Neutral Citation Number:  EWHC 3430 (Fam)
IN THE HIGH COURT OF JUSTICE PRINCIPAL REGISTRY
Royal Courts of Justice
Tuesday, 29 July 2014
MR JUSTICE MOYLAN
- - - - - -
YASMIN AISHATU MOHAMMED PREST
- and -
MICHAEL JENSEABLA PREST
- - - - - -
MR JEREMY POSNANSKY QC appeared on behalf of the Applicant
MISS SARAH DINES appeared on behalf of the Respondent
- - - - -
Digital Transcript of Wordwave International, a Merrill Corporation Company 165 Fleet Street, 8th Floor, London, EC4A 2DY Tel No: 020 7421 4046 Fax No: 020 7422 6134 Web: www.merrillcorp.com/mls Email: firstname.lastname@example.org (Official Shorthand Writers to the Court)
- - - - - -
MR JUSTICE MOYLAN
I propose in this judgment to refer to the parties as the husband and wife, although they were divorced in 2011.
This is the hearing of a judgment summons brought by the wife in which she seeks the husband's committal to prison for failing to pay sums due by way of periodical payments under the provisions of an Order which I made on 16th November 2011. The amount alleged to be due, and in respect of which the husband is alleged to be in default, is £428,200.
The wife is represented at this hearing by Mr Posnansky QC; the husband has been represented by Miss Dines.
At the commencement of the hearing yesterday, Miss Dines applied for an adjournment on behalf of the husband. I dismissed that application for reasons I gave in a short judgment. The application was based on an assertion that the husband was not well enough to attend court. This assertion was first contained in an email, which the husband had sent direct to my clerk on 24th July, and to which was attached a report from the husband's GP dated 21st July 2014. The report is not specific about the husband's health problems. It is in broad terms and states that:
“the emotional pressures of the past few years (have) taken their toll on the husband's physical and mental health and led to his current clinical state”.
It also states, without any detail, that: “several specialists … have concurred with the diagnosis”. The report does not state what has been diagnosed.
The report records similar advice to that given by the husband's GP as set out in a very short report dated 19th March 2013. In this report, which referred to an unspecified “stress related condition”, the husband was advised “to rest and take time away from his usual activities”. The advice recorded in the report of 21st July 2014, is that the husband should “dramatically reduce his commitments for the foreseeable future and … remove himself from any situation that may cause him emotional or mental stress …”.
Later yesterday, a further report was provided from the husband's GP which states he is of the opinion that the husband is not fit to attend a two day court hearing "due to his continuing medical and stress-related problems". Again, there is no reference to the specific nature or extent of those problems, nor any explanation given as to why they might make him unfit to attend court.
Today, I have been provided with two further medical reports dated 28th July 2014; one again from the husband's GP and one from a Consultant Psychiatrist. I did not give Miss Dines permission to reopen the application for an adjournment of this summons on the basis of those reports.Statutory Framework
A judgment summons is an application under section 5 of the Debtors Act 1869. Under this section, a judgment creditor can apply to the court for the committal to prison of a judgment debtor, for a maximum period of six weeks, in respect of, among other orders, 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."
There are then two provisos. The second proviso reads as follows:
"(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 Family Procedure Rules 2010 deal with committal by way of judgment summons under Part 33, Chapter 2, starting at rule 33.9. 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."
Subparagraph (2) provides that the debtor may not be compelled to give evidence.
It is clear from the second proviso (referred to above) and from the Rules that, before I can make a committal order, I must be satisfied: (a) that the husband has, or has had, since the date of the order the means to pay the sum in default; and (b) that he has refused or neglected, or refuses or neglects, to pay that sum.Background
These proceedings have a long and complex history which begins with the wife's application for a financial remedy order made on 11th March 2008. I propose to start with a summary taken from my judgment of 12th July 2013, in which, starting at paragraph 5, I said:
"To summarise the history very briefly, the parties married in 1993. They had four children and the marriage came to an end in 2008. During the course of the marriage, the family enjoyed a very high standard of living. During the course of the proceedings, for example, the husband asserted that the annual family expenditure in England was approximately $400,000. He put his annual income needs for himself and the children at £800,000. In paragraph 103 of my judgment [a reference to my substantive judgment of 4th October 2011]:
'As to his income the husband states that his income as chief executive officer of PRL for the last financial year was $500,000. He estimates his total income for the next 12 months at £330,000. His capital needs are said to be for a home in London costing, with furniture, £2.7 million, and a car. His income needs are put at £610,000 per annum for himself, an increase from his current expenditure of £324,000, and £190,000 for the children, making a grand total of £800,000.'
6. At the conclusion of the substantive hearing the husband's then counsel, Mr Pointer QC, submitted that I should make the following orders in the wife's favour:
(a) a housing fund of £1.6 million;
(b) a lump sum of $150,000;
(c) a pension fund of £200,000 and
(d) a lump sum of $1.6 million payable over eight years, ie, $200,000 per annum and, in addition, all the costs relating to the children, including school fees."
By those submissions, made on behalf of the husband, it was clearly being contended that the husband was in a position to meet those proposed orders which would have required him to pay £1.8 million, a lump sum of $150,000 and a further sum of $200,000 within a short period.
My substantive judgment, in which I determined the wife's application for a financial remedy order, was given on 4th October 2011. It followed a heavily contested hearing at which both the husband and the wife had been represented by Leading Counsel. In addition, a number of companies were also represented by Leading Counsel.
During the course of my judgment I said, at paragraph 12:
"This judgment has taken me far longer than it should have done, largely because I have sought to make sense of the husband's factual case. Ultimately, I have decided that this has been a vain task because the husband has failed so comprehensively to comply with his obligation to provide full and frank disclosure and to give clear evidence that his case does not permit of such an exercise. It became apparent to me that the evidence in this case is not such as would enable me to produce a comprehensive account into which all the various pieces of evidence could be fitted. Notwithstanding the quantity of documents which have been produced, there are far too many gaps for this to be an attainable objective. As I commented during the hearing, the result of the way in which the case has developed is that a great deal of energy has been expended by the husband on seeking to establish what he is not worth rather than the more conventional focus being on seeking to demonstrate what he is worth."
In paragraph 13 I said:
"As a result of the husband's abject failure to comply with his disclosure obligations and to comply with orders made by the court during the course of these proceedings, I do not have the evidence which would enable me to assemble a conventional schedule of assets."
In paragraph 125 of my judgment, I gave my assessment of the husband:
"I regret to say that I have found the husband to be a wholly unreliable witness. The husband is clearly an extremely intelligent, articulate and astute individual. I formed the clear impression that he regards the proceedings as a game in which he has sought to manipulate the process to his advantage. Despite occasional suggestions, largely at my prompting, that he was seeking to help the court, the husband was an extremely evasive witness. He was adroit but was deliberately evasive. He would frequently fail to answer a question, although he clearly understood its meaning, and would often digress onto a different subject or ask questions about the question. I do not consider that I can rely on any of the husband's evidence unless corroborated by other reliable evidence."
I found that the husband was worth, conservatively, at least £37.5 million and my order was made on that basis.
The Order of 16th November 2011 requires the husband, by paragraph 3, to transfer the former matrimonial home to the wife (unencumbered); by paragraph 4, to pay her a lump sum of £17.5 million (with the former matrimonial home being £4 million of this); by paragraph 5, to transfer a number of properties to the wife; by paragraph 7, to pay the wife for her own benefit periodical payments of £270,000 per year (being 2% of £13.5 million); and to pay her periodical payments for the children of £24,000 per year each (£96,000 per year in all). Periodical payments total £366,000 per year (£30,500 per month).
The husband and the companies appealed my decision. On 16th February 2012, the Court of Appeal gave the husband conditional permission to appeal. The conditions, in summary, required the husband to pay the wife £617,000 by 1st March 2012 and to provide security for costs in the sum of £180,000 by 15th March 2012. In addition, the Court of Appeal suspended paragraph 7 of my Order, under which I ordered the husband to pay the wife periodical payments for her benefit.
The husband did not comply with these conditions by the dates stipulated by the Court of Appeal and applied for an extension of time to comply with the order that he pay the wife £617,000. The application by the husband was dismissed by the Court of Appeal on 20th April 2012 and consequently his appeal was also dismissed. Further, as a result, the suspension of paragraph 7 of my Order came to an end.
The appeal by some of the companies to the Court of Appeal was successful. The Court of Appeal set aside property transfer orders I had made against properties held within those companies. The wife then appealed to the Supreme Court, which reinstated those orders on the basis that the companies held the properties on trust for the husband.
The lead judgment in the Supreme Court was given by Lord Sumption. He describes the husband's conduct of the proceedings as having been characterised "by persistent obstruction, obfuscation and deceit and a contumelious refusal to comply with rules of court and specific orders": para 4. Later at paragraph 43 of his judgment, Lord Sumption refers to the "defective character of the material as being almost entirely due to (the husband's) persistent obstruction and mendacity".
By the Order of 16th November 2011, I ordered the husband to pay the wife periodical payments (a) for herself at the rate of £270,000 per year and (b) for the children at the rate of £24,000 for each of the four children. Payments were to be made monthly in advance from 16th February 2012.Judgment Summons
The history of the progress of the judgment summons is linked with other applications.
On 19th March 2013, the husband applied to vary the periodical payments order for the wife and the lump sum order which I had made of £17.5 million.
On 11th April 2013, the wife applied for a judgment summons which was issued on 12th April. It is this judgment summons which I am determining today. The judgment summons has been amended to refer to the correct paragraphs in the Order of 16th November 2011, namely paragraphs 7 and 8. The amount claimed is £428,220 plus £100 in respect of the court fee.
The wife's Affidavit in support of the judgment summons was sworn by her on 11th April 2013.
Both the husband's variation applications and the wife's judgment summons, were listed for hearing on 5th June 2013.
On 28th April 2013, the husband issued an application to vacate the hearing listed on 5th June. The husband relied on a number of matters in support of his application. These included that he had seen his doctor on 19th March 2013 and had been advised he was “suffering from stress related conditions” and should “rest and take time away from (his) usual activities”.
On 2nd May 2013, I listed the husband's adjournment application to be heard on 5th June.
The husband's statement, in response to the wife's Affidavit of 11th April 2013 and in support of his variation application, is dated 1st June 2013.
On 4th June, the husband served a further statement in order, as he says, to explain why he was in Nigeria and might not be able to attend the hearing on 5th June. He had left England for Nigeria on 29th May to attend what he called “a family emergency”. He was already feeling unwell when he left and had developed a high fever and symptoms suggestive of malaria. He was not sure whether he was going to be strong enough to fly to England for the hearing.
The husband did not in fact attend court on 5th June. I adjourned the applications, including the judgment summons, to 11th July 2013. I ordered the husband to attend that hearing.
On 5th July 2013, the husband paid the wife's solicitors £6,437 in respect of costs and gave a post-dated cheque (for 30th August 2014) from a friend for £77,244 in respect of costs payable by the husband to the wife in the period June to September 2008.
On 8th July 2013, the husband filed a further statement.
At the hearing in July 2013, and at the request of the husband, I first determined his variation applications. Having dealt with them and a number of other matters, there was no time left to deal with the judgment summons. I gave judgment dismissing the husband's variation applications and listed the judgment summons for hearing on 18th and 19th November 2013.
On 24th October the wife filed a further Affidavit.
On 14th November 2013, the husband gave the wife £5,000 in cash.
On 15th November 2013 the husband filed a further statement.
On 18th November, the husband gave the wife a cheque from a friend for £20,000. The husband also sought an adjournment of the judgment summons because he was having an operation on his foot that afternoon. I acceded to the application and adjourned the judgment summons to 15th/16th January 2014. The parties agreed to the adjournment of that hearing, and a further hearing was fixed for 28th/29th July. These were dates said to be convenient for the husband.
At a hearing before a district judge on 10th June 2014, it is recorded that the husband informed the court that he intended to attend the hearing listed before me on 28th and 29th July. It was known that these dates coincided with when the husband was due to be in New York with the children. The recital specifically records that the husband will return form his holiday in New York to England for the purposes of attending the hearing.
The husband is, as I understand it, in New York with the children, having left England on 13th July 2014. He is due to return in a few days.Evidence
Turning now to the evidence. In her Affidavit of 11th April 2013, the wife deposes to the fact that the husband has paid none of the maintenance due to her, either for herself or for the children. The sum due is £428,220, being £30,500 per month for 13 months for herself and the children with interest added. The amount due in respect of maintenance without interest is £396,500.
The wife accepts that the husband has made payments for the benefit of herself and the children but asserts that he has not paid maintenance as required by the order. She states, at para 9:
"He has made no payments under either paragraphs 7 or 8 of the order, save for £150 per week to meet the cost of food and household items which he pays through his personal assistant. He has continued to meet the cost of a housekeeper and cleaner at our home and meet some household bills as set out below. In other words, he has chosen to make modest payments which he has decided to pay rather than complying with the Order of the court."
The wife then deals with her knowledge of the husband's means. This is obviously limited but she refers to holidays which he has provided for the children and taken with the children, as well as the husband's reference to himself as a "tax exile" in his statement dated 17th January 2013. She states, at para 18:
"His income must therefore be such that he has taken the decision to live outside the jurisdiction in Monaco to avoid paying tax here. In a letter to my solicitors dated 31 October 2012, Michael's solicitors at that time referred to Michael's tax position when considering whether he should have a home here for the children to use when he visits to have contact with them. He said,
‘In many respects the reality is this remains a matter that can only be decided in line with current HMRC rules. Similar strictures are placed on many people in Michael's position. It comes with this territory and the alternative you seem to suggest is a premature return to the UK which would put in doubt Michael's ability to pay your four children's school fees’.
Similarly, at paragraph 8 of his application under the Children Act dated 27 November 2012, Michael provided the following reason for making his application ... ‘There are strictures on the applicant's permission to stay in the UK which has to accord with current HMRC rules. These restrictions need to be taken into account in the division of time for contact visits throughout the year.' Maintaining non-UK domicile status and residence with its associated tax advantages is a common objective for international high net worth individuals."
In paragraph 21 of her statement the wife says:
"Since the judgment of Moylan J, Michael has not altered his lifestyle or reduced his standard of living in any way. He continues to live well and spend extravagantly, in particular travelling extensively. The details of his very high spending on holidays and travel which I provide below are known to me because they have involved the children and I have therefore had to know about the arrangements."
Later in her statement, the wife sets out details of the holidays of which she is aware. She refers to, what she describes as, "expensive holidays" taken by the husband and provided by him for the children in 2012 and 2013. For example, she produces evidence of the cost of a ski chalet, to which the husband took the children in February 2012 and February 2013, and calculates the cost at approximately £100,000 for a week. She also produces evidence of the cost of villas in Tuscany, which she says the husband rented for five weeks in 2012 and which would have cost in excess of £70,000. She refers additionally to flight to Nevis and New York. The wife also points to the fact that the husband continues to employ a full-time driver and personal assistant.
The husband's statement in response to the wife's is dated 4th June 2013. In this statement he refers to "the total collapse of the trading business I was involved in and which had provided my salary, bonus and the means upon which I (and his family) lived on during the marriage”: para 5.
The Husband also refers to “the demise of the Petrodel trading business” which has “directly affected my earnings and my ability to support my family”: para 23. The husband asserts, or appears to assert, that this demise was due to the terms of the 16th November 2011 Order which "spooked" (para 26) the business’ banks, namely BNP Paribas and Ahli United Bank. He says, at para 26:
"The fact that these banks cut off all future meaningful relations with Petrodel suggests to me that the banks reacted very badly to the property orders and that killed the underlying trading business that was the bedrock of my income and standard of living."
The husband reiterates that BNP Paribas “stopped any meaningful business relationship with Petrodel”: para 28.
Later in his statement the husband says, at para 37:
"I do not accept Yasmin's description … that I have chosen to make modest payments which I have decided to pay. I have done the best that I can given the difficult circumstances I am in. I have had to prioritise on a weekly basis payments that could be made and have almost always had to borrow from (he then gives the name of his personal assistant) to make weekly payments for the upkeep and staff of (the former matrimonial home) as I have not had sufficient income and/or cash flow to make payments on time."
The husband states that he has been paying approximately £317 per week for food and that he has been making other payments for the benefit of the wife and children, including in respect of school fees.
In dealing with the wife's evidence as to the cost of holidays spent with the children, the husband says
(a) that the ski chalet has never been rented "to me";
(b) that he has not paid for any ski flights for guests; and
(c) that he has not paid for “the suggested flights”. He says he has benefited in particular from using air miles and, it seems, that he is saying free flights were provided for him by a travel company. The total cost of all flights said to have been taken between 2011 and 2013 was £4,370.
Further, (d) that he had not rented villas in Tuscany or a villa in Tuscany but was a guest of the owner.
The husband says that he has only been able to pay the children's school fees with the support of friends and a former brother-in-law. He refers to loans he has received from other named individuals totalling approximately £150,000.
At the end of summer 2012, the husband calculated that to cover his monthly outgoings, including support for the family but not, it seems maintenance, he would need $63,300 a month (para 88). He undertook the same exercise in 2013 and calculated he would need $42,000 per month (para 90).
The only reference in the husband's statement to his resources, either capital or income, is a bare assertion that "the income I earned in 2012 and 2013 has been from advisory work … and averaged approximately … $312,000 … per year.": para 29. He says that he hopes “business can improve or that I can secure employment” which he is actively seeking.
The husband's next statement is dated 8th July 2013. Again he provides no significant details about his financial resources, nor any corroborative documentary evidence beyond statements from third parties attached to his statement which contain, largely, very generalised assertions. He states that much of his earlier statement was written when he was suffering from, amongst other things, a high fever, and he felt that in part it did not respond to the wife's statement in sufficient detail.
He produces a schedule setting out the payments he says he has made for the benefit of the wife and children, but excluding school fees, in the period February 2012 to May 2013 (inclusive). The total is just over £228,000. A significant part, some £84,000, is in respect of staff at the former matrimonial home or employed in any event by the husband. There are also significant payments for the children of approximately £40,000. These do not, as I have said, include school fees which are also substantial, as all four children attend private schools.
The wife's further affidavit was sworn on 24th October 2013. In this she states that the husband again rented villas in Italy for five weeks in summer 2013, with the advertised rental cost being £16,000 per week.
The husband’s further statement is dated 15th November 2013. This refers to Petrodel Resources Ltd being in liquidation; to the properties transferred to the wife; to payments he has continued to make for the children and the wife since his earlier schedule, including “as best I can, holiday costs”; and to his search for well-paid employment. It, again, contains no account of the husband’s financial resources.The Hearing
At this hearing, the wife has given brief oral evidence and I have read and heard submissions from the parties’ representatives.Law
Turning to the law. I have already referred to the provisions of the Debtors Act. Given that the application is for the husband's committal to prison, these are criminal proceedings. The standard of proof is the criminal standard of proof. The burden of proof is on the wife as applicant. The matters which must be proved are those set out in section 5 of the Debtors Act and paragraphs 33.14(1)(c)(i) and (ii) of the Family Procedure Rules.
I have been referred to three authorities, namely Zuk v Zuk
 2 FLR 1466, Bhura v Bhura
 2 FLR 114 and Mohan v Mohan
 1 FLR 717.
the Court of Appeal allowed an appeal from a committal order. During the course of his judgment, Thorpe LJ said:
" … There are scant means of enforcement open to a person (usually a wife) who has achieved ancillary relief orders, unless there are assets within the jurisdiction against which the order can be readily enforced and it is important that the power to apply for committal under the Debtors Act should be seen by debtors as a real and lively threat
 ... 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."
, Mostyn J made a committal order against a husband for failing to pay sums due to a wife. He summarised the applicable principles as being (paragraph 13):
"i) Section 5 requires the Court to be satisfied to the criminal standard that: a) the Respondent has had at any point since the date of the order the means to pay the sums due under the order; and b) has refused or neglected to pay them.
ii) The use of the present and past tenses in the phrases "either has or has had" and "and has refused or neglected, or refuses or neglects" means that the section will be satisfied if proof of both ability to pay and refusal or neglect to pay is made at any single point from the date of the order right up to the date of the hearing.
iii) The use of the alternative verbs "refuse" and "neglect" means that the court is not confined to proof of a positive wilful refusal to pay; the section will be equally satisfied if proof is made of a culpable indifference to the obligation to pay.
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.
v) The Respondent is not required to give evidence or to incriminate himself. In the absence of a case to answer being demonstrated the Respondent is entitled to have the application dismissed without more.
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 section 5 will be found proved against him or her to the requisite standard.
vii) The Applicant does not have to serve evidence prior to the hearing but if he or she fails to do so the court will be astute to ensure that the Respondent is not taken by surprise and that the hearing can proceed without unfairness to him or her.
viii) It is perfectly permissible for both the enquiry into the Respondent's means at all points since the making of the order and the enquiry into whether he or she has been guilty of a refusal or neglect to pay to take place in one conflated hearing..."
In Mohan v Mohan
, the Court of Appeal again addressed issues relating to judgment summonses. The wife had issued a judgment summons in respect of the husband's failure to pay her sums due under a financial remedy order. In the course of his judgment, Thorpe LJ said:
" ... the wife's advisers might have reviewed the enforcement armoury and concluded that, given his mobility and absence of assets within the jurisdiction, 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. If he failed to attend the hearing then he would be liable to sentence under Rule 33.14(1)(a). If he attended but declined to give evidence he would be little better off. The reality is that if he attended, although not compellable, he would have been obliged to proffer explanation and excuse."Submissions
Turning to the parties' submissions, Miss Dines has made brief oral submissions on behalf of the husband. She elected not to cross-examine the wife when in the witness box. Her submissions consisted in part of her reading a written statement from the husband. More generally, she submitted that the husband's business has been destroyed; that his days of oil trading are over; and that he has made significant payments for the benefit of the wife and children which at least ameliorate, if not extinguish, the husband's default.
Mr Posnansky on behalf of the wife makes clear that she does not want the husband to go to prison. Her aim is to secure compliance with the court's orders and in particular to seek recovery of the maintenance due to her as set out in the judgment summons. He submits that the wife has proved beyond reasonable doubt that the husband has had the means to pay the sums due as set out in the judgment summons and that he has refused or neglected to pay the wife what she is due.
Mr Posnansky points to the husband's persistent and wilful disobedience to court orders and submits that he has frequently disobeyed orders in an attempt to frustrate the wife's claims. He has not paid any part of the lump sum due of £17.5 million and did not transfer the former matrimonial home unencumbered as required by paragraph 3 of the substantive Order.
Mr Posnansky submits that the husband's evidence must be assessed in the context of his long-standing and persistent dishonesty. He also submits that the payments made by the husband, as set out in the schedule produced by him, are payments made of his own choosing and are not paid in accordance with or pursuant to the orders for periodical payments. Even if all the sums in the schedule, totalling just over £228,000, were set off against the maintenance due of £428,000, there would still be a shortfall of approximately £200,000.Determination
Turning to my determination. I repeat that the burden of proof is on the wife and that before I can make a committal order, I must be satisfied so that I am sure of the requisite elements as set out in section 5 of the Debtors Act 1869 and repeated in Family Procedure Rules 33.14(1)(c)(i) and (ii).
First, is the husband in default? It is clear that the total amount due under paragraphs 7 and 8 of the 16th November 2011 Order, namely periodical payments for the wife (a) for herself at the rate of £22,500 per month and (b) for the children at the rate of £8,000 per month, is for the period up to April 2013, £396,500.
What sum or sums has the husband paid in respect of his liability under those orders for that period? Although there is no evidence which specifically addresses whether the sum of £5,000, paid by the husband to the wife in cash, or the cheque for £20,000, paid to the wife in November 2013, were paid in respect of these orders, I propose to treat both sums as being paid towards the amount claimed in the judgment summons. In my view, it would be right to treat those payments as reducing the husband's liability.
What of the payments set out in the schedule produced by the husband for the period February 2012 to May 2013? Whilst these payments might be relied upon in mitigation, they are not payments made as required by the provisions of the Order which were for the payment of periodical payments to the wife for her own benefit and for the children. The payments set out in the schedule are payments made of the husband's choosing. The only payments made directly, or which appear to have been made directly to the wife, are the sums paid for food and household items. The wife's evidence was that those amounted to £150 per week. The husband's evidence is that they totalled, for the 16 month period set out in the schedule, £13,866 or an average of £867 per month. Accordingly, I propose to treat £11,300 of these payments as being made pursuant to the periodical payments order.
I treat the husband, therefore, as having paid a total of £36,300 towards the sum due of £396,500 giving a balance of £360,200. I have not, for the purposes of this judgment included interest in that sum.
Accordingly, husband is in default in the sum of £360,200.
Turning next to the matters set out in the Debtors Act: has the wife proved that the husband has or has had since 16th February 2012 the means to pay the sums due in respect of maintenance? The husband was not, because of the suspension of the periodical payments order for the wife's benefit by the Court of Appeal, under any obligation to pay her maintenance until 20th April 2012. I take that matter into account as well.
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.
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.
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.
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".
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."
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."
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.
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.
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.
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 second issue I must address is whether the husband has refused or neglected to pay the sum due. 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 has wilfully failed to do so. The same matters referred to above lead me inexorably to this conclusion.
The husband has, to adopt the words of Thorpe LJ, proffered no explanation or excuse which bear any weight. The wife has satisfied the burden resting on her and proved the requisite elements of the charge made in the judgment summons to the criminal standard.[After further submissions]
I have previously declined or refused applications made on behalf of Mr Prest to adjourn this judgment summons hearing because, in my view, no valid reason has been advanced for adjourning the application. I consider that it has been his own choice not to be at court. I do not therefore consider it appropriate to adjourn determination of the penalty which I should impose, having concluded that the matters set out in the Debtors Act have been proved.
Miss Dines has had the opportunity to mitigate on behalf of Mr Prest which she has done, by referring to a number of matters which I do not propose to record, but I take into account all the matters raised by her in mitigation.
In my view, Mr Prest is wilfully in default of the maintenance order in the terms set out in the judgment summons. He has paid almost no sums as required under the order. He is in default in the sum of just over £360,000, which relates only to the period up to April 2013.
When deciding what penalty to impose, I take into account and give significant credit to the husband for 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.
Having regard to my conclusions as to the nature and extent of the husband's culpability, I propose to impose a term of imprisonment. The maximum allowed is six weeks. Despite my view as to the gravity of the husband's failure to comply with his obligations, I propose to impose a term only of four weeks. Further, given that this is the first application for a judgment summons and again, notwithstanding the failure by the husband to comply with his financial obligations as required by the Order, I propose to suspend that term of imprisonment on the following conditions. I suspend the sentence for a period of three months, to 28th October 2014, and I do so to give the husband the opportunity within that time to pay the sum due of £360,200. I do not propose to include interest in respect of that amount. I suspend the term of imprisonment in any event for three months, and it will be suspended entirely if within that three month period the husband pays the wife £360,200.