Interim maintenance and a lesson in burning money
By:2 commentsNovember 10, 2016
Do you have lots of money that you want to throw down the drain? Do you have lots of money to which you intend to set fire? Do you have lots of money you make absolutely no use of whatsoever? And also…are you going through a divorce?
If the answer to all these questions is a resounding “yes” then surely you can do no better than follow the example of a Mr H (sadly we are not told his name) who appeared in a case against his wife in the High Court in London last year. The judgment has just recently been published.
It’s an absolute must-read but let me explain why as, at first sight, you might think it rather dry.
Mr H was on a roll. When his wife tried to divorce him in London, his response was to issue proceedings in Ireland and lose. His petition under EU legislation was not deemed first in time therefore it was unsurprisingly stayed by the High Court in Dublin the day before this hearing. Not to be outdone by the potentially insurmountable procedural technicality on which the Irish court was satisfied he had failed, Mr H let it be known he still “might” appeal.
His argument was that this should somehow work in his favour in the English proceedings, which both courts had anyhow thought should go forward. Well, let’s say he came second with that too.
Anyhow that minor distraction wasn’t what did ultimately occupy the crowded, cramped and frantically valuable time of a Judge and the London court. It was about his wife’s request for interim maintenance, her legal services application to meet her legal costs, and his failure to file a Form E as per the court order.
So let’s see what happened.
It’s not complex. The assets of the parties were somewhere between £8 million and £10 million. The couple had been married since 1982 and had four children. He was approaching 60 and she was not far behind. The assets were spread out in UK, Ireland and the United States. The capital was all under the husband’s control. The wife simply had the income he gave her and debts.
It’s not rocket science working out an overall likely split here, is it?
The only question should be confirming the final sum and then working out how it should be paid or offset, given their location and a US pension offshore which keen blog readers will know might not be possible in this jurisdiction.
If you’ve somehow missed it from last week, this is what I mean.
So far so good, right? Wrong.
Let’s see why. There seems to be no prospect of a negotiated settlement on the horizon as at the date of this hearing. And instead the wife needed ongoing financial support throughout all this legal posturing.
The husband has £18,000 per month income to spend excluding his bonus. His wife was getting £5,500 per month and needed another £2,200 monthly to meet her needs until the case was resolved. Again, let me add, she had debts.
Not unreasonable for a fairly wealthy husband to pay, right?
Mr H’s proposal was to reduce the monthly sum. Care to guess what happened?
She got it. The Judge made the order in the round as he should under Section 22 of the Matrimonial Causes Act 1973, in relation to what should normally be a fairly short-lived order for interim maintenance. The husband was still left with the vast majority of his income.
Game over? No.
Her lawyers’ fees needed to be paid. There is law about this. If the wife can’t get funding and can prove it, which she could, the court could order him to pay. Mr H, remember, has control over all the capital, half of which will be going to her in any event.
So why not pay up? Right?
Instead, he came up with the genius idea of paying the fees by instalments. Or “drip feed” as the Judge called it.
The lawyers’ fees, under a Legal Services Order as per Section 22ZA of the same 1973 Act, came to £65,000 up to the FDR hearing.
Guess what the Judge did?
He made an order for a payment of £65,000 within 21 days.
Then Mr H asked for the forthcoming first appointment in relation to the finances to be adjourned because he was unable to file a Form E of his financial position. In fact every applicant and respondent to a financial application must file without exception and within 35 days of the First Appointment. This was even more surprising because Mr H had in fact given all the relevant information to the Irish court. A first appointment in England was looming in 15 days.
Ever heard of such an argument before? No? Me either. This isn’t a case involving billions in offshore trusts and even in those cases I’ve seen an asset schedule on one piece of paper.
Guess what happened? You’ve guessed.
And then, when this was all over, the expensive “first rank” lawyers were squabbling over who paid the costs of this hearing. Mrs H had costs of £18,000 and she got an extra £5,000 to be paid out of his share after final distribution.
I haven’t had time yet to check if this case has been further reported. I hope it hasn’t and they’ve settled. Sometimes you do need a day in court to blow off steam but hopefully then, after a particularly bad result (and Mr H had two pretty bad days) you come to your senses and allow common sense to prevail… or not.
Photo by Zechariah Judy via Flickr under a Creative Commons licence.
November 10, 2016
Categories: Finances and Divorce