MG v GM (MPS LSPO) (rev 1)
| Jurisdiction | England & Wales |
| Judge | PEEL J |
| Judgment Date | 01 March 2022 |
| Court | Family Court |
Financial remedies – Maintenance pending suit – Extremely high standard of living – Jurisdictional dispute and prospects of success – Extremely polarised positions – Husband asserting liquidity issues – Court assisted by objectively verifiable facts and contemporaneous documents – Impact of husband’s failure to provide documentation – Whether husband able to meet award – Budget analysis – Excessive spending – Excessive claim for legal fees.
The husband and wife were both citizens of more than one foreign country. They met in 2016, married in London in January 2017 and had two children, who were citizens of the UK and two other countries. The husband had a prominent business career, including running for some time a successful hedge fund which collapsed at the end of 2018. Since then he had been involved in a wide range of projects. The family lived in London until February 2021, when they moved to country E (where they were not citizens).
The marriage came to an end during summer of 2021, when the husband applied in country E for interim measures in respect of the children. At this point the husband stopped all financial support for the wife and the children. The husband also sold the London family home, without the wife’s knowledge or agreement, and invested £4.3 million from this sale into business interests, including new businesses; he also invested the proceeds of sale of another London property. In August 2021, the wife and children left country E and returned to the UK, without the husband’s knowledge or consent. Soon afterwards, the husband applied for the children’s summary return to country E under the 1980 Hague Convention. The wife issued an English divorce petition, based on behaviour, asserting that she was domiciled and habitually resident in England; shortly afterwards she applied to the English court for financial remedies. The husband contested the jurisdiction of the English court and at the end of September 2021 he issued divorce proceedings in country E. However, in November 2021, the husband’s Hague Convention application was dismissed on the basis of a finding that the wife and children were habitually resident in England; the husband was refused permission to appeal.
The wife’s financial proceedings were stayed in December 2021, pending resolution of the jurisdictional point. In January 2022 she applied for maintenance pending suit and a legal services payment order. Her maintenance claim included £68,250 to secure a new rental property from 28 February 2022, with ongoing rental at £25,000 per month; £510,000 per annum general maintenance; plus the cost of two nannies at £126,000 per annum and nursery and school fees. She was also seeking £448,846 in backdated maintenance. Her legal services claim included £230,810 to cover all outstanding and unpaid legal fees, plus £246,000 over 10 months to cover future costs in the Children Act proceedings (which had been stayed for mediation to take place); and £423,000 over 10 months to cover future costs in the divorce jurisdiction proceedings. She was clear that she would be seeking continuation of these payments beyond 10 months if either set of proceedings were not concluded by then.
Because the financial remedy proceedings had been stayed, there were no Forms E. There was instead an exchange of statements, with statements from supporting witnesses. The wife identified net family assets of not less than £100 million; the husband identified net family assets of between £25 million and £50 million (claiming that much of this belonged to the wife) but asserted that they had severe liquidity problems and no actual income. It was clear that the standard of living during the marriage was at the luxurious end, involving expensive cars, use of private jets, opulent holidays, and rental of very substantial properties. The wife had spent about £43,000 per month between June 2020 and June 2021, with the husband paying, in addition, housing costs, staff and other expenses. On the wife’s own case, since the separation she had been able to continue spending at the rate of £72,900 per month (including rental of £12,000 per month), despite the husband having cut off all support. She had secured personal loans from friends totalling nearly £500,000. One of these friends ran a business, A Ltd, with which the husband had had business dealings; the husband now claimed that the wife had a significant interest in A Ltd and had received large sums of money from it. Shortly before the hearing the husband applied for specific disclosure in relation to A Ltd.
In February 2022, the court in country E concluded that that the husband and wife were habitually resident in England and that it did not have jurisdiction. The husband intended to appeal.
Held, awarding the wife maintenance pending suit and a legal services payment order—
(1) The fact of a jurisdictional dispute was relevant, but did not weigh too heavily, given that (a) the English court had decided in the Hague Convention proceedings that the wife and children were habitually resident in England, and (b) the court in country E had very recently declined jurisdiction. The wife’s prospects of success were not so remote that this application should be limited by a pessimistic prognosis of the outcome of her suit (see [39], below).
(2) An interim maintenance application was almost invariably tried on the basis of submissions only, as had happened in this case. In many (perhaps most) cases, there was sufficient information for the court to exercise its jurisdiction broadly, with a tolerably accurate assessment of the finances. In this case, the court had been hampered by the fact that each party denied holding any liquid assets, yet was accused by the other of having access to a great deal of wealth. Each said that the other was a barefaced liar. The court could not be completely sure of the ground on which it stood where the positions were so polarised, and must be circumspect. It should not be afraid to draw adverse inferences if these were warranted, but should not make orders without either; (a) credible evidence that one or other party was able to access large sums of wealth; or (b) being satisfied that the disclosure by either party was so deficient as to justify, even at this stage, making an award which that party denied was capable of being met. In this respect, the court was most assisted by objectively verifiable facts, and contemporaneous documents (see [40], [41], below).
(3) It was directly relevant that the wife had provided a full run of bank and credit card statements, allowing detailed analysis of her finances, whereas the husband had produced only a summary balance and one bank statement. Although the husband had not been ordered to provide such statements, it must have been obvious that in a case where everything was disputed, such documents would be necessary. It was, accordingly, more difficult for the court to accept what the husband said at face value (see [42], below).
(4) It was significant that the husband had suddenly cut off the wife and the children financially in mid-2021 and telling that during 2021 he had invested millions of pounds in his business interests from the sale of the two London properties. In doing so, the husband had elected to prioritise his own interests over those of his family; his actions in selling the London property had deprived the wife of the opportunity to seek a share of the proceeds to meet her interim needs. Further, it seemed highly unlikely, even on an interim evaluation, that the husband had invested millions of pounds into businesses, knowing that he would not have any monies left even for his own personal needs. If he had been short of funds and/or had no liquidity, it was particularly hard to see why he would have invested in new businesses (see [43]–[45], below).
(5) In the light of the history, the court was sceptical about the husband’s stated liquidity issues. The husband himself said that he had had ‘almost constant problems with liquidity’ since the collapse of his fund at the end of 2018, but, nevertheless, he had managed to sustain a very fine lifestyle for the whole family, and had invested large sums in business ventures. On the certificate of complexity the husband himself had put the family assets at £25 million–£50 million. His explanation that this was because, in his view, the wife had at least as much wealth as him, was pure speculation. Even in his own narrative statement, he placed his worth at £14.5 million. Moreover, applying Behzadi v Behzadi [2008] EWCA 1070, it was for him to find a way to unlock liquidity, particularly in circumstances where he had invested so much family wealth in his business during 2021. Overall, it seemed that he was likely to be able to arrange his wealth in such a way as to ensure that funds could be made available. The court was therefore satisfied, in broad terms, that the husband was able to meet an award (see [46], [48], below).
(6) Although the wife appeared to have sort of involvement in A Ltd, the court was satisfied, on an interim evaluation, that she had not had, and did not have, access to large sums from A Ltd. Given that the court was not satisfied that the wife had access to funds as asserted by the husband, it was appropriate to make an award. The question was at what level (see [49]–[51], below).
(7) The court did not propose to analyse each and every line of the wife’s claimed budget, instead taking a broad Purba v Purba [2000] 1 FLR 444 approach. Her budget was, on an interim basis, grossly exaggerated. Her expenditure since separation, with no support from the husband and no resources of her own, had been irresponsibly excessive, showing no restraint. Exaggerated and unreasonable items, on an interim basis, included the cost of a housekeeper at £53,000 per annum, holidays and travel at £120,000 per annum, clothes and shoes at £78,000 per annum, and nanny costs at £126,000 per annum...
To continue reading
Request your trial