Financial Remedies: Nicholas v Nicholas no longer good law

Christopher Sharp QCThis is a guest blog post by Christopher Sharp QC, barrister and Head of Family Practice Group at St John’s Chambers. Christopher is a leading silk on the Western Circuit, known well for his expertise in high value ancillary relief cases.

 

PETRODEL RESOURCES LTD; PETRODEL UPSREAM LTD; VERMONT PETROLEUM LTD – v -  YASMIN AISHATU MOHAMMED PREST; MICHAEL JENSEABLA PREST; ELYSIUM DIEM LTD  [2012] EWCA Civ 1395

 

In a very significant decision by a majority of the Court of Appeal dealing with the ability of the Court in financial remedy cases to make orders directly against the assets of a company that is the alter ego of one spouse to satisfy the entitlement of the other, Nicholas v Nicholas (1984) FLR 285 has not been followed and all the decisions following it have been held to be wrong. As a consequence, Munby J’s decision in Mubarak v Mubarak (No.1) [2001] 1 F.L.R. 673 has been overruled and W v H (Family Division: Without Notice Orders) [2001] 1 All E.R. 300 is overruled in part. To the extent that Mostyn J followed Nicholas in Kremen (formerly Agrest) v Agrest [2010] EWHC 3091 (Fam), [2011] 2 F.L.R. 490 and in Hope v Krejci [2012] EWHC 1780 (Fam) and treated company law principles as inapplicable in family cases, the court disagreed, so Kremen and Hope are doubted.

Accordingly a property adjustment order under s.24(1(a) of the MCA 1973 cannot be made against the property of a company unless there are legitimate grounds for piercing the company veil, including a finding to the necessary extent of impropriety (and not simply the obfuscating and dissembling conduct in which the husband had indulged in the instant case). The principles set out in Salomon v Salomon & Co Ltd [1897] A.C. 22 were stated to apply to all jurisdictions and the principles of legal personality had to be respected.

Thorpe LJ, in a vigorous dissenting judgment, pointed out that the principles in Nicholas had stood and been followed by the most specialist judges of the Division for three decades. It had been, he said, a relatively early pronouncement of the power necessary to enable the judge in financial provision cases to do justice. He went on: Continue Reading…

Book Review: Financial Remedies Under The Family Procedure Rules 2010 & The @eGlance Guide

Zoe SaundersThis review is a guest post written by  Zoe Saunders, barrister at St John’s Chambers, Bristol. Zoe has particular expertise in cohabitation disputes, including applications for financial provision for children and trusts of land issues, and financial remedies on divorce. You can also find Zoe on twitter (@ZASaunders).

Financial Remedies Under the Family Procedure Rules 2010 by Singer, Mostyn, Marks & Smith 

Financial RemediesThis is a really useful book for anyone who does what we must now call ‘financial remedies’ formerly known as ancillary relief. The commentary on each chapter is likely to continue to be useful long after one has gained familiarity with the overall structure of the news rules and for those who are not yet familiar with the new FPR they are a really helpful guide to the most important changes.

The book is clearly laid out with commentary on the relevant sections of the rules preceding the rules themselves. It is a neat volume which is much more portable than the red book. It is clearly aimed at practitioners but does manage to balance adequate explanation without being excessively detailed.

Purchase of the book (£95 from Class Legal) also gives you access to the www.familyprocedure.com website which contains the full text and updates. One minor quibble is that it would be useful to see exactly what has been updated without re-reading the whole section, but other than that it is a useful resource and means that you can access the text without the physical book, which can be handy for when other members of chambers borrow it without asking! In my view although expensive I think this book is a worthwhile purchase.

@eGlance

We also got access to the @eGlance site for which you can get a discounted 12month subscription on purchase of the book (£30 off the usual £85 cost).

@eGlance suffers from two major flaws – the first of which is that it is not Apple compatible, which in the brave new world of ipads seems to me to be a really fundamental error and one which I think the authors / publishers really should get a grip on as soon as possible. The second flaw it that the user-interface looks like something which was designed 20 years ago and hasn’t been touched since.

In my view these two errors run the risk of putting off potential users, which would be a real shame, because once you get past the initial impression and start to actually use the software it is really pretty impressive. It has pretty much everything you could really ask for in a programme designed to help with anything from big money downwards. You can print off information and calculations and I suspect that it could become a really invaluable tool, if you can repress the urge to snigger every time you load it!

Both the Financial Remedies book and the @eGlance software can be purchased through Class Legal.

The Second Wife Impact

snake

the aptly named rat snake (thanks to Cotinis on flickr)

Andrew Commins, a colleague in chambers, has written an interesting article for Family Law Week on the impact of remarriage on variation applications by the ex spouse. I particularly like the mental image described in the extract from Delaney v Delaney [1991] 2 FLR 457, CA, that the court will deprecate “any notion that a former husband and extant father may slough off the tight skin of familial responsibility and…slither into and lose himself in the greener grass on the other side...” (Delaney, at page 461E).

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Fork tongued husbands be warned…