Series 7 Practice Exam 11 QampA Täglich und monatlich bezahlen, kreditieren oder reinvestieren Erläuterungen: Die meisten Geldmarktfonds erklären täglich Dividenden und bezahlen, verdienen oder reinvestieren die Dividenden monatlich. Diese Informationen finden sich üblicherweise im Prospekt des Geldmarktfonds. Blue-Sky Gesetze gelten für die TWO der folgenden Auswahlmöglichkeiten a. Eingetragene Vertreter b. Wertpapiere der Stadt Chicago c. Geschäftspapiere d. Wertpapiere, die von einem REIT Erläuterung: Blue-Sky Gesetze sind staatliche Wertpapiere Gesetze. Diese Gesetze gelten für die Registrierung von Vertriebsmitarbeitern (eingetragene Vertreter), die Registrierung und den Verkauf von nicht besetzten Wertpapieren. REITs (Real Estate Investment Trusts) gelten als nicht gesicherte Wertpapiere und werden daher durch staatliche Gesetze geregelt. Kommunale Wertpapiere und Commercial Paper gelten als steuerfreie Wertpapiere. Joseph Carlyle ist Kunde einer städtischen Wertpapierfirma. Auf der Grundlage seiner bestehenden Kontodokumentation ist er offenbar für Wertpapiere mit einer spekulativen Bonität ungeeignet. Allerdings hat er eine Bestellung zum Kauf einer Anleihe, die bewertet BB von Standard und Poors. Sein Vertreter, Bob Thomas, hat ihm mitgeteilt, dass diese Transaktion nicht in seinem besten Interesse basiert auf den Informationen, die die Firma auf Datei hat. Was diese Situation betrifft, ist die folgende Aussage TRUE a. Bob sollte die Bestellung verarbeiten, da eine BB-Bewertung nicht spekulativ ist. B. Bob sollte die Bestellung verarbeiten, da MSRB-Regeln die Bestellung ausfüllen können, wenn der Vertreter Joseph erklärt, dass der Handel ungeeignet ist c. Bob sollte die Bestellung bearbeiten, weil der registrierte Vertreter keine Treuhänder ist und deshalb immer das tun muss, was der Kunde d sagt. Bob sollte die Bestellung nicht verarbeiten, da MSRB-Regeln die Verarbeitung einer eindeutig ungeeigneten Transaktion verbieten b. Bob sollte die Bestellung verarbeiten, da MSRB-Regeln die Bestellung ausfüllen können, wenn der Vertreter Joseph erklärt, dass der Handel ungeeignet ist. Erläuterung: Nach aktuellen Interpretationen der Eignungsregel des MSRB sollte Bob den Kundenauftrag bearbeiten, solange er die Zeit in Anspruch nimmt Um Herrn Carlyle zu erklären, warum er glaubt, dass die Investition für ihn nicht geeignet ist. Gemäß MSRB-Regeln gilt die Lieferung eines verstümmelten Zertifikats als eine gute Lieferung: Wird das Zertifikat vom Emittenten oder der Übertragungsstelle authentifiziert Erläuterung: Ein verstümmeltes Zertifikat kann vom Emittenten oder einem Vertreter des Emittenten (z Oder Zahlstelle). Wenn authentifiziert, gilt es als eine gute Lieferung. Ein verstümmelter Coupon kann von jeder Geschäftsbank sowie dem Emittenten oder seinem Vertreter garantiert werden. Im Mai verkauft ein Kunde einen STC Juli 40 aufgeführten Aufruf für eine 6 Prämie und kauft einen STC 30. Juli aufgeführten Aufruf für 10. Nahe expiration, STC wird mit 39 verkauft. Der 40 Anruf läuft und der Kunde schließt den 30 Anruf an seinem Intrinsischen Wert. Das Nettoergebnis ist ein: Erläuterung: Wenn der Marktpreis von STC bei 39 ist, hat der 30. Juli-Aufruf einen inneren Wert von 9 Punkten. Da der Investor eine Belastung von 400 bezahlt hat, ergibt sich ein Gewinn von 500 (900 intrinsischer Wert - 400 Debit). Ein registrierter Bevollmächtigter hat für Herrn Smith einen diskretionären Kommunalanleihekonto eingerichtet. Welche der folgenden Wertpapiere kann der registrierte Kaufmann für Herrn Smiths a. Allgemeine Obligationen nur b. Anleihen mit Baa oder höher c. Double-barreled Anleihen nur d. Alle geeigneten Bindungen d. Alle geeigneten Anleihen Erläuterung: Ein registrierter Vertreter muss sicher sein, dass die erworbenen Anleihen geeignet sind. Ein Investor besitzt ein 1.000.000 diversifiziertes Portfolio von Aktien mit einem Beta von 1,5. Er möchte sein Portfolio durch den Kauf von SampP 100 Index Optionen zu sichern. Er kann dies durch den Kauf erreichen: 60 SampP 100 Puts mit einem Ausübungspreis von 250 Erläuterung: Beta ist ein Maß für eine Volatilität des Aktienbestands (oder Portfoliobestandes) im Verhältnis zum Gesamtmarkt. Der Markt als Ganzes (in dieser Frage durch den SampP 100 Index vertreten) ist eine Beta von 1 zugeordnet. Die Portfolios Beta von 1,5 bedeutet, dass die Portfolios Preis 1 12 Mal so viel wie der Markt ändern wird. Kaufen puts bietet eine Absicherung, da eine Verringerung des Wertes des Portfolios durch einen Gewinn in der Putze ausgeglichen werden kann. Ein Ausübungspreis von 250 entspricht einem Gesamtwert von 25.000 (250 Basispreis x 100 Multiplikator). Daher repräsentieren 40 Putze einen Gesamtwert von 1.000.000 (der Wert des Portfolios). Da sich das Portfolio um 1,50 je 1 Veränderung im Markt ändert (beta 1,5), sind 60 Puts (1 12 x 40) notwendig, um das Portfolio effektiv abzusichern. Eine Anrufoption würde als abgedeckt gelten, wenn sie gegen alle folgenden Optionen geschrieben wurde: EXCEPT: a. Die zugrunde liegende Stammaktie in einem Geldkonto b. Der Stammaktienbestand einer Bank c. Die zugrunde liegende Stammaktie bei einer Treuhandgesellschaft d. Die Wandelschuldverschreibungen oder Wandelschuldverschreibungen eines anderen Unternehmens d. Die Wandelschuldverschreibungen oder wandelbaren Vorzugsaktien eines anderen Unternehmens Erläuterung: Die Option gilt als abgedeckt, wenn sie mit Ausnahme der wandelbaren Vorzugsaktien oder Wandelschuldverschreibungen eines anderen Unternehmens schriftlich verfasst wird. Eine in Stammaktien umwandelbare Sicherheit ist zulässig, muss aber von derselben Körperschaft sein und sofort in mindestens die gleiche Anzahl von Aktien umgewandelt werden, die durch die gezeichneten Optionen vertreten werden. Welche der folgenden Aussagen ist NICHT WAHR bezüglich der Merkmale von Optionen und Optionsscheinen a. Optionsscheine werden von der Gesellschaft gegründet, deren Aktien dem Instrument zugrunde liegen, und Optionen werden durch Vertrag zwischen einem Optionskäufer und einem Optionsschreiber b erstellt. Sowohl Optionen als auch Optionsscheine können wertlos auslaufen, wenn sie nicht ausgeübt werden. C. Bei Ausübung der Optionen ist für den zugrunde liegenden Wert ein Festpreis zu zahlen und bei Ausübung der Optionsscheine die Sicherheiten ohne zusätzliche Kosten zu erhalten. Sowohl Optionen als auch Optionsscheine können im Sekundärmarkt gekauft und verkauft werden. C. Wenn Optionen ausgeübt werden, muss für den Basiswert ein festgelegter Preis gezahlt werden und bei Ausübung der Optionsscheine werden die Wertpapiere ohne zusätzliche Kosten eingegangen Erläuterung: Sowohl Optionen als auch Optionsscheine haben einen Ausübungspreis. Wenn sie ausgeübt werden, werden die Transaktionen für den Basiswert zu diesem festgelegten Kurs erfolgen. Bei Wandelschuldverschreibungen oder wandelbaren Vorzugsaktien können Anleger die Sicherheit ohne zusätzliche Zahlung in den Basiswert umwandeln. Welche ZWEI der folgenden Aussagen sind WAHR bezüglich der vermittelten CDs, die von den eingetragenen Vertretern verkauft werden I. Eine kündbare CD gibt dem Anleger das Recht, die Sicherheit vor der Fälligkeit II zurückzuzahlen. Wenn die CD vom Emittenten gerufen wird, kann der Kunde nicht in der Lage sein, einen vergleichbaren Zinssatz zu erhalten III. Eine aufrufbare CD, die vor der Fälligkeit aufgerufen wird, kann dem Kunden eine Rendite anbieten, die geringer ist als die Rendite bis zur Fälligkeit IV. Da die Sicherheit von einer Bank ausgestellt wird, wird eine kündbare CD keine Beschränkung für den Betrag der FDIC-Versicherung bieten. Erläuterung: Wenn ein Kunde eine von einer Bank ausgegebene Broker - oder Langzeit-CD kauft, ist der Broker-Händler, der das Produkt anbietet, verpflichtet Stellen Sie dem Kunden bestimmte Informationen zur Verfügung. Diese Angaben basieren auf den für den Kunden relevanten potenziellen Risiken und Investitionen. Für kündbare CDs sind folgende Angaben zu machen. - Der Emittent kann nach eigenem Ermessen beschließen, vor der Fälligkeit die CD aufzurufen. Der Kunde hat daher nicht das Recht, die CD vor der Fälligkeit einzulösen. - Wenn die CD vor der Fälligkeit aufgerufen wird, kann der Kunde nicht in der Lage sein, die Fonds zu reinvestieren und einen vergleichbaren Zinssatz zu erhalten (falls die Renditen sinken). - Eine CD, die vor der Fälligkeit aufgerufen wird, kann dem Kunden eine Rendite anbieten, die geringer ist als die Rendite bis zur Fälligkeit. - Die CD kann vom Emittenten nicht aufgerufen werden, so dass der Kunde die Sicherheit bis zur Fälligkeit halten muss. Alle vermittelten CDs tragen eine begrenzte FDIC-Versicherung, wenn der Betrag der CD bei einer Bank die von der FDIC festgelegten regulatorischen Grenzen überschreitet. Ein registrierter Vertreter schreibt einen Brief, um zu sehen, ob seine Kunden Interesse an Handelsoptionen haben. Der Brief ist generisch und beschreibt die Vor - und Nachteile des Optionshandels. Dieser Buchstabe: I muss vor der Verwendung durch ein ROP II zugelassen sein. Sie müssen vor Gebrauch nicht zugelassen sein, solange sie keine Empfehlungen enthält. Es ist ein Risikohinweis IV beizufügen. Eine Begleitdokumentation ist nicht erforderlich. Erläuterung: Alle Einzelhandelskommunikationen bezüglich der Optionen müssen von einem ROP genehmigt werden, bevor sie an einen Kunden gesendet werden. Da es keine spezifischen Empfehlungen gibt, muss das OCC-Offenlegungsdokument dem Brief nicht vorausgehen oder begleiten. Jedoch muss der Kunde das Risiko-Offenlegungsdokument bei oder vor der Genehmigung des Optionshandels erhalten. Welche der folgenden Aussagen ist WAHR hinsichtlich der Geschenk - und Erbschaftssteuer, die von einem Ehemann und einer Ehefrau gezahlt werden. Geschenke zwischen Ehegatten sind unbegrenzt und keine Geschenk - oder Erbschaftssteuer wird bezahlt, wenn ein Ehegatte vergeht b. Geschenke zwischen Ehegatten sind unbegrenzt und es gibt keine Schenkungssteuer, aber Erbschaftssteuer muss bezahlt werden, wenn ein Ehegatte vergeht c. Steuerfreie Geschenke zwischen Ehegatten sind begrenzt auf 14.000 pro Jahr, aber Steuern sind nicht fällig über Überschuss, bis ein Ehegatte vergeht d. Steuerfreie Geschenke zwischen Ehegatten sind begrenzt auf 14.000 pro Jahr und Steuern müssen auf jeden Überschuss in dem Jahr, das die Gabe gegeben wird, bezahlt werden. Geschenke zwischen Ehegatten sind unbegrenzt und keine Geschenk-oder Erbschaftssteuer wird bezahlt werden, wenn ein Ehegatte vergeht Erklärung: Es gibt keine Beschränkung für die Höhe eines Geschenks zwischen Ehegatten. Ein Ehemann oder Ehefrau kann einem Ehegatten einen Betrag ohne Steuerpflicht gewähren. Eine Erbschaftssteuersumme kann auf den Wert eines Vermögens eines Erblassers erhoben werden, aber es wird keine Erbschaftssteuer fällig, wenn ein Ehegatte stirbt, wenn alle Vermögenswerte an den überlebenden Ehegatten weitergegeben werden. Das gesamte Gut kann steuerfrei an den Überlebenden weitergegeben werden. Wenn Vermögenswerte an andere Personen als den dezedenten Ehegatten verteilt werden, kann das Vermögen besteuert werden, wenn der Betrag die im geltenden Steuerrecht festgelegten zulässigen Grenzen überschreitet. Geschenk Steuern müssen von einem Spender, nicht der Empfänger des Geschenks bezahlt werden. Eine Person kann ein Geschenk von 14.000 pro Person, pro Jahr (28.000 für gemeinsame Renditen) ohne eine Geschenk-Steuer zu geben. Der Spender muss die Schenkung Steuern auf die Beträge über diese Zahl zu zahlen. John Jones, ein Aktionär der XYZ Corporation, liest in der Zeitung, dass XYZ Corporation beabsichtigt, neue Aktien durch ein Rechteangebot auszustellen. Die Rechte der Rechte sind wie folgt: 1. 10 Rechte plus 10,50 sind erforderlich, um eine neue Aktienaktie zu zeichnen 2. Bruchteile werden ganze Aktien 3. Der Datensatz ist Freitag, 17. Oktober 4. JPMorgan Chase und Bank of Amerika sind die Transfer-Agenten 5. Goldman Sachs und Morgan Stanley sind die Standby-Underwriter John entschied sich für das Bezugsrecht abzuschließen und kaufte zusätzliche XYZ Corporation Stammaktien am 16. Oktober. Basierend auf seinem letzten Aktienkauf, wird er: Nicht zulässig zu abonnieren Da die Aktie am 15. Oktober die Ex-Rechte gehandelt hat. Erläuterung: John würde das Rechteangebot für die neuen Aktien nicht abonnieren, da er die Aktie am 16. Oktober kaufte. Die Aktie verkaufte Ex-Rechte am 15. Oktober Nicht zum Aktienrekord für diese Aktien am Stichtag 17. Oktober. Ted Wilson, ein eingetragener Vertreter mit Ralston Financial, hat seinem Kunden den Erwerb eines Investmentfonds sowie einen variablen Annuitätsvertrag, der von demselben Sponsor unterzeichnet wurde, empfohlen , Slipstream Growth Fund und Slipstream Variable Annuity. Der Kunde hat beschlossen, beide Investitionen zu erwerben, die Anträge auszufüllen und sie mit einer Zahlung für beide zu übermitteln. Welche der folgenden Aussagen ist bezüglich der Käufe zutreffend? Der Investmentfonds und die variable Annuität können ohne vorherige Zustimmung, wenn b. Der Wachstumsfonds kann sofort erworben werden, aber der variable Annuity-Kauf muss zuerst von einem Kapital genehmigt werden c. Die variable Annuität kann sofort erworben werden, aber der Investmentfonds muss zunächst von einem Hauptgesellschafter genehmigt werden. Sowohl der Investmentfonds als auch die variablen Annuitätskäufe müssen von einem Kapitalgeber vor Beginn der Käufe genehmigt werden. B. Der Wachstumsfonds kann sofort erworben werden, aber der variable Annuity-Kauf muss zuerst durch eine prinzipielle Erklärung genehmigt werden: Für beide Käufe kann eine pauschale Zahlung eingegangen sein. Das Geld für die variable Annuität kann nur zugeteilt werden, nachdem ein Auftraggeber den Kauf schriftlich genehmigt hat. Das Geld für den Investmentfonds kann sofort verrechnet werden und bedarf keiner Genehmigung. Ein Kunde verlangt, dass ein Broker-Händler verkaufen Aktien, die sie besitzt und die Erlöse aus dem Verkauf an einen anderen Bestand zu kaufen. Bei der Bestimmung der Höhe der Markup, dass er berechnen wird, der Makler-Händler: Sollte nur berücksichtigen, die Menge des Geldes in den Verkauf an den Kunden beteiligt Erklärung: Wenn der Erlös aus dem Verkauf einer Aktie verwendet werden, um eine andere Aktie aus dem gleichen zu kaufen Broker-Dealer, wird die Transaktion als Erlös Transaktion. Bei der Festlegung der Markup der Broker-Händler erheben wird, nach Branchenregeln fest, dass das Unternehmen sollte nur die Menge an Geld in den Verkauf an den Kunden beteiligt. Die kurzfristigen kommunalen Verpflichtungen aus Mitteln, die in der Regel von der Bundesregierung zu zahlen sind, sind: Zuschussempfängererklärungen Erläuterung: Bei den Zuteilungsscheinen handelt es sich um kurzfristige Kommunalschuldverschreibungen, die auf die Erwartung der Gewährung von Zuschussgeldern, in der Regel von der Bundesregierung, ausgestellt werden. Welche der folgenden Aussagen ist NICHT ein Merkmal eines elektronischen Kommunikationsnetzes (ECN) a. ECN fungieren als Market Maker b. ECNs erlauben den elektronischen Handel c. ECNs erlauben den anonymen Handel d. ECNs erlauben den Handel nach Stunden a. ECNs fungieren als Market Maker Erläuterung: Elektronische Kommunikationsnetze ermöglichen es den Marktteilnehmern, Quotes anzuzeigen und Transaktionen durchzuführen. Diese Teilnehmer werden als Abonnenten bezeichnet und zahlen eine Gebühr an die ECN, um elektronisch durch das System zu handeln. ECNs ermöglichen es den Abonnenten, nach dem Stundenhandel zu handeln und ohne Angabe ihrer Namen (anonym) zu zitieren und zu handeln. ECNs agieren in einer Agenturkapazität und werden nicht auf eigene Rechnung kaufen oder verkaufen wie bei einem Market Maker. Dedicated Securities wurde eingeladen, sich einem Syndikat anzuschließen, das ein neues Angebot an Stammaktien verkauft. Der Leiter des Unternehmens Syndikatsabteilung bemerkt, dass die Vereinbarung unter den Versicherern ein Strafgebot erwähnt. Welche der folgenden Optionen ist ein Beispiel für ein Strafgebot a. Wenn Dedicated seine Zuteilung nicht verkauft, haftet er für das Doppelte seiner normalen Verpflichtung b. Wenn Dedicated eine bestimmte Anzahl von Zinsangaben nicht verlangt, ist es erforderlich, dem Syndikatmanager eine Gebühr zu zahlen. C. Wenn Dedicated einen Teil der Emission an einen Kunden verkauft, der später die Aktie bei dem Stabilisierungsgebot an das Konsortium veräußert, verliert Dedicated die Konzession für diese Aktien d. Wenn Dedicated einen Teil der Emission an einen Kunden verkauft, der später die Aktie bei dem Stabilisierungsgebot an das Konsortium veräußert, kann Dedicated für die Nichteinhaltung des Börsenkurses bestraft werden. Wenn Dedicated einen Teil der Emission an einen Kunden verkauft, der später die Aktie bei dem Stabilisierungsgebot an das Konsortium zurückveräußert, verliert Dedicated die Konzession für diese Aktien. Erläuterung: Ein Strafgebot ist eine Vereinbarung, die es dem verwaltenden Underwriter erlaubt, Konzession von einem Syndikatmitglied, wenn die ursprünglich verkauften Wertpapiere vom Syndikat zur Stabilisierung von Geschäften zurückgekauft werden. Welche Informationen würde ein Analyst bei der Bewertung einer Umsatzanleihe am meisten betroffen sein? Bevölkerungswachstum der Gemeinde b. Verschuldung der bewerteten Bewertung c. Ein Tarifvertrag d. Grundsteuer c. Ein Tarifvertrag Erläuterung: Ein Analytiker würde am meisten mit Tarifverträgen zu tun haben. Dies ist eine Vereinbarung des städtischen Emittenten, um die Preise hoch genug zu halten, um die Instandhaltungs - und Betriebskosten zu decken und die jährlichen Schuldendienstanforderungen zu erfüllen. Die übrigen Konditionen gelten für allgemeine Schuldverschreibungen. Die Ausschreibung von Beteiligungsrechten ist zulässig, wenn eine Einzelperson: I. Long-Investment-Grade-Anleihen, nicht umwandelbare Wertpapiere II. Long-Call-Optionen oder ausgeübte Wandelschuldverschreibungen III. Lange eine Wandelanleihe, die nicht für die Umwandlung IV angedient wurde. Im Besitz der Wertpapiere aufgrund der Kreditaufnahme II und III nur Erläuterung: Kurzfristige Ausschreibung von Aktien (d. H. Ausschreibungsbestand, den eine Person nicht besitzt) ist verboten. Dividendenwerte können nur dann ausgegeben werden, wenn der Anleger die Aktie lang oder gleichwertig ist. Gleichwertige Wertpapiere umfassen Rechte, Optionsscheine und andere Wertpapiere, die von der Gesellschaft ausgegeben werden, die Gegenstand des Übernahmeangebots ist. Alle diese sind sofort umwandelbar, oder austauschbar oder ausübbar für die Subjektsicherheit. Standardisierte Call-Optionen sind keine gleichwertigen Wertpapiere, es sei denn, die Option wurde ausgeübt. Die Genehmigung durch einen Auftraggeber ist NICHT erforderlich, wenn ein Kunde die folgenden Dokumente a. Eine Zusammenfassung von einer offiziellen Erklärung b. Ein Formularbrief c. Ein Forschungsbericht d. Ein roter Hering d. Ein roter Hering Erläuterung: Ein Abstract aus einer offiziellen Erklärung, ein Formularbrief und ein Forschungsbericht werden als Werbe - oder Verkaufsliteratur betrachtet und müssen genehmigt werden. Ein roter Hering (vorläufiger Prospekt) wird verwendet, um einen potenziellen Investor mit Informationen zu versorgen und wird durch die SEC reguliert. Eine Einzelperson wünscht, Aktien gemäß Regel 144 Anforderungen zu verkaufen. Es gibt 3.500.000 Aktien ausstehend. Die Einzelperson entscheidet, am 30. Januar zu verkaufen. Das Handelsvolumen für die Aktie ist wie folgt. Woche endend am 1. Januar 20.000 Aktien Woche endende Januar 8 48.000 Aktien Woche endende Januar 15 30.000 Aktien Woche endende Januar 22 36.000 Aktien Woche ende Januar 29 40.000 Aktien Wie viele Aktien verkauft werden können Erläuterung: Die Einzelperson kann die größere von 1 der ausstehenden Aktien verkaufen Oder das durchschnittliche wöchentliche Handelsvolumen der vorangegangenen vier Wochen. Der Durchschnitt ist 38.500 (40.000 36.000 30.000 48.000) geteilt durch 4. Dies ist größer als 1 der ausstehenden Aktien (1 von 3.500.000 entspricht 35.000). Sipcar ist eine auf Nasdaq notierte Aktie. Der Innenmarkt ist 3,40 - 3,45. Ein Kunde kontaktiert eine RR und möchte eine Bestellung aufgeben, um die Aktie bei 3,425 zu kaufen. Die beste Vorgehensweise für die RR ist: Nicht akzeptieren, die Bestellung Erklärung: Nach Verordnung NMS, Broker-Händler sind nicht zulassen, Angebote, Angebote oder Anzeigen von Interesse für NMS-Aktien um 1,00 oder mehr in Schritten kleiner als zu akzeptieren 0,01 und bei NMS-Beständen von weniger als 1,00 in Schritten von weniger als 0,0001 (ein Hundertstel eines Pfennigs). Die RR ist nicht berechtigt, eine Bestellung zu kaufen oder zu verkaufen in Subpennies (mehr als zwei Dezimalstellen) zu akzeptieren, wenn die Aktie bei oder über 1,00 gehandelt wird. Der RR ist nicht berechtigt, diese Bestellung anzunehmen. Alle folgenden Aussagen sind bezüglich der Zinskurven TRUE, EXCEPT: a. In einer aufsteigenden Kurve sind die kurzfristigen Zinssätze niedriger als die langfristigen Zinssätze b. Sie sind fix und dürfen nur vom Federal Reserve Board geändert werden. C. In einer absteigenden Kurve sind die kurzfristigen Zinssätze höher als die langfristigen Zinssätze d. In einer flachen Zinskurve sind sowohl kurzfristige als auch langfristige Zinsen gleich b. Sie sind fixiert und dürfen nur vom Federal Reserve Board geändert werden. Erläuterung: Die Renditekurven steigen (steigende Kurve von der kürzeren zur längeren Laufzeit), wenn das Geld einfach ist. In diesem Fall sind die kurzfristigen Zinsen niedriger als die langfristigen Zinssätze. Eine absteigende Zinsstrukturkurve, die auf eine knappe Geldsituation hindeutet, zeigt kurzfristige Zinssätze, die höher sind als die langfristigen Zinssätze. Eine flache Zinsstrukturkurve zeigt, dass kurzfristige und langfristige Zinssätze ungefähr gleich sind. FRB-Richtlinien können die Zinskurven beeinflussen, sind aber nicht fixiert und werden durch eine Vielzahl von Faktoren beeinflusst. Beim Vergleich hochkarätiger Anleihen mit niedrigwertigen Anleihen haben niedrigere Anleihen diejenige TWO der folgenden Wahlmöglichkeiten I. Höhere Renditen II. Niedrigere Erträge III. Höhere Marktpreise IV. Niedrigere Marktpreise Erläuterung: Eines der Grundprinzipien des Investierens ist, je größer das Risiko, desto größer die Rendite und je niedriger das Risiko, desto geringer die Rendite. Da Anleihen mit niedrigerer Bonität riskanter sind als Anleihen höherer Bonität, werden sie höhere Renditen und niedrigere Marktpreise aufweisen. Buy-Stop-Aufträge oder Verkaufsstopp-Aufträge können alle folgenden Funktionen bereitstellen, EXCEPT: a. Preisschutz für eine kurze Position b. Preisschutz für eine lange Position bieten c. Geben Sie einen Makler frei, wenn der Auftrag aktiviert ist. Möglicherweise eine Schwankung des Marktpreises eines Bestandes verursachen c. Geben Sie eine Makler-Diskretion an, wenn der Auftrag aktiviert ist. Erläuterung: Buy-Stop - oder Verkaufsstopp-Aufträge geben dem Broker keine Diskretion, wenn der Auftrag aktiviert ist. Bei Aktivierung wird der Auftrag zur Marktordnung und sollte sofort ausgeführt werden. Alle anderen Optionen sind korrekt. XYZ Corporation verfügt über eine ausstehende 6 12 Wandelanleihe, die in 40 Stammaktien umwandelbar ist. Die Anleihe ist derzeit auf dem Markt mit 85 (850) verkauft und die Stammaktien werden bei 21 verkauft. Die XYZ Corporation bietet ihren bestehenden Anleihegläubigern eine neue (nicht umbaubare) Anleihe mit 6 12 an, die zur gleichen Zeit wie die Wandelanleihe reift . Der erfolgreiche Abschluss des Vorschlags würde sein: I. Verringerung der Zinskosten II. Reduzieren Sie potenzielle Verdünnung III. Haben keine Auswirkungen auf die Zinskosten IV. Erhöhung der Verwässerung Erläuterung: Vor der Rückzahlung würden, wenn alle Anleihen in Stammaktien umgewandelt wurden, die ausstehenden Aktien ansteigen, wodurch das Ergebnis je Aktie sinkt (verdünnt). Der erfolgreiche Abschluss des Vorschlags (Erstattung) würde eine Verringerung der potenziellen Verwässerung zur Folge haben, da die Umwandlungsvorschrift beseitigt wird. Die Zinskosten würden nicht gesenkt, da die neuen Anleihen den gleichen Zinssatz wie die alten Anleihen zahlen (6 12). Welche TWO der folgenden Aussagen sind Merkmale von REITs I. Sie sind als Kommanditgesellschaft II gebildet. Sie haben eine beschränkte Haftung für die Aktionäre III. Sie investieren nur in Hypotheken IV. Sie sind verpflichtet, einen minimalen Prozentsatz ihres Einkommens zu verteilen Erläuterung: Ein Immobilien-Investment-Trust (REIT) ist als Aktiengesellschaft organisiert, die der Öffentlichkeit Aktien zur Verfügung stellt und somit Anlegern eine beschränkte Haftung bietet. REITs sind keine Kommanditgesellschaften und haben daher keinen Durchfluss von Verlusten. Ein Investorenrisiko ist auf ihre Investition begrenzt. Sie können eine Eigenkapitalposition in Immobilien haben (eigene Gebäude) oder an Hypotheken-Aktivitäten beteiligt sein (Geld leihen). Sie müssen 90% ihres Einkommens ausschütten, um für eine steuerliche Vorzugsbehandlung zu qualifizieren. Ein Kunde besitzt einen Investmentfonds, der primär in ausländische Wertpapiere investiert. Welche TWO der folgenden Beträge wird dem Kunden über die steuerliche Behandlung von Zinsen und Dividenden I gemeldet. Der Nettobetrag der Dividenden und Zinsen II. Bruttobetrag der Zinsen und Dividenden III. Der Betrag der Steuer, die an den Internal Revenue Service (IRS) IV. Der Betrag der von der ausländischen Regierung einbehaltenen Steuer Erläuterung: Besitzt ein Anleger einen Investmentfonds, der in ausländische Wertpapiere investiert und Dividenden und Zinsen an einen US-Investor ausgezahlt werden, so können diese Erträge von dem Land, aus dem sie stammen, einer Quellensteuer unterliegen bezahlt. Der Makler-Händler sendet dem Investor ein Formular, das den Bruttobetrag der Dividenden oder Zinsen und die Höhe der von der ausländischen Regierung einbehaltenen Steuer berichtet. Ein Kunde, der einen Exchange Traded Fund (ETF) erworben hat, kann von einem Broker-Dealer verlängert werden. Erläuterung: Einige Investmentgesellschaften, wie Investmentfonds, sind gemäß Reg. T. Allerdings gelten sie als neue Emissionen von Wertpapieren. Das Securities Exchange Act von 1934 hindert einen Händler daran, den Kredit auf eine neue Ausgabe für mindestens 30 Tage auszudehnen. Sobald die Investmentzertifikate für 30 Tage gehalten wurden, können diese Wertpapiere als Sicherheiten für ein Darlehen in einem Margin-Konto beim Händler verwendet werden. In dieser Frage kauft der Kunde eine ETF, die nicht als neue Ausgabe betrachtet wird. In diesem Fall kann die Gutschrift sofort verlängert werden. Eine neue Emission von Kommunalanleihen hat einen Nominalwert von 10.000.000. Das Syndikat erhielt 5.000.000 in designierten Aufträgen, 5.000.000 in Gruppenaufträgen und 5.000.000 in Mitgliedsordnungen. Wie wird die Emission zugewiesen werden 5 MM-Gruppe und 5 MM bezeichnet Erläuterung: Bei der Zuteilung von Anleihen in einer neuen kommunalen Ausgabe haben Vorverkaufsaufträge in der Regel erste Priorität. Dies wird von Gruppennetz, gekennzeichnet und dann Mitglied Bestellungen gefolgt. Dabei werden die 5 MM in Gruppenaufträgen und 5 MM in bezeichneten Aufträgen vergeben. Es gibt keine Anleihen für Mitgliederbestellungen. Ein Anleger kauft 40.000 eines Investmentfonds, wenn der Kurs des Fonds 18.50 ist. Im gleichen Jahr erhält der Investor eine Dividendenausschüttung von 700 und eine Kapitalgewinnverteilung von 1.100. Beide Ausschüttungen werden zu einem Preis von 17,90 in weitere Aktien reinvestiert. Wenn der Fonds einen aktuellen Wert von 22,80 hat und der Anleger 9,000 Wert des Fonds verkauft, was ist der Kapitalgewinn der Anleger unter Verwendung der durchschnittlichen Kostenmethode Erläuterung: Unter Verwendung der Durchschnittskostenmethode wird der Gewinn durch Subtrahieren der Kostenbasis von der Verkaufserlöse. Um die Kostenbasis nach der Methode der Durchschnittskosten zu berechnen, teilen Sie die Summe aller Anlagen mit der Anzahl der im Besitz des Anlegers befindlichen Aktien. Der Anleger kaufte 40.000 des Fonds zu einem Preis von 18.50, Die Gesamtzahl der gekauften Aktien beträgt 2.161,16. Darüber hinaus erhielt der Anleger insgesamt 1.800 Ausschüttungen, die wieder in weitere Aktien investiert wurden, wenn der Kurs 17,90 beträgt. Die Gesamtzahl der gekauften Aktien beträgt 100,59. Der investierte Gesamtbetrag beläuft sich auf 41.800. Die Gesamtzahl der Aktien beträgt 2.262,75. Daher sind die durchschnittlichen Kosten 18,47. Die Anzahl der verkauften Aktien beträgt 394,74 (9,000 22,80). Wenn wir die Kostenbasis von 7.290 (394.74 x 18.47) von 9.000 subtrahieren, ergibt sich ein Kapitalgewinn von 1.710. Wann kann eine neue Ausgabe 30 Tage ab dem tatsächlichen Datum marginable werden Erläuterung: Wenn für den Margin-Handel durch die FRB genehmigt, wird eine neue Ausgabe 30 Tage ab dem Wirksamwerden des Angebots marginable. ein. Underwriter b. Händler c. Agent d. Principal Erläuterung: Ein Trader ist verantwortlich für die Positionierung (Tragen Inventar) Sekundärmarkt kommunalen Anleihen. Ein Underwriter ist an der Verteilung neuer Themen beteiligt. Für die folgenden Größenvorgänge hat der ABC-Investmentfonds einen Geldkurs von 8,50 und einen angefragten Kurs von 9,26. Welche der folgenden Verkäufe ist unter den Verhaltensregeln erlaubt a. Ein Mitglied verkauft 250 Aktien des ABC-Fonds bei 9.10 an eine Nicht-Mitgliedsfirma b. Ein Mitglied verkauft 250 Aktien der ABC-Fonds bei 9.10 zu einem anderen Unternehmen durch eine nicht-Firma Firma c. Ein Mitglied verkauft 250 Aktien des ABC-Fonds bei 9.10 an einen der Firmenkunden d. Ein Mitglied verkauft 250 Aktien des ABC-Fonds bei 9,26 an einen der Firmenkunden d. Ein Mitglied verkauft 250 Aktien des ABC-Fonds bei 9,26 an einen der Firmenkunden Erläuterung: Eine FINRA-Mitgliedsfirma darf den Fonds nicht mit einem Abschlag (9,10) an eine Nichtmitgliedsfirma oder an eine der Firmenkunden (die Öffentlichkeit) verkaufen. Entsprechend den Verhaltensregeln kann eine Mitgliedsfirma nur einen Rabatt vom Börsenpreis an ein anderes Mitgliedsunternehmen geben. Die Rabatte und der Verkauf von Konzessionen, die Mitgliedsunternehmen gegenseitig vergeben, sind Anreize für Firmen, Mitglieder der FINRA zu sein (die Selbstregulierungsorganisation von Over-the-Counter-Broker-Händlern) und sich an ihre Regeln und Vorschriften halten. Die ursprüngliche FRB Margin Anforderung ist 50. Ein Kunde kauft 1000 Aktien von XOP bei 48 pro Aktie und macht die notwendige Anzahlung. Wenn XOP den Wert auf 57 pro Aktie erhöht und später auf 45 eine Aktie sinkt, ist die folgende Aussage TRUE a. Die SMA in dem Konto ist 4.500 und das Eigenkapital ist 21.000 b. Die SMA auf dem Konto ist 4.500 und das Eigenkapital ist 33.000 c. Es gibt keine SMA und das Eigenkapital beträgt 21.000 d. Die SMA ist 9.000 und das Eigenkapital beträgt 33.000 a. Die SMA in das Konto ist 4.500 und das Eigenkapital ist 21.000 Erklärung: Erstens, die Höhe der Belastung Gleichgewicht zu bestimmen. Wenn der Kunde 48.000 Aktien im Rahmen einer 50-Margin-Anforderung gekauft und 24.000 Euro hinterlegt hat, beträgt der Sollsaldo 24.000 (48.000 Marktwerte - 24.000 Margin-Anforderungen 24.000 Debitguthaben). XOP erhöht sich auf 57 pro Aktie, so dass der Markt Wert 57.000. Das Eigenkapital erhöht sich auf 33.000. Das überschüssige Eigenkapital (SMA) wird durch Subtraktion des FRB-erforderlichen Eigenkapitals von 28.500 (50 von 57.000) vom tatsächlichen Eigenkapital im Konto von 33.000 gefunden. Die SMA ist daher 4.500. Der SMA bleibt auf dem Konto, bis er verwendet wird. Die SMA-Bilanz wird sich aufgrund der Marktbewegungen nicht verringern. Wertpapiere in einem Margin-Konto, die Wertzuwachs kann überschüssiges Eigenkapital (SMA) zu schaffen, aber wenn diese Wertpapiere später im Wert sinken, wird dies nicht verringern SMA. Das Eigenkapital verringert sich, da der Marktwert auf 45 pro Aktie gesunken ist und nunmehr 21.000 (45.000 - 24.000) beträgt. In Zeiten leichter Geldes, wenn die Zinsen sinken, neigen Zinskurven dazu: Steigen Sie von den kürzeren zu den längeren Laufzeiten aufwärts Erläuterung: In Zeiten leichtes Geld, wenn die Zinsen sinken, sind die Renditen bei kürzeren Laufzeiten geringer als die der längeren Laufzeiten. Die Renditekurven neigen dazu, von den kürzeren zu den längeren Laufzeiten nach oben zu neigen. Ein Kunde besitzt 50 Aktien der ABC Corporation. ABC Corporation engagiert sich in einem Rechte-Angebot. Jede bestehende Aktie erhält ein Recht. Die Bedingungen des Angebots sind, dass 10 Rechte plus 35 erforderlich ist, um eine neue Aktie zu kaufen. Wenn der Kunde die Bezugsrech - nung abonnieren möchte, wie viele zusätzliche Rechte müsste sie 100 neue Aktien erwerben? Erläuterung: Die Bedingungen für das Bezugsrechtsangebot sind, dass 10 Rechte zur Zeichnung einer neuen Aktie erforderlich sind. Wenn ein Investor 100 Aktienaktien abonnieren möchte, benötigt der Investor 1.000 Rechte. (10 Rechte x 100 Aktien 1.000 Rechte.) Der Investor besitzt 50 Aktien und erhält 50 Rechte von der Gesellschaft (ein Recht für jede Aktie im Besitz). Wenn der Kunde 100 Aktien über das Bezugsangebot abonnieren möchte, müsste der Investor weitere 950 Rechte erwerben. Ein Unternehmen hat derzeit 125.000.000 von 3 14 Wandelschuldverschreibungen. Das Unternehmen bietet den Anleihegläubigern 125.000.000 von 3 14 nicht umwandelbare Anleihen plus Barmittel von 15.000.000 für die Wandelschuldverschreibungen an. Wie wird diese Transaktion, wenn erfolgreich, die finanzielle Situation der Gesellschaft beeinflussen Es wird die Cash-Position und die potenziellen Verwässerungseffekt auf die Stammaktien reduzieren Erläuterung: Die Wirkung der Transaktion wird es sein, die Cash-Position und die möglichen Verwässerungseffekt auf die gemeinsame reduzieren Stock. Die Gesellschaft bezahlt Bargeld und gibt anstelle von Wandelschuldverschreibungen (die in Stammaktien umgewandelt werden können) auch nicht - umwandelbare Schuldverschreibungen. Dadurch werden die Liquidität und der mögliche Verwässerungseffekt auf die Stammaktien reduziert. Welche der folgenden Wertpapiere würden Sie vermutlich einem Anleger empfehlen, der eine feste Geldsumme in zehn Jahren erhalten muss? A zero-coupon municipal bond b. A high-yield corporate bond c. Collateralized mortgage obligations (CMOs) d. Treasury Inflation-Protected Securities (TIPS) c. Collateralized mortgage obligations (CMOs) Explanation: The risk that an investor will receive her principal earlier than projected instead of at one time (i. e. prepayment risk) is the most important risk pertaining to mortgage-backed securities such as CMOs. Since the investor wants to receive a fixed amount of funds in 10 years, a CMO would be the least suitable of the securities listed. Under the provisions of the Securities Act of 1933, which TWO of the following securities are exempt I. Securities issued by broker-dealers II. A general obligation bond issued by the city of San Francisco III. Corporate debt maturing in six months IV. Securities issued by an investment company Explanation: The Securities Act of 1933 exempts government securities (both direct and agency), municipal securities (e. g. a G. O. bond), and corporate debt with a maturity of 270 days or less. A customer has a federal tax rate of 35 and a state tax rate of 7. Which of the following investments would afford him the BEST after-tax yield a. A 6.40 in-state municipal bond b. A 7.10 out-of-state municipal bond c. A 10.95 investment-grade corporate bond d. A 11.50 mortgage bond d. A 11.50 mortgage bond Explanation: The major advantage of municipal bonds for most investors is that the interest received from the bond is exempt from federal taxes. In addition, most states also exempt interest from bonds issued within their state from a residents state and local income taxes. However, if a state resident earns interest from an out-of-state municipal security, that interest is usually subject to state and local taxation. If an investor in a particular tax bracket would like to compare the benefit of tax-free interest income to after-tax income of a taxable bond, it is necessary to find the equivalent taxable yield. The mortgage bond is a type of corporate bond and both are fully taxable. Since the investor can purchase an in-state municipal bond and out-of-state municipal bond, we use the combined rate of 42 for the in-state bond and the federal rate of 35 for the out-of-state bond. The formula is: Municipal Bond Yield (100 - Investors Tax Bracket) Equivalent Taxable Yield The customer is in the 42 combined tax rate. The municipal bond has a yield of 6.40. 6.40 (Municipal Bond Yield) 58 (100 - 42) 11.03 Equivalent Taxable Yield The out-of-state municipal bond has a yield of 7.10 and the equivalent taxable yield is 10.92 (7.10 65). The mortgage bond has the best or highest after-tax yield. How he obtained the prospects home number Explanation: Registered representatives, when telemarketing, are not required to tell prospects how their names were obtained. However, an RR must disclose his name, contact information, and the purpose of the call. A limited partner has contributed capital to a direct participation program. Two years later, he extends a loan. Which of the following statements is TRUE if the DPP declares bankruptcy a. The LP is considered a limited partner for both the capital contribution and the loan b. The LP is considered a limited partner for the capital contribution and a creditor for the loan c. The LP is considered a creditor for the capital contribution and a limited partner for the loan d. The LP is considered a creditor for both the capital contribution and the loan b. The LP is considered a limited partner for the capital contribution and a creditor for the loan Explanation: A limited partner who has committed capital may also extend a loan to the partnership. If the partnership declares bankruptcy, the LP will be considered a limited partner for the capital contribution and a creditor for the amount of the loan. Which of the following option strategies is most suitable in a retirement account under ERISA guidelines a. A long straddle b. Covered call writing c. A credit spread d. No strategies, since options are not permitted in retirement plans b. Covered call writing Explanation: Options may be used in the investment strategies of retirement plans subject to ERISA provisions, but they tend to be limited to the most conservative approaches, such as the sale of covered call options. An insider owning 500,000 shares of unregistered ABC stock has filed a Form 144 Notice of Offering. The weekly volume of trading for ABC on all exchanges was: June 30 61,000 June 23 62,000 June 16 64,000 June 9 65,000 June 2 40,000 ABC has 6,500,000 shares of stock outstanding. On July 3, the insider would like to sell a portion of his unregistered stock. What is the maximum amount of shares he may sell under Rule 144 Explanation: On July 3, the insider wants to sell unregistered ABC stock under Rule 144. The trading volume for the previous four weeks was: June 30 61,000 June 23 62,000 June 16 64,000 June 9 65,000 Total four-week volume 252,000 The average volume is 63,000 shares (252,000 divided by four weeks equals 63,000). Rule 144 states that the insider may sell an amount equal to the average weekly volume of the previous four weeks, or 1 of the outstanding shares, whichever is greater. One percent of the 6,500,000 outstanding shares equals 65,000. Therefore, the investor may sell 65,000 shares of the security. A customer buys an ABC July 50 call, paying a 3 premium. Seven months later, the customer exercises the call when the market price of ABC stock is 60 per share. The customer immediately sells the stock for 6,000. If the customer had sold the option at 8 instead of exercising the option, the profit would have been taxable as: A 500 capital gain Explanation: If the customer had sold the option at 8 instead of exercising it, the 5 profit per share (8 sale minus 3 cost equals 5 profit) would be taxable as a capital gain. Which of the following statements is NOT TRUE of industrial development revenue bonds a. They are issued by local municipal governments b. They may be used to finance the construction of commercial property that will be used by private corporations c. Their credit rating is determined by an analysis of the municipal government issuing the bonds d. Interest is paid from rents received from private corporations c. Their credit rating is determined by an analysis of the municipal government issuing the bonds Explanation: Industrial development revenue bonds are issued by local municipal governments to build factories or other commercial properties. The plant or property is leased by the municipality to a corporation. The interest on the bonds is paid from the lease rental payments made by the corporation. The credit rating of the bond is based on the credit rating of the corporation and not on an analysis of the credit rating of the municipal government issuing the bonds. A registered representative is permitted to borrow from, or lend funds to, customers in all of the following situations, EXCEPT: a. The customer is an immediate family member of the registered representative b. The customer is an accredited investor c. The loan is based on a business relationship independent from the member firm customer relationship d. The customer has a personal relationship with the registered representative b. The customer is an accredited investor Explanation: Registered personnel of a member firm are generally prohibited from borrowing money from, or lending money to, any customer. However, if the firm has written rules and procedures that allow borrowing and lending between registered personnel and their customers that meet one of the following conditions, the activities are permissible. - The customer is an immediate family member of the registered person. - The customer is a financial institution or other entity that engages in the business of providing credit, financing, or loans in the course of its business. - The customer and the registered person are both registered with the same member firm. - The customer has a personal relationship with the registered person wherein the loan would not have been solicited, offered, or given if the relationship did not exist. - The loan is based on a business relationship other than that of a member firm customer. There is no exception based on the type of customer, for example, an accredited investor. A customer has funded her IRA with pretax contributions. The account has total assets of 350,000. How much may be withdrawn from this account tax-free None of the funds Explanation: The earnings on an IRA account grow tax-deferred. If only pretax contributions are made, the entire withdrawal is taxable as ordinary income. None of the funds may be withdrawn tax-free. If an investor maintains an IRA account that has pretax and after-tax contributions and makes withdrawals, the IRS considers withdrawals to come from both sources. Therefore, a portion of the withdrawal is taxable and the other portion is tax-free. Withdrawals from a Roth IRA are tax-free if certain conditions are met. Explanation: MIG stands for Moodys Investment Grade and is used to rate municipal notes. There are three MIG ratings, with the best rating being MIG 1 and the lowest rating being MIG 3. Aaa is Moodys best rating for bonds, and C is its lowest rating for bonds. A client buys 100 shares of XYZ Corporation at 27 per share and writes an XYZ October 30 call at a 3 premium. The option order ticket would be marked: Opening sale, covered Explanation: The question states that the individual writes an option after buying the underlying stock. The initial sale of the option would be an opening sale. Since he is long the underlying stock, he is covered. If he did not own 100 shares of XYZ stock, his position would be uncovered and must be executed in the margin account. Mrs. Jones owns stock from which she received 3,000 in cash dividends. Mr. Jones owns stock from which he received 400 in cash dividends. How much of the cash dividends received are Mr. and Mrs. Jones liable for when filing their joint return Explanation: Cash dividends received by individuals are fully taxable and, therefore, the entire 3,400 total of dividends is liable for taxes. The initial FRB margin requirement is 50. A customer purchased 100 XRX at 100 per share depositing the required margin. If Xerox increased in value to 150 per share, how much SMA would the customer have in the account Explanation: First, determine the amount of the debit balance. If the customer purchased 10,000 worth of stock at a 50 margin requirement and deposited 5,000, the debit balance is 5,000. (10,000 market value - 5,000 margin requirement 5,000 debit balance). XRX increased to 150 per share, making the market value 15,000. The equity then increases to 10,000. The SMA (excess equity) is found by subtracting the FRB required equity of the current market value in the account (50 x 15,000 7,500) from the actual equity in the account (10,000). The SMA is, therefore, 2,500. A client wants to invest 250 a month and have broad exposure to the U. S. equity market. Which of the following recommendations is the most suitable for this client a. A managed closed-end fund b. An SampP 500 Index mutual fund c. An SampP 500 Index exchange-traded fund d. An DJIA exchange-traded fund b. An SampP 500 Index mutual fund Explanation: Although all of these investments are suitable for a client seeking broad exposure to the U. S. equity market, the mutual fund is the most cost-effective method for an investor to accomplish this goal with 250 per month. The closed-end fund and ETFs are purchased on an exchange and the client pays the current market price plus a commission. Most index mutual funds do not charge the client a sales charge (no-load). If the investor were to purchase a large dollar amount at one time, any of these funds may be appropriate. A registered representative is sending an e-mail to all her customers in anticipation of a new product being offered by the firm. If her customers consist of a large group of individual investors with assets from 100,000 to 100,000,000, which of the following statements is TRUE a. This would be defined as a correspondence b. This would be defined as an institutional communication c. This would be defined as both a retail and an institutional communication d. This would be defined only as a retail communication d. This would be defined only as a retail communication Explanation: FINRAs Communications with the Public Rule defines different types of communication. - Correspondence, which is defined as any written or electronic communication that is distributed or made available to 25 or fewer retail investors within any 30 calendar-day period. - Institutional communication, which is defined as any written or electronic communication that is distributed or made available only to institutional investors. This would not include any internal communication by the broker-dealer. - Retail communication, which is defined as any written or electronic communication that is distributed or made available to more than 25 retail investors within a 30 calendar-day period. - Public appearances are situations where employees associated with a broker-dealer or sponsor participate in a television or radio interview, seminar, or forum, or make a public appearance, or engage in speaking activities that are unscripted and are not otherwise considered retail communication. Social media sites, which permit real-time communication or interactive, electronic forums, fall under the guidelines of a public appearance (e. g. Facebook, Twitter, and LinkedIn). An institutional investor under this rule is any bank, SampL, insurance company, registered investment adviser or investment company (mutual fund), any person with total assets of at least 50 million, government entity, employee benefit plan, any member firm or registered person of the firm, and any person acting solely for any institutional investor. Since the e-mail is being sent to both retail and institutional investors, it is defined as a retail communication. If the communication is made available only to customers with total assets of at least 50 million, then it would be defined as an institutional communication. When calculating cost depletion for an oil program, all of the following items are necessary, EXCEPT the: a. Adjusted basis of the property b. Recoverable reserves c. Amount extracted and in storage d. Amount extracted and sold c. Amount extracted and in storage Explanation: To calculate cost depletion, the adjusted basis, amount of recoverable reserves, and the amount extracted and sold are needed. Percentage depletion is based on a percentage of gross income from the property. Which of the following statements is NOT considered misleading regarding a variable annuity communication a. Telling a client that a variable annuity is a mutual fund b. Representing that a variable annuity will meet short-term liquidity needs c. Telling a client about the negative impact of an early redemption d. Making a representation that a death benefit guarantee applies to the investment return of the annuity c. Telling a client about the negative impact of an early redemption Explanation: FINRA is concerned about misleading communications regarding product identification, liquidity, and claims regarding guarantees. A firm should not imply that the underlying account is a mutual fund. Annuities should be purchased with long-term goals in mind, not short-term liquidity needs. Death benefits may be guaranteed, but investment results may not. It would be advisable to inform a potential investor of surrender charges incurred as a result of early redemption. When comparing long-term bonds and short-term bonds, all of the following statements are TRUE, EXCEPT: a. Long-term bonds generally have higher yields b. Fluctuations in the dollar price of long-term bonds are usually greater than for short-term bonds when the general level of interest rates change c. Long-term bonds generally provide greater liquidity than short-term bonds d. There is more purchasing power risk with long-term bonds when compared to short-term bonds c. Long-term bonds generally provide greater liquidity than short-term bonds Explanation: When comparing long-term bonds and short-term bonds, all of the choices listed are true except long-term bonds generally provide greater liquidity than short-term bonds. Short-term bonds do not suffer from as large a price movement as long-term bonds when interest rates are changing. Long-term bonds are open to greater market risk, interest-rate risk, and purchasing-power risk. Both individual and institutional investors alike are more willing to accept a lower return (yield) in favor of more stable principal (less severe price swings). The interest rate that fluctuates the most is the: Federal funds rate Explanation: Short-term rates fluctuate more than long-term rates. The federal funds rate, which is the rate of interest one bank charges another bank for the use of excess reserves for short-term periods (usually overnight), fluctuates the most since it has the shortest maturity. Although long-term bond prices fluctuate more than short-term bond prices, the yields of short-term securities fluctuate more than those for long-term securities. An investor purchases Swiss francs in the spot market at 61. As a hedge, the investor buys a Swiss franc June 60 put at 0.50. This strategy will be profitable if: I. The U. S. dollar weakens II. The U. S. dollar strengthens III. The spot price for the Swiss franc is 61.75 IV. The spot price for the Swiss franc is 59.25 Explanation: An investor who buys Swiss francs would purchase a put to provide protection if the U. S. dollar strengthens (which would cause the Swiss francs to decrease). If the Swiss francs decline, the investor could exercise the put or sell the put at a profit. The investor will break even when Swiss francs increase to a value equal to his cost (61) plus the premium paid (0.50). This makes the breakeven point 61.50 or .6150 (since strike prices and premiums for Swiss franc options are in cents per unit, the decimal must be moved two places to the left). The investor will have a profit if the Swiss franc rises above the breakeven point (61.50) which would occur if the U. S. dollar weakens. According to the Securities Exchange Act of 1934, a person who is on the board of directors of a public corporation and owns 3 of the company stock is: a. Required to sell shares of the company stock currently owned every three months b. Not permitted to purchase additional shares of the company stock c. Required to register as an insider of the corporation d. Not required to register as an insider of the corporation c. Required to register as an insider of the corporation Explanation: An insider, as defined by the Securities Exchange Act of 1934, is a director, officer, or owner of more than 10 of the voting stock of a corporation and his immediate family members. Individuals who become insiders are required to report to the SEC within 10 days of becoming insiders. An officer or director is required to register regardless of the number of shares he owns of the public corporation. Insiders are not permitted to make short-swing profits in the stock of the corporation in which they are insiders. If an insider sells the stock at a profit within six months of its acquisition, or sells stock for a profit that was held six months or longer and then repurchases it within six months of the sale, the corporation may sue for recovery of the profit. Insiders are also not permitted to short the stock of the company in which they are shareholders. Insiders are never required to sell shares, but are permitted to buy additional shares as long as it is reported to the SEC. Which TWO of the following statements apply for a new issue to be sold in its home state and neighboring states I. The issuer must file a Rule 147 Form II. Registered representatives selling the stock must be registered in whatever states in which they plan to make sales III. FINRA must approve the sale in all the states IV. The Blue-Sky laws (state securities laws) of all the states in which the securities will be sold must be observed Explanation: For the issue to be sold in its home state and neighboring states, individuals selling the new issue must be registered to sell the securities in those states. The Blue-Sky laws (state securities laws) of those states in which the securities will be sold must also be observed. Which of the following sources of revenue is NOT used to pay the debt service on general obligation bonds a. Income taxes b. Property taxes c. Licensing fees and traffic fines d. Tolls collected at a tunnel located in the municipality d. Tolls collected at a tunnel located in the municipality Explanation: A general obligation (GO) bond is backed by the full faith and credit of the municipality. Items that may be used to pay the debt service on GO bonds include fines, sales taxes, property taxes, income taxes, and licensing fees. Items such as tolls, concessions, and lease rental payments would be used to back a revenue bond. Which of the following choices is a type of retirement plan associated with individuals who work for a private company a. A 401(k) plan b. A 403(b) plan c. A 457 plan d. A 529 plan Explanation: A 401(k) plan is a tax-advantaged retirement account established by corporations, both private and publicly traded. A 457 plan is a tax-advantaged retirement plan that may be established by a governmental body (a municipality) or nongovernmental (nonprofit) employers. 403(b) plans are established by certain nonprofit organizations, such as religious organizations or public schools. A 529 plan is a tax-advantaged savings plan used by individuals to fund higher education needs. A registered representative has established a discretionary municipal bond account for a customer. Which of the following bonds may the RR purchase for the account a. General obligation bonds only b. Any suitable bonds c. Bonds rated Baa or higher d. Any bond that is not subject to the alternative minimum tax b. Any suitable bonds Explanation: An RR must be sure to recommend only bonds that are suitable for a customer in any type of account. If an investor had cash and securities in his account, why would the investor write call options against the securities To increase the overall rate of return of the portfolio Explanation: The purpose of writing calls against securities owned is to increase the overall rate of return of the portfolio. The premium the purchaser of the call pays the writer will be added to whatever dividends the writer was receiving to increase the yield of the portfolio to the writer. If the stock declines in value, the writer will make the premium on the expiring call. However, the investor is still exposed to large downside risk in the stock. Therefore, generating income for the portfolio is a better choice than to hedge. When a client buys a bond above par, the confirmations must indicate the: a. Rating b. Contraparty c. Lower of yield to call or yield to maturity d. Catastrophe call provisions c. Lower of yield to call or yield to maturity Explanation: A bonds confirmation must disclose the lower of the yield to maturity or the yield to call. This is sometimes referred to as the yield to worst. An investor purchases 40,000 of a mutual fund when the price of the fund is 18.50. In the same year, the investor receives a 700 dividend distribution and a capital gain distribution of 1,100. Both distributions are reinvested in additional shares at a price of 17.90. If the fund has a current value of is 22.80, what is the investors cost basis using the average cost method Explanation: To calculate the cost basis using the average cost method, divide the sum of all investments by the total shares owned by the investor. The investor purchased 40,000 of the fund at a price of 18.50. The total number of shares purchased was 2,162.16. The investor also received a total of 1,800 in distributions, all reinvested in additional shares when the price was 17.90. The total number of shares purchased is 100.56. The total amount invested is 41,800. The total number of shares owned is 2,262.72. Therefore, the average cost is 18.47. The current value of the fund is not relevant. Mann v Mann 2016 EWHC 314 (Fam) Judgment of Roberts J in which she calculated outstanding arrears due to a wife after 17 years of litigation, considered the applicability of s 24 Limitation Act 1980 to claims for interest on unpaid financial orders, and also considered recent developments concerning the burden of proof for committal under s 5 Debtors Act 1869. Mrs Mann (W) was aged 48, and her former husband, Mr Mann (H) aged 50. The parties had been litigating for almost 17 years following their divorce in 1999, that litigation travelling on various occasions from hearings in front of High Court judges to the Court of Appeal and back (sect 2). At this hearing Roberts J considered Ws application pursuant to FPR 2010 r.33.3(2)(b) for general enforcement of an order made by Charles J in May 2005 (in a case stated, at sect 9, to be reported as 2005 EWHC 701 (Fam)). W sought a suspended order for Hs committal as a result of what she claimed was Hs wilful refusal to pay her a sum of just under pound2 million. The parties had married in 1988 in South Africa, and had subsequently raised two daughters, born in 1993 and 1994. The parties separated in 1998, and decree absolute was pronounced in 1999. In April of 1999 Ws financial claims were settled by way of a consent order. In 2004 H was adjudged bankrupt, and he applied to vary downwards periodical payments, W successfully applying at the same time, to Charles J, to capitalise. The thrust of Ws case remained that H had undisclosed assets, whilst H insisted that he was impecunious. Although he described himself as a businessman, his declining health had impacted upon his ability to match the income he had been able to achieve earlier in his lifetime. It was common ground that payments had been made from H to W over the years totalling just under pound1.5m. On various occasions in the litigation, W had been prepared to suspend her strict legal entitlement and to explore settlement. In particular, agreement (the Callman Mediation Agreement) had been reached in 2006, following participation in the Court of Appeal mediation scheme, led by His Honour Judge Clive Callman. H had been granted permission to appeal aspects of Charles Js order, including the basis of a Duxbury calculation, but he had not sought to appeal Charles Js findings of fact, which included adverse inferences drawn by the court against him. A further mediated agreement had been reached in November 2011, W agreeing on terms to stay her hand in relation to the statutory demand she had by then issued against H. W now wished to enforce payment of a lump sum of pound1.3 million (representing maintenance capitalised by Charles J), c. pound74,500 maintenance arrears, costs of pound323,902, pound118,680 in arrears of child support, rent arrears of pound272,674 together with interest on the unpaid judgment debt (sect 16, 92 and 123). H had consistently maintained that the findings made by Charles J in 2005 were wrong, but he had never pursued an appeal against them. Evidence before the court The hearing before Roberts J took place over seven non-adjacent days. The judge heard oral evidence from the parties, from Hs former accountant, and from the purchasers of a flat in Eaton Place, London in which H had formerly lived. W had subpoenaed Hs partner, and the partner also gave evidence. Finally, written evidence was available from Hs sister, who had been making payments to H. In a thorough judgment extending to 185 paragraphs over 64 pages, Roberts J set out the background and the history of the litigation in some detail, before making the necessary findings. The ownership of the flat in Eaton Place W had indicated that she believed H to retain a beneficial interest in this flat, which had been owned by a company, the company being an asset of an offshore trust, the Hilbery Foundation. The court accepted the evidence of Hs former accountant, of the purchasers of the flat, and of H, with respect to the ownership of the property, and the judge was entirely satisfied that H no longer has any legal or beneficial interest in the property (sect 58). Computation of what, if any, sums remained due and outstanding to W Mostyn J had in an earlier round of litigation in 2014 directed both parties to instruct accountants in relation to computation. The figures had been something of a moveable feast (sect 91). The court found that H was unable to rely upon the terms superimposed on Charles Js order by the Callman Mediation Agreement. This had operated as a stay, and would simply fall away if H were to default, as he had, on the timetable for payments (sect 99). It was of no further legal effect (sect 114). The court was of the view that its ability to reflect a fair outcome lay in the discretion the court had to make appropriate orders in relation to interest and remission of arrears (sect 99). The headline figure of pound1,698,330 was now agreed (sect 100, 114). The court was not prepared to compensate H for voluntary overpayments he had made to W, without Ws prior consent (sect 106). The court found that the parties had not applied their minds to how the payments being made on an ongoing basis by H should be treated in terms of any apportionment between his capital and income liabilities (sect 109). As a result of this, W was granted leave to enforce payment of child maintenance which was more than twelve months in arrears (sect 121). The court allowed W to claim arrears of rent pursuant to the Callman Mediation Agreement, the agreement reflecting that fact that W was being kept out of her capital (sect 124). The amount remaining outstanding and due to W was pound624,886 (sect 125), excluding interest. What interest, if any, was W entitled to The court set out the principles, and directed the parties accountants to recalculate the interest on this basis. W would not receive interest on the unpaid rental payments (sect 124). The court considered the seminal authority in relation to s 24 Limitation Act 1980, Lowsley and Another v Forbes (ta L E Design Services) 1999 1 AC 329, and its treatment by various commentators. Section 32 MCA 1973 had not been amended so as to disapply s 24 (2) Limitation Act 1980 (sect 145). However, despite clarification in Wyatt v Vince 2015 UKSC 14 that there is no formally prescribed limitation period with respect to the bringing of an application for a financial order (sect 146 - 147), Ws arguments that financial orders fell outside the restrictions of s 24 Limitation Act 1980 were rejected (sect 148, 149). W was precluded by s 24 and by Lowsley from recovering arrears of interest from 2005 to the present. Interest would be allowed for a period of six years from when it became due and payable (not six years backwards from the present date) (sect 151). The court considered with approval the comments in Imerman v Tchenguiz 2001 Fam 116 and Prest v Petrodel Resources Ltd amp Ors 2013 UKSC 34 that judges sitting in the Family Division make their decisions by applying the same legal principles as the judges who sit in the other Divisions of the High Court (sect 149). In Re TW (Children) 2015 EWHC 3054 (Fam) Mostyn J had held that interest was not payable on arrears of child maintenance in the county court. However, in Mann . which was in the High Court, the court had not heard submissions as to interest on unpaid child maintenance, and it declined to wrestle with all the complexities and to make any specific findings in relation to recoverability of interest, as it would have exercised its discretion to disallow recovery in any event (sect 157). Given the level of provision H had made to W to date, requiring H to pay to W interest on unpaid child maintenance would be unfair (sect 157). Interest on other sums was allowed, at the judgment rate of 8, but only simple interest as H had been providing support more or less throughout the period of his default (sect 159). The application for committal pursuant to s 5 Debtors Act 1869 The court considered the guidance of Mostyn J in Bhura v Bhura 2012 EWHC 3633 (Fam) and of McFarlane LJ in Prest v Prest 2015 EWCA Civ 714: As to the law in relation to the burden and standard of proof, I take the view that the recent guidance given by the Court of Appeal in Prest v Prest . whilst not an all-embracing statement of the position, is nevertheless correct and is in any event binding upon me (sect 183). The burden of proving that H has or has had since May 2005 the means to pay the sums found owing, but had neglected or refused to do so remained throughout on the wife (sect 184). On the facts, she had not discharged this burden, for the various reasons given by the court in sect 185 of the judgment. The judge added I am not sure that the hidden wealth to which the wife points actually exists (sect 185). The court could find no assets, including alleged hidden or secret funds, from which H could satisfy all, or even a significant part of, his debt to W, and in those circumstances it declined to make the suspended order for committal (sect 186ndash7). The court recorded its sincere sympathy for W, who was facing an uncertain future arising from a problem which was not in any sense of her making (sect 189). This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court. Case No: FD98D03022 Neutral Citation Number: 2016 EWHC 314 (Fam) IN THE HIGH COURT OF JUSTICE FAMILY DIVISION Royal Courts of Justice Strand, London, WC2A 2LL SHELLEY MANN Applicant - and - DAVID ANTHONY MANN Respondent - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr Rex Howling QC (instructed by the Applicant on a direct access basis) and The Responden t acting in person Hearing dates: 5 th. 6 th. 7 th and 8 th May 2015, 27 th August 2015, and the 29 th and 30 th October 2015 - - - - - - - - - - - - - - - - - - - - - Judgment Mrs Justice Roberts. A. Introduction 1. Before me is an application made by a former wife for general enforcement of an order made by Charles J in May 2005. Her application is made pursuant to FPR 2010 r.33.3(2)(b) which provides, in terms, that an applicant may apply for such method as the court may consider appropriate. 2. This case concerns two former spouses who have now been locked together in litigation for a period of almost 17 years, more than twice the effective length of their marriage. Throughout its history and on various occasions, the litigation has travelled from hearings in front of High Court judges to the Court of Appeal and back. The parties two children were respectively 6 and 7 years old when the litigation started. They are now young adults aged 21 and 22 years old. That the proceedings have taken a very significant toll on each of the parties has become obvious to me as I have heard this case. The husbands ill health is borne out by the medical evidence he has put before the court. He is currently not a well man and is under the care of several different doctors. Whilst the wife remained stoically composed for most of the time, her exhaustion and sense of complete frustration (if not desperation) were all too obvious to me. For the purposes of the hearings before me, she has been represented by Mr Rex Howling QC whom she instructs on a direct access basis. For all other purposes, she is a litigant in person and has been since May 2014 when she was no longer able to afford the services of a solicitor. The husband, too, is a litigant in person. Despite the fact that I granted him a short adjournment at the start of the current enforcement proceedings to secure legal representation, he has been unable to do so. 3. In circumstances which I shall explain, Mr Howling QC, on behalf of the wife, seeks a suspended order for the husbands committal to prison in respect of what he claims is his wilful refusal to pay to her a sum of just under pound2 million which she says she is owed. The husband denies that this sum is due (or anything approaching that sum) but tells me that, even if it were, he does not have the means to pay. He points to the fact that, whilst not strictly in accordance with the terms of orders which have been made in this case, he has nevertheless paid to her over the years of this litigation sums totalling almost pound1.5 million. Those sums have been paid, in part, as a result of agreements made between the parties during the currency of the litigation. They were agreements made in the context of an expectation that all issues would be dealt with through a process of mediation. On these occasions, the wife has been prepared to suspend (but not abandon) her strict legal entitlement whilst settlement of all remaining issues was explored. The husband contends that he has, at times, made financial provision for the wife over and above the terms to which he has agreed. He seeks to persuade me that there are no further sums due to the wife. If he remains liable to meet any balance due, he joins with her in asking me to determine what sums remain outstanding. That computation issue is the subject of case management directions made by Mostyn J in 2014. As part of her claim, W seeks payment of a substantial sum in respect of interest on the judgment debt due to her. I have been asked to determine a point of law which has arisen in relation to the extent of her claim in respect of interest. 4. The position has been complicated by the fact that, in 2005 and in the husbands absence, Charles J made a number of findings of fact about his financial resources. Those findings have remained undisturbed for over ten years. Although the husband has consistently said they were wrong, he has never pursued an appeal against the findings. Mr Howling, on behalf of the wife, relies on those findings as evidence both of the husbands bad faith and as pointing to the likelihood that he has access to financial resources which will enable him to meet any sums which are found to be due to the wife at the conclusion of the present proceedings. Several of Charles Js findings related to an offshore trust called the Hilbery Foundation through which it was claimed the husband had an interest in a valuable property in Eaton Place, London SW1. It has been part of Ws case in these enforcement proceedings that he has never provided a satisfactory explanation in relation to his interest in the Hilbery Foundation or the company through which the London apartment was owned. In these circumstances, one of the functions of the oral examination of the husband in these enforcement proceedings has been to explore whether or not he does have any interest in that property since all he presents in his Form E is a significant raft of debt without any corresponding assets. 5. During the course of the proceedings before me, the husband made it clear that he wished to give evidence about these matters and, further, that he wished to call other witnesses who would be able to explain the circumstances in which the London apartment was sold and the Foundation wound up. Despite my warning that he was not obliged to give any evidence and could properly rely upon the privilege against self-incrimination, he waived that right and, over the course of several non-consecutive days, I have now heard evidence from the husband and three witnesses called on his behalf. I shall come to consider that evidence and my findings in relation to it in due course. It goes to the second limb of this application which is the husbands ability at various stages of these proceedings to pay the sums which are found to be due to the wife. My first task is to establish what sum or sums are due. Before embarking on that exercise, I need to refer to the background. 6. On 5 March 2014, Mostyn J delivered a judgment in this case in respect of one of the mediation agreements. It is reported as Mann v Mann 2014 EWHC 537 (Fam) . 2014 2 FLR 928. In that judgment he set out at some length the relevant facts, including the precise terms of the mediation agreement with which he was then dealing. In order to give my judgment internal coherence, I am proposing to set out a short exposition of the background but that judgment of Mostyn J stands as an invaluable further reference point. B. Background 7. The wife is 48 years old. H is 50. They married in 1988 in South Africa which was then the husbands home and that of his family. Their two daughters were born in 1993 and 1994. They separated in 1998 and their marriage was dissolved by decree absolute in 1999. In that same year, the wifes financial claims were settled and reflected in a consent order dated 8 April 1999. Under its terms, she retained the former matrimonial home in Hampstead on the basis that the husband would discharge the mortgage interest payments during the minority of their two children. At that point, the obligation to redeem the mortgage fell to the wife. In addition to the mortgage interest, the husband agreed to pay periodical payments to the wife at the rate of pound24,000 per annum. Child maintenance and school fees were also provided for. 8. In March 2004, the husband was adjudged bankrupt as a result of a debt which he owed to a bank in the sum of about pound50,000. By that stage he had already issued an application to reduce the periodical payments he was making to the wife. She issued her own application for a full capitalisation of those maintenance payments. Those applications were listed before Charles J in May 2005. The hearing before Charles J in May 2005 9. Both parties were represented at that hearing. In the material before me was a full transcript of the judgment delivered on 11 May 2005. It is reported at 2005 EWHC 701 (Fam). Soon after the final hearing commenced, the husbands solicitors made an application to come off the record. The husband himself did not attend the hearing to give evidence. He tells me that he was advised by his counsel and solicitor to absent himself from the proceedings because much of the forensic enquiry into his means was focused upon his familys financial affairs and the extent to which, as a family member, he had access to offshore funds principally through the Hilbery Foundation, a Stiftung based in Vaduz, Liechtenstein. In his opening note for that hearing, the husbands counsel had asserted that the ownership and control of the Stiftung and the financial benefits that the husband had from it, and would in future derive from it, were the main issues in the case. The husband was willing to give evidence about these matters in the sanctity of the witness box. Whilst in his written evidence he had provided some explanation as to the manner in which the Stiftung was linked to other entities, the husband had been unwilling to say more because, as he told me, he was concerned about the tax and other implications for his family (and, in particular, his father) who had set up the structure in order to enable the family to avoid the consequences of the strict South African exchange controls then in force. There was very little before the court in terms of underlying documentation because the trustees or managers of the Stiftung had been unwilling to disclose it. 10. Charles J proceeded to hear the case in the husbands absence. He was aware of the husbands bankruptcy which was due to come to an end shortly thereafter. The wifes case was that the husband had not made truthful disclosure of his assets and that a significant liability which he asserted in terms of a debt he owed his father was an invention. 11. The judge identified the underlying problems as a lack of documentation to support the husbands assertions the inconsistencies in the representations then being made by the husband, his father and sister and the different assertions being made by the husband as to the persons who were beneficially entitled to the Foundation and its assets. He concluded, hellip in my view when read as a whole and with the assertions made by, and on behalf of, the husband these notes and records make it clear that the Mann family was involved in substantial trading and had substantial assets through a foundation, and thus convincing evidence that (i) a member or members of the Mann family created Hilbery and hashave the ability to procure that assets are applied solely for his, or her, benefit by Hilbery and companies it owns, and (ii) control of Hilbery does not lie outside the Mann family. (see para 85) 12. The husbands parents are still alive and living in South Africa although both are now elderly and his mother is unwell. His father has been retired for very many years, and the husband tells me that the devaluation of the South African Rand by some 80 over recent years has made very significant inroads into whatever wealth his father had built up during his working life. His sister lives in South Africa where she works as a lawyer. 13. The husband has historically earned his income from trading stocks and shares and from introduction fees for mining and associated deals. By piecing together information extracted from various bank records, the judge made findings (based in part on adverse inferences which he drew against the husband) that he controlled the assets of two special purpose corporate entities, one of which (Ballentine Estates Limited) owned the property in Eaton Place. In relation to the Hilbery Foundation, the judge found that its assets were held on discretionary trusts of which the husband was a beneficiary (probably with his father and sister). Since he also found that the husband could direct or procure access to funds (including the apartment at Eaton Place) without putting improper pressure on the trustees, the judge made an award in the wifes favour of pound1.3 million by way of capitalisation of her remaining claims for income. The husbands application for a downward variation was dismissed. 14. As to the basis of that award, the judge found that a fair figure for the multiplicand in relation to a Duxbury calculation was pound30,000 per annum. In addition to this award for her general living expenses, he included an annual figure of pound28,600 for rent (in place of the original obligation to meet the mortgage interest on the former matrimonial home which had been transferred to the wife under the terms of the 1999 consent order). This brought her annual need to pound60,000. The wife was then not earning although she was relatively young (in her late 30s). The children were then 10 and 11 years old. The judge took the view that, if capitalisation was not in issue, the way to treat her potential earning capacity would be to review the periodical payments when the children were older. However, he felt that the argument for capitalisation was a strong one. At para 203, he said this: hellip Capitalisation could be on the basis of a reducing rate of periodical payments from say the time when the youngest child is 16 through to the wifes retirement age. I do not have tables which would enable me to calculate this. Subject to argument when I hand down this judgment as to how the wifes ability to work in particular from around her mid forties to her retirement age (and perhaps beyond) should be taken into account I propose to use the Duxbury tables as a tool or guide (which as appears above in my view I am entitled to do). 204. The wife is younger than the starting age in the Duxbury tables included in At a Glance. The table shows that at age 40, pound60,000 per annum would require pound1.499M and pound50,000 would require pound1.175M. In my judgment from that guidance the wifes periodical payments should be capitalised at pound1.3M to take account of her ability to work. 205. Returning to the question whether that is affordable and fair having regard to the husbands access to assets, and the pressure such an award together with my other awards would put on persons who could provide that funds or assets to be paid or transferred to the husband, I have concluded that although I cannot quantify the assets that are, or could be made, available to the husband this lump sum is fair and affordable in all the circumstances of this case. 15. Under the terms of Charles Js order : (i) the original (1999) periodical payments order of pound24,000 per annum was discharged with effect from the following month (ii) all arrears which had accumulated under the 1999 order were to be paid by the husband as a further lump sum of just under pound74,500 (there were then 6 years of payments outstanding) (iii) within 28 days (by 8 June 2005) the husband was to pay to her a sum of pound1.3 million (iv) the order for child support was increased to pound6,750 per annum per child (index-linked) together with school fees, as before (v) the husband (with two of the corporate entities which had been joined as parties to a freezing injunction application made by the wife) were ordered to pay her costs in the sum of pound323,902. 16. It is those terms (or the net balance due to her) which the wife, by her present application, seeks to enforce: in other words, the lump sum of pound1.3 million (the maintenance capitalisation) c. pound74,500 (the arrears of maintenance payable under the 1999 order) costs of pound323,902 arrears of child support and interest on the unpaid judgment debt. 17. In my judgment, of specific relevance in relation to the award of capitalised maintenance are the following matters:- (a) the award was based upon a whole life entitlement and not upon some reduced multiplier to take account of her relative youth (b) the figure alighted upon by the judge which represented her annualised net budget included not only her living expenses but a specific element for the cost of ongoing rent. There was no corresponding adjustment or reduction in the figure he settled upon to reflect the fact that, once the husband had paid the lump sum, she would have been in a position to buy a property and the need to rent would thereby fall away (c) the judge assumed that she would find employment in due course when the children were older, thereby making a direct contribution towards her own ongoing needs. 18. The husband applied for permission to appeal. On 13 October 2005, his application succeeded. On the conditions that he paid the costs below and paid pound40,000 into court as security for the costs of the appeal, the Court of Appeal gave him permission to appeal and ordered a stay in respect of the balance of the capitalised maintenance award over pound700,000. (One of the grounds for allowing the appeal was the basis upon which the judge had carried out the calculation of the Duxbury award.) There was no application by the husband to appeal against the findings of fact made by the judge. The first Mediation Agreement (the Callman Agreement) 19. The substantive appeal was never heard. The parties accepted the invitation extended by the Court of Appeal to participate in the Court of Appeal mediation scheme. His Honour Judge Clive Callman led the mediation which was attended by both parties and the husbands solicitor on 10 January 2006. Agreement was reached on terms acceptable to both parties. Instead of paying a lump sum of pound1.3 million by way of capitalised maintenance, the husband agreed to pay, and the wife agreed to accept, a reduced figure of pound926,000 payable in nine instalments over 4 years. There was one condition attached to her agreement: a sum of pound700,000 on account of that sum was to be paid by the end of that year (i. e. by 31 December 2006). Until payment of that first tranche, the husband was to continue paying the wifes rent on the property in which she and the children were then living. It was a specific term of that mediation agreement that, if the husband defaulted on any instalments, the agreement would fall away and the order made by Charles J would revive in full and the wife would be entitled to take immediate steps to enforce payment of the full pound1.3 million. 20. The Callman Agreement was given legal effect later that month by an order made by Wall LJ. 21. By 31 December 2006 the husband had only paid pound362,000. As a consequence, with effect from 1 January 2007, the terms of the order made by Charles J revived together with the wifes entitlement to enforce its terms. The hearing before Vos J in February 2011 22. Five years later, on 21 April 2010, she issued a statutory demand claiming that the husband owed her just under pound1.6 million with interest. The husband applied to set aside that statutory demand. The matter came before Vos J in February 2011. By that stage it was accepted that, prior to the issue of her statutory demand, the husband had paid to the wife sums totalling c. pound700,000 (although the husband said it was more). It was accepted by both parties at that stage that a substantial sum remained outstanding in respect of the lump sum order originally made by Charles J. Vos J declined to calculate the precise balance outstanding. 23. For the purposes of that hearing, the husband had attributed no specific figure to his (then) net worth but had stated in his written evidence that: Regrettably the respondent has also routinely claimed historically that she believes that I have hidden assets when the truth is that I do not have, and have never had any such hidden assets, as she well knows. My significant asset is my personal ability to generate an income stream through my skills and contacts as a businessman. During our marriage that income stream was largely dissipated on our lifestyle, as the respondent well knows. hellip Regrettably and sadly my financial circumstances have been, and are such, that I have never been able to comply with those Orders, and this remains the case today. My financial circumstances are such that the payments the respondent records me as having made historically, and the additional payment I have made that she does not record, represent my best endeavours to comply with the Orders, and to provide for the respondent and our daughters. hellip The respondent is, and has always been intimately familiar with my financial circumstances. I believe the reason that the respondent has never sought enforcement of the Orders through the courts is that the respondent knows, and has always known that I do not have the means, and have never had the means to meet the Orders in the manner and time contemplated by the Orders, and that any process of enforcement, should she pursue it, would demonstrate that. I believe it is for this reason the respondent has misguidedly chosen to seek to invoke the bankruptcy procedure as her first recourse through the courts following the making of the Orders. 24. On instruction, the husbands counsel told Vos J that his client had but a few thousand pounds worth of assets, mainly in chattels, and lived with his new partner and their son in rented accommodation. He pointed to the fact that the husbands earlier bankruptcy had been discharged at about the same times as Charles J had made his order. His trustee in bankruptcy had failed to uncover the existence of any hidden assets and thus there was no point in allowing the wife to proceed with another petition in bankruptcy. 25. In refusing the husbands application to set aside the wifes statutory demand, the judge made the following remarks: This is a case where the wife has reached the end of her tether in making her attempts to persuade the husband to satisfy the order to which he consented i. e. the Callman Agreement. Many years have passed, and she is, in my judgment, entitled to serve a statutory demand and to present a petition in due course to enforce that debt by way of bankruptcy proceedings. 26. The wife was prevailed upon to stay her hand in relation to bankruptcy and, later that year, on 2 November 2011, the parties once again reached an agreement as to the way forward. The second (interim) Mediation Agreement 27. As at 2 November 2011, each of the husband and the wife were living in rented properties in central London. The formal written agreement which they concluded was drawn up and witnessed by the wifes (then) solicitors. It recorded their mutual intention to use reasonable endeavours to attempt to compromise all existing legal disputes between them and to provide for the present and future maintenance of the wife. Each was advised separately in terms of the legal effect and consequence of its terms. Its operative provisions were agreed to be contractually binding as between them. 28. On the basis that they would engage in a formal mediation process by 31 January the following year (2012) with a view to concluding a legally binding Mediation Agreement, the husband agreed to pay to the wife on a regular monthly basis :- (i) a sum of not less than pound4,000 per month and (ii) a sum of not less than pound83,200 per annum (payable quarterly) in respect of the rent for a new property into which she was proposing to move (35 Briardale Gardens, Hampstead NW3). 29. He would facilitate that proposed move by paying not only the deposit on 35 Briardale Gardens but also 6 months rent in advance, as required by her new landlord. These sums together with the regular payments which the husband would be making in respect of the wifes general living expenses and her rent were to be deducted pound for pound from such balance of Charles Js original award which was eventually found to be due to her as a result of the intended mediation process. Specifically, the mediation in which they intended to engage would be used to determine not only the amount which she was owed but also the amount and frequency of the instalment payments to be made by the husband to the wife in full discharge of the balance. 30. Pausing there, in my judgment, two important signposts emerge at this point of the chronology. First, it is quite clear that both parties accepted that the award made by Charles J in 2005 (some six years earlier) should form the cornerstone of the husbands liability to the wife. Secondly, it was implicit in the wifes agreement to this second mediation process that she recognised the futility of trying to enforce immediate payment by the husband of the amounts then due and owing to her. Whilst she made no specific concession in relation to the amount or frequency of the instalment plan which they were yet to agree, those two factors were an essential element of their intended mediation. 31. The costs of the mediation were to be borne in equal shares. All further appeals and enforcement process would be halted in the meantime. 32. Following that agreement, attempts were made in the ensuing months to set up the mediation. They were not successful. As Mostyn J recorded in his judgment (to which I referred earlier), each party blamed the other. 33. The 31 January 2012 came and went without any engagement in the intended mediation process. Nevertheless, as Mostyn J was to find, from 2 November 2011 (the date of the second interim Mediation Agreement) until October 2013 (when he claimed to be unable to continue paying her rent), the husband complied diligently with each of his obligations to provide financial support for the wife, both in respect of paying her rent and meeting the cost of her monthly allowance of pound4,000. 34. During this period he was continuing to earn his living by doing deals. In 2012, he completed a deal with Tantalus Rare Earths AG (TRE) which earned him a commission of euro235,000 (a sum which he has yet to receive and in respect of which there is ongoing litigation). In June 2013, he received a commission of pound160,000 from a company called Discovery Gold. 35. At the end of her years tenancy at 35 Briardale Gardens, W moved to a new rented property at 4 St Barnabas Mews, London SW1. H nevertheless agreed to continue meeting her rent notwithstanding that it exceeded his contractual liability for the rent at Briardale Gardens. Mostyn J was to find that he had no equivalent contractual liability for the rent at St Barnabas Mews and the payments which he made from October 2012 until October 2013 were essentially voluntary in their nature. 36. His ceasing to meet the rent was the trigger for the enforcement application which the wife issued on 16 December 2013 under FPR 2010 r 33.3(2)(b) and which is currently before me. C. The proceedings before Mostyn J in 2014 37. That enforcement application came before Mostyn J on 26 February 2014. Having found that the husband had complied in full with his obligations to provide financial support for the wife in accordance with the terms of the November 2011 mediation agreement and making no findings in respect of the reasons for the failure to engage in a formal mediation process as envisaged by that agreement, the judge adjourned the oral examination of the husband in order to allow a further 8 weeks for a final attempt to restore the process. The husband was directed to file an updated Form E. 38. Both parties exchanged Forms E on 2 April 2014. The parties updated financial disclosure 39. The husband was represented by Sears Tooth when he made his most recent financial presentation in Form E. He describes himself as a businessman and records the fact that he lives with Ms Cozzelino and their son who was born in December 1997 (so then 16 years old). They were then living in a short term grace and favour flat in Jermyn Street, London W1 which had been made available by a close friend belonging to the same synagogue attended by the husband. They had recently been obliged to leave the apartment which they had rented for the previous seven years (30 Grosvenor Crescent Mews, London SW1) because of rent arrears in respect of which Ms Cozzelino was being sued. By this stage the parties elder daughter was an undergraduate living in university accommodation during the term and staying with the wife during the holidays. Their younger daughter was working in a law firm and dividing her time between the (rented) homes of her two parents. The husband maintained that he was making voluntary financial provision for all three children. 40. Apart from a negligible amount of cash, the husbands assets consisted of a small portfolio of mining shares to which he had no access since he maintained that they were pledged as collateral security for a drawdown loan facility he had negotiated with a company called United Capital. He was owed just under pound200,000 in commission from the Tantalus deal (to which I have referred earlier) together with smaller sums he had lent to two friends in respect of which recovery was doubtful. 41. His overall indebtedness (including the loan from United Capital) was said to amount to over pound864,000 and included obligations in respect of personal loans, credit card debts and outstanding rent from their previous rented apartment 1 . He declared his directorship of a consultancy vehicle called Hexstar Limited which was producing no income. In terms of is capital needs, he stated, I have no assets and therefore whilst I would obviously like to purchase a house for my partner and children, it is not feasible. 42. In terms of the manner in which he was then able to fund his legal representation, the husband gave evidence that Mr Tooth, his solicitor, was a personal friend who was not insisting on the payment of his fees up front and Mr Justin Warshaw, his (then junior) counsel, was also prepared to assist by waiting for his fees. 43. He produced a budget showing an income need of pound146,000 per annum which included a sum of pound52,000 per annum for rent. 44. The wifes own Form E was a similarly stark document. Aside from the sum of just under pound2 million which she claimed to be the sum (with interest) which she was owed by the husband, she had no income and was some pound70,000 in debt, a figure which included a bank loan and pound36,000 in respect of rent arrears owed to Grosvenor Estates in respect of her tenancy at 4 St Barnabas Mews. Despite being unemployed and disclosing no income, the wifes budget (including rent) was presented in a sum of just under pound130,000 per annum. 45. There was no further mediation. The wife said she did not have the funds to pay for it. 46. On 12 May 2014, the matter was restored before Mostyn J. The husband was represented by Mr Warshaw the wife was a litigant in person. The wifes accommodation position by that stage was precarious. In order to alleviate her difficulties, the judge made an interim periodical payments order at the annual rate of pound120,000. This appears to have been designed to create immediate notional arrears equal to the arrears of rent which were due to Grosvenor Estates, her landlord. Despite Mr Warshaws apparent concession that the court had jurisdiction to make that order, some nine days later the husband applied to vary the order. The wife alerted the judge to the fact that he had failed to pay any of the notional arrears and that she was facing eviction. The judge required the parties to attend court in order that the husband might show cause why he should not be committed to prison for contempt. The husband then issued a notice of appeal against the judges earlier order and Gloster LJ stayed the proceedings pending a consideration of whether he should be given permission to appeal. 47. He duly appeared before Mostyn J on 12 June 2014. On that occasion the judge re-characterized his earlier periodical payments order as a scheduled court directed part-payment of the outstanding lump sum and made an additional pound for pound order which prevented the husband from paying anything to his own solicitors unless the wife was given an equivalent sum. He adjourned the matter to 30 June 2014. 48. On 4 July 2014, McFarlane LJ granted the husband permission to appeal the financial order made by the judge. 49. The matter came back before Mostyn J on 19 September 2014 for further case management directions. I have read a full transcript of what transpired at that hearing. By this stage, Ms Cozzelino, the husbands partner, had been formally adjudged bankrupt. The wifes enforcement application was listed for two days on 16 March 2015 before Mostyn J when the three issues for determination were identified as (i) the oral examination of the husband as to his means (ii) to show cause why he should not be committed to prison for having refused or neglected to pay the sums due under Charles Js order and (iii) to determine the outstanding principal sum due to the wife and any interest which the court considered to be payable. 50. As appears from the face of the transcript, there appears to have been a concession by Mr Warshaw on the husbands behalf at that hearing that a sum of at least pound600,000 was due to the wife. I shall need to return to this at a later stage of my judgment. The husband told me that this was a concession made without his instruction. The transcript shows that, whatever the content of Mr Warshaws note for the court on that occasion, he had told the judge he would nevertheless be taking a number of technical points in relation to that figure. In delivering judgment on that occasion, Mostyn J said this: 5. If pound600,000 of principal is outstanding today that is payable today. So in a sense my endeavours to get H to focus on the amount that needed to be paid to save W from eviction and bankruptcy can be seen to have been, to an extent, an exercise in beating the air, because not only were they in a sense completely otiose ndash because if he owes pound600,000 then ex hpothesi he owes pound100,000 ndash but the consequences of my endeavours to focus Hs mind on almost a moral obligation to prevent his ex-wife being rendered homeless has simply led to an explosion of appellate litigation, all of which I consider to be quite spurious. 6. So I shall leave the appellate proceedings to run their course, but would simply in this judgment make it abundantly clear that, irrespective of the question of interest (as to which Mr Warshaw seeks to take points under s.24(2) of the Limitation Act 1980) irrespective of the question of whether the asserted compliance by H with the compromise that was thrashed out in mediation with His Honour Judge Clive Callman, should or should not lead to remission of all or part of the interest, there can be no doubt that as at today the husband owes around pound600,000, probably pound650,000 (being Mr Warshaws pound681,679 less the pound33,000-odd that has been paid since February) in principal to W. That sum is payable today and I see no reason at all why at the next hearing H should not show cause why he should not be imprisoned for failing to pay that sum of principal or part of it. 7. If he has paid part of it by the time of the next hearing then that will no doubt provide strong mitigation. Of course, in any enquiry under the Debtors Act, the court has to be satisfied that H is in wilful default and there will have to be a close enquiry as to whether his circumstances are as desperate as he says in the affidavit which he made on 21 July pursuant to my previous order. 8. I have to say this, that although the definitive enquiry into the state of Hs means is awaited, I have to say that having read the affidavit made in response to my previous order, I believe it is certainly possible ndash and W will have to reflect on this ndash that she is clutching at straws in believing that there is hidden wealth in the property, Flat 3 47 Eaton Place, or within the loan facility with United Capital or in secret bank accounts. 9. In relation to Eaton Place, H has given what seems to me to be a plausible explanation as to how he was effectively foreclosed in relation to his interest in that property. He has given what seems to me to be a reasonable explanation in relation to his loan account with United Capital and how that has now run into a cul-de-sac. In relation to the allegation that he has a secret bank account from which he is paying rent, he has, to my mind, quite persuasively explained how that suspicion is unfounded. The rent was not in fact paid in full but the deposit was appropriated leaving arrears in respect of which his girlfriend was either bankrupted or made herself bankrupt. 10. He has also in his affidavit explained his dire medical condition, which is supported by the letter from his doctor, and it does seem to me that it would be an extreme example of cutting off his nose to spite his face if he were not to reveal secret funds, as part of his feud with W, at a time when he is facing such acute medical problems. helliphellip 13. The other purpose of that hearing is to establish the exact amount of principal and interest that H owes W. For this purpose there needs to be a determination by the court of the precise amount of the principal, in circumstances where, as I have said repeatedly, H accepts that he owes around pound650,000 but W says it is rather more. There needs to be a determination of what the actual interest at judgment debt rate has accrued since then. There needs to be a determination of whether any part of that interest is unenforceable by virtue of s. 24(2) of the Limitation Act 1980. Then there needs to be a determination of whether any part of the interest, or principal for that matter, should be remitted in the exercise of the courts discretion. 14. In that regard, H places considerable emphasis now on the fact that he did in numeric terms pay the compromise that was reached before His Honour Clive Callman sic. He says numerically he paid it, he just did not pay it on time. To which W, to my mind, makes a compelling riposte, which is that had he paid the sums due under the compromise agreement at the due time she would have bought a house. She was not able to buy a house and the payments subsequently made only went to pay rent which is, of course, lostdead money, the result of which is that, although the monies may have been paid, she has not at the end of it got a househellip. 51. Four days later, on 22 September 2014, Grosvenor Estates obtained judgment against the wife in Hammersmith County Court in the sum of just under pound50,000 in respect of unpaid rent. The husband continued to provide some financial support to the wife throughout November 2014. However, in December 2014, he was served with a third party debtor order, the effect of which was to prevent him from paying any further sums to her. By this stage she had moved out of 4 St Barnabas Mews as a result of the possession order which her landlord had obtained. She is currently staying in accommodation which has been provided to her on a temporary basis by a friend. 52. On 19 December 2015 the husbands appeal against the orders made by Mostyn J in May and June that year were heard in the Court of Appeal. Lady Justice Macur delivered the leading judgment. She found that the judge had no jurisdiction to make any form of periodical payments order in the wifes favour since Charles Js order in 2005 had been framed on the basis of an immediate clean break: the dismissal of the wifes entitlement to further income provision was not conditional on the sum of pound1.3 million having been paid. At para 22 of her judgment, Macur LJ said this: Neither Mostyn J nor Mr Howling have sought to justify the orders made in May and June 2014 as being by way of alternation of a subsisting maintenance agreement. For the avoidance of doubt, I consider that Ws failure to participate in the Mediation defined as a mediation in which the Parties intend to participate by the end of 31 January 2012, by that date or subsequently, renders the November 2011 agreement as at an end. W clearly thinks so in pursuing enforcement proceedings. Section 35 of the Matrimonial Causes Act 1973 only permits application to alter a subsisting maintenance agreement. 53. Later in her judgment, her Ladyship said this (para 28): Ws application for permission to appeal out of time the order of Charles J, in order to seek to insert a provision that the order for periodical payments will not be discharged until payment of the capitalised lump sum, lacks any realistic prospect of success, the elapse of time aside, the parties have compromised Hs intended appeals against the order and other proceedings initiated by W by mediated agreements, partially satisfied by each party. Charles J made clear the basis of his decision was to enable W to enforce the award rather than to counter successive applications to vary periodical payments. W was represented by counsel who did not seek to argue for deferred discharge of the order. All these things militate against her. In any event, rectification of the order will not bring her the relief she seeks. If H has assets the purpose of her judgment summons will succeed. If he doesnt, there is nothing available to meet an order for periodical payments. I would dismiss her application. D. The proceedings before me in 2015 54. The restored hearing of the wifes judgment summons was listed before me on 16 and 17 March 2015, some three months later. 55. Whilst the original two day time estimate might have been sufficient whilst the husband had been represented, it was immediately apparent that, as a litigant in person who had only just taken delivery of five bundles of documents, the case would not be finished within its allotted time frame. That, and the fact that the husband had by then indicated that he wanted to put before the court additional evidence in relation to the ownership of the Eaton Place apartment, resulted in further hearings which eventually concluded at the end of October 2015. 56. In all, I heard from five witnesses. On behalf of the wife, Mr Howling had subpoenaed the husbands partner, Miss Cozzelino. In addition to the husbands own evidence, I heard from Mr and Mrs Greyling and Mr Irving Aronson, a retired accountant who was involved in the sale of the company which owned the apartment at 47 Eaton Place. I also had some written evidence from the husbands sister although she was not available in this jurisdiction for cross-examination. The ownership of Flat 3, 47 Eaton Place 57. As I have said earlier in this judgment, at the time of the hearing before Charles J in 2005, the legal title to the apartment at 47 Eaton Place was held by a company called Ballentine Estates Limited. That company, in turn, was an asset of the Hilbery Foundation. On behalf of the wife, Mr Howling now accepts that the property is the only asset owned by that company. It is also accepted that, after ten years, much of the paperwork which might have assisted in piecing together the evidential trail in relation to this issue may have been destroyed. 58. At the commencement of the case before me, it was the wifes belief that, through the Hilbery Foundation, the husband retains a beneficial interest in this property. It was a property in which he had lived at one time. Having now heard the evidence, I am entirely satisfied that he no longer has any legal or beneficial interest in the property. It is therefore not a financial resource to which he can look for the purposes of satisfying any debt which is due to the wife. 59. How does the evidence lead me to this clear conclusion Mr Irving Aronson 60. In May 2015 the husband produced a letter from Mr Aronson. It is dated 7 May 2015. In that letter he stated that in 2005 he had acted on behalf of a client named Mrs Anne Greyling who had acquired the remaining leasehold interest in the property through the acquisition of the Hilbery Foundation. There was then some 30 years left to run on the lease. Mr Aronson described how Mrs Greyling purchased the Foundation and, in doing so, took over the company named Ballentine Estates Limited which was the legal owner of the property. The consideration for the transaction, according to that letter, was the payment by Mrs Greyling of the mortgage arrears which had accrued in the sum of about pound60,000. The Foundation did not have funds available to discharge the debt and the property had been on the market for sale for some time. Since no buyer had come forward despite an extensive marketing exercise by Savills, the mortgagor was threatening to repossess the property. The value of the property at that time, according to Mr Aronsons letter, was less than the outstanding mortgage of pound1.99 million and the property was in negative equity. In exchange for Mrs Greylings agreement to pay off the arrears and assume responsibility for future mortgage payments, the trustees of the Foundation agreed to transfer the entire structure to her. Her occupation of the property with her husband was governed by the terms of a lease into which she entered with Ballentine Estates Limited. Some two years later, in 2007, as the sole beneficiary of the Foundation, she had agreed to the sale of the shares in Ballentine Estates Limited to a company called Sunny Haze Limited. That company was owned and controlled by a Mr Walter Henning, an arms length purchaser. The mortgage was repaid on the sale and the property was transferred out of the effective ownership of the Foundation. 61. Mr Aronson was subsequently to repeat the gist of that evidence in a sworn statement dated 13 May 2015. It accords with the explanation which the husband had given me when he first went into the witness box at the start of the 2015 round of the proceedings. 62. Following receipt of that evidence, somewritten questions, formulated by Mr Howling, were put to Mr Aronson. He replied to those questions in writing before his appearance in court to give his oral evidence. He and the husband have worked together in the past and are social friends (Mr Aronson is also South African). He confirmed that he performed a due diligence exercise in relation to the Foundation at the time of Mrs Greylings purchase of the property in 2005 although he had no knowledge of, or dealings with, that entity prior to that date. He says that it was clear to him at that time that there was nothing to suggest that the husband had an interest in Ballentine Estates Limited or the Foundation. He was later to tell me during his oral evidence that he was aware at that time that the Hilbery Foundation had been set up by members of the husbands family in South Africa. 63. As to the current status of the Hilbery Foundation, Mr Aronson told me that a corporate entity known as Intrust Limited was his point of contact with the trustees of the Foundation, First Advisory Limited, an entity based in Switzerland. 64. Before me in the written material was a copy of a letter concerning Ballentine Estates Limited. It appears to have been sent by courier on 28 November 2005 to Intrust Limited whose offices were in Wigmore Street, London W1. With that letter came a number of documents relating to the company. They are set out in a list of documents and include the share certificates, various minutes and directors resolutions, the Memorandum and Articles of Association together with the company register and seal. There is a further letter written by Intrust Limited on 21 November 2005 to Schreiber amp Zindel Treuhand Anstalt in Liechtenstein. That letter was signed by Mr Michael Shore and relates to the Hilbery Foundation and Ballentine Estates Limited. It reads as follows:- We hereby confirm that we will take over the above named Foundation including its assets at no cost and with all present assets and liabilities. We understand that the Foundations sole asset is the BVI company Ballantine Estates Limited. This company is the legal owner of a London property and it holds a bank account 2 and a mortgage with the Bank of Scotland. We also understand that there is a freezing order on the property. 65. Mr Aronson had no recollection of having seen that letter but confirmed to me that all his dealings on behalf of Mrs Greyling were with Intrust Limited. He had introduced her to the directors (including Mr Michael Shore) who, in turn, dealt with the trustees of the Foundation. He told me that Mr Shore, a fellow accountant, had first worked for him in the late 1980s but had subsequently worked for a South African company when Intrust Limited was wound up in 2012. Mr Shores fellow director in Intrust Limited was a gentleman called Mr Martin Landman. They were Mr Aronsons point of contact in relation to the sale in 2007. 66. When he was cross-examined by Mr Howling, it became clear that Mr Aronsons recollection of the precise sequence of events as they took place in 2005 and 2007 on the sale of the property by Mrs Greyling was less than entirely clear. He recalled several subsequent letters or conversations with the directors of Intrust Limited who were chasing Mrs Greyling for payment of their fees in subsequent years. He was unaware of whether they had recovered those fees when the company was liquidated by its creditors in 2012. The only document which he recalled seeing was the lease which Mrs Greyling signed with Ballantine Estates Limited. 67. When Mrs Greyling disposed of her interest in the property in 2007, a solicitor called Mr David Conway had dealt with the matter on behalf of the purchaser. (The husband told me that he had approached Mr Conway in order to try and obtain further documents relating to the sale but had been obliged to abandon those efforts when he was asked to pay a substantial fee before Mr Conway was prepared to act for him. Mrs Greyling has confirmed in her statement that she has no objection to the release of al relevant documents concerning this transaction to the court.) 68. I also have amongst the papers an email from Mr Shore dated 27 March 2014. This was written in his capacity as a director of a different company called Western Intrust (Ireland) Limited and was sent to an employee of the husbands former solicitors, Sears Tooth. It confirms Mr Shores and Mr Landmans collective belief that both entities (the Foundation and Ballentine Estates Limited) were transferred out of the management of Intrust Limited in February 2010 and that Mrs Anne Greyling was the beneficiary of the Hilbery Foundation which had disposed of its shares in Ballantine Estates Limited in 2007 when the flat was sold. 69. Mr Aronsons recollection of these events was by no means entirely clear in his mind in terms of the precise detail of the transactions. He has not acted for Mrs Greyling subsequently in a professional capacity and his memory may well have faded or become confused with the passage of time. Nevertheless, I accept that he was an honest witness who was trying to do his best to assist me with transactions which occurred eight to ten years ago. Mrs Anne Greyling 70. Mr Aronson described Mrs Greyling as a strong willed lady who knew her own mind. I agree entirely with that description. Both she and Mr Greyling are South Africans although they now live in Kent. She was entirely open in her evidence about what was described as her husbands somewhat chequered past. Some years ago Mr Greyling was convicted in the United States of security fraud. He spent 13 months in prison on remand whilst awaiting trial and was deported back to South Africa. He had also been made bankrupt whilst living in this country. She confirmed that she had become the beneficiary of the Hilbery Foundation in 2005 at the time when she and her husband moved into the property as their London pied agrave terre (they then owned the property in Kent where they still live). She was aware of the broad framework of the terms on which they moved in and was aware that she had never owned the property outright in her sole name. She confirmed that all the arrangements in relation to the mortgage and the repayment of the arrears which had then accrued were dealt with by her husband. She had signed a letter of wishes, a lease granted by the company, and she remembers having to sign documents when the property was sold in 2007. She said she had been unaware that the property was the subject of a freezing order when she and Mr Greyling moved in but she had become aware of that fact by the time the property was sold since there were substantial legal costs involved before clear title could be passed to the purchaser. 71. It was clear to me that this lady really knew very little about the circumstances in which her husband had done the deal in relation to the apartment. It was he who had made all the arrangements. As she put it to me, he had taken her to see the property and told her it was available. She had gone to visit her cousin in France and, by the time she returned, everything had been finalised and she signed what she was asked to sign. They moved in and lived at the property for two or three night a week over the next two years and took over responsibility for all the outgoings, including the monthly mortgage payments. 72. Mrs Greyling told me that she had been introduced to the directors of Intrust Limited when she became the beneficiary of the Hilbery Foundation. She was aware that the original trustees had been replaced by Intrust Limited in 2005. She took tea with Mr Landman at his office in Wigmore Street and he explained to her that they would henceforth be looking after her interests and would hold the letter of wishes she had signed in which her own children were named as her beneficiaries in the event of her death. 73. As to Mrs Greylings relationship with the husband, she told me that they had had a number of very serious blow ups. She recounted an episode which took place in the offices of Intrust Limited at the time the apartment at 47 Eaton Place was sold in 2007. It was clear from her evidence that she was presented with some form of completion statement showing the disbursements which had been deducted from the sale price. A sum of c. pound25,000 had been paid to solicitors in connection with the removal of the lis pendens which the wife had registered against the title at the time of the original proceedings before Charles J in 2005 when she had secured a freezing order. Once the outstanding fees due to Intrust Limited had been deducted, the balance due to her was reduced to some pound38,000. She told me that she was aware that the legal fees paid to Mr Stephen Alexander (the solicitor dealing with the lis pendens ) arose in connection with the divorce proceedings and she telephoned the husband from the offices of Intrust Limited to demand an explanation. It was at this point she discovered that the property had been subject to a freezing order some eighteen months after she and Mr Greyling had moved in. She accepts that this was a heated conversation and one which ended abruptly when she terminated the call. 74. She told me that, by the time the property was sold in 2007, it had become something of a mill stone. The lift serving the three apartments in the building had broken and she had difficulty climbing the stairs because of an injury to her knee. She told me that at one stage she and her husband had the property valued to see whether a remortgage was feasible but were advised that, without acquiring an extended lease, the property was little more than a wasting asset. She was lonely living in London during the week whilst her husband worked and the time came when she had said to him, Just let it go I cant do this any more. 75. I accept that Mrs Greyling had very little grasp of the legal mechanism by which she became a beneficiary of the Foundation, nor the basis of the deal which enabled her, with her husband, to live in the flat from 2005 to 2007. She knew practically nothing about the sale in 2007 save for the fact that it had eventually yielded much less in terms of financial benefit than that which she had been expecting. The full explanation of that deal only became clear when Mr Greyling went into the witness box to give his evidence. Mr Lesley Greyling 76. Mr Grayling did not make a statement prior to giving his evidence. He told me that he had met the husband in the early part of 2005 having been introduced by a solicitor who knew each of them as businessmen. He became aware that the husband was involved in a difficult divorce case and had seen their common entrepreneurial backgrounds as a possible basis for helping him to earn some money. 77. At that time, he and Mrs Greyling were looking for a London base since he was spending about two or three nights each week away from home in the city. The husband had said he should look at the apartment in 47 Eaton Place since it was available, distressed and in negative equity. Mr Greyling told me that the husband had said there was probably a means by which he could take it over without coming up with a lot of money. He explained that the property was held within a structure and it might be possible for Mr Greyling to take the property over within that structure. As long as the mortgage was paid, the Bank of Scotland would not repossess the property and there would be no need for Mr Greyling to give any sort of personal guarantee to the bank. I suspect (but was not told) that the husband was by then aware of the difficulty which Mr Greyling might encounter in securing a mortgage in his own name. 78. Mr Greyling told me that he had shown his wife the apartment and she had agreed that, if a way could be found to do the deal, they should do it. Having confirmed their interest, Mr Greyling told me that the husband had said he would introduce Mr Greyling to the trustees of the Foundation which owned the company which held the title. He suggested that, because of what Mr Greyling himself described as his chequered past, Mrs Greyling might be a more acceptable client for the trust company. Given that their home in Kent was already in her name, Mr Greyling readily agreed to this way forward. He told me that Mr Aronson was the intermediary who had arranged the practical steps. The husband put Mr Aronson in touch with the trustees in Lichtenstein whom Mr Greyling understood to be the Directors of the Foundation and of Ballantine Estates Limited. The company then had a mortgage loan due to the Bank of Scotland in the sum of about pound1.99 million. The mortgage payments were in arrears and the company had no funds with which to discharge the arrears or make future payments since the tenant was about to vacate the property. Mr Aronson was able to secure the trustees approval to allowing new trustees to step into the shoes of the trustees who acted for Davids family in South Africa provided that all mortgage and service charge arrears were paid by the new beneficiary who would have to appoint his or her own trust company to act in future. Thus, Mr Greyling asked Mr Aronson if he could represent his wife (as the new beneficiary) and handle all the negotiations with new trustees on her behalf so as to leave him one step removed from the transaction. 79. In this way, Mr Landman and Mr Shore (business acquaintances of Mr Aronson) agreed to meet Mrs Greyling and Intrust Limited became the new trustee of the Hilbery Foundation. She was accepted as an Intrust client. Because Intrust Limited, as a United Kingdom trust company, was not able to become registered as the trustee of a Lichtenstein Foundation, it needed a local agent in Vaduz. A corporate Swiss entity called First Advisory Trust was appointed whereupon the trustees who had hitherto acted for the husbands family in South Africa resigned and transferred the administration of the Hilbery Foundation to First Advisory Trust (its new Swiss trustees). 80. Intrust Limited (in London) had prepared all the documentation. Whilst initially there had been some correspondence about the possibility of acquiring the property through a transfer of the shares in Ballentine Estates Limited, the trustees had advised that if the property was acquired indirectly in this manner on the basis that the shares left the Foundation, the trustees would be obliged to notify the Bank of Scotland which would in turn trigger a redemption clause in the mortgage deed. In that instance, the entire mortgage debt of c. pound2 million would have to be repaid or the Bank would have to agree to a transfer of the debt to the new shareholder. If the shares remained in the Hilbery Foundation, there would be no obligation on the trustees to advise the Bank of any change of shareholding. It was clear to me from this evidence that Mr Greyling was well aware that neither he nor his wife were likely to be acceptable candidates for taking on the primary legal responsibility for the mortgage and they did not have the resources to discharge the entire mortgage debt, although they did discharge the arrears. 81. Mr Greyling admitted that he became aware of the existence of the freezing order which the wife had secured at some stage but he accepted that part of the deal had been the Greylings willingness to take on the property with liens, debt, warts and all. He told me that, despite these liabilities, he had thought it a good deal. The property had by then been on the market for some two years and the tenant was about to leave. He met with Savills before concluding the deal and asked if it would be possible to resell at a profit if they acquired the property for just under pound2 million. He had been informed that a new lease from Grosvenor Estates would cost about pound1.5 million. 82. In my view, the true benefit to Mr and Mrs Greyling was that, albeit through the Foundation, they were acquiring an asset which might acquire greater value at some point in the future. Whilst it remained a depreciating asset, neither had any personal legal liability whatsoever for the mortgage secured on the property. The apartment belonged to Ballantine Estates Limited and that, in turn, was owned by the Foundation. They were paying the mortgage but would no doubt have spent that money on rent. Mr Greyling knew, I suspect, that he would otherwise have been unable to buy in his own name and that they could walk away at any time without any liability for the Bank of Scotland mortgage. 83. As to the subsequent sale of the property in 2007, Mr Greyling told me that by this stage they were spending no more than two nights a week at the property and were paying approximately pound10,000 per month in respect of the mortgage. The lift broke down regularly and they had received a quote of pound150,000 to repair it. The owners of the two other apartments in the building were not interested in making a contribution to their share of this cost and Mrs Greyling was experiencing serious difficulty getting up and down the stairs in the building. Through a business associate, Mr Greyling met a gentleman called Mark Wilcox, a South African mining magnate. On behalf of one of his business associates, he expressed an interest in buying the apartment. One of Mr Wilcoxs associates, Walter Henning, was identified as the person who would acquire the property through an entity called Sunny Haze. By 2007, Mr Greyling was aware that the husband had reached a settlement with the wife (this was the interim Callman agreement) as a result of which she had agreed to remove the lis pendens over the property. Hitherto that had operated to prevent the apartment being sold by the company. Mr Greyling accepted that it had been an expensive exercise to clear the title of the lis pendens the work had been undertaken by their solicitor, Mr Steven Alexander. The sale transaction proceeded on the basis that Intrust Limited (in London) instructed First Advisory Trust (the Foundations Swiss trustees) that the beneficiary (Mrs Greyling) wished to dispose of Ballentine Estates Limited. Mr David Conway, a solicitor to whom I have referred earlier, was instructed to handle the transaction on her behalf. The purchaser had arranged its own funding through a different bank. Sunny Haze Limited acquired the shares in Ballentine Estates Limited. The Bank of Scotland mortgage was discharged in full. Whilst the Greylings no longer had any interest in the property, Mr Greyling told me he was aware that the purchaser then acquired a new lease of 900 years from Grosvenor Estates, put the property back on the market and resold at a substantial profit. 84. He told me that after the sale of the property, the Hilbery Foundation continued to exist as an entity but after the sale of its shares in Ballentine Estates Limited it had no assets and there was no activity within the Foundation. For the next few years, it remained dormant albeit that fees of some pound20,000 or pound30,000 were incurred. In 2011 it was struck off the register in Vaduz. The directors resigned and the Foundation ceased to exist as a legal entity. When asked by Mr Howling why the Foundation had not been wound up immediately after the share sale in 2007, Mr Greyling told me that he had initially thought that it was worth preserving the structure in case the opportunity presented itself to acquire another property in future. It appears neither he nor Mrs Greyling took any steps to put funds in place to discharge the costs which were being incurred by the Swiss trustees and eventually the authorities in Lichtenstein caused it to be struck off. 85. Mr Greyling was cross-examined by Mr Howling at some length about his character and his previous involvement in criminal proceedings in the United States. He admitted much of it, albeit that at points in his evidence he tried to put a more favourable gloss on these (largely historical) events. He told me, for example, that he had pleaded guilty in 1996 to violation of US visa laws but that his only offence was working without being in possession of a green card. However, he had pleaded not guilty to the forty-seven counts of fraud in the security exchange control case against him. He spent over 2 million on legal costs trying to clear his name and, after spending 13 months on remand in prison, he was acquitted of 46 counts. He accepted a guilty plea on the one remaining count in order to secure his deportation to South Africa where he was able to be reunited with his family. 86. It is not necessary for me to go into further detail about the evidence he gave me of his past. I remind myself in terms of a specific Lucas 3 direction that people tell lies for all manner of reasons including shame, humiliation, misplaced loyalty, panic, fear, distress, confusion or emotional pressure. Just because someone has been dishonest andor told lies on occasions in the past does not necessarily mean the evidence they give is necessarily untruthful. 87. I listened carefully to what Mr Greyling had to tell me about his and his wifes involvement with the apartment at 47 Eaton Place. It is quite clear to me that Mrs Greylings knowledge of these matters is very limited. The whole deal whereby she acquired her interest in the property (such as it was) was clearly orchestrated and supported by both the husband and Mr Greyling. I accept as true what Mrs Greyling told me about the ill-tempered telephone call she had with the husband when she went to Intrust Limiteds London office to complete the formalities for the sale in 2007. She clearly regarded him as being responsible through his divorce proceedings for the heavy fees which were incurred in clearing the title. She clearly believed at the time they did the deal (as did Mr Greyling) that any financial benefit which arose on a future sale of the apartment would enure for their benefit without any obligation or liability to account to the husband for some or all of any profit. 88. On balance, I am prepared to accept Mr Greylings evidence as a true account of the basis upon which the apartment changed hands in 2005 and 2007. Not only was it a clear and coherent account in terms of his recollection of the detail it accorded with what Mr Aronson was able to remember and with what the husband had previously told me in terms of the flat having been sold as part and parcel of the structure within which it was held. I am also persuaded that Mr Greyling was telling me the truth because, in explaining during the course of cross-examination why he did not share information about his finances with his wife, he told me about a personal matter which he had not disclosed to her. He did not need to tell me this since it would have been a relatively easy matter to provide an alternative explanation had he been lying to me. His account also fits with and is supported by such of the historical documentation as is currently available. I accept, as Mr Howling submits, that the paper trail is far from complete but I do not believe that the documents which have been placed before the court have been doctored or manufactured to provide support for the husbands case that he has no financial interest in the property. Whatever may have been the case at the time of the hearing before Charles J in May 2005, I am prepared to accept that the property has since been sold to a third party purchaser and legitimately alienated from any further interest or control of the husband or his family. Even if he had some interest in or expectation of benefit from the property in 2005 as a result of his interest as a family member in the underlying assets of the Hilbery Foundation (as found by Charles J), I accept that the property was then in negative equity and that the mortgage was not being paid. Even if the entire net proceeds of sale had found their way into the husbands hands, Mrs Greylings evidence was that there was only some pound38,000 available after the mortgage and other disbursements had been paid. Whatever the precise amount may have been, it would not have enabled the husband to pay to the wife the lump sum of pound1.3 million which Charles Js order required him to pay. 89. Because on balance I accept the husbands and Mr Greylings evidence, I derive no further assistance from the apparent inconsistency in the evidence of the original trustees of the Hilbery Foundation which was placed before Charles J in 2005. In their joint statement, the trustees (who were also directors of Ballantine Estates Limited) had made reference to a recent sale of shares in the company to an entity called Compagnie Financiegravere Celeste SA in 2005. They referred to the fact that Savills had advised that this was an offer they should accept, the property owned by the company having been on the market by then for some 12 to 18 months. Mr Howling sought to cast some doubt on the explanation offered to me by Mr Greyling in the light of that evidence. Mr Greyling told me that he had never heard of this company. The husband told me that this was a reference to an abortive sale in respect of which contracts were never exchanged. I accept that explanation and, for the purpose of my finding that the husband retains no interest in the property, attach no weight to what might otherwise appear on its face to be an inconsistency in the evidence before me. 90. I turn now to the issue of computation. E. The computation issue: what sums, if any, remain due and outstanding to the wife 91. In accordance with directions made by Mostyn J at the end of 2014, both parties have instructed accountants in relation to the computation issue. There was considerable slippage in the timetable, however, and the figures produced by the accountants have been something of a moveable feast. By the end of the hearing, I was presented with a number of hypothetical scenarios in respect of which the underlying issues of computation had been agreed. Whilst initially these ran to ten separate scenarios, Mr Howling accepted by the time he came to make his closing submissions that I could ignore the first six. These had been calculated from the foot of an assumption that interest was recoverable on sums which the husband had paid in respect of rent. It seemed to me that this amounted to double recovery. Mr Howling and the accountants agreed. 92. In terms of an agreed methodology, and in relation to each hypothesis in terms of outcome, the accountants have calculated what sums should have been paid in terms of lump sum, costs and arrears of maintenance as ordered by Charles J 4 . Rounded up, this is a fixed and agreed figure of pound1,698.330. They have then calculated the total sum payable in respect of child support on the basis of the sums ordered for the two children (allowing for indexation per paragraphs 4 to 6 of Charles Js order) (pound118,680). To that sum has been added the rent on 35 Briardale Gardens payable under the terms of the interim Callman agreement until 1 November 2011 (pound246,371). Notwithstanding the fact that the husband continued to pay the rent on 4 St Barnabas Mews until October 2013 when he claims he ran out of money, this additional years rent has not been treated as monies owing to the wife in accordance with the finding by Mostyn J that he had complied in full with his obligations under the 2011 agreement. The accountants have then calculated the interest due at the judgment debt rate of 8 on a per diem basis. The interest figures for each scenario are different and depend upon whether the interest is taken to run for the full ten year period from 11 May 2005 until 6 May 2015 (being the date upon which it was envisaged we would have embarked upon the final hearing of the wifes present application) or for the six year period prior to 6 May 2015. 93. From each of the final figures put forward by the wife as the total sum due from the husband, the accountants have then subtracted the global sum which they agree has been paid to her by the husband over the years of this litigation. That figure is not broken down into component elements but is a reflection of all monies paid to or for her benefit over the last ten years. Here, the parties are apart by some pound70,000 odd. The husband contends that he has paid pound1,535,704. The wifes figure is pound1,464,798. Part of this differential turns on the accounting treatment of the six months initial deposit of pound41,600 which the husband paid in respect of the wifes tenancy at 35 Briardale Gardens (which the wife says the husband has double counted). Part relates to the initial rent paid directly to the estate agent when she moved to 4 St Barnabas Mews (some pound6,066). These are factual issues which I was not asked to determine but which should be capable of resolution. By the time of closing submissions at the end of October 2015, Mr Howling told me that he could account for all but some pound15,000 odd of the differential since he, too, had identified points of double counting in the husbands accountants figures. Matters were left that the husband was going to check those figures with his accountant and, if appropriate, adjust his own figures. I have not received any further information since concluding the hearing but I shall proceed in the expectation that this issue will have been resolved by now. 94. It is accepted that there will need to be some recalculation to reflect the actual date when my judgment is handed down. In my view, there should also be an adjustment in the figures to reflect that fact that, under the terms of Charles Js order, the husband was not obliged to pay (a) the lump sum and the historical arrears of periodical payments until 8 June 2005 and (b) the costs award until 25 May 2005. This can be achieved by a simple adjustment on the per diem calculation. Strictly speaking, the liability for the second tranche of costs (pound101,591) was a joint and several liability imposed upon not only the husband but upon Ballantine Estates Limited. Since it was a joint and several liability, and in the absence of any further involvement in these proceedings of the company which I have found has now been alienated from family ownership and extracted from the structure of the (now defunct) Hilbery Foundation, that liability must fall to be paid by the husband. Both parties agree that, once my judgment in relation to the computation issue has been handed down, the accountants will agree and produce a final figure from the foot of the spreadsheets which they have already prepared. That figure can then be incorporated into a final order. (i) What is the precise sum of principal outstanding under the terms of the order made by Charles J in May 2005 95. The first issue which must be determined under this head is what is the correct legal analysis of the effect of the husbands default in paying the first pound700,000 payable to the wife under the Callman agreement by the due date, i. e. 31 December 2006. As I have recorded earlier in my judgment, the husband had only paid about half of that sum by the end of 2006. 96. The answer to this question lies in paragraph 2 of the Mediation Agreement itself which was subsequently given full force and legal effect by the order made by Wall LJ in January 2006. Each provided in identical terms for a stay of the relevant parts of Charles Js order but the stay was conditional upon the husbands compliance with his obligations under the Mediation Agreement. Each is quite clear in its terms: Pending such payment, paragraph 3 of the Order payment of pound1.3 million and paragraphs 7 to 15 secured provision and permission to move to immediate enforcement shall be stayed unless H is in default of payment of any lump sum provided for in paragraph 1 above i. e. pound700,000 by 31 December 2006) in which event paragraphs 7 to 15 of the order shall immediately be enforceable in full . my emphasis I have conflated the two paragraphs 97. Thus, if the husband failed to deliver on time in terms of the revised bargain he had struck with the wife, the terms of the Callman mediation agreement simply fell away and the full terms of the order made by Charles J revive on the basis that the temporary stay is lifted. That was how the order of Wall LJ was interpreted by Vos J on 23 February 2011. In para 7 of his judgment, Vos J said this: The effect was that Mr Justice Charless order that the husband should pay the sum of pound1.3 million by way of a lump sum matrimonial payment was reinstated. 98. It was the conclusive view of the Court of Appeal in December 2014, per Macur LJ at para 4: H reneged upon the Callman agreement. The order of Charles J revived. 99. I have no hesitation in respectfully agreeing with this analysis. The Callman Mediation Agreement was superimposed on the order of Charles J. It operated as a stay the husbands obligation to perform in accordance with a strict timetable was suspended by agreement but on the strict term and condition that, if he defaulted on the mediation timetable, the whole agreement would simply fall away and his future obligations would thereafter be governed by Charles Js original order. Whilst I accept that the husband has continued to pay substantial sums to the wife such that, if the Callman Agreement were the operative instrument, he might well now have complied in full with his payment obligations, the fact is that the sums now being claimed by the wife are sums payable under Charles Js order. The fact that the husband did not simply walk away from his obligations and return to South Africa (as he might have done) leaving the wife to pursue her remedies against him in those courts is to his credit. He has remained in this jurisdiction and he has continued to make payments (albeit at a reduced level) until very recently. However, his legal obligations remain governed by the provisions of the order made in May 2005. My ability to reflect a fair outcome to both parties given the lengthy history of these proceedings lies in the discretion which I have to make appropriate orders in relation to the payment of interest andor the remission of arrears and I shall come on to that aspect of the wifes claims in due course. 100. The headline figure in terms of the principal is agreed. It is pound1,698,330 (a reflection of paragraphs 3 (lump sum), 9 (arrears of maintenance accrued as at May 2005), 14 and 15 (costs). Child maintenance 101. There is no allowance included within that figure for outstanding principal for the sum of pound118,680 claimed by the wife in respect of child maintenance. Paragraphs 4 and 5 of Charles Js order (child maintenance) made provision for ongoing support for the children payable to the wife until each child reached the age of 17 years or completed secondary education. Whilst Charles J varied upward the quantum of those payments (which remained subject to indexation), he did not extend the duration of the term provided in the original 1999 consent order. Those orders for child support have long since expired. All that the wifes accountant has done is to calculate what the husband should have paid in respect of child support over the lifetime of the orders in respect of each of their two daughters. The orders made in 1999 and 2005 were both silent in relation to financial support during the childrens tertiary education and in any gap year. They ended on each childs 17 th birthday or (later) completion of her secondary education. Whilst the payments which the husband was making to the wife throughout that period were not broken down into component elements for the general support of the wife and the children, he was nevertheless supporting the family and I am told that he continues to provide financial support for the girls to this day. I shall return to this aspect of the computation issue in due course. 102. I simply remark at this stage that the husbands accountants response to the figures produced by the wifes accountant is to provide a global figure representing every last pound he has paid in the last ten years. That figure is pound1,535,704. It is a figure which is agreed by the wifes accountant and it represents all sums which she has received whether by way of cash payments for her and the childrens general living expenses, rent, interest, or a payment by way of a reduction in the capital sum outstanding. There is nothing more to assist me to determine the underlying intention of the parties as to how these sums should be allocated and in discharge of what aspect of the husband outstanding liabilities under the order of Charles J. For good reason, I am told that it would be an impossible task to undertake at this stage. This is the basis upon which the accountants on both sides have agreed to present the court with a number of scenarios in order to determine the extent of his outstanding liability (if any). 103. I suspect that the underlying reality of the situation is that, without the means to buy a home for herself and the children, the payment of rent into the foreseeable future became the underlying reality of life for both the wife and the husband. He recognised his obligation to put a roof over their heads and, until October 2013, fulfilled his obligation to meet the rent on various properties in which she lived. Those properties were far from a subsistence level of accommodation. During the same period he, too, on his case was without the capital to buy a property and he continued to rent. Much criticism has been made of his choice to rent at the top end of the market, a criticism which he himself accepts to be entirely justified with the benefit of hindsight. He claims to have been subsidised by his family and friends (something to which I shall return shortly). His only prospect of discharging his obligations to the wife (on his evidence) was to carry on generating capital sums through deals. In recent years, as his health has deteriorated, he has not maintained the successful track record he was once able to demonstrate. On his case, he has earnt nothing since June 2013 but has run up a very significant level of debt. I suspect that what was important to each of the husband and wife during this period was to keep the family afloat financially. The wife continued to leave no stone unturned in her efforts to establish that the husband had hidden means and was refusing to pay the lump sum award which would have enabled her to buy a home. The husband, on his case, was continually spinning plates in order to find the cash to pay the wife the pound4,000 per month he had agreed she should have with effect from November 2011 together with her rent. 104. In his final submissions to me the husband argued that at the time of the order made by Charles J in May 2005 he was paying the wifes rent in the sum of between pound1,800 and pound2,000 per month. This level of rent continued throughout the period between May 2005 and January 2006 when the Callman Agreement was put in place. At the time of the Callman Agreement, the wife and children were living either at 95 The Avenue, London NW3 or at 15 Connaught House, London W9. (Her chronology at B2:250 does not enable me to fix the dates when she was resident in these properties and I heard no evidence on the point.) The agreement envisaged that she would continue to rent for the remainder of that year. January 2007 arrived and, with the husband then in default of the obligation to pay pound700,000, for the next three and a half years or thereabouts, the terms imposed by Charles J had revived. By 21 April 2010 when she issued her statutory demand, the wife claimed that she was owed a total of pound1.077 million after giving credit for all sums paid by the husband up to that point (i. e. pound628,928). Of the total sum owed at that stage, an amount of pound518,374 was said to represent interest leaving outstanding principal as at that date of just under pound560,000. 105. By November 2011, some eighteen months later, fresh arrangements were in place pursuant to the Mediation Agreement brokered on 2 November 2011. From this date until the hearing before Mostyn J in May 2014, a period of some eighteen months, it is the husbands case that he complied in full with his obligations under this financial regime and that the judge on that occasion found as much. However, it is clear from the face of the second Mediation Agreement in 2011 that its terms did not (and were not intended to) replace or otherwise vary the underlying obligations imposed on the husband by the terms of the order made by Charles J in May 2005. The Definitions recorded in the agreement refer specifically to the lump sum order which Charles J had made in 2005 (i. e. pound1.3 million together with costs and arrears of maintenance) and the fact that there was then an outstanding balance due to the wife. As a holding position, the husband agreed to meet the rent on 35 Briardale Gardens and pay a monthly sum of pound4,000 per month until matters between them had been finalised. But his obligations under the 2005 order remained subject only to any final determination of the balance to be paid and such determination was to be the subject of a future mediation process which never happened. 106. Part of the husbands case is that, because the wife wished to move to larger and more expensive accommodation during this period, and because he was willing to assist her by increasing his payments in respect of rent, he should be compensated for his voluntary agreement to pay at a higher rate. By his calculation, a sum of pound200,000 should be deducted for this overpayment from the sum which she now claims for rent. The husband describes this gesture on his part as a bit of give and take on both sides. He says it was the quid pro quo for the fact that he was not able to meet the capital sum which was due to her and it was always his expectation that the sums he paid would be set off against any capital sums he owed her. The wife denies that there was any such agreement. In my view, without first securing his former wifes agreement to set off any rental uplift against any sums due and owing under the terms of Charles Js order, I am not prepared to imply an additional term into the second 2011 Mediation Agreement to that effect. However, that does not necessarily mean that the husbands willingness to assist her financially in this way is of no consequence or effect since I take the view that this is a matter more properly considered in the context of the exercise of the wide discretion given to the court in relation to the remission of interest. The wifes case in relation to how the sums paid to her by the husband over the years have been spent 107. As is clear from the financial presentation made by the wife in her updated disclosure, she has no capital savings at all. The husband raised the issue during the proceedings before me as to how she had spent the sums he had paid to her. She provided the following breakdown in an email dated 12 March 2015 which Mr Howling reproduced in his opening note for the March 2015 hearing. Total money paid: pound1,406,682.00 5 From that money paid towards: 1. Rent ndash Due pound553,149.00, paid pound462,159.00 2. Child maintenance - pound118,680.00 This gives a balance of pound825,843 to be set off against the capital due. 3. Further payments to Collyer Bristow Ws former solicitors following the trial 230206 pound15,000 050506 pound10,000 270606 pound48,919.88 090508 pound7,870.00 190808 pound2,548.00 Total pound84,338.47 4. Furniture, beds, linen etc that had to be bought when we moved to 15f Connaught House as we had a flood at the former matrimonial home hellip. I estimate that this cost pound60,000. This leaves a figure of pound681,505.53. If I divide this by 9yrs and 7 moths (115 mths) it comes to a figure of pound5,926 a month pound71,112 per annum which I do not believe to be extravagant in terms of general living expenses bearing in mind that this covered all holidays etc that I paid for when I took the children away and I also contributed a great deal to their clothes and living expenses as maintenance between pound550-600 per child was a modest sum. Counsels earlier concession in relation to outstanding principal 108. In paragraph 50 of my judgment, I have referred to the fact that the husbands counsel, Mr Warshaw, made a concession in May 2014 that a sum of at least pound600,000 was due to the wife. I have set out the passage from Mostyn Js judgment wherein he refers to this apparent concession. There was no opportunity for Mr Warshaw to ventilate the technical points which he advertised on that occasion. The husband denies that the concession was made on his instruction and he told me that the figures were never properly examined by him or Mr Tooth. If these were Mr Warshaws own calculations, then the husband had no knowledge of the basis upon which they were made. 109. Mr Howling relies on that concession since the figures are not wholly dissimilar from the wifes own calculations which underpinned both her statutory demand in April 2010 and her current enforcement application under FPR 2010 r. 33.3(2)(b). The difficulty for me is that these calculations appear to have been reached using a different methodology from that which is now the basis of the accountancy evidence before the court in 2015. That exercise, by agreement between the parties, has proceeded on a simple calculation which involves offsetting against all sums due all sums actually paid. Depending on the treatment of the husbands obligation to pay rent under the CallmanMediation Agreements, interest is then applied to the resulting figures both on the basis that it is payable for the whole ten year period and on the alternative basis that it is limited to six years recovery pursuant to s. 24(2) of the Limitation Act 1980. There is nothing in the papers before me, and I heard no evidence on the point, to suggest that these parties applied their minds at any point in time over the last few years as to how the payments being made on an ongoing basis by the husband should be treated in terms of any apportionment between his capital and income liabilities (the latter including her rent). The difficulty is compounded by the fact that frequently payments have been made in cash in dribs and drabs of pound250 one day and pound100 the next. The husband told me that, as his financial situation deteriorated, he was obliged to run his economy on a cash basis. I shall have to come on to the underlying reality of his financial situation in due course but I have seen compelling evidence of banks withdrawing his banking facilities and demands for payment from his private health insurers as standing order and direct debit payments have fallen into arrears. 110. I have revisited the case management directions made by Mostyn J on 19 September 2014. On that occasion he directed both parties to exchange statements setting out their respective cases as to the outstanding principal owing under the order dated 11 May 2005 and any remittance of interest due thereon. Paragraphs 7 and 8 of his continued thus: 7. By16:00 on 31 October 2014 the Respondent shall serve on the Applicant a report from an accountant setting out his case as to the actual interest due under the order dated 11 May 2005 on the basis of his assertions and the Applicants assertions. 8. By 16:00 on 20 November 2014 the Respondent shall serve on the Respondent her response to the Respondents accountants report which may be from her own accountant. 111. There was then provision for the accountants to endeavour to agree the figures and, in default, for the production of a table setting out their different contentions. That exercise never took place. When the matter first came before me on 16 March 2015 for directions, I made an order requiring the parties to endeavour to agree the interest figures. I extended the timetable for the accountants to meet and ordered them to produce their table of differences (if any) by 28 April 2015. When the matter came back before me, I had within the main bundle a composite document entitled Schedule of interest B2289-382. It took the form of a spreadsheet running to over ninety pages on which there are various columns of figures representing sums said to be due and payable in respect of the following:- (ii) child maintenance (iv) days outstanding (v) daily rate of interest calculated at 8 offset in a further column by (vi) monies received from the husband. 112. This spreadsheet was then recalibrated through various hypothetical scenarios (six in all at that stage) to reflect possible outcomes in terms of the courts treatment of the various constituent elements. By the time we reached final submissions in October 2015, these had increased to ten. I accept that both parties as litigants in person have done their best with help from their accountants to assist me. However, the exercise which has been undertaken lacks the sophistication which I suspect Mostyn J had in mind when he made his case management directions at the end of 2014. The case must now be resolved and thus I am proposing to proceed on the basis of the invitation extended to me by each of the parties and their respective accountants. It is an approach endorsed by Mr Howling on behalf of the wife. 113. The essence of the wifes case is that since 1999 she and the children have never had a secure home and have been forced to move from one rental property to another. Rather than paying the sum of pound1.3 million, or the reduced first stage payment of pound700,000, which would have enabled her to get into privately owned accommodation, the husband has drip fed small sums in payment of both his capital and income obligations. She says in her statement dated 26 February 2015 that she had intended to set up a small business with any remaining funds after buying a home and invested time and effort into researching this venture. The fact that the husband stopped paying her rent on 4 St Barnabas Mews left the wife with a significant debt to her landlord, Grosvenor Estates. It is a debt which now stands at over pound80,000 with interest and one which she has no hope of repaying without receiving capital from the husband. She faces the very real threat of bankruptcy. 114. By his statement dated 26 February 2015, the husband accepts that the wifes figure of pound1,698,330.86 is correct. He contends that he has paid pound1,535,703.88 up to 6 October 2014. (A further pound6,620 was paid thereafter.) This figure includes all sums he has paid by way of child support. Based on these calculations, he estimates that he owes no more than pound162,626.98. His figure makes no allowance for interest at all . To the extent that the husband relies upon the Callman Agreement of 2005 as superseding and cancelling his obligations under the May 2005 order, I have rejected that submission for reasons I have already explained. The husband accepts that he made payments to the wife an on ad hoc basis. He says that he had no other option given the inconsistent nature of his work and the fact that he was so heavily reliant on world markets to broker his deals. He has set out a comprehensive list of the payments made under the terms of the Callman Agreement. I accept, as did Mostyn J, that he is not in default of that agreement in any material respect. However, once he breached the timetable for payment of the first pound700,000, that agreement was of no further legal effect. The fact that the wife had been unable to buy a home within 12 months (as envisaged by the agreement) inevitably meant that the parties were trapped in a continuing cycle of having to pay rent for the various homes she occupied. However, the fact that the husband continued to comply with the agreement during the period of his default cannot, in my judgment, expunge the debt which became due to her when the May 2005 order revived. 115. The husband explains the absence from his accountants calculations of any interest by relying on his own interpretation of what Mostyn J had intended by his order. At paragraph 5.2 of his statement dated 10 March 2015, the husband says that his understanding was that, as long as the capital amount had been paid, any issues relating to interest could be reviewed at a later date. Because it is his case that he has paid all capital sums due, he agrees with the wife that all and any questions relating to interest should be left to the court. 116. Both parties now agree that I should proceed to calculate the amount due to the wife from the foot of scenarios 7 to 10 of their closing Schedule of Agreed Accountancy Evidence. It is to those that I now turn. The relevant scenarios which I am being asked to consider 117. To avoid confusion, I will adopt the numbering of these different scenarios as they appear in the Agreed Schedule notwithstanding that there are now only four which both parties accept to be relevant to my determination. Each is based upon the agreed figures in respect of sums due and payments received 6 . Individually they are adjusted to reflect different periods in respect of (a) the husbands obligation to pay rent, and (b) the period during which interest properly runs, subject only to the courts discretion in relation to remission. (i) Scenario 7 This scenario ssumes that the husbands obligation to pay rent comes to an end after 1 November 2011. This accords with the extent of his obligation pursuant to the undertaking which he gave in the 2011 Mediation Agreement. It also accords with the previous finding of Mostyn J. It also assumes that interest at 8 is payable throughout the full 10 year period and is not affected by the provisions of the Limitation Act 1980. On this basis, the wife claims she is owed a total sum of pound1,993,646. The husband contends he owed pound162,626.98 together with any interest which the court finds to be due and payable. (ii) Scenario 8 This scenario adopts the same set of facts as set out in Scenario 7 above but assumes that interest only runs for the six years prior to 6 May 2015. The parties have thus worked backwards from the date when they anticipated the hearing might have concluded. However, s. 24(2) of the Limitation Act 1980 provides that no arrears of interest are recoverable after the expiration of six years from the date on which interest became due . The lump sum of pound1.3 million and the arrears of maintenance in the sum of pound74,428.86 were payable under the terms of Charles Js order by 8 June 2005. Interest therefore started to run from 9 June 2005 and, if statute barred under the terms of the 1980 Act, continued to accrue until 9 June 2011. The costs orders were payable by 25 May 2005. On this basis (which includes what I regard as a flawed interest calculation), the wife claims that she is owed pound1,140,715.69. The husband contends he owes pound162,626.98, plus interest (to be assessed). (iii) Scenario 9 This scenario assumes the same set of facts as before in Scenarios 7 and 8 save that rent has been omitted apart from that payable under the Callman Mediation Agreement (i. e. 2006 to 2011) until capital of pound700,000 has been paid. Once that cap is reached, the accountants have simply calculated the amount of rent paid during the intervening period and inserted this figure as part of the overall sum due to the wife. No further allowance has been made in respect of any rent due from the husband once the payments he made pass the pound700,000 figure. The justification for this treatment of the figures is that this was the sum which he had to pay before his obligation to pay rent fell away. It is informed, in part, by Mostyn Js finding that he had no obligation to pay rent once the wife moved from 35 Briardale Gardens. Pausing there, whilst I can understand why this basis of computation was adopted by the parties because of their (and my) inability to determine on an evidential basis which payments should be appropriated to principal and which to income obligations, it seems to me that there is no basis in law for this particular hypothesis. Once the husband defaulted on payment of the pound700,000 by the due date, the Callman Mediation Agreement was of no further legal effect because the order made by Charles J revived. Nevertheless, the parties and their advisers have opted to put forward this scenario as a pragmatic solution to the issue of computation which reflects an element of fairness to both. Scenario 9 includes interest for the full 10 year period on the wifes case. On this basis, she claims that she is owed pound2,016,919.53 ( inclusive of interest). H contends he owes pound162,626.98 plus any interest assessed by the court to be due and payable. (iv) Scenario 10 This is a repetition of Scenario 9 but on the basis that interest only runs for 6 years because of the s. 24(2) of the Limitation Act 1980. I will not here repeat what I said about the window of calculation and the date(s) from which interest starts to run. The parties appear to have worked backwards from the date of the hearing whereas, in my view, interest starts to run from the date when the judgment debt becomes payable. On this basis, the wife claims that she is owed pound1,173,192.94 (inclusive of interest). H contends he owes pound162,626.98 (exclusive of interest). 118. My task is to make a determination which is (a) sound in law and (b) fair to the parties in terms of the exercise of my discretion in relation to interest. 119. In my judgment, the husbands alleged inability to pay the capital award in 2005 (which led to the cycle of rentgeneral maintenance payments provided for in the two Mediation Agreements) cannot disturb the legal basis for his existing obligations to the wife. He did not appeal Charles Js findings of fact in relation to the resources which were available to him in 2005. Although he secured permission to appeal the award of pound1.3 million because of perceived deficiencies in the manner of its calculation, he decided to compromise that appeal by agreeing with the wife to mediate. The Court of Appeal in December 2014 dismissed any suggestion that either party could now apply to appeal out of time the provisions of the order made in May 2005. It is that order which governs the legal obligations of the parties despite their various attempts to settle matters in the intervening years. I accept that the husband has continued to provide financial support to the wife because (on his case) he has not been in a position to discharge his legal obligations to her and bring into effect the clean break which Charles Js order was intended to achieve. She, for her part, has been kept out of the capital which would have enabled her to achieve a measure of security by investing in the central London housing market at a time when she would have had the benefit of the exponential growth reflected in that market over subsequent years. 120. Given that paragraphs 3 (lump sum), 9 (arrears of maintenance) and 14 and 15 (payment of costs) of the order made by Charles J in May 2005 provide the legal foundation for the husbands obligations, my starting point has to be the figure of pound1,698,330.86 which both parties agree to be the sum which was then due to her in terms of the capitalisation award, the arrears of maintenance and her costs. These are fixed sums and and there is no dispute about that figure. I cannot begin to embark upon a retrospective investigation into how to apportion payments which the husband has made to date so as to distinguish between (i) his capital obligations to meet the sum of pound1.3 million, the arrears of maintenance and the costs, and (ii) his income obligations which arose as a consequence of his default. I have no evidential foundation for embarking on that exercise and I suspect that the reality is that the parties themselves never applied their minds to that exercise. 121. In relation to child maintenance, the wife claims a figure of pound118,680 as the total sum due for the two children over the life of the order made for their benefit by Charles J. I am assuming that the accountants have included indexed figures for the purposes of their calculations. The childrens entitlement to financial support under the terms of the May 2005 order fell away some years ago, although the husband continues to provide financial support on a voluntary basis. Thus, an element of the wifes present claim under this head relates to maintenance payments for the children which are more than twelve months in arrears. She requires leave to enforce those arrears. Because I accept that it is simply not possible to draw any clear lines of distinction between the husbands payment of capital and income, I propose to exercise the wide discretion which I have in these matters and allow her to enforce all those arrears. 122. Thus, in terms of principal, the total recoverable becomes pound1,698,330 pound118,680 rent (if payable). Rent 123. The order of Charles J in May 2005 (which is the order in respect of which these enforcement proceedings bite) contained no provision for the payment of rent. Under the terms of the Callman Mediation Agreement, the husband was under an obligation to pay the wifes rent until he had paid her a sum of pound700,000 on account of his obligation to pay the reduced figure of pound926,000. Under the terms of the second Mediation Agreement, the husbands obligation to pay rent fell away after her move to 4 St Barnabas Mews in October 2012. That was the finding of Mostyn J with which I respectfully agree and by which I am bound. The reality is that his moral, if not legal, obligation to provide a roof over her head has throughout had to be met by the payment of rent because she has not had the capital to purchase her own home as was the intention behind the original order made by Charles J. Although the wife has claimed figures of pound246,370 (scenarios 7 and 8) and pound272,674 (Scenarios 9 and 10) as being due and payable in respect of rent for the purposes of the scenarios I am considering, her accountant has created contra-entries in his calculations so as to neutralise the liability in respect of interest on the rent claimed. This has been done, with the agreement of the husbands accountant, because the parties accept that a claim for rent and interest would represent double recovery. The figures themselves are agreed calculations. 124. The inter-relationship between rent and interest is difficult. These enforcement proceedings relate to the order of Charles J and the wifes entitlement to an outstanding judgment debt of pound1,698,330. Nevertheless, I cannot ignore the fact that she agreed to enter not one but two formal mediation processes as a result of which, at least for a period of time, the husbands financial obligations under the 2005 order were suspended. He, in turn, accepted an obligation to pay rent in recognition of the fact that she was being kept out of her capital. Once he had paid a sum of pound700,000, that obligation fell away. However, he defaulted on the payment schedule which would have allowed the wife to move into a home of her own after a further year in rented accommodation. Under Scenarios 9 and 10 the wife has capped her entitlement to rent once that notional figure of pound700,000 has been deemed recovered. The fact that such recovery has been achieved not by a single payment (or a series of payments within an agreed time frame) but by way of a notional set off of payments made over a period of time means that she has been deprived of the capital she needed (and still needs) to provide a secure home for herself and the children. In my view, the fairest outcome to both parties is to disallow rent except for that specifically payable under the Callman Mediation Agreement but to allow recovery in respect of interest on all sums outstanding (save in relation to the rental element) subject only to my decision in relation to the point taken in relation to the Limitation Act 1980. I am thus in the territory of Scenarios 9 and 10. The sum claimed for rent is pound272,674. There will be no recovery of interest in respect of this sum (and, as I have already said, the accountants have already provided in their spreadsheet for any notional interest on this figure to be neutralised). I am satisfied that this is fair both to the husband and the wife and it was the course adopted and approved by Baron J in similar circumstances in H v H (Lump Sum: Interest Payable) 2005 EWHC 1513 (Fam), 2006 1 FLR 327. 125. Thus, leaving interest aside, and on the basis of my decision in relation to the arrears of child support and rent, this produces a total indebtedness on the husbands part of pound2,089,684 7 . If he has paid a total of pound1,464,798 as the wife contends 8 . the principal sum outstanding and due to the wife (without taking any account of interest) is pound624,886 . 126. I am invited by the parties to proceed on the basis of this somewhat simplistic set off arrangement and it seems to me that, in the absence of any cogent evidence as to their intentions at the time in relation to the apportionment of his payments by way of set off, that is the only sensible and fair way to proceed. On this basis, it seems to me that it is unnecessary to make any specific findings about the concession alleged to have been made by Mr Warshaw in May 2014 since the figures are broadly similar. 127. The treatment of concessions made by counsel at trial was considered in BT Pension Scheme Trustees Limited v British Telecommunications PLC and Secretary of State for Business, Innovation and Skills 2011 EWHC 2071 (Ch). At paragraphs 33 to 44, Mann J considered the law which he summarised in these terms: Thus far, so far as appeals are concerned, one can therefore extract the following propositions:- (i) The party who wishes to resile from a previous concession has the burden of establishing that the previously foregone point should be raised. (ii) It will be harder to raise a point which has been expressly conceded. (iii) If taking the point would risk causing prejudice to the other, in the sense that it might have been deprived of the opportunity of dealing with the case differently in the court below, then it is unlikely that the resiling will be allowed. The greater the risk, the less likely it is that it will be allowed. (iv) There is a low threshold of risk for these purposes (see any possibility in Paramount ). (v) The burden of establishing no risk is on the party who wishes to withdraw the concession, and the other party should have the benefit of any doubt in this area. 128. It seems to me that Mr Warshaws so-called concession was qualified in any event however it may have been treated by Mostyn J in his judgment. We are many months further on in this litigation and both parties are now inviting me to proceed from the foot of their agreed scenarios. The figure upon which I have settled as fair to both parties is more or less on all fours with that advanced by Mr Warshaw in 2014 albeit that the underlying methodology of our respective calculations may not have been the same. Conclusion in relation to the first issue in relation to computation 129. In answer to the first question, therefore, my finding is that the husband still owes the wife a sum of pound624,886 in terms of the principal sum, arrears of maintenance and rent outstanding under the orders made by Charles J on 11 May 2005 and in terms of the Callman Mediation Agreement as converted into the order made by Wall J in January 2006. F. What is the position in relation to interest 130. I turn now to consider the law in relation to the recovery of interest on the sums due to the wife. The balance which I have found to be the principal now due and payable does not reflect the much greater sums on which interest will have run over the course of this litigations ten year history. 131. As I have already said, I am not satisfied that the figures produced by the accountants in Scenarios 9 and 10 in respect of interest are correct calculations. Respectively, the sums which appear in the Schedule of Agreed Accountancy Evidence are pound1,392,033 and pound548,306. The difference lies in period in respect of which interest is recoverable. 132. Section 24 of the Limitation Act 1980 provides as follows:- 24. (1) An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable. (2) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due. 133. Section 39 of the 1980 Act provides that:- 39. This Act shall not apply to any action or arbitration for which a period of limitation is prescribed by or under any other enactment (whether passed before or after the passing of this Act) or to any action or arbitration to which the Crown is a party and for which, if it were between subjects, a period of limitation would be prescribed by or under any such enactment. 134. The seminal authority in relation to s 24 of the Limitation Act 1980 is Lowsley and Another v Forbes (ta L E Design Services) 1999 1 AC 329, 1998 3 All ER 897. That case established that the word action in s 24(1) of the 1980 Act meant a fresh action and did not include enforcement proceedings per se. Accordingly, the section did not operate so as to prevent a judgment creditor from enforcing a judgment after six years but precluded the bringing of a fresh action on the judgment. However, the House of Lords held that there was no reason why the words no arrears of interest hellip. shall be recovered in s 24(2) should not be given their ordinary meaning so as to bar execution after six years whilst limiting recovery of interest to a six year period. 135. The issue which I have to decide is whether Lowsley applies in the context of the matrimonial jurisdiction and, in particular, section 32 of the Matrimonial Causes Act 1973. If Lowsley applies, it will operate so as to prevent the wife from recovering interest pursuant to the order of Charles J which is more than six years old. 136. Mr Howling tells me that there is no authority on this point and the legal commentators are divided in their opinion as to whether or not the 1980 Act applies in the context of litigation under the Matrimonial Causes Act 1973. 137. Section 32 of the Matrimonial Causes Act 1973 provides that:- 32. (1) A person shall not be entitled to enforce through the High Court or any county court the payment of any arrears due under an order for maintenance pending suit, an interim order for maintenance or any financial provision order without the leave of the court if those arrears become due more than twelve months before proceedings to enforce the payment of them are begun. (2) The court hearing an application for the grant of leave under this section may refuse leave, or may grant leave subject to such restrictions and conditions (including conditions as to the allowing of time for payment or the making of payment by instalments) as that court thinks proper, or may remit the payment of the arrears or any part thereof. (3) An application for the grant of leave under this section shall be made in such manner as may be prescribed by rules of court. 138. Mr Howling on behalf of the wife submits that the wording of s 32 of the 1973 Act is wholly consistent with a statutory scheme which falls outside the provisions of the Limitation Act 1980 in accordance with the terms of s 39 of that Act. He contends that s 32 of the 1973 Act provides a discretionary and fact specific remedy in respect of which there is no time limit apart from a statutory presumption that there is a twelve month time limit on recovery unless a court decides otherwise. He relies for support of this proposition on the view expressed by the editors of Jacksons Matrimonial Finance 9 th Edition. At paragraph 21.107, the editors set out the substance of s 32 in relation to arrears which are more than twelve months old. By way of footnote they refer to s 32(1) thus:- This express statutory provision in the 1973 Act creates a different regime from the general rules under the Limitation Act 1980 as interpreted by the House of Lords in Lowsley v Forbes (ta LE Design Services) 1999 1 AC 329, 1998 3 All ER 897, HL, where it was held that on their true construction the words an action hellip upon any judgment in s 24(1) of the Limitation Act 1980 meant a fresh action and did not include proceedings by way of execution of a judgment in the same action and that, accordingly, the plaintiffs were entitled to leave to enforce the judgment by way of garnishee and charging orders despite the passage of more than six years since the judgment had been entered. 139. The editors of Rayden and Jackson on Divorce and Family Matters, 18 th Edition do not agree with this interpretation. At paragraph 28.16, they cite Lowsley as specific authority for the proposition of law that interest may not be recovered after six years have expired from the date on which it became due. They go on to state the general rule that interest on lump sums accrues from the date stipulated for payment rather than the date of the order. Their authority for that proposition is Preston v Preston 1982 Fam 17, 1982 2 FLR 331, CA which departs from the wording of s 17 of the Judgments Act 1938. 140. Similarly The Family Court Practice 2015 (more commonly referred to as the Red Book), cites Lowsley as clear authority for the proposition of law that no more than six years interest may be recovered in ay enforcement proceedings: see pages 791 and 2576. 141. This interpretation is supported by Halsburys Laws of England, Vol 73, 5 th Edition (2009) where, in the specific context of matrimonial law and the enforcement of financial and other orders, at paragraph 915, the following passage appears: Interest may not be recovered after six years have expired from the date on which it became due. At paragraph 918, the principle is repeated again : 918. Limitation on the recovery of interest . Interest on a judgment debt is not recoverable after six years have expired from the date when the interest became due, even though there is no such limitation on the enforcement of the judgment itself. Lowsley v Forbes is specifically cited as authority for that proposition. 142. The husband seeks to limit any recovery of interest to six years rather than the ten years interest claimed by the wife. He argues that the Limitation Act 1980 does not provide for a general limitation on matrimonial actions since they are not specifically identified as one of the various classes of actions referred to in Part I of the Act. Part I provides for what are referred to as ordinary time limits in relation to the various classes of actions identified therein: s 1(1) of the 1980 Act. Those ordinary time limits are subject to powers of extension or exclusion in accordance with the provisions of Part II: s1(2). 143. He argues that, whilst s 32 of the Matrimonial Causes Act 1973 makes specific provision for the need for a judgment creditor to secure the courts leave to enforce arrears in respect of an order for maintenance pending suit, an interim order for maintenance or any financial provision order before enforcing arrears which are more than 12 months old, it does no more than that. It does not affect the limitation on the recovery of interest which is governed by s 24(2) of the 1980 Act. That limitation applies to arrears of interest in respect of any judgment debt and is applicable in the matrimonial jurisdiction just as it is in the Chancery and Queens Bench Divisions of the High Court. Analysis 144. In terms, section 39 disapplies the provisions of the 1980 Act to any action hellip for which a period of limitation is prescribed by or under any other enactment my emphasis. Section 32 of the Matrimonial Causes Act 1973 is certainly an enactment. It is framed by reference to payments made in respect of maintenance or other financial provision which are essentially periodical by their nature. They are payable on an arising basis and thus default in respect of any one or more payments gives rise to arrears. There has long been a policy in the courts administering a matrimonial jurisdiction which prevents the enforcement of stale arrears unless there is a sound reason to allow enforcement: see H v H (Financial Provision) 1993 2 FLR 35 at page 42, per Thorpe LJ. This is the rationale for requiring a judgment creditor to secure the courts permission in respect of arrears which are older than twelve months as a condition of proceeding to enforcement. Can section 32 of the Matrimonial Causes Act 1973 be construed as a prescriptive statutory formula which, on the one hand, prevents without leave the recovery of maintenance or any order for financial provision in respect of arrears which became due more than twelve months before enforcement proceedings are begun but which, on the other hand, leaves all other claims (for example, those in respect of interest on a judgment debt) entirely at large. Did Parliament intend in framing the matrimonial legislation in this way to prescribe that there should be no specific period of limitation in the matrimonial jurisdiction save in relation to arrears of those orders referred to in section 32 145. There has been no subsequent amendment of section 32 of the Matrimonial Causes Act 1973 to disapply the provisions of section 24(2) of the 1980 Act. 146. It is clear from the recent decision of the Supreme Court in Vince v Wyatt 2015 UKSC 14 that there is no time limit imposed upon any application by a spouse who seeks orders in respect of financial provision or property adjustment orders following a divorce. Lord Wilson delivered the leading judgment. At paragraph 17 and in the context of the courts relatively new power to strike out actions under FPR 2010 r.4.4, his Lordship said this: Consistently with the potentially life-long obligations which attend a marriage, there is no time-limit for seeking orders for financial provision or property adjustment for the benefit of a spouse following divorce. Sections 23(1) and 24(1) of the 1973 Act provide that such orders may be made on granting a decree of divorce or at any time thereafter. Yet there is a prominent strain of public policy hostile to forensic delay. The court will look critically at explanations for it and, even irrespective of its effect upon the respondent, will be likely, by reason of it and subject to the potency of other factors, to reduce or even to eliminate its provision for the applicant. 147. Thus, no formally prescribed limitation period arises in respect of a spouses ability to bring an application for financial remedy orders, regardless of the delay between the dissolution of the marriage and the application. Does this mean that Mr Howling is correct in his interpretation of the law so that section 24(2) of the Limitation Act has no application in the matrimonial jurisdiction 148. In my judgment, this is to stretch a point of construction too far. The two sections in the statutes deal with different matters. Section 32 of the 1973 Act concerns the payment of arrears due under maintenance or other financial provision orders. It reflects a policy decision that, if a maintenance creditor has not taken any steps to enforce arrears which are more than twelve months old, he or she must provide a good reason for being allowed to reach back beyond a year. Section 24(2) of the 1980 Act deals with something completely different, i. e. the recovery of interest on a crystallised judgment debt which remains unsatisfied beyond the date specified for payment . Lowsley makes it plain that the recovery of interest on a judgment debt is not an action within the meaning of section 32(1) or a right of action within the meaning of section 32(1)(b) of the 1980 Act. Their Lordships also stressed that all judgments are caught by the words of the statute so as to bar under section 24(2) of the 1980 Act execution in respect of arrears of interest after six years (see page 906h). 149. What is now abundantly clear from the highest judicial authority from Imerman v Tchenguiz 2011 Fam 116 to Prest v Petrodel Resources Ltd and Others 2012 EWCA Civ 1395 . 2013 UKSC 34, 2013 2 AC 415 is that judges sitting in the Family Division make their decisions by applying the same legal principles as the judges who sit in the other Divisions of the High Court. That is the principle which has been accepted by the distinguished authors of Halsburys Laws of England and Rayden amp Jackson . each of which are regarded as seminal works of authority. I agree and respectfully concur with their views. Conclusion in relation to interest 150. Accordingly, in my judgment the wife is precluded by the decision in Lowsley and as a result of section 24(2) of the Limitation Act 1980 from recovering arrears from 2005 to the present day. Her entitlement to interest as a matter of law on the outstanding sums payable (see paragraph 129) runs for six years (and no more). 151. Whilst the figure calculated by the accountants under Scenario 10 is pound548,306, Mr Howling told me that this was the calculation for the period from 6 May 2009 to 6 May 2015. In my view, this is not the correct period for reasons which I have set out above and the two accountants should be asked to recalculate the sum due on the basis that interest runs for a period of six years from the date upon which interest became due and payable as a result of the husbands non-payment. The detailed spreadsheets which they have already produced showing the sums paid by the husband and the dates of payment should enable them to do this with relative ease. Indeed, the husband told me during submissions that all that was required by the accountants to produce a final calculation in relation to interest was my decision in terms of the sums recoverable. 152. Thus, for the reasons explained in my judgment, I give leave to the wife to enforce all the accumulated arrears of child maintenance (pound118,680) notwithstanding the fact that they are now more than 12 months in arrears but on the basis that I am disallowing any recovery in respect of rent save for the sum of pound272,674 payable under the Callman Mediation Agreement. We are therefore squarely in the territory of Scenario 10 save for the period during which interest will need to be recalculated by the accountants. 153. In respect of interest, the following issues remain to be resolved:- (i) Is interest payable on the sum claimed by the wife in respect of arrears of maintenance for the children (paragraphs 4 and 6 of Charles Js order) andor on arrears of spousal maintenance (paragraphs 8 and 9 of the order) (ii) At what rate should any interest payable be made. 154. In relation to interest on arrears of maintenance, I did not hear argument since it appears that both parties simply assumed that interest was payable. Certainly, that was Mr Howlings position on behalf of the wife. However it seems to me that the position is not quite so straightforward. The issue was raised by Mostyn J with Mr Warshaw at the hearing on 19 May 2014. Mr Warshaw was unable to take the judge to chapter and verse in respect of the law but invited the court to proceed on the assumption that interest would run. 155. Very recently, Mostyn J has had to consider the question of whether or not, in the context of a county court judgment, interest is payable on arrears in respect of an order for child maintenance. 156. In Re TW (Children) 2015 EWHC 3054 (Fam) . the proceedings related to an award of child maintenance pursuant to Schedule 1 of the Children Act 1989. The respondent father was ordered to pay certain sums to the childs mother in respect of child support. He fell into arrears. The district judge at first instance remitted the arrears save for a specified sum which was to be paid by a certain date, failing which interest was to accrue at 8. On appeal, Mostyn J held that interest was not payable because the sum due was a quantification of arrears of periodical payments and not a lump sum payment pursuant to either Sch 1 of the 1989 Act or under s 23 of the Matrimonial Causes Act 1973. As such, the order which attached interest to the quantification of arrears was ultra vires and was revoked. In delivering judgment, Mostyn J said this: 17 The imposition of interest is a legally complex issue. If the case had been decided under the Matrimonial Causes Act then by virtue of s.23(6) the court may award interest at such rate as may be specified but only where the court has made an order under this section for the payment of a lump sum. The order made here, which quantifies the arrears in the sum of pound12,500 and remits the balance, is not an order for a payment of a lump sum under s.23 of the Matrimonial Causes Act nor, for that matter, is it an order for payment of a lump sum under para.1(2)(c) of sch.1 of the Children Act. I observe that there is no comparable provision to s.23(6) of the Matrimonial Causes Act within sch.1 of the Children Act 1989. The order made here was in the Family Court at the Central Family Court. The Family Court replaced all courts which previously exercised family jurisdiction. The orders that had been made previously in this case had been made in the Principal Registry of the Family Division sitting as a county court. If the Family Court had not arrived in existence and the old regime had been continued then this order would have been made or treated as having been made in the county court. In those circumstances interest on a judgment debt is payable pursuant to s.74 of the County Courts Act 1984 and art. 2 of the County Courts (Interest on Judgment Debts) Order 1991, SI 1184. That provides in art.2(4) as follows: Where the relevant judgment makes financial provision for a spouse or a child, interest shall only be payable on an order for the payment of not less than pound5000 as a lump sum whether or not the sum is payable by instalments. It also provides that For the purposes of this paragraph no regard is to be had to any interest payable under s.23(6) of the Matrimonial Causes Act 1973. 18 Therefore, by reference to that provision, interest would not be payable on this order automatically because the order here is not the payment of a lump sum but is a quantification of arrears of periodical payments. Article 2(5), as recently amended, provides that, A judgment debt under a relevant judgment of or registered in the Family Court does not carry interest under this order if, by virtue of any other enactment, it does not carry interest. That seems to suggest that judgment debts in the Family Court do not carry interest but that begs the question as to whether an order made in the Family Court attracts entitlement to interest under s.17 of the Judgment Acts 1838. Section 17 of the Judgments Act 1838 provides that Every judgment debt shall carry interest and I believe that the Judgments Act 1838 goes on to provide that for the purposes of the Judgments Act 1838 decrees of courts of equity would constitute judgment debts for the purposes of the entitlement to interest. The interest rate is set in the Judgments Act at 8 per cent per annum. 19 The Judgments Act 1838 has been interpreted in the White Book at para.40.8.2 as being applicable to High Court proceedings and in a decision of the House of Lords in Thomas v Bunn 1991 1 AC 362, Lord Ackner states, This judgment debt can only arise where the judgment quantifies the sum which the judgment debtor owes to the judgment creditor and can only apply to a single judgment which constitutes the judgment debt. The Judgments Act 1838 refers laconically to every judgment debt and a literal reading of those words would suggest that it does apply to the Family Court. Moreover, s.31(E) of the Matrimonial and Family Proceedings Act 1984 provides that in any proceedings in the Family Court the court may make any order which could be made by the High Court, which suggests perhaps that an order made in the Family Court is caught by the 1838 Act. This is difficult territory. It seems to me that the draftsmen of the amendment to article 2(5) of the County Courts (Interest on Judgment Debts) Order 1991 contemplated that a Family Court debt would not carry interest. It would be very strange, however, if the entitlement to interest on a lump sum which was available under the order in respect of an order made in ancillary relief or Children Act proceedings in the County Court had lost the right to carry interest. On the other hand, it would be a step too far, I think, to interpret the 1838 Act as applying to this order for payment of this sum in circumstances where it is clear to me that before the advent of the Family Court interest was only payable on lump sums. In my judgment, although the position is murky, the orders made here which remit some of the arrears and quantify the balance do not qualify as orders which attract interest under the Judgments Act 1838. In those circumstances, inasmuch as para.2 of the orders specifies that they shall carry interest at 8 per cent, that order was made ultra vires and that part of the order should be revoked. However, I do not revoke the quantification of the arrears under each order and indeed there is no appeal against that those orders remain extant. 157. The arrears of maintenance with which I am dealing arise under an order made in the High Court and thus I do not have to wrestle with all the complexities of the situation which confronted Mostyn J in Re TW . Because I have not heard submissions on this point, I do not intend to make any specific findings in relation to the recoverability of interest on the maintenance arrears per se because I have decided that, if interest is indeed payable as a matter of law, I should exercise my discretion so as to disallow recovery in any event. I have allowed the wife to enforce all the arrears of child maintenance (paragraph 121) notwithstanding the fact that the husband continued to provide her with sums in respect of her general living expenses pursuant to the Mediation Agreements. She has calculated that the surplus over and above the rent, legal costs she has paid to her former solicitors and the cost of replacing the flood damaged items following her move from the former matrimonial home provided her with an average income of just under pound6,000 per month. That, it seems to me, is an inevitable consequence of treating the payments he has actually made as a set off against the capitalised sums expressed to be payable under Charles Js order, the most significant element of which was the lump sum order for capitalised maintenance in the sum of pound1.3 million. It would be unfair, in my judgment, to require the husband now to pay interest on any sums payable to the wife in respect of unpaid maintenance, whether for herself or the children given the level of provision he has made available to date. 158. In relation to the rate at which interest is payable, the judgment rate is currently 8. see Judgment Debts (Rate of Interest) Order 1993. The court has power to award interest to run from a date later than the date of judgment. However, postponement should not be directed merely because the judgment rate is considerably higher than a commercial rate of interest prevailing from time to time: see Fiona Trust amp Holding Corp and Others v Privalov and Others 2011 EWHC 1312 (Comm). In Fisher Meredith LLP v JH and Another 2012 EWHC 408 (Fam) . 2012 2 FLR 536, Mostyn J mitigated the impact of the judgment debt rate in this way: I have been asked to award interest on the sum of pound15,000 which is to be returned to FM pursuant to para 61 above. Interest at the statutory rate of 8 is claimed. I am sure that I have a discretionary power to compensate FM for being kept out of their money. However, the statutory interest rate bears no relationship to interest rates which are commercially available. I judge that FM should receive simple interest at 2 from the date on which they paid the money until the date upon which it is returned. If this is not agreed then the parties must work out and agree a later date from which the interest at the statutory rate shall run so that the amount of interest received at that rate corresponds to 2 from the date that the sum was originally paid by FM. 159. The principle at play is that a person who is owed money by a certain date is entitled to financial compensation for the period when he or she is denied the opportunity to spend or invest the sum which is owed. Here, the sums which the husband was due to pay to the wife would have been invested in a property in central London. The wife was denied that opportunity which Charles J held to be her entitlement. His findings stand undisturbed by an appeal. In my judgment I am entitled to take judicial notice of the fact that a capital investment in a property in central London in 2005 would have returned to the wife in value more than the equivalent of 2 simple interest per annum. As it is, the principal sum which I have found to be due to her is unlikely to be sufficient to purchase the sort of property she might have acquired in June 2005 had the funds been paid on time. Notwithstanding the fact that the solution adopted by Mostyn J in Fisher Meredith has the undoubted attraction of commercial realism in an era when interest rates are historically at an all-time low, that case involved a claim for liquidated damages of pound15,000. The period during which the debt had been outstanding was very significantly less than the ten year period in this case. In my view, the wife is entitled to interest at the judgment debt rate (i. e. 8) but, because the husband has been providing financial support more or less throughout the period of his default, she shall only be entitled to simple interest. G. The wifes enforcement application pursuant to s 5 of the Debtors Act 1869 160. Section 5 of the Debtors Act 1869 provides as follows:- Subject to the provisions hereinafter mentioned, and to the prescribed rule, any court may commit to prison for a term not exceeding six weeks, or until payment of the sum due, any person who makes default in payment of any debt or instalment of any debt due from him in pursuance of any order or judgment of that or any other competent court. (2) That such jurisdiction shall only be exercised 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 in respect of which he has made default, and has refused or neglected, or refuses or neglects, to pay the same. Proof of the means of the person making default may be given in such manner as the court thinks just. 161. The procedure is governed by FPR 2010 Part 33.9 to 33.17. Under r.33.16(2), the court has power to make a suspended order for committal on terms that the sums due to the judgment creditor are paid either at a specified time or by instalments. 162. The principles to be applied in such cases were considered by Mostyn J in Bhura v Bhura 2012 EWHC 3633 (Fam) . 2013 2 FLR 44. At para 13, his lordship said this: 13. Stated shortly it seems to me that the applicable principles are these: i) s5 requires the Court to be satisfied to the criminal standard that: a) the Respondent has had at any point since the date of the order the means to pay the sums due under the order and b) has refused or neglected to pay them. ii) The use of the present and past tenses in the phrases either has or has had and and has refused or neglected, or refuses or neglects means that the section will be satisfied if proof of both ability to pay and refusal or neglect to pay is made at any single point from the date of the order right up to the date of the hearing. iii) The use of the alternative verbs refuse and neglect means that the court is not confined to proof of a positive wilful refusal to pay the section will be equally satisfied if proof is made of a culpable indifference to the obligation to pay. iv) It is essential that the Applicant adduces sufficient evidence to establish at least a case to answer. Generally speaking, this need not be an elaborate exercise. Proof of the order and of non-payment will likely give rise to an inference which establishes the case to answer. my emphasis v) The Respondent is not required to give evidence or to incriminate himself. In the absence of a case to answer being demonstrated the Respondent is entitled to have the application dismissed without more. vi) If the Applicant establishes a case to answer an evidential burden shifts to the Respondent to answer it. If he fails to discharge that evidential burden then the terms of section 5 will be found proved against him or her to the requisite standard. my emphasis vii) The Applicant does not have to serve evidence prior to the hearing but if he or she fails to do so the court will be astute to ensure that the Respondent is not taken by surprise and that the hearing can proceed without unfairness to him or her. viii) It is perfectly permissible for both the enquiry into the Respondents means at all points since the making of the order and the enquiry into whether he or she has been guilty of a refusal or neglect to pay to take place in one conflated hearing. ix) Provided that principles (i) ndash (viii) are carefully observed then the procedure will be Convention compliant. 163. That guidance now has to be seen in the light of the recent decision of the Court of Appeal in Prest v Prest 2015 EWCA Civ 714 . handed down on 7 July 2015 whilst this case was adjourned part-heard. McFarlane LJ delivered the leading judgment and said this: Discussion: the legal context 53. In the course of submissions we were taken to a number of authorities relating to the use of an application for a judgment summons under the 1869 Act, s 5, in matrimonial proceedings. As is well known, this court in the case of Mubarak v Mubarak 2001 1 FLR 698 identified the difficulties involved in adapting the judgment summons procedure to the requirements of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950. Notwithstanding the criminal nature of the proceedings, the judgment summons process at that time made no reference to the criminal standard of proof, required individuals to incriminate themselves, placed the burden of proof on the person facing committal and seemingly muddled the separate processes of undertaking a means enquiry and of committal proceedings. In consequence the court in Mubarak predicted that the practical effect of these difficulties would be to render the Debtors Act 1869 largely obsolete as a means of enforcement in matrimonial proceedings. 54. As a consequence of the decision in Mubarak the relevant court rules were amended and now appear in the form set out in FPR 2010, r 33.14 (see paragraph 11 above). Counsel have drawn attention to three authorities relating to the judgment summons process subsequent to these amendments: Zuk v Zuk 2012 EWCA Civ 1871 2013 2 FLR 1466 Bhura v Bhura 2012 EWHC 3633 (Fam) 2013 2 FLR 44 and Mohan v Mohan 2013 EWCA Civ 586 2014 1 FLR 717. Each of these authorities contains dicta which, with respect, I consider should be treated with a substantial degree of caution. The relevant passages are, firstly, in Zuk at paragraph 19 where Thorpe LJ said: 19. However, all that said, where the order which the creditor seeks to enforce is a lump sum order, the judgment creditor starts from the strong position that the order itself establishes, either expressly or implicitly, that the payer had the means to pay at the date the order was made. As my Lord, Patten LJ, put it in argument, perhaps at that stage the evidential burden passes to the debtor, whilst not of course undermining the obligation on the creditor to discharge the burden of proof. Plainly in a case where there has been some major and unforeseen financial development which removes from the payer the ability to pay which he had at the date of order, the ordinary expectation is that he would be the applicant to the court seeking the variation of the order either under the limited powers of the court to revisit in the light of some volcanic development or perhaps simply to seek some relief by way of deferment of the date of payment or perhaps future payment by instalments. So although of course the rule is and must remain that the burden of proof rests on the applicant, I think in a case such as this that burden is lightly discharged and an evidential burden may switch to the debtor. In Bhura at paragraph 13, where Mostyn J said: Stated shortly it seems to me that the applicable principles are these: i. hellip ii. hellip iii. hellip iv. It is essential that the applicant adduces sufficient evidence to establish at least a case to answer. Generally speaking, this need not be an elaborate exercise. Proof of the order and of non-payment will likely give rise to an inference which establishes the case to answer. v. hellip vi. If the applicant establishes a case to answer an evidential burden shifts to the respondent to answer it. If he fails to discharge that evidential burden then the terms of s 5 will be found proved against him or her to the requisite standard. And in Mohan . at paragraph 45 where Thorpe LJ said: hellip the wifes advisers might have hellip concluded that hellip the only effective remedy was the immediate issue of a summons under the Debtors Act. Very little evidence would have been necessary from the wife in support. hellip The reality is that if he attended the summons hearing, although not compellable, he would have been obliged to proffer explanation and excuse. 55. The collective professional experience of Thorpe LJ and Mostyn J in these matters makes me most hesitant to express a contrary view, but my reason for advising caution concerning this set of observations is that they each suggest that, in the course of the criminal process that is the hearing of a judgment summons, it is simply sufficient to rely upon findings as to wealth made on the civil standard of proof in the original proceedings and that those findings, coupled with proof of non-payment, is sufficient to establish a burden on the respondent which can only be discharged if he or she enters the witness box and proffers a credible explanation. The facts of each case will differ, and the aim of Thorpe LJ and Mostyn J in envisaging a process which is straightforward and not onerous to the applicant is laudable, but at the end of the day this is a process which may result in the respondent serving a term of imprisonment and the court must be clear as to the following requirements, namely that: i. The fact that the respondent has or has had, since the date of the order or judgment, the means to pay the sum due must be proved to the criminal standard of proof ii. The fact that the respondent has refused or neglected, or refuses or neglects, to pay the sum due must also be proved to the criminal standard iii. The burden of proof is at all times on the applicant and iv. The respondent cannot be compelled to give evidence. 164. Mr Howling does not accept that the Court of Appeals decision in Prest now provides an unequivocal road map through this area of the law but he does accept that the guidelines given by Mostyn J in Bhura (on which he relied for the purposes of his opening) must now be subjected to more rigorous scrutiny in accordance with the guidance given by McFarlane LJ in Prest. The husbands evidence 165. I have already referred to the husbands evidence insofar as it relates to the sale of the apartment at 47 Eaton Place. Whilst I am sceptical about the purposes for which he persuaded Mr and Mrs Greyling to enter into the somewhat murky financial arrangements by which means they were able to occupy the flat and (so it appears) retain the surplus proceeds from the sale of the property to the third party purchaser, Sunny Haze, I am satisfied that, by 2007, the property had been alienated from ownership of the Hilbery Foundation. It was not thereafter available as a resource which could be used by the husband to satisfy the debt which he owed the wife. 166. I also bear in mind that the husband continued to pay substantial sums to the wife during the currency of her attempts to procure payment of the lump sum. I accept that his income is, by its nature, uncertain both in terms of timing and amount. He has never had regular employment but earns his living by cutting deals. His expertise, such as it is, lies in brokering deals in the field of mining. His last deal, for which he was paid a commission of pound160,000, was in 2013. That appears to be the only substantial deal which he concluded during that year. The commission he was expecting to receive in respect of the Tantalus Rare Earth deal in 2012 has yet to be paid to him and is now the subject of litigation. 167. Because of the findings made by Charles J, I approach the issue of the husbands credibility with a pronounced degree of caution. By 2014, even Mostyn J appeared to be having doubts about whether there was any money against which the wife could enforce. He had read the husbands statement dated 21 July 2014 and found the account of his parlous financial situation to be plausible if not determinative. On the husbands case, since 2007, and aside from any commission payments, he has been living on the sale proceeds of some share sales and drawing down against a pound500,000 loan facility with United Capital. His remaining shares are pledged as security for this loan and he has exhausted his potential to borrow from this source. Funds have been remitted to this jurisdiction through Hextar Limited, his consultancy vehicle. Payments have come in as loans rather than as offshore remittances (which is what they were) and thus no tax has been paid. He told me (and I accept) that he would not have been able to make the payments he has to the wife out of taxed income, albeit that such mutual benefit as each may have received from these enhanced payments could, and can, never justify the fact that the funds were brought onshore below the radar of HMRC (as the husband accepts they were). 168. As these sources of funds have dried up, he says he has become wholly reliant on the charity of friends and family. He told me that he has received significant assistance from members of the local synagogue he attends he is clearly a well-known member of his local Jewish community. 169. Much criticism was made by Mr Howling of the level of rent which the husband has been paying to live in central London for several years. His present accommodation in Ennismore Gardens is costing some pound90,000 odd per annum. He maintains that his sister in South Africa has been meeting a significant part of his housing costs. He has produced a statement from her which confirms that to be the case. Because I did not hear oral evidence from his sister, I have to exercise care about the weight which can properly be attached to her evidence. I have to consider, too, whether this financial support is what the husband says it is (i. e. monies made available from his sisters resources) or whether, as Mr Howling contends, the likelihood is that she is simply the conduit through which Mann family money is channelled to the husband. 170. What is clear to me is that the husband is operating almost exclusively on a cash basis at the present time. Understandably, the absence of any reliable paper trail is a matter of much concern to the wife. I heard evidence that the devaluation of the South African Rand was making it increasingly difficult for the husbands sister to maintain these payments. He has produced evidence of cash transactions through Western Union. These relate to sums which have been sent to him by his friend, Mr Danziger. He told me that his rent is now in arrears and he is receiving help from members of his synagogue to pay this quarters rent. I have seen letters from his Rabbi supporting the husbands case in relation to financial support. He has now made an application to his local council for housing benefit since he accepts that he is no longer in a position to afford housing at this level in the private rented sector. 171. The only bank account which he now operates is with Metro Bank. There is very little movement on this account and, as at September 2015, the balance was less than pound5. He is being chased by HSBC in respect of overdraft and loan facilities which remained unpaid when the Bank elected to end its relationship with H. His previous relationship with Allied Irish Bank has been terminated, again at the behest of the Bank. I can see from statements which he has produced prior to the closure of his account with HSBC that he has received sums from time to time from Mr and Mrs Greyling. They confirmed to me during the course of their oral evidence that they were aware of his dire financial situation and had offered help from time to time. 172. He was cross-examined by Mr Howling about the inter-relationship between the funds he was drawing down against his loan facility with United Capital and Hexstar Limited, his consultancy vehicle. Many of the drawings are shown as transfers to Hexstar. The husbands evidence was that these transfers were the means by which he remitted funds onshore to pay the wife. He said that she would be in a position to check those amounts against sums credited in her own accounts. She undertook to carry out that exercise. No more was said about this during Mr Howlings closing submissions and I am therefore going to assume that there is nothing in this point to contradict the husbands evidence. 173. I heard evidence about the Loan Agreement between the husband and a company called Santando Global Limited. That company is operated by an associate of the husbands. It lent him pound50,000 in 2012. I accept that was a genuine loan and not a recycling of monies to which the husband was beneficially entitled. 174. As to lifestyle, the husband was cross-examined at some length in relation to various entries appearing on his credit card statements whilst he was still in a position to use them. The husband told me that, in 2011 and 2012, whilst money was still coming in from his deals, he would often pay for meals at restaurants for his friends and they would reimburse him in cash. In this way he was able to keep his domestic economy afloat albeit at the expense of running up significant debt. One substantial item of expenditure on travel about which he was asked turned out to be a holiday which he had funded for the wife and children (some pound9,158 in August 2012). 175. I heard from his partner, Miss Cozzelino. I found her to be an honest witness albeit one who was extremely irritated by having become involved in this litigation. She was quite open in her acceptance that she knew very little about the detail of the husbands financial modus operandi. She told me that she was very frightened by the state of their finances and I accept her evidence that this has put a substantial strain on their personal relationship. She told me that things started to get difficult some time ago but that over the last two years the situation had become acute in terms of their financially straightened circumstances. Because the lease to their previous property had been in her name, it was she who had become bankrupt when they were forced to move because of escalating arrears. She clearly blames the husband for that and referred to his insistence at living in a smart part of town as financial suicide. She told me that at times she has questioned his ability to think rationally about their financial predicament and that, had matters been left in her hands, she would have moved to cheaper accommodation a long time ago. She was aware that he was receiving financial help from friends and from members of the local synagogue. She spoke about the extent to which they had had had to juggle credit cards in order to meet the payments to the wife. Ms Cozzelino told me that she currently receives nothing in terms of financial support from the husband save for the roof over her head. She works and studies on a part-time basis and makes a significant contribution to their general living expenses. She was aware of the fact the husband owes money to his family and to everybody. She told me that, despite paying for a holiday for the wife in 2012, as a family they had been unable to take any holidays at all over the last three years. 176. As to the husband, I have already recorded the fact that he elected to waive privilege in respect of self-incrimination. He went into the witness box and gave evidence about a number of the issues which were the subject of findings by Charles J in 2005. He volunteered to put before the court evidence from third parties and I have already made my findings in respect of what I heard from Mr and Mrs Greyling and Mr Aronson. When the case resumed part heard on 27 August 2015, he put before the court further documentary evidence in support of what he had told me the previous May. 177. Mr Howling points to the fact that these documents do not support the complete picture as it is now presented by the husband. In many respects they are deficient in terms of reliable documentary support for the state of abject impecuniosity which the husband now alleges. In terms of the last two years, Mr Howling appeared to accept that, apart from the expense of his current rent, there was not much to which he could point to demonstrate wanton or excessive expenditure. I do not accept that payments of less than pound50 on taxis are a substantial foundation on which I can erect a case against the husband in relation to his current lifestyle. Mr Howling conceded, properly in my view, that Ms Cozzelinos evidence about their current financial circumstances sounded genuine and truthful, yet he remains distinctly concerned about the quality of the evidence available from the husbands sister. He suggested that it was not outwith the bounds of possibility that the husband was continuing to trade and broker deals and was receiving payment for his efforts behind a smokescreen provided by his sister. 178. If that was the reality of the husbands current financial situation, I stand back and ask myself whether it is likely that he would have been able to maintain this faccedilade over a considerable period of time and against the background of failing health (which I accept from the medical evidence which is before the court). He is currently unable to pay for his private medical insurance. He was obliged to remove his son from school for a period of six months when he was unable to meet the fees. I observed the distress which overcame the husband at various points in his evidence. I have heard his evidence on not one but several occasions at various hearings as this case has run its course. Notwithstanding the careful warning which I have given myself about the husbands capacity to deceive andor behave in a thoroughly underhand manner, I do not believe that distress to have been feigned. 179. I ask myself why, if he has been in a position to pay in full the sums which he owes the wife, he would have carried on paying throughout the period of his indebtedness the substantial sums which he has been paying in respect of her rent and general maintenance. If he had the means to satisfy the first tranche of capital due under the Callman Mediation Agreement in 2006 (pound700,000), why did he not simply pay and secure for himself the discount on the sum of pound1.3 million for which he was liable under Charles Js order. If he was determined to escape his financial responsibilities to the wife, why did he not relocate lock, stock and barrel to South Africa and refuse to pay a single penny. 180. Mr Howling submits that an individual who runs up indebtedness to the extent incurred by the husband must know that he has the wherewithal to repay that debt at the end of the day. He invites me to draw adverse inferences against the husband on this basis. Whilst superficially attractive, I remind myself that, as a matter of law, there has to be some evidential platform available from which I can proceed to draw those inferences. From my review of all the evidence, I can find no such basis for drawing the inference that this husband could immediately procure the sort of sum which underpins the wifes current judgment summons. 181. In terms of the absence of a full run of documentation, the husband told me that the wifes former solicitor, Mr Rutter, had secured the production of the documentation relating to 47 Eaton Place and the Bank of Scotland mortgage. All those documents were already in her possession despite the fact that they had not been produced for the purposes of this hearing. He did not have physical possession of documents relating to the sale because the solicitor who dealt with that transaction, Mr Conway, had retained the papers if indeed they still existed. He could not afford to instruct Mr Conway and Mrs Greyling had given her permission for all and any papers to be disclosed to the wife. He had nothing whatsoever to hide and remained willing for the wife to take whatever steps she wished in order to obtain them. 182. I bear in mind, too, that at the time of the order made by Charles J in 2005, the husband was an undischarged bankrupt. The judge directed that a copy of his judgment and findings should be served on the trustee in bankruptcy. He further directed that the letter which was sent should specifically draw to the attention of the trustee (i) all points made in relation to the freezing order in respect of the flat at 47 Eaton Place, and (ii) the steps which the trustee was proposing to take in the light of the courts findings and steps already taken by the trustee to identify foreign assets owned or controlled by the husband from abroad. Nothing further was uncovered then and nothing further has been uncovered since. 183. As to the law in relation to the burden and standard of proof, I take the view that the recent guidance given by the Court of Appeal in Prest v Prest . whilst not an all-embracing statement of the position, is nevertheless correct and is in any event binding upon me. Thus, I remind myself about the careful guidance given by Mostyn J in Bhura in the light of the most recent observations of the Court of Appeal. 184. Before I can take the course of imposing the suspended committal order which Mr Howling seeks on behalf of the wife, I have to be satisfied so that I am sure that this husband has or has had, since May 2005, the means to pay the sum of pound1,698, 330.86 but has refused or neglected (or refuses or neglects) to pay the same. In my judgment, and in accordance with the view expressed by the Court of Appeal, the burden of proving those facts remains throughout on the wife. 185. Having deliberated long and hard about this case and having reviewed with care all the documents and the oral evidence which I heard, my finding is that she has not discharged that burden. I am unable to say that I am sure that the husband has had, or currently has, the means to pay the sums which I have found to be due to her. It makes no sense to me at all that he would have paid over the sums he has over several years (albeit inconsistently) if he could have expunged the debt once and for all by means of a single payment. If she is right and he has throughout had the means to pay, he has sheltered behind an elaborate faccedilade to the detriment of his own ability to move on with his life in a home of his own. I find it difficult to conceive of circumstances where he would consider spending many hundreds of thousands of pounds on his own and the wifes rent in central London if funds were available to enable each to purchase a property. If she is right and he has access to undisclosed wealth of this magnitude, then it follows that he has been prepared to see his partner of almost twenty years bankrupted and his son removed from school at a critical time of his education simply to continue the lie. I do not find this husband to have deliberately allowed those steps or events to have occurred with the ulterior motive of preserving the fiction for the purposes of these proceedings andor his position vis agrave vis the wife. Whilst I accept that he has not always behaved honestly and that he is to a certain extent the author of his own misfortune in not putting before Charles J the evidence which has been before this court, I am not sure that the hidden wealth to which the wife points actually exists. 186. I do not know what (if any) sums the husband may in due course inherit on the death of his parents. I accept that there is no further value in the Hilbery Foundation and that it no longer exists as a legal entity. I can find no other evidence which points to the existence of any legal or beneficial interest or entitlement to property in this jurisdiction which would enable the husband to discharge all, or a significant part of, the debt which I have found to be due to the wife. I can find no reliable evidence of hidden or secret funds belonging to the husband or within his direct control which have been or would now enable him to expunge what he owes. 187. In the circumstances, I decline to make an order for his committal to prison, suspended or otherwise. 188. I have already adjudicated upon the sums which remain due and payable to the wife. For convenience, I have set these out in the schedule which is attached to my judgment. Once the accountants have provided the parties with the correct calculation for the interest payable, I shall ask Mr Howling to draft the appropriate order which will include a declaration as to the sums currently due to the wife. 189. Before concluding my judgment, I should record the sincere sympathy which I have had throughout for the wife. I accept that she is facing an extremely uncertain future. She is owed a significant sum of money by her former husband but, at the present time, he has no means of discharging that debt. No stone should be left unturned in the ongoing and collective efforts of the parties to find a solution to this problem which is not, in any sense, of her making. Schedule of sums due to the wife on the basis of my findings pound 1,698,330 per Charles J order (para 129) (i. e. balance of pound1.3m arrears of spousal pps costs) 118,680 arrears of child support under Charles J order (para 121) (on basis of permission to enforce 12 mths ) 272,674 rent arrears (para 124) 2,089,684 (1,464,798) Sums deemed paid by the husband by way of set off (para 125) 624,886 TOTAL SUM DUE TO W EXCLUDING INTEREST Plus interest (yet to be determined) The accountants will provide the appropriate figure for the outstanding interest calculation on the basis of my indications in paras 150 and 159 (i. e. the wife can recover 6 years interest on the outstanding sums due to her but not on the maintenance arrears or on the rent). The interest rate will stand at the judgment rate of 8 to reflect the compensatory nature of the award but she will be entitled to simple and not compound interest to reflect fairness to the husband in terms of the ongoing payments which he was continuing to make throughout this period. 1 H accepted during cross-examination that the figure he had provided for the balance owed to United Capital was wrong, a concession which had been made earlier by his counsel during one of the hearings before Mostyn J. 2 This word was omitted from the original text but is plainly, in my judgment, a typographical error. 3 R v Lucas 1981 QB 720, 1981 73 Cr App R 159, 1981 2 All ER 1008 4 i. e. lump sum pound1.3m arrears of periodical payments to May 2011 pound74,428 costs pound323,902 5 The sums claimed by the wife had increased to pound1,698,330 by the time of closing submissions. 6 For these purposes I am proceeding on the basis of the wifes figures in respect of sums paid and the difference of some pound70,000 odd on the basis that I have not been told since the last hearing that the husbands accountant disagrees with Mr Howlings submission in relation to his double-counting.
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