(Family Division, Mostyn J, 9 June 2015)
Financial remedies – Enforcement –Third party debt order – Husband failed to pay lump sum order – Whether money held in an account by the husband’s brother belonged to the husband
The full judgment is available below. A final third party debt order was made against the husband's brother.
When the husband and wife divorced an order was made in 2013 that the husband would pay the wife £80,000 within 4 months. If the sum was not paid by then a property left to the husband in his parents' will would be sold.
The husband failed to pay and the wife sought a third party debt order of almost £109,000 against sums held in an account of the husband's brother. The husband claimed that he had met the wife and paid her £40,000 in cash in full satisfaction of the lump sum order. Although the brother gave evidence on behalf of the husband there was no documentary evidence supporting his claim.
The husband's evidence was rejected as being implausible in the extreme and totally uncorroborated. It was further found that the husband and brother had sold the property and the proceeds had been deposited in the brother's bank account despite the fact that it was undoubtedly the husband's money. The brother was either a nominee or a bare trustee for the husband. Significant sums had subsequently been transferred to the husband and the money had disappeared.
The remaining money in the brother's account was undoubtedly the husband's. His claim that it consisted of money owed by the husband to the brother was rejected. A third party debt order was made for approximately £109,000. An indemnity costs order was made against the husband and the brother and the judgment would be sent to the DPP for consideration of whether perjury proceedings should be brought.
Case No: FD10D05219
Neutral Citation Number:  EWHC 1592 (Fam)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
MR JUSTICE MOSTYN
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Ranbir Kaur (previously known as Minda Singh)
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Bhupandir Singh Randhawa
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Marlene Cayoun (instructed by Goodman Ray Solicitors) for the Petitioner/Applicant
1st Respondent in person 2nd Respondent in person
Hearing date: 2 June 2015
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Mr Justice Mosty
In this judgment I shall refer to the applicant as "the wife", to the first respondent as "the husband" and to the second respondent, who is the husband's brother, as "the brother". 
The wife applies pursuant to FPR 33.3(2)(b) for general enforcement of an order dated 11 October 2013 which required the husband to pay her a lump sum of £80,000. She seeks a third party debt order of £108,854.28 against sums frozen in a Lloyd's Bank account held by the brother. The extra £28,854.28 is referable to interest and costs. 
In addition there is listed before me the wife's application that the husband be committed to prison pursuant to section 5 of the Debtors Act 1869. That application has not been pursued. It will be adjourned generally. 
The order of 11 October 2013 was made by District Judge Hess. Para 1 provided that the husband should pay the lump sum of £80,000 by 5 February 2014. Para 2 provided that if the sums was not paid by the due date the property 48 Wimbourne Avenue, Hayes should be sold. Para 3 gave directions for the sale and provided that on any sale the agents and conveyancing solicitors were to be jointly instructed. Para 4 specified that the proceeds of sale should be applied first in the discharge of the mortgage (which was about £40,000), second in meeting the costs of sale, third to the wife so that she received the lump sum together with any interest thereon which had accrued, and fourth, as to the residue, to the husband. 
48 Wimbourne Avenue, Hayes was held in the names of the husband's late parents but they had left it to him in their wills. At the time of the order their estates had not been fully distributed and the property had not been registered in the name of the husband. But it was unquestionably beneficially his property and the order was framed in recognition of that certainty. 
The wife says that by 5 February 2014 the husband had not paid any part of the lump sum. 
By contrast the husband says that in December 2013 he met the wife (and their child) at a Pizza Express in Slough where he paid her £40,000 in cash she having earlier agreed with him to accept this sum in satisfaction of her entitlement under the order. He says she agreed to accept this lesser sum in cash so that her receipt of benefits would not be disturbed. She agreed that her "charge" over the property would be lifted on payment of the £40,000. 
The wife flatly denies this. She says that the last time she met the husband was in 2011. 
The husband says that he borrowed the £40,000 from his brother. It was in £50 notes in packets of £2,500 – 16 packets in all. He says his brother came with him as well as another person who would act as a witness. He says that he took photos on his phone of him handing over the money but unfortunately he has since lost the phone. He says that his brother told him to get a receipt but he did not do so, as he trusted his wife. He said he had Facebook messages which would prove that the wife received the money. 
The brother says that he had the £40,000 in his safe. Alternatively he may have got it out via a casino. At an earlier hearing he had explained to me that "whenever we need cash, yes, I often go to a casino and take out the money there because its very lot easier to take it out". He says he accompanied the husband to Slough with the cash. He advised the husband to get a receipt. He did not see the husband hand over the money. He did see the wife walking past in the street. The husband did not mention taking photographs. He could not remember if they brought a third person with them; they might have done. 
These stories, which were given in witness statements, were repeated from the witness box on oath. 
I have no hesitation in rejecting the evidence of the husband and his brother. I am certain it is false. Not only is it implausible in the extreme but it is not corroborated by contemporaneous documentary evidence or subsequent events. The husband has not produced any evidence from the alleged witness. His printouts of his Facebook account show no admissions from the wife (although the husband says that those were in audio clips which are referred to in the printouts.) The brother's bank account does not show £40,000 taken from a casino at that time. It shows over four days in December 2013 £35,000 paid into a casino and £50,000 paid out, a net withdrawal of £15,000. Perhaps most significantly on 12 February 2014 in a conversation with the wife's solicitor the husband said he "was not going to comply with the order". In that conversation, as recorded in the attendance note, the husband did not say that two months earlier he had paid the wife £40,000 in cash which she had accepted in full satisfaction of her entitlement under the order. It is inconceivable that he would not have mentioned this if it had in fact happened. 
From 12 February 2014 the wife's solicitors were taking steps to enforce the order for sale including writing to the court seeking further directions. However, on 22 May 2014 the property was secretly sold unilaterally by the husband and his brother (who was the executor of the estate of his parents) in defiance of para 3 of the order. On that day the sum of £281,295.75 was received by the brother in a Lloyd's account No. 37384868. At the time that the money was received that account had a zero balance. This sum of £281,295.75 was unquestionably the husband's money. The fact that it was received in an account in the name of the brother is immaterial. In strict legal terms the brother was either a nominee or a bare trustee for the husband. 
Between 22 May 2014 and 30 May 2014 the brother transferred just over £130,000 to another account of his at Lloyds No. 35469468, leaving £150,000. From 30 May 2014 the brother has produced no further statements on account No. 37384868. He told me that the freezing order obtained on 24 September 2014 captured about £110,000 in that account. If that is true (and we do not know exactly how much money the freezing order has captured) then a further £40,000 of the proceeds of sale of 48 Wimbourne Avenue has disappeared. 
Of the £130,000 transferred to account No. 35469468 the brother transferred the following sums to the husband's account at Santander No. 25312123: £1,000 and £20,000 on 22 May 2014, £19,000 on 23 May 2014, £20,000 on 28 May 2014, £10,000 on 30 May 2014; a total of £70,000. That money has disappeared. The husband says that he has spent it, largely on gambling. The £60,000 left behind in the brother's account was withdrawn as cash via a casino on 27 May 2014. The brother says that this cash was given to the husband. This is very unlikely to be true. Why would the brother interpose this cash extraction in the middle of the sequence of bank transfers to the husband which I have described above? That cash has disappeared. The husband says that he did receive it and has spent it, again in large measure on gambling. 
The husband and the brother say that the £110,000 frozen in account No. 37384868 is the brother's money and not the husband's. This is so, they say, because they had agreed before 48 Wimbourne Avenue was sold that the husband owed the brother £100,000 made up as follows: £40,000 supplied in cash to give to the wife in Slough; £15,000 in respect of legal costs incurred in the ancillary relief proceedings; £20,000 being the contribution due from the husband and the wife to recovery proceedings for the cost of care of the brothers' late mother launched by the local authority against her estate; and £25,000 funds provided for general spending. I consider this debt to be entirely fictitious. I have already rejected the story about £40,000 being paid to the wife in cash. There is no evidence of the other payments of £15,000 and £20,000 falling due or being paid by anyone. The £25,000 in spending money is wholly un-evidenced. I am sure I have been told flat lies by the husband and the brother about this so-called debt. 
It therefore follows that the sum of around £110,000 captured by the freezing order in account No. 37384868 is unquestionably the husband's money. 
In the circumstances I make a final third party debt order against Lloyd's bank in respect of the sums held by them in or deriving from account No. 37384868 in the sum of £108,854.28. Of this £80,000 is the principal sum and £8,454.28 is statutory interest from 5 February 2014 to 2 June 2015. The balance of £20,400 relates to cost (being £17,000 plus VAT). This is the capped figure under the wife's legal aid certificate. In fact her solicitors have done work to a value considerably in excess of this figure. 
It is not necessary to make an interim third party debt order here. That procedure is used on an ex parte basis in effect to freeze the money pending the final hearing. Here the money is already frozen and the husband and the brother are before the court. 
If an inter partes order for indemnity costs were made against the brother and the husband on a joint and several basis then the wife's solicitors would be entitled to relinquish the legal aid certificate and be paid on a private basis. This is perfectly acceptable; indeed given the very low rates of pay by the agency legal aid firms depend on such orders for their survival. 
In my judgment the disgraceful conduct of the husband and the brother well justify an order for indemnity costs. The freezing order will remain in place until the balance of the costs award has been ascertained and paid. Obviously the freezing order is varied to permit the third party debt order to be executed. 
I direct that this judgment and the court bundle be sent to the DPP for her to consider whether proceedings for perjury should be brought against the husband and the brother.