Jensen v Jensen and Ors [2018] JRC 126 (13 July 2018)

in the name of the husband) and the property in France, which is apparently owned by a French company. There is also apparently a French bank account. This Court has no more up to date information as to the value of the IG portfolios than is mentioned at paragraph 12 above. As to the amounts standing to the credit of the Barclays accounts, the Court was told that there was only some £12,000 in total at the time of the October hearing. However, it appears that income has subsequently been transferred from the IG accounts in London to the Barclays accounts. The Court has not been shown any bank statements but it was informed by counsel at the hearing in April that there was approximately 133,000 in the account, although counsel were not clear whether this was pounds sterling or US dollars. It must presumably be pounds sterling because that is the amount which the husband sought to transfer as set out at para 15 above. 26. The transcript of the hearing before Judge Stacener indicates that on more than one occasion, Mr Kaminsky, on behalf of the husband, said that the husband was unable to pay amounts due (e.g. the fees and expenses of the court appointed referee Mr Sardam which, quite naturally, were of considerable concern to Judge Stacener) because his assets were frozen in Jersey. 27. That was an incorrect assertion. It was open to the husband at any stage to provide monies out of the Barclays accounts for payment of amounts due by order of the Superior Court as follows:- (i) The freezing injunction does not prevent the husband or the Company from transferring any sums from the IG portfolios in London to the Barclays accounts in Jersey. (ii) The freezing injunction contains a standard provision that it may be varied by written agreement between the parties. Accordingly it was open to the husband at any stage to approach Advocate Renouf on behalf of the wife and request agreement to pay a sum out of the Barclays accounts. If that sum was required in order to comply with an order of the Superior Court, it is hard to imagine that Advocate Renouf would have declined any such request. As far as this Court is aware, no such request has ever been made by the husband. (iii) In the unlikely event of Advocate Renouf, on behalf of the wife, refusing to consent to such a payment, it would be open to the husband to apply to this Court. This Court will invariably sit at short notice to consider requests for payment out of frozen accounts. If the payment was required in order to comply with an order of the Superior Court (e.g. provision of the fees and expenses of the court appointed referee or the provision of security of US$300,000 referred to below) this Court would undoubtedly vary the injunction to permit such a payment, provided it was satisfied that arrangements were in place to ensure that the funds released were in fact applied for that purpose. It would agree to vary the injunction because, as stated above, the sole purpose of the injunction is to ensure that any order made in the Superior Court is not set at nought because the monies have disappeared from Jersey to some other jurisdiction. 28. I repeat therefore that, should funds need to be extracted from the Barclays accounts in order to pay sums due under any order of the Superior Court, there would be no difficulty, one way or another, in the husband obtaining the release of such funds for such purpose; and that has been the position since the injunction was imposed in September 2016. The current application 29. I turn therefore to consider the summons before me. As matters developed during the hearing, it seeks the following two main orders:- (i) An order for costs in relation to the original obtaining of the injunction. The summons appeared originally also to seek an order for costs for the entire proceedings but Advocate Renouf did not pursue that aspect. (ii) An order for costs incurred in connection with the variation of the injunction in June 2017. 30. I shall consider each of these in turn. (i) Costs of application for the injunction 31. Advocate Ingram submitted forcefully that, in the light of the adverse findings against the wife by Judge Warriner in the Statement of Decision, the injunction should never have been granted in the first place. He pointed to the following examples:- (i) The wife's assertion that $1.35m should be restrained was clearly grossly excessive because the Superior Court had upheld the Agreement (which entitled her to much less) and also held that she had wrongly valued the horses at $1m (the Superior Court preferring the husband's valuation of $60,000), which had inflated the value of the family assets. (ii) The Superior Court had found that she was aware of the fact that the Barclays accounts contained some $1.45m at the time the Agreement was entered into on 26 th May, 2015. As the ten suspicious payments out of the joint account all predated 26 th May, the inference must be that she was aware of them and accordingly she had failed in her duty of full and frank disclosure by not making this clear. (iii) She had been found by the Superior Court to have lied in alleging the addition of wording in the Agreement by the husband, alleging forgery by him, and alleging that the procedure before the Notary Public had prevented her from reading the relevant document. All of these were material matters which she had relied upon for her assertion that there was a risk of dissipation by the husband but which had now been shown to be false. (iv) The wife had clearly therefore been guilty of a failure to provide full and frank disclosure in support of the application for an injunction. 32. Advocate Renouf, on the other hand, referred to the November judgment and the many reasons which the Court had given in that judgment for concluding that there was indeed a risk of dissipation. The Court had refused the husband's application to discharge the injunction and it was therefore clearly reasonable for the wife to have applied for it in the first place. 33. He accepted that the Superior Court had made a number of findings against the wife since then but submitted that, even allowing for the findings of the Superior Court, there were still sums due by the husband which had not been paid such that it was reasonable and necessary for the wife to have applied for the injunction. Thus:- (i) The Superior Court had made an order on 21 st April, 2016, for spousal support of $4,658 per month. Only five of these had been paid and, according to the attorney for the wife, some $68,160 was outstanding under this order as at November 2017 together with the monthly amounts which had accrued since then. (ii) The husband owed $20,000 in attorney fees in accordance with the court order of 21 st April 2016. (iii) The husband owed his share (at least $11,497) of the fees and expenses due to the court appointed referee. (iv) As set out in the November judgment, the husband had failed to comply with an order of the Superior Court dated 16 th June, 2016 (reaffirmed on 1 st September, 2016) that he deposit $300,000 into a special security account. (v) Following the decision of the Superior Court in relation to the Agreement, the wife is entitled to one half of the funds on deposit at Barclays in Jersey at the time of the Agreement after deducting $1.2m of pre-marriage assets. Although this sum had not yet been calculated and there were some deductions to be made, it was likely that some monies would still be due. Furthermore, the husband was obliged in the Agreement to pay $5,000 per month for 10 years. Virtually none of these had been paid. The arrears were therefore due. This would in effect take the place of the monthly spousal support of $4,658 referred to above. 34. I raised with counsel during the course of the hearing whether it was premature to decide the question of costs in relation to the obtaining of the injunction, given the fact that the wife is appealing the findings against her in relation to the validity of the Agreement and that this might be relevant. However Advocate Ingram objected to this course. He had spent time preparing a defence to the summons and the matter of costs should not be adjourned. 35. Despite the submission of both counsel, I was at one stage minded to adjourn the wife's application in respect of the costs of obtaining the injunction. This is because the question of whether the costs of obtaining a freezing injunction should be awarded to a plaintiff will often turn on whether, at the end of the day, it was not only reasonable for the plaintiff to seek the injunction but it was also necessary to do so, in the sense that preservation of the assets was required in order to meet any sums ultimately awarded or agreed upon. 36. However, on balance I have concluded that I should award the wife her costs of obtaining the injunction at this stage on the basis that I think it right to do so even given the existence of the adverse findings against the wife by Judge Warriner. If these findings are overturned on appeal, it will merely strengthen the case for my decision. I would summarise my reasons for so concluding as follows:- (i) I accept that, as submitted by Advocate Ingram, a number of the matters relied upon the wife in obtaining the injunction have now been decided against her (albeit subject to any appeal on her part against Judge Warriner's Statement of Decision). Thus, for example, the Agreement has been upheld, her allegation of forgery and of secretly adding words to the Agreement on the part of the husband have been rejected, as has her suggestion that she was misled in front of the notary public. Furthermore, it has been held that she was aware of the transfers of money to Jersey. (ii) However, it is not disputed that the husband has failed to pay sums which he has been ordered to pay by the Superior Court. Thus he has not paid the $300,000 pursuant to the order of 16 th June, 2016, (reaffirmed on 1 st September, 2016), he has not paid the spousal support of $4,658 per month ordered on 21st April 2016 and he has not paid $20,000 in attorney fees ordered on 21 st April together with his share of the fees and expenses of the court appointed referee. When maintaining the injunction in the November judgment, the Court relied upon these matters as well as upon those where the wife's evidence has subsequently been disbelieved. (iii) The husband has not paid the sums which, even on his case, are due under the Agreement e.g. $5,000 per month and any balance from the sum of $125,000 after deductions. (iv) The husband, through his Californian attorney, has asserted that he is unable to pay these sums unless he has recourse to the Barclays account (and the IG accounts). This suggests he is not willing to use other assets to pay what is due or is unable to do so. Furthermore, he has not applied for the release of any sums in order to meet his obligations under the orders of the Superior Court even though, as indicated above, this is something he could have done at any stage. Thus, events have shown that access to the Barclays accounts is necessary to secure payment of any sums due by the husband. (v) The husband has a record of failing to comply with orders for disclosure about his assets. He failed to comply with the disclosure order attached to the injunction issued by this Court originally and even when he did partially do so, this Court described his affidavit of disclosure as 'sparse' . This Court also pointed out at paragraph 31(viii) of the November judgment that the husband and the Company were still in breach of the disclosure requirements contained in the injunction. The husband also admitted at the time of the October hearing that he had been slow to comply with the discovery requirements of the Superior Court. 37. Putting these matters together, I am satisfied that, even discounting the matters upon which the Superior Court has subsequently decided against the wife, there were reasonable grounds for the wife to believe that, unless she injuncted the assets in Jersey, the husband would not pay the sums which he had been ordered to pay by the Superior Court and the injunction was necessary in order to secure payment of those sums. Subsequent events have shown that belief to be justified in that the husband has still not paid the sums due, he has not applied for release of the funds to pay them, nor has he paid the sums due from alternative sources. 38. In the circumstances I consider it right that the wife should be awarded the costs of and incidental to the obtaining of the injunction until close of business on 28 th September, 2016, (at which point the costs order of 29 th September, 2016, takes effect). Such costs are awarded on the standard basis jointly and severally against the husband and the Company. (ii) Costs of the amendment to the Order of Justice 39. I was taken through the various email exchanges between the parties at the time of the amendment. What follows constitutes a summary of the more important exchanges but I have not included everything. 40. As mentioned at paragraphs 15 and 16 above, Advocate Renouf received a letter on 6 th June, 2017 from Advocate Ingram informing him that the husband had instructed Barclays to pay out a total of £133,000. At 10:20 on 6 th June, Advocate Renouf emailed the advocate for Barclays with a copy to Advocate Ingram asking, inter alia , for confirmation that the transfers requested by the husband would not be made. Advocate Ingram emailed Advocate Renouf and the advocate to Barclays at 10:34 stating that the transfers were permitted under the terms of the Order of Justice and the Act of th October, 2016, ("the October Act"). There appears to have been a telephone discussion between Advocate Renouf and Barclays because at 12:59, Advocate Renouf emailed Barclays to the effect that the October Act laid down certain conditions which the husband had to satisfy before he could receive any funds and these had not been complied with. Advocate Renouf sent Advocate Ingram a letter of the same date pointing out that the three conditions set out in the October Act were that there must be an affidavit from the husband justifying the need for the £25,000, there must be provision of the undertakings as set out in the Act and there must be a further affidavit exhibiting the information provided by IG Group in London and that none of these conditions had been complied with. 41. A telephone conversation took place on 8 th June between Advocate Renouf and Advocate Ingram with Advocate Renouf's assistant also participating. She subsequently made a file note although its accuracy is not fully accepted by Advocate Ingram. The time of the conversation is not set out in the file note but it clearly follows emails dated 12:36 and 14:15 that day. In that conversation, Advocate Ingram re-iterated that his client had fulfilled the conditions. Advocate Renouf disputed this and said that the wife needed Advocate Ingram to confirm to Barclays that no funds would be released until the parties had reached an agreement on interpretation of the October Act and whether the conditions set out in that Act had been complied with. According to the note, Advocate Ingram replied that the best he could offer was to suggest that Advocate Renouf should ask Barclays to respond to the husband's correspondence by saying they would not action his payment pending agreement of the parties or further order of the Court, but Advocate Ingram said that this was not an accurate reflection of what he had said. We are not in a position to rule on that difference of recollection at present. 42. On 9 th June, Advocate Renouf wrote to Barclays re-iterating his contention that the conditions set out in the October Act had not been complied with and that the bank should not honour the instructions from the husband. He further indicated that the wife would be applying to the Royal Court to vary the injunction so as to remove the £3,000 per week living expenses/legal fees exception. He wrote to Advocate Ingram enclosing the file note of the telephone conversation on 8 th June. He re-iterated that the conditions had not been fulfilled; the undertakings had not been given and no further affidavits had been filed. He said that in the absence of any suspension of the request for payment by the husband, the wife would have no alternative but to apply for an immediate amendment to the Order of Justice to make it clear that no sums could be paid out. 43. At 14:19 that day, Barclays responded by email in which they referred to the fact that the order permitted £3,000 per week going forwards and said that where the parties had agreed a valid payment instruction could be made by the husband for £3,000 a week, Barclays would not be in a position to refuse such an instruction in the absence of any amending order. At 14:24, Advocate Renouf emailed Advocate Ingram to say that, in the light of no-one confirming that the payment request was being suspended, he was pursuing an immediate application to the Court to amend the injunction. 44. Advocate Ingram replied by email at 14:57 explaining that he was in London and repeating that the husband would not be applying to transfer money away from Barclays without notice. Advocate Renouf replied at 15:02 to the effect that, as the bank had indicated they would pay out if requested by the husband to do so, Advocate Ingram's assurance did not help. He needed a positive instruction to Barclays from the husband suspending any requests and stating that the husband would not make any request for, say, a week at least. Advocate Ingram replied at 15:20 in essence repeating what he had said earlier. Advocate Renouf replied at 15:26 enclosing Barclays' email of 14:19 saying that all that was needed was for Advocate Ingram to take instructions about a temporary suspension. 45. At 15:45, Advocate Ingram emailed Advocate Renouf (with a copy to Barclays) to say that the parties would have to agree to disagree as to whether the payments were permitted. However, given the impasse, and given that it was thought the parties were attending a settlement meeting the following Monday in the United States, he confirmed that no transfer would be made that day although he emphasised that he given this instruction without instructions from his client. Following a query from Advocate Renouf he confirmed at 15:58 that it was a direction to Barclays to temporarily suspend any transfer but said that he would need to take instructions over any continued moratorium until Wednesday, as had been requested by Advocate Renouf. 46. On 13 th June at 10:50 Advocate Ingram emailed Advocate Renouf to enclose a copy of a letter dated 5 th December, 2016, which had filed the husband's third affidavit (i.e. the affidavit justifying the requests for £25,000). The email also indicated he expected his client to renew his request to Barclays for the transfer of monies once the US proceedings had been finalised. 47. Advocate Renouf responded immediately by letter saying that he had never received the third affidavit referred to and that, having now seen it, he did not consider it complied with the requirements of the Court as to detail etc. He further re-iterated that the undertakings had not in fact been given even though the advocates had agreed the terms between them. He asked for confirmation by return that he would be given at least 24 hours prior notice of any intention by the husband to access the monies in the Barclays account. 48. The next day, 14 th June, Advocate Renouf emailed Advocate Ingram at 08:28 referring back to his letter of the previous day and stating that, in the absence of the requested confirmation and given the apparent willingness of Barclays to execute the transfers, he was applying for an amendment to the Order of Justice. He enclosed a copy of the amendments being sought. 49. Advocate Ingram replied at 08:36 to the fact that he did not have any instructions at present from the husband but stating that the application was premature and unnecessary in view of the assurances which he had given. 50. Advocate Renouf replied at 09:50 to the fact that his client remained exposed. He pointed out that the moratorium agreed on Friday (9 th June) had effectively expired on Monday and that no new assurance had been given since then. 51. As already mentioned, the amended Order of Justice is dated 15 th June (although it appears from an email dated th June that it may actually have been signed that day, although nothing turns on this). 52. In my judgment, it was reasonable for Advocate Renouf to conclude that the conditions referred to in the October Act had not been complied with. Although it appears that Advocate Ingram had sent the third affidavit to the Court, a copy had not been sent to Advocate Renouf who was therefore unaware of this. Furthermore, there is no evidence before me that the undertakings have actually been given by the husband (as opposed to the terms being agreed between advocates) or that the additional affidavit exhibiting the information provided by IG Group in London has been filed or produced to Advocate Renouf. 53. Advocate Ingram submits that there was no need for the variation of the injunction to be obtained because of the various assurances which he had given. I do not underestimate the difficulties which faced Advocate Ingram. He was out of the Island (sometimes on a train) when these exchanges were taking place and he had difficulty in obtaining instructions from the husband, not least because the hearing concerning the Agreement was taking place before the Superior Court. However, the fact remains that the only clear instruction to Barclays to suspend the payment lasted for only one day on th June. Advocate Renouf was therefore reasonably entitled to conclude that his client was exposed from the following Monday (12 th June) onwards, given the apparent willingness of Barclays to act upon the husband's instructions. Advocate Ingram submitted that, when properly construed, the email from Barclays at 14:19 on 9 th June was only concerned with £3,000 per week going forward. It was not indicating that Barclays would necessarily comply with the instruction for the £25,000 and the arrears of £108,000. I agree that it is possible to construe the email in this way but I think it was also reasonable to construe it as applying to cover the arrears as well. Certainly, it would have been a bold advocate who would have relied upon such wording to be confident that Barclays would not act upon the instructions to pay away £133,000 which the husband had given. 54. Putting these matters together, I consider that the husband was given an opportunity by Advocate Renouf to provide a clear suspension of his instructions and that his failure to do so made it inevitable that Advocate Renouf would apply for a variation of the injunction. I consider therefore that the costs of applying for that variation should be paid by the husband and I order him and the Company jointly and severally to pay the costs of and in connection with the variation application on the standard basis. Other matters 55. The costs awarded against the husband in the costs judgment dated 6 th December 2016 have not yet been submitted for taxation by the wife's advocates. Advocate Renouf explained that he had not done so because he understood there only to be some £12,000 in the Barclays accounts. Now that he has been informed that there is £133,000 in the accounts, he wishes to proceed with taxation. However, he is out of time pursuant to RCR12/10(1)(a) which provides that the receiving party must begin proceedings for taxation of that party's costs within two months of the relevant order in the case of an interlocutory matter. There is power to extend the period of two months pursuant to RCR1/5. Whilst in my judgment such an extension should, on the facts of this case, be granted, it is not a matter which is formally before me and it is therefore a matter for the Greffier to consider if and when Advocate Renouf seeks leave to extend the time for proceeding with taxation. The Greffier has the necessary power to extend time pursuant to Rule 1/5. 56. Secondly, the summons seeks an order that any costs as are found to be due should be paid in the first instance from the Barclays accounts. I agree that this is the appropriate way of proceeding and I so order. 57. Thirdly, Advocate Renouf raised the issue of the costs of the Second Party Cited. When obtaining the injunction contained in the Order of Justice, the wife gave the usual undertaking to pay the reasonable costs of the Parties Cited incurred as a result of the order, including the costs of ascertaining whether the Parties Cited held any of the Defendant's assets. I have not been addressed on the quantum of the costs claimed by the Second Party Cited but understand that the claimed amount has been outstanding for some time. The reasonable costs of the Second Party Cited are recoverable pursuant to the order I have made in relation to the costs of obtaining the injunction and accordingly I direct that any sum properly due by the wife to the Second Party Cited pursuant to her undertaking shall be paid immediately out of the funds in the Barclays accounts. As and when any costs of Barclays are ascertained, they may be paid in similar manner. Authorities Jensen v Jensen [2016] JRC 212 . 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