Ekaterina Fields v Richard Fields
| Jurisdiction | England & Wales |
| Judge | Mr Justice Holman |
| Judgment Date | 04 June 2015 |
| Neutral Citation | [2015] EWHC 1670 (Fam) |
| Docket Number | No. FD13D00008 |
| Court | Family Division |
| Date | 04 June 2015 |
[2015] EWHC 1670 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Mr Justice Holman
(Sitting in public)
No. FD13D00008
Mr L. Marks QC and Miss R. Budden (instructed by Charles Russell Speechlys) appeared on behalf of the wife.
Mr S. Trowell QC and Mr M. Sirikanda (instructed by CHR Family Solicitors) appeared on behalf of the husband.
Introduction
This is a wife's claim for financial remedies after a divorce. The parties were in a relationship for about nine and a half years and have two young children. They are rich, but not by the standards of today very rich. Both leading counsel agree that it is a "needs based" case. The wife has no claim for compensation as such. If the available assets are shared equally there would be insufficient for the wife appropriately to re-house herself and the young children, so she must, as the husband accepts, receive more. She also needs significant periodical payments, i.e. maintenance or alimony. My statutory duty is to have regard to all the circumstances of the case and to give first (although not paramount) consideration to the welfare of the two children while they remain minors. I must in particular have regard to the matters mentioned in s.25(2) of the Matrimonial Causes Act 1973 in relation to the parties, and to the matters mentioned in s.25(3) in relation to the two children. I must strive to reach an overall outcome which is fair to each party and to their children.
This is a case which should have been very easy to settle. Although the assets cannot be divided equally, there are enough to provide more than adequately for each of them. The husband has a relatively high and currently secure income. Although, as so often after divorce, neither will be able to sustain the same standard of living and lifestyle in two separate homes and establishments as they could and did before separation, each will retain considerable prosperity. As I have repeatedly pointed out to them, settlement offered many advantages. It would have avoided the very obvious litigation risk for both sides in this case. It would have facilitated a much more tailored and detailed outcome than I can give in judgment. It would have given them ownership of the outcome instead of having it imposed upon them. It could have saved some of the costs, even at the start of the hearing itself. It would have avoided a very painful and wounding confrontation in the courtroom. It would have avoided the publicity to which I refer below. But despite my affording repeated opportunities to negotiate and despite legal representation of the highest calibre, the parties have not been able to agree on a negotiated outcome. Instead, they have now spent over £1 million on legal costs, a figure which would have been even higher if the husband, being resident in America, was not exempt from paying VAT. As will be seen, that £1 million could have been far better deployed in meeting their respective needs or aspirations. As the so-called "liquid capital" in this case now approximates to a little over £3 million, the £1 million spent on costs is nearly twenty-five per cent of what the total liquid capital could have been (viz £3 million plus the £1 million now spent). I cannot be told, and do not have the slightest idea, what may have been offered or counter-offered or discussed in any negotiations. I do know that the open position of the wife right up to the outset of the hearing was too high and that of the husband was too low. How tragic that they could not identify a fair middle ground.
For reasons which I have explained in my judgment in Luckwell v. Limata [2014] EWHC 502 (Fam) at paragraphs 2 to 5, there is, in my view, a pressing need for more openness in divorce financial remedy proceedings. I will not repeat those reasons, but incorporate them into this judgment by reference. The family courts must be more transparent and there is no good basis for making an exception of financial cases. Such cases are heard in public on appeal to the Court of Appeal and the Supreme Court, and the law reports and press reporting are riddled with considerable intimate and financial detail of many financial cases on appeal. Accredited journalists are, in any event, entitled to be present even when the court is sitting in private, subject to strict and limited exceptions. To permit the presence of accredited journalists, but then tightly to restrict what they can report, creates a mere illusion of transparency. For these reasons I decided at the outset of the hearing to exercise the discretion under Family Proceedings Rules, rule 27.10, to direct that the bulk of the hearing (including now the delivery of this judgment) should be in public.
As I said in Luckwell v. Limata at paragraph 5: "Protection of commercially sensitive or other confidential information of third parties may raise special considerations." This is reflected also in paragraph 5. of the Practice Direction 27B on "Attendance of media representatives at hearings in family proceedings" and the reference there to "price sensitive information (such as confidential information which could affect the share price of a publicly quoted company)." A part of the evidence and submissions in this case did involve consideration of information of that kind. At those points of the hearing I did, for reasons which I gave and without any resistance by the journalists who were present at the time, exclude not only any public but also the press. With these exceptions, this has been an entirely open and transparent hearing. Press attended almost all the hearing and a very small number of members of the public attended short parts of it.
I am aware that as it progressed the case attracted considerable coverage in some newspapers and online, which I was told that the parties found distressing. I regret their distress; but it cannot, in my view, override the importance of court proceedings being, so far as possible, open and transparent. Courts sit with the authority of the Sovereign, but on behalf of the people, and the people must be allowed, so far as possible, to see their courts at work. There is considerable current, legitimate public interest in the way the family courts daily operate, and that cannot be shut out simply on an argument that the affairs of the parties are private or personal. Precisely because I am a public court and not a private arbitrator, I must be exposed to public scrutiny and gaze. But the exposure is very avoidable by the parties themselves. That is one of the many advantages of settling a case. The system already provides judicial assistance with settling at the totally private and totally privileged Financial Dispute Resolution or FDR stage. These parties had two whole days of such a hearing before a very senior High Court Judge in December 2013 and January 2015. That was their opportunity for judicially assisted in-court resolution without any publicity. If a case really cannot be settled, there are now sophisticated and specialist out of court mechanisms for private arbitration, including that provided by the Institute of Family Law Arbitrators. The advantages of arbitration include convenience (the parties can choose their own place and date), probably earlier resolution, probably costs savings, and certainly complete privacy.
Despite their inability to settle with each other, both parties have engaged with me, as the court, with courtesy, charm and, so far as possible, good humour and I thank them both for that. I also sincerely thank the teams of lawyers on both sides. Although they appear to have been unable to broker or facilitate settlement, their presentation of their respective client's case in court was of the highest order, and the final written and oral submissions of both Queen's Counsel, ably supported by their junior counsel, were outstanding.
The essential facts
The husband is an American lawyer. He is now aged about fifty-nine and a half. The wife is Russian and was brought up there, but is now also a British citizen. She is now aged about forty-two and a half. These respective ages and the age gap are important aspects of this case. The husband had been married and divorced four times previously and has two fully adult children from his first and second marriages, who are not relevant to outcome. At the age of eighteen the wife fled from Russia and soon met her first husband, an American banker, with whom she lived in London. She and that husband have no joint children. These parties first met in September 2001. The husband was then almost forty-six and the wife almost twenty-nine. The husband was obviously rapidly captivated by her, and from November 2001 they began to live together.
On 2 nd November 2001, within weeks of first meeting, the husband signed a deed of gift prepared by solicitors on their joint instructions under which he would pay her £500,000 by five annual instalments of £100,000 in July of each year. In fact the husband never made those payments. Instead, in September 2002 and by agreement, he transferred to the wife his shares in a certain company which it is not necessary to identify. Although the percentage shareholding in that company is very small (I believe around one per cent), those shares currently yield an income of about $180,000 gross per annum. The shares themselves were later transferred by the wife to her father and then by her father to a trust called "the Parfenova Trust", which was established for the benefit essentially of the parties' two children. That...
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