High Court: Solicitor jailed after lying to court in ‘despicable’ bid to reduce child maintenance

About this case:

• Citation:
  [2021] NIFam 26
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice O'Hara

Praising the “tenacity” of his ex-wife, who now works as a solicitor for a high-profile public inquiry in Scotland, Mr Justice John O’Hara said respondent John Brian Stelfox’s conduct was “all the more despicable because he is an experienced practising solicitor”.

Background

John Brian Stelfox and Clair Elizabeth Stelfox divorced in March 2016 after more than 20 years of marriage. The couple have four children and a financial settlement reached during the divorce was made a rule of court.

Mrs Stelfox brought family law proceedings against Mr Stelfox as early as late 2016, alleging that he had failed to comply with the terms of the court order and had not paid her maintenance as he was obliged to do. His last payment was made in spring 2017.

Meanwhile, Mr Stelfox asked the court for a downward variation of the maintenance to zero on the basis that he has not been in a position to pay it since 2017. He also sought remission of all outstanding payments.

Matrimonial agreement

Mr Stelfox had agreed to pay £1,250 per month to his ex-wife in respect of their three youngest children until they had each completed third level education. The maintenance would gradually decrease from £3,750 per month to £2,500 to £1,250 to zero.

It was known when the agreement was reached that Mr Stelfox was likely to be made bankrupt “sooner or later, as a result of a disastrous property investment some years earlier in the Republic of Ireland”, which had led to a judgment against him for more than £3 million.

However, Mr Stelfox also had “a well-established solicitor’s practice in Derry and Limavady and the opportunity to continue to earn money to satisfy his obligations to the petitioner”.

In November 2016, Mrs Stelfox issued a summons to have Mr Stelfox committed to prison for his failure to comply with the agreement and court order to pay £3,750 per month. She said he had been paying the maintenance both late and short for some months and in October had paid nothing at all and said there would be no more payments.

Work as a solicitor

In response to the committal proceedings, Mr Stelfox averred in a December 2016 affidavit that he had ceased practice as a solicitor from the start of November 2016 because his practice had “become unviable” due to high staff numbers and a decline in criminal legal aid work.

In another affidavit two weeks later, Mr Stelfox said many of his clients had left him from May 2016 when one of the solicitors in his practice opened her own practice, CMS Solicitors, which he had now approached for part-time consultancy work.

In affidavits filed in February 2017, a private investigator hired by Mrs Stelfox and one of her cousins said they were able to call a number and arrange appointments with Mr Stelfox, who appeared to be working from his Derry and Limavady offices.

The private investigator, who pretended to be seeking advice on a divorce, said Mr Stelfox told him he had “handed the practice over to three of his lawyers” and was now “working for them”, partly because “I pay my ex £5,000 a month and decided not to pay her any more”.

In light of these affidavits, orders for discovery were made against the respondent to include documentary evidence of his income, proof of his employment relationship with CMS and bank statements, as well as a response to the allegations.

Relationship with CMS

In June 2017, Mr Stelfox swore in an affidavit that he had obtained employment with CMS Solicitors at a monthly salary of £2,000 net from around the start of November 2016 – the same time he had previously sworn he had ceased working. However, he claimed his relationship with CMS had “disintegrated” and he had to terminate his employment in April 2017 and had not worked since.

He withheld a written contract of employment with CMS during discovery as “irrelevant”. This showed that he had agreed a five-year contract, to be paid £25,000 plus car expenses in the first year and £40,000 plus 30 per cent of net profits in the second year, and then increasing with inflation.

“The respondent’s oral evidence that he regarded the document as irrelevant can only be regarded as a lie, especially coming from an experienced solicitor,” Mr Justice O’Hara said. “He tried at all times to hide this employment relationship and the income he received from it as part of his efforts to deceive the court and deny the petitioner her maintenance.”

It also emerged in evidence that despite the suggestion that he was only an employee of CMS, Mr Stelfox had paid to them over £50,000 in three payments between December 2016 and March 2017.

Relationship with Proactive Law

A letter from the Law Society showed that Mr Stelfox’s practice certificate, which was suspended automatically upon his adjudication of bankruptcy in June 2017, was reinstated with conditions in January 2018 after he received an offer of employment from a firm called Proactive Law.

Mr Justice O’Hara said the nature of Mr Stelfox’s relationship with Proactive Law was “rather murky and unsatisfactory”. There were a number of “irregular episodes” with the firm which eventually led to a Law Society intervention.

There was a falling out among solicitors at Proactive Law leading to one solicitor, Gareth Magee, opening a new firm, Proactive Lawyers, in late summer 2018 in the same building where Proactive Law had been based.

Mr Stelfox was dismissed from Proactive Law in early September 2018 and subsequently told the court that he was no longer in employment. However, Mrs Stelfox “was suspicious about this” and called the new firm, Proactive Lawyers, on two occasions and was told Mr Stelfox was in court but would be available later that afternoon.

When cross-examined in January 2019, Mr Stelfox claimed he was not working for Proactive Lawyers at the time “in the sense of being financially on the books”, but had begun to receive a salary of just £1,000 a month from December 2018, which he continued to receive.

Mr Justice O’Hara said he did not accept “that I have been told anything approaching the truth by the respondent and Mr Magee about when their business relationship started or what its terms are”. He said he was “sure beyond any doubt that he earns more than has been disclosed by the court”.

Other issues

The court also considered issues concerning Mr Stelfox’s partner, a Ms Faulkner, who Mr Justice O’Hara was persuaded had been “deliberately used by the respondent as a means of channelling money over a period of time”. He said he was “unsure” of the extent of her awareness of this.

As Mr Stelfox’s practice was closing down in 2016/17, his office manager gave him substantial amounts of cash which were lodged in Ms Faulkner’s account, including £5,000 in January 2017 and £8,000 in February 2017. Between 2016 and 2018, Ms Faulkner lodged £34,750 in her account despite only having a “modest income”.

Some of this money had been used to pay Mr Stelfox’s maintenance arrears in April 2017 and other sums were given to his sons in cash or other forms. Almost nothing was paid to his daughters and nothing was paid to his ex-wife.

Mr Justice O’Hara said it was beyond doubt that Mr Stelfox had “at certain points in time, and certainly around 2017 and 2017 … access to funds, probably significant funds, which he attempted to hide or wash by putting them through Ms Faulker’s account”.

Conclusion

Mr Justice O’Hara concluded that Mr Stelfox had been unemployed for a single period between leaving CMS in April 2017 and starting with Proactive Law in January 2018. However, he said it was “much harder to define” what his “true income and assets have been at any particular time”.

He added: “It is reasonable to be suspicious of everything he says on the basis of the cash given to him by his office manager alone, never mind his false averments and withholding of documents. I believe that he revealed his true self to the private investigator – the transcript reveals a boastful, dishonest man denigrating his ex-wife to a complete stranger.”

However, the judge acknowledged that Mr Stelfox was unlikely to be able to pay everything he owed and therefore reduced both his ongoing maintenance and his arrears by half.

In respect of the breaches of court orders for discovery and false averments in his affidavits, Mr Justice O’Hara said these were also “deliberate and, in my judgment, were undoubtedly designed to mislead the petitioner and the court and therefore to skew the outcome of the case”.

Paying tribute to Mrs Stelfox, he said it was only “as a result of her tenacity and the admirable commitment of her legal representatives that the respondent’s lies were exposed despite his best efforts”.

He added: “The respondent’s conduct in this case is all the more despicable because he is an experienced practising solicitor. If he is not punished for contempt, who will be? Nobody knows or should know better than practising lawyers what the consequences of disregarding court orders are.”

In the circumstances, Mr Justice O’Haa said he would impose of a sentence of three months in prison.