Strand, London, WC2A 2LL |
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B e f o r e :
sitting as a Deputy High Court Judge
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TF |
Applicant |
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- and - |
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SF |
Respondent |
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Mr Alexander Thorpe KC and Ms Saima Younis (instructed by Birketts LLP) for the respondent
Hearing dates: 15, 16, 17, 18, 19 and 20 May 2025
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Crown Copyright ©
Mr Justin Warshaw KC:
Background – prior to separation
Background – post-separation including the litigation
a. W should set out any allegations of conduct upon which she sought to rely by 1 April 2025;
b. H should provide Ms Hart, the business valuer, with an update of fixed assets;
c. The liquidator of ABC should provide Ms Hart with the information she had requested with the liquidator's costs being met from the escrow account;
d. Ms Hart's report should be served by 7 March 2025;
e. The chattels valuations should be re-timetabled;
f. There should be a pre-trial review before me on 11 April 2025; and
g. A further £400,000 should be made available to W from the escrow account for legal costs.
I noted in my order that a final hearing was listed before me on 15 May 2025 for 7 days. This had been in my diary for some time at this point. In addition, I made an order by consent that H pay £12,567 towards W's costs of the committal application on the indemnity basis agreed in the sum of £12,567.
a. That H should evidence the tax payable on the payment of £29.5 million;
b. That H should comply in full with his obligations under my previous order for updating disclosure;
c. That H should comply with all reasonable requests made by Ms Hart for documents and information;
d. That Ms Hart's report should be served by 25 April 2025, with questions on the report by 30 April 2025 and answers from Ms Hart by 7 May 2025;
e. That the parties should supply one another with photographs of all watches;
f. That W should amend her points of alleged conduct by H by 30 April 2025;
g. That the parties should serve s25 statements by 9 May 2025; and
h. That the parties should exchange open proposals by 9 May 2025.
The witnesses
'h. Ibiza, Mid 2022 — Friend's wedding – I only paid for the flights the hotel was paid for as part of the wedding'
Mr Thorpe KC took him to bank statements which demonstrated that some £13,000 had been spent by H on a hotel in Ibiza at that time. H explained that was entirely consistent with his written evidence which only addressed the stay in the hotel paid for by the hosts. It was a masterclass by H in what might nowadays be termed 'gaslighting'. He said it calmly and seemed convinced that I would consider it a true answer. In the same context, i.e. holidays, he told me several times that, if W had told him she wanted to go on nice holidays, he would have paid for them. He explained that she didn't ask so that he could be cross examined about this failing. I do not accept either proposition.
The children
Standard of living
Interim provision
Allegations of non-disclosure
Allegations of conduct
'i) the facts relied upon;
ii) if established, that those facts meet the conduct threshold, which has consistently been set at a high or exceptional level; and
iii) that there is an identifiable (even if not always easily measurable) negative financial impact upon the parties which has been generated by the alleged wrongdoing. A causative link between act/omission and financial loss is required …'
He went on at [46] to explain that the reason for this requirement is that:
"…[a] party who seeks to rely upon the other's iniquitous behaviour must say so at the earliest opportunity, and in so doing should; (a) state with particularised specificity the allegations, (b) state how the allegations meet the threshold criteria for a conduct claim, and (c) identify the financial impact caused by the alleged conduct. The author of the alleged misconduct is entitled to know with precision what case he/she must meet."
a. Paragraph 1 sets out very general complaints of non-disclosure. It would have been far more helpful for W to specify with greater particularity her complaints.
b. Paragraph 2 complains about H's failure to make proper interim provision and his tactics in this area. This is a perfectly proper complaint but it does not amount to conduct under s25(2)(g).
c. Paragraph 3 relates to action taken by H in respect of ABC assets and their onward transfer to DEF. I will deal with this below.
d. Paragraph 4 relates in part to the ABC assets and in part to disclosure of the fixed assets register. The latter is a disclosure issue. The former will be dealt with below.
e. Paragraph 5 relates in part to the ABC assets and in part to disclosure generally.
f. Paragraph 6 relates to disclosure of documents relating to the LM1 sale.
g. Paragraph 7 relates to H's statement in response to the freezing injunction failing to disclose the £9.5 million payment due in October 2025.
h. Paragraph 8 asserts that H has been 'reckless and wanton in his custody' of the funds received from the sale of LM1 which were not frozen.
Computation of the assets
a. The Family Home – this has been valued on a joint instruction by Mr Gulvin of Strutt & Parker. He values the property at £3.5 million. There is currently an application by the National Grid to erect pylons near the property. Mr Gulvin says that if permission is refused for the pylons the value would rise to £3.9 million. Mr Finch, who made submission to me about the ES2 on H's behalf, says that W has no plans to sell and that I should take the mid-point between the current value given by the SJE and the value if the pylon issue goes away. I disagree. I am appraising the value of the assets at trial. It is a matter for W as to whether she keeps or sells the property. I take its value at £3.5 million, giving net equity of £3.395 million.
b. H's Property – H bought this property for £3.4 million in 2024. Ms Younis' diligent examination of banking records on behalf of W shows that £1,293,163 has been spent on the property. Mr Thorpe KC on W's behalf says I should add that to the value of the property. The problem with that approach is that it double counts H's directors loan account with DEF. Mr Finch on H's behalf says I should add £522,659 to the value which has in turn been deducted from the amount outstanding to H on the loan account. I agree with this approach. I take the net value at £4,029,972.
c. Bank accounts – There is no dispute here. I take H's accounts at £1,887,870, W's at £22,588 and the joint escrow account with the balance of the frozen funds at £5,037,784.
d. DEF – H's loan account is agreed at £5,395,122. I will deal with value of DEF below.
e. Other loan accounts – H's JKL loan account stands at £740,466 and NMO loan account at £578,000. These represent property investments made by H. These values may be understated as they take no account of planning permissions and general plans for the investments.
f. LM money – This is £9,478,913 due in October 2025. There is £5,998,791 tax due on the total payment. I will deal with the penalties and interest below.
g. Chattels – I take for both parties each party's assertion as to value save in respect of H's number plate. He proposes a value of £300,000. He told Ms Hart it was worth £450,000. I take his assertion of value as given to Ms Hart. H's chattels are therefore £600,500 and W's chattels £107,095.
h. Credit card debt – H has credit card debt of £52,782.
i. Outstanding legal costs – W's stand at £259,211 and H's £163,436. I think that the parties agreed at the end of submissions that W was free to take the whole or part of her outstanding fees from the joint escrow account.
Whilst the accounts of ABC indicated assets of £9.5m, this was based on a historic fixed asset register and does not take into account that ABC disposed of a lot of its assets over time in an attempt to trade through the COVID lockdown. The Insolvency Service has been provided with, and has accepted, full explanation for the whereabouts of all of ABC's assets. No further action has been taken by police and the investigation into my conduct as a director of the company was completed and no disqualification proceedings sought against me
Value | Current status |
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H | W | ||
The family home | 3,395,000 | 3,395,000 | |
H's property | 4,029,972 | 4,029,972 | |
H bank accounts | 1,887,870 | 1,887,870 | |
W bank accounts | 22,588 | 22,588 | |
Joint bank accounts | 5,037,784 | 2,518,892 | 2,518,892 |
DEF DLA | 5,395,122 | 5,395,122 | |
DEF | 5,671,615 | 5,671,615 | |
JKL DLA | 740,466 | 740,466 | |
NMO DLA | 578,000 | 578,000 | |
LM | 9,478,913 | 9,478,913 | |
Tax on LM | (5,998,791) | (5,998,791) | |
H chattels | 600,500 | 600,500 | |
W chattels | 107,095 | 107,095 | |
H credit cards | (52,782) | (52,782) | |
H o/s legal costs | (163,436) | (163,436) | |
W o/s legal costs | (259,211) | (259,211) | |
TOTAL | 30,470,705 | 24,686,341 | 5,784,364 |
The open positions
Post separation accrual
a. Post separation non marital assets can exist at the date of trial even where there has been no undue delay;
b. In assessing post separation non marital assets I must guard against counting in the product of passive growth;
c. I should remain mindful of the extent to which the person claiming post separation assets is simply benefitting from investing the unallocated funds of the other spouse; d. I should not overlook the domestic contribution which may be taking place by the other spouse;
e. While a formulaic approach may be better than a 'by and large' approach I will have to make such assessment as I best can on the facts as I find them.
Outcome
a. W will retain the family home (£3,395,000);
b. The balance of the escrow account will be paid to her forthwith (£5,037,784), to the extent that payments have been made to W from this account for legal fees no adjustments will be made;
c. H will pay to W a lump sum of £4.8 million by 31 October 2025.
a. All DEF assets at the family home shall be returned to DEF (at DEF's expense) on payment in full of the lump sums;
b. W must return to H all his personal chattels given a value on the ES2 which are still a at the family home on payment in full of the lump sums;
c. H shall indemnify W against any claims brought against her by DEF and for any tax liabilities relating to maintenance paid to her through DEF;
d. H should meet the parties' youngest child's educational expenses and pay child maintenance of £25,000 per annum until conclusion of tertiary education. This must be by consent as I have no power to make the order. If no consent is given W will have to make an application to the Child Support Agency.
Costs