DH v RH
| Jurisdiction | England & Wales |
| Judge | Mr Justice MacDonald |
| Judgment Date | 05 July 2023 |
| Neutral Citation | [2023] EWFC 111 |
| Court | Family Court |
| Docket Number | Case No: BV20D01752 |
[2023] EWFC 111
THE HONOURABLE Mr Justice MacDonald
Case No: BV20D01752
IN THE FAMILY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr James Ewins KC (instructed by Burgess Mee) for the Applicant
The Respondent appeared in person
Hearing dates: 9 June 2023
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
In this matter I am concerned with financial remedy proceedings between DH (who I shall hereafter refer to as ‘the wife’), represented by Mr James Ewins of King's Counsel, and RH (who I shall hereinafter refer to as ‘the husband’), who acts in person.
The applications that are before the court for determination at this point are (a) an application by the wife for a legal services payment order (LSPO) and an application by the wife for an order for maintenance pending suit (MPS). There are also a number of other applications before the court, but these will fall to be dealt with at a later date following the determination of the applications currently before the court.
In determining the wife's applications, I have had the benefit of reading the court bundle prepared by the wife's solicitors and a detailed written response to the wife's applications prepared by the husband, together with further sundry documents submitted by both parties ahead of this hearing. Following the hearing, both the husband and, through her solicitors, the wife attempted to submit documents via email not directed by the court and not accompanied by an application to admit further evidence. The court has been required on a number of occasions to remind the parties that the court does not conduct proceedings by correspondence and that any application to admit further evidence should be made by way of application in accordance with the requirements of the Family Procedure Rules 2010.
With respect to the nature and extent of the matrimonial assets, at this hearing the court has also had the benefit of a Schedule of Assets prepared by the husband on 23 April 2023. Whilst that Schedule is not agreed, and I have not treated it as such, both parties have relied on its contents at this hearing in support of their respective submissions. The Schedule details total assets of some £13.2M.
In light of the relative complexity of the circumstances in which the current interlocutory applications fall to be determined, having heard submissions on behalf of the wife from Mr Ewins KC and from the husband, I reserved judgment. I now set out my reasons for making the orders that I have determined are merited in this case.
BACKGROUND
For the purposes of the applications before the court, the background to this matter can be set out in relatively short order.
The wife is 54 and was born in April 1969. The husband is 57 and was born in July 1965. The parties have two daughters, M, born in 2005 and E, born in 2007. Both M and E are in private education. The parties met in New York in 1993 and were married in July 1995. They lived in New York until shortly after M's birth in July 2005 when they moved to London. The family relocated to central England in September 2016 so that the children could attend their current school.
Both parties have a background in the financial services industry. The wife started her career at Citibank, before joining Lehman Brothers where she remained until 2004. The husband was a trader at Goldman Sachs before being made redundant in 1996. He then worked at Deutsche Bank in New York before leaving Deutsche Bank to join Barclays Capital in 2004, where he remained until 2014. Following his departure from Barclays, the husband was employed in a series of roles in the financial industry. The husband is not employed at present but during the course of his submissions stated that he has a role with a publicly listed entity, which reimburses his expenses. Commencing in 2014, the husband began investing in cryptocurrency, to which investments I shall return.
The wife petitioned for divorce on 23 January 2020 and decree nisi was pronounced on 26 November 2020. The financial remedy proceedings were issued in the Family Court sitting at Bristol on 2 December 2020 and the parties exchanged Forms E on 17 March 2021. The First Directions Appointment took place on 7 April 2021. I pause to note that in his Form E the husband listed an investment in a company called Topanga Canyon Holdings LLC (hereafter ‘Topanga’), to which I shall return. The stated value of the investment in the Form E was $75,000.
The parties own two properties in Wyoming, in addition to properties in New York. At the First Directions Appointment (FDA) on 7 April 2021, both parties gave undertakings to refrain from taking steps to diminish the balance of the funds held in all the parties' accounts with a US bank, save for the purposes of meeting mortgage payments in respect of the mortgages secured over those properties and meeting necessary costs referable to the maintenance, upkeep and administration of those properties. At the FDA the court dismissed the wife's application to instruct an expert to examine the extent of the husband's cryptocurrency holdings, it appearing on the face of the order that the court was not satisfied at that stage that there were legitimate grounds for the wife's suspicions regarding the nature and extent of those holdings.
A private Financial Dispute Resolution Appointment (FDR) was held on 20 July 2021, which did not result in the resolution of the financial remedy proceedings. Ahead of the private FDR, the Topanga investment referred to above received no treatment in the husband's Replies to Questionnaire on 24 June 2021. However, in July 2021 and just prior to the FDR, the husband disclosed that Topanga was a vehicle for holding shares in Coinbase, a cryptocurrency platform, and that as the result of the public listing of Coinbase 7 days after the FDA held on 7 April 2021, the Topanga investment had increased in value to circa $7M, the value standing at circa $5.28M at the time of the private FDR. The husband has continued to state that the wife was aware of the investment in Coinbase (relying on mention of Topanga in a US tax return in 2016 and further mentions in documents from 2017 to 2019), an assertion the wife denies. For present purposes, I simply record that it is clear that as a result of this incident of alleged non-disclosure, and later alleged incidents I shall come to, there is now no trust on the part of the wife that the husband has been frank in disclosing assets held as cryptocurrency and that she has continued and continues to entertain concern that there may be other deficiencies in this regard. A significant number of the applications made by the wife following the FDR held on 20 July 2021 have concerned the Coinbase investment.
A further application for an expert report on the husband's cryptocurrency holdings was made by the wife but dismissed by the court on 19 August 2021 on the grounds that there was insufficient information on the nature, scope and cost of such an expert instruction. On 19 August 2021, the court also dismissed an application by the wife for a LSPO, without prejudice to any further application the wife may make in the future. The wife renewed her application for an expert report on the husband's private equity and cryptocurrency holdings on 18 February 2022, including on whether the husband's disclosure accurately reflected the extent of his declared holdings and dealings in such assets and the definability, certainty exclusivity, control and assignability of those assets. HHJ Cope acceded to that application, permitting the instruction of a firm called ‘Another Day’ to prepare a summary of all the husband's holdings and dealings, to include mining activities, including the return on such activities, and decentralised finance activities, including staking, lending, and liquidity providing, in crypto-assets since 1 January 2019. The wife contends that following the instruction of the expert, the husband revealed further cryptocurrency assets (in the form of electronic wallets and accounts) not previously disclosed by him. This is disputed by the husband. Following delays in the provision of information to the jointly instructed expert, on 31 May 2022 HHJ Cope adjourned the final hearing and directed that the expert be provided with the primary documentation with respect to the husband's holdings, rather than the spreadsheet prepared by the husband, together with updating disclosure. On 1 August 2022 the matter was reallocated to a judge of High Court level.
As I have noted, at the FDA on 7 April 2021, both parties gave undertakings to refrain from taking steps to diminish the balance of the funds held in all the parties' accounts with the US bank, save for the purposes of meeting mortgage payments in respect of the mortgages secured over the two Wyoming properties and meeting necessary costs referable to the maintenance, upkeep and administration of those properties. On 15 September 2022, the US bank wrote to the parties stating that the parties' “financial condition, which was relied upon as a basis for the approval of the existing loan guarantee with the US bank, has materially deteriorated” and requested that the loan amount secured on Wyoming properties “be reduced by at least $1,720,000, to bring the balance owing to an amount no greater than $4,000,000.” On the same day, and without reference to the wife, the husband made two transfers in the amount of $450,000 and $225,000 from the parties' US bank account to pay down the parties' mortgage with that bank. On 14 October 2022, the husband wrote to the wife's then solicitors to inform them that he had further reduced the...
To continue reading
Request your trial