Family case briefing

At the end of a long and challenging day recently, I came across the wonderfully named K v K (Financial Relief: Management of Difficult Cases) [2005] EWHC 1070 (Fam) '“ at the time, I was feeling that all my cases were difficult '“ which contains some helpful guidance about what to do when faced with clients who really, really cannot (or will not) be sensible about the division of chattels, as well as some more general points about case management.

K v K was clearly one of those nightmare cases where anything that could go wrong did go wrong. The husband used every trick in the book to engineer delays in the proceedings, including changing his lawyers several times and threatening his wife with dire consequences if she pursued her claims. He also understated his assets by about £6m. After numerous interlocutory hearings, the final hearing was fixed 11 months in advance, but when the time came the husband indicated that he was not prepared to return from Cuba for the trial, on the basis that he was a fugitive from justice in the US and Spain, that his passport and travel documents had been stolen and that his wife had threatened to have him imprisoned!

On the first day of the trial he asked permission, through his solicitors, to give evidence by video-link and the appropriate arrangements were made at the Royal Courts of Justice. However, it then transpired that Cuba does not actually have the technology to enable a video-link to take place, so the husband gave evidence by telephone, thus making life even more difficult for the wife and her legal team. Mr and Mrs K owned about £330,000 worth of antiques, all of which was still in dispute at the date of the trial, so Baron J was also faced with the unenviable prospect of having to decide who should get which item.

Perhaps not surprisingly, given the breadth of conflict in the case, costs were estimated to be about £930,000, or 15 per cent of the total assets.

In giving her judgment, that each party should receive just over £3m, Baron J took the opportunity not only to give some guidance about how such cases should be run, but also to criticise both firms of solicitors for the way they had conducted the case, as judges who have never had to deal on a day-to-day basis with clients behaving in the way the protagonists in K v K behaved, are prone to do.

Difficult cases: guidelines from K v K

• 'This type of case should be managed by an allocated High Court Judge from the outset'¦ Obtaining disclosure is pivotal and demands continuity combined with the expertise of judges with specialist knowledge.' How one is to identify 'this type of case' at the outset was not explained.
• It is the duty of solicitors for a party who wants to give evidence by video-link to ensure that the link has been tested and is viable before the hearing.
• As far as chattels are concerned, the division of chattels must be accomplished prior to trial, with a clear schedule denoting the destination of items. If the parties cannot agree, a Scott Schedule must be completed with the items marked as agreed or remaining in dispute, setting out in an abbreviated form the reasons why the particular item is sought.
• The general practice in the Family Division should be that only joint valuations are acceptable and the refusal by one side to co-operate could not be circumvented by unilateral action. The frustrated party should refer the issue back to Court for further directions.

The learned judge criticised the solicitors in the case for not dealing with the issue of chattels, or narrowing the issues about chattels before the beginning of the trial. 'Solicitors must not forget chattels.' Counsel in the case did not escape blame either: 'In a case with leading counsel, the task of finalising chattels can, mostly, be delegated to the junior. But'¦ it is counsel's responsibility to ensure that chattels are not forgotten.'

In my own experience, shying away from the topic of chattels, and accepting at face value an airy, 'oh, I am sure we can sort that out without solicitors' from a client, is only saving up problems for a later day. For me, in such cases, problems with chattels have surfaced at the FDR, or even after a draft consent order has been prepared. In future, I intend to be much more insistent about flushing out difficulties at an early stage, citing Baron J as my authority for so doing.

Funding a wife's legal costs

Although the funding of the wife's legal costs during the litigation was not highlighted as a problem in K v K, it can be a very real problem for a wife and her advisers trying to deal with a wealthy, manipulative husband determined to avoid giving proper financial disclosure and evade his financial responsibilities. An application for maintenance pending suit under s 22 of the Matrimonial Causes Act 1973, to include a component for legal costs, is a possible remedy if the husband in such a case can fund suitable payments. However, the Court of Appeal in Moses-Taiga v Taiga [2005] EWCA Civ 1013 held that the court will exercise the jurisdiction to make an order under s 22 to include a component for legal costs only in an exceptional case.

In C v C (Maintenance Pending Suit: Legal Costs) [2006] Fam Law, Hedley J, in making an order which included a legal expenses component of £120,000, said that the words ofThorpe LJ in Moses-Taiga, about the situation in which a costs component could exceptionally be included in an order for maintenance pending suit, were illustrative and not definitive. If other Family Division judges (and those in the lower courts) follow Hedley J's more liberal interpretation of the Court of Appeal guidance, it is likely that many more applications for maintenance pending suit including a costs element will be successfully made.

Mr and Mrs C had been married for 15 years, during which Mrs C, who was 50 years old, had been at home full-time with the two children of the family. It was not suggested that she had any earning capacity. Mr C was a businessman in his mid-40s with a shareholding in a company valued at £13m. He claimed that he had liquidity problems. The application was unusual, in that a consent order for maintenance pending suit had been made only three months previously, but that order had not included any element for legal costs.

Hedley J said that the court should generally uphold agreements freely arrived at in arms-length negotiations with the benefit of legal advice, save in exceptional circumstances. Varying the maintenance pending suit order would infringe this principle. However, in this case, if he did not make an order increasing the periodical payments to include a component for costs, the wife would have to mortgage her interest in the family home and thereby put her security, and that of the children, at risk. Hedley J held that this would be wholly unfair in circumstances where the husband could fund the costs if he re-ordered his financial affairs. The facts of this particular case, where the assets were controlled by one party and there was a need for investigation of those assets, made the case exceptional and permitted the court to add a legal costs component. Accordingly, he varied the order.

Parental responsibility

Holiday arrangements for the children of divorced or separated parents are not very often the subject of litigation. Where there has been previous litigation and a residence order, the Children Act is clear about what can and cannot be done by the parent in whose favour a residence order has been made. What is not so clear is what should happen where there has been no dispute between the parents about residence and therefore no residence order is in force.

A parent who has a residence order in his or her favour is able to take or send a child abroad for a period of less than one month without needing to obtain the formal consent of the other parent or an order from the court, and commits no offence under the Child Abduction Act by doing so. Where no residence order is in force, the situation is different, because there is no blanket provision in the Children Act enabling the parent with care to take the child out of the jurisdiction without the consent of the other parent (unless he or she believes that the other has consented or has been unable to communicate with the other parent despite his or her best efforts to do so).

In Re N (Leave to Remove: Holiday) [2006] EWCA Civ 357, the Court of Appeal heard an appeal by a mother against an order refusing her permission to send a nine year old child, unaccompanied, on a two week holiday during 2006 to visit the mother's family in Slovakia, in a case where no residence order was in force.

The mother claimed that she could not take the time off work to take the child to visit her family. The father was opposed to her plans because, he said, the little boy was too young to travel alone, did not speak Slovak and the mother's family did not speak English. In the face of the father's opposition, the mother applied to the Court for permission to send the child on the planned holiday.

The Court of Appeal arrived at a very pragmatic fudge. It held that the judge had failed to take into account positive factors, over-emphasised negative factors and had failed to give proper weight to the evidence that the child had had happy experiences staying with his mother's family in the past. However, the court was not satisfied that the mother could not take time off work to take the child in 2006 and held that, if she did so, he would be better prepared for an unaccompanied visit in 2007. Accordingly, the appeal was granted, but permission was given for the unaccompanied holiday to take place in 2007, not 2006.