FAMILY LAW ISSUES: ENFORCEMENT
The recently reported case of Kaur –v- Randhawa  EWHC 1592 (Fam) related to the issue of enforcement. It is an unfortunate truth that a number of cases do not end when the parties either reach an agreement or the court imposes a final financial order in divorce. For some the litigation will continue because one or both parties will fail to do what is required of them either because they cannot do so or because they refuse to do so.
In this case an order was made on the 11 October 2013 requiring the Husband to pay to the Wife a lump sum of £80,000 by 5 February 2014. In default the order provided for a property to be sold.
The first point to be made is that when drafting any order requiring the payment of a lump sum then consideration should always be given to having provision as to security and what would happen in default. If these issues can be dealt with in the order then it often assists the parties if there are problems later on.
In this case the property which was the subject of the default sale provision was held in the names of Husband’s late parents but although the estate had not been fully distributed by the time of the order the property was unquestionably beneficially owned by the Husband.
By 5 February 2014 the Wife said that the Husband had not paid any part of the lump sum. Somewhat bizarrely the Husband had a totally different version of events and he said that he had met the Wife at a Pizza Express in Slough and paid to her £40,000 in cash which she had agreed would discharge his obligations under the order.
The Husband said that he had borrowed this money from his brother and that his brother had been with him when he met the Wife. The brother said that he had accompanied the Husband to Slough but had not seen any money change hands.
The brother also appeared to be unable to say whether the £40,000 had been taken from a safe or had been withdrawn from the casino.
In the circumstances Mr Justice Mostyn had no hesitation in rejecting the evidence of the Husband and his brother and said he was “certain” it was false.
There was no corroborating evidence and also the Husband had spoken to the Wife’s solicitor on 12 February 2014 and indicated that he was not going to comply with the order. He made no mention of the alleged meeting and payment to the Wife which had supposedly taken place 2 months earlier.
Enforcing the order
In any event the Wife’s solicitors took steps to enforce the order. On 22 May 2014 the property (which was the subject of the default sale clause) was sold and the net proceeds appeared to be paid to the brother. Over the following week the brother transferred over £130,000 into another bank account. A freezing order made on 24 September captured £110,000 but around £40,000 of the sale proceeds disappeared.
Of the £170,000 transferred into a different bank account around £70,000 appears to have been transferred back to the Husband’s account in various transactions. The Husband at the hearing indicated that he had spent this money largely on gambling. The Husband and his brother maintained that the frozen sum of £110,000 belonged to the brother because it had been agreed prior to the sale that the Husband owed him £100,000.
Again Mr Justice Mostyn felt that this explanation was fictitious.
He made a final third party debt order against Lloyds Bank in respect of £108,852.28 being £80,000 lump sum plus statutory interest from 5 February 2014. The balance related to the Wife’s capped costs under her Legal Aid Certificate of £17,000 plus VAT.
In the circumstances Mr Justice Mostyn went even further and made an indemnity costs order against the Husband and his brother as a result of their conduct which entitled the Wife’s solicitors to relinquish their Legal Aid Certificate and be paid on a private basis.
He also directed that the court bundle be sent to the DPP for consideration as to whether proceedings for perjury should be brought against the Husband and his brother.
Although it appears that this must be the right outcome in this case and the Husband and his brother may well have had their comeuppance for their conduct what should not be forgotten is how much stress and anxiety this no doubt caused the Wife in the interim.
On the one hand this case underlines the powers of the court in terms of enforcement but it also underlines the need for everyone to consider this issue properly and carefully when they are entering into any settlement by consent and to consider how any potential problems about default may be addressed. Sometimes those are unavoidable and as in this case sometimes a court has imposed the order and therefore there is little that the parties can do about it save to draw any potential issues to the attention of the court.