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Financial Remedy Update, January 2022

Stephanie Hawthorn and Abigail Pearse, associates, and Rob Jackson, trainee solicitor, at Mills & Reeve LLP consider the most important news and case law relating to financial remedies and divorce during December 2021.

Stephanie Hawthorn and Abigail Pearse, associates, and Rob Jackson, trainee solicitor, Mills & Reeve LLP

Case Law Update

Her Royal Highness Haya Bint Al Hussein v His Highness Mohammed Bin Rashid Al Maktoum [2021] EWFC 94

This case, widely discussed in the press, involved various applications by Her Royal Highness Haya Bint Al Hussein ("HRH") against His Highness Mohammed Bin Rashid Al Maktoum ("HH"), the Vice President and Prime Minister of the United Arab Emirates, the Minister of Defence and the Ruler of the Emirate of Dubai.

In short, there were 3 applications before the Court (although only the first two were actively pursued):

1. Application under Schedule 1 of the Children Act 1989 in respect of financial provision for the couple's 2 children.

2. Application pursuant to Part III of the Matrimonial and Family proceedings Act 1984 for financial provision following an overseas divorce- limited in scope to costs of security for herself and her children.

3. Application pursuant to the Married Women's Property Act 1882 for declarations as to the ownership of jewellery, horses, etc. This application was seeking financial recompense for the loss of these items, rather than the items themselves.

The parties married in 2004 and had two children, aged 13 and 9 at the time the applications were heard.

The parties divorced under Sharia law in 2019 and the marriage breakdown was acrimonious. Following separation, HRH travelled to England with the children and was living in her home near Kensington Palace, purchased for £87,500,000. It was found that HRH and the children would be habitually resident in England.

A previous fact-finding hearing had taken place, where several serious findings were made against HH, including regarding the abduction of two of his other children.

HRH had received no financial support for the children following the parties' separation and was utilising her own resources (aside from a £1 million sum paid by HH for the children's education). There were however claims that HRH had withdrawn significant sums from accounts in the names of the children on her return to England and HH considered some of the money to have been used inappropriately. HRH accepted that she owed money to the children, but she denied any misuse of the funds.

The President of the Family Division heard an application for security for costs and dispensed with the need for financial disclosure, given HH accepted his wealth was sufficient to meet any reasonable order.  An interim order of £439,000 per month was made, which was subsequently increased to £470,000 per month.

A further order for legal services funding of £2 million was later made by Mr Justice Moor, who heard the financial applications, together with an order that HH pay education and medical costs. An application by HRH for security for costs and for disclosure was adjourned.

A significant feature of HRH's budget was the cost of security for herself, and the children and various budgets and counter-budgets were drawn up by the parties, covering current costs and future costs. The President had previously noted the exceptional feature of the case to be that it was HH who posed the main risk, and it was he who was challenging the quantum.

Mr Justice Moor had previously ordered HH to put in place a bank guarantee in the sum of £95 million, failing which he would be ordered to provide a schedule of all his assets valued at £15 million or over anywhere in the world in which he had a chargeable interest. A further £1 million was ordered relating to HRH's legal costs, with provision made for all her future costs to be met in full.

Following the initial PTR there were allegations that the phones of HRH and her team were hacked and reasonable evidence of the same was found by the President at a further fact-finding hearing. Additional money to be spent on security was found to be reasonable and the interim award was increased to £596,833 per month, together with an additional sum to meet urgent capital expenditure. HRH's legal services funding was increased to £1.4 million per month by consent.

Further awards were subsequently made in relation to interim provision (including £900,000 to fund two armoured vehicles), given delays in the mater as the hacking judgment was awaited. However, HRH's application for financial disclosure from HH was dismissed, together with an application for increased security provision.

The final hacking judgment was delivered on 5 May 2021, finding that on the civil standard of proof all six phones were infiltrated by Pegasus software (from the Israeli based group, NSO). HH was the probable originator of the hacking, with it being found that no other person came close as a likely perpetrator.

It was also determined that HH did not have immunity from civil jurisdiction in relation to HRH's claim pursuant to Part III and the inherent jurisdiction of the High Court. Permission to appeal was refused.

At a further interim hearing, Mr Just Moor found that HRH could make an application under Part III, on the grounds that she had a more than sufficient connection with the country and no conditions were imposed on the grant of leave.

At a final Pre-Trial Review, conditions were placed on the cross-examination of HRH as she was declared to be a vulnerable witness and a further legal services funding order was made by consent in the sum of £1,133,333 per month for October, November and December 2021.

Parties' Positions

HRH's position was that she wished for payments for the children's security to last throughout their lives and wished for capitalisation of a fund in respect of this (together with further capitalised lump sums in respect of all maintenance claims and for her items not returned). Indeed, she did not feel that HH, as the payer, could be the ultimate employer of her security operatives, which would be the case if periodical payments were ordered.

For her general expenditure, she was being forced to liquidate assets and wished for various items to be returned to her (albeit she sought a declaration regarding horses that there was a common understanding that they were hers, with an order of £75 million sought for compensation).

She sought to also remind the Court of the hacking judgment, and she said that the psychological impact on her of this situation had been "overwhelming". The ultimate amount sought in her open proposal was more than £1,000,000,000.

HH's position was that he had no hacked material in his possession - albeit the finding of fact to the contrary. He continued to be concerned by HRH withdrawing funds from the children's accounts. He sought there to be a secured periodical payments order, due to HRH's misuse of funds (including, some payments made to blackmailers and to her brother).

HH did not accept that clothing was to be returned to HRH and said he knew nothing about her jewellery. He accepted that he would send various items back to the UK but made the point that HRH's valuations were arbitrary. He disputed the ownership of the horses.

HH ultimately felt that HRH's claim for capitalisation was a disguised claim for herself, under the guise of a claim for the children.


The court had jurisdiction to make an order under Part III and it was appropriate for it to do so - HRH and the children were based in England, she could not make a claim in Dubai, and she was not making substantive applications for herself (aside from her security costs, in relation to her chattels and in relation to legal fees).

The opulent standard of living of the parties was considered and HRH's budget was scrutinised.

Mr Justice Moor recognised that the court could permit a personal allowance for a caring parent in assessing the quantum of periodical payment orders, although normal convention is that these are not capitalised.

Also, under Part III, when a court decides to exercise its powers, the overwhelming weight of authority is against capitalising payments, although there is jurisdiction to do so.

Mr Justice Moor accepted that HRH and the children required "water-tight security to ensure their continued safety and security in this country". It was noted that the magnetic feature of the matter was that it is the payer himself who is the main threat, thus it would be "intolerable" for HRH to be dependent on ongoing provision. She was entitled to know her security budget is written in stone.

It was found that there is a risk to the children, almost which was certain to persist until they attain independence (as they may reconcile with their father) and risk to HRH for the remainder of her life. Therefore, the security budget was capitalised for HRH and the children until they reached independence, with a continuing order for periodical payments in place that will not terminate on their attaining their majority or completing their education, which could thus be terminated should circumstances change.

Mr Justice Moor did not consider, on the evidence, that HRH's conduct was such that it would be inequitable to disregard.

Mr Justice Moor determined that the children's general maintenance however should not be capitalised. HH should have a continuing financial responsibility for his children and the court was satisfied he would make any payments ordered. An irrevocable bank guarantee from HSBC would cover any concerns about payment.

Thus, the award was structured as follows (per page 42 of the judgment):

• A capitalised payment to HRH to cover her security needs for herself for life and for the children during their dependency, to include during tertiary education.

• A lump sum to compensate HRH for the chattels she lost because of the ending of the marriage and to deal with other aspects, such as the costs of the litigation.

• A secured periodical payments order to cover the general maintenance of the children to the completion of their tertiary education and to continue thereafter to cover their security needs as adults, irrespective of the death of HH, secured by bank guarantee from HSBC, backdated, at least in part, to the date of the Schedule 1 application.

• An education fund in the sum of £3.04 million, administered by independent accountants.

It was considered unnecessary to make an award to cover future legal fees, as provision was being made for security. Any further litigation costs could be met using legal services funding orders. 

Austin v Haynes [2021] EWCA Civ 1919


Following their separation, Mother ("M") applied for financial provision under Schedule 1 of the Children Act 1989. A consent order was made requiring Father ("F") to make a housing fund of £2.75m available to M and their children to purchase a new home, together with payment of a lump sum of £200,000, and payments to fund outgoings and a nanny.

F failed to provide this housing fund, and thus enforcement proceedings were commenced using a Form D11 (general application notice), as opposed to using a D50K (notice of application for enforcement).

A passport notice was made in May 2021, at which point F had failed to pay the lump sums totalling £100,000, was in arrears of maintenance and had not paid some of the costs ordered. His passport was later released to him, but he failed to re-lodge it with M's solicitors.

In July 2021, HHJ Oliver made an interim charging order against F's interest in the property, for the £2.75m housing fund, together with £203,000 in costs.

The original order was varied to give F a deadline by which to make the housing fund available (as no compliance date was previously given). A further passport order was made, and HHJ Oliver deemed M's application to be made in form D50K.

F appealed.

Grounds of appeal

The grounds of appeal were set out by Moylan LJ as follows:

Procedural Impropriety: That the Judge had discussed the matter with M's barrister, failing to inform F's representative, who only became aware of such discussions on the day of the hearing. The Judge was also wrong to deem the application made on D50K.

Right to a fair hearing: The Judge had been wrong to make orders on M's application without notice to F and without F being able to file evidence in response.

Charing Order: An interim charging order should not have been made without a properly constituted application and it was wrong to find that F had an interest in the property.

Variation: The Judge was wrong to vary the order without notice to F and without permitting evidence in response.

Passport Seizure Order: The Judge was wrong to make a passport order, when the mischief for which the order was originally sought had expired and failed to give adequate reasons for the order.


It was held that ultimately the Judge had adequately explained the reasons for making his order. They were not complex orders, indeed the housing fund was given a specific date for compliance because without this it would not be enforceable.

The ex-parte discussions were held to have lasted for no longer than 2 minutes and M's counsel duly informed F's counsel of what had been said. Any concerns of procedural impropriety were not raised at the hearing in July – thus the ground was totally without merit. so Moylan LJ stressed the importance of ensuring accuracy of matters asserted in documents provided to court

Regarding the use of a D11, as opposed to a D50K, the Judge was plainly entitled to remedy the error under the Family Procedure Rules, if it was an error at all. Again, the point was without merit.

It was not correct to say that F had not had the opportunity to file evidence. The only order made regarding M's application was regarding the interim charging order and F should have realised the Judge might well make such an order (as it was F who had been arguing that M's application for judgment summons should be dismissed, on which he was successful). The issue of enforcement was "squarely before the court" and "the parties would have had to be ready to deal with any matter relevant to enforcement whether that was being sought by means of a judgment summons or by means of a general application for enforcement."

With regards to the charging order being made without notice, and thus impacting F's right to a fair hearing, Moylan LJ found that the Judge was plainly entitled to make an interim charging order on the basis it was treated as being made without notice to F (per Rule 40 of the FPR). The order states that F "has a beneficial interest," but that this point would fall to be considered at a further hearing in respect of the charging order itself.

A general application for enforcement was before the court, and so it could not be said that there was not a properly constituted application.

F had argued that the interim charging order should not have included amounts that fell due after the date of the application.  Moylan LJ again found no merit in F's submission – there is no FPR provision limiting the specific enforcement order to the amount(s) due at the date of the application under Rule 33.  Moylan LJ described as comparison how maintenance arrears often continue to accrue after the date of an enforcement application and there is no bar to the court including these sums in an order.

Moylan LJ also rejected the argument raised during the proceedings suggesting that a court can only order a settlement of property over a property that already exists. This went in the face of established case law. Moylan LJ clarified that the power in Schedule 1 of the Children Act allows settlement "of property", not "a property". Money is property. The court therefore had power to view the 'housing fund' as a lump sum order or a settlement of property order.

Counsel for F sought to raise the point that there was no power to vary the order, as the provision of the housing fund was contained in recitals rather than the body of the order itself. This was dismissed - Moylan LJ clarified that it is accepted law that provisions in a financial order, expressed as undertakings or agreed provisions in recitals can be enforced as orders (provided the court has power to order the provision concerned).

Finally, regarding the passport order, the judge made the order to ensure F's presence in the jurisdiction on the date of the hearing to deal with the interim charging order. As Moylan LJ said, "this was not a mischief which had expired." The Judge was entitled to conclude that the interests of justice required a further passport order.

F's appeal was duly dismissed.

S v S [2021] EWFC B71 


Husband and Wife married in 1973 and had three children together, all now adults. They separated in 2018 and Husband left the family home.

In 1980, the Husband had commenced a relationship with another woman ("Miss K") and had a further 2 children, also now adults. He kept his other family a secret from Wife until 2004, although they continued to live together for a further 14 years prior to separation. When the Husband left the family home, he moved in with Miss K.

The parties adopted traditional roles during their marriage and the Husband was successful in his business affairs for a period, prior to his limited company being placed in voluntary liquidation in 2011. He also ran a property portfolio.

Husband had set up a partnership with Miss K, and the value of the partnership was introduced into another limited company (held in a director's loan account for Husband and Miss K), with Husband becoming a shareholder and director. Conflicting evidence was given by Husband as to his involvement in this business.

Various arguments were made regarding the valuation of assets, the contents of a safe, and evidence was also given regarding who lived at the family home.

Several allegations (totalling 33) were made by the Wife against the Husband concerning financial misconduct, none of which were made out. There were also arguments about the legitimacy of Husband's debts and Husband's income position.


Husband's debts were found to be genuine, and it was found that there was "considerable potential" for Husband to make a profit on his property portfolio (should he choose to retain it) and potentially to be paid out of the limited company if he were to make a valuable contribution to the business.

HHJ Booth ultimately made a decision regarding the distribution of the assets between the parties, allowing Wife the opportunity to remain in the family home (albeit noting she would have to sell if the cost of running it proved beyond her). Husband retained the rental properties, which he could sell to re-house himself or the Judge noted he "had the business acumen to run them at a profit".

In order to reach a roughly equal outcome, it was ordered that the Husband was to pay the Wife a lump sum of £125,000.

Important to this case is that Husband and Wife had spent over £600,000 between them on their divorce, fighting over the financial consequences of it and on an injunction application regarding Husband leaving the family home. This was stated to be a "tragedy" by HHJ Booth. Without spending this money, they would both have been in a "significantly better financial position."

Criticism was levelled at both parties for the conduct of the litigation, including Wife making all her allegations without evidence (based on her mistrust of the Husband) and Husband telling different people different things.
HHJ concluded: "neither party has won... both have lost substantially by getting themselves into debt through their legal fees." No order for costs was made as "both are to blame for the scale of the costs incurred and each must take the consequences."

HH v Secretary of State for Work and Pensions and ASP (CSM) (Child support - calculation of income) [2021] UKUT 280 (AAC)


The case concerned a Father's appeal against the amount of child maintenance payable in respect of his daughter to the Mother (the resident parent).

The Father has been notified that he was to pay £147.70 per week from 1 October 2017 ("the effective date"). This was based on information from HMRC relating to the 2015/2016 tax year, showing his income as £135,849 - historic income.

However, the Father's income on the effective date was significantly lower than that in the 2015/2016 tax year, as he had resigned his position and pursued his own management consultancy business via a limited company.

As the difference was greater than 25%, the amount was re-calculated to £9.50 per week from the effective date. The Mother appealed, alleging non-disclosure of income and that his newly disclosed income (£8,163.96 per annum) was inconsistent with his lifestyle.

That appeal was allowed, with it being held that the Father's gross income should be regarded as £30,603 per annum, with a variation made on the grounds of diversion of income, so that a further £51,413 of income would be taken into account.

The figure of £30,603 was on the grounds that the tax return for 2016/2017 showed income from his former employer of £22,542.74 and a director's salary of £8059.95.

The Father appealed.


The appeal was successful and the case was remitted back to the First Tier Tribunal.

As noted in the judgment, the Child Support Maintenance Calculation Regulations 2012, S.I. 2012/2677 ("the 2012 Regulations") indicate that the gross weekly income of a non-resident parent may be determined by looking at either historic or current income.

It was correct for the calculation to be on the basis of his current income, under regulations 37 to 42 of the 2012 Regulations. These make reference to current income "as an employee or office holder" but do not include express provision about the period to be considered, albeit Regulation 37(1) references "a weekly amount at the effective date". This was held to suggest that the starting point as far as employment income is concerned, is the employment or office the non-resident parent was in on that date. This would suggest that only the Father's director's salary could be considered as employment income.

Regulation 39 also supported the view that the rationale of the 2012 Regulations "is that current income is income from sources which are ongoing at the effective date."

There was thus no basis for considering income that a non-resident parent has received for employment that ended in the previous tax year and the matter was remitted back to the First Tier Tribunal.

LS v PS [2021] EWHC 3508 (Fam)


Q, a litigation funder, who was an intervenor in ongoing financial remedy proceedings, applied to set aside a consent order that had been made. The wife took out a litigation loan from Q to fund her legal expenses during the proceedings, creating a significant debt in the context of the parties' assets, which stood at nearly £1 million (including interest that had accrued) at the time of Q's application. Q possessed some privileged material (including without prejudice offers generated for a private FDR).

The parties' marriage broke down in 2016. Following a four-day final hearing, at which the wife was legally represented, the wife was awarded £3 million on the basis of 'her future needs' - to meet both her future housing and income needs, and any other liabilities that had been accrued. The husband's resources were assessed as £9 million.

The husband indicated his intention to appeal the award.  There were also ongoing Children Act 1989 proceedings, in which a live with order was made in the husband's favour.  In December 2018, the wife approached Q for funding.  The wife conceded to the husband's appeal going ahead and the matter returned to court for new disclosure.  At this stage, the wife had three separate loan agreements with Q (for a total of £630,000 debt).  The parties' reached an agreement at a private FDR in February 2021, a sealed consent order was provided in March 2021. The wife was initially represented at the private FDR, funded by the husband as she had maximised the funding provided by Q, but she became a litigant in person at a later stage due to a conflict of interest arising amongst her legal team.

Q then issued a set aside application for the consent order and the hearing of this application is to take place in March 2022. Q argued that the settlement arrived at was structured deliberately to leave the wife with insufficient assets / no entitlement to sufficient property or liquid funds to repay the debt owed to Q.

In summary, the settlement arrived at, as recorded in the consent order, was as follows:

•The family home (worth approximately £1.8 million) was to be transferred into the  husband's name;

•Via a life interest trust, the husband was to provide the wife with £1 million, to allow  wife to rehouse and remain living in the property for the remainder of her life,   irrespective of whether she cohabited or remarried another;

•The wife's maintenance claims were to be dismissed; and

•The husband agreed not to pursue child maintenance from the wife.

The wife, who earnt approximately £30,000 per annum, did not have the financial means to repay her debt to Q under the proposed settlement, which she informed the company after the FDR.

Q immediately contacted the husband's legal team and the court making clear that it wished to be joined to the proceedings. Q informed the wife that the settlement put her in breach of her loan agreement. On that same day, the husband's legal team sent the draft consent order to the s.9 judge allocated to the case via his chambers. The judge was not told that Q objected to the order, nor was Q told that the judge had been sent the draft. Also, the D81 sent to the judge wrongly recorded the wife's income as £31,000 per month, as opposed to per year, and it did not disclose the husband's trust interests. The D81 therefore wrongly painted a joint net asset base of approximately £590,000, with liquid assets of approximately £412,000.

Q's joinder application was granted on the same day (18 February 2021). Correspondence between Q and the husband's team continued, but Q was still not told about the informal request made of the judge to approve the consent order. The judge emailed his clerk on 2 March 2021 to confirm the draft order could be approved as signed. The order then made its way back to the Family Office in the RCJ. Q made a further application that the order should not be granted until it had the chance to make representations to the court. However, the consent order was approved and then sealed on 16 March 2021.  However, on 17 March 2021, a temporary stay was imposed on the consent order and Q was provided with the correspondence with the judge's chambers and the husband's legal team. A freezing injunction was also ordered to prevent the parties' from dealing with the former family home and their other property in Israel.

Q alleged that the omission of not telling the judge about its joinder application and dispute to the draft order was deliberate and a failure of the ongoing duty of disclosure that both parties' owed to Q (in its capacity as an existing party in the proceedings). Q felt that its case had been effectively bypassed given it was a legitimate creditor and that the wife had no clear way to satisfy her debt. Q argued that it suffered fraud as a creditor and as a result the consent order should not have been approved without Q being heard on the issue first.

Q already had access to a selection of financial disclosure that was generated during the financial remedy proceedings, as well as some of the privileged material that was generated for the purposes of the private FDR. 

The present application was based on Q's request to use the confidential material in the set aside proceedings to help prove its case for relief contrary to ss 423 to 425 Insolvency Act 1986. The husband sought to rely on the without prejudice privilege that attached to all FDR hearings.


Mrs Justice Roberts ruled that the privileged material will remain subject to the FDR privilege, as mandated by para 6.2 of PD9A. She concluded that the court would have ample evidence as it already had a wealth of material available to it, without the privileged material, to form a view as to whether the order should be set aside. When deciding whether to go against FDR privilege, the court have to balance crucial competing policy considerations.

The judge agreed (even though it was not an issue in the proceedings) that the joinder of the litigation funder was appropriate.

As the use of litigation funders, as well as private FDR's, grow in popularity, it is to be seen whether cases such as this will occur more and more. In a footnote, the judge also hinted that the rules themselves might require another look, saying that "given the important of litigation funding to the system, the Family Procedure Rules Committee may wish to consider whether the potential issues raised by this case require some reconsideration of the 'absolute bar' in the interpretation of para 6.2 of PD9A."

DN v UD [2021] EWCA Civ 1947


The parties' relationship commenced in 1996 and ended in approximately 2017/2018.  The parties had three children (ages 22, 19 and 14, referred to in the judgment as DD, TD and GD respectively).  The father also had three children from a previous relationship, SD (aged 33) and ED (aged 20). 

The mother and three children moved from Russia to the UK in 2010.  They lived in the FMH, valued at approximately £10 million. The father made plans for DD's financial future, giving him £607,000 to purchase a property in London.

The mother issued Schedule 1 proceedings in 2018 (at this stage the children were age 20, 17 and 12).  Amongst other things, the order required the father to settle the London family home and its contents in a trust for the benefit of TD and GD (who were aged 19 and 14 by this point). The trust commenced upon establishment of the trust and ended on the first to occur of various events, including GD turning 18, or 6 months after GD completed full-time tertiary education. The father was granted leave to appeal in relation to this settlement of property order that was made in favour of TD and GD.

The issues before the court in this appeal were as follows: 

· Ground (1) - whether the court had the power to make an order, on an application by a parent, under Schedule 1, in a case where the child, the subject of the application, had turned 18 between the date of the application and the date of the proposed order;

· Ground (2) –whether the court had the power to make a property transfer order, or a lump sum order, to or for the benefit of a person who would be aged over 18 when it took effect or when it would be paid; and

· Ground (3) – whether the judge, in the circumstances of the case, had been wrong to make an order providing the children a deferred, absolute interest in the family home (when the children would be adults upon receipt of such capital provision).


In relation to the first ground of appeal, in considering the novel point raised, the Court of Appeal confirmed that the court had power to make orders under Schedule 1 to or for the benefit of a relevant child over the age of 18, if the application was issued before that child attained the age of 18. To reiterate, the court has jurisdiction to make Schedule 1 orders if the child is under 18 at the date of the application. There is nothing in the statutory scheme to indicate that the financial provision must stop when the child is 18.

Moylan LJ commented that it would be very surprising if the court did not have the jurisdiction to make an order providing capital provision that provided a benefit to or for a child when they were an adult where there were special circumstances justifying it, such as a disability.

It was made clear that the order made by the judge was a settlement of property order, and not as suggested by the husband, a transfer of property order. The order took effect when it was made, even if the children's interest in the family home would only realise at the end of the trust period.

An interesting point made was that such a decision was consistent with the purpose of the statutory scheme to remove the distinction between the rights available to children of married parents and those available to children of unmarried parents (as per Hale J in J v C).

Finally, the third ground of appeal directly challenged the judge's decision made at first instance.  Financial provision ordered in favour of an adult child who is not in education or special training is limited to special or exceptional circumstances which create a financial need. In this case, it was held that there were no special or exceptional circumstances that would justify the decision made in favour of TD and GD. The trial judge noted concern that the father would not provide equal financial support for the younger children that had been made for the oldest child as a form of exerting control and manipulating them, this was based on general observations made as to the long-term effects on the children of the previous abuse by their father over them in the family home.  It was held in the Court of Appeal that this 'vulnerability' to manipulation that the father might have sought to exert over the adult children was insufficient to show financial need and did not fall within the scope of special or exceptional circumstances justifying the capital award made. There was also no evidence to confirm the children would be at risk of control or manipulation from their father. 

On this basis, given the circumstances of the case, the capital provision made for the benefit of TD and GD was not justified and therefore had to be set aside

L v L [2021] 10 WLUK 588


This case concerned whether the husband (aged 52), referred to as Mr L in the judgment, should be able to retain greater wealth than the wife, referred to as Mrs L (aged 45), on the basis that the commercial property business, established in 1963 by the husband's father, which generated the family's wealth, was acquired by the husband from his father before the parties had even met.  The husband became a director of the business in 1994, acquiring a 38.94% shareholding.  A trust was established by the husband's father in 1997 that appointed further shares to the husband.

The parties have three children: twins (aged 18), one of whom has a disability, and an 11 year old. They began cohabiting in 2000, married in 2002 and separated in 2019. The family home, where the wife continues to live, has equity of £3.5 million. The husband borrowed (and would need to subsequently repay) £2.7 million from the business to buy a home for himself.

The business, valued at £49 million net, generated an annual net profit of £3.2 million. In 2016, prior to the parties' separation, the shareholdings were restructured to mitigate inheritance tax and provide financial security for the children. The new arrangements took effect in 2018. The value of the business was frozen in 2018 and at this stage the husband held 57% of the voting shares. A company was created to hold shares equally for the parties (with each party's shares valued at £11.93 million each). The balance of the ownership was transferred to vehicles to hold on behalf of the children. The parties retained a fixed interest in the business. The balance and any profit or growth generated after 2018 belonged to the children. Instead of drawing a salary from the business, which continued to rely on his skill, the husband took dividends to fund the family's outgoings. Any dividend on the parties' shares diminished the value of their fund totalling £23 million. 

The wife had no 'effective' earning capacity and had responsibilities towards the youngest child for many years to come. Comparatively the husband could draw a seven-figure salary from the business if he decided to pay himself a salary.  

In 2000, the husband's shareholding was valued at £3.3 million.  However, on the facts of this case, the restructure was critical, and the wife had no proper understanding of what was done, though she likely understood why it was done in terms of preserving wealth for their children. The parties retained a fixed amount of wealth and had given away the dynamic part of the business. For computation purposes, any deduction representing the value of the business in 2000 should fall on the children's share consistent with the dynastic nature of arrangements and the children having the benefit of the husband's father's contribution reflected in the dynamic part of the business.

The wife wished to sever all ties with the business, and this was possible as the company was able to buy back her shares.


His Honour Judge Booth ordered an equal division of the parties' wealth (made up in their respective homes and shareholdings) on the basis that on the facts, an unequal division would create an unfair outcome. This outcome is unusual given the husband's pre-marital contributions to the business.  The restructuring of the family business was crucial in considering computation of wealth. The business dynamics were relevant to the process of distribution of assets in these proceedings.

HHJ Booth noted that the husband could have fixed the ownership of the parties' wealth other than in equal shares during the restructuring process, but he did not do so, and the wife agreed to this approach. The fair outcome therefore was to allow both parties to retain their equal shares of that wealth as they embarked on 'independent living.' The holding company would be able to purchase the wife's shares in the business to achieve a clean break between the parties.

It was held that it was appropriate for the husband to vote himself dividends to repay the debt incurred in purchasing his house using business funds. It was noted that such a method (borrowing from the business and repaying via dividends) was utilised by the husband during the marriage to finance the parties' lifestyle. An equal division of what is then left is the fairest outcome in this case.

Finally, the husband prevented the wife from using joint funds to discharge her litigation costs. This could be deemed to be litigation misconduct as arguably it was for the wife to decide how she chose to spend her share of the joint funds. This meant that the wife had to take out a litigation loan, which carried a high interest rate, to fund her legal fees. HHJ Booth ordered that the wife was entitled to be put back into the position she would have been in had she not had to borrow via a litigation loan.

Santi v Santi [2021] EWHC 388 (QB)


The parties, who were husband and wife, were engaged in ongoing divorce proceedings.  The husband commenced proceedings in the Queen's Bench Division in relation to the alleged misuse by the wife of the husband's confidential information seeking:

· an order to prevent the wife from disclosing information that she had allegedly obtained from the husband in breach of confidence and privacy;

· an order that the wife provided copies of the husband's documents and information that she had allegedly obtained;

· a witness statement setting out exactly what information the wife had obtained, and how and to whom any of the information had been distributed; and

· a forensic imaging order in relation to the wife's computers and devices.

The court did not take the view that there was clear enough justification to grant a forensic imaging order against the wife given the intrusive nature of such orders.  The imposition of a forensic imaging order needs to be necessary and proportionate.  The application was ultimately dealt with by the wife providing an undertaking that she would: (i) retain intact and not dispose of any of the relevant devices identified, (ii) not disclose or publish any of the husband's private and confidential information, and (iii) to provide any hard copy documents that she had obtained in breach of the husband's confidence and privacy.  Costs for the application were reserved until the return date for the interim injunction application.

It was agreed between the parties that these ongoing proceedings ought to be transferred to the Family Division so that the issues at hand could be considered and dealt with as part of the family proceedings.

Nicklin J was tasked with resolving the issue of costs of the interim injunction application. 

Parties' positions

On behalf of the husband, it was argued that costs should follow the event and given the husband largely succeeded in obtaining the relief sought, the husband sought an order that the wife was to pay the costs of the interim injunction. An argument was also advanced by the husband's counsel that the application could have been avoided had the wife followed the guidance set out in Tchenguiz v Imerman [2011] Fam 116 – the case which sets out the procedure to be followed in matrimonial proceedings where a party obtains confidential documents belonging to their spouse. 

On behalf of the wife, it was argued that costs should be reserved to be determined at the end of the matrimonial proceedings on the basis that it is usual that where an interim injunction is granted, the court normally reserves the costs of the application until the substantive issue in the proceedings is dealt with (as per Digby v Melford Capital Partners (Holdings) LLP [2020] EWCA Civ 1647).

The wife's position was argued on the basis that the husband relied on evidence at the initial hearing that was not correct, arguably making the proceedings entirely unnecessary.  It was argued that a spouse accessing confidential material is understandable, albeit unlawful, and therefore the wife's culpability was on the lower end of the scale. The argument was also advanced that the wife could not afford to pay the costs being sought.


Nicklin J commented that a person who has credible grounds to believe that another person, including their spouse, has obtained confidential or private information about them, should be entitled to seek the relief of a Court, even if the issues arise in the context of a matrimonial dispute.

Nicklin J rejected the wife's position that the costs of the husband's application should be dealt with by the Family Division in this case and departed from the usual order of reserving the costs. Given the husband was largely successful in his injunction application (as he obtained undertakings from the wife that were not offered before the hearing), Nicklin J held that the husband was entitled to initiate the proceedings and such a step was justified, irrespective of the fact that the remaining issues were to be dealt with in the Family Division. The wife was ordered to pay 60% of the husband's costs of the injunction application.  The judge made clear that the wife's inability to pay the sum ordered did not affect the making of such an order, though it may impact upon the required timing of payment (e.g., whether it should be immediate, on account of costs or over an extended period).

News Update

Electronic Court Bundles

New guidance has been given regarding electronic court bundles, designed to ensure a consistent approach among practitioners, to assist the Court.

Key guidance includes:

• Bundles must be in PDF format

• Numbering should not be done by hand

• No pages should be upside down

• The PDF should be bookmarked and indexed, with the index being hyperlinked

• All typed text should be searchable via optical character recognition

• Resolution should not be greater than 300 dpi

• If further pages are to be inserted after the bundle has been sent to the judge, the pages should be added and paginated for the end of the bundle.

For the full guidance, click here .

Remote Hearing Evaluation

On 10 December 2021, HMCTS published Evaluation of remote hearings during the COVID-19 pandemic, which assessed the characteristics, experiences and perceptions of court and tribunal users during the pandemic. Underpinning the evaluations were over 8,000 survey responses and 180 interviews.

The Evaluation concluded that, overall, across all jurisdictions and key demographic groups, public users who attended hearings remotely had an equal or better experience with their hearing than those who attended in-person. Judges and other professionals commented that:

· More complex cases and those with potentially life altering outcomes, including custodial sentences and child custody decisions, were less suited to remote hearings.

· Remote hearings worked less well for public users who require an interpreter, and hearings involving users in custody.

· Across remote and in-person court users, a similar proportion felt they received a fair hearing, had confidence in how the court or tribunal handled their case and agreed their case was given an appropriate amount of care and attention.

Other key points to emerge from the Evaluation were:

· Factors influencing the decision to hold a remote hearing included the perceived vulnerability of parties, the likely hearing length and complexity, the severity of the case, the potential seriousness of the outcome, the stated preference of public users and health considerations (pages 38-39).

· The lack of informal out of court conversations with the other party's representative limited lawyers' scope to resolve issues before the hearing (page 16).

· Cloud Video Platform was the most commonly used video platform (pages 30-31). Inconsistent quality of technology and loss of connection were common themes. Challenges with e-bundles were raised (see pages 31-32). Judges and lawyers were more satisfied with training and guidance on the use of video platforms than HMCTS staff (pages 33-37).

· Around half of all respondents said that the stress of remote hearings had had an impact on their health (pages 62-64).

· 78% of lawyers preferred to work from home during the pandemic and 59% said that they would still prefer to do so post-pandemic (pages 28-29).

· Areas for development and improvement were identified (81-83).

Courts to carry on through pandemic

On 9 December 2021, the Judiciary published a message from Lord Burnett of Maldon, the Lord Chief Justice, and Sir Keith Lindblom, the Senior President of Tribunals, following the Prime Minister's announcement on 8 December 2021 that England will move to Plan B of the COVID-19 Response: Autumn and Winter Plan 2021 (Plan B) in response to the Omicron variant.

The message confirmed that "the work of courts and tribunals will continue as it has done over the course of the pandemic". The measures being introduced under Plan B mean that hearings should continue to take place in person alongside effective use of video hearings and remote attendance, where that is in the interests of justice.

The LCJ and the Senior President of Tribunals said that "[t]he coming weeks will bring their difficulties across all jurisdictions both professionally and personally but we have been there before and are equipped to cope". They are grateful for the efforts of judges, tribunal members, magistrates, the legal profession, HMCTS and Judicial Office staff, and all involved in the justice system over the last two years in support of the administration of justice and sure that this will continue.

Financial Remedy Court Organogram: November 2021

An updated diagram showing the Financial Remedy Court structure can be found by clicking here .

Outdoor Weddings and Civil Partnerships

From July 2021, couples have been able to have their civil marriage and civil partnership proceedings outside, in the grounds of buildings such as stately homes and hotels which are approved or become approved for civil ceremonies. This was, as noted by the government, allowed during the Covid-19 pandemic to give couples more choice and to support the wedding and civil partnership sector. The statutory instrument has effect only until 5 April 2022.

A consultation is now underway seeking views to continue this indefinitely and to permit outdoor religious marriage in the grounds of places of worship.