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England and Wales Family Court Decisions (High Court Judges)


You are here: BAILII >> Databases >> England and Wales Family Court Decisions (High Court Judges) >> KV v KV (No. 3) [2025] EWFC 97 (28 February 2025)
URL: http://www.bailii.org/ew/cases/EWFC/HCJ/2025/97.html
Cite as: [2025] EWFC 97

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This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.
Neutral Citation Number: [2025] EWFC 97
Case No. 1707-3925-2784-9181

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

Courtroom No. 49
1st Mezzanine, Queen's Building
The Royal Courts of Justice
Strand
London
WC2A 2LL
28th February 2025

B e f o r e :

THE HONOURABLE SIR JONATHAN COHEN
____________________

KV

- and -

KV

[NO. 3]

____________________

MR C HOWARD KC and Ms J PALMER (instructed by HFC Law) LLP appeared on behalf of the Applicant Wife
NO APPEARANCE by or on behalf of the Respondent Husband

____________________

HTML VERSION OF JUDGMENT (APPROVED)
____________________

Crown Copyright ©

    SIR JONATHAN COHEN:

  1. This is my judgment, following the hearing that I have conducted between the 26- 28 February 2025.
  2. On 13 December 2024, I handed down a judgment, in which I found that Mrs KV, who I shall call the wife, was habitually resident in England and Wales and that England and Wales, was the convenient forum for the divorce and financial proceedings to take place, following the breakdown of the marriage between the wife and the husband, as I will call Mr KV.
  3. My judgment was circulated in draft about a week before it was handed down, so that the parties were aware of the outcome some days beforehand.
  4. At the conclusion of the hearing on 13 December, I fixed this current hearing, initially for two days to deal with the progress of the financial remedy proceedings and various applications that had been taken out by each party. However, I extended the matter to three days, as a result, in particular, of the husband's application to discharge the order made by Peel J on 11 June 2024, when he fixed the level of maintenance pending suit.
  5. On or about 24 January and immediately upon the issue of his application to discharge the order, his solicitors, Payne Hicks Beach, came off the record in the financial remedy proceedings and four days later came off the record in the divorce proceedings. Since then, the husband has acted in person.
  6. As a result, I ordered him to attend this hearing, starting on the 26th, so that he could present his case in person to the Court. My order was penally endorsed, that is it set out that there would be sanctions that may be applied to him in the event that he did not attend.
  7. It is known that he received the order, but he did not respond to it.
  8. Despite the order, he has failed to attend the hearing or any part of it, whether to present his own application, or to respond to the applications of the wife.
  9. His failure to attend is just one of a number of orders of which he is in breach.
  10. I am completely satisfied that he had been served with all relevant documents in respect of this hearing, and I have seen a schedule prepared, showing when they were sent by email to him, and his opening every document on the day it was sent, normally within minutes of its arrival.
  11. I was determined to ensure that throughout this hearing his rights were fully respected, notwithstanding his refusal to participate or engage, or to reply to any communications sent to him.
  12. I have read carefully the documents that he has provided, in particular, his statement in support of his application to discharge the interim order for maintenance pending suit and a letter sent by him to the court on 25 February, setting out his arguments in opposition to the making of a further legal services payment order.
  13. I now set out what seem to me to be the particularly material events that have occurred since my order of 13 December 2024:
  14. (i) With effect from my judgment, the husband ceased to make any payments under the order of Peel J. Thus, there were no payments made by him in December 2024, January 2025 or February 2025. Not only has he not paid any of the monthly sum of £183,000, but he has also ceased to pay the expenses of the former matrimonial home in England, where the wife still lives, and various other expenses which he had undertaken to pay, that is he had agreed to pay. The amount of arrears now stands at £630,981, comprising three months' maintenance which totals £550,000 and expenses of £80,981. This causes the wife immense anxiety, as no doubt was intended, and, of course, leads to a very significant drain on her resources.

    (ii) On 11 November 2024, the LBN Trust was established. LBN being the initials of the three children of the family and into it was ported the large part of the assets of the Family Trust. This was plainly done at the husband's instigation. The beneficiaries of LBN are the three children. At the hearing before me, which started on 25 November 2024, it was the husband's case that one of the reasons why the E country was a more appropriate forum for the parties' finances to be resolved was because the wife could apply as a beneficiary of the Family Trust for variation of the settlement, the other beneficiaries being the three children. The husband did not reveal that he had, either directly or through agents, set up a new entity to which the bulk of the Family Trust assets would be passed and in respect of which, she was not a beneficiary. The actual transfer of assets appears to have been completed on 10 January 2025.

    (iii) On 12 December, he issued a notice to show cause application, seeking to enforce an agreement said by him to have been made between his agent and the wife, under the terms of which, she would receive an award of some €200 million, paid over a period of years, some of it upfront by way of transfer of properties and cash, some paid annually. It was a surprising claim for him to make in the light of his claims made soon afterwards that his current indebtedness did not permit him to honour the maintenance pending suit order.

    (iv) Nor did he reveal to the Court that a court in the E country's second city, had made an order on 24 October, that he make the payment to W company, a company with which he is associated, in the sum of approximately £80 million which became enforceable against him on 14 November 2024. That order, which has not been satisfied, led to the freezing of assets of both the husband and the wife in the E country, the assets being both property and bank accounts. The husband has minimal assets there because, as set out in my judgment of December 2024, he had transferred most of his assets in that country to his son by his first marriage. The wife, however, has two blocks of flats, which provided her with small income. She was said by him to be jointly liable for the debt under a guarantee arrangement, which she says she has never personally signed. The husband took no steps to defend the proceedings arising out of the guarantee and that is one of a number of reasons why the wife says that I should regard the alleged existence of these debts as bogus.

    (v) W company has obtained an interim charging order against the matrimonial home in SE England. It could, of course, have gone against two properties in Belgravia which had the far higher equity, but, says the wife, it is significant that it has not done so and symbolic of the husband's determination to cause as much pain to the wife as possible, that is by making a claim against her family home, rather than other, more valuable properties.

    (vi) The husband sought to appeal my decision of 13 December, not that part of it which found that the wife was habitually resident in England and Wales, but solely that part which found England and Wales to be the convenient forum. On 10 February 2025, Moylan LJ refused his application.

    (vii) Despite my order, the husband has failed to file a Form E that was due on 17 February or any evidence about his means. The wife has filed her Form E, albeit two days late, a delay which I regard as immaterial.

  15. With that introduction, I turn now to the issues that I have to determine. The background can, of course, already be read in my judgment of 13 December, which is publicly available.
  16. I deal first with the wife's application to enforce the order of Peel J and the husband's application to discharge it, the two obviously being linked to one another.
  17. The order made by the judge was very substantial. Not only did it comprise the annual sum of £2.2 million by way of maintenance, but monthly expenses in a significant sum, those being undertaken to be paid by the husband.
  18. The husband filed no statement of resources for the hearing before Peel J but accepted that he could meet any reasonable order that the Court might make; a form of "millionaire's defence" as it used to be called. His stance was unsurprising as, according to the wife, who has also had access to tables prepared by Forbes, his worth was put at some several billion dollars.
  19. The parties had had a very luxurious lifestyle, and I refer to paragraphs 16 and 17 of the judgment of Peel J:
  20. 16. W describes a standard of living available only to the super rich. She refers to the use of (i) two magnificent yachts, (ii) two high-end private jets, and (iii) numerous expensive family properties around the world including in France the Caribbean, D country, F city, London (a house in Belgravia) and Paris, as well as the SE England home. H says that "Whilst we have enjoyed access to impressive properties, private jets and boats, often we have leased them from XYZ Group". On any view, they had unrestricted use to these properties, jets and yachts, however those arrangements were structured. It is not difficult to conclude provisionally that the wealth and lifestyle of this family was fabulous.
    17. In terms of expenditure and funding, W says that spending had no real restrictions, which seems to me to be a reasonably accurate description. She had access (via her PA) to a UK account in H's name from which she met the running costs of the English property, school fees, staffing costs and general expenditure. H typically topped up the account by £150,000 every two to three months; during 2023 the total top ups came to about £900,000 which seems to have been representative of annual expenditure on those items. H met the costs of all the other properties, yachts, jets and the horses.

    In addition, W had access to:

    i) A family credit card belonging to H, but which was also used by H, his mother,
    his first wife, his son by his first marriage and the three children; expenditure on that was about £60,000pm or £720,000pa.
    ii) Two other credit cards which H paid without question, of which one had a
    spending limit of £832,000pa.
  21. Thus, it was, against that evidence that the judge made the order in the sum of £2.2 million per annum, payable monthly, and the expenses in respect of the matrimonial home, horses, and other expenditure, which amounted to the equivalent of £1.67 million, that is a total of £3.87 million per annum.
  22. He also went on to make a legal services payment order, the terms of which were satisfied, and which were intended to cover the wife, to the end of the jurisdiction hearing.
  23. Peel J's order was not appealed by the husband and remains in existence.
  24. The husband in his statement says two things, first he cannot pay because of the proceedings in the E country arising out of the guarantee, which have had the effect of freezing all his assets worldwide; secondly, he says that he is over-borrowed.
  25. I will deal with the two issues separately, starting with the E country proceedings.
  26. I do not accept that the E country order has any extra-territorial effect; in other words, I do not accept that it bites on assets outside of the E country. I refer, particularly, to pages 1008 and 1012 of the supplementary bundle. At 1008, the question is posed to the expert lawyer, used by the wife:
  27. "Q: Does the prohibition on the obliger to dispose of his property from the moment of the service of the notice of the commencement of the enforcement proceedings … also apply to the obliger's property located abroad?

    A: The prohibition to dispose of property … does not apply to the obliger's property abroad as it cannot be seized by the E country Court Executor in enforcement proceedings conducted under E country law".

  28. Then at 1012, the author says this:
  29. "On the basis of the above, I conclude that the explicit instruction that the prohibitions and restrictions referred to in section 44(A)(i) of the enforcement code also apply to the obliger's property abroad, is not normally included in the Court Executor's summons to fulfil the enforced obligation and in the notice of the commencement of the enforcement proceedings and does not correspond to the templates contained in the annex to the relevant decree. Indeed, such an instruction would contradict the principles of E country execution law".

  30. Nearly all the husband's assets are now outside the E country, so that the order is no burden to him. Moreover, nearly all the husband's assets are now in the name of an entity, rather than his personal name and his lifestyle has, for years, been funded by loans from XYZ. This is a K country company, quoted on the T Stock Exchange, and is not registered in the E country. XYZ even owns the three private jets which the husband can enjoy. The order of the E country Court is only against him, it is not against any entity from which he can benefit.
  31. In a telling exchange of texts, he told the property manager of two of the Belgravia properties, owned by one of his entities, not to insure them "until we see how the divorce plays out".
  32. The evidence before me, is that the existence of the E country order is not compromising his lifestyle in any way.
  33. I turn to the second argument, where he alleges inability to pay. I have, of course, already referred to the standard of living that was enjoyed at the time when Peel J made his order.
  34. The wife says that his lifestyle remains as it was before, as set out in her statement. There is no evidence whatsoever from the husband that his lifestyle has been compromised in any way.
  35. I repeat, there is no Form E and no statement of means, even though an order has been made for disclosure by him. He cannot complain if he provides no evidence to rebut what the wife says.
  36. Requests for information made by the wife's solicitors have been unanswered by PHB when they were on the record, no doubt on instructions.
  37. It is also, of course, completely inconsistent with his notice to show cause. How is it that he can, on the one hand, ask the Court to make an order that would require payment of some €200 million, of which at least £25 million would be payable forthwith and yet, on the other hand, say that he cannot pay maintenance?
  38. I dismiss the application by him for discharge of the maintenance order and I order that any further application he might wish to make is not to be issued unless it is accompanied by a completed Form E and statement in support.
  39. Notwithstanding my dismissal of his claims that he cannot pay as a result of the E country order, which I accept applies to his E country bank account, but does not bite on the vast bulk of his assets, and my dismissal of his plea of indebtedness, I still have to have regard to the balance of the order.
  40. Insofar as the wife is concerned, her Form E does not suggest that her assets had as yet reduced; however, in the absence of maintenance pending suit or periodical payments and in the absence of the payment of expenses, she will inevitably burn through her capital fast. That is probably what the husband has intended. However, it emphasises the need for the order to remain in place.
  41. According to her Form E, her liquid assets are limited to some £460,000 in various bank accounts and £850,000 in bonds abroad, some of which may not be available to her.
  42. A continued breach of the court order will lead to a substantial reduction in her capital. Peel J's order did not anticipate her having to use her bonds to maintain herself, and nor should I expect her to do so, simply because the husband does not like the order, satisfied as I am, that he has the means to pay it.
  43. Insofar as the maintenance order recites undertakings, voluntarily given by the husband to make payments for the wife, in respect of property and other costs, those undertakings are to be converted into court orders.
  44. I turn now to the legal services payment order, and I shall use round figures. Peel J granted the wife a legal services payment order to cover her until the end of the jurisdiction hearing. It did not cover the period after the five-day stay hearing. He had determined that the wife should pay £113,000 towards her own pre-existing costs, with the husband to pay the balance and allowed her £500,000, as opposed to the sum sought of £580,000 to get her to the end of the jurisdiction hearing.
  45. He declined to make an order which covered the period from the end of the jurisdiction hearing to today, the end of the first directions appointment.
  46. The total award by way of legal services payment order was £736,000 and £331,000 short of what she was seeking. That shortfall was made up of the £113,000, which the judge ordered her to pay herself, the £80,000 being the difference between £580,000 and £500,000 and £138,000 being the sum that she sought for the period from the end of the jurisdiction hearing to the end of the first appointment. As a matter of, I think, both good management and good luck, the costs estimates provided by the wife's solicitors were unusually accurate and by the end of 21 January, the wife's costs outstanding were £332,000 rather than £331,000.
  47. The next period I have to consider is that from 21 January to the 28 February, that is today. The wife's estimate for this period was £282,000, inclusive of VAT and disbursements. They will in fact be slightly lower to cover the somewhat reduced time that this hearing has taken, it being two and half days in Court for argument and a half-day for today, giving judgment.
  48. I take those costs, together with the earlier costs, under the heading of past costs. My conclusions about them are as follows:
  49. (i) The situation being what it is now, I do not consider that the wife should be obligated to use her own resources to make up the shortfall of costs. Her resources will fast diminish by reason of the husband's default. I am, therefore, satisfied that she cannot properly contribute to her own costs. In the context of this case, her resources are relatively small.

    (ii) The wife won the jurisdiction argument. Looked at in a vacuum, I would have been inclined to award her costs, but on a standard basis.

    (iii) However, it is clear, that the husband was not frank in his evidence to the Court. He told the Court nothing of the movement of the Family Trust funds to another trust. Indeed, as I have mentioned, his case was that wife should pursue her financial remedy application in the E country because she could benefit by a variation of trust of the Family Trust for which she was beneficiary. He was silent as to the establishment of the new trust and the removal of her as a beneficiary. This was a situation which he had engineered and of which she was ignorant. Those factors would have led me to make an indemnity award of costs in respect of those proceedings.

    (iv) I am satisfied from the statement of her solicitor, Mr Labi, that the wife has no access to a litigation loan nor that her solicitors would be amenable to a Sears Tooth agreement. In the circumstances of this case, it would be surprising if anyone would advance funds or credit when the wife has next to nothing available to her which is unencumbered.

    (v) Her access to her own E country funds has been severely hampered as a result of the actions that have been taken in the E country. That includes her inability to access the rental income or the underlying assets in the form of the two blocks of flats that she owns there.

    (vi) I would have ordered the costs of this three-day hearing on an indemnity basis against the husband; his breach of court orders and his non-attendance makes this a clear case for such an order.

  50. I do not think that I should make any significant shaving of the costs sought for this period. The estimates provided by the wife's solicitors have been reliable. The sums that I shall order are the repayment of the £332,000 in respect of the first period, and £268,000 in respect of the second, the second sum being slightly reduced to reflect the time saved, and so as to produce a round figure of £600,000.
  51. I turn now to the periods up to the pretrial review. I am determined to approach the matter in this way, rather than the conventional way of providing for costs up to the conclusion of a finance dispute resolution because, for reasons that I will come to, which are obvious, I am not going to order that there should be a FDR.
  52. I anticipate that there will be three directions hearings, one which we have already fixed for 30 April, the second on a date yet to be determined and the third, which will be around 1 October, which will be a combined pre-trial review, directions hearing, and a hearing to deal with the costs of funding the final hearing.
  53. I remove from the schedules provided to me the costs attributable to the instruction and report of a single-joint expert valuer of the husband's businesses. I do so (i) because there is no part 25 application before me, and (ii) there are no costs estimates of what an expert would actually charge. If such an application is made, I will consider that in due course.
  54. I accept that each hearing will be a complex matter, mixing directions with enforcement. I also accept that this is a challenging and dynamic case, requiring extensive work by solicitors, who are having to cope with a highly complex set of finances with minimal disclosure and situated in a number of different jurisdictions.
  55. I have made a small reduction in respect of each of the three periods with which I am concerned, and it amounts to around 15% in each instance as I regard some of the estimates as being overgenerous.
  56. For the first period, up to and including 30 April hearing, I shall allow the sum of £200,000 as being reasonable, rather than £232,000.
  57. For the second period, where £295,000 is sought, and having deducted the costs attributable to the SJE, I allow the figure of £250,000 as being reasonable, with, of course the costs of the SJE to be considered, if necessary, later.
  58. In addition, for the third period, leading up to the pre-trial review, but including that hearing, I allow the figure of £240,000 rather than £280,000.
  59. Thus, it is that I have broadly reduced the sums by about 15% for each compartment of time.
  60. The drafting of the order will need to be done so that each period of time has its specific sum allocated against it. That means that if there are not three hearings, but are two hearings, then an appropriate adjustment can, clearly, be made. It is not intended to provide funds for hearings that do not take place.
  61. I shall need to hear submissions as to when the sums are going to be paid and in drafting paragraph 29 of the draft order, it will need to be adjusted to reflect that.
  62. The wife, sensibly, asks me to deal with her outstanding costs incurred up to and including today, not by way of costs orders, which would need assessment, which in itself is expensive, but way of an LSPO. I accede to that and, therefore, there will not be additional costs orders in respect of the jurisdiction dispute.
  63. I turn now to the freezing order.
  64. As I set out in my judgment of December 2024, shortly before that hearing commenced, the husband had divested himself of three very valuable properties to his son by his first marriage and he had, in addition, sold or was in the process of selling, we still do not know which, a substantial property in another European country, which the wife wished to have for herself. He apparently has for sale, two yachts, for which he is asking very large sums of money.
  65. There is an appearance of him trying to divest himself of assets. It is right, therefore, that I should make an order to preserve such property as there is now known to exist. I made a limited order of that nature on 13 December, when the wife's understanding of the husband's finances was rather less than it is now.
  66. I remind myself that when I made that order, the husband's leading counsel, said that he was unable to make any submissions in respect of it because he had not had instructions from his client about it. I gave the husband the opportunity therefore, to apply to set aside the orders. He has not done so.
  67. Of course, the wife's current resources are being reduced, not just by his non-payment, but by the litigation in which she is now thrust into as a result of the guarantees, which she says has been engineered by him, in the sense that the debts have been created by him guaranteeing loans made between entities with which he is associated so as to affix him with a potential debt.
  68. The result has been when the guarantees are called upon and not honoured by the husband, that freezing orders were made against his assets in the E country.
  69. However, as I have explained, these orders appear to impact more on her than him. The wife's case is that none of these debts are genuine, in the sense that he or indeed the wife has any personal liability for them which cannot be avoided if only the husband wished that to be the case.
  70. I have not heard from the husband and I have not heard from any of the entities with which he is said to be associated and so I make no finding about the contractual relationship between the husband and the entities.
  71. Of course, the wife's concerns are enhanced by the recent imposition of an interim charging order on the matrimonial home and the cessation of any support for her.
  72. This seems to me to be an obvious case where all the assets that can be identified must be preserved. The order that I make is self-explanatory, save in one respect which I will come back to in a moment.
  73. The undertakings which the husband gave, as recorded on 13 December, about the preservation of property are converted into orders.
  74. The one reservation that I wish to make, or explanation that I wish to make, is in respect of the order made against funds held by his former solicitors and I have read carefully the letter written to me by Payne Hicks Beach in that regard.
  75. They received notice of the application to freeze the sums held by the husband on 11 February 2025. They, responsibly, have not, since then, paid out sums in respect of their own or counsel's fees. I consider it proper that they should be allowed to be paid for the services provided to the husband whether by solicitors or by counsel up until that date. Thereafter, the funds are to be preserved and, if necessary, I will hear further argument about those funds at some later stage.
  76. I have been asked to make a Hadkinson order, that is an order barring the husband from making further applications or adducing evidence or making submissions in the financial remedy proceedings until he has remedied his various defaults.
  77. I decline to do so, certainly in the form in which it is asked. It is, of course, an infringement of his rights to litigate and I think it will be particularly unhelpful in this case, to the wife, who will need to enforce whatever orders she eventually obtains in other jurisdictions.
  78. I want the husband to be involved in and participate in these proceedings. I do not wish to put hurdles in the way of that.
  79. However, in the light of his non-compliance with orders, I am not prepared to let him pursue his application for costs against the wife, following his success in proceedings between him and her about the parties' horses, until he remedies the breaches of failing to file a Form E, making the payments ordered by Peel J, and satisfying the legal services payment order made by me.
  80. His application for costs will be adjourned until that is done. Thereafter, of course, he must attend the hearing before Garrido J and I order that any success that he achieves in those proceedings will lead to the sum awarded being set off against such lump sum as he is ordered to pay the wife in the financial remedy proceedings.
  81. I turn now to the notice to show cause application. I have already commented that it seems a curious application in the context of his application to discharge the maintenance pending suit order.
  82. The wife has asked me to strike it out, both because of the husband's contempt of court, repeatedly displayed in flouting of orders, and because it is unsupported by any statement.
  83. I regard it as wrong to do so at this juncture. The husband needs to be given an opportunity to remedy his performance, and I will, therefore, adjourn the matter until 30 April, the next hearing, when I shall reconsider her request that I should strike it out in the light of whether or not he has complied with the requirements in terms of the provision of documents and payment of sums due. If he has, then I will give directions to help lead towards the resolution of his application.
  84. I turn now, and finally, to various case management directions. They will largely be seen in the orders which have, very helpfully, been prepared for me, mainly I think by Ms Palmer of counsel, and which have been the subject of substantial debate and amendment over the course of the last couple of days.
  85. In summary, I make the orders for disclosure sought by the wife against Z Bank.
  86. I join the two sets of trustees, that is those of the Family Trust and the LBN Trust.
  87. I release this case from the requirement for an FDR. If and when the husband engages, I am happy to reconsider this and would be likely to order that there should be a financial dispute resolution hearing. However, absent that, the case is to be set down for a five-day hearing before me, preferably in the Michaelmas term of this year, that is between 1 October and the end of December.
  88. As to service, all orders are to be served on the husband, and may be served on third parties, by email and insofar as the husband is concerned, also by post to the address which he has specifically asked in his letter of 25 February 2025 that that documents should be sent to.
  89. I have accelerated the divorce so that the wife can apply to make the conditional order final forthwith whilst preserving her Family Law Act 1996 matrimonial homes rights.
  90. I shall invite the KBD Master seised with the charging order proceedings to transfer them so that they can be heard in the Family Court with the FR proceedings.
  91. There are, today, no less than six orders that have been drafted for my approval. Some of them are extremely detailed. I have, I hope, covered all the main items in my judgment, but they need to be read carefully by the husband to ensure that he is fully aware of their terms.
  92. Unless there is any issue that I have overlooked, that is my judgment on the issues that have been canvassed before me over the course of the last few days.

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