Stepping off the Family Lawyers Desert Island : Procedure and Tactics for Family Lawyers Andrzej Bojarski Barrister, Mediator and Family Arbitrator Head of 36Family
Why Venture off the Desert Island? TOLATA Claims
Differences between Financial Remedy and TOLATA cases Financial Remedy Add up and divide by two. Form E gathers key information. Strict ownership does not matter - DJs have wide powers to be fair and ignore legal niceties. Leading cases White and Miller: fairness. Duty on court to investigate and be satisfied. Settlement at FDR. No pleaded case. Flurry of activity just before hearings. Presumption against costs.
Difference between Financial Remedy and TOLATA cases TOLATA cases No need for results to be fair (usually): binary outcomes. Cases may turn on points of law or impression of evidence which will not be known until day of trial. No Form E type template to gather essential information. Pleadings front load work: consequences if not done properly. Likely to be a winner and loser: Part 36 and costs. CPR different from FPR. Circuit judges rather than DJ. No automatic FDR system.
Clash of the Regimes Strict property rights on property law principles may arise in financial remedy proceedings: Third party interests: Binding resolution: Tebbutt v Haynes [1981] 2 All ER 238, Pleadings etc: TL v ML [2006] 1 FLR 1263, Joinder: Fisher Meredith v JH [2012] EWHC 408 Bankruptcy. Proceeds of crime proceedings.
Key things to have in mind Few cases will fight to trial Better preparation = identification of issues and better chance of settlement. Need to be prepared differently to ancillary relief: pleadings, case-management and evidence. More front loading rather than just before hearings. More rigidity in application of procedural rules.
Key things to have in mind Express declaration of trust is final (usually in TR1 post 1 April 1998 transfers) If no express trust: what are you trying to prove? Parties intentions in respect of ownership - What has been said / agreed? - Does behaviour evidence intention? Often see statements which appear mainly concerned with contributions and fairness.
What type of case do you have? (1) Co-owners on legal title (1) Express Declaration of Beneficial Interests Conclusive proof of ownership: Pettit v Pettit [1970] AC 777 at p. 813; Goodman v. Gallant [1986] Fam 106 Not varied by separation: Turton v. Turton [1988] Ch 542 Pankhania v Chandegra [2012] EWCA Civ 1438, [2013] 1 P & CR 16 But is there room for variation by subsequent estoppel / constructive trust? Equitable accounting?
What type of case do you have? (2) Co-owners on legal title (2) no declaration of beneficial ownership Presumption of beneficial joint tenancy (Stack v Dowden [2007] UKHL 17 [58]. Is there evidence to rebut this presumption? Mainly issue of quantification, applying whole course of dealing review (Stack [61], [69]) Looking for how the parties intended to share? If court cannot find (infer) parties intentions then Jones v Kernott states that the court may impute (i.e. make up) an intention for the parties, by reference to what the court regards as fair. To date only in context of quantification of an interest.
What type of case do you have? (3) Single legal owner (1) Lloyds Bank v Rosset [1991] AC 107. Claimant needs to (1) prove has an interest, and (2) quantify the interest.
What type of case do you have? (4) Single legal owner (2) Will anything less than direct contributions to purchase price found a Rosset II trust? Until Stack answer resounding No but see Le Foe v Le Foe [2001] 2 FLR 970 (Nicholas Mostyn QC as deputy, relied on earlier authorities such as Gissing v Gissing [1971] AC 886 and Burns v Burns [1984] Ch 317. Stack para [26] Lord Walker the law has moved on and para [63] Lady Hale set hurdle rather too high. Jones v Kernott (joint names case, but) in determining intentions deduced objectively from conduct [52] (Hale & Walker) and Lord Wilson at [84] imputation in sole name case will merit careful thought.
What type of case do you have? (5) Investment property/shares: resulting trusts live on. Laskar v Laskar [2008] EWCA Civ 347: Use resulting trusts if investment property rather than for family cohabitation. Maybe moot point what is family home and what is investment e.g. Family home retained when parties move up property ladder and then used as buy to let. Companies: now see Petrodel Resources v Prest [2013] UKSC 34 and M v M [2013] EWHC 2534 (Fam)
What type of case do you have? (6) Proprietary estoppel? Mainly where equitable remedy less than beneficial share e.g. Don t worry, you can live here forever. Minimum to do justice e.g. Right to occupy. 3 stages: Is there an equity? Assurance, (Reasonable) Reliance and Detriment. What is extent of equity? Very fact specific What remedy should equity afford? Beneficial interest, cash, occupation right? Leading cases:- Thorner v Major [2009] UKHL 18 Davies & Another v Davies [2014] EWCA Civ 568 holistic exercise, not split trial.
What type of case do you have? (7) Other Avenues of Altered Ownership One party clears off for years and then comes back and wants their share: Stack [108] and [138]. See also Jones v Kernott [2011] UKSC 53 @[51] Estoppel / constructive trust post separation? Very difficult to prove. Abandonment? - Quaintance v Tandan [2012] EWHC 4416 (Ch). Also consider equitable accounting. Side agreements: Young v Lauretani [2007] EWHC 1244 (Ch); [2007] 2 F.L.R. 1211
What type of case do you have? (8) Property located out of jurisdiction of England and Wales: Webb v Webb [1994] QB 696, Prazic v Prazic [2006] 2 FLR 1128 England has jurisdiction as to equitable rights because claim is as to rights in personam and does not affect rights in rem. But beware recognition of foreign judgments: Orams v Apostolides [2011] QB 519
Equitable Accounting What is it? when the proceeds of sale are realised there will be equitable accounting between the parties before the money is distributed. If the woman has left, she is entitled to receive an occupation rent, but if the man has kept up the mortgage payments, he is entitled to credit for her share of the payments; if he has spent money on recent redecoration which results in a much better sale price, he should have credit for that, not as an altered share, but by repayment of the whole or part of the money that has been spent. These are but examples of the way in which the balance is to be struck LJ Griffiths in Bernard v Josephs [1982] 1 Ch 391 See: Equitable accounting for Family Lawyers http://www.familylawweek.co.uk/site.aspx?i=ed1746 Expert Evidence?
Equity of exoneration Useful when one person s debts burden property in question. Re Pittortou [1985] 1 WLR 58 But now see Lemon v Chawda (Chief Registrar Basiter, 1/10/13, Westlaw) artificial to allow wife to take benefits of prosperous lifestyle (on back of husband s business in part financed against FMH) while simultaneously seeking to enforce the right of exoneration to his disadvantage. Death knell? See also Morgan J in Day v Shaw [2014] EWHC 36 (Ch): the principle lives on.
TOLATA factors Often see so much effort going into establishment and quantification of share that other aspects of the case are missed. When court deciding how to exercise the power of trustees under s.14 (with knock on effect on s.13 accounting), must bear in mind checklist at s.15: a) Intentions of parties who created the trust; b) Purposes for which the trust is held; c) Welfare of a minor who occupies or who might reasonably be expected to occupy any land subject to the trust as his home; d) The interests of any secured creditor of any beneficiary; e) Circumstances and wishes of beneficiaries entitled to occupy. Relevant to order for a sale, terms of occupation for remaining beneficiary and equitable accounting for occupation rent.
TOLATA factors ss 13 and 14: May make an order relating to exercise of trustee functions. Declare nature and extent of beneficial interests. Exercise consequential powers, including exclusion and power to limit right of occupation. No power order one party to buy the other out: Rahnema v Rahbari and Ansari [2008] 2 P&CR DG5 But see Bagum v Hafiz [2015] EWCA Civ may not order one to buy other out but may order sale and direct that one party has right of first refusal Powers on sale see CPR 40(16) and (17) and PD 40D. Court can control who can bid for property by granting only one party permission to bid.
Other Remedies Children Act 1989 Schedule 1. Which court? County Court and Family Court no longer have the same jurisdiction. W v W (Joinder of Trusts of Land and Children Act Applications) [2004] 2 FLR 321 guidance no longer applicable? No jurisdiction for Family Court to hear TOLATA with Schedule 1 or for County Court to hear Schedule 1? Either High Court Family Division or County Court with judge ticketed for family and civil. See further as to which court below.
Other Remedies Matrimonial Proceedings and Property Act 1970.s37 Engaged couples. Get interest if made substantial contribution in money or money s worth to property and no contrary intention evidenced not to share beneficially. Little used but might help plug a gap now and then.
Pre-Commencement of Proceedings Early correspondence Often see extensive correspondence clips with sparring and risk of misstating case or being inconsistent. Results in unhelpful piecemeal exchange of information. Rare to see one letter containing chapter and verse in a comprehensive way.
Pre-Commencement of Proceedings Many cases turn on who said what? Issue of credibility and hence consistency important. Need to try and make sure what said at start is what saying at trial. Prepare properly and especially take care with: Need to provide evidence to Land Registry if entering a Restriction in form RX1 (and careful with FLA proceedings) Pre-action Conduct Practice Direction to CPR court will take compliance into account when giving directions CPR 3.1(4) and when it considers costs CPR 44.2(5)(a)
Pre-Commencement of Proceedings Early careful analysis important to get case off on right track. May even be issues which do not jump out of papers which are crucial to strength of case e.g. Issue of illegality. What if one party has done something a bit dodgy? Tinsley v Milligan [1994]] 1 AC 340 Patel v Mirza [2016] UKSC 42 illegality defence now less arbitrary but also less predictable? Often takes hours to sift through these kind of issues to get case straight.
Pre-Commencement of Proceedings Is there an express declaration of trust? Land Registry office copy entries: Legal title - Form A restriction Transfer between 1974 and 1 April 1998 JP(19) do not usually contain express declaration of trust, but some do. Transfer post 1 April 1998: TR1 (or TP1) do contain express declarations of trust. Registration since 15 October 2012: Form JO and Public Guide 18 Unregistered land try and locate conveyance Land Registry may well have a copy. Trust document may be located elsewhere e.g. ancillary relief order which contained a property adjustment order which was never implemented.
Pre-Commencement of Proceedings Other Key Documents Conveyancing file and IFA attendance notes All bank and credit card statements for relevant periods and in order Mortgage application forms Mortgagee waiver forms Insurance and utility bills Proof of income for whole period of review Tax records Receipts for anything and everything Wills
Pre-Commencement of Proceedings Need for real precision as to what said, where, when and by whom. Hammond v Mitchell [1991] 1 WLR 1127 at 1139, The primary emphasis accorded by the law in cases of this kind to express discussions between the parties ( however imperfectly remembered and however imprecise their terms ) means that the tenderest exchanges of a common law courtship may assume an unforeseen significance many years later when they are brought under equity s microscope and subjected to an analysis under which many thousands of pounds of value may be liable to turn on fine questions as to whether the relevant words were spoken in earnest or in dalliance and with out without representational intent. This requires that the express discussion to which the court s initial inquiries will be addressed should be pleaded in the greatest detail, both as to language and as to circumstance.
Protective Measures: Land Registry If sole owner case need to protect interest by entering a Restriction using RX1 form. Find form of words in Practice Guide 19 on Land Registry website (Form A). Since 1 July 2013 Adjudicator no more: obliged to refer the matter to the Land Registration division of the Property Chamber, First-tier Tribunal unless the matter has been referred to the Courts by one of the parties Avoid Tribunal proceedings. Ask for stay. Don t overlook severance of joint tenancy (But do not implicitly accept joint tenancy in tenancy in common case!!!).
PROCEEDINGS
Proceedings Not too fast or there could be implications in costs policy is litigation should be a last resort (PD Pre-Action Conduct and Protocols at 8) - Pre-action Conduct and Protocols CPR r.3.1 and r.44.2(5) - No specific protocol for cohabitee claims but general requirement for letter of claim, response and disclosure of key documents (PD P-AC&P at 6) - Includes duty to stocktake and narrow issues before claim ( 12) - Mediation: unwillingness to enter into N-CDR processes without justification may have cost consequences (even if you win): - PGF II SA v OMFS Co 1 Ltd [2014] 1 WLR 1386
Proceedings Which Court? - Family Court and County Court no longer share identical jurisdiction. - TOLATA proceedings are not family business as defined by s.32 of MFPA 1984. They are civil claims. - They are (probably) chancery business by SCA 1981 s.61 and Schedule 1 (see also County Court equity jurisdiction CCA 1984 s.23). - CPR Part 64.1(3): trust claims must be brought in the Chancery Division (not Family Division) see Procedural Guide A4 in the Family Court Practice (editors propose issuing in High Court / County Court)
Proceedings Which Court? Parallel TOLATA and Schedule 1 proceedings: - A District Judge of the Central Family Court is also a District Judge of the Family Division of the High Court - Issue CA 91 application in CFC and TOLATA in High Court and transfer both to be heard together in High Court. - Or do the same in a court centre where judges sit in both County and Family Courts.
Proceedings Part 7 or Part 8 claim? CPR 64.3 which deals with trust claims, A claim to which this section applies must be made by issuing a Part 8 form. If substantial dispute of fact Part 7 better issue by issue statements of case. If started by Part 8 and narrative statement tendency to lack precision and miss things e.g. who owns funds in bank accounts, who owns beneficial interest in investment policies and significant chattels?
Jackson Reforms for Family Lawyers Amendment to Overriding Objective at CPR 1.1. not only to deal with cases justly but now also at proportionate cost. Proportionality (CPR 44.3(2)) will generally trump reasonableness on an assessment of standard basis of costs (e.g. K v K (Appeal: Excessive Costs) [2016] EWHC 2002 (Fam)) Costs budgeting for all multi track cases on Part 7 (not Part 8 CPR r.3.12(1), Kershaw v Roberts [2014] EWHC 1037 (Ch)). Less indulgence for relief from sanctions for non-compliance with orders CPR 3.9. Mitchell et al New menu of disclosure options at CPR 31.5(7) Courts can more pro-actively limit issues on which factual evidence may be given: CPR 32.2(3)
Jackson Reforms for Family Lawyers 22 April 2014 amendments, of note:- Equity jurisdiction of County Court up to 350,000 County Court (nominated judges) has unlimited jurisdiction to grant freezing orders (but not search orders) Claim needs to be worth in excess of 100,000 to issue in the High Court. Statement of truth amended on Precedent H Costs budgeting confirmed not to apply to Part 8 And Buffer amendment in force 5 June 2014 CPR 3.8(4) can agree 28 day extension by written agreement if do not put hearing date at risk (overturns effect of MA Lloyds v PPC Limited [2014] EWHC 41)
Jackson Reforms for Family Lawyers Staying out of trouble: comply or apply Sanctions: e.g. late service of statements / unless order If apply to extend time limit after time for compliance past then court will apply CPR 3.9 test in determining application. If apply to extend time prior to breach then 3.9 does not apply Kaneria v Kaneria [2014] EWHC 1165 (Ch)
Jackson Reforms for Family Lawyers What do I do if I am in trouble? New rule 3.9(1) provides:- On an application for relief from any sanction imposed for the failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need:- (a) for litigation to be conducted efficiently and at proportionate cost (b) to enforce compliance with rules, practice directions and orders Much tougher approach to relief cf: earlier 3.9 checklist
Jackson Reforms for Family Lawyers Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1526. Plebgate costs budget served late: Relief will be granted if the non-compliance was trivial or there was good reason for it. Good reasons for noncompliance? A debilitating illness; or An accident ( depending on the circumstances ) may constitute a good reason for not complying with a court order. Series of cases applying this test very rigidly (even harshly).
Jackson Reforms for Family Lawyers Denton & Others v TH White & Others [2014] EWCA Civ 906. 3 fold test:- a. Identify and assess the seriousness or significance of the breach. If not serious relief likely to be granted. b. Why did the default occur? c. All the circumstances of the case, with court seeking to deal justly with the application, with particular emphasis on 3.9(1)(a) and (b) (cf previously: paramount Lawyers have duty to further overriding objective and opportunistic procedural arguments may well be met with costs sanctions.
Case Management Court will make provisional allocation to track upon filing of Defence (almost inevitably to multi-track) Notice of proposed allocation will require parties to agree or propose directions (file and serve completed questionnaires in Form N180) File proposed or agreed directions 7 days prior to CMC (and use model directions PF52) Disclosure reports (see Disclosure below)
Costs Management and Budgeting CPR 3.12-3.18 and PD3E Applies to all multi-track matters on Part 7 Parties must file and serve Precedent H (not Form H), 7 days before CMC Court may make capping order. Beware: failure to comply results in costs recovery being limited to court issue costs (r.3.14) Complex and tricky. Get costs draftsman to complete. Try to agree with other side. Court only revises parts not agreed (r 3.15(2) Beware of regional variation: some centres relaxed others treat as mini detailed assessment. On standard basis assessment of costs may only depart from Costs Management Order if court satisfied there are good reason to do so (r. 3.18).
Disclosure Pre-Jackson: Standard Duty of disclosure: Duty to disclose documents which support and undermine case [CPR 31.6] In TOLATA disputes almost anything can be relevant. Consider settlement pressure brought about by disclosure. Understand dynamics. Open court = potential embarrassment Chase important documents if not volunteered.
Disclosure Post Jackson new menu of disclosure options at CPR 31.5(7). No disclosure Party disclose documents on which it relies and at same time request any specific disclosure from another party Issue by issue disclosure An order that each party disclose any document which it is reasonable to suppose may contain information which enables that party to advance its own case or to damage that of any other, or which leads to an enquiry which has either of those consequences Standard disclosure Any other order which the court considers appropriate. Parties to file and serve disclosure reports 14 days prior to CMC. Meet in person or by phone 7 days before to try and agree disclosure.
Experts CPR 35.1, still reasonably required test cf FPR 25 necessary. Likely Experts: Surveyors/valuers Market valuation (current, not time of separation!); Increase in value occasioned by works; and Rental value (re equitable accounting) Quantity surveyors? the bag of receipts rarely paints a clear picture of what works cost or the increase in value
Witness Statements You need to prove your case: the burden and standard of proof. It needs to be detailed and complete (judge unlikely to allow new evidence to be lead in chief): CPR 32.5(2): witness statement shall stand as his evidence in chief unless the court orders otherwise 32.5(3): with permission may (a) amplify and (b) give evidence on new matters which have arisen since statement served. 32.5(4): permission only where good reason not to confine evidence to contents of witness statement.
Bundles PD39A & Chancery Guide (Vol 2 White Book) & note Seagrove v Sullivan [2014] EWHC 4110 (Fam) PD 1.10.14 before Chancery Masters: No bundle, no hearing http://www.judiciary.gov.uk/publications/practicenote-chancery-chambers-changes-1st-october-2014/
FDR? Do not officially exist in CPR - instead CPR often stay is made to give parties chance to go off and mediate (or seek neutral evaluation). Briggs report: FDRs in the Chancery Division. Now implemented in the new Chancery Guide 2016, but parties must agree. County Court District Judges more receptive to idea? Usefulness: More difficult in sole name cases as only after evidence can it be determined whether there is an interest at all. Probably more useful in joint name cases where you are quantifying beneficial shares as less is going to turn on credibility as much of the evidence will be in bank statements. Settlement meetings / mediation benefit of meeting rather than exchanging blows by letter.
Trial: Open Court and Public Private cf public trial: see W v M (TOLATA Proceedings: Anonymity) [2012] EWHC 1679 (Fam), [2013] 1 FLR 1513 Arbitration is ideal for TOLATA disputes: Quicker. Assured expert tribunal. No robes (feels more like a family court) No nasty Mitchell / Denton traps. Civil order, so easily enforceable under Arbitration Act 1996.
QUESTIONS? abojarski@family.co.uk Twitter: @AndrzejBojarski
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