Rogan v Rogan

This is a judgment summons. A former wife, Sarah Annabel Rogan (whom I will call the wife) applies to commit her former husband, Richard Grant Rogan Junior (whom I will call the husband) to prison for significant non-payment and arrears of spousal maintenance following their divorce.

If the husband is committed to prison, that is likely to be very damaging to relationships between the parties and their two children, now aged 14 and 11, and seems likely to have a damaging effect on the husband's business.

During the hearing I have questioned whether the wife really wished to take this summons to the wire, but she said that she does. It is her belief that if a suspended order for imprisonment is made, the husband will, in the end, produce the money. That being so, it is my duty to hear and determine the judgment summons.

The essential and undisputed background is as follows. The husband is now aged 63 and the wife 44. They married in 2002, separated in 2012, and were divorced in 2014. Their two children are now aged 14 and 11. The husband's business involves the trade in inter-governmental offsets and is complex. It seems to be common ground that during the marriage, as well as since, there could be successful deals, which generated considerable wealth for the husband, followed by periods in which he had no income at all. He always has been a man who had means, but no regular periodic income.

The financial agreement following the divorce is also complex, and was tied to various transactions which were then current. The upshot for the purpose of this hearing and judgment is that the husband was required by two consent orders to pay to the wife a lump sum of, altogether, £5 million. The second instalment was only due and payable on 31 December 2017. The first instalment was duly paid. The second instalment, due on 31 December 2017, became quantified as £1,996,632. None of that instalment has been paid, and a calculation of statutory interest shows that, as at 20 September 2018, the interest due was £115,094, making a total of the principle lump sum and interest due of £2,111,726.

Although the present judgment summons, as issued on 30 May 2018, relates to the whole of that outstanding lump sum and the then accrued interest, Mr James Ewins QC, who appears on behalf of the wife, has made clear that he does not proceed with the present judgment summons by way of enforcement of the lump sum. I record the fact that the husband is currently in arrears of lump sum and interest in the sum of £2,111,726, but now leave it entirely out of account. I make clear that, having not pursued the present judgment summons in relation to the arrears of the lump sum, the wife cannot issue any further judgment summons in relation to the lump sum which relies upon its non-payment up to today. It will of course remain open to her to issue a further judgment summons if the lump sum and interest remain unpaid after today.

The two consent orders of 14 March 2014 and 17 December 2015 further provided (in the events which have since happened) that until payment of the lump sum in full, the husband must pay to the wife spousal periodical payments in the current sum of £8,000 per month, or £96,000 per annum. Upon payment of the lump sum in full, the spousal maintenance stands automatically dismissed. In fairness to the wife, therefore, the point needs to be stressed that this case did not involve long-term maintenance or a so-called meal ticket for life. Provided the husband had duly discharged the obligations by which he had agreed and been ordered to pay, in aggregate, £5 million by the end of 2017, all spousal maintenance would have ceased forever at that point. Therefore, the purpose of the maintenance was to provide an agreed level of income for the wife until she had received her capital, after which she would be self-supporting.

As well as spousal maintenance, the husband is currently under an order to pay periodical payments for the two children in the total sum of £2,092 per month, plus school fees and extras. There were some relatively small arrears in the child periodical payments but he has now paid them. I understand that the school fees for the current term have not yet been paid but the husband is in negotiation with the schools about them, and for the purpose of this hearing and judgment, I treat him as being fully paid up with regard to his children.

Unfortunately, until this week he had not paid a penny of spousal maintenance since the payment due on 1 November 2017. As at the date of the issue of the judgment summons, there were arrears of seven months at £8,000 per month, or £56,000. The monthly maintenance remained wholly unpaid until he made one payment of £1,000 this week. Therefore, as at the beginning of this week, there were total arrears of 11 months at £8,000 per month, or £88,000. I credit the £1,000 paid this week to the amount due as at the date of issue of the judgment summons, thereby reducing that amount to £55,000 and the total arrears to £87,000.

It is not in dispute, and I am satisfied so that I am sure, that at the date of issue of the judgment summons and now today, there were, and are, arrears in those respective sums and, accordingly, that the husband has made default in payment of a debt due from him in pursuance of an order of this court. Section 5(2) of the Debtors Act 1869 provides that the debtor may only be committed to prison '...where it is proved to the satisfaction of the court that the person making default either has or has had since the date of the order or judgment the means to pay the sum ... and has refused or neglected, or refuses or neglects to pay the same'. Proof to the satisfaction of the court requires proof to the criminal standard so that I am sure. Despite the protestations of the husband, I regret to have to say that I am indeed quite sure that the husband has, or has had, the means to pay both the arrears of (now) £55,000 as at the date of issue of the judgment summons and indeed the total arrears now of £87,000.

I and other judges have repeatedly informed the husband (including in very clear bold language at the end of my own order dated 5 July 2018) that he is not obliged to make any statement or say anything at all. He repeatedly told me that he understands that, and being an intelligent person, he clearly does understand that. However, he chose to give evidence both by written statements of truth and by sworn oral testimony, upon which he was cross-examined by Mr Ewins.

I perfectly accept the husband's evidence that he does not have any regular periodic income such as a salary or dividends or other such regular and reliable receipts. The wife herself agreed during her oral evidence that that was always the case during the marriage. I perfectly accept, too, that the husband has often been, and currently is, dependent upon borrowing. He has borrowed from commercial lenders such as American Express, with whom he had run up a debt of £63,388 when they closed his account on 15 July 2018; and he has been able regularly to borrow considerable amounts from friends and other sources. But this is his long established business method. He borrows during the leaner periods between successful deals, and can then pay off the borrowing and show considerable capital profit when he concludes a deal.

As recently as 2015 he was able to purchase a large and 'striking' (the estate agent's description) country house near Wallingford in Oxfordshire, with five reception rooms, six bedrooms, tennis court, swimming pool, garages and 24 acres of land for £4.3 million. He then placed it in trust for, he says, his own two children of this marriage and his two step-children from his present marriage. But he lives there himself and appears to pay all or most of the substantial outgoings. By reference to the schedule produced by Mr Ewins, I am sure that the husband's Barclays Bank account (held jointly with his present wife) discloses payments-in between 1 November 2017 and earlier this month of £412,651, or an average of £40,752 per month. These payments are derived from a combination of payments from his own business, Blenheim Capital, and significant payments from several named lenders, whom I will not identify in a public judgment.

I accept that, as the husband says, some of the payments are no more than the reimbursement of business expenses which he has incurred. However, I am quite sure that out of these receipts, together with the aggregate £63,000 borrowed from American Express, the husband was able to make, and did make, substantial payments which were entirely private or personal and in no sense business expenses. A capacity to borrow is itself a financial resource, and having that capacity (which he appears still to have) the husband has means. He expended those means on many different things, but conspicuously failed since 1 November 2017 to expend one penny of them until the £1,000 this week upon discharge, or even partial discharge, of his obligation to pay spousal maintenance. He thus made a choice, which can only have been deliberate, to prioritise other expenditure over expenditure on his former wife.

Most conspicuously, in a period between January 2018 and mid-May 2018, the husband spent about £24,775 on a wedding to his present wife here in England, plus about £48,000 upon a wedding to the same wife in Morocco. The wedding in England took place on 24 March 2018; the wedding in Morocco (which cannot have had any legal effect) took place on 6 May 2018. The husband says that he had already contracted in September 2017 to pay for the Moroccan wedding when he learned that they could not be validly married there, so it was necessary to arrange an additional and earlier wedding here in England. He says, too, that during September 2017 he and his current wife had invited friends from all around the world to the wedding in Morocco. The friends had booked and paid for flights and it would have been very difficult, if not impossible, to cancel it.

The figures have been very carefully extracted by the wife's lawyers from the husband’s bank statements and are now set out in exhibit SAR1 to the wife's second statement dated 24 August 2018, now at bundle page C298. In that part of the schedule which relates to the Moroccan wedding, the husband says that an item on 8.3.2018 for cash withdrawal of £300 at Heathrow Airport does not pertain to the wedding at all, and I deduct it, bringing the total for that wedding down to just over, but in round figures, £48,000. The husband does not dispute the total of £24,775 in the schedule for the UK wedding. However, he says that of that total the two card payments on 20 April 2018 to the Crooked Billet in Henley (where the reception was held) totalling £14,143.50 were debited to his American Express card and form part of his closing debt to AMEX of £63,000. Therefore, he says that that £14,143.50 has never actually been paid by him. I do not accept the argument. When he made the payments he had the means to pay them, namely by use of his card. He still is paying them, albeit it over a very long period, by the arrangement he has come to with the firm to which AMEX later factored the debt. In any event, in April 2018 he could have used the card to pay £14,000 on other, more essential expenditure, thereby freeing up some of the cash from his bank account to make payments to his wife.

In the very period from February to March 2018 when he was getting into increasing debt and arrears to his former wife, the husband had the means to pay over £72,000 upon two wedding ceremonies. I am sure that he had the means, if he had chosen to spend in a different way the money which was available to him, to pay (as at the end of May 2018) £56,000 to his former wife. He could indeed have paid the £56,000 to her and still paid over £15,000 on an admittedly much more modest wedding.

The wife's solicitors have conducted further analysis of the bank statements, and produced today (sent to the husband last night) further schedules which show that in the period 14.11.2017 to 30.8.2018 the husband expended £5,484 on generous but optional expenditure on his step-children and his grandson, on activities such as air cadets and a summer music school. In the period 7.11.2017 to 7.9.2018, he expended £1,771 on pet care and insurance for a dog or dogs. In the period 6.11.2017 to 28.8.2018 he expended £4,154 on pubs and restaurants. This item is extracted from his Barclays Bank account alone and not from his AMEX account, and excludes any such expenditure in London, which may have been of a business nature.

In two periods, in January and August 2018, the husband took holidays in France. The total expenditure as extracted from his Barclays Bank account was £3,292. From that I deduct £550, being expenditure at supermarkets in France, in deference to the husband’s point that spending at a supermarket in France is merely expenditure that he would otherwise have made at a supermarket in England. This reduces the total, in relation to those holidays, to about £2,740.

Finally, in the period 13.11.2017 to 13.8.18 the husband paid £11,136 to the man who is the gardener at his country house. The husband says that the man not only gardens but helps maintain the house as is required by covenants under the lease. I understand the point; but it, just like the husband's argument that he became contractually bound to a hotel in Morocco, seeks to prioritise obligations under a covenant, or a contract with a hotel in Morocco, over pre-existing obligations under a maintenance order to which he had already agreed in favour of his former wife, long before he employed the gardener or entered into any contract with the hotel in Morocco. A total of the amounts in those schedules is a little over £25,250. It is all voluntary personal expenditure, which the husband was able to make, and chose to make, in priority to making any payments at all to the former wife.

This evidence as a whole leaves me quite sure that in the period since the maintenance arrears began to arise and today, the husband has had the means to pay all of the arrears, the subject of the present judgment summons, namely now £55,000. The wife has proved to the satisfaction of the court, to the required criminal standard, that Richard Grant Rogan Junior has failed to pay the sum of £55,000, being the debt due from him to her in pursuance of an order of this court, and that he has had, since the dates when the debts arose, the means to pay that sum. He has refused or neglected to pay it, and that refusal or neglect has been deliberate and wilful and is culpable, being in contempt of court.