Mubarak v Mubarik & Ors

A court may make a further property adjustment order to enforce an earlier financial order where the earlier order did not finally dispose of the relevant settlement or claim. The question is determined by construing the original order objectively, in its contemporary context. A clean-break provision does not necessarily constitute a once-and-for-all capital order.

Where a spouse has persistently failed to pay a lump sum, and a trust is in substance that spouse’s alter ego, the court may exceptionally vary a post-nuptial settlement so that trustees pay sums already due, provided there is no double recovery and the order is limited to the trust assets.

The wife sought further relief after the husband had failed for seven years to pay the principal lump sum, maintenance arrears and costs ordered in December 1999. She applied to set aside the transfer of shares into the IMK Family Trust, set aside her later exclusion as a beneficiary, vary the trust as a post-nuptial settlement, and correct the 1999 order under the slip rule.

The central jurisdictional issue was whether the 1999 order had finally disposed of the wife’s claim to vary the settlement, or had left that power available until payment of the lump sum.

1. Applications 1 and 2. The transfer of the husband’s shares into the trust was a reviewable disposition under section 37 of the Matrimonial Causes Act 1973, but the wife did not prove that, when the transfer was made, defeating her financial claim formed a substantial part of the husband’s actual intention. The application under section 423 of the Insolvency Act 1986 added nothing on these facts. Both applications were dismissed.
2. The instrument excluding the wife from the discretionary trust was not a disposition capable of being set aside under section 37(2)(b) or (c). The court considered that an earlier application might have been available to restrain the exercise of the exclusion power before completion, but the completed exclusion could not be reversed under those paragraphs.
3. Applications 3 and 4. The 1999 order had to be construed objectively by reference to the order and admissible contemporary material. The court had neither exercised nor finally declined to exercise the power to vary the post-nuptial settlement. The order was not intended to be a once-and-for-all capital order before payment of the lump sum. The passage in the earlier judgment preserving the wife’s claims until payment was not displaced by the later enforcement provisions.
4. The court therefore corrected an accidental omission under RSC order 20, rule 11 by adding express words preserving the remaining property-adjustment claims, including variation of the trust, until payment in full of the lump sum.
5. In exercising discretion under section 24(1)(c) of the Matrimonial Causes Act 1973, the court treated the case as wholly exceptional. The husband’s persistent non-payment, the effect on the wife and children, the earlier concession that the trust assets would be treated as his, and the trust’s lack of genuine separation from the husband justified variation despite the Jersey situs and the prospect of further litigation.
6. The variation was directed to payment of the unpaid lump sum, arrears of periodical payments and assessed costs. Payments by the trustees had to reduce the husband’s liability pound for pound, and the trustees could not be required to pay more than the value of the trust assets.

The judgment describes the December 1999 ancillary-relief order and subsequent enforcement proceedings. A later committal order was set aside by the Court of Appeal for procedural errors. This judgment was a first-instance determination of the wife’s further applications.