Mann v Mann

A mediation agreement which conditionally stays enforcement of an existing financial order does not replace that order where the specified condition is breached. The original order then governs the debtor’s liability.

Interest on a judgment debt is subject to the six-year limit in section 24(2) of the Limitation Act 1980, including in matrimonial enforcement proceedings. The court may exercise its discretion to remit or limit interest and arrears to achieve a fair result.

Committal under section 5 of the Debtors Act 1869 requires proof to the criminal standard that the debtor had the means to pay and refused or neglected to do so. The burden remains throughout on the applicant.

The applicant sought enforcement of financial orders made in 2005 following the parties’ divorce. Those orders included a capitalised maintenance award, arrears, costs and child maintenance.

The parties subsequently entered mediation agreements under which the respondent made payments and the original order was temporarily stayed. He failed to make the required first payment under the first agreement, causing the original order to revive. Later payments and a further mediation agreement did not discharge or replace the underlying liability.

The court had to determine the principal sum outstanding, the recoverability and rate of interest, and whether the respondent should be committed under section 5 of the Debtors Act 1869.

1. Principal liability. The first mediation agreement operated as a conditional stay of the 2005 order. On failure to pay £700,000 by the agreed date, the stay was lifted and the original order revived. Subsequent payments did not expunge the debt arising under that order.
2. The court adopted an agreed set-off methodology because there was no reliable evidential basis for allocating payments between capital, maintenance and rent. It allowed enforcement of arrears of child maintenance older than twelve months and included rent payable under the mediation agreement. The principal balance was declared to be £624,886, subject to final accounting.
3. Interest. Following Lowsley v Forbes, section 24(2) of the Limitation Act 1980 limited recovery of judgment-debt interest to six years from the date on which it became due. Section 32 of the Matrimonial Causes Act 1973 concerned stale arrears of maintenance and did not displace that separate limitation rule.
4. The applicable judgment rate was 8 per cent. In the circumstances, fairness required simple rather than compound interest. Interest was not recoverable on the maintenance arrears or the rent, although the principal arrears remained enforceable.
5. Committal. Applying Prest v Prest [2015] EWCA Civ 714, the wife bore the burden throughout of proving to the criminal standard both the respondent’s ability to pay at some point after the order and his refusal or neglect to pay. The evidence did not establish that he had or had had the means to pay the judgment debt. The application for committal, suspended or otherwise, was therefore refused.
6. The accountants were directed to recalculate the recoverable interest and a final order was to be drawn recording the sums due.

The judgment describes earlier proceedings before the High Court and Court of Appeal, including orders made by Charles J and Wall LJ and later decisions concerning enforcement. Those decisions formed part of the same litigation and are not appellate decisions for the present case.