Frank Eric Hersman v Alexandra Caroline De Verchere

The court may work out and enforce an earlier financial remedy order while it remains executory. It may award compensation for losses caused by deliberate non-compliance, including profits wrongfully retained and mortgage surcharges attributable to the breach. Any award must avoid double recovery and must be supported by evidence rather than speculation. A party’s deliberate failure to participate may justify adverse inferences, but only inferences properly drawn from the available material, the failure to engage and the inherent probabilities. The court may also grant an injunction to protect rights established by the earlier order.

The parties applied to enforce and account for sums due under a final financial remedy order made by Mostyn J on 12 June 2019. That order declared the applicant beneficial owner of two French properties, required their transfer, and required payment of a lump sum to the respondent. The respondent retained possession of Chalet Pearl, continued to let it, and failed to account for the rental income or comply with later orders for vacant possession and disclosure.

The applicant sought compensation, mortgage-related sums, an injunction and costs. The respondent’s cross-application sought enforcement of the unpaid lump sum and other relief, including an expert assessment of Capital Gains Tax. The central issues were the court’s jurisdiction to work out the earlier order, the losses properly attributable to the breaches, and the relief available.

1. Jurisdiction and adverse inferences. The court had jurisdiction to work out and enforce the 2019 financial remedy order while it remained executory. It also had jurisdiction, in principle, to order an indemnity as part of the equitable jurisdiction of the High Court, although an indemnity was not appropriate on the facts. The respondent’s deliberate absence permitted adverse inferences, but only where properly drawn from the available evidence, the nature and extent of the failure to engage, judicial experience and the inherent probabilities. The court was required to assess the applicant’s case fairly and could not speculate.
2. Compensation and account. The applicant was entitled to compensation for losses caused by the respondent’s breaches of the February 2023 order. The court accepted rental profits for the relevant seasons, using the respondent’s own disclosed figures where appropriate and making a modest estimate for the later period. Mortgage instalments could not be recovered twice where the applicant received the net profits and was responsible for paying the mortgage. Mortgage late-payment surcharges incurred after the respondent had been given a reasonable further period to comply were recoverable, subject to the applicant’s undertaking to use the sum only to pay the lender and repay it if the surcharges were not payable.
3. Claims outside the proper scope. A speculative claim for future lost rent was refused. A late claim concerning Villa Pearl was refused because it was introduced shortly before the hearing and would have required evidence the respondent had no fair opportunity to address. Claims for legal fees, website fees and various alleged offsets were rejected. The court would not determine matters governed by French law.
4. Orders. The respondent owed the applicant approximately €3,582,221, rounded to £3,062,000, less the £709,707 lump sum due to her. The lump sum was declared satisfied in full and her cross-application was dismissed. An injunction restraining denigration and representations inconsistent with the applicant’s ownership was granted. The applicant’s earlier injunction concerning the London property was discharged. The respondent was ordered to pay costs on the indemnity basis, with £80,000 paid on account.

The judgment records earlier enforcement proceedings in the same litigation. Permission to appeal from the February 2023 order was refused by Moylan LJ on 7 July 2023 because there was no real prospect of success. The present judgment determined the outstanding enforcement, accounting, injunction and costs applications at first instance.