AK v TK
| Jurisdiction | Cayman Islands |
| Judge | Gunn J |
| Judgment Date | 15 October 2018 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE NO. FAM 39/2015 |
| Date | 15 October 2018 |
Hon. Gunn J (Actg)
CAUSE NO. FAM 39/2015
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FAMILY DIVISION
IN CHAMBERS
This Judgment is distributed with the strict understanding that, in any report of it, no person, other than the attorneys (and any other person identified by name in the judgment itself) may be identified by name or location and in particular the anonymity of the children and adult members of the family must be strictly preserved .
Mr A. Walters of Campbell's for the Husband
Mr D McGrath of McGrath Tonner for the Wife
The parties are formerly husband (AK) and wife (TK). Their marriage was dissolved by order of Williams J on 16 th May 2017. They have two school age children, K and M.
On 9 th May 2017 Williams J made final ancillary orders with regards to the financial affairs of the parties, which included an order for AK to make lump sum payments as well as periodic payments (“the Order”) to TK. These proceedings concern the child and spousal maintenance element of that order. AK was ordered to pay US$3,000 per child per month as child maintenance and spousal maintenance for 3 years on a diminishing basis: US$3,000 per month for the 1 st year, US$2,500 per month for the second year, and US$2,000 per month for the final year.
On 14 th November 2017 the Court of Appeal dismissed AK's appeal of William J's order (CICA 3/2017). AK complied with the financial orders, until his employment was terminated with effect from 28 th March 2018. AK made the last maintenance payment on 1 st April 2018.
On 23 rd April 2018 AK filed a summons seeking a downward variation of the maintenance payments pursuant to section 23 of the Matrimonial Causes Law (2005 Revision) (“the Law”) on the grounds that he is no longer able to meet the terms of the Order. That summons came before me on 11 th May 2018. After extensive discussions, both in and out of court, the parties agreed a consent order adjourning AK's summons pending the disclosure of further financial information. Additionally the parties agreed that although arrears would continue to accrue,
until AK's summons was heard. These two clauses have been referred to as the “moratoriums”. It was clear in May that the intention of the parties was that, given the uncertainty of how long AK would be unemployed, payments would stop until the summons was heard.
-
(i) AK was not required to make any payments 1; and
-
(ii) TK could not seek enforcement of arrears without leave of the court 2
AK's summons was subsequently set down for hearing on 11 th October 2018. Fortunately, AK secured new employment in August. AK's new employment contract provides that AK's salary is CI$200,000 per annum (“the basic salary”) in addition to other discretionary payments. AK's new basic salary represents an approximate US$100,000 decrease in basic salary.
AK received his first salary on 20 th September, totalling US$18,596.01 following all deductions. Despite securing new employment, AK did not voluntarily resume making maintenance payments, even partial payments. It is important to note that although a shared residence order made by McMillan J on 15 th December 2015 requires the parties’ two children to reside with each parent on a weekly alternating rotation, K is residing with AK full-time and has no contact with TK. This was the position when the matter was before the Court of Appeal. Their Lordships concluded that despite the existing circumstances, given the terms and intention of the shared residence order, it was proper for AK to pay child maintenance for K to TK (at paragraph 44). There is no application before the court to vary the residence order.
Prior to AK's summons coming on for hearing, counsel for both parties were in communication. AK offered to pay TK US$1,500 per month for M, but that maintenance for K and spousal maintenance would cease. AK also suggested that the parties participate in mediation to come to an agreement for reduced maintenance payments going forward. TK refused the offer of mediation, asserting that it had no prospect of success. AK subsequently withdrew his offer of payment, I am told, on the basis that it became apparent to him that he could not even afford US$1,500 per month. Ultimately, the parties agreed through counsel that the hearing of AK's summons should be adjourned again and the hearing date be used for a directions hearing. Additionally, AK was requesting an adjournment of 6 weeks so that the parties can pursue mediation.
On 5 th October, six days before the hearing, TK filed her own summons seeking orders -
-
(i) lifting the moratorium on payments;
-
(ii) giving TK leave to commence enforcement of arrears; and
-
(iii) arranging K's counselling;
-
(iv) mandating AK to participate in counselling;
-
(v) mandating that TK continue counselling;
-
(vi) the preparation of an addendum report by DCFS; and
-
(vii) that the matter be re-listed for mention in February 2019 for a review of K's treatment pursuant to (iii) above.
Despite TK's summons being filed so close to the hearing, I was satisfied that the summons did not raise any new, unexpected or complicated issues that would prevent the parties from properly arguing the point on the evidence before me.
On 11 th October I heard lengthy submissions from counsel on all aspects of their summonses and I gave a brief oral judgment with limited reasons. I undertook to provide more detailed reasons in short order as AK wishes to seek leave to appeal my order. My perfected judgment is hereby provided.
These proceedings are concerned with the child and spousal maintenance aspect of William J's order. Currently, AK is required to pay a total of US$8,500 per month in maintenance. Since the moratoriums were imposed arrears of US$51,000 have accrued. Upon AK's summons being heard, that figure may be less.
Mr Walters, on behalf of AK, invited me to stay the proceedings for 6 weeks in order for the parties to participate in mediation.
Paragraph 3(1) of the Mediation Information and Assessment Rules (“the Rules”) provide that at any stage of the proceedings the court shall consider whether the matter is suitable for family mediation. If the court considers that it is and the parties agree to mediation, then the proceedings should be adjourned to allow mediation to commence (paragraph 4(1)).
It is widely accepted that mediation is a valuable tool in family proceedings as, if successful, it is often quicker and considerably less expensive than litigation. The Rules presume that a matter should be referred to MIAM and mediation unless an exemption applies.
Paragraph 3(2) provides that in deciding whether a matter is suitable for mediation the court should consider -
-
(a) whether a MIAM took place;
-
(b) whether a MIAM exception applies; and
-
(c) whether the parties have previously attempted mediation or another form of non-court dispute resolution and the outcome of that process.
The final factor was the focus of both pre-hearing correspondence and submissions. AK is optimistic that mediation will result in a satisfactory agreement on lower maintenance payments, or certain payments ceasing altogether. AK referred to a previous mediation session as evidence that the parties were capable of successfully mediating their issues. After further probing, Mr Walters conceded that mediation terminated after one session without the parties reaching agreement on any of the issues and that the case proceeded to a contested hearing. Mr Walters asserted that a consent order bringing the contested hearing to an early conclusion was as a result of matters arising from the mediation. TK and her counsel Mr McGrath disagreed with Mr Walters’ analysis, asserting that mediation was entirely unsuccessful and that any further attempt would be futile. TK maintained that a request for mediation was AK's attempt to avoid/delay making maintenance payments rather than a genuine desire to resolve the current issues.
Mr Walters submitted that TK's refusal to participate in mediation is unreasonable given that calculating a smaller maintenance amount is amenable to mediation at a considerably lower cost than litigation. He argued that the court should consider leaving open the option of TK paying all or part of AK's costs which will accrue from continued litigation. Mr Walters drew my attention to the judgment of Mr Recorder Furst QC in PGF II SA v OMFS Company 1 Limited [2013] EWCA Civ 1288 in which the learned Recorder opined -
“51. …a finding of unreasonable conduct constituted by a refusal to accept an invitation to participate in ADR or, which is more serious in my view, a refusal to engage in discussion about ADR, produces no automatic results in terms of a costs penalty. It is simply an aspect of the parties’ conduct which needs to be addressed in a wider balancing exercise…the proper response in any particular case may range between the disallowing of the whole, or only a modest part of, the otherwise successful party's costs.
52. …the court might go further, and order the otherwise successful party to pay all or part of the unsuccessful party's costs. While in principle the court must have that power, it seems to me that a sanction that draconian should be reserved for only the most serious and flagrant failures to engage with ADR, for example where the court had taken it upon itself to encourage the parties to do so, and its encouragement had been ignored.”
I was also provided with the decision in SM v DAM [2014] EWHC 537 (Fam) which confirms that, while the court cannot force the parties into mediation in family proceedings, an unreasonable refusal may well attract a costs order.
A failed attempt at mediation in the past is probably not enough on its own to constitute a...
To continue reading
Request your trial