S v T

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: J. A. Clyde-Smith,Jurats Blampied,Sparrow
• Judgment Date: 22 May 2018
• Neutral Citation: [2018] JRC 93
• Date: 22 May 2018

[2018] JRC 093

ROYAL COURT

(Family)

Before:

J. A. Clyde-Smith, Esq., Commissioner, and Jurats Blampied and Sparrow

Between

S

Petitioner

and

T

Respondent

Advocate C. R. G. Davies for the Petitioner.

Advocate B. J. Corbett for the Respondent.

Authorities

S v C [2003] JLR Note 24 .

Currey v Currey [2006] EWCA Civ 1338 .

Matrimonial Causes Rules 2005.

Matrimonial Causes (Jersey) Law 1949.

WS v HS [2018] EWFC 11 .

H v H [2008] JRC 097A .

Matrimonial Causes Act 1975.

O v O [2005] JLR 535 .

de Lasala v de Lasala [1979] 2 All ER 1146 .

S -v- T (Matrimonial) [2016] JRC 223B .

Rayden and Jackson 18th edition.

TL v ML and Ors (Ancillary Relief: Claim against assets of extended family) [2006] FLR 1263 .

Matrimonial — applications by the Respondent for costs in respect of legal fees and for an interim lump sum and an application by the Petitioner to vary maintenance.

THE COMMISSIONER:

1 The Court sat on 25 ^th April, 2018, to determine three interim applications, namely (1) an application by the respondent for a costs allowance from the petitioner of £200,000 in respect of his legal fees up to and including the end of the final hearing; (2) an application by the respondent that the petitioner should transfer to him £1,650,000 by way of an interim lump sum with a view to his purchasing a property to live in, and (3) an application by the petitioner for the spousal maintenance paid by her to the respondent to be varied downwards.

Background

2 The parties married on in 1995 and separated 21 years later in 2016. The respondent is 56 years old and the petitioner 58 years old and there is one child of the marriage, who is now 21.

3 The respondent moved out of the former matrimonial home in Jersey in May 2016 and moved to England, where he lives in rented accommodation. The petitioner commenced divorce proceedings in June 2016, and a decree nisi was granted in April 2017.

4 The family wealth derives in major part from a business the petitioner had developed which was sold in December 2014, netting her £22.8 million, partly payable in shares in two tranches, the second tranche vesting in December 2016.

5 A consequence of the sale was the loss of the petitioner's employment status and her ability therefore to live in the former matrimonial home in Jersey, which now stands empty and is being marketed for sale. The petitioner resides partly in Guernsey and partly in France.

6 The bulk of the petitioner's wealth has been loaned into a trust created by her during the course of these proceedings, and within the trust structure are numerous properties, including X.

7 The petitioner's draft schedule of assets and liabilities estimates her net wealth at just over £20 million. As a draft it is subject to revision. The respondent, in his schedule of assets and liabilities, estimates the petitioner's wealth at over £24 million, and his own assets, in contrast, at £779,000, comprising in the main his interest in a number of pension funds.

8 The respondent had latterly been employed in the petitioner's business, but following the separation, he has qualified as a lawyer and is now employed as a trainee within X Law Firm. He estimates that he will be earning £1570 net of tax per month.

9 On 5 ^th December, 2016, following a contested hearing, the Registrar ordered the petitioner to pay the respondent interim spousal maintenance of £3,575 per month, which, by consent, was increased on 7 ^th July, 2017, to £5,725 per month, to take into account rental being paid by the respondent. On the same date, and again by consent, the petitioner paid the respondent £45,000 towards the respondent's legal fees incurred up to the end of an anticipated Financial Dispute Resolution (“FDR”), such sum to be taken into account in the respondent's final settlement. FDR has not yet taken place.

10 On 15 ^th August, 2017, the respondent's application for ancillary relief was referred up to the Royal Court. For the reasons set out in the Commissioner's unpublished judgment of the 22 ^nd March 2018, whilst the petitioner had made serious allegations of domestic violence on the part of the respondent, she was not going to rely upon them for the purpose of the ancillary relief application.

11 Following the giving of further directions by this Court, including orders for financial disclosure and the commissioning by the petitioner of a report by BDO on her trust structure, the final hearing of ancillary matters was due to take place in the seven days commencing 23 ^rd April, 2018. However in March 2018, the petitioner changed her position, and indicated that she did intend to rely on her allegations of domestic violence, because her medical condition had deteriorated, exacerbated she alleged by the domestic violence. At a hearing on 22 ^nd March, 2018, and in the light of the evidence of her medical condition, the final hearing date was vacated. There will now be a fact finding hearing in relation to the allegations of domestic violence, scheduled for the three days commencing 10 ^th October, 2018, followed by a final hearing for the eight days commencing 19th November 2018.

12 We now take the three interim applications in turn.

Legal fees

13 The respondent's financial position is that he has bank savings of some £53,000, out of which he will shortly have to pay £25,000 to Advocate Corbett's firm for fees incurred up to and including this hearing. In addition to that, he has three small shareholdings worth £2,348.58p, two ISAs worth £8,815.76p, a pension valued at £239,657.61p, a share of the “T Retirement Scheme”, a scheme he valued at £336,336, and a “Vantage” pension, his interest being valued at £15,036. He has some personal items, two cars and a number of motorcycles. The respondent lists the petitioner as having a collection of some nineteen cars/vehicles; something she does not accept.

14 Advocate Corbett produced a schedule of legal costs from and including the hearing of the interim applications on 25 ^th April, 2018, up to the end of the final hearing (but excluding any FDR), totalling £221,867.50, covering the time of herself, Advocate Nicholas Le Quesne who has the day to day conduct of the file, and English Queen's Counsel.

15 Advocate Davies was critical of this schedule because of duplication, she said, between the work of Advocate Corbett and Advocate Le Quesne, and the use of a QC; her client would be using Junior Counsel. According to the schedule the cost of the QC for the final hearing alone was estimated at £72,000.

16 Advocate Davies compared this estimate of the respondent's costs with the fixed fee arrangement she had with the petitioner for £73,000, which excluded any FDR, the cost of Junior Counsel and disbursements.

17 Advocate Davies submitted that the respondent had no need for assistance on legal fees, because in addition to the monies held in his bank accounts:–

• (i) He could withdraw £5,000 from his Vantage pension.

• (ii) The petitioner would consent to his withdrawing 20% of the fund under the T Retirement Scheme, of which the petitioner was a trustee and under which both had an interest; the petitioner valuing the fund at £699,130.

• (iii) There is a frozen joint account with Coutts in the sum of £33,490 which the petitioner would agree to release with the proceeds being distributed equally between them, which would bring him some £16,500.

• (iv) He could sell his small shareholdings and cash in his ISAs.

18 Advocate Davies said the respondent was well able to meet his own reasonable legal costs. She pointed out that out of the spousal maintenance paid by the petitioner to the respondent to date, only some £10,000 of it has been spent by the respondent on his living expenses; the rest had been used to pay his legal fees, which to date amounted to some £155,000. She calculated that the petitioner had indirectly contributed £92,000 in this way to the respondent's legal fees, in addition to the sum of £45,000 the petitioner had already contributed by consent.

19 It is now well established that a costs allowance can be included in an award for spousal maintenance (see S v C [2003] JLR Note 24). The courts in Jersey have looked for guidance on the principles to be applied to the judgment of Wilson LJ in the English Court of Appeal decision of Currey v Currey [2006] EWCA Civ 1338:–

“20 In my view the initial, overarching enquiry is into whether the applicant for a costs allowance can demonstrate that she cannot reasonably procure legal advice and representation by any other means. Thus, to the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, whether directly or as the means of raising a loan, in funding legal services. Furthermore, not to forget the third of Thorpe L.J.'s three features, she has also to demonstrate that she cannot reasonably procure legal services by the offer of a charge upon ultimate capital recovery. I would add, fourthly, that the court needs also to be satisfied that there is no such public funding available to the applicant as would furnish her with legal advice and representation at a level of expertise apt to the proceedings, i.e. that the application does indeed in that regard fall within the unserved constituency referred to by Thorpe L.J. in the statement quoted at [1] above.”

20 The respondent has filed an affidavit dated 5 ^th April, 2018, explaining the attempts he has made to raise litigation finance and we accept that he cannot raise a loan in anything like the amounts necessary or obtain litigation funding. There is no public funding available. Nor do we think it reasonable that he should have to raid his pension funds or liquidate the few shares and ISAs that he has.

21 We reject the criticism that he has, in fact, been funding his legal costs in part to date through spousal maintenance. That maintenance...