Financial Remedies Case Round-Up (Mid-April to mid-September 2023)

Published: 21/11/2023 07:00

A spate of proprietary estoppel cases

In the previous issue, I wrote about the increasing number of reported nuptial agreement cases. In the time period covered by this issue, the tendency has been towards proprietary estoppel cases. Certainly, published judgments can appear rather like buses, several at once and then nothing for a while. Nevertheless, a sudden spate was not expected of proprietary estoppel, which has been the dodgy rural bus service of the family law world for a long time. Not all of the cases involve many years of labour on a family farm, but a surprising number still do. Could this be the effect of litigants reading about Guest v Guest [2022] UKSC 27 in the news and wondering about their own situation?

In Hughes v Pritchard [2023] EWHC 1382 (Ch), a farming case, both the promisor and the promisee had died, and the issue was between those who inherited from each. The Court of Appeal did not allow the issue of whether estoppel survived the death of the promisee to be argued as it was raised too late, but it appeared common ground between the parties that death was not in principle a bar to relief but may be relevant to unconscionability and remedy. The promisee’s death meant that he could not suffer the ‘soul-destroying, gut-wrenching realisation of being deprived of which Lord Briggs spoke in Guest’ and was one of several reasons why unconscionability was not found in this case.

We note with considerable dismay that the wife in reported farming case Teasdale v Carter, has recently been charged with the attempted murder of the husband. Mr and Mrs Teasdale took different sides in a proprietary estoppel case brought by their daughter and heard by HHJ Shelton, whose decision was upheld by Moor J when the wife appealed (reported at [2023] EWHC 490 (Fam)). In his judgment, Moor J referred to it as ‘one of the most regrettable pieces of litigation that I have ever come across.’ Pamela Teasdale is due to stand trial in March 2024 and denies the charge.

Spencer v Spencer [2023] EWHC 2050 (Ch) is yet another farming case. The father had promised the son would inherit the farm which they both worked. These promises were intended to mollify the son, with whom he had a fractious relationship. Detriment was found but the interesting element is the approach to remedy post-Guest. The court gave effect to the promise, but as the promise related to the inheritance of farming land, the court did not award the son a further portion of land which was non-agricultural and whose value lay in mineral extraction.

Death and money in the Supreme Court

The death of a party was also an issue in the Supreme Court in Unger & Anor (in substitution for Hasan) v Ul-Hasan (Deceased) & Anor [2023] UKSC 22. This was a leapfrog appeal from a decision by Mostyn J that the wife’s un-adjudicated claim under Part III Matrimonial and Family Proceedings Act 1984 did not survive the death of the husband and could not therefore be continued against his estate. Mostyn had considered himself to be bound by an earlier decision of Lord Denning MR, but disagreed with it. It was, therefore, a rare case of a judge wanting to be overturned on appeal. The Supreme Court dismissed the appeal. As an issue of statutory interpretation, the 1984 Act, read with the Matrimonial Causes Act, rendered the rights to apply for financial relief personal rights and obligations only capable of being adjudicated between living parties. Barder v Caluori [1988] AC 20 provided only a very limited exception to this. Jennifer Lee of Pump Court Chambers summarised this case for the Financial Remedies Journal website; and the site also hosts expert blog posts from counsel representing each party.1

Modest asset cases

We are pleased to see more modest asset cases being reported although these are still few in number. Ditchfield v Ditchfield [2023] EWHC 2303 (Fam) was an unsuccessful appeal heard by Peel J involving net assets of £339,000 and litigation misconduct by the husband. BF v LE [2023] EWHC 2009 (Fam) also involved modest assets, but here the issue before Lieven J was whether a lack of special measures and participatory directions leads to an automatic conclusion that a decision should have been set aside. Lieven J held that it depended on whether the failure to provide special measures amounted to a breach of natural justice. In JD v RMD [2023] EWFC 125 (DDJ Hodson), the parties had equity of £20,000, debts of £30,000 and legal costs of £26,000, a tragedy all round. Li v Simons [2023] EWHC 1626 (Fam), heard by Moor J, involved arrears of periodical payments, with the husband’s legal fees equating to 5 years’ of those payments. All four judges are of course regular publishers of their decisions. To this we add three judgments of HHJ Shelton in the case of AB v CD at [2022] EWFC 197, [2022] EWFC 198 and [2023] EWFC 103, respectively. This concerned the maintenance for a disabled adult child and her maternal carer under the Matrimonial Causes Act 1973, and cases on this area of law are not often reported.

The Mostyn Award: the use and abuse of disclaimers

In each issue we give the Mostyn Award to the case which is a must-read for the practitioner. This issue that award goes to the decision of HHJ Coe KC in Joanne Lewis v Cunningtons Solicitors [2023] EWHC 822 (KB), a solicitor negligence case in which a solicitor was found negligent despite the client signing a boilerplate disclaimer acknowledging that the solicitors felt they could not advise on an appropriate financial settlement absent financial disclosure.

HHJ Coe KC held that the solicitors had sufficient information to know that the husband’s police pension was extremely valuable, indeed was the only asset of any value, and that after a lengthy marriage it was virtually certain that a court would give her a substantial pension share, likely equal division. The disclaimer did not alleviate the solicitors of their duty to inform the client of a risk or potential risk that arose in the course of doing that for which they were retained, or which was reasonably incidental to it. What is reasonably incidental depends upon ‘all the circumstances of the case, including the character and experience of the client’ (Minkin v Landsberg [2015] EWCA Civ 1152, [2016] 1 WLR 1489). Ms Lewis was a vulnerable and unsophisticated client. The solicitors had to pay compensation of £400,000 with the certainty of the award meaning that there was no deduction for loss of chance, and the vulnerability of the client meaning there was no contributory negligence.

The message from this case is that disclaimers are still useful, but they are not a get-out-of-gaol-free card. They need to be tailored to the circumstances so that the client knows what they are giving up. Here, Ms Lewis should have been advised in the clearest possible terms to pursue a pension share and how much financial difference this would make to her.

Child maintenance top-ups

The issue of child maintenance top-ups continues. You may recall Mostyn J’s view, originally in GW v RW [2003] EWHC 611 (Fam), that the starting point should be the formula applied by the Child Maintenance Service. In CB v KB [2019] EWFC 78 Mostyn J suggested the CMS formula applicable to incomes up to £650,000 was useful. In CMX v EJX (French Marriage Contract) [2022] EWFC 136, however, Moor J noted that this would cause ‘an unrealistic disparity’ between what a receiving parent will receive for one child, as opposed to four children, when the amount each child ‘costs’ is not disparate. It also was capable of yielding an amount significantly higher than the court might usually award.

James v Seymour [2023] EWHC 844 (Fam) was an appeal from HHJ Vincent’s decision in A Wife v A Husband [2022] EWFC 154, with the basis of the appeal being that Her Honour had failed to follow Mostyn J’s approach. Mostyn J accepted Moor J’s criticism and created what he called the Adjusted Formula Methodology. This involved a starting-point formula which was then adjusted. Mostyn J’s judgment contains a number of tables setting out how this works, which can be utilised in other cases (simply by reading across the table), but with the caveat that the outcome, the Child Support Starting Point, is just that – a starting point. Calum Smith summarises this case for the Financial Remedies Journal website, with a blog post by Thomas Braithwaite discussing the limitations to his proposals which Mostyn identifies, and Dom Christophers preparing an excel spreadsheet applying the calculation, for readers’ convenience.2

Capitalisation of maintenance

WK v GC [2023] EWFC 151 is a decision of HHJ Hess about the approach to be taken on an application to capitalise spousal maintenance when some years – here, 19 – have passed since the original order was made. HHJ Hess held that the fact that the court on varying or discharging an income-related order can make a capital order does not mean that capital claims should be re-opened. It is instead about varying the periodical payments (with the payee having the burden of justifying ongoing dependency and consideration of whether they can adjust without undue hardship), and then considering whether they can be capitalised and if so the mathematics of that – the judge made a Duxbury calculation. One relevant consideration was the fact that the original decision was prior to the Report of the Pension Advisory Group, A Guide to the Treatment of Pensions on Divorce (July 2019), and the 2004 judge’s approach of not sharing pensions partly accrued prior to marriage would not now be considered appropriate.

The never-ending stories

This issue’s round-up ends with a number of judgments in long-running cases that show no prospect of a quick resolution. Xanthopoulos v Rakshina rumbles on. The latest judgment, at [2023] EWFC 158, was the husband’s successful application for a legal services payment order to allow him to pursue his appeal. The next stage is that appeal. Simon v (1) Simon (2) Integro Funding Limited (‘Level’) [2023] EWCA Civ 1048 provided that litigation funder Level was to remain a party for the purposes of whether the consent order, previously set aside, should be re-made. That order was structured in such a way as to deprive the wife of liquid capital from which Level could be repaid. Gohil v Gohil and CPS [2023] EWHC 1567 (Fam), which went to the Supreme Court in 2015 ([2015] UKSC 61) is now at confiscation proceedings stage. We will report on further developments in a future issue.

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