Year: 2019

All family lawyers will be familiar with the phenomenon of the client who has a strong sense of what they are ‘due’ or entitled to when it comes to financial remedies on divorce. Now, there is nothing intrinsically wrong about believing you are entitled to something, whether it be money or property, but a really strong sense of entitlement can sometimes cloud the judgment. Sometimes, for example, that party can be rather too eager to recover what they believe they are due, and end up incurring costs in a forlorn pursuit of their ‘entitlement’.

I’m not saying that the applicants in the two quite different recent cases to which I am about to refer suffered from this phenomenon, but certainly the cases act as a useful reminder of the perils of being too eager to recover what you believe you are due.

Both cases are recent judgments of Mr Justice Mostyn.

The first case is Purvis v Purvis, which concerned a rather unusual application by the husband. He was apparently convinced that the wife may have been hiding assets in the USA, which obviously should have been taken into account in any divorce settlement.

The facts of the case given in the judgment are rather ‘bare bones’, as the judgment did not require full details. Essentially, the parties began a relationship in this country in 1992, in 2001 they purchased a property in Florida, and they were married in January 2004. In July 2004 they acquired a cafeteria business also, I assume, in Florida, to which they moved at some point in that year. In December 2005 the marriage broke down and the husband returned to this country. Divorce proceedings were eventually commenced in this country in 2009, although they have yet to be finalised.

The husband made a financial remedies claim within the divorce proceedings. Obviously, both parties were required to make full disclosure of their means. However, the husband was not satisfied that the wife had provided sufficient explanation as to what had happened to the property and business in Florida. He claimed that the house is worth $250,000 and the business was profitable, with a turnover of $750,000. The wife was in sole control of both. However, the house was foreclosed in November 2008 and the company ceased to be registered in 2013.

The husband therefore applied for an order that a letter of request be issued to the authorities of the United States of America for the wife to be examined in Florida and to produce documentation to disclose the true nature of her financial resources. Mr Justice Mostyn refused the application, which he considered to be nothing more than a “fishing expedition”. The husband had no evidence as to the existence of any of the residue of the assets, he was merely “fishing” for that evidence.

The second case is Gladwell v Gladwell. This concerned an application by a husband to set aside a writ of control issued by the wife to recover a debt that was not yet due (a writ of control authorises a court enforcement officer to seize goods of a debtor in order to recover the debt).

The relevant facts of the case were that the court had made a consent order, setting out the financial settlement agreed by the parties. A term of the order was that the husband should pay to the wife the sum of £5,889 in lieu of her claims against his pension, from his share of the proceeds of sale of the parties’ timeshares in Malta.

Clearly, the payment was not due until the timeshares were sold. However, despite this, the wife issued the writ to recover the payment before the sale took place. On the 28^th of March 2019 enforcement officers attended at the home of the husband. The enforcement officers’ costs had increased the debt to £8,304.72. That sum was paid by the husband on his credit cards.

The husband then applied to have the writ set aside. Without going into detail, Mr Justice Mostyn found that the writ was unlawful, and that the monies had been wrongly taken from the husband. He therefore set aside the writ and ordered that the monies be returned to the husband.

In both of these cases the applications had been misguided, quite possibly because of the applicants being too eager to recover what they believed they were entitled to. The result, however, was that the applicants had failed, and could well have incurred considerable costs for their efforts. The moral is: think hard (and preferably take the best available advice) before you act!

You can read the full report of Purvis v Purvis here, and of Gladwell v Gladwell here. As far as the latter is concerned, a word of warning: in family cases the party who was originally described as the ‘applicant’ can subsequently become the ‘respondent’, and vice versa, if the original respondent later makes an application of their own. Unsurprisingly, this can sometimes lead to a little confusion, so please bear it in mind if you read the Gladwell judgment.

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“Embroiled in a bitter divorce battle” “estranged wife wins bitter £1.4m divorce battle…”

We have all read the tabloid headlines as another super-rich or celebrity marriage ends. High-profile divorce cases come with their own unique issues (scrutiny by the public and media and complex assets to start with) but they do not have to end in a bitter, drawn out, not to mention expensive, court case.

We asked Julian Hawkhead, Senior Partner, to join us on the blog to look at alternative options to help high-profile couples keep their marriage and their business out of the public domain.

This weekend I read how a certain celebrity baker and his estranged wife were destined for a courtroom showdown.

According to the article, friends of Mrs Alex Hollywood said that she was finding the whole process of divorcing her husband Paul exhausting and conflicts over money distressing. No doubt a feeling shared by both parties involved.

There are plenty of salacious rumours around the causes of the marriage breaking down, allegations of scenes in car parks and abuse being thrown around. None of this is unusual, anger is a key stage of the grieving process and to vent emotion is healthier than bottling it up. It enables you to move on with your own life. It is, of course, difficult when every incident, every alleged insult thrown is aired in the public domain.

However, what particularly caught my eye was the suggestion that mediation had failed, and the couple were destined to end up in Court. Another newspaper reported it would be an “epic court showdown”. Now I don’t tend to rely on this media source for a true account of what is happening in the world.  However, what disappointed me but did not surprise me, was that the media appeared to present the stark choices of mediation or an epic courtroom battle. Whereas this is simply not true and there are lots of different options available.

Any divorce litigation is exhausting, expensive and often acrimonious. Lawyers are trained to seek solutions but when agreements cannot be reached, the next step is to achieve your desired outcome in an arena where somebody else, most commonly a Judge, decides that outcome for you.

So, you embark on building your case, identifying issues where you can discredit the other party, sling enough mud and some of it is bound to stick and gather evidence that supports your arguments that what you are asking the Judge to decide upon is perfectly reasonable.

It can turn into a war of attrition, trench warfare where you are firing your best weapons at each other and it can sometimes get you the result you wanted. However, if you are media-worthy it will be ventilated, warts and all, in the public domain.

So, what other options exist where a negotiated settlement seems to have hit a wall?

Firstly, there are private FDRs but what is an FDR?

An FDR is a Financial Dispute Resolution hearing which divorce couples would usually come upon if they found themselves in financial court proceedings because of their divorce.

At this hearing, a Judge will:

(1) consider all proposals made by both parties, even those made on a without prejudice (or private and off the record) basis

(2) listen to any further arguments in support of each party’s proposals

(3) will encourage both parties to put their cards on the table to identify what the issues are, what is and is not agreed and consider compromise as a better course of action to facing further costs and uncertainty

(4) express a view to both parties as to what the FDR Judge considers would be the outcome if the case was to be decided at a final hearing. This view is not a binding decision, it is merely an expression of an opinion, albeit carrying the gravitas of coming from a Judge. This should help the parties entrenched firmly in the view that they must be right, reach an agreed settlement.

These FDR hearings are what can otherwise be called Early Neutral Evaluations.

Early – because the intervention is at the earliest stage in a Court process once all the facts and figures are known (and importantly before a final hearing when a Judge does make a binding decision on both parties);

Neutral because that is what any Judge is expected to be and when you have two lawyers jousting and pronouncing that they are right, fair and reasonable and the other party is wrong then you need somebody neutral to help give an independent evaluation or assessment of what is a fair outcome.

However, avid readers of all things family justice will be aware that the Court system is under pressure. There are long delays in waiting for hearings in many Courts. Sure, there are reforms on the horizon particularly with the specialist Family Court programme that is being rolled out but will this succeed on a national level or will we just see pockets of success.

There is the risk in the meantime that the Judge you come before for your FDR is not an experienced family lawyer. They may have practised in a completely different area of law when they were a solicitor or barrister before becoming a Judge so their experience and ability to give you an informed opinion may be based on limited knowledge of the relevant law.

That is the context of FDR hearings within the Court system. Private FDRs involves the same process, but you go private, you pay for an experienced lawyer, often either a retired senior Judge or a practising senior barrister or solicitor to conduct the FDR hearing for you.

The venue is not a courtroom but a place of your choosing, it might be the barrister’s chambers or the lawyer’s offices or a completely neutral venue such as a dedicated meeting room or a hotel. Whatever the option, it is infinitely more comfortable than being in a Court building surrounded by other litigants.

You also get as much time as you want. Your Private FDR Judge will dedicate their entire day to your case, giving you as much time to negotiate as you want or as much time in the hearing as you need.  In the Court system, you are constrained by opening and closing times and by the fact that the Judge has a full list of other cases to get through leaving your time restricted.

In some courts, one often finds several FDR hearings listed at the same time in the hope that some will settle easily. This leaves the Judge to juggle a number of cases, all with different facts and figures where their ability to give the matter full attention is then naturally impaired.

Most importantly the private FDR is private, it is away from the public gaze. One often finds the media wandering around the Central Family Court in London looking for a story or you run the risk of other litigants in Court seeing you. A Private FDR gives you a truly confidential and safe place to sort out your issues with the other party. You are paying for it but with that, you get a better-quality experience, and this must increase the prospects of you reaching a financial agreement.

In the next instalment, Julian will look at arbitration, another route to resolving divorce financial issues in private.

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