Family Law Hub

Young v Young [2013] EWHC 34 (Fam)

  • In a tweet: First Thursfield, now Young - family courts get tough with non-disclosers

    Summary:  Here the court was dealing with two applications brought by the wife ("W"):

    • one to commit her husband ("H") to prison for contempt of court; and
    • one to activate a suspended committal order made by Mrs Justice Parker on 29 June 2009. 

    This particular case has, as you may well know, a very long history. In essence, H's position is that he is both penniless and bankrupt. In stark contrast, W's position  is that H is a wealthy man, worth up to £400million. She contends that he has hidden all his resources to avoid his financial obligations towards her and their two children. That though was not the issue before Mr Justice Moor; however, in order to be able to get to the truth, it was of course important that H give full and frank financial disclosure and that non-disclosure was what lay behind W's committal applications. 

    Back in June 2008, Mr Justice Moylan had given W permission to serve a further questionnaire on H to obtain the documents that H appeared to be relying on when presenting his case. The questionnaire was served in late July 2008. H did not respond.  In late October 2008, Mrs Justice Pauffley ordered H to respond by 7 November 2008 and attached a penal notice to that order. Still there was no response. In March 2009, Mr Justice Coleridge made a further order that H provide the documents W sought and he directed that H needed to do this by 1 May 2009. 

    H did provide some answers in May 2009 but W was not satisfied with what was provided and, in mid May 2009, she issued a committal summons. She then served a further questionnaire on H at the beginning of June 2009.  Significantly, this questionnaire included a question about how H was maintaining himself and, in particular, sought documentary evidence of all payments he alleged had been made for his benefit by third parties. This was extremely important as W was trying to establish that H had, in fact,  been making these payments himself from undisclosed financial resources and that he was simply lying when he said he was being funded by third parties. 

    When matters came before Parker J on 29 June 2009, she committed H to prison for six months for contempt of the orders of Pauffley J and Coleridge J but she suspended the term of imprisonment for 92 days on terms that H provide the answers and documents W sought by the beginning of September 2009. In making that committal order, Parker J made a finding (to the criminal standard of proof) that H was in contempt by failing to answer W's questionnaires. 

    Perhaps predictably, H did not comply with Parker J's order; his evidence was that he had in fact been detained under the Mental Health Act between 28 August 2009 and 10 September 2009. 

    H was given extra time to serve his replies and he instructed solicitors who, finally, served replies on W together with some 50 lever arch files full of documents plus a statement by H setting out his business dealings. W contended that H's replies had not purged the contempt and that there remained questions where the answers were either inadequate or insufficient. 

    In November 2009, W sent a letter to H setting out the alleged deficiencies in his replies. On 16 December 2009, H responded that he would use his best endeavours to answer the questions but nothing was received. That same month, Mrs Justice Black heard W's MPS application. She ordered that H pay W's rent, the children's school fees and the sum of £27,500 per month. H did not appeal but neither did he comply with the order. By the time of this hearing, the arrears were approaching £1million. 

    Matters then went cold. Partly this was because Parker J was unwell, partly it was to do with W having problems in funding the litigation. 

    In January 2011, Mr Justice Mostyn ordered that there should be no further application to activate the committal without prior permission of the court. This was because Mostyn J had taken the view that the case should be heard on the basis of the evidence before the court and, if appropriate, adverse inferences then be drawn as to H's financial position.

    However, in October 2012, W applied to the court (and in fact to Mr Justice Moor) to adjourn the final hearing from its listing in November 2012; Moor J reluctantly agreed to that adjournment on the grounds that the case was simply not ready for trial. Consequently, W applied in November 2012 for permission to activate the committal. That permission was granted and a detailed order was made by Moor J on 12 November 2012 that provided:

    "that the husband shall produce by 4pm on 10th December 2012:

    (a) answers to FTI's request for disclosure;

    (b) full answers to question 13 of the Wife's questionnaire dated 3rd June 2009 (namely the sources of the husband's funding from March 2006 to 10th December 2012 to include documentary evidence in support); and

    (c) a witness statement in response to the witness statement of Mr Hebron dated 7th November 2012."

    H was also ordered to provide certain tax returns and a penal notice was attached. In his judgment, Moor J said that he had made very clear to H that the situation was serious and, if he did not comply, there would be an application to send him to prison for contempt. 

    H then did comply (or attempt to comply) with the order – but did so the day before the committal application was due to be heard in January 2013. He instructed new solicitors (it is not clear when he dis-instructed the previous firm of solicitors) again just days before the committal application although at the hearing he represented himself. And, again, he gave evidence that he had been an inpatient in hospital, this time between 21 December 2012 until 13 January 2013.  Interestingly, W gave evidence that the day H sought medical treatment was also the same day her enquiry agent had attempted to serve him with the committal application; indeed, she went so far as to say that H's hospital admission was contrived. 

    For his part, H complained that the private investigators W had instructed were harassing him and that there was potential legal action he could take against them in the criminal courts. He submitted that W's pursuit of the litigation had made him unwell. 

    The issue before the court was whether or not H had breached the order made on 12 November 2012. If found to be in breach of that order, it was not necessary for the court to deal with the suspended committal. However, that suspended order remained relevant as to the sentence that should be applied by the court in the event that it was found H had breached the November 2012 order. 

    The burden of proof was on W to show to the criminal standard of proof that H was in contempt. H did not have to prove anything and he did not give evidence on oath (something which could not be held against him). 

    Held:  H was sentenced to six months imprisonment for contempt. 

    Moor J looked first at the two aspects of the November 2012 order that he felt that H had materially complied with. These were the tax returns and the statement in reply. Although W was not satisfied with either, Moor J was and he noted that any points that had gone unanswered in the statement, were a matter for cross examination at the final hearing. 

    However, Moor J was not persuaded that H's disclosure about his sources of funding were sufficient. He noted that H's answer had set out the total funding he had had. H had relied upon a schedule he had prepared and disclosed previously in the proceedings which showed that between 2006 and 2009 he had received £1.17million from friends and family. He had added an extra schedule which showed that he had received a further £315,000 between 2009 and 2010. The vital issue though was that H had produced absolutely no documents to prove where the money had come from. H argued that he did not have any of these documents in his possession and that, due to the negative press the case had attracted, none of the third parties wanted to provide H with details of the payments they had made. 

    Moor J roundly rejected H's submission and said:

    "It is absurd to say that these friends are prepared to support him financially to such a huge extent but that not one of them is prepared to produce any documentary evidence that the money came from them. There is no evidence whatsoever that he has tried to obtain such information from them. He knew what was required."

    He concluded that H had deliberately failed to comply with the order and that the criminal standard of proof had been met. 

    Moor J then turned to H's answers to FTI Consulting's request for disclosure (FTI Consulting were forensic accountants W had instructed to prepare a schedule of deficiencies and further questions). He highlighted that H's response would again be "fundamental to the case" as it went to the heart of H's assertion that he was insolvent as it required H to verify his financial losses. Commenting that H's reply did not advance his case at all, Moor J noted that H's answer to each question was the same – he either did not have the document or he believed that the document would be in the possession of someone else and that W should examine the files of those persons / firms. (It is relevant to say that W's advisors had already written to those people / firms identified and no substantive response had been received).

    There was no doubt as to Moor J's satisfaction that H had failed to comply with this part of the court order either. 

    Taking into account the seriousness of both contempts, Moor J held that a fine would be both useless (as it would go unpaid) and unjustifiable. He also took the view that a suspended sentence would be worthless and neither could he  be persuaded by H that the matter be adjourned for 28 days to enable him to make good the deficiencies. 

    H had also requested that the matter be adjourned to allow him to have legal representation. Moor J declined that request, stating that H could have been legally represented on this occasion -  he had had plenty of opportunity to arrange legal representation; but, in any event, there was nothing that a lawyer could say to change the outcome of the case – there had been a flagrant and deliberate contempt over a long period of time. 

    Moor J passed a sentence of imprisonment. Given that Parker J had imposed a sentence of six months, which had not been appealed, for the same contempt, he took the view that the sentence should be the same. There would not however be double jeopardy and the previous suspended committal was not activated. 

    Reminding H that he was at any stage entitled to purge his contempt and that he had brought this entirely upon himself, H was ordered to serve one half of the sentence in custody.

    Comment

    A couple of points to pick up from the judgment:

    • Insofar as the MPS arrears were concerned, Moor J made clear that there had not been a judgment summons application in relation to them and that therefore there had been no finding of fact to the criminal standard that H had had the means to pay and had deliberately refused or neglected to do so – the court could not take the default into account in relation to this application.
    • Had H actually complied with the November 2012 order, even though he had provided his answers very late in the day, it would not have been appropriate to commit him to prison simply for being late. The main objective – to prove his current financial position – would have been satisfied. 
    • Moor J was not prepared to make a finding of fact that H's admissions to hospital were contrived. He only went so far as to say that it might have been that the imminent threat of prison had made H unwell. However, he also highlighted that there would not have been a threat of imprisonment if H had fully complied with the orders and illness was no excuse for contempt.   
    • Moor J was also not prepared to make any findings about whether H was being harassed. The sole concern of the court was the issue of whether or not H had complied with the order – harassment was not a legitimate defence to a failure to comply with a court order. Further H had not raised the issue with Moor J previously and, even when he had raised his health problems, H had not actually contended that his illness had prevent him from complying with the order. 

    So, what now? Well, Scot Young is now residing at Her Majesty's pleasure (apparently, he was led away in handcuffs carrying a Louis Vuitton suitcase) and Michelle Young has made clear in the press that she intends to take proceedings against those institutions which are hiding are ex-husband's millions. Whilst it appears that the family courts are taking a tougher stance against serial non-disclosers, is Scot Young simply taking a calculated risk? Six months imprisonment but he still keeps his millions hidden? How much further does the imprisonment get Mrs Young? Is she any closer to discovering what the truth of ex-husband's financial situation actually is?

    Following the Prest decision, I commented on the possibility of an increase in committal applications - one of the "thermo-nuclear options". Are the Thursfield and Young decisions going to persuade potential applicants that the family courts do have teeth and will bite and so they should make that committal application? Or do applicants have to accept that committal applications are "long-haul" - the court is unlikely to nip non-disclosure in the bud and that it could be years before a non-discloser is jailed?

Case note, published: 23/01/2013

Topics

See also


Published: 23/01/2013

Copyright 

Copyright in the original legal material published on the Family Law Hub is vested in Mills & Reeve LLP (as per date of publication shown on screen) unless indicated otherwise.

Disclaimer

The Family Law Hub website relates to the legal position in England Wales and all of the material within it has been prepared with the aim of providing key information only and does not constitute legal advice in relation to any particular situation. While Mills & Reeve LLP aims to ensure that the information is correct at the date on which it is added to the website, the legal position can change frequently, and content will not always be updated following any relevant changes. You therefore acknowledge and agree that Mills & Reeve LLP and its members and employees accept no liability whatsoever in contract, tort or otherwise for any loss or damage caused by or arising directly or indirectly in connection with any use or reliance on the contents of our website except to the extent that such liability cannot be excluded by law.

Bookmark this item