view of the submissions made by Mr Turner QC on behalf of the husband in this appeal it is necessary to set out the judge's conclusions on this point in full:
"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."
- The next issue the judge was required to address was whether the husband had refused or neglected to pay the sum due. On this point the judge was able to state his conclusion shortly:
"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 judge therefore concluded that the wife had discharged the burden upon her by proving the requisite elements of the charge made in the judgment summons to the criminal standard.
- After further submissions the judge declined to adjourn the question of penalty and proceeded to impose a four week term of imprisonment, being a discount from the maximum six week term available under the Act, but suspended for a period of three months in order to give the husband an opportunity to pay the outstanding sum of £360,200. In reaching that conclusion the judge gave "significant credit" to the husband for the fact that he had continued to pay school fees for the children and also that he had made substantial payments for the benefit of the wife and children as set out in a schedule produced by the husband.
- It is against that outcome that the husband now seeks to appeal.
- The husband's appeal has been presented before this court by Mr James Turner QC, leading Mr Peter Mitchell, neither of whom has been involved in this case prior to these appeal proceedings. They raise six grounds of appeal which, in summary, are as follows:
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.
- Taking the grounds of appeal in turn, Mr Turner accepts before this court, as he surely must, that the medical information supplied to the judge in support of the adjournment application was not sufficient to lead a court immediately to agree to a substantive adjournment. The husband's argument is that the material was sufficient to raise a question mark as to the husband's fitness to attend and that the judge should have established a proper investigation of the husband's medical condition and capacity to partake in the proceedings before coming to a final conclusion on the adjournment application. Mr Turner accepts that the judge had discretion in this matter, but he submits that it was an evaluative discretion and that the judge should, in any event, have required the GP to attend and give oral evidence.
- In response to ground 1, Mr Posnansky submits that the judge was entitled to look at this husband in the context of the overall findings which were that he was an entirely dishonest man. Secondly, he points to the fact that the medical "reports" were insubstantial, did not accord with the rules and were not even in the form of statements. Thirdly, Mr Posnansky points to the fact that only a few weeks earlier the husband had attended court in support of his own application before the district judge under CA 1989 and expressly stated, as recorded in the recital to the order, that he would attend the judgment summons hearing. Mr Posnansky therefore submitted that the judge was entitled to question the medical assertion that the husband's debilitating condition was a long-standing one.
- With respect to ground 2, which relates to the real risk, or at least legitimate perception, that the judge may take improper account of previous findings reached on the civil standard of proof, Mr Turner submits that, in a case such as this, where the husband comes before the court having established "a bad press" in previous proceedings, it is particularly important that due process and proper procedure is applied. There is, he submits, a particular danger where the judge who conducts the committal process has been the judge who originally made a series of adverse findings against the husband. Essentially two points are made; firstly the risk of, or the perception of, bias by a judge who has already made adverse findings revisiting the case and being required to make further findings. Secondly, the risk of contamination of findings that must be made on the criminal standard from earlier findings made only on the civil standard. This latter point is compounded where, as was necessarily the case here, part of the judge's earlier conclusions were based upon adverse inferences rather than direct evidence. In the context of the judgment summons the wife was required to establish, to the criminal standard, that the husband had or had had the means to pay the order.
- In response to ground 2 Mr Posnansky submits that the wife's case was tightly focused before the judge, she did not seek to look back at all to the 2011 findings, and she only sought to concentrate upon the 13 months covered by the judgment summons. He points out that, insofar as the judge refers to the 2011 findings at all, they are in the part of the judgment headed "Background", whereas the later section headed "Evidence" deals entirely with factual matters which are contemporaneous with the period covered by the judgment summons. In respect of those matters the judge states plainly at all relevant stages of his judgment that he is deploying the criminal standard of proof, as he is required to do.
- Further, in relation to ground 2, Mr Posnansky points to the fact that Moylan J had been the judge dealing with the judgment summons proceedings from the time of their inception more than a year before the final hearing. At no stage did the husband, or any lawyer instructed on his behalf, object to that state of affairs. The "legitimate perception of bias" point arises for the first time before this court and should, he submits, be rejected as a ground of appeal.
- In relation to ground 3, namely that the judge did indeed take improper account of previous findings made on the civil standard, Mr Turner points to the various parts of the judgment in which the judge refers back to his 2011 judgment.
- Ground 4 raises two separate issues. Firstly whether all of the various payments conceded by the wife as having been made by the husband should be taken into account. The approach taken by the judge was that, whilst these payments might be relied upon in mitigation, they were not payments made in the form required by the order and should not trigger a discount in the calculation of what was due under the order. The judge, it will be recalled, took a different approach to the two sums totalling £25,000 paid directly by the husband to the wife. Mr Turner accepts that the husband cannot simply say to the court that he is paying for particular items, but ignore the court order. He submits, however, that where, as here, the husband is meeting many of the daily costs in running the wife's car and home, being expenditure that she would otherwise have to meet out of her maintenance, a discount should apply. Mr Turner was, however, required to reduce the force of this submission by accepting that the judge did give a further discount of £11,300 (being 13 months at the rate of £867 per month) claimed by the husband as payments for food and household items and further by accepting that, at the very least, this feature was relevant in mitigation when considering the overall culpability of the husband prior to determining whether or not to sentence him to a term of imprisonment. In this regard it is of note that the judge expressly afforded mitigation to the husband on this point by indicating that he had fixed upon the term of imprisonment after taking account of the fact that:
"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."
- The wife's case on the first limb of ground 4 (credit to be given for other payments made by the husband for the benefit of the wife and/or maintenance of her home) is that the husband was obliged to make payments under the order and it was not for him to decide to pick and choose which bills he might pay. If the court were to accept the husband's conduct in this regard as legitimate, and afford him credit for these payments, it would, Mr Posnansky submits, drive a 'coach and horses' through matrimonial finance law. The husband's willful refusal to comply with the order should not be condoned.
- The second limb of ground 4 raises an entirely different point which was expanded upon in the course of oral submissions. As a result it became clear that this second point further subdivided into two elements:
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.
- In relation to (a), the only property transferred to the wife within the period covered by the judgment summons (other than the former matrimonial home which is not included in £13.5 million lump sum) was "E Mews", which had been agreed at a value of £1,450,000 in the proceedings. The husband's original case before this court, therefore, was that the outstanding lump sum during the judgment summons period was £12,050,000 and that the periodical payments due should be reduced to reflect that reduction. As I shall explain, that submission turned out to be unsustainable as a result of information that Mr Posnansky later disclosed to the court and, for the first time, to Mr Turner.
- The husband's case in relation to part (b) of the second limb of ground 4 (the 'set off point') was also dealt a fatal blow by the information that Mr Posnansky subsequently disclosed. Initially Mr Turner submitted that, in addition to "E Mews", a further nine properties were transferred to the wife as a result of an order made by Moylan J on 12th July 2013. In October 2013, Farrer & Co, acting for the wife, had served valuations for four of those properties on the husband indicating a total value for those properties (together with "E Mews") of £7,250,000. Valuation evidence concerning the other five properties was not available to Mr Turner and he was therefore obliged to fall back to making a widely based submission that a great deal of property had now been transferred to the wife and there was at least the prospect that the total value transferred now exceeded the total of £13.5 million required by the lump sum order and that any excess should be set off against the judgment summons debt. Because Mr Turner did not have the necessary information as to valuation he could take the matter no further.
- It is, unfortunately, necessary to observe that the submissions concerning the valuation evidence relating to these two parts of the second limb of ground 4 occupied the court for a considerable time. On the day prior to the appeal hearing, my lady, Gloster LJ, requested counsel for the appellant to draw up a schedule to demonstrate this and other points of alleged mathematical error being relied upon by the appellant. Mr Mitchell, the husband's junior counsel, will have spent a good deal of time preparing a schedule in response to that request. Although there had been no request for him to do so, it is, as events turned out, of note that no document or information was provided on this topic by Mr Posnansky prior to the start of the hearing. Given the time and energy spent by the court and by the husband's team in explaining and developing these points during the morning, it was surprising to hear Mr Posnansky's response to them when he came to address the court in the afternoon. Mr Posnansky produced documentation which established that each of the properties transferred to the wife (including "E Mews") was encumbered by charges against the husband's debts to a value of approximately £5 million. In addition, that documentation set out the wife's case on valuation which asserted that the unencumbered value of the properties that had been transferred was £7.5 million and, in any event, well below the figure of £13.5 million at which any question of a 'set off' would arise. The key document setting out this information was an email sent by Mr Posnansky on 18th March 2014 direct to the husband at a time when the husband was acting as a litigant in person. This email was seen by Mr Turner and those instructing him for the first time when it was introduced to the court by Mr Posnansky.
- As a result of the information provided by Mr Posnansky, Mr Turner immediately, and inevitably, had to concede that there was in reality nothing in either limb of the second part of ground 4. This information was not, apparently, provided to Moylan J during the July 2014 hearing. In these appeal proceedings the information should have been given to Mr Turner and to the court prior to the commencement of the hearing, once it became clear that the court was seeking assistance on the valuation points and once Mr Posnansky had seen Mr Mitchell's schedule setting out an erroneous position. The document should certainly have been provided at the latest early on in Mr Turner's submissions on this issue, but it seems that Mr Posnansky did not even draw Mr Turner's attention to it during the luncheon adjournment, after Mr Turner had made it plain on a number of occasions to the court that he and the husband's legal team simply had no information concerning these figures.
- Mr Posnansky's decision to sit on this information, and only to provide it after the court and Mr Turner had, as it turns out, wasted a considerable amount of time on these points was both unhelpful and unattractive forensic behaviour
- The husband's case on ground 5 was put shortly. There was an outstanding application by the husband to vary the periodical payments order, that application encompassed the period covered by the judgment summons and, it was submitted, as a matter of principle, it was wrong to proceed with the judgment summons process or to make a committal order in respect of alleged debts that might subsequently be expunged or reduced when the extant application for variation was heard.
- In response Mr Posnansky submits that there was no application before the judge to hold back from determining the judgment summons on this point. The application to vary the periodical payments order was without merit and had, in any event, been properly stayed by Moylan J with the judge's order for the stay not being the subject of any appeal. The period covered by the judgment summons related to the very earliest months of the order and was therefore unlikely to be the target of a successful application to vary.
- The matters in ground 6 effectively speak for themselves and required no further elaboration from Mr Turner in the course of his oral submissions.
- Mr Posnansky submits that the term of imprisonment was essentially a matter for the court and that the judge was entitled to impose the conditions upon suspension on the basis of the findings of fact that he had, properly, made.
Discussion: the legal context
- In the course of submissions we were taken to a number of authorities relating to the use of an application for a judgment summons under the 1869 Act, s 5, in matrimonial proceedings. As is well known, this court in the case of Mubarak v Mubarak  1 FLR 698 identified the difficulties involved in adapting the judgment summons procedure to the requirements of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950. Notwithstanding the criminal nature of the proceedings, the judgment summons process at that time made no reference to the criminal standard of proof, required individuals to incriminate themselves, placed the burden of proof on the person facing committal and seemingly muddled the separate processes of undertaking a means enquiry and of committal proceedings. In consequence the court in Mubarak predicted that the practical effect of these difficulties would be to render the Debtors Act 1869 largely obsolete as a means of enforcement in matrimonial proceedings.
- As a consequence of the decision in Mubarak the relevant court rules were amended and now appear in the form set out in FPR 2010, r 33.14 (see paragraph 11 above). Counsel have drawn attention to three authorities relating to the judgment summons process subsequent to these amendments: Zuk v Zuk  EWCA Civ 1871;  2 FLR 1466; Bhura v Bhura  EWHC 3633 (Fam);  2 FLR 44; and Mohan v Mohan  EWCA Civ 586;  1 FLR 717. Each of these authorities contains dicta which, with respect, I consider should be treated with a substantial degree of caution. The relevant passages are, firstly, in Zuk at paragraph 19 where Thorpe LJ said:
"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:
(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.
(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."
- The collective professional experience of Thorpe LJ and Mostyn J in these matters makes me most hesitant to express a contrary view, but my reason for advising caution concerning this set of observations is that they each suggest that, in the course of the criminal process that is the hearing of a judgment summons, it is simply sufficient to rely upon findings as to wealth made on the civil standard of proof in the original proceedings and that those findings, coupled with proof of non-payment, is sufficient to establish a 'burden' on the respondent which can only be discharged if he or she enters the witness box and proffers a credible explanation. The facts of each case will differ, and the aim of Thorpe LJ and Mostyn J in envisaging a process which is straightforward and not onerous to the applicant is laudable, but at the end of the day this is a process which may result in the respondent serving a term of imprisonment and the court must be clear as to the following requirements, namely that:
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.
- These considerations are, of course, relevant to this appeal as they lie at the heart of the husband's contentions under grounds 2 and 3.
Discussion: the appeal
- I propose to take the husband's grounds of appeal in turn and, in relation to ground 1, my conclusion can be stated shortly. The question of whether or not to grant an adjournment, important though the outcome of that decision was for the husband, was essentially a case management decision for the judge. It is clear that the judge approached the matter properly, considered the material, such as it was, submitted on behalf of the husband, heard oral submissions from his counsel and, indeed, allowed a renewal of the application late in the first day of the hearing when fresh material became available. Mr Turner accepts that the material submitted was insufficient to justify a substantive adjournment; his case is that the judge should have been sufficiently concerned by that material to require a full investigation of the circumstances and, if necessary, direct that the GP should attend court to give evidence. Whilst, of course, a judge may take such a course in any particular case on the basis of the particular material submitted, it is a substantial jump to assert, as Mr Turner does, that in such a situation a judge must adjourn for further enquiries and that a failure to do so amounts to a breach of the husband's Article 6 right to a fair trial.
- The medical condition relied upon by the husband was said to have become established over the course of a number of months, running to at least a year. In the circumstances, given the husband's familiarity with the court process, the extent to which the judge was likely to consider the evidence and the previous adverse views as to his reliability expressed by this judge, it was, in my view, entirely the responsibility of the husband to put forward full and cogent medical evidence, if it existed, in support of his application for an adjournment. It was not the responsibility of the judge to seek to make good the obvious inadequacies in the husband's medical evidence.
- In any event, Mr Posnansky is right to stress that this application for an adjournment was properly seen by the judge in the overall context of the case. That context included the judge's previous findings as to the wholly dishonest and evasive stance of the husband within the financial remedy proceedings. The husband had demonstrated a desire, at every turn, to avoid the adverse impact of the court process upon him. Finally, the judge was entitled to pay full regard to the fact that the husband had attended a court hearing before a district judge some 6 weeks earlier and, moreover, had expressly stated his intention to attend the judgment summons hearing.
- In short I am entirely satisfied that the judge was acting well within the boundaries of his discretion in rejecting the sustained applications for an adjournment and proceeding with the hearing.
- I can also deal with ground 2 in short terms. If there is any potential for the judge to fall into error as a result of having decided, in the earlier proceedings, certain points on the civil standard of proof yet, in the judgment summons, having to re-visit similar points on the criminal standard, then that falls to be considered under ground 3 and requires a determination of whether or not the judge did indeed fall into such error. Ground 2, which relates to the "real risk" that the judge might fall into that error or the "legitimate perception", by analogy to the concept of "apparent bias", does not, in my view, take the matter any further. If this were a real and valid concern on the part of the husband, then the point could have been raised at any stage between March 2013, when the judgment summons was issued, and the final hearing in July 2014. It was not raised. I therefore agree with Mr Posnansky that it is simply too late for the husband now to argue the point in ground 2 on appeal.
- Ground 3 is, however, of more substance. It is, indeed, necessary for a judge who is required, at a subsequent stage in proceedings, to make findings on the higher criminal standard of proof, to ensure that earlier findings made on the lower civil standard are not, even inadvertently, relied upon as substantive findings in the subsequent quasi criminal process.
- In this regard the clear structure of the judge's judgment is informative. It is the case, as Mr Posnansky observes, that the judge restricts reference to findings made in 2011 to the section of the judgment headed "Background". The later section of the judgment headed "Evidence" deals entirely with later matters which are:
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.
- Immediately after the section on "Evidence" under the heading "Law" the judge states in terms that "the standard of proof is the criminal standard of proof" and "the burden of proof is on the wife as applicant". Later, at paragraph 70, at the beginning of his description of his "Determination", the judge repeats these two central requirements.
- In the "Determination" itself, as the extracts from the judgment that I have already set out establish, at paragraph 83 onwards, the judge sets out five specific factors which have driven him to be satisfied so that he is sure that the husband had the means to pay the sum due. Each of those matters arises from events since the 2011 judgment and, in fact, are each based upon evidence originating from the husband, with the exception of the fifth category relating to his holiday expenditure in 2012 and 2013 which, the judge observes, was not the subject of any significant challenge by the husband.
- It follows that, when the judge's approach is looked at in detail, it is plain that ground 3, to the effect that the judge failed to apply the correct burden of proof and/or relied upon matters previously found to the civil standard of proof, is simply not made out. Further, although the judge sets out in full the relevant extracts from the judgments in Zuk, Bhura and Mohan, there is no indication that he adopted an approach to the burden and standard of proof that in any manner falls short of that required in judgment summons proceedings.
- In the light of the wife's evidence as to the valuation of property and the extent to which the properties are charged in relation to the husband's debts, the second limb of ground 4 concerning the level of the periodical payments order and any 'set off' must, as Mr Turner accepts, fall away. The first limb of ground 4, which seeks to attract credit to husband for the payments that he has made directly to maintain the wife and/or the home, is of more substance, at least in mathematical terms. The schedule of payments produced by the husband records a total sum alleged to be paid by him during the judgment summons period of £208,473.53. That figure compares to the much more modest credit to the husband of £11,300 awarded by the judge. If the husband is given full credit for these payments, as Mr Turner argues should be the case, the effect would be to reduce the judgment summons debt from £360,200 to £163,027.
- During the course of submissions, the court enquired whether the wife had ever acquiesced in, or encouraged, the husband making direct payments for her bills as opposed to honouring his obligations under the court order. It was not possible to give a definitive answer to this question during the hearing, but we have subsequently been provided with clips of email and other correspondence from both sides. It is not for this court to make findings of fact after the close of the hearing and without receiving submissions. Having considered this material, however, I am of the clear view that, taken at its highest, it would be insufficient to establish acquiescence or encouragement on the part of the wife. Time and again the emails directly from the wife, and those to the husband from Farrer & Co, plead with him simply to pay the monies that are due under the periodical payments order. Such other communications from the wife which seek direct payment, other than for matters concerning the children's activities, are very few and certainly insufficient to trigger a conclusion that the husband should be relieved of his obligation to pay under the order and given credit, pound for pound, for the payments he asserts that he has made.
- In relation to this ground more generally, I am entirely at one with the submissions made on behalf of the wife. It cannot be acceptable for a husband persistently to fail to discharge his responsibility under a court order to make periodical payments, whilst at the same time choosing to make payments on his own terms in substantial sums. If the court were to acquiesce and to condone such conduct, the result might well substantially undermine the authority and reliability of orders for such payments made under the Matrimonial Causes Act 1973. The judge was, in my view, in addition to affording a modest credit of £11,300, right to acknowledge these payments made by the husband as mitigation in relation to the penalty under the judgment summons, rather than marking it by further reducing the sum outstanding under the periodical payments order. Mr Turner does not rely upon any authority in support of the contrary view and, for my part, I would not seek to establish any authority for such a practice by acceding to his submissions on the point in this case.
- In contrast to ground 4, ground 5 can be considered more shortly. I have already rehearsed the arguments on each side. Although it is technically correct that the husband's application to vary the periodical payments order is outstanding and has been stayed, that factor was not one which should have impeded the judge from proceeding with the judgment summons on the facts of this case. The reason that that is so arises from the particular, and unusual, connection between the periodical payments order in favour of the wife and the lump sum order. In this case the periodical payments provision is expressly calculated to represent 2 per cent of any outstanding portion of the lump sum payment. There has been no appeal on this point against the substantive 2011 order. The judge has dismissed the husband's more recent application to vary the lump sum. Thus the mechanics of the periodical payments order remain intact. In adjourning the husband's application to vary periodical payments, the judge expressly provided that it was not to be reinstated until the lump sum payment had been satisfied. Again, there has been no appeal against that decision by the judge made in July 2013, a year before the judgment summons hearing. In the circumstances the point behind ground 5 is simply one that could not have been run, and, indeed was not run, before Moylan J in July 2014. It is, therefore, not a point that can engage in the husband's favour within this appeal.
- Finally, with regard to ground 6, in the context of an overall statutory limit on the length of any prison sentence set at 6 weeks, and against the background of a default in payment of the order of £320,000, a prison sentence of 4 weeks is unremarkable. In setting the tariff at that level the judge, rightly, took account of the mitigating factors related to the payments that the husband has made, and gave appropriate discount.
- In relation to ground 6(c), namely that the judge had no proper basis on which he could have concluded that the husband was capable of fulfilling the conditions set on the suspended sentence, the husband's case is circular. If, as I have already held, the judge was fully entitled to make the findings that he made with respect to the husband's current financial circumstances, those findings support a conclusion that the husband had the means to meet the conditions on the suspended sentence. In the light of my earlier conclusion, this ground therefore falls away.
- It follows from the conclusions that I have now described that the husband's appeal fails on each of the six grounds of appeal and, if my lady and my lord agree, that the appeal must be dismissed. The judge's order, which has been stayed pending the determination of the appeal, must now be amended to provide for a revised period of suspension but, in all other respects, the judge's order stands. Subject to any further submissions from counsel, I would propose that clause 2 of the order of 29th July 2014 is amended to read:
'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:
- I agree
Mr Justice Blake:
- I also agree.
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