Kremen v Agrest

This is an appeal from an order of Holman J resulting from the grant of permission by Black LJ on 13 April 2001. Having reviewed the story she concluded that the four grounds of appeal advanced by the appellant demonstrated a real prospect of success.

The appellant is Ms Kremen, formerly Mrs Agrest, and the respondent is Mr Agrest, her erstwhile husband and the father of her three children. It is enough to say that there have been extremely acrimonious financial proceedings between the parties. The applicant's claim is brought under Part III rather than under the Matrimonial Causes Act and she has struggled to achieve financial independence for herself as well as money for the considerable costs of maintaining and educating privately the two younger children.

Mr Mostyn QC, as he was, endeavoured to inject performance and reality without a great deal of success and, now that he is the judge of the Division, has continued to deal with the case. The orders that he made in April 2010 were orders both under Part III and under Schedule 1 of the Children Act and under the Debtors Act. So the first order appears at page 15 in the appeal bundle and sets the case forward towards a final hearing. Mr Jonathan Cohen QC had dealt with the case on 12 February and had ordered maintenance at a monthly rate, which it was apparent by 16 April had been ignored. So the order under the Debtors Act provided that the respondent be committed for 35 days for his contempt but suspended until 4pm on Friday 14 May, the order to be discharged if prior to 4pm on 14 May, the husband paid to the wife £10,000 that had been ordered by HHJ Brasse on 3 February 2010 and an issue fee for the judgment summons.

There is no doubt that that money was not paid and there is equally no doubt that the prison sentence was never brought into effect because Mr Agrest has taken refuge in Russia. There have been continuing proceedings and unfortunately, as it seems to me, the ideal of judicial continuity was lost in this case, for it was before Holman J that the case was listed on 15 February 2011.

The outcome was that that fixture, which was a fixture of the trial with a five-day time estimate, was ineffective because Mr Agrest was not present, and he submitted in his submissions from afar, written submissions, that it was not possible for him to participate. Given that the Damoclean sword waved over his head he would be open to imprisonment were he to set foot in this jurisdiction. He asserted that any breach of which he was apparently guilty was without any turpitude because he was without means, employed for a pittance and unable to make any contribution to the maintenance of his wife and children; indeed he could not even raise the fare to come to London. Although he was neither present nor represented, Holman J, with his usual sense of clemency, looked at the situation to see whether the anxieties expressed by the absent respondent might not be settled were the apparent risk of imprisonment dissolved, and accordingly the judge developed for himself the satisfying conclusion that an arrangement that had been put into place by Mostyn J in October 2010 effectively discharged the liability that was the subject of the suspended committal order.

The provisions for payment written into Mostyn J's October order were to this effect: that on 19 October 2010 from the proceeds of sale of a property held by the court there should be taken various sums which were to be paid out to the wife. The order continued:

So that was the foundation for Holman J's conclusion. The effect of the order of 15 October 2010 satisfied the liability for which the committal had been imposed. The appellant's notice, grounds and skeleton considered by Black LJ were settled by Ms Kremen as a litigant in person, but, as happens in this case, Mr John Hamilton of counsel has been brought in to handle oral argument at the hearing.

He identifies the second and third grounds of appeal as being his strongest. His second ground of appeal is that there can be no satisfaction under Section 5 of the Debtors Act if the payment is made not by the debtor but by the court out of a court fund.

Mr Hamilton's third ground is that even if payment out of a court fund is capable of meeting the provisions of Section 5, in this case it could not even be said that the money within the fund was the debtors money. All that the court held was the proceeds of sale of a property, and there was a great deal of dispute as to who was beneficially entitled to those proceeds. So without an investigation and a conclusive finding as to the beneficial ownership of the proceeds, it could not possibly be said that the effect of the order of 15 October was to discharge the sentence by the respondent's vicarious payment.

I consider that those grounds are made good by Mr Hamilton. I do not think that the payment out by court order from a court fund satisfied the section, which only provides for the debtors discharge if "he satisfies" the debt. I think Mr Hamilton is also sound in his second proposition that it was unduly generous to the defaulter to treat the proceeds of sale as his equitable entitlement.

In addition to those considerations, part fact, part law, I would emphasise that Mostyn J had made very clear and robust findings as to the respondent's conduct and integrity. He had labelled the respondent as a man without integrity, without honour, infinitely rich, and prepared to go to any lengths to evade the court's endeavour to do fairness to the wife and to secure the children. A man so labelled should gain no advantage by a fortuitous listing of the case in front of some other judge and, as Mr Hamilton has asserted, the process in front of Holman J can be categorised as a review by one puisne of the order of another.

So for all those reasons I would allow the appeal and set aside paragraph 1 of the order of Holman J which provides that the suspended order for committal and the warrant for his committal be irrevocably discharged with effect from 15 February. In the result the warrant remains, as it were, on the table and capable of execution. It is very important that Mr Agrest should not interpret this outcome as another compelling reason for him to boycott these proceedings. I point out that paragraph 4 of the order provided for a directions hearing in advance of the trial. It is agreed that the directions hearing will take place on Friday of next week, the 28 October, and that the five-day trial will commence before Mostyn J on 12 December. Paragraph 5 of the order is unusual in that it directs both parties' personal attendance, not only for the trial but also for the directions appointment.

Accordingly, Mr Agrest must be in London on Friday week if he is to comply with paragraph 5 of the order. Mr Beck, who is here as his McKenzie Friend, has kindly agreed to draw Mr Agrest's attention to that provision. I would hope that the warrant, now revived, will not be executed as Mr Agrest passes through immigration. In the event that he decides to come either next week or in December, it would not advance the cause of justice if his preparation for the hearing were impeded by the execution of the warrant.

I agree with all that has fallen from my Lord, Thorpe LJ. I would add the following short observations. First as to the Debtors Act 1869 Section 5, there may well be cases where Section 5 does entitle a person to be discharged from custody as where he arranges for payment the payment of monies by a third party and does not make payment himself, but that is a completely different case from the present, where the monies were only paid because of a court order for that purpose and the funds that were used are not funds which at this stage can be said clearly to belong to the respondent. On any basis, the payment was made late and (if it be relevant) Mrs Kremen has not been compensated for any loss of interest in the meantime.

I would also point out on Section 5 that no argument was addressed to the words "out of custody"; we have proceeded on the assumption that that applies with necessary modification to the discharge of a suspended committal order.

Lastly, I would record that in argument Mr Hamilton wisely accepted on behalf of the appellant that the appellant would not oppose any application that may be necessary to be made by the respondent to enable him to be heard by the court on any future application listed before the judge, notwithstanding the outstanding suspended committal order.