EM v AK [2013] EWHC 4393 (Fam)

[2013] EWHC 4393 (Fam)Case No FD12D04105
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Venue Royal Courts of JusticeDate Friday, 21 June 2013
Strand,
London WC2A 2LL
Before
MR JUSTICE MOYLAN
Between
EMPetitioner- and–
Between
AKRespondent
Digital Transcript of Wordwave International, a Merrill Corporation Company165 Fleet Street, 8 th Floor, London, EC4A 2DYTel No: 020 7421 4046  Fax No: 020 7422 6134Web: www.merrillcorp.com/mls Email: mlstape@merrillcorp.com(Official Shorthand Writers to the Court)
MS N GRAY (instructed by Sears Tooth) appeared for Petitioner.The Respondent appeared in person (assisted by a McKenzie friend). for in person
Judgment
[1]This is a hearing in the course of contested financial remedy proceedings. At this hearing the wife has been represented by Ms Gray. The husband has appeared with the assistance of a McKenzie friend (Mr Stroilov), who I have permitted to advocate on behalf of the husband.[2]At the outset of his submissions, Mr Stroilov referred me to difficulties in the husband’s position, which difficulties have also been set out in a skeleton argument prepared by the husband, or on his behalf, dated 20 June 2013.[3]The background is that on 14 June, i.e. a week ago, the husband dispensed with the services of his legal representatives, because of a disagreement, as I understand it, as to the level of a bill they had submitted. So he became, with effect from 14 June, a litigant in person. His previous solicitors have declined to release to him the papers relating to these proceedings. On Monday, the husband asked the wife’s solicitors to send him the bundles. They offered instead to provide him with copies of the bundles if he collected them from their offices. He was unable to do that, and so has had a very limited period of time in which to familiarise himself with the papers. Notwithstanding these difficulties, a very detailed skeleton argument has been prepared by or on behalf of the husband, and Mr Stroilov has been able to make very detailed submissions. I am, therefore, satisfied that I have been able to undertake a fair hearing today to address the issues which have been raised before me.[4]The two matters which have been listed for hearing are the wife’s applications for maintenance pending suit and for a Legal Services Order, the latter being pursuant to the new power contained in section 22ZA of the Matrimonial Causes Act 1973.[5]Given the time (and it is now approximately 4.15), I do not propose other than to give a relatively summary judgment. I consider that such a judgment is sufficient and appropriate, in part because this case was before King J on 7 June 2013 and she gave a short judgment in respect of the applications which were then before her. The applications before her were, again, applications on behalf of the wife for maintenance pending suit and for a Legal Services Order, and also an application made on behalf of the husband for a variation of a freezing order.[6]The background to the case is set out in King J’s judgment, and I very briefly summarise it. The parties married on 8 January 2008. They are both Russian nationals. They started living together, according to the wife in 2005 and, according to the husband in 2007. They left Russia in 2009, following which the husband made a successful application for asylum as a political refugee. The wife was also granted permission to remain in the United Kingdom. The parties separated in August 2012. There are no children. This is, therefore, as described by King J, a short, childless marriage. The husband is aged 52 and the wife is aged 28.[7]The assets, according to a schedule that has been prepared for today’s hearing by Ms Gray, total approximately £3.1 million. They comprise (very broadly expressed) properties in Montenegro in the joint names of the parties valued at just over £500,000, properties and other assets in the wife’s name valued at approximately £128,000 and properties and liquid resources (bank accounts and bonds) in the husband’s name valued at approximately £2.5 million.[8]As at the date of the hearing before King J, the principal issue on which the court was then focusing was the extent to which the assets in the husband’s name were beneficially owned by him or were beneficially owned by his son. It was the husband’s case that the bulk, if not all, of the assets in his name were in fact held by him on behalf of his son as the sole beneficiary. The court had listed a 3 day hearing for the determination of that issue. During the course of her judgment, notwithstanding the husband’s asserted case, King J decided that the husband had the financial resources available to him to satisfy a Legal Services Order. She also decided that the wife had no assets available to her for the purposes of enabling her to obtain legal advice and representation. In reaching those conclusions, King J was applying the terms of sections 22ZA and 22ZB of the Matrimonial Causes Act. That is because, by 22ZA(3): “The court must not make an order under this section unless it is satisfied that, without the amount, the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings or any part of the proceedings.” s. 22ZB sets out the matters to which the court must have regard.[9]Having concluded that the wife would not reasonably be able to obtain appropriate legal services, and having concluded that the husband had financial resources available to him, King J made an order that the wife should receive a sum of £40,200. That sum was calculated by reference to the anticipated cost of the 3 day hearing. In paragraph 29(2) of King J’s judgment she said:
“I dismiss that part of the wife’s claim also which sought extensive backdating of the A v A order and a monthly sum of a quite astonishing £39,000 per calendar month, astonishing I would say in any event, but wholly disproportionate in relation to the relatively modest matrimonial pot.”
She makes clear that her order is to cover the likely cost of the 3 day hearing.[10]Following the hearing before King J, the husband’s then solicitors wrote a letter to the wife’s solicitors dated 12 June 2013. This contains a concession made by the husband and his son, who was joined as a party to the proceedings by King J. I quote:
“In the circumstances, both our client and his son have taken the purely pragmatic decision to concede the issue of the ownership of the assets in his name and to therefore deal with them as his assets for the purposes of these proceedings.”
As a result of that concession, namely that the assets in the husband’s name are, by concession made by the husband and his son, to be deemed to be beneficially owned by the husband for the purposes of the financial remedy proceedings, the 3 day hearing was vacated. That left the matters which King J listed for determination at the conclusion of the preliminary hearing, namely the wife’s applications for maintenance pending suit and for a Legal Services Order.[11]The parties have both raised a number of other issues which they have sought to persuade me to determine, but given the limited time available to me, I will not be able to address all those issues.[12]Before coming to the application for maintenance pending suit, there is one other letter that I want to refer to. By letter dated 28 May 2013 written by the husband’s then solicitors to the wife’s solicitors, the husband made an open offer for the settlement of the wife’s claim, under which he proposed transferring to her a property in Montenegro valued at €300,000. The reason I refer to the offer is that it makes evident the husband’s position that the wife should receive some financial provision in respect of her claim. That is relevant, in my view, when I consider the applications for maintenance and a Legal Services Order, and more generally.[13]Turning to the application for maintenance pending suit, the wife asserts that she is in need of maintenance because she only has an income of £1,333 per month, which she receives as a result of working in a shop. As for the resources in her name, they consist of a flat in St Petersburg, which although it is now in the name, I believe, of her parents, the wife asserts that it is not a resource which is available to her to meet her immediate needs because it is occupied by her parents and she cannot sell it, and she is currently unable to pay for any loan which might otherwise be secured against it. The other property she owns is in Montenegro, and it is also asserted that this is not currently available to her as a resource. The wife has set out her interim needs as being £3,300-odd a month, of which approximately £2,000 per month is the rent in respect of her property.[14]The final hearing of the wife’s application is listed on 4 November. If I was to accede to the wife’s application for maintenance, without backdating, the total amount payable between now and the conclusion of the final hearing would be approximately £15,000.[15]On behalf of the husband, Mr Stroilov submits that I should make no provision at all for the wife. He contends that the wife is litigating this case in a manner which is disproportionate to the issues and he points, for example, to her failure to respond to the open offer to which I have referred. He contends that her budget is inflated, and he contends that she has access to resources. He submits that she would be able to obtain a loan certainly in respect of the property in St Petersburg.[16]During the course of the hearing I raised with Mr Stroilov what prejudice there would be to the husband, given the recognition that a financial award should be made in the wife’s favour, if I was to order maintenance, on the basis that any sum paid to the wife would be treated as a sum on account of her claims, or otherwise to be taken into account, in either event as may be considered appropriate by the court when determining the wife’s application for financial remedy. In other words, the court at the final hearing would decide, having heard all the facts of the case, and having regard to the overall level of award which it was fair to make in the wife’s favour, whether or not the sums which have been paid pursuant to my order should be in addition to any such award or part of any such award. Mr Stroilov did not seem to be particularly attracted to that proposal.[17]However, given the wife’s currently limited income, given what I perceive to be difficulties that she would encounter in accessing the capital that she has, given the recognition in the letter of 28 May that the wife, on the husband’s case, should receive assets with a value of €300,000, I consider it reasonable to make an order in respect of maintenance in the sum of £3,000 per month, on the basis, as I have indicated, that (as may be considered appropriate by the court hearing the final application) those sums can be treated as on account or otherwise to be taken into account.[18]The next issue is the application for legal costs. This is, in my view, a more difficult application. In her submissions, Ms Gray sets out the asserted justification for a Legal Services Order in the sum of £52,000. That sum is achieved by adding up the following: two bills provided to the wife by her current solicitors, Sears Tooth, totalling approximately £53,000; a bill, in respect of which I am told judgment has been obtained by her former solicitors Anthony Gold, of just over £21,000; her current solicitors’ costs from today up to the conclusion of the financial dispute resolution hearing of £8,400; counsel’s fees for that hearing of £6,000; and prospective valuers’ fees of £3,600. The total is approximately £92,400, but there is then deducted the amount ordered to be paid by King J of £40,000, leaving a balance of £52,000.[19]I remind myself of the provisions of the Matrimonial Causes Act (as referred to earlier in this judgment) and, in particular, 22ZA(3), which I repeat:
“The court must not make an order under this section unless it is satisfied that, without the amount, the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings or any part of the proceedings.”
[20]The order made by King J of £40,000 was, as I have stated, expressly to enable the wife to pay the costs of the subsequently aborted 3 day hearing. The balance of the wife’s claim for a Legal Services Order, including extensive backdating, was (referring again to the word used by King J) dismissed. As I see it, King J listed the wife’s application for a Legal Services Order to be heard at the conclusion of the hearing which was to commence on 19 June, on the basis that, by that date, the sum of £40,000 would have been exhausted by the costs of the preliminary hearing.[21]In my view, the wife, in renewing her application for backdating in respect of the pre-existing bills, including the Anthony Gold costs, is seeking to re-open a matter that was addressed by King J. What I should decide, in my judgment, is whether, following receipt by the wife of £40,200, pursuant to the order of King J, the wife will be able to fund legal services up to the conclusion of the financial dispute resolution hearing, because I do not consider it would be appropriate currently to provide a Legal Services Order that extended beyond that date, and indeed no such order is sought by Ms Gray on behalf of the wife.[22]I am not persuaded that I should make a further Legal Services Order in addition to that made by King J, having regard to the terms of her judgment and having regard to the effect on the wife of the implementation of the order. The costs which will be incurred up to and including the FDR, excluding valuers’ fees, is £14,400. That leaves £25,800, which will be sufficient to discharge the Anthony Gold bill. In addition, the wife has very modest liquid resources and will, pursuant to my order, be receiving £3,000 per month by way of maintenance pending suit. Accordingly, I make no order on the wife’s application for a further Legal Services Order.[23]There are a number of additional matters which I propose to deal with. The first is that I have been told that NatWest are refusing to release the £40,200 to the wife’s solicitors without an authority being signed permitting them to do so by the husband. Mr Stroilov says the husband has not refused to sign that authority; he simply wishes to have time to consider it. I am going to give him until 12 o’clock on Monday to consider it. I will order the husband to sign such authority as may be required by NatWest, to be in the form provided to him today by the wife’s solicitors, by 12 o’clock on Monday. I am also going to provide that, in default of the husband signing such authority by 12 o’clock on Monday, the same do be signed on his behalf by a district judge of the Principal Registry. That will ensure that the wife receives the sum of £40,200, as provided for in the order of King J.[24]The parties have made a number of submissions in respect of the orders for disclosure made by King J. Although those orders might principally have been directed towards the preliminary hearing which was then listed, I do not propose to reconsider the orders that she made, because in my view the information which she ordered to be provided is equally necessary for the purposes of the substantive financial remedy application. During the course of his submissions, Mr Stroilov indicated that there might be difficulty in obtaining the bank accounts relating to Freshtel Holdings Limited, because it is in liquidation. I do not at the moment consider it appropriate to vary the order, because the fact that a company has gone into liquidation does not in my mind justify amending the order made by King J.[25]Another issue raised on behalf of the wife is whether I should order there to be valuations in respect of a number of properties, those being in Montenegro, Florida, Russia and London. I have no idea of the likely cost of procuring all those valuations, nor whether it would be possible for them to be obtained for the purposes of the FDR on 15 July. Further, I question whether it is necessary to have those valuations for the purposes of the financial dispute resolution, given the fact that the assets already have a cumulative value of just over £3 million. Given the time available, and given the fact that I have no indication of what the likely cost would be, and given my view that the FDR can be effective without such valuations being obtained, I do not propose to make any directions in respect of valuations.[26]Mr Stroilov on behalf of the husband has sought to persuade me that I should vary the freezing order made originally, I believe, by Mostyn J, as varied by King J. As that matter has also been so recently considered by King J and is referred to in her judgment of 7 June, I do not propose to make any further variation of the freezing order, save to permit the sum of £3,000 a month to be withdrawn from one or other of the frozen accounts. Perhaps the same NatWest account would be sensible as that being used for the purposes of paying the sum of £40,200.[27]As I understand it, in addition the husband seeks the revocation or discharge of paragraph 2, which is the order which provides for the release from NatWest account No 43153437 of £40,200 to be paid to the husband’s then solicitors. The order is phrased that “the following sums shall be released”. The husband no longer wants that sum to be released. I am prepared, if this is what the husband wants me to do, simply to discharge that paragraph of King J’s order, it having already been suspended by Jackson J until the conclusion of the hearing then due to commence on 19 June.[28]During the course of his submissions, Mr Stroilov sought to persuade me that I should make further orders for disclosure against the wife. Given the time available and given the fact that it became clear to me that there are substantial issues involved, I do not propose to make any orders in respect of additional disclosure. __________

Cited in 1 later judgment