Enforcement tips and tricks – part one

In the current economic climate and the international age in which we work, family practitioners increasingly face the need to enforce (both within this jurisdiction and abroad) orders made in financial remedy proceedings.  Lord Sumption acknowledged in Prest v Petrodel Resources [2013] All ER (D) 90 (Jun) that ‘in an age of internationally mobile spouses and assets’ enforcement in countries ‘which may not give direct effect to the orders of the English Court…is a more significant problem than it once was…’.

Enforcement is a complex topic with the relevant law scattered between a multiplicity of legislation and case law.  Below is the first part of a summary of tips and tricks that may make enforcement easier both in this jurisdiction and abroad.

Think early!

It is vital to think about enforcement from the outset of a case, as it is likely to have a bearing on key early decisions, including:

  • who to serve the Form A on
  • who to join to the proceedings; and
  • how to manage your client’s expectations eg if the total assets are £10m, but only £1m is in the jurisdiction, you may need to give your client unpalatable advice about the odds, and costs, of enforcing any order made by the English court against the offshore assets, depending on where the assets are located and how they are held

Family lawyers will want to ensure that any order made in this jurisdiction is worth the paper it is written on ie there is a good prospect of recovery (without prohibitive costs).

Remedies

A panoply of remedies is available to the enforcing party, as listed in this schedule.  Which remedy or remedies are appropriate will depend on:

  • the nature of the order and magnitude of the sum being enforced
  • the location of the assets
  • the evidence available to the enforcing party; and
  • the costs of the application

Consult the relevant legislation and case law when deciding which remedy to pursue and to ensure all legal and procedural requirements are met, as well as being alive to reciprocal enforcement treaties and regulations between this jurisdiction and other jurisdictions as these could have a significant impact on the prospects of recovery.  For this reason (and issues of brevity), I have not set out the substantive law in this blog post.  Instead, I offer tips and tricks below that may assist enforcement during, and at the conclusion of, the proceedings:

Joinder

Who to join?

See Family Procedure Rules 2010 (FPR 2010), 9.26B. Consider who to join from the outset (and on an ongoing basis, particularly following financial disclosure).  Joinder of a third party may be appropriate (provided the court considers it ‘desirable’) where:

  • there is a dispute with a third party over the ownership of an asset or significant other matter
  • an order is sought which affects a third party’s rights eg  variation of a nuptial settlement or when seeking to avoid a disposition made to a third party under Matrimonial Causes Act 1973, s 37; or
  • where there is evidence that joinder of a party would aid enforcement

Applications for joinder must be made under the FPR 2010, Pt 18 procedure.

The onus when applying for joinder is on the party who seeks to argue that the beneficial ownership of an asset is different to the legal title (Fisher Meredith v JH & PH (Financial Remedy: Appeal: Wasted Costs) [2012] 2 FCR 241) ie where the applicant claims that a property in the name of a third party beneficially belongs to the respondent, the applicant should seek to join the third party.  Where the respondent claims that property to which they have legal title is beneficially owned by a third party, the respondent and/or the third party should seek joinder.

Disclosure on joinder

When joining a third party, the court may make orders for disclosure against the third party (Tchenguiz-Imerman v Imerman [2012] All ER (D) 241 (Jun)).  In Tchenguiz, the court agreed to join three adult beneficiaries of Jersey and BVI trusts, which the wife sought to vary as part of financial remedy proceedings, notwithstanding that the trustees – with the adult beneficiaries’ support and the Jersey and BVI courts’ approval – had decided not to participate in the English proceedings.  The court decided to join the beneficiaries on the basis that it might (in the absence of the trustees) assist the court with the investigation and resolution of issues in dispute.  The judge took the view that as parties they would be under an obligation to disclose all documents relevant to the issues in the proceedings.  However, see DR v GR (Financial Remedy: Variation of Overseas Trust) [2013] All ER (D) 230 (May) in which Mostyn J adopted a stricter approach to joinder of trustees and underlying companies in holding that it was not an essential pre-condition for the validity of a variation order or to obtain disclosure as the court could make orders for disclosure against a person who was not a party to the proceedings under FPR 2010, 21.2, 21.12 or 21.16.  Joinder may also assist with enforcement ie having participated in the proceedings it may be more difficult for beneficiaries to argue in a foreign court that a decision of this jurisdiction should not be enforced.

Joinder and pleadings

It is imperative that any claim against a third party is properly pleaded so the nature of the claim can be clearly understood (TL v ML [2006] 1 FCR 465).  Failure to respond to the pleaded case may result in the court drawing adverse inferences against an uncooperative party (Prest v Petrodel Resources [2013] All ER (D) 90 (Jun)).

Part two of this blog post on enforcement will consider:

  • Hadkinson relief
  • orders subject to conditions
  • declarations of beneficial interest
  • an order for lump sum(s) and in default an order for sale
  • drafting maintenance orders
  • payment on account of costs
  • interest
  • a general application for enforcement; and
  • committal by way of a judgment summons

Sophie Chapman is a solicitor at Withers LLP 

Twitter: @WithersFamLaw

 

 

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