Decree Absolute: Divorce & Cohabitation in the UK
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LM v DM (Costs Ruling) [2021] EWFC 28 (12 March 2021)

LM v DM (Costs Ruling) [2021] EWFC 28 (12 March 2021) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
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Exercising the Thwaite jurisdiction: Kicinski v Pardi [2021] EWHC 499 (Fam)

Exercising the Thwaite jurisdiction: Kicinski v Pardi [2021] EWHC 499 (Fam) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
This hearing was the latest stage in long running litigation between Antje Kicinski ("W") and PeterPaul Pardi ("H"). W appealed a decision of Recorder Allen QC ("the Judge") dated 16 July 2020 (a summary of which can be found here). Although only the matter of whether a stay should be granted to W, to allow her not to transfer certain monies from a Swiss account pursuant to the order under appeal, was listed to be considered at this hearing, the parties agreed that both the stay and the outstanding points on appeal should be determined, and Lieven J felt it was just and proportionate for her to deal with both matters. Background The parties had married in November 1991 and had two adult children. W was a German national, and H a dual Italian and US national. One part of the financial dispute between the parties concerned c. €8m in cash and securities in four Swiss bank accounts in W's sole name. The funds in those accounts had been transferred during the marriage from H's uncle and aunt ("U&A") to W. U&A executed notarised deeds of gift and made gift declarations when donating the funds to W. There had been various tax problems regarding those funds, but W eventually reached a settlement with HMRC. In December 2018, W had been served with a notice of claim instituted by U&A in Italy for W to return the Swiss funds to them. U&A instructed an Italian lawyer, Avv Grisanti, in those proceedings, and W instructed Withers (in Italy), with Withers also acting for her in the English proceedings at that point. The parties reached an agreement on the morning of the last day of the final hearing of the financial remedies proceedings in October 2019. Heads of Terms were agreed, and the Judge made a Rose order. Those Heads of Terms set out that (among other things): There would be a tripartite binding agreement between H, W and U&A. H, W and U&A had agreed a full and final settlement of U&A's claims against H and W. U&A would withdraw the Italian proceedings against W. H, W and U&A would enter into a deed in Switzerland and in Italy in which H and U&A would undertake not to commence, pursue or entertain any further proceedings against W or Withers. W would retain c. £1.6m of the monies in the Swiss accounts, and the rest of the balances would be transferred to H. However, after the Rose order had been made, the drafting became contentious and draft orders went back and forth between the parties' lawyers. In February 2020, W made an application (pursuant to the Thwaite jurisdiction) for an order for H to provide indemnities in relation to any liability of W's and/or Withers arising from U&A commencing, pursuing or entertaining any further proceedings of any nature against W or Withers. At the hearing of that application, the Judge refused to make the indemnity sought, and refused W's application for the costs of the hearing. W then appealed the Judge's order. When she sought permission to appeal, W had argued that the Judge should have ordered H to indemnify Withers, but W no longer pursued that argument and at this hearing argued only that an indemnity should have been provided to her in order to cover any liability if U&A sued Withers, and Withers then pursued her. The deeds between H and W had been signed, but the draft deeds between U&A and W had not been finalised. However, the Italian proceedings brought by U&A had been rejected by the Italian court and the time for appeal had expired. U&A had not agreed not to start proceedings against Withers, but did offer in the Italian proceedings to waive any claims against W. The Judge's decision Lieven J thought that the Judge was correct when he said that a Rose order should be treated as a final and binding order, notwithstanding that it still requires perfection and sealing. She commented that '[t]he point of a Rose order is precisely that it is a court order rather than a Xydhias agreement' [18]. In deciding whether the Thwaite jurisdiction should be applied, the Judge firstly considered whether the Rose order remained executory. He concluded that it did, as elements of the order had not been complied with (e.g. W had not transferred the funds in the Swiss accounts to H). He secondly considered whether there had been a material change in circumstances that would trigger the Thwaite jurisdiction. He concluded that the fact that the two tripartite agreements had not been executed did not represent a change in circumstances, and nor did the fact that U&A had not withdrawn the claim against W in Italy. Thirdly, he considered whether it would be inequitable to hold W to the terms of the Rose order, and concluded that it would not be. He was not prepared to find that H was the architect of W's difficulties in the Italian litigation because it was not open to him to find that U&A were the 'puppet' or 'creature' of H, and equally he could not find that W had been the cause of the problems since the Rose order was made. He rejected H's argument that it was not open to W to argue that it was unconscionable for her to be held to the terms to which she had originally agreed. He therefore refused to exercise the Thwaite jurisdiction. He then considered whether he would have granted the indemnity sought by W. Although those parts of the judgment were obiter, they had some relevance to the appeal in that if Lieven J found that the Judge was wrong to refuse to exercise the Thwaite jurisdiction, she would then have to consider whether the indemnity should be ordered. The Judge found he did not need to determine the issue of whether H could be ordered to give an indemnity to Withers in respect of any actions that U&A might choose to bring against them, but said his provisional view was that the court did not have jurisdiction to order a party to the marriage to indemnify a non-party in respect of actions by another non-party. W's position W argued that the Rose order had been intended to create a complete end to all proceedings relating to W, and that that was the fundamental nature of the agreement which she had entered into. An end result of the litigation which left her with a potential liability to Withers, if U&A chose to sue them, was therefore fundamentally outside the terms to which she had agreed, and amounted to a significant change of circumstance. She submitted that the Judge was wrong to find there had been no significant change between what had been agreed in the Rose order and the position before him on 16 July 2020. It had been a clear term of the agreement, and the basis of the order, that U&A would enter into the deeds, both releasing W but also Withers from any possible future liability. In plain contradiction of the agreement, U&A chose neither to withdraw proceedings against W, nor to enter into the deeds. The indemnity sought on behalf of W had always included protection from any claim by Withers. The Thwaite jurisdiction was clearly engaged, and the Judge was wrong to find otherwise. W said that it would be inequitable if she were to be left exposed to a liability in respect of Withers, where that was plainly not what she had thought she was agreeing to. The order was a 'clean break' order, which meant that W would be left with no ability to be reimbursed for any future liability to Withers. W accepted that she could argue that U&A entering into the deed was a condition precedent to the agreement, and that their failure to do so voided the agreement and the Rose order. However, W submitted that would undermine the thrust of the case law, which was to ensure that parties in financial remedies litigation cannot wriggle out of agreements by saying that certain parts have subsequently not been agreed, and therefore the entire agreement has been voided. It would be unfair on W if she had to unravel the entire deal and effectively start again, because of H's refusal to give the undertaking sought. A stay should be granted so that W was not required to transfer the Swiss funds unless and until she knew she was free from any liability by reason of actions by U&A. H's position H argued that the Judge was right to find there had been no significant change and that the Thwaite jurisdiction was not engaged. U&A had agreed not to pursue W, and therefore the only potential action they could bring was against Withers, and any potential liability on W's part could only arise via Withers. However, H said that that was not the indemnity which W had sought before the Judge, and it would be unfair, and outside the scope of Thwaite, for the court now to impose a liability on H in a different form from that sought, and in respect of actions by U&A over which H had no control. H also submitted that the terms between U&A and W were not fully agreed, and that W was fully aware that there were 'known unknowns' in the Heads of Terms. That U&A might not sign the deeds was therefore not an unforeseen event. There could not be said to have been a significant change of circumstances when U&A did not withdraw the Italian proceedings and did not enter into deeds, because these were all foreseeable when the agreement was entered into. H submitted that the appropriate relief for W to seek was to ask the court to hold that the agreement was void. It would be inequitable to force H to provide an indemnity in respect of any actions that U&A might take, because U&A were entirely independent actors whom H did not control and for whose actions he was not responsible. H further argued that there was no ground to stay W's obligation to transfer the Swiss funds to U&A. H was having to support U&A from his own funds because they had no money (all of it being in the Swiss accounts). This was causing prejudice to him and to U&A, and therefore no stay should be granted. In his Respondent's Notice, H had submitted that the Judge should have made findings of fact based on W's oral evidence, which would have strengthened his conclusions. Lieven J thought this argument was 'misconceived', and said it would only be in 'the most exceptional cases' that it could be appropriate for a judge to make findings of fact in a case when the trial was aborted because the parties reached a compromise [45]. Lieven J's decision Lieven J understood the case law to say that the first question in deciding whether to exercise the Thwaite jurisdiction is whether there has been a significant (and necessarily relevant) change in circumstances since the order was entered into, and that the section question is whether, if there has been such a change, it would be inequitable not to vary the order. The conclusion reached by Lieven J was that the Judge had been wrong to say both that the Thwaite jurisdiction was not engaged and that there had not been a significant change in circumstances. At the time of the hearing on 16 July 2020, W was in a very materially different position to that she had bargained for on the day the agreement was reached. When she agreed the Heads of Terms, she believed that she was accepting a capital payment and releasing the Swiss funds on the basis that that would be a complete end to proceedings concerning the financial position between her and H, and that there would be a clean and complete break, with no outstanding contingent liabilities. She based that understanding on the fact that she believed, and H had supported her belief, that U&A would withdraw all proceedings against her and would enter into the deeds in respect of her and Withers. However, that did not happen, and although U&A had agreed not to pursue W, they had not so agreed in respect of Withers. The fact that U&A had not agreed to enter into the deed in respect of Withers, and that H had not agreed to indemnify Withers, or W for any liability from Withers, showed that the risk perceived by W could not be considered fanciful. It was 'wholly reasonable' for W to have placed full reliance on U&A abiding by what W and H had agreed given that H gave every indication that he was proceeding on the basis that U&A would enter into the deeds, and given the relationship between H and U&A (not just in terms of their being relatives but also the mutual financial support between them) [50]. It is not part of the Thwaite tests that the significant change must be wholly unforeseen. There was a clear understanding in the Heads of Terms that U&A would waive any liabilities, and that was a fundamental part of the deal that had been made. It was not realistic to suggest that the agreement that was reached on H's behalf did not involve him having an absolutely clear understanding of U&A's position, and, in effect, speaking on their behalf. Otherwise, he was making an agreement that U&A would forgo a very large amount of money without their agreement, which Lieven J did not find to be a credible position. There was, therefore, a significant change of circumstances. Considering the second question, Lieven J concluded that it would be inequitable not to vary the order as sought by W, and that the Judge was wrong to find otherwise. It was 'plainly inequitable to leave the Wife exposed to a contingent liability in circumstances where she is entering into a clean break settlement' and therefore would have no ability to recover any money she had to pay to Withers [61]. If U&A had no intention of suing Withers, then H's liability did not arise, and it could be that the fact of H giving the indemnity would reduce the prospect of U&A pursuing Withers. It was appropriate to take into account the very closely intertwined financial relationship between H and U&A in determining whether it was equitable to require H to give the indemnity. Although it was not possible to make findings about the degree to which U&A acted independently of H, the fact that H had sought to recover funds effectively on their behalf, was said to have been supporting them financially while their Swiss funds were frozen, and was apparently their principal legatee could be taken into account. Henrietta Boyle, Barrister at 1 Hare Court
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AA & BB (Rev 1) [2021] EWFC 17 (01 March 2021)

AA & BB (Rev 1) [2021] EWFC 17 (01 March 2021) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
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Kicinski v Pardi [2021] EWHC 499 (Fam)

Kicinski v Pardi [2021] EWHC 499 (Fam) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
The latest stage in a protracted piece of financial remedies litigation. The matter listed had been whether a stay should be granted to the wife to allow her not to transfer certain monies from a Swiss account pursuant to the order under appeal, but in the event Lieven J was able to consider both the stay and the outstanding points on appeal. The wife argued for the husband to provide an indemnity that covered her potential liability to a firm of solicitors. Lieven J found that the risk the wife perceived could not be considered fanciful. There had been a significant change of circumstances, and it had been inequitable not to vary the order. The clean break settlement would have left her unable to recover the money needed to cover the contingent liability to which she was potentially now exposed. Judgment, published: 06/03/2021 Topics Share
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Family Law Week: Money for Nothing? Crypto-assets and their Implications in Matrimonial and Private Client Work

Family Law Week: Money for Nothing? Crypto-assets and their Implications in Matrimonial and Private Client Work | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
Home > Articles Money for Nothing? Crypto-assets and their Implications in Matrimonial and Private Client Work Helen Brander, barrister of Pump Court Chambers, considers the current treatment by the courts and taxation authorities of crypto-assets   Helen Brander, barrister of Pump Court Chambers. For the matrimonial finance and private client lawyer, crypto-assets can form a major part of a client's estate and we are seeing them with increasing frequency. It is vital that we can identify, value and understand them, and advise on their implications for clients, for others interested in client assets, and to assist the court, if necessary. Where are we now with crypto-assets? Although crypto-assets were born as recently as 2008 with Bitcoin following the worldwide banking crash, fewer than 13 years later Bitcoin, Ethereum, Litecoin, Monero and similar crypto-currencies and tokens have generated surging interest. At the time of writing on 18th February 2021, according to XE.com, 1 Bitcoin (XBT) is worth £37,052, up from £7,802 just one year ago. On the same date, a Bitcoin exchange traded fund through Purpose Investments opened on the Toronto Stock Exchange, seeing almost seven million shares in the fund change hands before midday and almost ten million shares by close of trading.  Ethereum's value grew 750 per cent from January 2020 to January 2021 and the smaller currencies are also gaining value. Tesla and Paypal entrepreneur Elon Musk has spent the last week or so promoting Dogecoin via social media and other outlets, increasing its value as a result. Crypto-assets, although being completely intangible, are currently white-hot property. Crypto-assets: currency, property or something else? Crypto-assets began with the person or persons named Satoshi Nakamoto publishing a paper in October 2008 entitled Bitcoin: A Peer-to-Peer Electronic Cash System setting out a vision of commerce transacted between parties with cryptographic proof of transactions, rather than requiring those transactions to take place on trust or via a trusted third party, such as a bank. This is done by the creation of a distributed ledger of transactions which is held on computers around the world and is updated simultaneously on all copies of that ledger whenever a transaction is recorded in it. The ledger is called the blockchain.  A person holding Bitcoin or other crypto-assets has a public key (a string of electronic data visible in that ledger) and a private key (a string of electronic information confidential to them and which should be stored safely and away from the public key – preferably in a non-internet accessible mode (a piece of paper in a locked box is perhaps safest!)). To record a transaction on the blockchain where a person providing goods or services is happy to accept Bitcoin or similar in exchange, the purchaser combines their private key with their public key and directs the agreed share of Bitcoin (as any fraction can be transferred) to the vendor, who then also receives a fresh and randomly-generated private and public key, with the transaction being recorded on the distributed ledger / blockchain by the transferee authenticating the transfer. That transaction then becomes historic and cannot be revisited. If the purchaser of the goods retains Bitcoin, they then also receive a new private key and their public key will be modified. The identity of the person, company or entity holding crypto-assets on the blockchain are often not recorded and transactions take place by reference only to anonymous computer address identifiers. These are "on-chain" transactions. "Off-chain" transactions can also take place where, for example, someone transfers their private key to another outside of the blockchain. The new holder of the private key then has control over the asset. It is now well-established that crypto-assets are considered in English law to meet sufficiently the relevant criteria to be defined as property, namely that a right in or affecting a thing must be: (a) definable; (b) identifiable by third parties; (c) capable in its nature of assumption by third parties; and (d) have some degree of permanence or stability (National Provincial Bank v Ainsworth [1965] AC 1175) although the question of permanence or stability may remain moot, since a transfer of crypto-currency from one person to another, in fact, necessitates invalidation of the previous "holding" of it and creation of a new "holding", as the previous block on the blockchain which recorded the earlier transaction becomes historic, immutable and irreversible 1.  The UK Jurisdiction Taskforce noted, however, in November 2019, that the assets are as permanent as other conventional financial assets which only exist until they are cancelled, repaid, redeemed or exercised. The effect of crypto-assets being defined as property is that an interest in them can be enforced against the whole world, as opposed to personal rights, which are enforceable only against someone who has assumed a relevant legal duty in respect of them.  If one has proprietary rights, they can be protected by injunctions, can be tracked down / traced, take priority over others asserting rights over the thing, and can be recovered where they have been unlawfully taken from the owner of the proprietary right. To date, crypto-assets have been accepted as property and have afforded their owners proprietary remedies in England and internationally 2.  The lessons learned from these cases have been considered and expanded upon by Byron James and Andrzej Bojarski in their excellent Family Law Week article, Cryptocurrencies and Cryptoassets: Freezing Orders, Disclosure Orders and the Instruction of Experts, which includes useful proposed precedents for orders referred to in the title of that article. Other jurisdictions treat crypto-assets, however, as currency, rather than property.  Italy, by legislative decree 90 of 2017 (amending the implementation of EU Directive 2015/849 (IV Anti-Money Laundering Directive)) imposed the same regulations on crypto-currency exchanges as apply to traditional money exchanges, thus treating those assets as a form of foreign currency, although they are defined as a "digital representation of value not issued by a central bank or public authority" and so are not declared by any recognisable authority as legal tender. With their different definitions in different jurisdictions, crypto-assets are treated differently for legal and taxation purposes, and the private client and matrimonial finance lawyer is well-advised to bear this in mind and take appropriate local advice, particularly where the client has international interests. Taxation issues In England and Wales, HMRC has been active in assessing how crypto-assets might be chargeable to tax.  They have issued a paper which all lawyers dealing with such assets ought to consider. In short: (a) crypto-assets held as a personal investment for capital appreciation in value are liable to capital gains tax upon disposal (including exchange of one crypto-asset for another) of those interests. Any transaction or transfer of value will result in a chargeable disposal at the transferor's marginal rate unless a relief or an exemption applies. (b) Crypto-assets received from employers as a form of non-cash payment or from crypto-asset mining (crypto-assets awarded for verifying additions to the blockchain ledger), transaction confirmation or airdrops (where someone receives an allocation of crypto-assets as, for example, part of a marketing campaign or advertising, but where they do not receive them as a gift) are subject to income tax and national insurance contributions. (c) Crypto-assets held by a deceased person form part of their estate and are relevant for inheritance tax. (d) Where crypto-assets received as income per (b) above are disposed of, then they are treated as capital and gains / losses are taxed accordingly. (e) Taxation of crypto-assets is based on the holder's residence in the UK. This is relevant for resident individuals who are non-domiciled for tax purposes. If crypto-currency is bought with gains made off-shore by someone making use of the remittance basis of taxation, then the crypto-currency transaction is considered remitted for UK tax purposes and charges arise. (f) HMRC considered that it would be exceptional for individuals to buy and sell crypto-assets with a frequency, level of organisation and sophistication that amounts to financial trading.  In light of the creation of exchange traded funds, then that assumption may require revision.  If an individual engages in that activity, then income tax takes priority over capital gains tax and will apply to profits and losses, as it would be considered a business. (g) Losing a private key (so losing the ability to access the crypto-asset and thus losing the asset itself) does not count as a disposal for capital gains tax purposes. If there is no prospect of recovering that private key, then a negligible value claim can be made, which, if accepted, means that the individual is treated by HMRC as having disposed of and reacquired the same asset (that they cannot access) so that a loss can be crystallised. (h) Being a victim of fraud or theft of a crypto-asset does not amount to a disposal and the individual cannot claim a loss for capital gains tax. The individual still owns the asset and has a right to recover it. If someone pays for and receives crypto-assets which turn out to be worthless, they may be able to make a negligible value claim to HMRC. (i) Individuals are well-advised to keep separate records for each crypto-asset transaction as crypto-asset exchanges may only keep records for a short period. (j) Crypto-asset values must be converted into pounds sterling for inclusion on tax returns and the value methodology must be recorded and kept for consideration by HMRC. (k) Crypto-assets cannot be used to make a tax-relievable contribution to a registered pension scheme as they are not considered to be currency or money. Our clients who decide to hold and / or invest in crypto-assets are well advised to consider their tax position carefully. In general, gifts / disposals to spouses and family members will have the same tax consequences as transfers of any other property. Orders and enforcement Crypto-assets have appeared in lawyers' caseloads with increasing frequency, but what can one do with them? Sometimes, they form the most significant capital asset, or one party may receive employment income or incentives / bonuses in the form of a crypto-asset. How should that be treated? As crypto-assets are property, property adjustment orders pursuant to s.24 Matrimonial Causes Act 1973 or property transfer orders pursuant to s.2(1)(c) Inheritance (Provision for Family and Dependants) Act 1975 may be made. This will be a chargeable disposal for capital gains purposes unless an exemption or relief applies. Maintenance orders and legal services provision orders may be made where the holder of the crypto-asset is required to transfer a sum equivalent to a fiat currency sum, valued on the date of transfer, to the other party, or otherwise is required to liquidate a proportion of the crypto-asset equivalent to a fiat currency sum and to pay that fiat currency over to the other party (both of which will involve a taxable disposal). Accountancy advice should be taken as to whether for the payee this amounts to chargeable income, and / or whether for the payer the draw down or transfer to the other party should be treated on each occasion as a disposal for the purposes of capital gains tax. In all circumstances where a person resident in the UK, but non-domiciled for tax, transfers crypto-assets to the other party of the court order, the parties and the court must be aware that the transfer itself will be taxable, even if the transaction at first glance takes place off-shore. If a person anticipates that their registered legal partner or otherwise a trustee (constructive or express) is likely to dispose of their crypto-asset then freezing injunctions may be obtained. If a person potentially liable to a duty to preserve the crypto-asset while litigation or negotiation continues does, in fact, dispose of it, then there are tracing firms such as Chainalysis, Elliptic and CipherTrace who can, by comparing movements in the public keys of assets and patterns, trace crypto-assets diverted by a party (or perhaps stolen by a hacker or blackmailer). Such orders can be made in conjunction with freezing orders. The reader should note that HMRC has invested and is further investing in tracing software and has requested disclosure of account holder information from crypto-asset exchange platforms, which those platforms are obliged to keep and produce to appropriate authorities.  But what if the holder of the crypto-asset refuses or fails to comply with the order made?  If there are other assets held by the transgressor, then enforcement may take place against those assets. But if there are not, the aggrieved party is in an invidious position with the only apparent tools to hand being committal, appointment of a receiver where that might make a difference, or otherwise an order to obtain information from a judgment debtor. Although this may be a route to obtaining compliance with the order, it may be a fruitless exercise. Legal policy makers and legislators urgently need to take steps to create a method of requiring a holder of crypto-assets to secure their private key in a neutral place to the satisfaction of all parties and the court, pending the outcome and satisfaction of litigation. While the holder of the private key has sole control, then the law, in its current state, is too insubstantial in its effect in the face of an unrepentant transgressor. 1 Note well, however, that the top six transactions on the chain are vulnerable to revision for a few hours until the distributed ledgers are fully updated and consensus is achieved. 2 See Vorotynseva v Money-4-Limited t/a Nebeus.Com [2018] EWHC 2596; Robertson v Persons Unknown (Unreported, 15 July 2019, Moulder J); AA v Persons Unknown who demanded Bitcoin on 10th and 11th October 2019 [2020] 4 WLR 35 (proprietary injunction granted); Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 2; Ruscoe v Cryptopia Ltd (in liquidation) [2020] NZHC 728. 2 March 2021
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Millions in maintenance: FRB v DCA (No. 3) [2020] EWHC 3696 (Fam) and (No. 4) [2021] EWHC 116 (Fam) | Class Legal

Millions in maintenance: FRB v DCA (No. 3) [2020] EWHC 3696 (Fam) and (No. 4) [2021] EWHC 116 (Fam) | Class Legal | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
Background In March 2020, Cohen J handed down judgment (FRB v DCA (No. 2) [2020] EWHC 754 (Fam)), “No. 2”) following a final hearing of the parties’ cross-applications for financial remedy orders. The husband (“H”) and the wife (“W”) were both the children of extremely wealthy Indian families, and each said that the other family was worth £2 billion or more. The effect of Cohen J’s order in March 2020 was that H should pay W £64 million, comprising the matrimonial home, mortgage free (worth £15 million), and a lump sum by instalments totalling a further £49 million. The parties then both made further applications arising out of the order made in March 2020. At the hearing in March 2020, H made an informal application for Cohen J to defer handing down judgment on the basis that the economic effects of Covid-19 were such that the basis of the order was likely to be fundamentally undermined and that the court should not make any final order, but should adjourn the case until September 2020. That application was refused. In No. 2, Cohen J had expressed anxiety about the paucity of evidence as to liquidity. In his judgment, Cohen J raised the possibility of there being a transfer of assets between the parties so that H had the option of converting some of the award he had to pay from cash into shares, but H chose not to take up that invitation at the hearing in March 2020. Indeed, H himself volunteered the following dates for payment, which were ordered: The sum necessary to redeem the borrowing (c. £12m) on the family home (“FMH”) was to be paid within six weeks and the property then transferred. £30m was to be paid within six months of the date of the order. £19m was to be paid within 18 months of the date of the order. The order provided that in the event of late payment of the second and third sums, interest would be paid at the rate of 4% or such higher rate as the court may subsequently order, and that in the event of failure to pay the second instalment on time, then the whole of the balance would become payable. Cohen J also ordered that pending payment, H should pay certain bills and expenses relating to the FMH (including the mortgage repayments) and periodical payments to W at the rate of £720,000 pa, to be reduced pro rata by the proportion of the £49m which had been paid to her. In August 2020 the Court of Appeal refused H’s application for permission to appeal Cohen J’s substantive order. Since the order was made, H had not paid anything at all in respect of the lump sum, nor had he transferred the FMH or redeemed the mortgage. However, he had paid the periodical payments as ordered. No. 3 Parties’ applications Two days before the payment of the first instalment of the lump sum and redemption of the mortgage were due, H applied to vary the order both as to overall quantum and as to time for payment. He also subsequently applied for an order that decree nisi be made absolute, although that application was not proceeded with and Cohen J considered that it should be dismissed. In November 2020, W applied for: An increase in the rate of maintenance paid to her to £2.5m pa; Interest on all three unpaid lump sums together with an increase in the rate from 4% to the judgment debt rate of 8%; and A legal services provision order in the sum of c. £1.4m. H’s application to vary H’s application to vary was put on the basis of a variation, or alternatively, that the lump sum provision be set aside and requantified on a Barder event basis. H stated that a large proportion of the assets ascribed to him by Cohen J at the final hearing were held in countries or underpinned by businesses which were among the hardest hit during the Covid-19 pandemic. However, H only provided figures for three quoted companies, and for the remaining assets, he did not seek to put any figures before the court. H also said there should be a complete revaluation of all the assets in the case (effectively a complete rurun of the whole valuation exercise), which would take six months to complete on the timescale put forward by H and would cost £300,000-£400,000 plus taxes and expenses. H also wanted to have input into the valuation process, which Cohen J considered to be an ‘inherently unsatisfactory prospect in the light of the findings that I made about H’s credibility’ [21]. Cohen J considered that ‘it would be exceptional for the court to vary the quantum of lump sums in circumstances markedly different to those that would justify a Barder variation’ [22]. It was held that it was ‘not proper for the court to accede to H’s application to vary the application on macro-economic grounds’, and that if H wished to assert that there had been a fundamental change in his worth so as to justify a reopening of the inquiry, then ‘it is up to him to provide prima facie evidence’ [26]. It was ‘significant that H has chosen not to provide the material which I regard as crucial’ [27]. There were no trading figures, no profit and loss accounts, no underlying documentation, and no valuations: ‘in short there is an almost complete absence of matter which could establish or even raise a prima facie case for the court to be satisfied that there are grounds for belief that H’s wealth has been significantly reduced’ [27]. H had also given no indication of what he was worth and what he could pay and when. Additionally, Cohen J noted that the ‘major stock market indices are now at a high level and have rebounded to above their pre-Covid-19 levels’ [30]. It was essential to view H’s application in the long term as well as in the short term. H’s application was therefore dismissed. H had ‘not shown a proper basis for reopening the award’ [31]. W’s applications Maintenance increase and interest on unpaid lump sums W asked for her maintenance to be increased to £2.5m pa, based on the addendum to the No. 2 judgment where for the purposes of enforcement under the Lugano Convention, Cohen J fixed her maintenance need at £2.5m pa subject to a multiplier of 9. Cohen J clarified that he was not saying that that level of income was appropriate to meet W’s day-to-day expenses, and certainly not on an interim basis. H pointed out that W had been living off a lesser sum than the £60,000 pcm which Cohen J provided her with (together with £5,000 pcm in child maintenance), but W said that was only because the Covid-19 restrictions had severely limited her lifestyle. W also asked for interest on all three unpaid lump sums. Cohen J bore in mind that the current rates of interest are less than the 4% which H was ordered to pay, but also that if W had received her award, she would have had the opportunity to invest it and could have made more by way of return given the rising stock market. Ultimately, Cohen J held that H should pay 4% pa on the second tranche of £30m, but that no interest should be attached to the first tranche (because H would continue to pay the mortgage on the FMH and W was not in reality being kept out of that element of her award), nor the third tranche (which liability had only arisen because of H’s non-payment of the second tranche, and which would otherwise only be payable from 30 September 2021). Interest on £30m at 4% gave rise to a liability of £1.2m pa. It was agreed between the parties that because there had not been decree absolute, the interest on the lump sum was only payable when payment of the lump sum became due. H said the remedy was for W to apply for decree absolute, but Cohen J thought this was unattractive, since W had not applied for decree absolute for various reasons, including that it was one small hold she had over H, who wished to remarry. Cohen J stated that H ‘does need to be given an incentive to make payment’, and said that W’s maintenance pending suit should be increased by £1.2m pa, in addition to what would otherwise be payable under the order, backdated to 30 September 2020 [41]. Little weight was given to the fact that H said his income had been reduced to £1.89m. Cohen J was satisfied that the sum he was awarding was payable by H without leaving H in a situation of need. He noted that H had recently chosen to take a lease on an apartment in one of the most prestigious and expensive blocks in Monte Carlo. Legal Services Order W sought: Outstanding legal fees of £253,389. £174,942 in respect of financial remedy proceedings up to and including this hearing. £357,882 in respect of continuing costs in the variation application (which fell away following Cohen J’s decision). £368,554 in respect of a dispute arising out of the ownership of artworks, to be heard in 2021. £188,899 in respect of Children Act proceedings. W had savings of just over £500,000. H argued that no order should be made on the basis that W could get the money from her parents, could borrow against ‘Property 11’ in London, and could have, if she had wished, had the FMH transferred to her, which would have given her the ability to use it as security to obtain a loan from a commercial lender. W said her parents were not willing to provide her with funds, and Cohen J saw no reason why they should. He also found that Property 11 was not available to her to borrow against since it was her parents’ (although it was registered in W’s name) and was not an asset she had received any benefit from. He also pointed out that it was not surprising that W found H’s offer regarding the transfer of the FMH unattractive: H offered to transfer the FMH, but leaving it subject to a mortgage (on the terms that H would borrow €6m against a property in France held in the parties’ joint names, use €4.9m of that sum to discharge about a third of the mortgage on the FMH, and provide €1.1m to put towards W’s costs), in exchange for which he expected W to transfer to him all her interest in the French property. Cohen J noted that under his order W was only to transfer the French property to H after he had made all the payments that were due from him. Cohen J was of the view that it would be entirely inappropriate to expect W to charge what little money/assets she had when H had been found to be wealthy and deceitful, and when he had failed to pay any part of the lump sum. In respect of money in her bank account, he considered that W ‘should not be expected to denude herself of all funds’ [52]. Cohen J accepted W’s evidence that she had drawn a blank with three well-known commercial lenders and had no other source of funds. H was therefore ordered to provide: £289,362 in respect of unpaid costs (for which he would get credit against the final payment of the lump sum, since the costs would have been paid by W out of the sums H should have paid). Litigation funding in relation to the art dispute (a hold-over from the main matrimonial proceedings), but on the basis that the issue of costs remained completely open and that W had to be prepared to repay the funds if so ordered. The Children Act costs (which arose in the context of proceedings where H sought to take the parties’ child abroad, in circumstances where W was concerned that H might not return the child to her, or might use him as a pawn in financial enforcement proceedings). The question of costs in the financial remedy proceedings was adjourned. No. 4 Cohen J gave the No. 4 judgment to supplement No. 3, having left open certain issues pending receipt of further argument from the parties’ counsel. Variation of periodical payments W said that the increase of £1.2m pa simply provided that she would receive some of her award earlier than would otherwise be the case, and provided an incentive for H to pay that which he should have already paid. H said that Cohen J had no jurisdiction to make an order for payment of a sum reflecting the interest due on the lump sum as it did not become payable until there was decree absolute. Cohen J accepted that the lump sum could not be enforced until there was decree absolute, but said that did not mean that it could not be paid before decree absolute. It was understandable why W opposed the making of decree absolute given it was the only arrow in W’s quiver, because of H’s wish to remarry. Cohen J held that there was no statutory bar on varying the order for periodical payments, and that it was not a misuse of the court’s powers to vary the maintenance order in circumstances where he found H had to means to make the payments towards the lump sum, and where he had paid not one penny, nor made any proposal for payment. H needed an incentive to pay. Since W would be receiving a sum in lieu of the interest that would otherwise accrue, Cohen J held that the payment of interest on that must cease to be payable, or W would receive the sum twice. Ultimately, Cohen J concluded that it would not be right for an increase in the periodical payments of this size to have no impact upon the original order, or there would be a risk of double counting. If H had paid the £30m, the periodical payments would have gone down to £280k pa (from £720k pa). The amount of this element of the periodical payments award would therefore be varied from £720k to £280k, giving H a figure of £1.48m to pay instead of £1.92m. Although W would not receive the full sum she would receive if the periodical payments were not to be varied, the loss was mitigated by the fact that W would not have to pay tax on the interest which would be accruing, and that W had the benefit of receiving the payment earlier than might have been the case. Cohen J ordered H to pay the arrears from the backdated element of his award in four equal monthly instalments, which was within H’s means. LSPO H proposed that he should pay £150k towards W’s total claim of £810,842. Cohen J remained of the view that H should pay W the necessary sum to cover her outstanding costs from previous proceedings, and that he should receive credit for that payment against the first tranche of the lump sum that he paid. Although the backdating of the increased maintenance award would create a fund when the arrears were paid, it would not be sufficient to cover both W’s past and future costs, and it was fair that she should be entitled to preserve a capital fund which was modest compared to H’s resources. Regarding the costs of the artwork dispute and the Children Act proceedings, Cohen J held that one half of the increase in periodical payments should be put by W towards her forthcoming costs, and that the other half should be available to her to use at her discretion. This was because, provided that she received the increased periodical payments (in the sum of c. £63.3k pcm), she would be in a position to make a contribution towards her own costs. H was therefore ordered to pay W’s outstanding costs of £253,389 (a revised figure following the figure given in No. 3), plus £399,453 (the payment for future costs of £557,453, less £158k – being five payments of £31.6k, half the increase of £63.3k which W would be receiving). Cohen J rounded that to £650,000 and accepted H’s proposal that the sum be paid by five equal instalments of £130,000, starting on 31 January 2021. Costs H was ordered to pay 80% of W’s costs, summarily assessed at £128,000, by 31 January 2021. W would have the resources to pay the rest. Henrietta Boyle, Barrister at 1 Hare Court
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Millions in maintenance: FRB v DCA (No. 3) [2020] EWHC 3696 (Fam) and (No. 4) [2021] EWHC 116 (Fam)

Millions in maintenance: FRB v DCA (No. 3) [2020] EWHC 3696 (Fam) and (No. 4) [2021] EWHC 116 (Fam) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
Background In March 2020, Cohen J handed down judgment (FRB v DCA (No. 2) [2020] EWHC 754 (Fam)), "No. 2") following a final hearing of the parties' cross-applications for financial remedy orders. The husband ("H") and the wife ("W") were both the children of extremely wealthy Indian families, and each said that the other family was worth £2 billion or more. The effect of Cohen J's order in March 2020 was that H should pay W £64 million, comprising the matrimonial home, mortgage free (worth £15 million), and a lump sum by instalments totalling a further £49 million. The parties then both made further applications arising out of the order made in March 2020. At the hearing in March 2020, H made an informal application for Cohen J to defer handing down judgment on the basis that the economic effects of Covid-19 were such that the basis of the order was likely to be fundamentally undermined and that the court should not make any final order, but should adjourn the case until September 2020. That application was refused. In No. 2, Cohen J had expressed anxiety about the paucity of evidence as to liquidity. In his judgment, Cohen J raised the possibility of there being a transfer of assets between the parties so that H had the option of converting some of the award he had to pay from cash into shares, but H chose not to take up that invitation at the hearing in March 2020. Indeed, H himself volunteered the following dates for payment, which were ordered: The sum necessary to redeem the borrowing (c. £12m) on the family home ("FMH") was to be paid within six weeks and the property then transferred. £30m was to be paid within six months of the date of the order. £19m was to be paid within 18 months of the date of the order. The order provided that in the event of late payment of the second and third sums, interest would be paid at the rate of 4% or such higher rate as the court may subsequently order, and that in the event of failure to pay the second instalment on time, then the whole of the balance would become payable. Cohen J also ordered that pending payment, H should pay certain bills and expenses relating to the FMH (including the mortgage repayments) and periodical payments to W at the rate of £720,000 pa, to be reduced pro rata by the proportion of the £49m which had been paid to her. In August 2020 the Court of Appeal refused H's application for permission to appeal Cohen J's substantive order. Since the order was made, H had not paid anything at all in respect of the lump sum, nor had he transferred the FMH or redeemed the mortgage. However, he had paid the periodical payments as ordered. No. 3 Parties' applications Two days before the payment of the first instalment of the lump sum and redemption of the mortgage were due, H applied to vary the order both as to overall quantum and as to time for payment. He also subsequently applied for an order that decree nisi be made absolute, although that application was not proceeded with and Cohen J considered that it should be dismissed. In November 2020, W applied for: An increase in the rate of maintenance paid to her to £2.5m pa; Interest on all three unpaid lump sums together with an increase in the rate from 4% to the judgment debt rate of 8%; and A legal services provision order in the sum of c. £1.4m. H's application to vary H's application to vary was put on the basis of a variation, or alternatively, that the lump sum provision be set aside and requantified on a Barder event basis. H stated that a large proportion of the assets ascribed to him by Cohen J at the final hearing were held in countries or underpinned by businesses which were among the hardest hit during the Covid-19 pandemic. However, H only provided figures for three quoted companies, and for the remaining assets, he did not seek to put any figures before the court. H also said there should be a complete revaluation of all the assets in the case (effectively a complete rurun of the whole valuation exercise), which would take six months to complete on the timescale put forward by H and would cost £300,000-£400,000 plus taxes and expenses. H also wanted to have input into the valuation process, which Cohen J considered to be an 'inherently unsatisfactory prospect in the light of the findings that I made about H's credibility' [21]. Cohen J considered that 'it would be exceptional for the court to vary the quantum of lump sums in circumstances markedly different to those that would justify a Barder variation' [22]. It was held that it was 'not proper for the court to accede to H's application to vary the application on macro-economic grounds', and that if H wished to assert that there had been a fundamental change in his worth so as to justify a reopening of the inquiry, then 'it is up to him to provide prima facie evidence' [26]. It was 'significant that H has chosen not to provide the material which I regard as crucial' [27]. There were no trading figures, no profit and loss accounts, no underlying documentation, and no valuations: 'in short there is an almost complete absence of matter which could establish or even raise a prima facie case for the court to be satisfied that there are grounds for belief that H's wealth has been significantly reduced' [27]. H had also given no indication of what he was worth and what he could pay and when. Additionally, Cohen J noted that the 'major stock market indices are now at a high level and have rebounded to above their pre-Covid-19 levels' [30]. It was essential to view H's application in the long term as well as in the short term. H's application was therefore dismissed. H had 'not shown a proper basis for reopening the award' [31]. W's applications Maintenance increase and interest on unpaid lump sums W asked for her maintenance to be increased to £2.5m pa, based on the addendum to the No. 2 judgment where for the purposes of enforcement under the Lugano Convention, Cohen J fixed her maintenance need at £2.5m pa subject to a multiplier of 9. Cohen J clarified that he was not saying that that level of income was appropriate to meet W's day-to-day expenses, and certainly not on an interim basis. H pointed out that W had been living off a lesser sum than the £60,000 pcm which Cohen J provided her with (together with £5,000 pcm in child maintenance), but W said that was only because the Covid-19 restrictions had severely limited her lifestyle. W also asked for interest on all three unpaid lump sums. Cohen J bore in mind that the current rates of interest are less than the 4% which H was ordered to pay, but also that if W had received her award, she would have had the opportunity to invest it and could have made more by way of return given the rising stock market. Ultimately, Cohen J held that H should pay 4% pa on the second tranche of £30m, but that no interest should be attached to the first tranche (because H would continue to pay the mortgage on the FMH and W was not in reality being kept out of that element of her award), nor the third tranche (which liability had only arisen because of H's non-payment of the second tranche, and which would otherwise only be payable from 30 September 2021). Interest on £30m at 4% gave rise to a liability of £1.2m pa. It was agreed between the parties that because there had not been decree absolute, the interest on the lump sum was only payable when payment of the lump sum became due. H said the remedy was for W to apply for decree absolute, but Cohen J thought this was unattractive, since W had not applied for decree absolute for various reasons, including that it was one small hold she had over H, who wished to remarry. Cohen J stated that H 'does need to be given an incentive to make payment', and said that W's maintenance pending suit should be increased by £1.2m pa, in addition to what would otherwise be payable under the order, backdated to 30 September 2020 [41]. Little weight was given to the fact that H said his income had been reduced to £1.89m. Cohen J was satisfied that the sum he was awarding was payable by H without leaving H in a situation of need. He noted that H had recently chosen to take a lease on an apartment in one of the most prestigious and expensive blocks in Monte Carlo. Legal Services Order W sought: Outstanding legal fees of £253,389. £174,942 in respect of financial remedy proceedings up to and including this hearing. £357,882 in respect of continuing costs in the variation application (which fell away following Cohen J's decision). £368,554 in respect of a dispute arising out of the ownership of artworks, to be heard in 2021. £188,899 in respect of Children Act proceedings. W had savings of just over £500,000. H argued that no order should be made on the basis that W could get the money from her parents, could borrow against 'Property 11' in London, and could have, if she had wished, had the FMH transferred to her, which would have given her the ability to use it as security to obtain a loan from a commercial lender. W said her parents were not willing to provide her with funds, and Cohen J saw no reason why they should. He also found that Property 11 was not available to her to borrow against since it was her parents' (although it was registered in W's name) and was not an asset she had received any benefit from. He also pointed out that it was not surprising that W found H's offer regarding the transfer of the FMH unattractive: H offered to transfer the FMH, but leaving it subject to a mortgage (on the terms that H would borrow €6m against a property in France held in the parties' joint names, use €4.9m of that sum to discharge about a third of the mortgage on the FMH, and provide €1.1m to put towards W's costs), in exchange for which he expected W to transfer to him all her interest in the French property. Cohen J noted that under his order W was only to transfer the French property to H after he had made all the payments that were due from him. Cohen J was of the view that it would be entirely inappropriate to expect W to charge what little money/assets she had when H had been found to be wealthy and deceitful, and when he had failed to pay any part of the lump sum. In respect of money in her bank account, he considered that W 'should not be expected to denude herself of all funds' [52]. Cohen J accepted W's evidence that she had drawn a blank with three well-known commercial lenders and had no other source of funds. H was therefore ordered to provide: £289,362 in respect of unpaid costs (for which he would get credit against the final payment of the lump sum, since the costs would have been paid by W out of the sums H should have paid). Litigation funding in relation to the art dispute (a hold-over from the main matrimonial proceedings), but on the basis that the issue of costs remained completely open and that W had to be prepared to repay the funds if so ordered. The Children Act costs (which arose in the context of proceedings where H sought to take the parties' child abroad, in circumstances where W was concerned that H might not return the child to her, or might use him as a pawn in financial enforcement proceedings). The question of costs in the financial remedy proceedings was adjourned. No. 4 Cohen J gave the No. 4 judgment to supplement No. 3, having left open certain issues pending receipt of further argument from the parties' counsel. Variation of periodical payments W said that the increase of £1.2m pa simply provided that she would receive some of her award earlier than would otherwise be the case, and provided an incentive for H to pay that which he should have already paid. H said that Cohen J had no jurisdiction to make an order for payment of a sum reflecting the interest due on the lump sum as it did not become payable until there was decree absolute. Cohen J accepted that the lump sum could not be enforced until there was decree absolute, but said that did not mean that it could not be paid before decree absolute. It was understandable why W opposed the making of decree absolute given it was the only arrow in W's quiver, because of H's wish to remarry. Cohen J held that there was no statutory bar on varying the order for periodical payments, and that it was not a misuse of the court's powers to vary the maintenance order in circumstances where he found H had to means to make the payments towards the lump sum, and where he had paid not one penny, nor made any proposal for payment. H needed an incentive to pay. Since W would be receiving a sum in lieu of the interest that would otherwise accrue, Cohen J held that the payment of interest on that must cease to be payable, or W would receive the sum twice. Ultimately, Cohen J concluded that it would not be right for an increase in the periodical payments of this size to have no impact upon the original order, or there would be a risk of double counting. If H had paid the £30m, the periodical payments would have gone down to £280k pa (from £720k pa). The amount of this element of the periodical payments award would therefore be varied from £720k to £280k, giving H a figure of £1.48m to pay instead of £1.92m. Although W would not receive the full sum she would receive if the periodical payments were not to be varied, the loss was mitigated by the fact that W would not have to pay tax on the interest which would be accruing, and that W had the benefit of receiving the payment earlier than might have been the case. Cohen J ordered H to pay the arrears from the backdated element of his award in four equal monthly instalments, which was within H's means. LSPO H proposed that he should pay £150k towards W's total claim of £810,842. Cohen J remained of the view that H should pay W the necessary sum to cover her outstanding costs from previous proceedings, and that he should receive credit for that payment against the first tranche of the lump sum that he paid. Although the backdating of the increased maintenance award would create a fund when the arrears were paid, it would not be sufficient to cover both W's past and future costs, and it was fair that she should be entitled to preserve a capital fund which was modest compared to H's resources. Regarding the costs of the artwork dispute and the Children Act proceedings, Cohen J held that one half of the increase in periodical payments should be put by W towards her forthcoming costs, and that the other half should be available to her to use at her discretion. This was because, provided that she received the increased periodical payments (in the sum of c. £63.3k pcm), she would be in a position to make a contribution towards her own costs. H was therefore ordered to pay W's outstanding costs of £253,389 (a revised figure following the figure given in No. 3), plus £399,453 (the payment for future costs of £557,453, less £158k – being five payments of £31.6k, half the increase of £63.3k which W would be receiving). Cohen J rounded that to £650,000 and accepted H's proposal that the sum be paid by five equal instalments of £130,000, starting on 31 January 2021. Costs H was ordered to pay 80% of W's costs, summarily assessed at £128,000, by 31 January 2021. W would have the resources to pay the rest. Henrietta Boyle, Barrister at 1 Hare Court
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From Russia with litigation: AG v VD [2021] EWFC 9 | Class Legal

From Russia with litigation: AG v VD [2021] EWFC 9 | Class Legal | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
AG (“W”) made an application pursuant to Part III of the Matrimonial and Family Proceedings Act 1984 for financial relief following the breakdown of her marriage to VD (“H”) and a divorce in Russia. Background W was 51, and H was 56. W had a daughter, S, aged 17, and H had four children by previous relationships. The parties met in 2008 and co-habited from 2009. They married in Russia in 2010. They then moved to London (having bought a flat in NW8) after W obtained a Tier 1 investor visa, having been loaned £1m by H. W and S had lived in London since that time, although H’s business interests mainly kept him in Russia and to a significant extent the marriage was spent apart. In early 2014, H fell out with the Russian government and had to leave Russia at short notice. H said the marriage came to an end in 2014, but W said it did not come to an end until 2017. Cohen J found that the marriage did not come to an end, and was not perceived to have come to an end by either party, until 2017. Among other things, from 2014-17, they had shared a bedroom on many occasions, went on holiday together, and celebrated birthdays together. It was clear to Cohen J that ‘the parties still saw themselves as a couple’ [35]. W claimed the marital assets were £29m, of which H owned £26.5m and W £2.5m. H claimed the total assets were only £7.6m, of which he owned £2.9m and W £4.6m, but that after repayment of sums he had borrowed from a foundation in which he had placed the majority of his assets, he was worth -£6m. Cohen J stated that ‘[t]he parties have lost all perspective of what this case is really about…They have sought to argue every point available to them and have thus between them expended some £2.1m on costs’ [8]. Curacao Foundation In November 2010, H entered into a Principal Party Agreement with a trust company, U, giving U control over 16 of H’s companies. In July 2011, U established a private foundation in Curacao (“the Foundation”), and it acted as director of the Foundation. In February 2012, H entered into the first of a series of loan agreements with a BVI company whereby funds held within the Foundation were made available to H by way of loan. H said he had borrowed a little over £13.5m in various tranches against a loan facility of £15m. H accepted it was highly unlikely that any of the loans would be called in during his lifetime. Loans were used to purchase: · A property in Cyprus in 2012, in the name of a Foundation company. · A property in Majorca in 2012, in the name of another Foundation company. · A second property in London in 2013, on The Bishops Avenue in Hampstead (purchased by way of loans apart from the last £1.7m). (The first matrimonial home in NW8 was sold at the end of 2014.) H said that he understood that in 2015 he had transferred the beneficial interest in the entities within the trust to his son, ND, but this was not supported by the only document from that time which H could produce. There had never been any document which H could produce which actually vested the interest H had in the entities in any other person. H said there had been no distributions from the Foundation to him, only loans, but Cohen J did not accept this. Three houses had been purchased with the use of funds from the Foundation (the properties in Majorca, London and Cyprus), the matrimonial home on The Bishops Avenue was funded by way of loan (save for £1.7m) but was placed in the names of the parties, and all three properties and/or the loans used for their purchase appeared on the books of the Foundation as assets held by it. Cohen J rejected the contention that H had gifted the majority of his wealth to ND. He was of the view that H remained the beneficial owner and the controller of the funds and assets within the Foundation, and had ‘no doubt that they are available to him as and when he wishes to call upon them’ [93]. W’s businesses In January 2013 the shares in one of the Foundation companies were transferred to W so she could set up a medical beautician business called LMS off Harley Street. H invested heavily in the business, including loaning W £200k. In early 2015, W incorporated MM, a high-end fashion retailer. H invested €100k into the project. Russian proceedings In December 2017, H issued his divorce petition in Russia. W had attempted to serve an English divorce petition on H and claimed he evaded service, but she eventually accepted defeat and her English petition was dismissed by consent. In September 2018, H issued his application for financial relief in the Russian courts. Cohen J found that in an attempt to remove from the distributive powers of the Russian court the assets held by W outside England, W had: · In October 2018, gifted to her mother a small flat in St Petersburg which S’s father had bought for W. · In December 2018, sold the Majorca property for €3.53m net, which she transferred in tranches to her own private account. · In March 2019, purported to sell the MM shop to an employee for €49k inclusive of stock. The purchaser had not paid the price, and although H suggested the sale was a sham, Cohen J found that W’s business acumen was very limited, that the project was a financial disaster and that W no longer had an interest in it. The effect of the Russian proceedings, heard in July 2019, was as follows: · The London matrimonial home and the shares in the Majorcan company which held the Majorcan property were to be divided 50/50. (Although by that point a significant part of the Majorca proceeds of sale had been spent.) · H’s claim on the flat in St Petersburg and for the return of the investor visa loan of £1m, plus interest of over £280k, was dismissed. · Some other minor assets were to be divided equally. · No form of continuing provision, whether by way of maintenance or otherwise, was provided for W or S. No account was taken of assets held in entities not owned by the parties, so that H’s business activities and all his funds which had been transferred into the Foundation did not enter the equation. H calculated that the effect of the order was to leave W with about £4m, being half the value of the London home and half the Majorca home, on the false assumption that the proceeds of the Majorca property had been preserved. H had obtained permission to appeal the order dismissing the application for the return of the investor visa money by way of a retrial. If he were to succeed, the value of W’s award from the Russian court would reduce by £1.3m, plus penalties accruing at 0.1% per day. W’s response to the Russian order was to apply for permission under Part III. Was England the appropriate venue for the application? Cohen J considered that there was a substantial connection with England, and that it was appropriate for an order to be made by the English court. This was for a number of reasons, including that: · The parties decided to leave Russia for England in 2010, and had had their main home here since then. · W had not visited Russia since 2015, and W and S had lived nowhere apart from London in the last decade. · W had long severed her links with Russia and the entirety of the parties’ married life was spent in England. · They bought their own property in London and took out British citizenship. · The Russian order did not lead to any redistribution of the family assets, and had not been complied with in any way of which Cohen J had been told. · The effect of the Russian order was to leave W with just £1m to house herself and S and to live off (it would give her c. £2.5m, of which she would be expected to repay one half of the proceeds of sale of the Majorcan villa, i.e. £1.5m). If H’s appeal to recover £1.3m plus penalties were to succeed, W and S would be left with nothing. The Russian order did not provide adequately for the needs of W and S. H’s business activities W had spent a large amount of time and money attempting to show that there had been a significant marital acquest through H’s business activities. However, Cohen J said that ‘[u]nless W’s share of that acquest exceeds a needs-based award she will not receive a sharing award’ [62]. Ultimately, Cohen J was not satisfied that sufficient had been earned or preserved during the marriage to entitle W to the making of a sharing award. He was satisfied that H did earn income and make profits during the marriage, but a large amount was spent by the parties on properties in London, Majorca and Cyprus, big sums were put into what turned out to be failed investments, and a very high standard of living was maintained. That expenditure had only reduced what might otherwise have been an acquest. Cohen J concluded that ‘the bedrock for any conclusion of a significant acquest is absent’ [69]. W’s use of resources H (Cohen J thought rightly) pointed out that W had run through an enormous amount of money during the marriage, including £757k which W had received following the sale of the parties’ first London home, £779k received on the redemption of government bonds, £3.18m from the proceeds of sale of the Majorca property, and very substantial transfers made by H to W’s account. However, Cohen J commented that it was ‘a little difficult for H to make complaint about the use of resources by W which he provided himself’, which covered most of the payments, especially given that H was ‘happy to indulge her’ [105]. With regard to W’s failed business ventures, H himself had invested in both of them. H asked Cohen J to add back a significant element of the money that W had received and spent. Although Cohen J regarded some of W’s expenditure as irresponsible, it was not wanton dissipation of assets. Additionally, Cohen J noted that bad investment decisions had been taken by both parties, e.g. H had invested £2.6m in a Russian restaurant in London. The parties’ assets The matrimonial home on The Bishops Avenue had a net value of circa £5.14m (£2.57m each). W had a surplus of other assets over liabilities after paying her outstanding costs of £95k, giving her assets of £2.66m. No fixed value was attributed to W’s jewellery or handbag collection, or the household chattels, since although they were realisable assets, Cohen J stated that ‘in a case of this nature, I do not regard it as reasonable to say that W’s needs should be met in that way’ [119]. H had his share of the matrimonial home of £2.57m, and Cohen J included the Cyprus property as an asset available to H (although it had been placed in H’s son’s name), which had a net value of £687k. H owed his solicitors £170k, leaving him with assets exclusive of the Foundation and business assets of £3.087m. Cohen J found that H was the beneficial owner of the Foundation and had access to its assets, and that he had an interest in German and Russian business ventures and companies in a sum that could not be determined. Cohen J was not satisfied that he could or should infer that H’s business interests and access to assets which he had not disclosed were ‘so significant or that H is so wealthy that W’s case as to her needs should be assessed at the upper end of the bracket as I am asked to do’ [125]. Offers W sought a transfer of the matrimonial home, and a lump sum of £3.8m (to provide her with £174k pa on a Duxbury basis). H offered to forego all repayments due to him, but only if his offer of W retaining her half of the home, and nothing more, was accepted. W’s needs Cohen J did not regard W staying in the matrimonial home as being reasonable in terms of meeting her needs ‘against the background of what is not a long marriage and when within a fairly short time her daughter will be taking steps towards independence’ [128]. W proposed properties on the market at well in excess of £4m, and H proposed properties at under £1.5m. Cohen J accepted that it would be reasonable for W to live in a purpose-built apartment building in a good and safe area of Hampstead/Highgate, and that she would need three bedrooms, but he did not accept that W required a swimming pool or gym within the development. He concluded that a proper sum for W’s housing was £3m, plus expenses of purchase, moving, setting up and SDLT, which was calculated at a total of £3.4m. Both H and W put forward budgets for themselves at around £250k pa (although W had originally sought over £860k pa). Cohen J bore in mind that this was not a long marriage and that W did not bring money in to the marriage, and that although the standard of living was very high, this could not ‘be allowed to predominate over other factors’ [134]. However, in his view, W did not have a significant earning capacity, and would not easily find a job in England. Cohen J stated that his award ‘must be sufficient to meet what I deem her reasonable needs to be on a lifelong basis without making the assumption that she can so contribute’ to her own outgoings [136]. He concluded that W needed £100k pa, which produced a capital sum on the Duxbury tables of £2.06m. W would therefore need a lump sum of £320k, in addition to the transfer of the matrimonial home. Cohen J was satisfied that this order did not impinge upon H’s ability to meet his own needs. H was further required to pay the service charge and, if separate, the buildings insurance on the matrimonial home until 1 September 2022 or earlier sale, and to pay (as he accepted he should) S’s school fees and thereafter her tuition and living expenses at university. He was also required to pay periodical payments to S in the sum of £24k pa (as he had offered), of which 50% would be paid directly to S, and the balance to W, from the time that S started at university. Cohen J further directed, given that his award was needs-based, that H must provide an indemnity and/or pay a lump sum equal to the amount of any award against W that he obtained in Russia. It would not be appropriate for a needs-based award to be reduced by H’s pursuit of the return of the investor visa loan, nor for H to be left with the ability to claim for the monies loaned to W’s businesses. Henrietta Boyle, Barrister at 1 Hare Court You may also be interested in: Dictionary of Financial Remedies 2021 (pre-order) The Dictionary of Financial Remedies is a unique reference guide to the key concepts, cases and practice of financial remedies. An ideal quick reference for when you are in court, conference or mediation and written in a style that will appeal to family lawyers, mediators and other non-lawyers involved in financial remedy proceedings. This 2021 edition is fully updated to include changes and developments in the law from the last twelve months, including those that have occurred as a result of the Covid-19 pandemic. New entries include: Privilege; Release from Undertakings; Executory Orders; Setting Aside and Remote Hearings. PRE-ORDER
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Tax: amber warning for those contemplating divorce or separation | Shoosmiths

Tax: amber warning for those contemplating divorce or separation | Shoosmiths | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
We’ve all become familiar with the Met Office issuing “traffic light” warnings about potentially disruptive weather. Couples contemplating divorce or separation could face similarly rough going when it comes to their tax affairs, especially Capital Gains Tax (CGT) when property or a business is...
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Family Law Week: IU anonymised [2020] EWFC 98

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WX v HX (Treatment of Matrimonial and Non-Matrimonial Property) [2021] EWHC 241 (Fam) (10 February 2021)

WX v HX (Treatment of Matrimonial and Non-Matrimonial Property) [2021] EWHC 241 (Fam) (10 February 2021) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
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SD v Royal Borough of Kensington And Chelsea [2021] EWCOP 14 (10 February 2021)

SD v Royal Borough of Kensington And Chelsea [2021] EWCOP 14 (10 February 2021) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
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Does fairness require a full equalisation of white goods and teaspoons? WX v HX (Treatment of Matrimonial and Non-Matrimonial Property) [2021] EWHC 241 (Fam) | Class Legal

Does fairness require a full equalisation of white goods and teaspoons? WX v HX (Treatment of Matrimonial and Non-Matrimonial Property) [2021] EWHC 241 (Fam) | Class Legal | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
WX (“W”) had applied for a financial remedy order against her husband, HX (“H”). The parties’ two adult daughters, NX and LX, had been joined as intervenors as a result of their status as beneficiaries of family trusts which had been the vehicle for holding a substantial element of the wealth which had been generated throughout the course of the marriage. Background The parties met in the early 1980s and became engaged within six months of meeting each other. They married in 1985. They had four children, the second of whom sadly died as a result of a brain tumour when she was very young. The other three children were now adults and had (or were forging) successful careers in finance and law. W had previously issued divorce petitions in 1991 and in 2013, but the parties reconciled after each of those petitions and only finally separated in September 2018. Decree nisi was pronounced in December 2020. W had suffered periods of ill health at points in the marriage. However, she had looked after the family without help from a full-time nanny and Roberts J accepted that she played a full role as a mother and homemaker. H originally worked in finance and became a partner in a bank at the age of 28. He made a very significant contribution to the marriage in terms of wealth creation. Both W and H came from wealthy families. H came from a wealthy and long-established North American business family. W was the beneficiary of two trusts (one set up by her father, and one set up after her father’s death) which were worth just under £9m net, and which provided W with income as high as c. £350,000 gross pa (£235,000 net). H managed W’s funds on her behalf. The family’s standard of living was high. Two years after the parties’ marriage they pooled the sale proceeds from their respective homes in London SW3 and SW7 and purchased the family home on M Street in South-West London (now worth £13.75m and mortgage-free). Six years into the marriage, they acquired a substantial home in Oxfordshire, which had a value of £10.65m (mortgage-free). The Oxfordshire property was where the family spent weekends and spent some of their holidays, and where they did their entertaining. H displayed much of his valuable art collection at the Oxfordshire property. The parties’ wealth and offshore structures Although there were issues which separated the parties in terms of the computation of their assets, the headline figures were not in dispute and the wealth available for distribution was between £50-£60m. There was a sum of c. US$50m held in an offshore trust (“the S Trust”), in respect of which the parties’ children were now the principal beneficiaries. By the time of the final hearing W accepted that those trust funds were no longer resources to which H should be treated as having access, although it was accepted by both parties that the wealth held within the S Trust had been generated entirely during the course of the marriage. Recognising his tax status as a non-domiciled UK resident, H was able throughout most of the marriage to make certain tax efficient arrangements in terms of his management of the family’s wealth. For example, the Oxfordshire property was purchased through the vehicle of an offshore trust, the H Trust. H accepted that the H Trust was a variable nuptial settlement. A tripartite structure of three offshore entities had also been created, which minimised the family’s tax exposure. In 1999, H sold his shares in his family business to one of those entities, N Ltd (a beneficiary of the S Trust), for CAD$25m, in return for which he received a promissory note for just under £10.5m, which sum was interest free and payable on demand either in whole or in part. N Ltd then sold the shares it had acquired to the S Trust, in return for which it received a further promissory note for an equivalent value which reflected in US dollars the full value of the consideration it had paid by way of its earlier promissory note drawn in H’s favour. H effectively converted the capital asset of those shares into an income stream, while the capital value passed tax free into the offshore structure. This structure provided the 'churn' which enabled H to extract value from his family shares when he needed access to funds, guaranteed by the existence of the promissory note. However, there was subsequently a hostile takeover bid of H’s family company. H resigned from the board of the family company, and the S Trust’s shares in the family business were sold for CAD$90m (c. £52m). H then became the de facto investment manager for the funds in the S Trust, having agreed a formal investment policy with the trustees. In March 2020, a deed was executed which had the effect of excluding N Ltd as a potential beneficiary of the S Trust, and operated as a formal and irrevocable release of the trustee’s power to add H, W or any legal entity controlled by either as a future beneficiary. This was to ensure that the primary purpose of the S Trust remained the preservation and growth of capital held within the trust for the benefit of the parties’ children. A loophole via which H could have still benefitted from the trust assets was also subsequently closed, hence W’s acceptance that H could no longer benefit from the S Trust. Open positions H had offered to transfer to W his 50% interest in the jointly owned family home in London, which had an agreed (mortgage-free) figure of £13.75m. On his case, this would leave each party with roughly half of their combined wealth. W sought the family home together with an additional cash sum of £10m, which she proposed would be paid from H’s personal offshore assets. On her case, that would leave each party with a half share of matrimonial assets, worth some £20m, on the basis that W’s non-matrimonial inherited wealth of c. £14m net was ring-fenced. Specific computation issues The value to be attributed to the Oxfordshire property held within the H Trust The issue of computation which arose in respect of the Oxfordshire property, and the legal ownership of it by the offshore trustee, was the value which should be attributed to H’s ability to remain there and to enjoy the property for the rest of his life. H argued that the court should not attribute to him the full value of the property because his interest was more properly reflected in the value to be attributed to the life interest he had in it. Roberts J concluded that, because, among other reasons, H had always accepted for the purposes of this litigation until very recently before the final hearing that he should be credited with the full value of the underlying equity in the Oxfordshire property, ‘it would be wrong to proceed on the basis that he will not be retaining the benefit of the full value of what has been his family home for the last thirty years’ [67]. She was satisfied that the structures H had set up would ‘afford him the opportunity with the cooperation of his children to enjoy the occupation of that property without the need to contemplate a sale’ [67]. The full value of the Oxfordshire property therefore fell to be counted as an asset of H’s on the matrimonial balance sheet. B House and the art owned by the S Trust In 2006, B House (which enhanced security at the Oxfordshire property, and which provided accommodation for employees at the Oxfordshire property to live in) was purchased. It was an asset of the S Trust, which also acquired some valuable art which was displayed at the Oxfordshire property. Roberts J concluded that these assets of the S Trust would be excluded from the schedule of the parties’ resources. B House provided no direct financial benefit for H, and in relation to the art collection, he could not sell the art, and there was no prospect of him realising value from the collection for his personal benefit other than through a wholesale rearrangement of the family trust structure. Chattels and art owned by the parties personally The parties had agreed that H would retain chattels worth c. £3.4m, out of a total value of just under £3.9m. This included the general household contents, of which H would retain contents worth just over £630,000 in the Oxfordshire property, and W would retain contents worth c. £327,000 in London. W submitted that these values should be included on the balance sheet such that allowance could be made in W’s favour for the imbalance. Roberts J ‘heard about four poster beds and two dishwashers which were needed at the Oxfordshire property whereas the contents of her own home in London had been purchased in the main from Peter Jones’ [72]. Roberts J did not propose to include in the asset schedule any allowance for general household contents. W would have more than ample resources to spend whatever she regarded as reasonable to re-equip her London home, if she wished to do so, and ‘the absence of a full equalisation in respect of everything from beds, tables, white goods and…“teaspoons”’ was not in any way unfair on the facts of this case. Tax There was an issue between the parties as to whether or not account should be taken of their individual liabilities in respect of tax. H had offshore assets totalling some £11.56m, and he was owed c. £9.285m by an offshore entity. He would not pay any tax on realising those funds unless they were remitted to England and Wales. W argued that no allowance should be made for tax because (i) the funds would not be remitted so as to create a taxable event, (ii) the funds would be absorbed almost entirely in meeting W’s lump sum claim for £10m over and above H’s interest in the London property, and (iii) value could be delivered to W without incurring any tax liability if the funds were transferred to her offshore and then remitted by her to this jurisdiction. H argued that the only way he could avoid a tax liability if he remitted funds received in repayment of a promissory note would be by moving permanently offshore to a tax haven. W’s largely inherited non-matrimonial assets were also pregnant with a liability in respect of tax, which would crystallise if she sought to realise capital value in any of her funds. Ultimately, Roberts J decided to make an allowance of 50% of H’s global tax calculation, which she considered made an appropriate allowance for any contingent tax which H was unable to avoid, bearing in mind that she thought he would take what steps he could to minimise his exposure to UK tax, but that he would nonetheless be living in the UK and running his life here. However, regarding W’s potential tax liability, Roberts J proceeded on the basis that W’s inherited trust funds were primarily an income resource rather than a liquid capital asset which W was likely to realise as cash. W had been clear that her trust wealth was dynastic in nature and was of principal benefit to her only in terms of the income it generated. W’s trust assets were included ‘below the line’ as non-matrimonial property for the purposes of computing an overall figure for the total assets available to the parties. Pre-marital/non-matrimonial assets In H’s case, much of the value in his offshore bank accounts was a reflection of an inheritance which he received from his step-father. In W’s case, she sought to discount completely any value in her inherited trust interests, and any assets which she owned personally which derived from those inherited funds. While W’s wealth had always been kept separate and outside the financial arrangements put in place to manage the family’s domestic economy, virtually all of H’s pre-marital wealth, together with the wealth he went on to generate through the marriage, had been applied towards the support of the family and the acquisition of assets from which they had had the benefit. H’s case in relation to the ‘matrimonialisation’ of W’s separate property H argued that he had made a very significant contribution to the management of W’s independent resources, and that his contribution resulted in a significant increase in the value of W’s funds over the years. Roberts J identified that the following principles could be derived from the authorities on matrimonial and non-matrimonial property [113]: The fact that property or assets owned by a party derive from a source outside the marriage (such as inheritance or pre-acquired wealth) does not per se lead to its exclusion altogether from the court’s consideration of a fair outcome to both parties. The overarching principle which supports fairness to both parties is that of ‘non-discrimination’. Each case has to be considered on its own facts and the court’s assessment of fairness in that particular case. The way in which property has been used over the course of the marriage has the potential to affect whether it remains ‘separate’ property. Assets or property which are matrimonial in character will be captured by the ‘sharing principle’ and divided equally between the parties. The application of the sharing principle, in practice, impacts only on the division of marital property and not on non-marital property. The application of the sharing principle will not always lead to an arithmetically equal division of the marital wealth. In this case, W’s inherited assets had remained wholly separate from the matrimonial assets at all times. The underlying capital held in W’s funds had never been used by W to meet housing or any other family needs. W’s intention was that the assets should remain available for the purposes of providing an income for the future benefit of family members. Roberts J concluded that W’s non-matrimonial property had throughout been preserved as her own separate property, and that it had not acquired a matrimonial character, either in whole or in part, as a result of H’s activities as an investment manager. There was insufficient evidence that H’s management of the funds produced a financially measurable uplift in value over and above any allowance for passive growth, and although H played a role in ‘liberating’ W’s funds from her family structure, Roberts J could not, on the evidence, conduct a reliable trace which produced significant uplift into the present value of W’s non-matrimonial funds on that basis alone. H also relied upon his involvement in carving out land retained by W’s family after her father’s death. If planning permission was granted over that land, W stood to benefit to the extent of some £6m as a result of an option agreement. Roberts J said that argument by H ignored the fact that W had this benefit as a result of the fact that she inherited a share of her father’s estate 30 years ago. Roberts J regarded it as essential that a clean break was achieved between the parties. She noted that the court has frequently stressed that it is a futile exercise to ‘rummage through the attic’ in order to identify which party’s contributions were more valuable than the other’s, and accepted that each party made an equal and significant contribution to the marriage. She rejected the notion that particular aspects of H’s contribution had somehow operated to ‘matrimonialise’ what remained, essentially, W’s separate property. She therefore considered that ‘unless it can be said to be required to address any element of H’s future ‘needs’ claim, I do not regard it as either necessary or appropriate to award him a share of the non-matrimonial property reflected in W’s potential share of the option’ [141]. Determination of Roberts J In terms of overall computation of the resources available to the parties, Roberts J calculated the parties’ assets had a total value of c. £54.646m. She identified the matrimonial assets as being worth c. £38.877m, 50% of which was c. £19.438m. On the basis that W would retain the London property and the matrimonial assets currently held by her, a 50% share would require a lump sum payment from H to W of c. £6.362m. On the basis that Roberts J intended that H would retain the Oxfordshire property as his home, that lump sum payment would leave H with the Oxfordshire property and assets (including the art) worth just over £9m, plus the residual value of his non-matrimonial inheritance. Roberts J accepted that the lump sum could be paid to W offshore, without incurring a tax liability for either party when W remitted the funds (or part of them) to the UK, notwithstanding that she had made an allowance for some tax in relation to the promissory notes. Roberts J considered whether that outcome was fair for each of the parties. It would provide both with a secure home, and W would be left with liquid cash funds of just under £11m (including her lump sum and her non-matrimonial property outside the trusts), in addition to a secure income stream from her trust funds of c. £340,000-£350,000 gross pa, without touching the underlying capital of c. £9m net. After payment of the lump sum, H would be left with cash and investments of just under £8m, leaving aside his chattels and art but including £1.7m of inherited non-matrimonial property. W asserted an annual net need of just under £785,000. H’s Form E budget was put at £435,000 pa. Both parties appeared to accept that it cost c. £1m pa to run their lifestyle between London and Oxfordshire. Roberts J regarded it as entirely reasonable to proceed on the basis that each party was likely to need c. £500,000 pa to fund their ongoing income needs. H would have cash and investments of just under £8m if he paid W the lump sum required for a 50% share, and his income needs going forward were c. £7.8m (£500,000 pa for life). Having determined that H’s needs would be met in full, Roberts J reached ‘a clear conclusion that W should be entitled to the full value of her share of the joint matrimonial assets’, and that H should pay the £6.362m lump sum to W and transfer to W his legal and beneficial interest in the London property (on a clean break basis) [159]. To mitigate tax consequences, the lump sum would have to be paid offshore and its timing would need to be considered. Henrietta Boyle, Barrister at 1 Hare Court
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Break-up Club: Top tips on how to avoid the seven deadly sins in divorce Tickets, Thu 15 Apr 2021 at 17:30

Break-up Club: Top tips on how to avoid the seven deadly sins in divorce Tickets, Thu 15 Apr 2021 at 17:30 | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
Eventbrite - Stowe Family Law presents Break-up Club: Top tips on how to avoid the seven deadly sins in divorce - Thursday, 15 April 2021 - Find event and ticket information.
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Kicinski v Pardi [2021] EWHC 499 (Fam) (05 March 2021)

Kicinski v Pardi [2021] EWHC 499 (Fam) (05 March 2021) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
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AA v AHM [2020] EWHC 3790 (Fam) (26 February 2020)

AA v AHM [2020] EWHC 3790 (Fam) (26 February 2020) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
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Horohoe v Horohoe [2020] EWFC 102 (24 November 2020)

Horohoe v Horohoe [2020] EWFC 102 (24 November 2020) | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
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Ratcliffe v Ratcliffe [2021] EWCA Civ 247

Ratcliffe v Ratcliffe [2021] EWCA Civ 247 | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
The husband appealed from the final financial remedy order. The issue at the heart of the appeal was whether the judge's determination of the £3.4m award he made in favour of the wife was flawed because it was based in part on a flawed figure for the parties' capital resources advanced on behalf of the wife. Moylan LJ came to the conclusion that the judge's decision was indeed flawed for that reason and had to be set aside. The figures that each side had put forward for the judge had been similarly flawed in their approach. He considered whether the Court of Appeal was able to substitute its own decision but he concluded that it could not. Popplewell and Phillips LJJ agreed, and the case was remitted to the same judge for rehearing. Judgment, published: 03/03/2021 Topics Share
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Message from the President of the Family Division: The Financial Remedies Courts | Courts and Tribunals Judiciary

Message from the President of the Family Division: The Financial Remedies Courts | Courts and Tribunals Judiciary | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
How the pilot scheme has been progressively rolled-out across England and Wales...
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Family Law Week: Message from the President of the Family Division: The Financial Remedies Courts

Home > News Message from the President of the Family Division: The Financial Remedies Courts On 24 February 2021 the President of the Family Division, Sir Andrew McFarlane, issued the following message: I am pleased to announce that the Financial Remedies Courts (FRC) pilot project has now been completed. This project had its origins in a paper published in November 2016 and was formally initiated as a pilot project by my predecessor in January 2018. The first pilot zone, the West Midlands, started work in April 2018. The pilot project has been progressively rolled out and is now 'live' in 18 FRC zones covering all parts of England and Wales. With the conclusion of the pilot phase, the FRCs should henceforth be regarded as an established and permanent part of the Family Court. The FRCs will deal with all financial remedy applications, whether arising from divorce, or under the Children Act 1989, Schedule 1, or under the Matrimonial and Family Proceedings Act 1984, Part 3. It will also deal with all applications for enforcement of financial remedy orders. I am hopeful that in due course legislation will be passed which will allow the FRCs to hear applications under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) and the Inheritance (Provision for Family and Dependants) Act 1975. The FRCs have a clearly defined structure. The zones and membership of the courts are set out in a helpful organogram published by the Ministry of Justice. The key governing constitutional documents of the FRCs are the Good Practice Protocol and the document "Overall structure of the Financial Remedies Courts and the role and function of the lead judge", both dated 7 November 2019. The zones and their lead judges are set out in this schedule. The structure is headed by Mostyn J with HHJ Hess as his deputy. I am very grateful to all involved for their hard work in bringing this project to fruition. In my judgment in Wodehouse v Wodehouse [2018] EWCA Civ 3009 I stated at [56]: "I hope that this decision is evidence of the value of creating a Financial Remedies Court – which is currently being piloted – so that only judges who are recognised for their knowledge of, and experience in, financial remedies cases following divorce will, in the future, sit on cases of this type." The experience of the pilot project has vindicated my hopes. The FRCs have functioned exceptionally well during the current pandemic. Although there were initial delays and backlogs these have largely been resolved. Almost all hearings are now successfully conducted remotely by video. Electronic bundles are universally used. Consent orders are now all dealt with online, which has substantially increased efficiency. With effect from 15 February 2021, Forms A are to be issued at the zone hub rather than the regional divorce centre. Allocation will take place immediately and the case will find its way to the right judge in the right place without delay. In about half of the zones it is possible now to issue Form A and to upload all relevant documents online; this will be extended to all the remaining zones in the coming months. I am expecting that online issue and filing will become the standard process before the year is out. On 8 March 2021, under the auspices of the Judicial College, Peel J will give the inaugural FRC lecture to the FRC judges. I am expecting that this will be the first of many continuing education events that will be offered to FRC's judges. I am very keen that all of the judges should have their knowledge and experience kept right up-to-date. I have noted that an increasing number of litigants are choosing to have their FDR conducted privately. I very much welcome this development. Private FDRs appear to have very high rate of success. Their successful use frees up more judicial time for the earlier hearing of those cases that are to be dealt with in court. The establishment of the FRC has been a success and I am therefore very pleased formally to put the project on a permanent footing within the structure of the Family Court. Sir Andrew McFarlane President of the Family Division 26/2/21
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Respondent's solicitors and digital divorce | The Law Society

Respondent's solicitors and digital divorce | The Law Society | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
Family Law Committee member Karen Dovaston looks at the respondent’s solicitors' journey with the online divorce portal.
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Solicitors Journal - Law Commission proposes reform of wedding laws

Solicitors Journal - Law Commission proposes reform of wedding laws | Decree Absolute: Divorce & Cohabitation in the UK | Scoop.it
<p>Commission proposes&nbsp;sweeping reforms to modernise laws governing wedding formalities.</p>...
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Family Law Week: Derhalli v Derhalli [2021] EWCA Civ 112

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