Category: Financial Remedies

Financing legal representation can often be a major issue for a party involved in financial remedy proceedings in connection with a divorce settlement.

One way to do so is via a litigation lender, who will lend the party the money to pay for their representation, on the basis that they recover the loan plus interest from the settlement monies that the party receives.

But obtaining a litigation loan may have just got harder, following the latest, and perhaps last, judgment in a long-running case.

The case began back in 2016 when the wife issued her financial remedies application.

In the course of the proceedings the wife entered into an agreement with a litigation lender, under which she received a total of £630,000.

In 2021 the parties agreed a settlement whereby the wife was to receive a life interest in a residential property to be purchased for a figure of £1 million by the husband’s trust, which would thereafter own the property absolutely. The wife was to receive no free capital or income in settlement of her claim, and given that she had no capital of her own, it followed that a consequence of the agreement was that she would have no funds with which to repay any part of the loan. The agreement was subsequently incorporated into a consent order.

The litigation lender applied to have the consent order set aside. It was set aside, and the proceedings went back before the court in June this year, at a hearing conducted by Mr Justice Peel.

However, neither the wife nor the husband sought any orders from the court. In these circumstances Mr Justice Peel made no order, on the basis that the wife would withdraw her application. Thus the wife has still not received a financial settlement from which the litigation lender can recover their loan.

As Mr Justice Peel pointed out at the end of his judgment, the litigation lender does have a civil claim against the wife, which now stands at some £1.2 million including interest, but whether it will succeed in recovering that sum, or any significant part of it, must be in doubt.

Whatever the ultimate outcome, the actions of the husband and the wife in this case may well mean that in the future, litigation lenders will be more cautious about lending money for financial remedy proceedings.

You can read the full report of the latest judgment in the case here.

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As explained here in our post, the rules governing the family courts have recently been changed, encouraging couples to resolve their disputes out of court. We have now seen the first reported case of these new rules in action.

The case concerned a wife’s financial remedies application.

The application went before Mr Nicholas Allen KC, sitting as a Deputy High Court Judge, on the 23^rd May. He explained that the facts of the case did not appear to be unusual, and that whilst it was seemingly a “big money” case, it did not appear to be unduly legally complex.

In the circumstances, he considered that this was a “paradigm case” for the court to exercise its new powers to encourage the parties to engage in non-court dispute resolution (‘NCDR’), such as mediation or arbitration. He said: “I consider NCDR to be appropriate and I wish to encourage the parties to engage in the same. This would be to their emotional and financial benefit as well as to the benefit of their children.”

The judgment indicates that there was some opposition to this from the wife’s counsel, who argued that the court should first order the parties to make full disclosure. But the judge pointed out that the court could exercise its powers under the new rules of its own initiative, and that in any event there was no need for financial disclosure to be given prior to parties engaging in NCDR, as NCDR will almost invariably provide for such disclosure to be given as part of the process.

The judge therefore gave the following directions:

1. That the wife’s financial remedies application be stayed (i.e. paused) with immediate effect;

2. That no further hearing was to be listed at the present time;

3. That the parties must tell the court by 4 pm on the 4th of July: (i) what engagement (if any) there has been with NCDR; (ii) whether any of the issues in the proceedings have been resolved; and (iii) in light of the foregoing their respective proposals for the way forward; and

4. That upon receipt of this letter the judge would decide the appropriate way forward.

Quite clearly, we can expect many more cases to be dealt with in this way in future.

You can read the full report of the case here.

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When the court decides upon a financial settlement upon divorce it will often do so by reference to the ‘sharing principle’.

The sharing principle states that, as a general guide, an equal division of the matrimonial assets between the husband and the wife should be departed from only if, and to the extent that, there is good reason for doing so.

But this raises the question: what are the matrimonial assets?

The answer, in simple terms, is that the matrimonial assets are the assets that were acquired during the marriage, through the joint efforts of the parties to the marriage. Accordingly, assets acquired before the marriage or after the parties separated are non-matrimonial, as are assets that were not acquired through the joint efforts of the parties, such as gifts and inheritances.

The importance of distinguishing between matrimonial and non-matrimonial assets was highlighted by a recent Court of Appeal case.

The case concerned an appeal by the wife and a cross-appeal by the husband from a financial remedy order.

As Lord Justice Moylan, giving the leading judgment of the Court of Appeal, explained, the appeals concerned the proper application of the sharing principle and, in particular, the manner in which the court identifies assets to which it applies.

In broad terms, the parties agreed that it applies to matrimonial property and does not apply to non-matrimonial property. However, they disagreed as to what makes an asset matrimonial or non-matrimonial property, and also as to the manner in which an asset which was initially non-matrimonial can be ‘matrimonialised’ – in other words, become an asset to which the sharing principle applies.

The facts of the case, and the arguments raised on behalf of both the husband and the wife, were quite complicated, and the judgment of Lord Justice Moylan runs to 183 paragraphs. We will therefore concentrate on just one aspect of the husband’s appeal here, and simplify it, for the sake of clarity. Any reader wishing to read the full judgment may do so, at the link below.

The judge who made the original financial remedy order found that the total assets in the case were £132 million, of which £112 million was matrimonial property.

Within the sum of £112 million were investment funds totalling £80 million, which the husband had transferred from his sole name into the wife’s sole name in 2017 (“the 2017 Assets”), as part of a tax planning scheme.

The 2017 Assets had, in fact, been acquired by the husband prior to the marriage, and were therefore originally non-matrimonial. However, the judge took the view that the assets had been ‘matrimonialised’ by the 2017 transfer, and were therefore subject to the sharing principle.

The judge did, however, acknowledge that the 2017 Assets had only been ‘matrimonialised’ towards the end of the marriage. Accordingly, he divided them 60% to the husband and 40% to the wife.

The husband appealed, claiming that the judge had been wrong to find that the 2017 Assets had been ‘matrimonialised’. The 2017 Assets should not, therefore, have been subject to the sharing principle.

Lord Justice Moylan agreed with the husband. The source of the 2017 Assets had not changed as a result of their transfer to the wife and, in the application of the sharing principle, this remained the critical factor.

Accordingly, the husband’s appeal was allowed.

You can read the full report of the case here.

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When a financial remedies claim is made then both parties will be required by the court to file a Form E financial statement, setting out full details of their means, so that the court can decide upon a fair settlement.

But what if one party fails to file a Form E?

Well, there are various options available to the other party, but perhaps the most drastic is to seek the committal to prison of the party who has not complied with the requirement, for contempt of court.

This occurred in a recently-published judgment that was handed down by the High Court in London last October.

The judgment concerned an application by the wife in financial remedy proceedings for the committal to prison of the husband for contempt of court for his failure to comply with an order made in January 2023 requiring him to file a Form E by the 1^st of May 2023.

The order had a ‘penal notice’ attached to it, warning the husband that he if he did not comply with the order he would be guilty of contempt, and may be committed to prison.

Despite this, the husband failed to comply with the order, and the wife therefore issued her application.

The application went before Mr Justice Moor. As he explained in his judgment, he had to be satisfied to the criminal standard of proof that the husband was in contempt, meaning that he had to be sure beyond reasonable doubt that he was in contempt.

In the event the husband accepted that he was in contempt, and accordingly the contempt was proved beyond reasonable doubt.

It therefore remained for Mr Justice Moor to decide upon the sentence to impose.

As he stated, there are two aspects to a sentence for contempt. The first is punishment for not having complied with an order, which is a very serious matter of itself. The second is to secure compliance with the order in the future.

Mr Justice Moor found that only a custodial sentence would be appropriate in this case, in view of the seriousness of the contempt.

However, he felt that a very important objective was to get a comprehensive Form E from the husband. He therefore decided that he should suspend the sentence of imprisonment.

Accordingly, he sentenced the husband to imprisonment for a total of 56 days, suspended on terms that the husband complete a comprehensive Form E setting out his financial position, within 28 days.

He also warned the husband that if there was a further contempt, the sentence was likely to be far longer, and be immediately imposed.

You can read the full report of the judgment here.

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When a family court is considering making any sort of financial order it will of course require the parties to disclose full details of their means, so that the court can make an informed decision.

But what if one party fails to make full disclosure? What can the court do then?

One answer is to make adverse inferences about the non-disclosing party’s means.

The drawing of adverse inferences was seen in action in a recently published judgment of the High Court in London.

The judgment concerned financial remedy proceedings arising out of the parties’ divorce. Within the proceedings the wife was applying for maintenance pending a final hearing and a legal services payment order for the husband to contribute towards her legal costs.

But on the basis of the details of his means that the husband had disclosed it appeared that he could not afford to pay anything.

However, His Honour Judge Hess, hearing the case, was not satisfied by the disclosure that the husband had made. He found that it was obviously deficient, and this entitled him to make some “robust inferences” about the husband’s ability to pay.

There were a number of factors that led him to this conclusion, including:

1. The family had lived at a very high level for a long period of time, commensurate with a family which has a high level of financial resources. They lived in a very expensive house with a swimming pool, had expensive holidays, and at one time were even thinking of buying a £2.5 million yacht. The husband’s presentation of his finances did not begin to explain how this was afforded over a number of years. That fact alone, said Judge Hess, “causes the judicial eyebrow to be raised.”

2. The husband appeared to be deliberately blocking the disclosure process in relation to a trust whose assets, estimated to be worth at least £45 million,  may actually belong to the husband (or at least he may have access to them). This, said Judge Hess, was “a classic reason for a court to draw adverse inferences.”

3. There was an indication in the evidence that for many years the husband had taken large amounts of money from the trust to support the family. Judge Hess said that his “broad impression” was that the husband had been able to take what he wished at any stage at will, and had regularly done so.

In the light of these matters Judge Hess concluded that the husband was not a man of relative impecuniosity as he claimed, but was actually a man with access to substantial assets, quite possibly the whole of the £45 million worth of assets in the trust.

Judge Hess therefore ordered the husband to make various payments, including the £19,000 per month mortgage payments on the former matrimonial home (in which the parties were still living), the household outgoings of £5,782 per month, £7,500 per month maintenance for the wife and a legal services payment order in the total sum of £367,557.

You can read the full judgment here.

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“You won’t see a penny of my money!”

It’s sadly a common occurrence in family proceedings concerning money. One party is so aggrieved by the breakdown of the relationship that they vow to ensure that the other party never receives any of their money, whether by way of maintenance, lump sum payment or property settlement.

And they then proceed to ensure that they make good their vow by disposing of their assets, so that they are out of the reach of the other party.

So what can the other party do to prevent this?

One answer is the freezing order. As the name suggests, the order freezes that party’s assets, preventing them from disposing of them. The order may, for example, be served upon their bank, to prevent the bank from releasing money to them. The assets will remain frozen until the conclusion of the case.

An example of the use of a freezing order occurred in a recent case that took place before Mr Justice Cobb in the Family Court in London.

The case concerned a mother’s application for financial relief for her daughter from the child’s father, who resides in the USA.

In March 2023 Mr Justice Cobb made an award requiring the father to make various payments, including providing the sum of £3.65 million for a property to be settled on the child until she attains the age of eighteen or ceases tertiary education; paying a lump sum to cover various expenditure for the benefit of the child; and making substantial periodical payments to cover the child’s maintenance, school fees and other expenses.

The father has failed to comply with the order.

The mother reported that when she met the father after the award was made he informed her that he intended not to honour the order, that she would “not see a penny” of the award, and that he had been “arranging and managing his finances for years to limit/restrict [the mother’s] ability to enforce”.

In light of this the mother applied for a worldwide freezing order against the father.

The application went before the court in November 2023, without notice to the father. Mr Justice Cobb made a freezing order in the sum of about £8.6 million. The order was subsequently served on the father’s bank in the USA.

The matter went back before the court in February this year, when the mother asked the court to continue the freezing order.

Mr Justice Cobb found that it was clear that the father was ignoring the original order, was determined not to comply with the award, and would dispose of his assets unless he is restrained by the court from disposing of them. Accordingly, he continued the freezing order.

You can read the full report of the case here.

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A financial settlement on divorce essentially involves the division of the ‘matrimonial assets’, i.e. those assets that were acquired during the marriage, through the joint efforts of the parties to the marriage.

Accordingly, assets that were acquired before the marriage or after it ended (the latter often referred to as ‘post-marital acquest’) will usually remain the property of the party who acquired them.

But that can raise the question: when did the marriage end?

The law will generally recognise that the marriage ended on the date that the parties separated, but there is a problem here in that there will often be no record of the date of separation, and the parties will often not be able to agree when it occurred.

How this can play out in court was demonstrated in a recent case, which involved a rather extreme discrepancy between the parties as to when the separation took place.

The case concerned a couple who were married in 1983 and had two children, now aged 33 and 30.

From about 2003 the husband spent his working week away from home, mostly doing lucrative work in Germany.

In 2010 the husband began a relationship with another woman in Germany. It appeared that he lived with her for approximately two years in the accommodation he had in Germany, until that relationship broke down.

During the relationship the husband rarely visited the wife or the children in this country, but after the relationship ended the life of the husband and wife resumed as it was before.

The wife knew about the relationship, but said that she had forgiven the husband and “took him back”.

In 2017 the husband commenced a second relationship with another woman. The relationship of the husband and wife, however, continued as it had done since 2012.

However, in 2021 the husband began a third relationship with another woman. On this occasion, he chose to exercise no discretion, introducing this woman to his children. As far as the wife was concerned, that was the final straw – in her words: “Three strikes and out”. She consulted solicitors, with a view to divorce proceedings.

In the subsequent financial remedy proceedings the husband sought to argue that the parties had separated in 2010 and that, accordingly, everything he earned after that date was ‘non-matrimonial’.

The judge did not agree. He found that the parties did not separate in 2010. The marriage continued thereafter, and did not end until 2021. Accordingly, everything that the husband earned between 2010 and 2021 was matrimonial, and therefore should be divided between the parties.

The moral of the story is, perhaps, that if you think the date of separation may be important then you should take steps to have it recorded and agreed if possible, for example in a separation deed.

You can read the full report of the case here.

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It is not unusual that one party to financial remedy proceedings on divorce will believe that the other party possesses assets that they have failed to disclose.

But a recent case was a rather extreme example of this situation: the husband alleged that the wife had concealed the ownership of a diamond ring, with an estimated value of £2 million.

The case concerned an application by the husband to set aside a consent order made in 2021, setting out a financial settlement that the parties had then agreed.

The primary reason why the husband maintained that the consent order should be set aside was that he alleged that the wife had failed to disclose that she owned a diamond ring worth £2 million.

The husband claimed that he had received a tip-off that the wife was selling the ring at auction, having purchased it some years previously at a car boot sale, when it was sold as costume jewellery.

The wife denied that she had possessed the ring.

To support his case the husband applied for a witness summons against the auctioneer.

The auctioneer duly attended court, but unfortunately his evidence did not support the husband’s case. As the District Judge, hearing the case, explained:

“The story of the diamond being found at a car boot sale, being valued by his auction house, and then being given a value of £2 million, was just that, a story, completely fabricated by him, to stir up interest in his failing auction business in a post pandemic era.  The car boot story, read by the husband, given to the press and the world in general was a lie, to generate some media interest for this diamond and the commission a sale would bring to his business.”

Unsurprisingly, the husband’s case then fell apart. He had failed to prove that the wife had had the ring.

Accordingly, the District Judge found that there had not been material non-disclosure by the wife. The husband’s application was therefore dismissed.

The case is obviously an example of the importance of ensuring that you have the evidence that you need to support your case, before taking the case to the court.

You can read the full report of the case here.

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It is quite common that one party to a financial remedies application on divorce will claim that the bad conduct of the other party should reduce the amount that that party receives.

But such claims rarely succeed, as the conduct has to be of a particularly serious nature to have a bearing upon the outcome of the application.

In a recently decided case, however, the court found both parties ‘guilty’ of bad conduct, and penalised them accordingly. The case stands as a warning to parties of the possible consequences of bad conduct.

The case had a long and complicated history, the original application having been made back in 2011.

But we need not go into the details of the history of the case, or its various complexities. What concerns us here is the conduct of the parties.

We will begin with the wife.

The wife was found to have committed two separate frauds.

The first fraud was that she, or someone acting on her behalf, had forged the husband’s signature to various documents, including a consent order made in 2011 stating that the matrimonial home would be transferred to the wife, and the document transferring the property to her. The consent order was subsequently set aside.

The second fraud was that the wife, who was an accountant at the time, tampered with one of her bank statements that was produced to the court, to suggest that her mother had loaned her a sum of money.

Turning to the husband, he was found to have sent a copy of the court’s judgment in respect of the wife’s first fraud to the professional body that regulates accountants, with the result that the wife lost her job, and suffered financial hardship accordingly. The court had specifically directed that the judgment should not be disclosed to third parties.

So how were the parties penalised for their conduct?

As to the wife, the court found that the husband was the joint owner of the former matrimonial home, and ordered the wife to pay the husband a lump sum of £150,354 in respect of his interest, that sum calculated by reference to the current value of the property (the wife had argued that an earlier value should be used), and disregarding the payments the wife had made in relation to the mortgage and improvements to the property since 2011.

As to the husband, the judge estimated that the wife had lost £10,000 as a result of his conduct. Accordingly, the lump sum payable to him by the wife was reduced by that amount (i.e. the husband would have received £160,354, but for his conduct).

You can read the full judgment in the case here.

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The primary issue in many financial remedy cases following divorce is the needs of the parties. And foremost amongst those are their housing needs.

But how does the court go about assessing a party’s housing needs?

Well, there is no strict formula, but an example of the court’s approach occurred in a recent case in the West London Family Court.

The case concerned a wife’s financial remedies application. The parties were married in Turin in 2006, and have one child, born in 2010. The wife, who has lived and worked in England since 2004, has dual Italian and British nationality, as does the child. The husband is an Italian national.

The parties separated in 2016, since when the wife and child have lived in rented accommodation in Brentford, London.

Following the separation there were various court proceedings, in both England and Italy, the details of which need not be repeated here. Suffice to say that divorce proceedings were issued in this country and the wife issued her financial remedies application within those proceedings.

The primary issue for the court to decide was the wife’s housing needs.

The wife argued that she required a fund of £1.25m to meet her housing needs, which would enable her to purchase a 3-bedroom terraced house in the Chiswick area of London. She claimed that she needed 3 bedrooms on the basis that her parents would visit on an occasional basis, and that the property should be in Chiswick, as that was where the child went to school.

The husband, on the other hand, argued that the wife would live in Italy, where she would only require around £350,000 for housing. In the alternative he argued that appropriate housing could be obtained in this country for about £450 – 500,000. He argued that the wife and child could live in a two-bedroomed flat similar to the property in which they were living, that there was no need for a three-bedroomed property, and that there was no need to move to the more expensive area of Chiswick, as it was not far from Brentford and in any event it had been the wife’s choice to send the child to school in Chiswick.

The judge decided:

1. That the wife’s future lay in London, not Italy, as the husband argued.

2. That the wife did not need anything more than a two-bedroomed property – it would not be appropriate to dip into other resources merely to house family members on occasional visits.

3. That it was appropriate for the wife and child to remain in Brentford, where they had lived for the previous seven years. The child’s school had been selected whilst living in Brentford, its maintenance had been entirely possible from Brentford, and the distance travelled is short.

But that did not necessarily mean that the judge agreed with the husband’s assessment that the wife needed £450 – 500,000 to meet her housing needs. As he pointed out, the search is for a fair outcome, not a coin toss between the options identified by the parties.

And the judge assessed that the wife needed £650,000 to rehouse herself, plus another £50,000 to cover the costs of purchase and furnishings. He therefore awarded the wife a lump sum of £700,000.

You can read the full judgment in the case here.

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A new report sheds light upon how couples sort out financial and property arrangements when they divorce.

The report, led by the University of Bristol and funded by the Nuffield Foundation, follows a survey of the experiences of over 2,400 people who had divorced in the past five years.

And the survey paints a worrying picture of couples often going through the process without proper legal advice, with the result that many clearly do not receive their true entitlement in the divorce settlement.

The survey found that only a third of divorcees made use of lawyers in relation to their financial arrangements, with many who did not do so deterred by fear of the cost.

But those who did seek legal advice reported that the amounts they spent on legal advice were relatively low. A quarter had had spent less than £1,000, with a further 18 per cent having costs between £1,000 and £2,999. Only nine per cent had costs of £10,000 or more, with those higher costs associated with greater wealth.

As to outcomes, the survey found that only 28 per cent of divorcees divided their wealth, including the matrimonial home, roughly equally, with some simply dividing assets according to who owned what.

Half of divorcees who had reached arrangements across all of their assets received less than £50,000, 21 per cent received less than £25,000, and 23 per cent ended up with nothing or only debts. Only nine per cent came out of the marriage with £500,000 or more.

But perhaps the most worrying finding was in relation to pensions. The survey found that more than a third of divorcees did not know the value of their own pension pot, let alone their spouse’s.

Unsurprisingly given that, the survey found that only 11 per cent of divorcees shared a pension pot. Reasons for not sharing included a general lack of interest in the pension, and a strong sense that it ‘belonged’ to the spouse who had been contributing to it.

Needless to say, failure to properly share pensions on divorce is likely to leave the party with less pension provision, most often the wife, suffering severe financial hardship in retirement.

Commenting upon the report Lead author Emma Hitchings, Professor of Family Law at the University of Bristol, said: “Overall, the report exposes the considerable financial vulnerability of women post-divorce. Although legal processes are largely fair, these are not being used, especially by those with least means but most need.”

You can find the full report here.

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A financial settlement on divorce obviously involves the division of the assets between the parties.

But what if one of the parties has transferred assets away, or is about to transfer assets away, with the intention of reducing the amount that the other party will receive? Is there anything that the other party can do?

The answer is yes, there is. They can apply to the court for an order stopping the other party from transferring the assets or, if they have already been transferred, setting aside the transfer.

It is important note that the party applying for such an order must show that the other party intended to defeat their financial claim, either by reducing the amount that they will receive, or by frustrating the claim entirely.

Where the transfer took place less than three years previously and had the effect of defeating the applicant’s claim then the court will presume that the other party intended to defeat the claim.

But if the transfer took place more than three years previously then the intent to defeat the claim must be proved, although it can be inferred from the circumstances.

If, for example, the transfer was made for no payment then it will be set aside.

And a transfer for less than the full value of the asset is also likely to be set aside.

Even a transfer for full value may be set aside if the person to whom the asset was transferred was aware that the purpose of the transfer was to defeat a financial claim.

An example of an application to set aside a transfer occurred in a recent case that took place in the Family Court at Oxford.

In the case the parties separated in 2017. The wife petitioned for divorce in 2018 and issued a financial remedies application shortly thereafter.

In 2021 the husband discovered that the wife had entered into two transactions selling shareholdings in one of the parties’ businesses to two people. Believing that she had done so with the intention of depleting the matrimonial assets, he applied to the court to set aside the transactions.

Hearing the application the judge found that the transactions took place less than three years before the date of the application, and had the consequence of defeating the husband’s claim for financial relief.

This gave rise to the presumption that the wife disposed of the shares with the intention of defeating the husband’s claim for financial relief, a presumption that the judge found the wife was unable to rebut.

Further to this, the judge found that the amount paid for the shares was considerably below their true value, and that the people buying the shares knew full well that the wife was selling the shares with the intention of defeating the husband’s financial claim.

In the circumstances the court set aside both transactions.

You can read the full report of the case here.

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If you expect a court to find in your favour then it should be obvious that you will first have to obey the directions of the court, and conduct your case in a reasonable fashion.

Anyone who fails to do this should not be surprised that the judge will not be well disposed towards them.

This simple truth was clearly demonstrated in a recent case that took place in the High Court in London.

The case concerned an appeal by a husband against a financial remedies order which divided the assets as to 62% to the wife and 38% to the husband.

The husband put forward a number of grounds of appeal, essentially challenging the findings of the judge in the court below as to his means, and the finding that the wife needed more of the assets to rehouse herself (the judge found that the husband’s earning potential would enable him to rebuild his resources so as to buy a property).

Hearing the appeal, Mr Justice Peel noted that the judge in the court below had made a number of “trenchant findings” about the husband’s “litigation misconduct, non-disclosure and general dishonesty”, pointing out that when a party fails to make full disclosure of their means the court is entitled to draw adverse conclusions where appropriate.

Specifically, the judge had recorded that after the parties separated the husband withdrew some £530,000 from his business ventures, and that the lack of disclosure the husband had provided prevented clear identification of where that sum had gone.

Mr Justice Peel commented that it seemed that, even on the husband’s own case, he had extracted getting on for £400,000, which was used for his own purposes. That sum, he said, easily matched or exceeded the difference between the sum award to the wife and the sum awarded to the husband.

Mr Justice Peel concluded:

“In looking at the case in the round, I take the view that [the husband] has only himself to blame for the findings made against him. His deficient disclosure, and manipulative litigation conduct, inevitably exposed him to the sort of findings and evaluation undertaken by the judge.”

In the circumstances the husband’s appeal was dismissed.

The full judgment can be found here.

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It may be thought that the possibility of imprisonment for failure to pay a debt was consigned to history long ago. But that is not quite true.

While relatively rare, it is possible for the court to imprison a person for failure to pay a sum ordered by the court.

The procedure involved is known as a ‘judgment summons’. It enables the court to “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.”

The court can only commit the debtor to prison if it is satisfied beyond reasonable doubt that they either have or have had since the date of the order or judgment the means to pay the sum due, and has refused or neglected, or refuses or neglects, to pay it.

The procedure was demonstrated in a recent case in the Central Family Court.

The case concerned a financial remedy application within divorce proceedings.

In connection with the application the court had made various orders for the husband to make payments to the wife in relation to her costs, the payments to be made by the 29^th of November 2021.

The husband failed to make the payments by that date and the wife therefore issued a judgment summons application, claiming the sum of £40,000.

The court heard the application in September last year.

As mentioned above, the court had to be satisfied that the husband had the means to make the payments on the 29^th of November 2021.

Having seen bank statements that indicated that on that date the husband had some £430,000 in his bank account, the court was satisfied that the husband had the means to make the payments.

And because the husband had that money available to him the court was also satisfied beyond reasonable doubt that he had refused or neglected to pay the sums due.

The court would therefore have been in a position to commit the husband to prison for failure to make the payments. However, committal to prison is obviously a very serious step, and the court will only do it if the correct procedure has been followed, including informing the debtor of their right to independent legal advice.

Here, the court did not have evidence confirming that the husband had been informed of this right, and it therefore adjourned the question of what the sentence should be to give him a further opportunity to obtain independent legal advice.

The matter eventually went back before the court in July this year, when the court found that the husband had still failed to pay some £36,000. That failure was deliberate, and no reasonable excuse was provided.

Accordingly, the court sentenced the husband to 21 days in prison, suspended on terms that he paid the £36,000 to the wife by 4.00pm on the 30^th of September 2023.

You can read the full judgment in the case here.

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Generally speaking, any money acquired in the course of a long marriage will, all other things being equal (in particular the needs of the parties), fall to be divided 50:50 between the parties on divorce, irrespective of where that money came from.

But sometimes the provenance of the money will have a bearing upon its division on divorce, as was seen in a recent case in the Family Court at Torquay.

The case was also notable for being one of the few ‘small money’ cases that are reported. Most reported financial remedies cases involve the division of substantial assets, and whilst all cases involve the same law, those big money cases are often of little relevance to couples with modest assets.

The case involved a couple whose only available assets were two flats. One of the flats, the former matrimonial home, had an equity of just £2,500, and the other, purchased as an investment property, had an equity of about £17,500.

Against this, the couple had debts of over £30,000 and legal costs of £60,000.

The couple separated when the wife and the children left the matrimonial home in 2019 and moved into rental accommodation. The husband remained in the matrimonial home.

Divorce proceedings ensued, and financial remedy claims were made.

The wife sought the sale of both properties, with her receiving the proceeds.

But the judge did not agree.

So far as the former matrimonial home was concerned, the judge felt that it was best that the husband keep the property, in view of the small level of the equity, the costs of sale and early redemption which would go with a sale, plus the precariousness of the level of the equity, with the risk it may go into negative equity.

As to the other flat, this was purchased wholly or primarily from compensation monies received by the husband for injuries he received in a road traffic accident.

Whilst the judge accepted that the wife had an interest in the flat, he felt that the court should not entirely ignore the question of provenance. The money for the flat came from the accident suffered by the husband, and it would be harsh and unfair simply to ignore that, for some sort of sharing equality of equal needs.

Accordingly, the judge ordered that the flat should be sold and that the wife should receiver£4,000 from the net proceeds, with the husband receiving the balance.

The full judgment in the case can be read here.

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It’s trite to say it, but a financial remedies court order is worthless if it can’t be enforced.

Just how you go about enforcing an order depends upon the circumstances, in particular the type of order. A lump sum order, for example, can be enforced just like any other debt, and a maintenance order will often be enforced by an attachment of earnings order, taking the amount owed out of the payer’s wages.

But a financial remedies order may contain other provisions apart from lump sum and maintenance orders. What if the other party tries to obstruct the implementation of those provisions?

The situation arose in not one but two recently published Family Court judgments.

The first case concerned a final financial remedy order made in May 2021. The order provided for three rental properties to be transferred from the wife to the husband, and for the wife to retain the former matrimonial home.

The order was not fully implemented. The husband claimed that the wife had deliberately sought to frustrate the order and delay its implementation.

We need not go into the details of the claim, but the husband said that these attempts had caused him significant financial loss, by reducing the value of the properties he was due to receive.

The husband therefore applied to the court for a further lump sum payment, to compensate him for the losses he said he had suffered.

The judge agreed that the wife had prevented the implementation of the order, and that the husband had thereby suffered loss. She therefore awarded the husband a further sum of £100,000, so as to achieve a fair outcome that preserved, so far as is reasonably possible, the intention behind the original order.

The second case concerned a common problem arising from financial remedy orders. In January this year the court made an order providing that the former matrimonial home, which was occupied by the husband, should be sold.

But the wife claimed that the husband was refusing to cooperate in the sale by (amongst other things) failing to provide copies of the keys to the property to the wife’s solicitor, who was to have conduct of the sale, and ignoring attempts by the appointed estate agent to contact him in order to gain access to the property for the purpose of preparing marketing information and arranging viewings.

The wife therefore asked the court to bring forward the date by which the husband had to vacate the property, so that he could no longer obstruct the sale (the order only envisaged that the husband vacate for viewings).

The judge agreed that the husband had not complied with the order and therefore ordered him to vacate the property within six weeks, failing which the wife would be able to apply to the court for a warrant to physically remove him from the premises.

You can read the judgments in the cases here and here.

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Marital agreements can take two forms: agreements entered into prior to the marriage, often referred to as ‘prenuptial’ agreements, and agreements entered into after the marriage, known as ‘post-marital’ agreements.

Such agreements are often entered into in circumstances where one of the parties has substantially more non-marital assets than the other, usually assets that they acquired prior to the marriage.

And that was the situation in a recent case in the family court in London.

The case concerned a couple who were married in 2015.

Prior to the marriage the couple entered into a prenuptial agreement. At the time of the agreement the couple provided each other with financial disclosure.

The information provided by the Wife was that her net assets were valued in the region of £50 million, and that she was likely to inherit at least several hundred millions of pounds. The information provided by the Husband was that his net assets were valued at about £225,000.

The agreement provided, amongst other things, that in the event of the marriage breaking down the husband would make no claim against the wife’s assets, save that the wife would provide for the husband’s housing needs while the parties’ son was in education, so that he had somewhere suitable to live when staying with his father.

The agreement was confirmed after the marriage, when the parties entered into a post-marital agreement, in similar terms.

The marriage broke down in 2021 and divorce proceedings ensued, in which the wife made a financial remedies application.

When the application was heard by the court the wife had assets of £250 million, and the husband’s assets were found to be £2 million.

The wife essentially sought an order that the parties be held to the terms of the agreements.

The husband, on the other hand, sought further financial provision from the wife, including a half share of one of the wife’s properties, equating to some £42.5 million.

But the judge did not agree that the husband should have more. He found that the agreements must carry full weight – the parties could have done no more to make clear their intentions as to what should happen in the event of separation in terms of their assets.

Accordingly, the husband’s claim for a share of the wife’s assets failed.

The full judgment in the case can be found here.

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If one party to a marriage has an affair with someone else then they are obviously likely to feel very guilty for doing so. And they may try to make amends by making a gift to their spouse.

But what if, as is obviously likely, the marriage then fails? What is then the status of that gift?

The question arose in a recent Family Court case in London

The case concerned a couple who were married in 1998 and separated in 2020.

Perhaps the defining moment of the marriage took place in 2017.

The husband had an affair with another woman. It was only short-lived, and ended after about six weeks.

The husband told the wife about the affair.

There followed what the judge described as “a period of acute stress for the family”, with the husband’s former girlfriend embarking upon a campaign of public and private harassment, and stalking of both the husband and the wife.

The effect of this, said the judge, was difficult for the husband, but was acutely traumatic for the wife, being deeply unpleasant in its character and even leaving a residue of deep distress to this day.

And it got worse. The woman told the husband that she was pregnant by him.

Having taken advice as to what sum he would be likely to have to pay should the woman seek financial provision for the child, the husband transferred the same sum, £1m, to the wife.

In fact, the woman was not pregnant.

Perhaps unsurprisingly, the marriage subsequently broke down. Divorce proceedings were commenced and the wife made a financial remedies application.

The husband and wife did not agree as to how the court should treat the £1m gift.

The wife contended that it was a gift to her expressly to use as she wished, and made by way of partial amends for the husband’s misbehaviour. It would therefore be inequitable if she should be required now to share it with the husband.

The husband, on the other hand, argued that the court should treat it as one of the resources available to the wife, and that it should be shared along with the other matrimonial assets.

The judge agreed with the wife. He said that it was a payment made by the husband to the wife “to make amends” for his behaviour and its appalling aftermath. He accepted that the money was a matrimonial asset that was available for sharing, but the circumstances of its giving were highly relevant. There was no need for the husband to share in it, and it was fair to both parties that the wife should be entitled to keep it in its entirety, as was intended when it was given to her.

The full judgment in the case can be read here.

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When you go to court to sort out a financial remedies settlement on divorce your private financial affairs will be discussed. Indeed, the court will expect nothing less – both parties will be required to make full disclosure of their finances.

And it may not be limited to your financial affairs. For example, if you are in business with others then their financial affairs will also be disclosed.

Now, if this disclosure is limited to those involved in the court proceedings, then little or no harm will be done.

But what if the judgment of the court is published? Then your private financial affairs will be made known to the world.

And these days the family courts are expected to be more transparent about what they do, which means more judgments being published.

This has led to a debate between family lawyers about whether parties involved in financial remedy proceedings should be entitled to anonymity.

In modern times it has generally been the rule that financial remedy judgments should be anonymised.

But this has recently come under question, with High Court judge Mr Justice Mostyn suggesting that the default position should be that judgments be published in full without anonymization (save that any children would continue to be granted anonymity), unless there was a good specific reason to depart from this ‘rule’.

However, a recent report has cast doubt upon Mr Justice Mostyn’s position.

The report, prepared by a group of mainly lawyers looking at the issue of transparency in the financial remedies court, considered the competing arguments for and against anonymization.

Arguments for anonymization include the right to privacy of the parties, the fact that non-anonymization could discourage parties from making full disclosure, and the fact that an individual’s name is not essential for the understanding of how the family court works.

Arguments against anonymization include the principle of that justice should be open, the infringement of the rights of the media caused by anonymization, and the fact that other non-family civil cases are not anonymized.

The group undertook a survey to ascertain what lawyers felt on the subject. The survey found that 77.5% of respondents favoured anonymization, with only 16.5% against (the other 6% were undecided).

The group concluded that there should be a starting-point that reporting, whether by the media or in judgments, should be anonymised. They said that this would not place a veil of secrecy over financial remedy cases – the only secrecy would be in respect of the actual name of the parties, which would lend little or nothing to the greater understanding of the case, or the public interest in scrutiny of the family justice system.

You can read the full report here (section 12 deals with the issue of anonymity).

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It is obviously common that one party to financial remedy proceedings owns, or has an interest in, a business.

Clearly, the court will want to know the value of that party’s business interest, but how does it go about valuing it?

A recent, and instructive, High Court case provides the answer.

The case concerned a couple who married in 1990 and separated in October 2020. The wife did not work outside the home during the marriage, and the husband had a long and largely successful career in financial services.

Divorce proceedings were issued, followed by a financial remedies application.

One of the issues to be determined in the application was the value of the husband’s interest in a business.

The court directed that a single joint expert be instructed to provide a valuation of the business.

But neither party was happy with this joint valuation. The court therefore allowed each party to instruct their own expert valuer.

Accordingly, by the time the case reached a final hearing there were no fewer than three valuations of the husband’s business interest, and the figures arrived at by the experts differed remarkably.

The joint expert valued the husband’s interest at nearly £9 million, the wife’s expert valued it at nearly £19 million, and the husband’s expert valued it at just £133,000.

So why did two experts value the business in the millions and one at just £133,000?

This was explained by the husband’s expert.

Essentially, it was because the husband was the business. He brought in 90% of the fees earned by the business. Without him, the business had no significant market value to a third-party investor.

And the judge agreed. He therefore include the sum of £133,000 as the value of the husband’s business interest in the schedule of matrimonial assets to be divided between the parties.

Including that figure, the total value of the matrimonial assets came to some £33 million.

The judge considered that a fair outcome would be to divide that sum as to 51% to the wife and 49% to the husband.

Obviously, the valuation of the husband’s business interest was critical to the outcome of this case. Had the wife’s valuation or the joint valuation been accepted by the court then the outcome would have been quite different, with the wife likely receiving considerably more than she did.

You can read the whole judgment in the case here.

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It goes without saying that anyone involved in court proceedings should comply with the orders of the court.

And a recently-published Family Court judgment demonstrates what might happen if a party chooses not to comply.

The judgment concerned the final hearing of a wife’s financial remedies application on divorce.

It should have been a reasonably straightforward case.

But there was a problem, as the judge explained at the beginning of his judgment. As he said, the husband had been dishonest throughout, failing to comply with court orders, failing to provide relevant financial information and documentation, and flagrantly breaching undertakings given to the court.

And since the parties separated in 2010 the husband had been taking steps to put assets beyond the reach of the wife.

It was, said the judge, one of the most flagrant breaches of the duty of full and frank disclosure that has come before the courts.

The failure by the husband to disclose details of his assets left the judge with no alternative but to make inferences as to what assets the husband possessed, from the limited information available.

The wife claimed that the husband had assets worth at least £5.5 million, which had disappeared. She sought an order that she receive half.

The husband, on the other hand, claimed that he had no assets, only debts. He asked the court to simply make a clean break order, with no provision for the wife.

So did the husband have assets that he had failed to disclose?

The judge found that he did. There was evidence that the husband had removed assets, he had failed to comply with orders requiring him to provide information regarding his assets, and he was currently living in Spain, with no visible means of support, which indicated he had undisclosed assets.

As to the value of the husband’s assets, the judge unsurprisingly preferred the wife’s version of events, given the husband’s dishonesty. In other words, the judge accepted that the husband had assets worth at least £5.5 million.

In the circumstances, the judge decided that the wife was entitled to everything that she had asked for.

The full report of the judgment can be found here.

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As a general rule, on a divorce the assets of the parties will be divided equally unless there is a good reason why one party should receive more.

In a recent Family Court case the husband sought to argue that there were indeed good reasons why he should receive more.

The case concerned a couple who began living together in about the year 2000 (the wife said it was 1999, and the husband said it was in 2001). Whenever it was, at that time neither of them had any material financial resources.

They were married in 2004 and had three children. The marriage broke down in 2019 and divorce proceedings took place. The wife issued a financial remedies application, and this was heard by Mr Justice Moor.

As Mr Justice Moor explained, the wife is a home-maker and child-carer. The husband, on the other hand, has had a very successful career in the pharmaceutical industry, amassing a substantial fortune. By the time of the divorce the couple’s assets totalled some £284 million.

The husband put forward two arguments why he should receive more than half of the assets: that he had made a ‘special contribution’, and that he had generated a significant proportion of the family wealth after the parties separated.

Mr Justice Moor did not find either of the arguments to be made out.

As to special contribution, we need not go into detail, either of the law or of the husband’s business achievements. Suffice to say that Mr Justice Moor did not consider that the husband’s contribution was so special as to justify him receiving more than half.

As to the ‘post-separation endeavour’ issue, the husband’s argument was that at the time of the separation his interest in the business was worth some £33 million, whereas when it was sold in 2022, it was worth over £250 million, an increase due to his setting up a new business after the parties separated.

Again, the details of the husband’s argument need not be set out here. Essentially, Mr Justice Moor found that the husband had not set up a new business after the separation – the business was the same one that was created during the marriage.

In the circumstances, there were no reasons to depart from an equal division of the assets between the husband and the wife, and accordingly that is what Mr Justice Moor ordered.

You can read the full judgment here.

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Obviously, financial arrangements on divorce should be agreed if possible, but what if one party subsequently realises that the terms of an agreement are unfair, before the court makes the agreement into an order?

The answer was demonstrated in a recent case that took place in the High Court in London.

As the judge in the case explained, an agreement between spouses is a contract, and the law insists on contracts being generally upheld.

Accordingly, the starting point is that the court should give effect to an agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.

And the most common reason put forward for an agreement being unfair is that it does not meet the needs of the party wishing to challenge the agreement.

That was the wife’s argument in this case (although she did also argue that the agreement should be set aside because the husband had failed to make full disclosure of his finances).

In the case the parties reached an agreement on the 10^th of February 2022, which was then recorded in a signed draft court order, and sent to the court to be made into an order. (It is not necessary here to set out the terms of the agreement.)

On the 22^nd of February the wife repudiated the agreement, writing to the court asking for a hearing to determine whether the agreement was fair, as she claimed it did not meet her needs.

The court did not immediately make the agreement into a court order, but instead made an order that the agreement was not negated by the husband’s non-disclosure; that it was fair; and that it should be made an order of the court.

The wife appealed to the High Court, claiming (amongst other things) that the court failed to properly assess how her financial needs could be met through the agreement, and failed to take into account her liabilities.

The High Court judge found that the judge in the court below had indeed failed to make findings as to the wife’s financial needs and liabilities, and that without making such findings she could not make a decision as to the fairness of the agreement.

Accordingly, the High Court set aside the order of the court below, and made an order that the wife’s financial remedies claims should be retried.

You can find the full judgment in the case here.

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The recent case of NO v PQ is a salutary lesson for anyone contemplating investing their share of the matrimonial assets in a business venture.

In simple terms, the lesson is: if the venture fails, you may not get a second bite at the ‘divorce cake’.

In the case the husband had been a successful restaurateur for many years. In 2017 he sold his restaurant, which realised the net sum of £1.3 million. By 2017 that sum had depleted to about £600,000.

The parties discussed what they wished to do with this money, and in 2018 it was agreed that they would develop a new, high-end, restaurant and bar.

The marriage broke down and in September 2018 the husband handed back his wedding ring. Shortly after that he moved out of the family home.

In 2019 the wife expressed the view that she did not want to be in business with the husband anymore.

An agreement was therefore reached between them. The parties were in dispute about exactly what was agreed, but the judge accepted the wife’s explanation that the husband’s investment in the new business would “come out of his side” of the divorce settlement.

Unfortunately, and for reasons we need not go into here, the new business failed.

Divorce proceedings took place, and the wife issued an application for financial remedies. At this point the only really significant asset was the former matrimonial home, which had an equity of about £625,000.

The wife’s position was that she considered that she was entitled to the former matrimonial home, in the light of the 2019 agreement.

The husband, on the other hand, claimed that there was no such agreement, and sought an order that the former matrimonial home be sold, with the net proceeds divided equally.

The question for the judge was: was the husband entitled to a share of the equity? Clearly, he was in a predicament of real need.

As indicated above, the judge found that there had been an agreement between the parties in 2019. He therefore found that found that, notwithstanding his needs, the husband was not entitled to more than he had already received as a result of the agreement.

As the judge stated, making no provision for a party in real need was an unusual outcome. However, he felt that it was justified as the only fair outcome on the facts.

You can read the full judgment here.

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The Government is at last going ahead with the long-anticipated review of the law dealing with how finances are divided among couples after divorce.

The review has been launched by the Law Commission of England and Wales, and will consider the use of financial remedy orders, making financial provision between couples at the end of their marriage or civil partnership.

The current law covering the making of financial remedy orders has essentially remained the same for the last fifty years, and inevitably there have been increasing calls for it to be reformed, by those who believe it is no longer fit for purpose.

The Government has therefore asked the Law Commission to review whether the current law is working effectively, and delivering fair and consistent outcomes for divorcing couples.

The Commission will carry out a detailed analysis of the current law, to determine whether there are problems with the framework which require law reform, and what the options for reform might look like.

Specifically, the Law Commission will consider whether there is potential for reform areas such as: whether there is a need for a clear set of principles, enshrined in law, to give more certainty to divorcing couples; what consideration the courts should give to the behaviour of separating parties when making financial remedy orders; whether pension orders are overlooked when dividing the divorcing parties’ assets; and the factors judges must consider when deciding which, if any, financial remedy orders to make.

The review will conclude by publishing a preliminary report in September 2024, which could provide the basis for a full review and future financial remedies reform. This timetable means that a government consultation on proposed reforms is unlikely to appear until at least 2025, and obviously any reform of the law will not take place until after the consultation has been completed.

Commenting upon the review Professor Nicholas Hopkins, Law Commissioner for Property, Family and Trust Law, said:

“The laws governing financial provision on divorce or the ending of a civil partnership should be as fair and simple as possible, minimising the risk of conflict, uncertainty or financial strain.

“Fifty years since the current law was put in place, it’s essential that we look at whether it is working effectively for all parties. This is a hugely important area, affecting separating couples and their children at an incredibly stressful time of their lives. It is essential that any reform in this area is very carefully considered.

“I am therefore pleased that the Law Commission will be undertaking this review, to consider how any reform of this significant area of law could be shaped.”

You can find the project’s terms of reference here.

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We are living in times of high inflation. The cost of everything is going up, and many are finding it increasingly difficult to pay for essential outgoings.

An obvious answer to the problem is to increase your income. But what if your income comes from a spousal maintenance order? Can you go back to the court and ask for more?

The answer is that you can – technically, it’s called a ‘variation’ application.

You can also ask the court to extend the duration of the maintenance order, so long as the order did not prohibit any extension, and you apply within the term of the original order.

If you apply to vary a maintenance order the court will look at all of the circumstances of the case, including the means of the parties, when deciding whether to vary the order, just as it would have done when it made the original order (although if the application is made shortly after the original order, then the court may consider that a full rehearing is not needed).

But the court will be particularly required to look at any change in those circumstances since the original order was made, as if there has been no change, or little change, then a variation will not be justified. The change may affect the income of the paying spouse, or the financial needs of the recipient spouse.

And sometimes when a maintenance order is made it is expected that the recipient spouse will take steps to increase their earnings – if this was the case, then it will be taken into account by the court on a variation application.

There is also another alternative available to the court on a variation application, apart from simply altering the amount of the maintenance: the court can ‘capitalise’ the maintenance, for example by replacing it with an order that the other party pay you a lump sum.

It should be noted that this post is about spousal maintenance orders, as (save in high income cases) child maintenance will be dealt with under the child support scheme, which does not involve the court. However, the court will quite often seek to retain some ‘control’, even where a full spousal maintenance order is not justified, by making a nominal maintenance order in favour of the parent looking after the child(ren). The court could, in theory at least, increase the nominal order at a later date, should the circumstances require it.

Before applying to vary a spousal maintenance order you should seek expert legal advice upon the likelihood of the court increasing the maintenance. We can find you an expert who can assist you via our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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It is quite common that one spouse believes that they should get a more favourable divorce settlement because of the other spouse’s bad conduct during the course of the marriage.

But can the conduct of one party be taken into account on a financial settlement? And if so, how likely is it to affect the outcome?

The answer to the first question is: yes, conduct can be taken into account, if it is such that it would in the opinion of the court be inequitable to disregard it.

However, the answer to the second question is: “not very likely”. To have an effect the conduct must be “both obvious and gross”, in other words of a quite serious nature – far more serious than would be encountered in most marriage breakdowns.

The result of this is that it is actually quite unusual for a ‘conduct’ argument to succeed.

However, a relatively rare example of conduct being taken into account by the court was recently reported.

In the case the husband, who was a doctor, obtained a post in a hospital in 2011. In 2012 he was suspended from work, and in 2018 he was convicted of fraud in relation to the representations he made to obtain the post, and sentenced to 6 years imprisonment. He also had a confiscation order made against him in the sum of £337,000.

In February 2021 the husband was released from prison, but the parties separated in the following month. The wife then commenced divorce proceedings, and made a financial remedies application.

By the time the application was heard late last year there was about £412,000 owing under the confiscation order, including interest.

In considering the wife’s application the judge held that this was clearly a case in which the husband’s conduct would be inequitable to disregard. As the wife put it in her statement, the husband’s suspension, conviction, imprisonment and being struck off had been catastrophic for herself, and the children – she felt “completely duped and defrauded by him”.

Taking this and other matters into account, the judge awarded the wife 55% of the non-pension assets, plus 66% of the husband’s pension (the husband had essentially sought an equal division of the assets, and for the wife to receive about a quarter of his pension).

Notwithstanding the outcome of this case, raising a conduct argument should only be done after first taking expert legal advice. We can find you an expert who can assist you via our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

The judgment in the case can be found here.

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It is of course not unusual that one party brings far more money into a marriage than the other. In such a case they may feel that they should be entitled to more on divorce.

But are they likely to be awarded more?

To answer the question we must begin with one of the basic principles guiding the division of assets on divorce: that the court must avoid discriminating between the husband and the wife, and their respective roles within the marriage.

Thus, for example, the court will in general consider the financial contribution of a ‘bread-winner’ party to be equal to the contribution of a ‘home-maker’ party. In other words, it is not just about the money each party brought into the marriage.

But what if a financial contribution of one party was really special? Would that be enough to justify them receiving more?

The simple answer is that it could be, but it is unlikely.

This can be illustrated by a case that reached the Court of Appeal in 2017.

In the case the husband was appealing against a decision that he and the wife were each entitled to half of the assets on divorce, as he felt that his special financial contribution entitled him to more than half (he claimed 61%).

The Court of Appeal agreed that a ‘special contribution’ argument could succeed. However, to do so the circumstances had to be wholly exceptional, such that it would not be fair to disregard the special contribution. The amount of the wealth alone may be so extraordinary as to make it easy for the party who generated it to claim an exceptional and individual quality which deserves special treatment. Often, however, he or she would need independently to establish such a quality, whether by genius in business or some other field – a windfall is not enough.

In this case the husband’s contribution was $225 million, the entirety of the marital wealth. However, the Court of Appeal did not find that sum to be sufficient to entitle the husband to more than half – his contribution was not sufficiently exceptional, such that it would be unfair to ignore.

Putting it another way, the judge who made the original decision considered that there was not such a disparity between the contributions of the husband and the wife (including her moving to Japan when the husband’s work took him there) that it would be unfair to disregard the husband’s contribution. This was a decision to which the judge was entitled to come.

In short, as the Court of Appeal indicated, the concept of special contribution is potentially relevant in only a very small number of very exceptional cases. This may of course come as a disappointment to some, but hopefully the knowledge will deter them from wasting considerable legal costs upon a fruitless line of argument.

You can read the full judgment of the Court of Appeal here.

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A financial settlement on divorce will obviously usually involve the division between the parties of what assets exist at the time of the divorce.

But what if one of the parties believes that, during the marriage, the other party was siphoning off assets, with the result that the assets are significantly less than they would otherwise have been?

That was what the husband alleged in a recent case in the Central Family Court.

The case concerned a couple who were married in 1994 and separated in 2018. The wife is 49 and is a property consultant. The husband is 59 and is a builder.

A significant feature of the case was that the husband is, or has been until quite recently, functionally illiterate. For the majority of his adult life, therefore, he has had to rely on others to support him with many aspects of day to day life which most people take for granted. It was not disputed that for the duration of the parties’ cohabiting relationship it was the wife who undertook that role.

Divorce proceedings were issued in 2019 and the wife applied for a financial remedy order.

The husband claimed that throughout the relationship the wife was leading what he describes as a “double life”. He believed that she conceived a plan to defraud him and ultimately to leave him, having enriched herself at his expense. He said that throughout the marriage the wife was siphoning off joint funds, and using them to accrue assets that he knew nothing about.

The husband maintained that his illiteracy permitted the wife to act in this way, and that she exploited his vulnerability in this regard.

In order to determine the husband’s claims the judge had to examine the allegations of financial misconduct made by the husband against the wife.

In doing so she made a number of findings against the wife, which she said demonstrated a pattern of behaviour on the wife’s part. She said that on repeated occasions, and over a period of several years, the wife sought to remove assets from the family “pot”, and to place them where the husband would not be able to access them.

In short, the sum of the parties’ assets was less than it would have been if the wife had not acted in the way she did.

So what was to be done?

To ‘compensate’ the husband the judge did two things:

Firstly, having found that the wife had siphoned off some of £160,000 from the assets, she included that sum as part of the wife’s assets.

Secondly, to ‘penalise’ the wife for her conduct, the assets were divided as to 53%:47% in the husband’s favour.

The result of this was that the wife received 47% of the assets, which included the £160,000, some of which was no longer available.

And that was not the end of it. The judge also ordered the wife to make a substantial contribution towards the husband’s legal costs, which could amount to as much as £40,000.

You can read the full report of the judgment here.

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The answer to this question may be found in many places. However, a recent Family Court judgment contains an excellent summary, which should act as a useful starting-point for anyone wanting to know how the law decides financial settlements on divorce.

The summary sets out the following legal principles that the court will follow:

1. The first is simple: The objective of the court is to achieve an outcome which is “as fair as possible in all the circumstances”.

2. Importantly, fairness means that there is no place for discrimination between husband and wife and their respective roles. Accordingly, for example, the primary ‘breadwinner’ in the relationship will not be entitled to any more than the primary ‘homemaker’, just because they brought more money into the marriage.

3. In evaluating what is ‘fair’, the court has a broad discretion, but is required to have regard to the statutory criteria laid down by parliament, the first consideration being given to any minor child of the family. The statutory criteria include: the parties’ financial resources, their needs, their ages, the duration of the marriage, their contributions to the welfare of the family, and their conduct.

4. The court should seek a ‘clean break’ between the parties (i.e. so that they have no further financial responsibilities towards one another), if possible.

5. For reasons that will become clear in a moment, the court must decide which assets are ‘matrimonial assets’ and which assets, if any, are ‘non-matrimonial assets’. The difference is that matrimonial assets are assets acquired during the marriage, through the joint efforts of the parties to the marriage. Usually, non-matrimonial assets have one or more of 3 origins, namely: property brought into the marriage by one or other party, property generated by one or other party after separation, and inheritances or gifts received by one or other party.

6. Lastly, the court must take into account three particular principles, set out in the case law:

(i) Needs – The needs of the parties, in particular their financial needs, taking into account the standard of living during the marriage. In the vast majority of cases the court’s enquiry will begin and end with quantifying and meeting the parties’ needs. It is only in those cases where there is a surplus of assets over needs that the sharing principle (see below) is engaged, and where the outcome suggested by applying the needs principle is an award greater than the result suggested by the sharing principle, the needs principle will prevail.

(ii) Compensation – i.e. compensation for ‘relationship-generated disadvantage’, for example where a wife gives up a lucrative career to bring up the family. In practice, successful compensation arguments are very rare.

(iii) Sharing – The principle that, as a starting point, the parties are ordinarily entitled to an equal division of the matrimonial assets, whereas non-matrimonial assets are usually retained by the party to whom they belong, unless there is a good reason to the contrary. In practice, ‘needs’ is usually the only justification for a former spouse sharing in non-matrimonial assets.

If you wish to read the full judgment you can find it here.

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When the court considers what order to make on a financial remedies application it will take into account not just the assets of the parties, but also their liabilities, and that includes their liability in respect of outstanding legal costs.

In addition, legal costs may have already been incurred, and paid from the marital assets.

Either way, the costs will have the effect of reducing the assets available for division between the parties.

And this can obviously have a bearing upon the outcome, especially in a case where the court considers it appropriate for the assets to be shared equally between the parties.

Now, if both parties have incurred a similar amount of legal costs then there would be no unfairness if the remaining assets are divided equally.

But what if one party has incurred far greater costs than the other?

Does this mean that the party who incurred less costs will get a smaller settlement than if the costs of each party had been similar?

Or can they argue that their share should be based upon what the assets would have been had each party’s costs been similar?

The answer can be found in a recent judgment of the Central Family Court in London.

The judgment concerned the final hearing of a financial remedies application. In the course of the application the wife had incurred legal costs of £463,331 and the husband had incurred legal costs of £159,044, a difference of £304,287.

The judge commented that, on the face of it, the wife’s costs seemed to be “grossly disproportionate” for what was not a particularly complex case, where the money really being argued about (i.e. the difference between the parties’ real cases) was in all probability less than that sum.

The judge held that where one party has incurred legal costs at a sensible and moderate level and the other has incurred legal costs at a grossly disproportionate level, the simple inclusion of both debts in the court’s schedule of assets and liabilities (whether already paid or yet to be paid) is likely to be unfair to the sensible and moderate spender.

Accordingly, the judge decided to add back the sum of £200,000 on to the wife’s side of the court’s asset schedule, recognising that some of her additional costs may have been reasonably incurred.

The net result of this adjustment, of course, was that the wife received less of the available assets than she would have done had her costs been reasonable, and the husband was not penalised for the wife’s disproportionate costs.

You can read the full judgment here.

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Cases relating to pre-nuptial agreements crop up quite frequently, and the way that they are dealt with by the courts is well known.

But what of post-nuptial agreements, i.e. agreements entered into after the marriage? How do the courts deal with them?

The answer is that the courts deal with all matrimonial agreements in the same way, irrespective of whether they were entered into before or after the marriage.

A recent Family Court case provides a useful demonstration of the court’s approach to post-nuptial agreements, albeit that the facts of the case were somewhat unusual.

The facts were that the parties were married in 2004 and separated in 2008, when the wife left the former matrimonial home. The wife issued judicial separation proceedings and in about November 2008 the parties agreed a financial settlement.

There is some confusion about the terms of the agreement, but essentially it provided for the equity in the former matrimonial home, the only asset, to be divided equally, in full and final settlement.

The former matrimonial home was owned by the husband. It was then worth about £280,000, and the equity was some £60,000.

The agreement gave the wife the opportunity to raise a mortgage to buy out the husband, failing which the husband would pay the wife £30,000 for her ‘share’.

The agreement was made into a consent court order, but the order did not take effect, because the judicial separation proceedings were never concluded. The agreement was never implemented.

The judicial separation proceedings were eventually dismissed, in 2019. This, as the judge said, had the effect of ‘morphing’ the 2008 agreement into a simple post-nuptial marital agreement.

Divorce proceedings were subsequently issued by the husband, and the court had to decide what to do with the agreement.

Both parties indicated that they were content with the terms of the 2008 agreement, but they differed as to how it should be implemented.

The husband wanted the court to order that he should pay the wife £30,000, although he was prepared to add another £10,000 to that, to take inflation into account.

The wife, on the other hand, invited the court to implement the 2008 agreement in such a way as to give her the opportunity to have the former matrimonial home transferred to her or, in the alternative, sold and the proceeds divided equally. This would amount to an order in the region of about £250,000 – £300,000.

The judge explained that the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to the agreement.

The only reason why the judge did not consider that the parties should be held to the agreement was due to the passage of time and the change in the value of money.

He considered that the husband’s offer of £10,000 to uprate the £30,000 was not enough in the circumstances.

He preferred to look at what the £30,000 was as a percentage of the gross value in 2008 (say 30/280 = 10.71%), and then apply that to the gross value of the property in 2022, which is in the order of £525,000, making the 2022 figure £56,227.

He then rounded that figure up to £60,000, in full and final settlement.

So the answer to the question is yes, the court can certainly hold you to a post-nuptial agreement, unless it considers that it would be unfair to do so, as would have been the case here if the wife only received the original sum of £30,000.

The full report of the case can be found here.

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Obviously a financial settlement on divorce can require one party to pay maintenance for the other. Such spousal maintenance orders will, unless stated otherwise, last until the death of either party, or the remarriage of the recipient spouse.

But what if the receiving spouse cohabits with another person without remarrying? What happens then?

A recent case demonstrates the answer.

The case concerned a couple who were married in 2010 and had two daughters, now aged twelve and ten.

The couple separated in 2012. Divorce proceedings then took place and a financial remedies order was made by agreement in 2014.

The order provided, amongst other things, for the husband to pay child maintenance of £20,000 a year and spousal maintenance of £52,000 a year for five years, thereafter dropping down to £40,000 a year, that sum payable until the youngest child reached the age of eighteen or finished school.

The wife entered into a new relationship in early 2020, and by the time the Covid lockdown came in March 2020, she and her new partner were spending most of their time living in the same household. The wife and her new partner did eventually get married, in August 2022.

Meanwhile, in January 2021 the wife applied to vary the financial order, initially seeking a capitalisation of the spousal maintenance and an increase in the child maintenance.

The wife subsequently accepted that she no longer had a claim against the husband for spousal maintenance, but she continued to seek an increase in the child maintenance.

The husband in turn claimed a repayment of the spousal maintenance in relation to the period during which the wife was cohabiting. It is how this claim was dealt with by the judge that is interesting as far as this post is concerned.

The judge made the following points:

1. The obligation of an ex-spouse to pay maintenance does not necessarily stop immediately when a cohabitation starts.

2. There must be a period of time before a cohabiting relationship has become settled and permanent, where it remains justified for spousal maintenance to continue.

3. It was open to the parties to decide for themselves what period of time of cohabitation would trigger the end of spousal maintenance, but here they did not provide for that in their order.

In all of the circumstances the judge decided not to award a back-payment of maintenance.

Clearly, the moral of this story is that if you are to pay spouse maintenance and are concerned about your former spouse cohabiting you should insist upon a time limit (say, six months) on how long cohabitation should last before it triggers the end of the maintenance.

You should also of course seek expert legal advice. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

The full report of the case can be found here.

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In recent posts we have looked at two ways in which one spouse can try to defeat, or at least reduce, the other spouse’s financial claim against them: by dissipating assets and by declaring themselves bankrupt.

Now we look at a third way, and one that is probably more common: by simply failing to disclose assets.

Obviously, a financial settlement involves the court dividing the matrimonial assets between the parties. But in order to do this the court must of course know what the assets are, and this requires that the parties disclose all of their assets.

So it can be tempting for one party to simply not disclose all of their assets. After all, surely the court can’t divide assets that it doesn’t know about?

Well, that is not entirely true.

The court does not of course have to accept what the parties say about their assets. In fact, it is duty bound to consider whether assets have been hidden.

The court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the true facts are.

And if the court finds that assets have indeed been hidden then it may add them back to the disclosed assets, and take them into account when dividing the assets.

To do this the court will obviously have to quantify the undisclosed assets.  It should attempt a realistic and reasonable quantification of the assets, looking at all of the evidence, including the lifestyle of the non-disclosing party.

In doing this the Court must ensure that a non-discloser should not be able to obtain an outcome from their non-disclosure better than that which would be ordered if the truth had told. However, if the result is an order that is unfair to the non-discloser, it is better that than that the court should make an order that is unfair to the other party.

How this works was demonstrated in a recent case in which the court found that the husband had failed to disclose assets.

The judge in the case assessed that the value of the undisclosed assets was £241,000. He therefore added that sum back into the ‘asset pot’, before dividing it between the parties.

If you have reason to believe that your spouse is failing to disclose assets then you should seek expert legal advice. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Obviously, one spouse may use every ploy at their disposal to defeat the other spouse’s financial claim against them. One such ploy is to make themselves bankrupt, in order to put their assets out of the reach of the other spouse.

But is there anything you can do if your spouse uses bankruptcy to defeat your claim?

Before answering that question we need to look briefly at how bankruptcy can affect a divorce settlement.

When a divorcing spouse is made bankrupt a trustee in bankruptcy will be appointed and all of the spouse’s assets will pass to the trustee, whose job is then to pay the spouse’s creditors.

Accordingly, the spouse will have no assets available for the divorce settlement, at least for the time being, and the court will not be able to make an order transferring the bankrupt spouse’s assets to the other spouse.

So can you do anything about it if your spouse makes themselves bankrupt?

The answer depends upon whether your spouse was genuinely bankrupt. If they were not then the court can annul the bankruptcy.

Therefore, if you believe your spouse was not genuinely bankrupt and only made themselves bankrupt to try to defeat your claim you can apply to the court to have the bankruptcy annulled.

To have the court annul the bankruptcy you will have to prove that at the time the bankruptcy order was made it ought not to have been made, or that the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court.

Note that your spouse’s suspect reasons for making themselves bankrupt will not justify an annulment if they really were insolvent at the time of the bankruptcy.

It should also be noted that if you make an application to annul a bankruptcy and it fails then you could be liable to pay the costs of the trustee in bankruptcy. An annulment application should only therefore be made after taking expert legal advice.

We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe’s accessible team of legal experts from various disciplines expedites the customer’s case and keeps them informed and in control 24/7 through a unique and secure online portal. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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A financial settlement on divorce obviously involves the division of the matrimonial assets between the parties.

Unfortunately it is not that unusual for one party to dissipate the assets in their possession, in an attempt to reduce the amount that they have to pay to the other party.

So what can you do if you have reason to believe that your spouse is about to dissipate assets?

The answer is that you can apply to the court for a freezing injunction, restraining your spouse from disposing of assets.

The court will make a freezing injunction if it is satisfied that your spouse is about to dispose of assets with the intention of defeating your financial claim against them.

A ‘guilty intention’ may be proved if the effect of the disposal would be to defeat your claim.

If it is satisfied, the court will make whatever order it thinks fit for restraining your spouse from disposing of the assets, or otherwise for protecting your claim.

If the court considers an injunction is not required, it could, for example, simply order your spouse to give notice of any intention to dispose of assets, so that you can then seek an injunction, if necessary. Or it could protect your claim by requiring your spouse to deposit money into court, or into a solicitor’s joint account.

Obviously, you may fear that your spouse may dissipate assets as soon as they hear of your application for a freezing injunction. In such a case you can ask the court to make an urgent injunction, without notice to your spouse.

But a word of warning. Freezing a party’s assets is a serious matter, which could obviously have a significant effect upon their ability to conduct their financial affairs. The court will not therefore make a freezing injunction unless it considers it to be absolutely necessary.

An example of what can happen if an injunction is applied for without good reason occurred in a recent case in which a husband applied for an injunction to freeze the wife’s assets, simply because he feared that she might dispose of assets.

But the husband had no evidence that the wife actually intended to dispose of assets. Accordingly, the court refused to make the injunction, and ordered the husband to pay the wife’s costs of the application, in the sum of £27,000.

Obviously, freezing injunctions should not be applied for without first taking expert legal advice. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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How the matrimonial assets are to be divided is likely to be at the forefront of the mind of anyone going through divorce.

But surely the answer is simple: isn’t everything just divided equally?

Well, it may be. But the assets are not always divided equally, and there is certainly no rule that says they will be.

The commonly held belief that each party automatically gets half stems from a misconception about what the law says.

What the law actually says, as was explained by the House of Lords back in 2000, is that: “As a general guide, equality should be departed from only if, and to the extent that, there is good reason for doing so.”

In other words, equality is the ‘norm’, but not the rule. If, as is often the case, there is a good reason why equal division is not appropriate then the assets will be divided in some different proportions.

So the question is: what kind of reasons make equal division inappropriate?

There is no definitive list of possible reasons for unequal division, but the following three reasons are perhaps the most common.

The first reason, and the most common of all, is the needs of the parties. Where one party’s financial needs are significantly greater than the other party’s, then it may be appropriate to give the party with greater needs more than half of the assets.

A common example of this is where one party will be looking after the children – their needs, particularly in relation to housing, may be greater than the needs of the other party.

A less common reason is that one party’s financial contribution towards the marriage is significantly greater than the other party’s contribution. But care needs to be taken here: the contribution must be so special that an equal division of the assets would be inappropriate – it is actually quite unusual for the court to make such a finding.

And it should also be remembered that not all contributions towards a marriage are financial. The law recognises that the contribution of a ‘homemaking’ spouse, who looks after the home and the children, will usually be considered to equal that of a breadwinning spouse.

A third reason for an unequal division of assets is that not all assets are ‘matrimonial’, in the sense that they were acquired during the marriage, through the joint efforts of the parties to the marriage. Some assets are ‘non-matrimonial’, in particular assets acquired before the marriage, inheritances and gifts to one party, and assets acquired after the parties separate.

Generally speaking, only matrimonial assets go into the ‘pot’ for division between the parties. The party who owns the non-matrimonial assets will therefore normally retain them after the divorce, and obviously this may lead to an unequal division of assets.

There is, however, an exception to this rule. Where the matrimonial assets are insufficient to meet the needs of the other party, the non-matrimonial assets may be used to cover those needs.

Division of assets on divorce can be a complex subject, upon which expert legal advice should be sought. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe’s accessible team of legal experts from various disciplines expedites the customer’s case and keeps them informed and in control 24/7 through a unique and secure online portal. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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A Guest Post by Sebastien Nicolleau, MD & Founder of Galleon Property Search

Supporting your housing needs case during the proceedings

Whilst going through your divorce finances case you may need to show evidence to support your housing needs case. As property sourcing experts, we can provide a specialist Property Particulars Report based on evidence and property market data. This can strengthen your position or challenge the other party’s case meaning the matter may settle without court proceedings or, if the case has reached court, make all the difference to the court’s decision.

Finding and securing your new home post separation

A separation or divorce is an emotionally charged time for all involved and often a period of high stress. Once you have got through your separation and dealt with all the challenges, you may have the further challenge of finding a new home.

Finding your new home, a nest where we feel safe, is essential to turn the page and rebuild our life. Searching for properties is very time and energy consuming. It is also important to remember that estate agents work for and represent the interests of the seller who is their client and not you.

However, you have the option to work with a buying agent who will represent your interests only, advise you, guide you and manage the whole process on your behalf. We have been selected by Family Law Cafe as their trusted buying agent to support you on your journey to a new life.

If you choose to work with us, the first step of the process is to put together a detailed brief for your new home. This can take into consideration the location you want to live in, including proximity to where your children are educated, travel to your place of work, and where your family members and friends are located. We will also look at the specification for the new home and work out what matters to you. A separation is the perfect opportunity to re-consider your lifestyle and how you want to live the rest of your life. With the brief in place, we will then be ready to scan the entire market and identify the homes best suited to your new needs as you move into the next stage of your life.

As buying agents we will engage with every single estate agent in your pre-determined search area to identify all properties matching your requirements. We will also uncover any off-market homes that are not for sale on the open market. From the search results, you will decide on a shortlist of your top properties to view, we will organise a viewing schedule to suit your commitments and accompany you.

Our role is to fully appraise each property with you, identify potential issues and give you all the information needed to make an educated decision. Once you’ve chosen your favourite property, your buying agent will use their expertise of the property market to negotiate the best terms on your behalf. Our mission is not just to find your dream home, but to secure it at the best possible price, saving you money and time. 

We help you with a joined up approach. Finding the right home at the right price is only one aspect of the process. You’ll also need a conveyancing lawyer, a surveyor, removals, and potentially an interior designer and contractors. Just like Family Law Cafe, we have a network of experts and between Family Law Cafe and ourselves we will make sure you have the best trusted experts for you to choose from. This ensures a coordinated approach, so the purchase moves safely through to completion and you moving into the house of your dreams. You can rest assured that all aspects of the process are covered professionally, relieving you of the stress and hassle, and empowering you to focus on planning your new post-divorce life.

As leading buying agents in the UK, with years of experience helping clients who are going through a separation or divorce, we appreciate how emotionally draining the situation can be. Finding a new home is only one aspect of this life change and it shouldn’t be a source of additional stress and anxiety. Our role is to make this journey and transition as enjoyable as possible and support you throughout.

Galleon Property Search are buying agents and part of the Family Law Cafe Network.

Call us for further Information on how they can work for you in your family matter.

Capital Gains Tax (‘CGT’) has long been a trap for the unwary on separation and divorce, but new rules should make the problem a thing of the past.

CGT is a tax on the profit when you sell (or ‘dispose of’) an asset that has increased in value since you acquired it, the tax being payable on the amount of the increase.

Obviously, it is often the case that on separation or divorce assets may be disposed of, by being transferred to the other party. Such disposals are potentially chargeable to CGT.

But transfers between spouses are subject to a special rule, which is designed to ensure that the transfers do not attract CGT.

The special rule provides that such transfers are made on a “no gain/no loss” basis in any tax year in which they are living together.

The effect of this is that any gain from the transfer is deferred until the asset is disposed of by the receiving spouse, who will be treated as having acquired the asset at the same original cost as the transferring spouse.

But the problem for separating spouses is that the special rule only applies if the transfer is made in the tax year in which they separate. After that, normal CGT rules will apply to the transfer.

This gives the couple very little time to sort out their financial settlement, and can mean that the settlement is dictated by CGT considerations, rather than considerations relating to the separation or divorce.

Thankfully, this issue is soon to be a thing of the past, thanks to changes being made to the CGT rules by the Government.

The changes will include two particular provisions to help separating spouses.

Firstly, they will be given up to three years after the year they cease to live together in which to make no gain/no loss transfers.

Secondly, the no gain/no loss treatment will also apply to assets that they transfer between themselves as part of a formal divorce agreement, in which case there will be an unlimited time to make the transfer.

The new rules will apply to transfers that take place on or after the 6th of April 2023.

The new rules are very welcome, although it should be understood that CGT may still be payable when the receiving spouse eventually disposes of the asset – something that should be taken into account in the settlement.

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Spousal maintenance orders are normally expressed to be payable until the death of either party, or until the remarriage of the recipient of the maintenance.

But what if the recipient moves in with someone else? Is the maintenance still payable in such circumstances?

The initial answer is yes, the maintenance is still payable, unless the court orders otherwise.

In other words, if you think you should stop paying maintenance because your ex has moved in with someone else, you will have to ask the court to discharge (i.e. cancel) the maintenance order.

The first problem you may have with such an application is that your ex may deny that they are cohabiting. You will then need to prove to the court that they are.

The court will decide the issue taking into account all of the circumstances, including whether your ex and their new partner are members of the same household, whether they share a daily life, whether the relationship is stable, whether there is financial support from the new partner, and so on.

But even if you are able to prove that your ex is cohabiting that does not automatically mean that the court will discharge the maintenance order. The law does not treat cohabitation in the same way that it does remarriage.

Cohabitation is a relevant factor for the court to take into account when considering the level of maintenance, but nothing more.

Quite how the court will take it into account, if at all, will vary from one case to another.

And one of the main questions for the court to ask is: what should your ex’s new partner be contributing towards your ex’s budget? Note that it is not what they are contributing, but what they should be contributing – often, in such situations income may not be pooled, in order to try to avoid the maintenance being discharged.

And the apparent permanence of the new relationship will also be a relevant factor – the court is not going to discharge the maintenance order if it is not sure that the new relationship is going to last.

If the court finds that your ex is being supported by their new partner, but is unsure whether the relationship will be permanent, then it may reduce the maintenance order to a nominal amount, rather than discharging it entirely. In that way, the maintenance can later be reinstated, if the relationship should fail.

In short, in some cases the cohabitation may have a considerable bearing upon the maintenance, and in other cases it may not.

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Financial remedy proceedings, if conducted in the wrong way, can lead to enormous wasted expense, as a family court judge warned in a recent case.

The judge said that the case should have been simple, involving just two properties, with a net value of about £730,000.

But it was not simple, primarily because the wife made ‘meritless and misconceived’ claims that the husband had interests in two other properties, and a controlling influence in a restaurant.

And the husband was also at fault, having been found to have been dishonest regarding his role within the restaurant business.

As a result of these things the couple ran up legal costs in excess of £200,000, which was obviously out of all proportion the value of the property in dispute, and seriously reduced the amount available for division between them.

Describing them as “feral, unprincipled and unnecessarily expensive financial remedy proceedings”, the judge said that it had taken him days to read the papers and even more days to write his 200-paragraph judgment.

He concluded the judgment by saying that the proceedings were “a disgraceful example of how financial remedy proceedings should not be conducted.”

Sadly, this case is just the latest in a very long line of similar examples of couples conducting financial remedy proceedings in the wrong way, and thereby running up exorbitant costs.

The lessons to be learned from the case are quite simple: don’t make hopeless claims, and be honest in your evidence. Failing to heed these lessons will simply make the case unnecessarily complex, and therefore much more expensive.

Those extra costs will have to be paid, either out of the pot available for division between the parties, or if just one party is at fault, the court can order them to pay the costs that they have caused the other party to waste.

In short, if you conduct financial remedy proceedings in the right way you are likely to find yourself better off at the end of the case, to say nothing of the time and stress involved.

Of course, an even better solution is to avoid contested court proceedings at all, by agreeing the financial settlement with your (former) spouse.

To ensure that you properly conduct financial remedy proceeding you should follow the advice of an expert family lawyer. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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In the course of financial remedy proceedings it will be necessary to produce to the court and the other party documentary evidence, as proof of your means.

And it is largely upon the basis of this evidence that the case will be settled, or the court will decide what the financial settlement should be.

But sometimes the documents are not all that they seem to be, as a judge in a recent case has warned.

Sometimes, a document will have been forged by the producing party, to give a false impression of their means.

And creating false documentation is all too easy, in these days of digitisation. All that can be needed is to download a real document, put it into an editing program, and make the required changes.

The result can easily fool an unsuspecting recipient.

And that is exactly what happened in the recent case. The judge found that the husband had dishonestly and falsely manufactured a bank statement, to mislead to wife into giving up her job abroad and moving to London, as a result of which the wife had “significantly suffered”.

The judge said that one reason why he wanted to have his judgment in the case published was to draw wider attention to the ability of dishonest parties to manufacture bank statements and other documents which, for all practical purposes, look genuine, but which are in reality are not.

So what is to be done about forged documents?

The answer is that if you are in any doubt as to the authenticity of a document you should raise the matter with your lawyer. They can then take steps to check to see whether the document is genuine.

In the particular case in question a genuine statement was obtained from the bank for the same period, and a number of transactions which were on the forged statement simply did not appear on the genuine one.

There are also other ways of checking to see whether a digital document is genuine. For example, all digital documents will have ‘metadata’ attached to them, giving details relating to the document such as the author, the document’s file size, and the date that the document was created.

Obviously, the original document’s metadata will change if it has been altered.

And if all else fails then a forensic expert can be instructed to examine the document, and give an opinion as to whether or not it is genuine.

In summary, be alert to the possibility that a digital document may not be genuine, and if in any doubt take steps to check whether it is. Failure to do so could result in an inferior settlement, or other adverse consequences.

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A case involving the former owner of the Ritz hotel demonstrates what can happen to anyone who fails to comply with a financial remedies order.

In March 2021 Sir Frederick Barclay who, with his deceased twin brother Sir David, built a business empire that included the Ritz hotel, was ordered by Mr Justice Cohen to pay his ex-wife, Lady Hiroko Barclay, lump sums totalling £100 million, to be paid as to £50 million in 3 months and the remainder in a little over one year.

It was one of the biggest divorce settlements ever in this country.

But it has not been paid.

And now Sir Frederick, who is aged 87, is facing the possibility of being committed to prison, after Lady Barclay issued contempt proceedings for non-payment.

However, before Sir Frederick is committed to prison Lady Barclay will have to show that Sir Frederick has the means to pay the lump sum, and that he had wilfully refused or neglected to pay it.

Sir Frederick argues that he does not have the means to pay, as his fortune is all held in trust for his daughter and nephews, and his nephews had blocked his attempts to access his funds.

And at a hearing in July Mr Justice Cohen ruled that Lady Barclay had failed to prove that Sir Frederick has the means to pay. He did, however, make clear that this ruling did not in any way reduce Sir Frederick’s liability.

But Sir Frederick may yet face prison for his failures to comply with court orders. Mr Justice Cohen did find him in contempt for failure to pay a sum of £245,000 in legal fees and delayed maintenance, and gave him six weeks to pay that sum.

At a further hearing this month it transpired that Sir Frederick had paid that sum, with the help of a loan from his daughter. His nephews had also been helping him with his legal fees. Accordingly, he avoided being sent to prison.

But the original lump sum and legal fees now amounting to more than £1 million, as well as further maintenance payments for Lady Barclay, are still outstanding.

Mr Justice Cohen gave Sir Frederick a further three months to pay, saying that he wanted to hear of real progress in the payment of the lump sum.

And Mr Justice Cohen also rebuked Sir Frederick and his nephews for failing to pay a penny of the divorce settlement. He said: “It should be a matter of shame for Sir Frederick and his nephews that Lady Barclay is left with next to nothing by way of financial resources for the future … It seems to me extraordinary that every member of the family is prepared to put their hands into their pockets to help Sir Frederick avoid prison but will do nothing to help assist the greatest victim in this, namely Lady Barclay.”

The case is a demonstration that everyone, no matter who they are, must comply with court orders. As counsel for Lady Barclay said: “There is a real public interest that men in Sir Frederick Barclay’s position, captains of industry, media moguls, knights of the realm, like anyone else in this country, ignore court orders at their peril.”

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It goes without saying that anyone seeking a financial settlement on divorce should try to resolve the matter by negotiation, rather than wait for the court to decide the matter for them.

But obviously there is no point in negotiating if the proposals that you put forward are unreasonable, and never likely to be agreed by the other party.

The cost of negotiating unreasonably was demonstrated by a recent Family Court case.

The case concerned the division of assets totalling some £12.47 million. The wife was ultimately awarded a total of £7.45 million by the court, which was about 60% of the total assets.

In the course of the proceedings the wife ran up legal costs of £917,000, and the husband ran up costs of £709,000.

At the end of the proceedings the husband asked the court to order the wife to pay £310,000 of his costs, in view of her unreasonable negotiating position.

The rule as to costs in most types of court proceedings is that the winner pays the loser’s costs. However, that rule does not apply in financial remedy proceedings, where the starting-point is that each party should bear their own costs.

The court may, however, make an order requiring one party to pay the costs of the other party where it considers it appropriate to do so because of the conduct of the other party in relation to the proceedings.

And the court will generally conclude that to refuse openly to negotiate reasonably and responsibly will amount to conduct in respect of which it will consider making an order for costs.

In the case the wife consistently sought £10 million or more and, far from moderating her position, increased her claims, so that by the time of the trial she was seeking not less than £10.6 million, which was about 85% of the assets. The husband, on the other hand, offered £7.15 million by the time of the trial.

The court found that the wife’s negotiating stance was so far wide of the mark (some £3 million), and so unreasonable that she should bear some of the husband’s costs. On the other hand, the husband’s proposal was close to the amount awarded by the court.

The court therefore ordered the wife to pay £150,000 towards the husband’s costs, to be set off against the sum awarded to her.

The moral of the case is clear: yes, try to settle the case by negotiating, but you must negotiate reasonably, and you may be penalised if you do not.

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If the parties to a divorce cannot agree a financial settlement, then they will usually of course ask the court to decide the matter for them, by applying for a financial remedies order.

Obviously the court will require full details of the parties’ circumstances and financial affairs, before it can make a decision. This will include the disclosure of the most personal and sensitive information, material that most people would not want to end up in the public domain.

However, court judgments in financial remedy cases on divorce may be published, especially if the cases are heard in the higher courts, for example where they are more complex, or where there is an appeal.

Until recently, this was more often than not not a problem for those wishing to keep their affairs private, as most judgments were anonymised at the request of the parties, removing their names before they were published.

All that may have now changed.

Last November High Court judge Mr Justice Mostyn, who hears many financial remedy cases, announced that in future his ‘default position’ would be to publish financial remedy judgments in full without anonymisation, save that any children would continue to be granted anonymity. He made it clear that there would have to be a good specific reason to depart from this ‘rule’.

And Mr Justice Mostyn’s approach has recently been approved by Sir James Munby, the former President of the Family Division.

Sir James has said that there is no convincing objection to Mr Justice Mostyn’s default position. He explained that many types of litigation involve private and sensitive matters but were not anonymised – the right to privacy in a financial remedy case was not qualitatively different from that of the parties in, say, a family dispute about the ownership of a company or the distribution of an estate.

Mr Justice Mostyn’s position is not yet a firm rule that must be followed by all judges, and it is not universally supported amongst family lawyers, but it does now seem possible that it may become the norm.

So how do you ensure that your financial remedies case is kept private? The answer is to avoid going to court in the first place. The best way to do this of course is to agree matters with your (former) spouse.

And if you can’t agree matters then you could consider going to arbitration, whereby a trained arbitrator will decide the case for you, completely in private. Note, however, that not all cases are suitable for arbitration – your lawyer will be able to advise you as to whether your case is suitable.

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A quite extraordinary judgment has once again highlighted the folly of parties to family court proceedings pursuing their case with such ferocity that they run up vast sums in legal costs.

The case concerned a couple who have incurred the incredible sum of £5,401,503 in legal costs, in just 18 months of litigation concerning their children and their divorce.

And that is not the end of the story. The case is continuing and it has been estimated that the total costs may be as much as £8 million by the time it is finished.

The judge dealing with the case said that to run up such costs was “apocalyptic”.

Needless to say, such costs can seriously deplete, or even extinguish, the assets available for the parties in the future.

Now, obviously most people do not have such sums available to them to spend on legal costs. However, the case does still act as yet another reminder that anyone involved in family litigation should do all they can to keep their costs to a minimum.

But how can this be done?

Perhaps the first and most important point is to try to keep any animosity out of the proceedings.

Obviously, when a marriage breaks down feelings can run very high, with each party seeking to take out those feelings on the other party, within the court proceedings.

But such behaviour is inevitably destructive. There is nothing to be gained by it, and much to lose. The court simply isn’t interested in ‘points scoring’ – it is only interested in finding the best possible outcome to the case.

Difficult as it may well be, every effort should be made to keep animosity at the door of the court.

The second thing is to be realistic about what you are seeking from the proceedings. Many may, for example, want to prevent the other party from having contact with their children, when it is quite obvious that the court will expect contact to take place. And in the realm of financial proceedings, taking the other party ‘for every penny’ is simply not going to happen.

The answer is to take expert legal advice as to what the best outcome of the proceedings is likely to be, and to follow that advice. An expert family lawyer will not advise you to seek an outcome that is simply never going to happen.

The last thing is the most obvious: do everything you can to avoid going to court at all!

The very best way to avoid running up large sums in legal costs is of course to agree matters, rather than go through contested court proceedings.

This first of all requires the parties to adopt a constructive approach to the case, rather than an adversarial one, avoiding conflict wherever possible. Such an approach will help to put in place the conditions under which an amicable resolution of the matter is far more likely.

As to exactly how matters may be agreed out of court, there are several options. The most common way is for agreement to be reached via negotiation between the parties’ lawyers. Another possibility is to go to mediation, whereby a trained mediator will try to help the parties resolve their dispute by agreement.

In short, it should be possible in all cases to avoid running up exorbitant legal costs. Most cases are, in fact, agreed out of court. And even where contested court proceedings simply can’t be avoided, it is still possible to keep the costs to a minimum.

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Very often when a marriage breaks down one spouse will cut off financial support from the other, leaving the less well-off spouse in a perilous financial position.

Obviously, a financial settlement will be obtained in the subsequent divorce proceedings, but this could take many months. How does the less well-off spouse manage in the meantime?

The answer is that they can apply to the court for maintenance pending suit.

As the name suggests, a maintenance pending suit order requires one spouse to pay maintenance to the other for the duration of the divorce proceedings, i.e. until a final financial settlement is ordered.

A maintenance pending suit order can be made at any time after divorce proceedings have been issued.

By its nature a maintenance pending suit application is urgent, and therefore the court considering the application will not go into great detail regarding the means of the parties. Instead, it will adopt a broad-brush approach, concentrating upon the applicant’s immediate needs and the respondent’s readily available income and resources.

The applicant’s needs do not include their legal costs for the proceedings, but the applicant can make a separate application for an order that the respondent contribute towards their costs.

The court will try to make an order that it considers to be fair, and a very important factor in determining fairness will be the standard of living enjoyed by the parties during the marriage.

Both parties will be required to make full disclosure of their means, and if the respondent fails to do so then the court is entitled to make ‘robust assumptions’ about their ability to pay. 

If it later becomes clear that the maintenance pending suit order was too high or too low, then an appropriate adjustment can be made in any final financial remedy order.

As indicated above, a maintenance pending suit order comes to an end when the divorce is finalised. However, if the court considers that the maintenance should continue after the divorce, then it can convert the order into an interim maintenance order, which will last until such time as the court makes a final financial remedies order.

If you need to apply for a maintenance pending suit order you should seek the advice of an expert family lawyer, at the earliest possible stage. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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If you have acquired assets completely independently of your spouse, for example assets owned by you prior to the marriage, then it may seem unfair to you that your spouse should share in those assets when it comes to divorce.

In such a case you should be aware of the principle of ‘matrimonial property’.

Essentially, the principle says that, subject to the exception we will mention in a moment, only ‘matrimonial property’ should go into the pot for division between yourself and your spouse on divorce.

So what is ‘matrimonial property’? The term refers to assets acquired during the marriage, through the joint efforts of the parties to the marriage. Accordingly, anything that was acquired by one of the parties before the marriage is not ‘matrimonial property’. (Similarly inheritances, gifts to one party and assets acquired after the separation are considered to be ‘non-matrimonial’).

The exception to the rule that only matrimonial property is divided between the parties is that where the matrimonial property is not sufficient to meet the financial needs of the parties then non-matrimonial property may be used to meet those needs.

The principle of matrimonial property arises quite frequently. A recent example demonstrates it being argued by a husband, in a Family Court case last October.

In the case the husband acquired an interest in a family business prior to the marriage. He therefore argued that the value of his interest in the business at the time of the marriage was not ‘matrimonial property’, and therefore should remain his property (the exception to the rule above did not apply, as the ‘matrimonial property’ in the case was more than sufficient to meet the parties’ needs).

The wife, however, claimed that the business had been ‘matrimonialised’ over the course of the marriage, and should therefore be divided equally, along with the other assets.

The judge agreed with the wife. A particular reason for this was that in 2016 the husband restructured the business, leaving him and the wife with equal shareholdings in part of the business, with the balance belonging to the children. This effectively meant that the husband acknowledged that his interest in the business was not worth more than the wife’s.

Accordingly, the judge ordered that the parties should share all property equally.

If you wish to argue that certain property is or is not ‘matrimonial’ you should seek the advice of an expert family lawyer. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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‘Financial remedy’ is a term used to describe various types of family law court applications concerning money or property. The most common type of financial remedy application is made in connection with divorce proceedings, but they are made in other situations as well.

Whatever the situation, the court will require both parties to provide relevant details of their means, so that it can decide the case. This is achieved by the parties completing a financial statement, known as a ‘Form E’, and sending copies to the court and the other party.

But there are different types of Form E, depending upon the type of application. These are designated Form E, Form E1 and Form E2.

So which one should you use?

As mentioned, the most common type of financial remedy application is in connection with divorce proceedings. For this, you should use the ‘original’ Form E, which is the most comprehensive of the three forms.

This Form E is also used in financial remedy applications on civil partnership dissolution, judicial separation, annulment and applications for financial relief after an overseas divorce.

But in some financial remedy situations the court does not need to have all of the information required by the original Form E.

This is where Form E1 comes in. Form E1 is used for all other types of financial remedy application, for example an application for financial provision for a child, usually made by a parent who was not married to the other parent.

Which leaves us with Form E2. Form E2 is used on an application to vary a financial remedy order. The most common situation here is where there is a spousal maintenance order, and one spouse wishes to increase or decrease the amount of the maintenance. Form E2 is the shortest of the three forms, as the court only requires limited information to decide the application.

You can find some tips on completing a Form E in this post, although as stated there you should really seek the assistance of an expert family lawyer. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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When a husband and wife cannot agree a financial settlement on divorce one of them will make a financial remedies application to the court, asking the court to decide the matter.

Obviously, the court cannot decide what would be an appropriate settlement without full details of both parties’ means. The parties are therefore required to complete a financial statement, setting out details of their income, outgoings and assets. The statement is known as a ‘Form E’.

The parties must exchange copies of the Form E and file it with the court on a date set by the court, which will be not less than 35 days before the First Directions Appointment.

The Form E can be quite a daunting document, so here are six tips to help you complete it.

1. Read through the whole form before you begin completing it, paying particular attention to the notes on the form, especially the warning on the front page that you have a duty to the court to give a full, frank and clear disclosure of all your financial and other relevant circumstances.

2. Once you have been through the form you will know what information you will need to complete it. Gather together all of the required information before completing the form. Adding information later may require amending the form in more than one place.

3. Similarly, the form requires you to produce various documents, as set out in the schedule at the end of form. Gather those documents together before completing the form (you may need to request certain documents, such as pension valuations). If you are not able to obtain any documents in time for filing the form with the court, tick the ‘To follow’ box on the schedule.

4. When completing the form don’t be tempted to miss items out, or to undervalue items – doing so could lead to you incurring further costs down the line, and could even lead to any final order that the court makes being set aside.

5. Perhaps the most important part of the form is section 5, in which you tell the court what order you are seeking, if you are able to do so (you may not be able to do so, as you may not be sufficiently aware of other party’s means). Whatever you say here will obviously have a bearing upon any final order that the court may make, so you should really seek advice before completing this section. Which leads us to…

6. Lastly, take legal advice! Form E is perhaps the most important document in a financial remedies application. It may, in theory at least, be designed for completion by a layperson, but it really needs the input of an expert lawyer, in all but the simplest of cases. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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When the court decides what financial settlement is appropriate on divorce it will take into account a number of factors, including not just the financial assets of the parties, but also their debts.

This means that if a party has significant debts then they may be granted a larger settlement, so that they have the means to pay the debts.

But what if, as is often the case, the debts, or at least a large part of them, comprise the legal costs incurred by the party in the financial remedy proceedings? Are these still taken into account by the court?

Before looking at the answer we must consider the rule as to payment of legal costs in financial remedy proceedings.

The rule is essentially quite simple: each party must normally pay their own legal costs. The court can order one party to pay the other’s costs, but only where this is justified by that party’s conduct in the proceedings, for example failing to comply with court rules, or failing to negotiate reasonably.

Now, the reader may have spotted a problem with taking a party’s legal costs into account when deciding how much that party should receive in the financial settlement. Surely, if that party receives a larger settlement, doesn’t this effectively mean that the other party is paying their legal costs, contrary to the costs rule?

Not necessarily so, as a recent family court appeal case demonstrated.

When deciding a financial remedies case on divorce the court must take into account the financial needs of the parties, and this includes their need to pay debts, which may include their legal costs.

In the case the judge accepted that giving a party a larger lump sum to cover their legal costs has the effect of relieving that party of their obligation to pay their lawyers, in the same way as a costs order would. However, the purpose of the larger award is quite different to a costs order: to ensure a fair settlement, rather than to ‘punish’ the other party for their misconduct.

Here, the failure of the court to include the wife’s legal costs in the lump sum awarded to her meant that she would have to pay those costs out of the sum the court allowed her in respect of her housing needs, thereby not leaving her with enough to obtain suitable rehousing. The wife appealed against this decision, and the appeal court allowed the appeal.

This case makes it clear that legal costs can be taken into account as a debt for the purpose of a divorce settlement.

It should be mentioned, however, that the appeal judge pointed out that each case is fact-specific. Costs will not always result in a larger settlement – it depends upon the circumstances of the case, including the available assets and the needs of the parties.

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When money is tight, a divorce settlement will usually be decided by reference to the financial needs of the parties. But sometimes a party’s legal costs can leave them without enough money to cover their needs.

In such circumstances the court will do what it can to ensure that needs are met, as a recent case demonstrates.

Housing needs

The case concerned what was described as “a straightforward financial remedy case”. Unfortunately, it also involved a high degree of animosity between the parties, as a result of which they ran up disproportionately high legal costs.

The wife owned all of the assets, including the former matrimonial home. The central issue in the case was that the husband would have to rehouse himself.

The judge determined that the husband should purchase a home for himself, and that he needed £400,000 for this, plus £25,000 to cover the costs of purchase, and the purchase of a small car.

However, the husband had debts of £257,000, including legal costs of £186,000. Clearly, the husband could not pay all of his debts out of the sum of £425,000, whilst still rehousing himself. Accordingly, the judge awarded him an extra £200,000 towards payment of his debts, making the total award £625,000.

The wife appealed against the debts part of the award, which she said was tantamount to ordering her to pay the husband’s legal costs. The appeal was ultimately dismissed, as the Court of Appeal held that the award was an order that the judge was entitled to make.

In short, if the court did not provide for the husband’s debts, then his needs would not be met.

Conduct not relevant

There is another aspect of the case that merits comment.

In earlier proceedings between the parties over arrangements for their child the court found that the husband had been violent towards the wife on two occasions, and at one stage in the financial proceedings the judge had suggested that it would be wrong to allow the husband his costs where such a finding had been made.

However, the Court of Appeal said that such violence could only be taken into account with regard to the financial settlement if it amounted to conduct that was so serious that it could not be disregarded.

Clearly, the husband’s conduct was not that serious. Indeed, as the Court of Appeal said, conduct is only rarely relevant to the issue of a financial settlement on divorce.

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The long-running divorce between Russian oligarch Farkhad Akhmedov and his former wife Tatiana Akhmedova has settled at last.

In 2016 the High Court ordered that Ms Akhmedova should receive the sum of £453 million, believed to be the biggest divorce award in this country. Since then, Ms Akhmedova has been attempting to enforce the award.

The latest round of this battle took place in the High Court in London recently, when Mrs Justice Knowles found that Mr Akhmedov had transferred money to various trusts, a company and the parties’ son Temur, with the intention of putting his assets beyond the reach of Ms Akhmedova. Accordingly, she ordered the trusts and company to make payment to Ms Akhmedova, and Temur was ordered to pay her some £75 million.

In the course of her judgment Mrs Justice Knowles described the Akhmedov family as “one of the unhappiest ever to have appeared in my courtroom.”

It has now been reported that the case has settled, with Ms Akhmedova agreeing to receive the sum of £150 million. Representatives for Mr Akhmedov said that he had agreed to pay her £100 million in cash and about £50 million in artworks. (The family assets include a modern art collection, which includes pieces by Andy Warhol, Mark Rothko and Damien Hirst, and which has been valued at £112 million.)

A spokesman for Mr Akhmedov claimed that Ms Akhmedova had ended up with “not a penny more” than she had been offered by Mr Akmedov six years ago.

It has also been reported that Ms Akhmedova has spent some £75 million on litigation funding and legal fees.

As far as we are aware Ms Akhmedova has not commented, either upon the settlement or the issue of her costs.

All of the above suggests, however, that Mr Akmedov may have got his way (although the settlement will still have to be approved by the court), and that Ms Akhmedova has lost out considerably, as a result of Mr Akhmedov’s failure to comply with the 2016 order.

That would certainly an unhappy message to take from this case, on top of the comments made by Mrs Justice Knowles.

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It may be thought that the idea of being imprisoned for failure to pay a debt belongs in the dark past of our legal history.

But anyone who believes that a debtor cannot now be sent to prison would be quite wrong.

Someone who is owed money under a court order, including a financial order made on divorce, can apply to the court for the debtor to be committed to prison for a term not exceeding six weeks, or until payment of the sum due. This procedure is known as a ‘judgment summons’.

And a recently published case is an example of this occurring in practice.

The case concerned a lump sum order made in February 2020. Under the order the husband was to pay to the wife the sum of £5,878,732. That sum was to be paid by instalments, the first instalment of £50,000 to be paid the day after the order was made, a further instalment of £647,732 to be paid by the 2^nd of March 2020, and the remaining sum of £5,181,000 to be paid by the 2^nd of March 2022.

The husband did not pay the first two instalments, and the wife applied for a judgment summons.

Before committing the husband to prison the court had to be satisfied that the husband had the means to pay the instalments, and refused or neglected to pay them.

The judge was not satisfied that the husband had the means to pay the second instalment, but was satisfied he had the means to pay the first instalment, and had refused or neglected to pay it. Accordingly, he sentenced the husband to the maximum prison term of six weeks.

However, the judge said that he did not want the husband to go to prison – he wanted the wife to be paid the money she was due. He therefore gave the husband 14 days to pay the sum of £50,000. If he did not pay that sum in full by then, he would go to prison for six weeks.

If you are owed money under a financial remedies order made on divorce then you should take legal advice as to how you may enforce payment. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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A recent Family Court case says at least two important things about sorting out finances on divorce. It also says a number of other things, but we will concentrate on two here: the perennial issue of depleting the available assets by running up excessive costs, and the age-old settlement method of ‘splitting the difference’.

The two things are, of course, closely connected: the best way to keep your legal costs to a minimum is to resolve the matter by agreement, and this may obviously entail each party settling for less than they were originally seeking.

The case concerned the division of assets of some £2.6 million, most of which had been inherited by the husband. Very sadly, in 2018 the wife had been diagnosed with Young Onset Alzheimer’s, which will have a significant effect on her life expectancy and medical needs during her remaining years.

We are told that at the start of the case the wife was seeking £1.2 million of the assets, and the husband proposed that she should receive £750,000, a difference of £450,000.

We are also told that the combined legal costs of the parties came to about £483,000, slightly more than the difference the difference between the two proposals. As the judge said:

“This is not a “big money” case by any stretch; the costs represent about 18% of the wealth, which is clearly disproportionate. To that should be aggregated the emotional toll which usually accompanies litigation of this nature.”

This is such an important message. So often parties to financial disputes drain the very assets they are arguing over, by running up excessive legal costs.

And in the end the judge ordered that the wife should have £953,000, which represented some 37 per cent of the assets. We will not go into the details of how he calculated this sum, but it is notable that, as in so many cases, the award ‘splits the difference’ between the parties’ proposals.

The lesson is clear: very often the answer to how a case should be settled lies quite simply between how much each party is proposing. This can surely not be unexpected, given that each party should set out openly what their proposals are. The court therefore knows the proposals before deciding the case, effectively setting an ‘upper limit’ upon what each party should receive.

Of course, this is not to say that the court will always ‘split the difference’. Sometimes, it may decide that it is fair to award a party all that they are seeking.

The ultimate lesson is to take expert legal advice, and to pitch any proposal accordingly.

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Maintenance for a spouse, usually the wife, is a relatively rare thing nowadays. But spousal maintenance orders are made, and sometimes they are for a purely nominal sum, such as five pence per annum.

But what is the point of such an order? The point is that, like any maintenance order, it can be varied (i.e. increased) at a later date. A nominal maintenance order of itself is meaningless, but it does give the court the opportunity to increase the maintenance at a later date, if circumstances require.

So what kind of circumstances may give rise to a nominal spousal maintenance order being increased? A recent family court case has shed some light upon this.

Before we look at the case we should say that the law essentially states that a maintenance order may be varied (i.e. increased or decreased) if there has been any change in the circumstances (in particular the financial circumstances) of either party.

But, as we will see, to trigger the variation of a nominal order, the change in circumstances has to be something significant, rather than just an increase or decrease in the income or outgoings of either party.

In the case the wife had a nominal maintenance order made in her favour in 2012. She worked as an airline pilot and, when the pandemic struck, she lost her job. She therefore applied to the court to have the nominal maintenance order increased, to cover the shortfall in her income.

The family court was not prepared to increase the order. The judge said that there was no causal connection between the marriage and the wife’s loss of employment, in these circumstances nearly a decade later. Further to that, it was probably the case that the wife would find new employment once the pandemic was over.

Putting it another way, the judge said that if the wife had, relatively soon after the end of the relationship, suffered a significant work-related disadvantage as a result of the marriage, then the court might be prepared to increase the nominal order. That is not, however, what happened here.

Accordingly, the wife’s application was dismissed.

If you or your former spouse are considering applying to vary a maintenance order, then you should seek the advice of an expert family lawyer. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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The Family Court has refused to publish in full the judgment in a financial remedies case involving the billionaire part-owner of The Daily Telegraph Sir Frederick Barclay. However, the judge did make part of the judgment public, to let the public know about Barclay’s ‘reprehensible’ behaviour.

The case concerned an application for financial remedies made by Barclay’s wife, in connection with their divorce. The case generated considerable media interest, and Barclay argued that no part of the proceedings should be published.

The media, on the other hand, argued that as Barclay is a public and political figure there was a public interest in the judgment being published in full, particularly as the judge, Mr Justice Cohen, had criticised Barclay for his conduct during the course of the proceedings.

Mr Justice Cohen said that Barclay had repeatedly ignored orders to produce documents and answer questions. He had also ignored an order to sell a yacht and produce the proceeds, instead applying the proceeds for his own use. Mr Justice Cohen described this behaviour as ‘reprehensible’.  

Mr Justice Cohen held that the judgment should not be published in full. The starting-point was that proceedings such as this were highly personal and should therefore be private. Whilst it was the case that Barclay had behaved badly, that behaviour was not sufficiently bad to warrant the publication of the entire judgment.

However, Mr Justice Cohen found that the public did have an interest in knowing about Barclay’s behaviour, and therefore he did set out details of that behaviour, in his judgment dealing with the issue of publication of the full judgment.

Lady Barclay was awarded lump sums totalling £100 million, payable in two instalments of £50 million. Barclay was also ordered to pay all of her legal costs, to the tune of some £1.8 million.

The moral of all of this is clear: you can ask the court to keep your financial affairs private, but do not expect full protection if you do not behave yourself in the proceedings!

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We have written here previously about the efforts of Tatiana Akhmedova to recover the divorce settlement she was awarded from her ex-husband Russian oligarch Farkhad Akhmedov – see, for example, this post.

To recap, in 2016 the High Court ordered Mr Akhmedov to pay to Ms Akhmedova the sum of £453 million, believed to be the biggest divorce award in this country. Since then, Ms Akhmedova has been attempting to enforce the award.

The latest round of this battle took place in the High Court in London in November and December last year, and the judgment of Mrs Justice Knowles has just been published.

Ms Akhmedova was alleging that Mr Akhmedov had done everything he could to put his money out of her reach, with the assistance of the parties’ son, Temur.

And Mrs Justice Knowles agreed. She said that Ms Akhmedova had “been the victim of a series of schemes designed to put every penny of the Husband’s wealth beyond her reach.” That strategy, she said, “was designed to render the Wife powerless by ensuring that, if she did not settle her claim for financial relief following their divorce on the Husband’s terms, there would be no assets left for her to enforce against.”

Temur had confirmed in his oral evidence that the Husband would rather have seen the money burnt than for her to receive a penny of it.

Temur, said Mrs Justice Knowles, learned well from his father’s past conduct and had done and said all he could to prevent his mother receiving a penny of the matrimonial assets. She found that he was “a dishonest individual who will do anything to assist his father, no doubt because he is utterly dependent on his father for financial support.”

Mrs Justice Knowles found that Mr Akhmedov had transferred money to various trusts, a company and Temur, with the intention of putting his assets beyond the reach of Ms Akhmedova. Accordingly, she ordered the trusts and company to make payment to Ms Akhmedova, and Temur was ordered to pay her some £75 million.

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It is sadly a feature of financial remedy disputes on divorce that couples expend disproportionate amounts of their assets on legal costs, arguing over who should have what. Sometimes, their legal costs even exceed the value of their assets, making the entire exercise somewhat futile.

Over the years family judges have often criticised couples for spending inordinate sums arguing over the division of their assets. We have written about this here previously, for example in this post in 2017.

And now another such case has been published. It is worth mentioning as a reminder of the folly of running up disproportionate legal costs.

And unlike so many of these cases, this one did not involve parties of great wealth. In fact, in the end they were arguing over negative assets.

The reason for this was that the parties’ assets were quite modest to begin with, and they ran up legal costs arguing over their division, greater than the value of those assets. The wife alone ran up legal costs in excess of £61,000. The end result was that their joint debts amounted to some £57,000.

And they did this despite the judge warning them at an earlier hearing that there was “a danger in this case that the cost of litigation and any final hearing will be disproportionately high relative to the asset base.”

The parties did, in fact, reach an agreement a few months before the final hearing, but they (in particular the wife) continued to argue over certain peripheral matters, with the result that the case dragged on to the final hearing.

In the end the judge made an order that was basically the same as what had been agreed previously. The husband therefore asked the judge to order the wife to pay his legal costs from the date of the agreement, amounting to some £29,000.

The judge found that both parties had been at fault in allowing the case to go to the final hearing, but also found that most of the fault lay with the wife. He therefore ordered the wife to pay £10,000 towards the husband’s costs.

All of the above led the judge to comment: “The level of costs in these proceedings has been ruinous to the parties. It is utterly disproportionate to the assets involved. To put the issue in context, the wife’s costs alone are just short of £4,000 in excess of the parties’ joint deficit.  Issues have been pursued which did not merit any significant expenditure of costs. Warnings as to the costs being incurred have gone ignored.”

The moral is quite clear: do everything you reasonably can to settle matters by agreement, always bear in mind the costs you are incurring, and always see the larger picture.

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The concept of ‘matrimonial property’ can be of great importance when considering the division of assets between husband and wife on divorce. But what exactly is ‘matrimonial property’, and how does this affect the division?

In simple terms, ‘matrimonial property’ is property that came into being in the course of the marriage, due to the joint efforts of the spouses. Accordingly, property owned by either spouse before the marriage is usually ‘non-matrimonial’, as is property acquired after the parties separated, or property acquired other than by the efforts of the spouses, such as gifts or inheritances.

The importance of the concept of matrimonial property comes from the basic idea that marriage is a joint venture, and therefore on divorce each spouse should be entitled to an equal share assets acquired during the marriage as a result of their joint efforts (whether those efforts involved actually acquiring the asset, or enabling the other party to do so, for example by looking after the home and bringing up the family).

But it should be noted that there is no absolute rule saying that on every divorce each party should get half of the matrimonial property, and keep any non-matrimonial property they own. The court has a discretion to divide ALL property as it sees fit, having regard to the circumstances of the case. Thus, for example, a party may be awarded more than half of the matrimonial property and, if the matrimonial property is insufficient to meet their financial needs, then they may even be awarded non-matrimonial property belonging to the other party.

The operation of the concept of matrimonial property was demonstrated by a recent Family Court case.

In the case there were assets totalling £54 million in value. These included a £5 million inheritance that the wife received, and £9 million in trusts established by the wife’s family.

On the face of it both the inheritance and the trust money was non-matrimonial, but the husband argued that because he had managed the trust money for some 16 years, that had the effect of ‘matrimonialising’ it. Accordingly, he said, he was entitled to a half share.

The judge did not agree. The trust money had not acquired a matrimonial character, either in whole or in part, as a result of the husband’s activities as investment manager.

The judge therefore held that only £40 million of the assets were matrimonial, and, there being no reason to depart from equality, each party was therefore awarded half of that sum.

The discussion of matrimonial property above is just a very brief introduction to what can be a complex subject. For more details, you should consult an expert family lawyer. We can find you an expert lawyer that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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A recent Family Court case acts as a warning to separating couples of the importance of finalising divorce financial agreements, and the perils of not doing so.

The case concerned a couple who separated in 2010. At that time they had various jointly owned assets, so in 2012 they agreed upon a division of the assets between themselves. Unfortunately, the agreement was never legally finalised.

In 2019 the wife commenced divorce proceedings, by which time the husband’s assets had risen in value considerably. This meant that the assets the wife received under the agreement represented only about 11 per cent of the total assets by the time of the divorce.

The wife issued a financial remedies application, seeking a significantly greater share of the assets. She was able to do so as the 2012 agreement had never been legally finalised, either by being put into a consent court order or, if there are no divorce proceedings, by being incorporated into a written separation agreement.

Both a court order and a separation deed really need to be prepared by lawyers, but the cost is relatively small, especially when compared to the cost of contested financial remedy proceedings.

The wife’s application was eventually dealt with by the court, and she was awarded a modest extra sum, although nothing like as much as she was seeking.

However, by the end of the final hearing the legal costs of both parties exceeded half a million pounds. This led the judge to comment “that an expenditure of perhaps a few thousands of pounds of legal costs in 2012 [on finalising the agreement] might well have saved and avoided the catastrophic expenditure of over £500,000 now.”

Obviously, separating couples should do all they reasonably can to resolve financial matters by agreement. However, they must then make sure that the agreement is legally finalised, so that there can be no come back later.

Family Law Café can find an expert family lawyer to help you both reach and finalise a financial agreement, working with you via our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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We wrote here in January about a case in which the husband was seeking rent from the wife in relation to her occupation of the former matrimonial home.

As we explained then the husband was appealing to the Court of Appeal against a ruling that the wife was not liable to pay rent of £5,000 per week (a total of £600,000) to the husband in relation to the period that she occupied the property before it was sold.

The Court of Appeal has now handed down its judgment. It found in favour of the wife, and therefore dismissed the husband’s appeal.

The appeal revolved around the interpretation of a consent court order that was drawn up in 2016, setting out the terms of an agreed financial settlement between the husband and the wife.

The order provided that the wife was to receive a lump sum settlement of £11.5 million, £6.5 million straight away, with the balance due when the house was sold. However, the sale was delayed, and did not take place until 2019.

The order did not specifically state that the wife should pay rent to the husband, but the husband argued that it would be ‘absurd’ not to imply a term into the agreement requiring the wife to pay rent – the parties would surely have agreed this had they known that the sale would take so long.

The Court of Appeal disagreed. The matter turned solely upon what the consent order said. As it did not say that the wife should pay rent, she was not obliged to do so.

The case demonstrates the need to be specific when drafting court orders. Care should be given to take into account all reasonable possibilities, and to provide for them accordingly, either by agreeing the matter with the other party, or by requesting the court to include a suitable provision in any order.

It may now be that a rental clause will be sought in any similar agreement, as a matter of course.

But that obviously means that this would have to be taken into account when negotiating the amount that the occupying spouse should receive from the settlement. As Lady Justice King, giving the leading judgment of the Court of Appeal, pointed out, the only way that the wife could pay £600,000 would be from her lump sum, thereby reducing the lump sum by a “very significant sum”.

Clearly, whichever side you may be on, you will need to obtain the best possible legal advice. We can provide the advice you need, by finding you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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When deciding what, if any, financial orders to make on divorce the court is required to consider a checklist of factors. One of those factors is the contributions which each of the parties has made to the marriage.

Contributions can be financial, or they can be non-financial, such as looking after the home, or caring for the family. They can be both past contributions and future contributions.

In appropriate cases contributions can have a significant bearing upon the outcome of the case, where it would be unfair to disregard the fact that one party had made a much greater contribution than the other. This is most likely in high-money cases, as in low money cases the assets are usually required to pay for the financial needs of the parties, irrespective of who contributed what.

Contributions were a major factor in a recent Court of Appeal case. The case made the national news, as it involved a well-known BBC executive. She argued that she should have a greater share of the matrimonial assets, not just because of her substantial financial contribution towards the marriage, but also because, she claimed, her husband had made a negative financial contribution.

The case concerned her appeal against a financial award, which had already been amended in her favour following an earlier appeal.

Briefly, the circumstances of the case were that the parties were married in 1993 and have two children, twins, born in 2011. The husband is now aged 69 and the wife 57. The parties separated in 2012/2013 when the husband left the former matrimonial home. The husband has not sought to have any real contact with the children since the separation.

The wife has, for many years, worked for the BBC, and the husband has not worked for some time. The wife was earning a substantial sum, had some savings and a BBC pension worth some £2 million.

The husband, on the other hand, had a very small pension, and significant debts.

The parties also jointly owned a number of properties, with a net value of just over £2 million.

The wife argued that the husband’s contribution was “significantly negative”, and that the imbalance between the respective contributions of herself and the husband justified a significant departure from an equal division of assets. The court did not agree that the husband’s contribution was negative, but did find that it was “modest”. The wife was therefore awarded 63.5% of the non-pension assets. The pensions were shared equally.

The wife appealed. Her appeal was allowed, and her share of the assets was raised to 73%, and the husband’s share of the pensions was lowered to 34%.

The wife did not think that this went far enough and appealed again, to the Court of Appeal.

The Court of Appeal dismissed the appeal. It found, amongst other things, that the “negative contributions” argument was not actually about contributions at all, but rather about the husband’s conduct – contributions are positive, not negative. Here, the husband’s conduct was not sufficiently bad as to affect the financial settlement.

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Obviously, when a married couple separate one of them is likely to remain living in the former matrimonial home, even if just for a limited period.

But this of course means that the party who left will have their interest in the property tied up, with them receiving no benefit from it.

Wouldn’t it be fair if the party still enjoying occupation of the property should pay rent to the party who left?

The answer to that is: ‘perhaps’, as a recent case, which has made headlines in the national newspapers, demonstrates.

The case concerned a couple who had lived in a five-bedroomed house in Kensington, which was owned by the husband. The marriage broke down and the husband left the property in 2014.

In 2016 the couple agreed a divorce settlement, whereby the wife was to receive a settlement of £11.5 million. She received an initial £6.5 million and was due the balance when the house was sold. However, the sale was delayed in the difficult post-Brexit referendum property market, and did not take place until 2019.

The husband demanded that the wife, who continued to occupy the house until it was sold, pay him £600,000 in back-dated rent, at the rate of £5,000 per week. The wife refused, claiming that she had the right to live in the property rent-free, until it was sold.

The husband took the matter to the court and last year the High Court ruled in favour of the wife. The husband recently appealed against that decision to the Court of Appeal, which will give its decision at a later date.

The decision of the High Court may be thought to suggest that a spouse living in the former matrimonial home cannot be forced to pay occupational rent, as it is called, to the other spouse. However, that is not so.

It is quite possible for a divorce settlement to include an occupational rent provision. The point in this case is that the settlement did not include such a provision, and the husband argued that such a provision should be inferred. Obviously, the High Court did not agree.

It is also possible in certain circumstances for a court to order a spouse to vacate the matrimonial home, and then order that the other spouse should pay them an occupational rent, although such orders are quite rare.

Obviously, anyone considering claiming occupational rent from their (former) spouse should first seek the advice of an expert family lawyer. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Café offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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We have written here previously about the divorce of Tatiana Akhmedova, former wife of Farkhad Akhmedov, the Russian oligarch and ally of Russian president Vladimir Putin.

In 2016 Ms Akhmedova was awarded a divorce settlement of £453 million by Mr Justice Haddon-Cave in the High Court. It was, and remains, the largest ever divorce award by a court in this country.

Unfortunately, however, Mr Akhmedov has failed to pay the award, and Ms Akhmedova has therefore been endeavouring to enforce payment.

The case has now returned to court as part of those efforts to enforce the award. Ms Akhmedova alleges that Mr Akhmedov transferred cash and assets to their son Temur, in order to avoid paying her the money. Mr Arkmedov and Temur deny the allegation.

The allegations have led to a breach between Ms Akhmedova and Temur, who is reported to have said that he would “never be reconciled” with his mother because “her outrageous, revengeful behaviour” has destroyed their once close relationship.

The case may obviously be interesting to the general public because of the people and amounts of money involved, but can those of ‘ordinary’ means who are going through divorce learn anything from it?

They certainly can. There are at least two lessons that apply in most financial remedy cases.

The first lesson is that getting a financial award is not necessarily the end of the matter. In fact, it may be only half of the battle. An award is of no value if it is not paid, and all too often the party ordered to make payment fails to do so, necessitating enforcement action by the party to whom the award was made.

And enforcement action can be long and expensive, as this case demonstrates. In short, anyone seeking a financial award from the court on divorce should understand that getting an award is not necessarily the end of the matter, and should be prepared to ‘be in it for the long run’.

The other lesson is that long acrimonious divorces can destroy families, with children and other family members ‘taking sides’. As we have seen, this can cause irreparable damage to family relationships.

Now, there may not have been anything that Ms Akhmedova could have done to prevent the breach that has happened between herself and her son, but parties should certainly think very hard before they involve other family members, particularly children, in the proceedings.

And protecting the wider family, and especially any children, from becoming embroiled in an acrimonious dispute is just one of the many reasons why parties to divorce should make every reasonable effort to resolve the matter by agreement.

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If you need to sort out financial arrangements on divorce then you should seek expert legal advice. We can find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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Last week we looked at the procedure to be followed to get a financial remedy order, setting out the financial settlement on divorce. But getting the order is not necessarily the end of the matter.

The order must still be complied with. What if the other party does not comply with it? What can you do? After all, an order that cannot be enforced is not worth the paper it’s written on.

Well, there are various different ways of enforcing financial orders. Which one is appropriate will depend upon the particular situation.

Enforcing Maintenance Orders

Because of their continuing nature, maintenance orders present special problems when it comes to enforcement. Normally, the amount that the court will enforce is fixed at the date of enforcement, meaning any future non-payment will have to be enforced separately.

For this reason, the most appropriate method of enforcing a maintenance order is by applying for an attachment of earnings order, whereby the debtor’s employer is required to deduct the maintenance and a sum towards any arrears from the debtor’s salary, and pay that to the court, for onward payment to the creditor.

Obviously, attachment of earnings orders can only be made where the debtor is employed. If they are not, then another method of enforcement will have to be used – see below.

Enforcing Orders for Transfer or Sale of Property

It is not uncommon for a party to refuse to obey an order to transfer a property, usually the former matrimonial home, to the other party. In this case, or where the transferring party cannot be found, application may be made for an order that the conveyance or transfer be executed by a district judge, instead of the transferring party.

Where there is an order for sale of property, and one party refuses to cooperate with the sale by refusing to give up possession of the property, then an application may be made for an order that that party deliver up possession to the purchaser or to whomever the court directs, to allow the sale to proceed.

Other Forms of Enforcement

There are a number of other methods of enforcing a financial remedy order. Here are some of the most commonly used:

Third party debt order – An order directing a third party who owes money to the debtor (e.g. the debtor’s bank) to pay the debt directly to the creditor.

Charging order – An order of the court placing a charge on the debtor’s property, to the value of the debt. The debt is therefore secured, and can subsequently be recovered by seeking an order for the sale of the property.

Execution against goods – Requiring the court bailiff to attend the debtor’s premises and seize goods to the value of the sum due. The goods will be sold and the proceeds used to pay the debt.

Judgment summons – This is a procedure whereby the debtor is required to attend court, where he will be examined under oath as to his means and will have to explain why he should not be committed to prison for failure to comply with the order. In practice, any committal order is likely to be suspended on condition that the debtor pay the amount due by a specified date, or by specified instalments.

And finally, what if you don’t know what method of enforcement to use? Well, then you can make a general enforcement application, seeking ‘such method of enforcement as the court may consider appropriate’.

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If you have a financial remedy order that you need to enforce then we would strongly recommend that you obtain the advice of an expert family lawyer. We find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe’s accessible team of legal experts from various disciplines expedites the customer’s case and keeps them informed and in control 24/7 through a unique and secure online portal. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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Last week we looked at the principles that the courts use to decide financial remedy applications on divorce. This week we will look at the procedure on such applications including, in particular, the Form E financial statement.

To keep things simple we will divide the procedure into five stages, although what actually happens in any particular case may differ.

Stage 1 – The Mediation Information and Assessment Meeting (‘MIAM’).

Before issuing the application you may have to attend a Mediation Information and Assessment Meeting. As that name suggests, the primary purpose of the meeting is to assess whether the case is suitable for mediation. Some people are exempt from the requirement to attend a MIAM.

Stage 2 – The application (‘Form A’).

If the case does not go to mediation then the application will be made, by completing a ‘Form A’ and filing it with the court, with the requisite court fee.  The court will then fix a date for the First Directions Appointment (‘FDA’ – see below), and timetable certain actions that should be taken by the parties. In particular, not less than 35 days before the FDA each party must file with the court and serve upon the other party a Form E financial statement, more of which in a moment.

Stage 3 – The First Directions Appointment (‘FDA’).

Both parties will have to attend the FDA. The main purpose of the FDA is to ascertain what the issues between the parties are, and to decide how the case should proceed. The court will then give directions as to what should happen next, and when.

Stage 4 – The Financial Dispute Resolution appointment (‘FDR’).

The next stage in the proceedings is usually a Financial Dispute Resolution appointment, or ‘FDR’. At the FDR the parties will be expected to use their best endeavours to reach agreement on the issues between them, with the assistance of the judge. If agreement cannot be reached, then the court will fix a date for the final hearing.

Stage 5 – The final hearing.

A full hearing of the case, at the end of which the judge will make their decision, and a final order will be made.

Form E

The Form E financial statement is the most important document each party will have to prepare in the course of the proceedings. In it, they must disclose full details of their means, including their income, their savings and capital assets, their pensions and any debts they have. In addition, certain specified documentary evidence, such as bank statements, must be attached to the form. You can see a Form E here.

Each party has a duty to fully and truthfully complete the Form E, as without full and accurate information about the means of both parties, the court cannot make a decision. Obviously, the other party does not have to accept the contents of the form at face value. If they believe that full disclosure has not been made then they can request further information or documentation in a questionnaire, which they will prepare before the FDA. The court can order the party to whom the questionnaire is directed to provide replies.

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If you are or may be involved in financial remedy proceedings then we would strongly recommend that you obtain the advice of an expert family lawyer. We find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Café offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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Last week we looked at the range of orders that the court can make when deciding a financial remedy claim on divorce. But how does the court decide what orders to make?

If all else is equal…

The starting-point in all cases is what is known as the ‘sharing principle’.

The sharing principle states that marriage is a partnership and that when the marriage ends each party is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary.

The sharing principle will be the determining factor in many cases.

The next question, of course, is what is a ‘good reason to the contrary’?

Needs must

The most common reason is the needs of the parties, especially in cases where resources are limited.

The court will try to ensure that the basic needs of both parties (in particular income and housing needs) are met, and if one party has greater financial needs than the other then it may be appropriate for them to have a greater than half share of the assets.

A typical example of this is where dependent children live with just one of the parties. That party will obviously need to have suitable accommodation for the children, and their housing needs will therefore be greater than the housing needs of the other party.

Needs will also of course have a bearing upon whether a maintenance order is appropriate, and what pension sharing order, if any, should be made.

Note that needs are ‘generously interpreted’, meaning that they are calculated by reference to the resources available, and the standard of living enjoyed by the parties during the marriage – the needs of a party are not always the same in every case.

Anything else?

Well, yes. In fact, potentially any relevant circumstance of the case could have a bearing upon the court’s decision.

That’s not particularly helpful, so here are a few examples:

□ The income, earning capacity, property and other financial resources of the parties – obviously!

□ The ages of the parties – could be relevant, especially if one or both of the parties are approaching pension age.

□ The duration of the marriage – for example, after a very short marriage it may simply be appropriate to return the parties to the same financial position they were in before the marriage.

□ Each party’s contributions – where, for example, one party brought significantly more wealth into the marriage, that they had accumulated prior to the marriage.

□ The conduct of the parties – but before you start counting how much you think you should get, bear in mind that only the most serious conduct, such as threats to kill, is likely to have any bearing upon the financial settlement.

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Once again, this is just a very brief introduction to a potentially very complex subject. If you are or may be involved in financial remedy proceedings then we would strongly recommend that you first obtain the advice of an expert family lawyer. We find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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For most people going through divorce the biggest issue is the financial settlement. Sorting out finances on divorce can be a complex and difficult matter, so it’s important to know what the court can and cannot do.

The orders that the court can make are called ‘financial remedy orders’. The term can refer to a specific type of order (see below), or the final order, setting out the full financial settlement, which will usually include several of the specific orders mentioned below.

Note the reference to a ‘final order’. That order is meant to bring matters to a conclusion. It is not therefore usually possible to seek a further financial order once a final order has been made.

It should also be noted that a final order should normally be obtained in all cases, even where matters are agreed (in which case it is called a ‘consent order’), or where neither party is making a financial claim against the other. The reason for this is to ensure that any agreement is enforceable, and that neither party can make any further financial claims in the future.

The court can essentially only make those orders allowed by statute. These include:

Maintenance orders – These are orders requiring one party to make regular (usually monthly) payments to the other. The order will either last indefinitely (until the death of either party, the remarriage of the recipient, or further court order), or for a limited, specified, time. The court can also make a temporary maintenance order, to last until a final order is made – this is usually called ‘maintenance pending suit’.

Lump sum orders – An order requiring one party to pay a lump sum of money to the other party. The order will state by when the money should be paid, and this can include payment by instalments.

Property adjustment orders – These are orders adjusting the ownership of property, for example transferring the ownership of property from one party to the other, or adjusting ownership of jointly owned property from 50:50 to, say, 75:25.

Pension orders – These are most commonly ‘pension sharing orders’, which transfer all or part of one party’s pension fund into a pension fund owned by the other party. Note that this does not mean that the other party will receive the money transferred – it goes straight into their pension, and when they can receive any benefit depends upon the terms of their pension.

These are some of the most common types of financial remedy orders. Sometimes, however, an issue needs to be included in a settlement that cannot be ordered by the court. An example of this might be one party paying for medical insurance for the other party. In such a situation the court can accept an undertaking from the paying party, and the undertaking can be enforced in a similar way to an order.

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Obviously, this is just a very brief introduction to a potentially very complex subject. Even if you have agreed matters with your spouse then an order will need to be drafted, and this is really a job for a lawyer.

Accordingly, if you wish to obtain a financial remedy order then we would strongly recommend that you first obtain the advice of an expert family lawyer. We find you an expert that works with you on our digital platform. For more information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe surrounds and supports the customer with both legal and pastoral care, end to end, from top barristers to case workers to therapists and mediators, to help the customer get the best possible result with the minimum stress. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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Pensions can be one of the most important assets on divorce, often only second in value to the former matrimonial home. It is therefore essential to know how the courts will deal with them, and two recent cases provide a useful demonstration.

The most important type of order available to the court in relation to pensions is the pension sharing order. Under such an order, a proportion of the pension fund belonging to one spouse is immediately transferred into a pension fund in the name of the other spouse.

The pension sharing order enables the court to deal with the common scenario in which one spouse has a significant pension provision, and the other spouse has little or none. Thus, for example, if all of the pension was accumulated during the marriage, it may be appropriate for there to be a pension sharing order transferring half of the pension fund to the other spouse, thus ‘equalising’ their pensions.

But equalising pensions is not always appropriate.

In the first of the two cases we want to look at the wife was awarded just 25.8% of the husband’s pension, following a marriage that lasted some 12 years. The reason for the wife receiving less than half was that a significant part of the husband’s pension was earned before the marriage.

The wife appealed, arguing essentially that the order had not taken into account her needs, which should take precedence over the fact that the husband accumulated much of the pension prior to the marriage.

The appeal judge accepted that needs could take precedence, but found that the decision was fair, having regard to the fact that the wife had received a higher proportion of the capital assets.

Needs were also a factor in the other case. Here, a husband’s claim for a share of the wife’s pension was struck out by the court, in part because the wife had accumulated a large part of her pension after the parties separated.

The husband appealed. The appeal judge found that the court had failed to take into account the husband’s needs (the husband was aged 59, in poor health and in receipt of benefits). Accordingly, the husband’s appeal was allowed.

Pensions can be a very complex issue on divorce, requiring the help of both legal and financial experts. Family Law Café can put you in touch with the expert assistance you need – for further information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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The Coronavirus lockdown is having a serious adverse effect upon the finances of millions. Incomes are reduced and the value of capital assets has been slashed.

But what if your finances have also been affected by a money order made by the divorce court? What if you can no longer afford to pay the money the court ordered? Or what if the money you were to receive is no longer enough? Is there anything you can do about this?

We are talking about the variation of financial orders: can the order be varied, and if so what are the criteria that the court uses to decide whether or not to vary it, and by how much?

Financial orders essentially come in two forms: capital orders and income orders. Capital orders are primarily lump-sum orders, and orders adjusting the ownership of property. The main type of income order is of course a maintenance order, whether for a spouse or a child.

The rules regarding variation of capital orders and income orders are quite different. Income orders can be varied, but capital orders are usually intended to be final.

The main exceptions regarding capital orders are lump sum orders payable by instalments and orders requiring the sale of property. However, the courts are generally reluctant to vary capital orders. For example, the variation of an order to pay a lump sum by instalments is only likely to relate to the timing of the payments. Still, this could be useful if you want to ask the court for more time to pay.

Otherwise, it is theoretically possible to ask the court to set aside a capital order (and make a different one), on the basis that events have occurred since the order was made which alter a fundamental aspect of the order. It could be argued, for example, that a significant reduction in the value of an asset due to the effect of the Coronavirus is one such event. However, setting aside orders in this way is very rare, and the general opinion is that it would be very difficult to persuade the court to order a strike out in these circumstances.

Maintenance orders, however, are commonly varied. In deciding whether to vary an order the court will have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen. The circumstances of the case include any change in any of the matters to which the court was required to have regard when making the order. Accordingly, if the maintenance payer’s income has reduced significantly, then the court is likely to make a significant downward variation in the amount of the maintenance payments.

Of course, the maintenance may be varied back up if the payer’s income subsequently returns to pre-virus levels!

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As usual, the above is just a very brief outline of what can be a complex topic. If you would like to apply to vary a financial order then you should first seek the advice of an expert family lawyer. Family Law Café can put you in touch with such a lawyer – for further information, call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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Bankruptcy of one of the spouses is often a feature of a financial remedy claim on divorce. Sadly, the current pandemic may lead to many more people falling into bankruptcy, as their businesses fail to survive the lockdown.

If this happens to you, can you ask the court to order your spouse to pay a lump sum to discharge your bankruptcy?

The answer to this question was provided by the recent case S v H, decided by His Honour Judge Booth in the Family Court at Manchester.

Briefly, the relevant facts in the case were that the husband had no assets and was the subject of a bankruptcy order, much of his debt having been incurred by his contributions to the family, albeit with borrowed money. Judge Booth calculated that he would need some £270,000 to discharge his bankruptcy and pay off his other debts. The wife, meanwhile, had net assets of more than £3 million.

The husband sought a lump sum sufficient for him to pay off his debts, and leave him with enough to buy a home to live in. The wife sought a dismissal of the husband’s claims against her.

The question arose as to whether the court could make a lump sum order in favour of the husband, in the light of his bankruptcy. Judge Booth found that it could.

He also found that it would be appropriate to discharge the husband’s bankruptcy by way of a lump sum payment by the wife, in view of the fact that most of the bankruptcy debt had been incurred for the benefit of the family.

Accordingly, Judge Booth made an order that the wife pay a lump sum of £270,000, so that the husband could be discharged from his bankruptcy, and pay off his other debts, thereby avoiding any future bankruptcy.

That still of course left the issue of the husband’s housing. Judge Booth decided that the wife should not be liable to pay a lump sum to the husband outright for this purpose. Instead, he ordered that she should pay him £375,000 for him to buy a home, on the basis that the home should revert to her when the husband dies, or no longer needs it.

A very instructive case, showing that you can ask for a lump sum from your spouse to discharge your bankruptcy, and that the court will make such an order, in appropriate circumstances.

You can read Judge Booth’s full judgment here.

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If you are going through a divorce and either you or your spouse have been declared bankrupt then you should consult an expert family lawyer as soon as possible. Family Law Café can put you in touch with an expert – call us on 020 3904 0506, or click here, and fill in the form.

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Family Law Cafe surrounds and supports the customer with both legal and pastoral care, end to end, from top barristers to case workers to therapists and mediators, to help the customer get the best possible result with the minimum stress. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.

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A survey by the investment company Fidelity International has found that a third of women would not be able to cope financially if their relationship ended tomorrow.

The survey, of 2000 individuals, also found that women between the ages of 55 and 64 years old are the most likely to find themselves financially vulnerable in the event of a relationship breakdown. One reason for this, of course, is the lack of adequate pension provision.

By contrast, only about one in five men felt they would not be able to support themselves financially in the event of a relationship breakdown.

A spokesperson for Fidelity said that, in addition to typically earning less and therefore saving less, women tend to take more time off work than men, which ultimately results in less time to pay into a workplace pension.

The findings emphasise the need for expert advice in the event of marriage breakdown, to ensure the best possible financial settlement. Family Law Cafe can put you in touch with an expert. To book a free initial consultation with us click the green button at the top of this page and fill in the form, or call us on 020 3904 0506.

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Family Law Cafe surrounds and supports the customer with both legal and pastoral care, end to end, from top barristers to case workers to therapists and mediators, to help the customer get the best possible result with the minimum stress.

Image: Pound coins, by J D Mack, licensed under CC BY 2.0.

Once again it appears that the record for the biggest money divorce to be dealt with by the courts in this country is to be broken. And once again it seems that it will be the wife of a Russian oligarch who will be seeking to break the record for the largest divorce award. That record is thought to be held by Tatiana Akhmedova, who was awarded £453 million in 2016.

That record, however, could be eclipsed by Natalia Potanina, the former wife of Vladimir Potanin, who made his reputed £15 billion-plus wealth in metals, following the break up of the Soviet Union. Mrs Potanina is reportedly seeking a lump sum of £5.76 billion, claiming that she was by his side as he built up his fortune from nothing.

The couple were together for some 31 years and had three children (all of whom are now grown up), before they separated in 2013. They were subsequently divorced in Russia, but Mrs Potanina has been living in London since 2016, hence the claim in the High Court. The courts in this country are considered by many to be considerably more generous to wives than the courts in many other countries (financial claims can be pursued here following foreign divorces, if either party lives here).

Most people, of course, can only dream of such sums. No matter what your wealth, however, Family Law Cafe can help you through your divorce. To book a free initial consultation with us click the green button at the top of this page and fill in the form, or call us on 020 3904 0506.

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Family Law Cafe offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area.

Image of Nornickel office in Norilsk by Ninara, licensed under CC BY 2.0. Mr Potanin is the largest shareholder in Nornickel.

Last week Amazon CEO Jeff Bezos, reputedly the world’s richest man, announced that he and his wife MacKenzie are seeking a divorce. The news has caused a stir amongst divorce lawyers around the world, but what could it mean in terms of a divorce settlement?

Relevant factors are that the couple were married in 1993, a year before Mr Bezos founded Amazon. It has been reported that they did not enter into a prenuptial agreement, so any settlement would be calculated by reference to the relevant divorce laws. According to the American business magazine Forbes, Mr Bezos has an estimated net worth of $122 billion.

Mr and Mrs Bezos reside in Washington state, which uses a “community property” approach to decide how to divide assets on divorce. Under this approach, all property acquired after the date of the marriage is presumed to be “community property”, in which each spouse has an interest. Unless one spouse can show that a specific item of property falls within an exception to this rule, all of the assets acquired during the marriage could be divided equally. This could mean that Mrs Bezos would receive the largest divorce award ever.

If the divorce were taking place in England there could potentially be a similar result, as the English courts use the “sharing principle”, whereby each party is entitled to an equal share of the assets of the marriage (i.e. the assets acquired during the marriage), unless there is a good reason to the contrary.

Happily, Mr and Mrs Bezos have indicated that the separation is amicable. We hope that it remains that way, and that they are able to resolve matters between them by agreement, rather than through the courts.

If you would like any further information as to the principles that the courts in this country use to decide financial settlements on divorce, see this post. For more detailed advice regarding your own case, book an initial consultation with us by clicking the green button at the top of this page and filling in the form, or call us on 020 3904 0506.

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Family Law Cafe provides a genuinely tailored technology-based service, allowing customers to be as involved or as removed as they wish, and to benefit from as much or as little support as they require.

Image of Jeff Bezos by Seattle City Council from Seattle [CC BY 2.0], via Wikimedia Commons.

We reported here last month that a Sharia court in Dubai had dismissed an application by a wife to enforce an English divorce court order that a £346 million luxury yacht, which is currently moored there, must be transferred to her as part of her divorce settlement.

The wife, Tatiana Akhmedova, was awarded £453 million from her Russian oligarch ex-husband Farkhad Akhmedov, by Mr Justice Haddon-Cave in the High Court in December 2016.

Well, the Dubai court order hasn’t stopped Mrs Akhmedova from seeking to recover the monies owed to her. It has now been reported that she has had a helicopter that was once used to ferry passengers to the yacht seized and sold, for about £4.5 million.

One of Mrs Akhmedova’s advisers is quoted as saying that: “The net has been closing on Mr Akhmedov for a while now, and the sale of this helicopter proves that our enforcement methods are not just working but bearing fruit”. However, a spokesman for Mr Akhmedov said that the net value of the helicopter was “negligible”, and that “Mr Akhmedov and the Akhmedov family trust remain confident that their legal efforts will continue to be successful in preventing the seizure of any meaningful assets”.

With respect, Family Law Cafe’s view is that a divorce court order must be obeyed. Whilst Mrs Akhmedova clearly has a long way still to go, the seizure of the helicopter at least sends out a message that parties should not expect to get away with wilfully failing to pay what a court has ordered.

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Family Law Cafe’s accessible team of legal experts from various disciplines expedites the customer’s case and keeps them informed and in control 24/7 through a unique and secure online portal.

Image of a Eurocopter EC155, similar to the one owned by Mr Akhmedov, by AKS.9955 [CC BY-SA 4.0], from Wikimedia Commons.

A Sharia court in Dubai has dismissed an application by a wife to enforce an English divorce court order that a £346 million luxury yacht ‘M V Luna’, which is currently moored there, must be transferred to her as part of the divorce settlement.

In December 2016 Mr Justice Haddon-Cave granted financial relief to Tatiana Akhmedova against her ex-husband Russian oligarch Farkhad Akhmedov in the sum of £453 million, and in April this year he ordered that the yacht should be transferred to her as part of the settlement. Mrs Akhmedova sought to have the order upheld in Dubai, but the Dubai court ignored the High Court order.

At 115 metres (377 ft) long, Luna is the world’s second largest ‘expedition yacht’ (i.e. yacht created for long distance cruising to remote areas of the world), and 23rd largest luxury yacht. It was formerly owned by Russian businessman Roman Abramovich, the owner of Chelsea Football Club.

The case has raised concerns amongst lawyers over the difficulties of enforcing English divorce court orders abroad, although it is understood that Mrs Akhmedova may not have exhausted all of her legal options in Dubai.

Of course if you cannot enforce an order then the order is effectively worthless. The best practical advice therefore must be to consult an expert upon the chances of recovering property abroad, before issuing any proceedings. Family Law Cafe can help you find such advice. To contact us, click the Contact link above and fill in the form, or call us on 020 3904 0506.

You can read the second judgment of Mr Justice Haddon-Cave here.

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Image: Mega Yacht LUNA, by Tomás Del Coro, licensed under CC BY 2.0.

It was originally expected to be a case that might change the law on the so-called ‘meal ticket for life‘, whereby one spouse is ordered to pay maintenance to the other, possibly for the rest of the other spouse’s life. Graham Mills, who has been paying his ex-wife Heather maintenance since they were divorced in 2002, had wanted to argue before the Supreme Court that the law should be changed so that one spouse should not have to pay maintenance to the other for life.

In the event, Mr Mills was only granted permission to take his case to the Supreme Court on the limited ground of whether, provision having already been made for Mrs Mills’ housing costs in their 2002 capital settlement, the Court of Appeal erred in taking her housing costs into account when it decided to increase her maintenance last year.

The Supreme Court has today unanimously allowed Mr Mills’ appeal. Giving the leading judgment, Lord Wilson said that the judge at the original hearing (in 2015 of the husband’s application to discharge or reduce the maintenance and the wife’s cross application to increase it) was entitled to decline to vary the maintenance so as to require the husband to pay all of the wife’s rental costs.

Provision for the wife’s housing had been made in 2002 when she was awarded capital to rehouse herself, but she instead exhausted the capital by entry into a series of unwise transactions, and so developed a need to pay rent. Lord Wilson said that a court would need to give very good reasons for requiring a spouse to fund payment of the other spouse’s rent in these circumstances.  A spouse may well have an obligation to make provision for the other; but an obligation to duplicate it in such circumstances is most improbable.

The order of the Court of Appeal was therefore set aside and the original order, that the maintenance should remain at the same level, was restored.

You can read the full Supreme Court judgment here.

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Image: ‘Fan of Money and House‘, by Images Money, licensed under CC BY 2.0.

The President of the Family Division Sir James Munby has given further details of the new Financial Remedies Courts, in the 18th edition of View from the President’s Chambers, his regular update on the process of reform of the family justice system.

As we have explained previously, the new courts, which will initially be piloted in three areas starting in February or March, will specialise in financial remedy claims. They will consist of regional hubs, with most of the hearings taking place in the hub court, or at a number of ‘Financial Remedies Hearing Centres’ (‘FRHCs’) within the hub area.

The President has set out his “current, tentative, thinking in relation to the possible ‘geography’ of the pilot areas” for the courts across the country. These will comprise ten hubs: the Central Family Court in London, Birmingham, Nottingham, Newport, Newcastle, Leeds, Sheffield, Chelmsford and two further hubs at as yet unidentified locations covering the Thames Valley, and Kent, Sussex and Surrey. Each hub will have between one and ten FRHCs.

The President has also indicated that all types of financial remedy applications will be commenced by using a new Form A application form. The form will require further details of the application than the old form, so that the court has sufficient information to enable a very early allocation of the case to the right judge at the right level, and at the right place.

You can read the latest View from the President’s Chambers here.

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Image of Newcastle Law Courts by Edmund Gall, licensed under CC BY 2.0.

Sir James Munby, the President of the Family Division, has announced that the specialist ‘Financial Remedies Courts’ that he mentioned in his 17th ‘View from the President’s Chambers’ last May are to be piloted in three places starting, he hopes, in February 2018. The pilots will take place in London, the West Midlands and South-East Wales, and he envisages that further pilots will follow quite shortly on a rolling programme.

In a circular published last Friday, the President said that the basic concept behind the new courts would include:

• That there would be a number of regional hubs, typically two for each of the six court circuits in England and Wales, at which both the administration and the judicial leadership for the relevant hub area will be based.

• That there will be a lead judge for each hub area, who must be a judge with ‘real experience/expertise’ in financial remedy work.

• That hearings will be conducted at the regional hub and also at a number of ‘Financial Remedies Hearing Centres’ within the hub area.

• That only ‘ticketed’ judges will sit in the court, although all judges currently in post who do this type of work will be ‘grandfathered’ in – in other words, as we understand it, new judges will be required to meet certain expertise requirements, but existing judges will be exempted from those requirements.

You can read the President’s circular here.

The benefits that it is hoped the new courts will bring include better and more consistent outcomes because of the greater expertise of the judges, greater judicial continuity (the same judge dealing with the case throughout), and reduced delays and inefficiencies caused by courts hearing many different types of cases. If these benefits are achieved, then Family Law Cafe will give the new courts a warm welcome.

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Image: £50 note, by Howard Lake, licensed under CC BY 2.0.

An Australian case has demonstrated that a pre-nuptial agreement will not be upheld if one party has used undue influence to persuade the other party to sign it.

The case concerned a multi-millionaire Australian property developer who married a woman from Eastern Europe who was much younger than him, after meeting her on a “website for potential brides”. About eleven days before the wedding the man told the woman, who spoke little English, that she would have to sign the agreement, or the wedding would be off. By that time the woman’s family had already travelled to Australia for the wedding. The woman was advised by a lawyer not to sign the agreement, which provided that she would only receive AU$50,000 in the event of a separation, but she signed it anyway.

The marriage broke down after about four and a half years, and the question arose as to whether the agreement was binding. The wife claimed that it was not, and sought a settlement in excess of AU$1 million. The High Court of Australia found that the agreement was not binding, as there had been undue influence. The husband had been guilty of “unconscionable conduct”, giving the wife “no choice” but the sign it. Accordingly, the agreement was set aside, and the case was sent back for the Federal Circuit Court to decide how much the wife should receive.

The case clearly illustrates that pre-nuptial agreements will only be valid if they are entered into completely freely. Any pressure put upon a party to sign, particularly very close to the wedding, is likely to result in the agreement being set aside. Parties should have plenty of time to consider the terms of an agreement, and to obtain legal advice upon those terms, without feeling pressured to sign.

If you require advice on a pre-nuptial agreement, Family Law Cafe can help you find it. To contact us click the Contact link at the top of this page and fill in the form, or call us on 020 3904 0506.

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Image of High Court of Australia by Thennicke (Own work) [CC BY-SA 4.0], via Wikimedia Commons.

The Court of Appeal has allowed an appeal by a Russian husband against an award of £1.4 million made by the High Court in favour of a Russian wife, ‘topping up’ an award that she agreed to in divorce proceedings in Russia.

The husband and wife are Russian nationals. They were married in Moscow in 1997. The family moved to London in 2004, where the wife still lives. The marriage broke down and the husband issued divorce proceedings in Russia. A financial settlement was agreed and made into a consent order by the Russian court in 2009. Under the order the wife retained investments in her own name and a flat in Moscow, to a total value of $10 million, out of total assets of $13.3 million. It was agreed between the parties that the settlement was equivalent to £5.1 million, when converted to sterling using the exchange rate applicable at that time.

In 2014 the wife issued proceedings in the High Court in London under Part III of the Matrimonial and Family Proceedings Act 1984, seeking a ‘top up’ to the settlement. In 2016 Mrs Justice Roberts ordered the husband to pay to the wife a lump sum of £1,148,480, together with provision for the children of the marriage. The husband appealed.

The Court of Appeal allowed the husband’s appeal. Giving the leading judgment, Lady Justice King said that it was not appropriate for Mrs Justice Roberts to have made an order, for the following reasons:

a) The Russian provision was made by agreement, and the agreement was fair. Mrs Justice Roberts did not consider whether in those circumstances it was right for the court to go behind the public policy principle that there should, if at all possible, be finality in litigation and that agreements freely reached should be upheld.

b) There had been no change in the wife’s circumstances. The application could properly be regarded as a wife seeking a ‘second bite of the cherry’.

c) The wife had delayed making the application, and Mrs Justice Roberts had made the serious finding that the delay had in part been tactical.

d) It has previously been held that in order to sustain a case of need, at any rate if made after many years of separation, a wife must show not only that the need exists but that it has been generated by her relationship with her husband. Here, the husband had adequately provided for the wife in 2009 – the wife’s needs were generated by her decision to embark upon the litigation.

e) That it was hard, if not impossible, for the wife to advance a case that she had, or would, suffer injustice or hardship without the making of an order. Whilst such a finding would not inevitably have led to the dismissal of her application, the absence of hardship or injustice must still be an important consideration for a judge when considering whether in all the circumstances an order should be made.

f) That the financial benefit provided by the husband was adequate in 2009 and remained adequate. The order made by Mrs Justice Roberts in effect amounted to no more than a contribution by the husband to the wife’s costs of the litigation.

Accordingly, the husband’s appeal was allowed and the lump sum award to the wife was set aside.

Family Law Cafe welcomes this decision. Part III of the Matrimonial and Family Proceedings Act 1984, which gives the courts in this country the power to make financial awards in favour of spouses who have divorced abroad, was surely never intended to enable a wife in such a situation to have a ‘second bite of the cherry’, as this wife sought to do.

You can read the full report of the Court of Appeal’s decision here.

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Family Law Cafe brings smart technology to complex family law issues, allowing customers to benefit from access to a friendly team of experts, assembled to the customer’s needs and budget.

Image of St. Basil’s Cathedral, Moscow by Rich Bowen, licensed under CC BY 2.0.

It has been reported that the television personality and glamour model Katie Price is to divorce her third husband, Kieran Hayler. We don’t wish to speculate upon whether the divorce will happen, but an interesting point has arisen regarding the pre-nuptial agreement that the couple is reported to have entered into prior to their marriage.

The pre-nuptial agreement apparently provides that if the couple divorce, Ms Price will keep all of her money and property. However, it has been reported that if the divorce goes through Mr Hayler will seek a half share of everything she has acquired since they have been together, on the basis that he has been looking after her children, thereby enabling her to go out to work. He will apparently also argue that he and the children have become accustomed to their present lifestyle.

Will these arguments succeed?

Ms Price has five children: a son by the former footballer Dwight Yorke, who was born in 2002 and is disabled, a son and daughter by Peter Andre and a son and daughter by Mr Hayler. Whether Mr Hayler claims to have been looking after all five children, or only some of them, we do not know.

As we have explained previously, the English courts will give effect to pre-nuptial agreements, provided they are freely entered into by each party, with a full appreciation of the implications of the agreement, unless it would not be fair in the circumstances to hold the parties to the agreement. The question therefore is: do the arguments that Mr Hayler will reportedly put forward mean that it would be unfair to give effect to the pre-nuptial agreement?

We will deal with the second argument first, that Mr Hayler and the children have become accustomed to their present lifestyle. The court will be concerned that the reasonable requirements of the children are met, and that Mr Hayler’s own needs are met. However, this does not necessarily mean that he and the children should continue to enjoy their present lifestyle, so we have doubts as to whether this argument would be successful.

The first argument, that Mr Hayler has been looking after the children and thereby enabling Ms Price to go out to work, may have more weight with the court, particularly if this arrangement was not envisaged when the couple entered into the pre-nuptial agreement. In that case, the court might find it unfair to Mr Hayler to give effect to the agreement, and might therefore be prepared to adjust the terms of the agreement in his favour, although whether he would be awarded a full half share of everything Ms Price has acquired since the couple have been together is another matter.

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Image of Katie Price by Southbank Centre [CC BY 2.0], via Wikimedia Commons

A wife who was only awarded a third of the assets after a twenty year marriage has had her appeal against the award dismissed by the Court of Appeal.

Karen Hart, a former air hostess, married John Hart, a property developer, in 1987. At that time Mrs Hart had no significant assets, but Mr Hart was already a multi-millionaire. They had two children, both now adult, and separated in 2006. Divorce proceedings were commenced in 2011 and a financial remedies hearing took place in 2015, when the assets were £9.4 million. Mrs Hart was awarded £3.5 million, a sum considered sufficient to meet her needs. The reason that Mr Hart was awarded more than half of the assets was that he had brought some £2.6 million into the marriage.

Mrs Hart appealed, arguing that after such a long marriage, to which she had made a considerable contribution, she was entitled to half of the assets. She also pointed out that Mr Hart had been less than forthcoming in disclosing his assets to the court, which made it difficult for the court to determine what assets were ‘matrimonial’, i.e. acquired during the course of the marriage, and what were ‘non-matrimonial’, i.e. acquired before the marriage.

In the Court of Appeal Lord Justice Moylan accepted that there were ‘deficiencies’ in Mr Hart’s evidence about the extent of his assets. However, he concluded, after much reflection, that the judge did not fall into error when awarding Mrs Hart £3.5 million. He said that the judge was plainly entitled to find that Mr Hart had substantial wealth at the commencement of the relationship, because this was agreed. He was also entitled to conclude that an equal division would be unfair to Mr Hart and, equally, that an unequal division would be fair to Mrs Hart.

Mrs Hart’s solicitors have described the decision as ” disappointing”, saying: “The decision of the Court of Appeal leaves the law in a state of flux; it allows a Trial Judge to find that even where it is not properly evidenced, the financial contribution of one spouse outweighs the family and domestic contribution of the other. This can lead to a result that is unfair and discriminatory, as it has done in this case. More such results are likely to follow, with the potential to set the law back more than 20 years.”

The full report of the Court of Appeal judgment can be found here.

Image: Air Hostess Uniform 1959 Winter 001, by Archives New Zealand, licensed under CC BY 2.0.

Graham Mills, who believes that he has been unfairly treated by being ordered to pay maintenance to his ex-wife for life, has been granted permission to take his case to the Supreme Court. For details of the case, see this post.

Mr Mills had asked the court to stop the maintenance, arguing that his ex-wife wife Heather had lost the capital she had been awarded in 2002 to rehouse herself through gross financial mismanagement, and that she was in a position to work more in order to increase her earnings. However, The Supreme Court has only granted him permission to appeal on the single ground of whether, provision having already been made for Mrs Mills’ housing costs in the capital settlement, the Court of Appeal erred in taking these into account when it decided to increase her maintenance.

A hearing will be scheduled in due course.

It is a pity that the Supreme Court will not be considering the wider issue of whether it is appropriate for a spouse to be awarded maintenance potentially for the rest of their life – the so-called ‘meal ticket for life’. Still, it will be interesting to see what the Supreme Court has to say regarding the housing costs issue.

Under the present law a spousal maintenance order lasts until either party dies, or until the party in whose favour it was made remarries or enters into a civil partnership, unless the court specifies that it should end sooner. Note that the fact that the party in whose favour the order was made cohabits with another person does not automatically bring the order to an end, but may be grounds to request the court to reduce, or even stop, the maintenance.

Image: UK Supreme Court building, by Cary Bass-Deschenes, licensed under CC BY 2.0.

The Supreme Court has allowed an appeal by a wife against the dismissal of her application to vary one of the terms of a consent order that set out an agreed financial settlement on her divorce.

The facts of the case were as follows. Financial remedy proceedings were concluded by a consent order in July 2010, which noted the husband’s agreement that he had no interest in the former matrimonial home. The wife gave an undertaking to secure the release of the husband from the mortgage on the property by the 30th of September 2012, failing which it was to be to be sold.

In November 2011 the wife applied to vary the undertaking so that the husband would be released from the mortgage or the property sold in default when their youngest child attained the age of 18 (in 2019), or when either of their two children completed full time education. She applied under section 31 of the Matrimonial Causes Act 1973, which would require the court to take into account the children’s best interests.

The District Judge held that the court did not have jurisdiction to hear such an application, essentially as it related to a property adjustment order (for an explanation of what a property adjustment order is, see here) which cannot be varied, because such orders are intended to be final. He therefore dismissed the application, and the wife’s appeal was also dismissed. The Court of Appeal dismissed the wife’s further appeal, holding that the jurisdiction to vary the order was derived from the inherent jurisdiction of the court, rather than section 31 of the Act, and that it was not appropriate to exercise it in this case. The wife appealed to the Supreme Court.

The Supreme Court held that there was jurisdiction to hear the wife’s application, and therefore allowed her appeal. Handing down the leading judgment Lord Wilson said that describing the wife’s application as being to vary her undertaking was confused. The court could not vary an undertaking, but it could grant or refuse an application for release from an undertaking, and it could accept a further, different, undertaking. Accordingly, the court had jurisdiction to hear the wife’s application. In any event, the undertaking related to an order for sale of the property, rather than to a property adjustment order, and an order for sale can be varied under section 31.

The Supreme Court remitted the wife’s application to His Honour Judge Waller to decide, although Lord Wilson made clear that it was by no means certain that the application would be successful.

Family Law Cafe says: It will be interesting to hear the outcome of the application, but Lord Wilson is quite correct that it is unsatisfactory that it has taken so long for the case to reach this stage. Family Law Cafe’s mission is to see an end to these long delays and convoluted processes, by ensuring there is a strategy from the beginning and by mentoring, checking and expediting the process.

The full report of the case can be read here.

Image: Supreme Court of the United Kingdom, by FuFu Wolf, licensed under CC BY 2.0.

A wife who complained that an equal division of the matrimonial assets was not fair to her because of the short duration of the marriage and her greater contribution towards those assets has won her appeal against the decision.

Julie and Robin Sharp lived together for six years from 2007, and were married for the last four of those years. There were no children of the marriage. For most of their time together they both worked and earned similar salaries, but Mrs Sharp received bonuses totalling £10.5 million, whereas Mr Sharp’s bonuses were ‘comparatively trivial’.

After the marriage broke down divorce proceedings were commenced and Mrs Sharp made a financial remedies application. The application was heard by Sir Peter Singer in the High Court. At that time the total assets held by either party amounted to £6.9 million, although Mr Sharp accepted that a property acquired by Mrs Sharp before the marriage should be left out of the pot of “matrimonial assets” that should be divided between the parties. The total value of the matrimonial assets was £5.45 million. Sir Peter Singer decided that that sum should be divided equally, and therefore awarded Mr Sharp £2.725 million.

Mrs Sharp appealed, claiming that an equal division of the matrimonial assets was not appropriate, in the light of the short duration of the marriage and the fact that the parties had largely kept their finances separate. Giving the leading judgment of the Court of Appeal Lord Justice McFarlane said that these factors, together with the fact that it was a childless marriage and both parties had their own income, justified a departure from the principle that matrimonial assets should normally be shared between the parties equally. Accordingly, the appeal was allowed and the award to Mr Sharp was reduced to £2 million.

You can read the full judgment of the Court of Appeal here.

Image: The Royal Courts of Justice, by Francisco Rojas, licensed under CC BY 2.0.

A man who believes that he has been unfairly treated by being ordered to pay maintenance to his ex-wife for life (unless she should remarry) is raising money via crowdfunding so that he can take his case to the Supreme Court, and change the law.

Graham Mills and his wife wife Heather were divorced in 2002. At that time he agreed to pay her a lump sum of £230,000 to enable her to purchase a house for her and their young son, as well as pay her maintenance of £1,100 per month. In 2014, having remarried and had another child, he applied to the court for the maintenance payments to stop. However, the court refused to stop the maintenance. Mr Mills appealed to the Court of Appeal and in February this year the Court of Appeal not only dismissed the appeal, but increased the maintenance payments to £1441 per month.

Mr Mills claims that his ex-wife is perfectly capable of supporting herself. He believes that the law should be changed, as it treats men as “cash machines for life”, and also encourages women to be “dependent upon men”.

He is not alone in this view. Not only have many members of the public indicated their support for it, former chair of the Bar Standards Board Baroness Deech has said of the case: “If there is one thing that stops women getting back on their feet and being treated seriously and equally at work, it is the assumption throughout the legal system that once she is married, she is somehow disabled and incapable of ever managing on her own. It is a very serious impediment to equality. This case shows how unethical, unpopular and out-of-date the law is.”

Last year the Baroness introduced a private member’s bill that would limit the duration of spousal maintenance orders to a maximum of five years, unless the court is satisfied that there is no other means of making provision for that spouse, and that that spouse would otherwise be likely to suffer serious financial hardship as a result.

So, should the ‘meal ticket for life’, as life-long spousal maintenance orders have been called, be ended? We will have to wait and see whether Mr Mills gets his case to the Supreme Court and, if so, what the Supreme Court Justices have to say. Otherwise, it does appear that the time may have come for the matter to be given proper consideration.

Image by Alex Liivet, licensed under CC BY 2.0.

We’ve seen here previously what kind of financial orders the court can make upon divorce, but what if the other party does not comply with the order? What can be done to force them to comply?

There are various methods of enforcement available, depending upon the type of order to be enforced. Some methods are specific to certain types of orders. For example, the court can require a maintenance order to be paid through the court, and if it is not paid then the party to whom the maintenance should be paid can ask the court to take enforcement action on their behalf.

Another example of an order-specific type of enforcement is where the court has ordered that a property, such as the former matrimonial home, should be sold or transferred, and the other party refuses to sign the necessary paperwork. In such cases a judge can be requested to sign the paperwork on their behalf.

The other most common methods of enforcement of family financial orders are:

Attachment of earnings orders – Requiring the debtor’s employer to make periodical deductions from the debtor’s earnings. Most commonly used to enforce maintenance orders, but obviously only available if the debtor is employed.

Judgment summons – Requesting the debtor to be committed to prison for failure to comply with the order. In practice, any committal order is likely to be suspended on condition that the debtor pay the amount due by a specified date, or by specified instalments.

Charging order – An order placing a charge on the debtor’s property, to the value of the debt. The debt is therefore secured, and can subsequently be recovered by seeking an order for the sale of the property.

Third party debt order – An order directing a third party who owes money to the debtor (e.g. the debtor’s bank) to pay the debt directly to the creditor.

Enforcement of financial orders can be a difficult and complex subject. If you would like any further advice about it, Family Law Café can help. To contact us click the Contact link above and fill in the form, or call us on 0208 768 2278.

Image: Barclays Bank, Ossett, by Tim Green, licensed under CC BY 2.0.

A recent case has highlighted the duty that the parties to family proceedings owe to the court.

Family proceedings are governed by the Family Procedure Rules 2010. The rules have the ‘overriding objective’ of enabling the court to deal with cases justly, having regard to any child welfare issues involved. Dealing with a case justly includes, so far as is practicable –

(a) ensuring that it is dealt with expeditiously and fairly;

(b) dealing with the case in ways which are proportionate to the nature, importance and complexity of the issues;

(c) ensuring that the parties are on an equal footing;

(d) saving expense; and

(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.

The court must seek to give effect to the overriding objective when it exercises any power given to it by the rules, or interprets any rule. However, what is not well known by many parties involved in family proceedings is that they are required to help the court to further the overriding objective.

An example of this not happening occurred in the recent case Christoforou v Christoforou. The case concerned a wife’s financial remedy application, where the resources were in the region of £50 to £55 million. The application was heard by Mr Justice Moylan in the High Court. He found that the husband, in particular, had conducted the case in a manner which was contrary to the duty placed on parties to help the court to further the overriding objective. He said:

“This failure can be demonstrated by the husband’s contention that he should be awarded the additional sum of €17,622 to compensate him for the wife’s unequal division of the balance in an account. I appreciate that a number of small sums can add up to a significant amount. I also recognise that, if the court too readily ignores what might be tactical accretion or expenditure of small amounts, parties might be encouraged to engage in such behaviour. However, to descend to this level in this case having regard to the available resources is, frankly, absurdly disproportionate.”

The case has not yet been finalised, but it may well be that the husband will be penalised on costs for his failure to help the court to further the overriding objective.

You can read the full report of the case here.

Image: Royal Court of Justice, by Santi Villamarín, licensed under CC BY 2.0.

A husband who claimed that his former wife should not receive an equal share of his wealth because of his “special financial contribution” has failed in a bid to have an award to his wife overturned.

In 2015 Mr Justice Holman awarded Randy Work’s wife half of his £140 million fortune, rejecting Mr Work’s argument that he had made a special financial contribution towards the marriage. Mr Work appealed, but the Court of Appeal has held that he had failed to show that Mr Justice Holman’s decision was wrong. The appeal was therefore dismissed. The judgment of the Court of appeal can be found here.

It is notoriously difficult to succeed with a “special contribution” claim, and thereby avoid the marital pot being divided equally between the parties. There have only been three reported cases of such claims being successful in the last seventeen years.

Undeterred by that, it has been reported that former footballer Ryan Giggs will argue that he made a “special contribution” to the creation of wealth during his marriage with his wife Stacey. The case is due to be heard before Mr Justice Cobb in the High Court.

It would appear that Ryan Giggs may have an uphill task in persuading the court that he made a “special contribution”, and not just because such claims rarely succeed. In his judgment in 2015 in the Randy Work case Mr Justice Holman made a prescient observation. He said:

“It is clear also that a successful claim to a special contribution requires some exceptional and individual quality in the spouse concerned. Being in the right place at the right time, or benefiting from a period of boom is not enough. It may one day fall for consideration whether a very highly paid footballer, who is very good at his job but may be no more skillful than past greats, such as Stanley Matthews or Bobby Charlton, makes a special contribution or is merely the lucky beneficiary of the colossal payments now made possible by the sale of television rights.”

Was Ryan Giggs merely the lucky beneficiary of the colossal payments now made possible by the sale of television rights, or did he make a “special contribution”? We will have to wait and see, although it could be a while before we find out, as the case is not expected to take place for some time.

If you are involved in financial remedy proceedings following divorce, Family Law Café can help you find the best help and advice. To contact us click the Contact link above and fill in the form, or call us on 0208 768 2278.

Image: 11 Ryan Giggs, by Lordcolus, licensed under CC BY 2.0.