Purba v Purba

In ancillary-relief proceedings, the court must identify the parties’ real financial resources. Moving cash into an account held by relatives does not remove it from the transferor’s beneficial ownership where the recipient is a bare trustee. The assessment of a lump sum and enforcement of arrears of periodical payments are closely interconnected. The same asset or expenditure must not be counted twice. Arrears older than 12 months may be enforced where the payer’s disregard of the order is flagrant. Conduct may form part of the totality of the section 25 assessment, although it should not be treated as a separate basis for increasing the award. A joint-lives periodical payments order is appropriate where dependency is established, subject to later variation if circumstances change.

The wife appealed against the financial orders made after the dissolution of the marriage. The husband had transferred substantial sums to relatives, failed to comply with interim periodical payments, and gave misleading evidence about his resources. The county court set aside the transfers, ordered joint-lives periodical payments, enforced arrears exceeding 12 months, awarded the wife a lump sum of £82,500 and ordered costs against the husband.

The husband challenged the treatment of his conduct, the valuation of the parties’ resources, the enforcement of arrears, the periodical payments and the lump sum. The central issue was whether the wife’s depleted savings had been counted both in assessing her resources and in enforcing the arrears.

The appeal was allowed to the limited extent of reducing the lump sum from £82,500 to £65,000. The remainder of the county court’s judgment and order was upheld.

1. Transfers to relatives. The cash transfers did not require formal orders under section 37. The court had been entitled to treat the money as remaining the husband’s because the recipient account holders were bare trustees. The real question was whose money it was.
2. Conduct and section 25. The husband’s submission, supported by the line of authority including Young v Young and Tavoulareas v Tavoulareas, was technically well-founded insofar as conduct should not be treated as an independent basis for quantifying the lump sum. Nevertheless, the judge had to apply the totality of the section 25 criteria, within which conduct could be considered alongside the wife’s needs and the other circumstances.
3. Double counting. The wife had used approximately £18,500 of savings because the husband failed to pay the interim order. If the arrears were enforced, those savings would effectively be restored. Her assets should therefore have been treated as at least £23,622, rather than £5,122, when the lump sum was assessed. The original award consequently involved double counting.
4. Arrears and periodical payments. The husband’s flagrant disregard of the orders justified enforcement of arrears extending beyond the conventional 12-month limit. The joint-lives periodical payments order was also justified by the wife’s established dependency and could be varied if circumstances changed.

There was no order as to costs. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): allowed the appeal to the limited extent of reducing the lump sum from £82,500 to £65,000; otherwise upheld the county court’s orders.
• Horsham County Court: ordered, among other matters, enforcement of arrears, joint-lives periodical payments, a lump sum of £82,500 and costs against the husband.