Zuk v Zuk [2012] EWCA Civ 1871

On 29 November 2012 the Court of Appeal considered whether a custodial sentence was correctly imposed on a party to ancillary relief proceedings who had breached an order directing that he pay over a lump sum.

Background

Mr Zuk was directed by a Court Order on 26 November 2010 to pay a lump sum of £10,000 to Mrs Zuk following contested ancillary relief proceedings. The Court had evidence that Mr Zuk had access to £37,000 from the proceeds of a property sale but it was unclear as to what he had done with that money.

Mr Zuk had indicated at the hearing that he had no intention of discharging whatever order the court might make, and consequently the judge had attached a penal notice to the order. Mr Zuk did not pay, and in April 2011 Mrs Zuk’s solicitors issued committal proceedings. Mr Zuk was present at that hearing but unrepresented.

On 8 November 2011 the judge committed Mr Zuk to prison for nine months and on 26 January 2011 his application to purge his contempt was refused.

Mr Zuk subsequently appealed both the committal and the refusal.

Findings

The Court allowed Mr Zuk’s appeal citing a significant number of procedural failings in the original decision:

  1. Mr Zuk was imprisoned under the Contempt of Court Act 1981. However, the Court concluded that the Debtors Act 1869 was in fact the appropriate statutory basis for determining a sentence for non compliance with a county court maintenance order. Section 5 of that Act limits a county court to sentences of no longer than 6 weeks. Consequently there had been no jurisdiction to commit Mr Zuk to prison for 9 months.
  2. Rule 33.16(1) of the Family Procedure Rules 2010 imposes a duty on the judge to consider alternatives to an order for immediate committal. The Court concluded that this had not happened. It was suggested that a judge should first consider whether an extension of the date for payment, suspension of payment or a regime of installments would be more appropriate.
  3. CCR Order 29 Rule 1(2B) additionally provides that an order must be served on the debtor before there can be an obligation to pay. In this instance, Mr Zuk had not been served with the Order prior to the issue of committal proceedings.
  4. RSC Order 52 and CCR Order 29 impose requirements on the Judge to ensure the debtor has a full opportunity to prepare a defence. However, Mr Zuk had only received notice of the committal hearing the previous morning. The Court therefore held that there was no effective time, let alone the required 14 clear days, in which to prepare his position. The notice had also given Mr Zuk no indication of the scope of the hearing or that he was at risk of imprisonment.
  5. Rule 33.14(1)(c) of the Family Procedure Rules 2010 requires the Judge to have regard to the debtor’s Convention rights. The Court did not have the benefit of a written judgment from the committal hearing but determined that at its lowest it appeared that the Judge did not have sufficient regard to this obligation.
  6. A judge, after finding a breach, must also allow the debtor the opportunity to mitigate. The Court stated that there was at least a suspicion that the judge went straight from finding breach to fixing a penalty without giving Mr Zuk an opportunity to mitigate.As a cautionary aside Lord Justice Thorpe’s leading judgment concluded:

“The end result seems to me that everybody suffers. The wife, who was the successful applicant in the ancillary relief proceedings, has been kept out of her money, and, however lacking in merit the appellant may be in the context of the ancillary relief proceedings, he has been unjustly imprisoned for a period which looks to me more like four-and-a-half than three months. It is a sad story, and the moral of it is that […] both those representing the creditor and the judge must take the greatest care to ensure that all the safeguards provided by statute are duly observed.”