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Goddard-Watts v Goddard-Watts [2022] EWHC 711 (Fam)

Sir Jonathan Cohen made an order for a further lump sum to the applicant at a second rehearing following non-disclosure by the respondent

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In 2010 a District Judge made a final order by consent in financial remedy proceedings. W received the former matrimonial home and £4m (payable in instalments) representing 40-45% of the disclosed assets. H retained his interest in his business. That order was set aside by Moor J on the basis of non-disclosure by the husband of trust assets which had not been disclosed: KG v LG (Appeal out of time; Material non-disclosure) [2015] EWFC 64. The matter was reheard by Moylan J who decide to build on the previous award rather than start from scratch: Goddard-Watts v Goddard-Watts [2016] EWHC 3000 (Fam). He awarded W a further £6.2m representing about 50% of the undisclosed assets. The house and business were found to be a previously valued.

There was then a second application to set aside for material non-disclosure because the husband was aware at the time that judgment was about to be handed down of potential interest in the shares in his business. Holman J therefore set aside the judgment of Moylan J and directed a further rehearing: [2020] 1 FLR 885, [2019] EWHC 3367 (Fam). In doing so he urged as he had repeatedly done that the parties seek to compromise "so that the vortex of profligate spending and mutual destruction finally ends".

Thus the second rehearing came before Sir Jonathan Cohen.

The judge having rehearsed the history, considered that he did not have to review whether Moylan J's approach was correct because the order had been set aside and he therefore had a discretion to start afresh or adopt a more limited approach: Kingdon v Kingdon [2011] 1 FLR 1409 (see also Sharland v Sharland [2015] UKSC 60, [2015] 2 FLR 1367 para 43).

The wife's assets had been reduced by buying flats in London for each of the adult children and gifts to family members. The judge did not criticise her for doing so but did not reduce her capital accordingly.

Both H and W spent much more than their income. The W increased her claims from £3m plus costs to £13.4m plus costs. H offered not to seek costs if W withdrew her claims.

The judge decided to apply a Kingdon approach as it was a single issue case. His starting point was to consider the effect of the non-disclosed assets, not the value of the other disclosed assets. He notes that if the H's disclosed business had gone bust, he could not have revisited the W's claims. He was not trading with her funds she had not been exposed to risk.  [para 73].

The judge rejected the W's claim that she might have sought transfer of the shares in 2009/2010 if she had known the value. The W had never been involved in the business or sought involvement. She had never sought to be a shareholder. The relationship was so bad that it was inconceivable that it would have been agreed [para 74].

In applying s25, the judge gave significant weight to the fact that since 2010 W had borne the burden of supporting the children in a way that was not expected. He reduced her needs budget as the cost of her own mother's care home and the money she sought to pay for her children's holidays (£30000 pa) and the recurrent costs on her home which she would be selling. Considering the Duxbury Tables he concluded that she needed a further £1.1m to fund her needs. He refused a sum to in effect pay for past costs saying:

"If W incurs costs which are far in excess of what costs orders (two of them on an indemnity basis) have produced, that is a matter for her.  As I have approached this case on a needs basis, this argument turns out in any event to be sterile.".

Sir Jonathan Cohen at the conclusion of his judgment noted that the parties had spent on costs more on this round of litigation than the sum awarded (W:824k per Form H1: H:737k per Form H). He considered this was bound to raise difficulties in dealing with the costs applications but his judgement does not reveal how this was resolved.

Case summary by Nicholas O'Brien, Barrister, Coram Chambers

For full case, please see BAILII