Facts:
The parties were married in 1986 and had no children. The wife is American while the former husband is English. The husband is wheelchair-bound. The couple disagreed as to when the marriage was over, but they executed a separation agreement in November 2015 in New York. The wife petitioned for divorce in 2021 in the UK. The value of the husband's assets is estimated at £5.6m, while the wife’s assets are valued at some £5.8m.
Decision:
The main issue was whether the husband should be held to the terms of a separation agreement executed by the parties in New York in 2015. Under the agreement, the wife calculated that she was entitled to a lump sum of £9.34m. The husband’s position was that all claims should be dismissed due to a change in his financial situation. If such a sum was granted by the Judge, it would leave the husband insolvent by a sum of £3.8m. It was argued that the husband had, in fact, sequestered at least $35m. Despite the husband having been dishonest, the allegation of hidden funds was not proven. The Judge ruled that it would be wrong to conclude that he had such funds based solely on his overt dishonesty.
Mr. Justice Mostyn found the husband to be an 'exceptionally poor witness' who ‘treated the entire litigation as if it was an impertinence and a joke'. However, the Judge made clear that the Court should not be influenced by demeanour, but must rather examine the actual evidence and avoid forming any bias against any particular witness. He concluded that the law was not ‘mono-dimensional as to conclude automatically that, if a party has lied to the court, then the fact in issue about which the lie was told must be decided adversely to that party.’
Regarding the agreement, the Judge held that the husband had to discharge his obligations but calculated them to be much lower than what the wife claimed. As a result, the husband was ordered to pay a lump sum of £1,614,000, including £200,000 towards lawyers’ fees as a form of sanction against his misconduct in court. The Judge also noted that the litigation, which was referred to as titanic litigation, reduced the net assets of the husband by £2,040,458 due to the high costs of litigation. While £200,000 might seem like a significant amount, it was actually very small compared to her total litigation costs, which approached £1.4m. The Judge felt that it would not be fair to grant her more, as the total costs were not considered to be proportionately or reasonably incurred, even if the husband’s misconduct was severe.
Moreover, in light of the respective financial positions of the parties, the Judge ruled that it would not be fair to require the husband to make any further payments of maintenance in the future.
Implications:
Although there were no real issues of law apparent, this case demonstrates the importance of sensible negotiations to avoid harsh outcomes, as befell the husband. It also highlights the fact that, although more frequent, cost orders are likely to only cover a fraction of the costs. A cautionary approach to the proportionality of costs is, therefore, very important throughout the process.