Russian husband’s divorce settlement appeal denied

Divorce|July 21st 2014

A Russian man has been denied permission to appeal his divorce settlement.

In B v K, the man’s ex-wife, also Russian, was awarded a lump sum of £627,250.

This settlement was decided based on the couple’s combined assets of £2.6 million. These included the former matrimonial home in London, a property in the United States in the husband’s name and a property in Russia in the wife’s name. There were also several properties in an unnamed country which were either entirely in the wife’s name or in both names but controlled by the wife.

The husband opposed the award. He said it “effectively sucks dry all of the liquid capital that he has” and left him without a home in England or the means to effectively support himself. His case, when it came on for permission to appeal was his wife was entitled to nothing. This tied the court’s hands somewhat to put it mildly.

He argued that the original judge gave the wife the “low lying fruit”, or the assets which would be much easier to access, in the divorce settlement.

He made particular reference to the properties held in the unnamed country, which was only identified as ‘Country B’ in order to better maintain the anonymity of the parties. Country B was one “to which the husband now has difficulties in travelling and having dealings”.

The husband claimed the property in the US was also difficult to offload quickly, so the lump sum he was ordered to pay “effectively gives the wife … all of the cash, but leaves [him] with the properties”.

The initial judge had taken “a particularly adverse view on the husband’s credibility” after he had originally claimed to hold no property.

Sitting at the Court of Appeal in London, Lord Justice MacFarlane said the husband’s attempt to hide his assets in the original hearing was “highly and fundamentally dishonest”. He added that this affected his view of the husband’s honesty in general.

The judge went on to say that the original judge’s decision was “probably as far as any finding could go” considering neither party was very precise with their evidence. He also said the accusation of unfairness by the husband “lacks sufficient substance to support an appeal”.

As the husband was giving no alternative to the court, Lord Justice MacFarlane concluded that there were no grounds for a successful appeal.

So apart from the shenanigans between the couple, why is this worth reporting?

I think it is an interesting case to readers, because it gives an example of discretion exercised by the court in a marriage where the parties were a husband in his early 50s and a wife in her 20s. They were married for four years but lived together for three years beforehand so a cohabitation “seamlessly” evolved into a marriage totalling seven years.

The award would provide the wife with a clean break. It was less than a third and more than a quarter of the total assets. Lawyers would describe this as “within the bracket” for marriages of that length of time where a wife was not entitled to a 50/50 split.

But it is also an example of a case where the quality of assets is, or would have been, more fully discussed on appeal – liquid as against illiquid assets and who gets what. It is not fair for one party to walk away with all the liquid assets and leave the other with all the hide bound risk laden assets – as Lord Justice McFarlane discusses referring to the leading case of Wells v Wells [2002].

Frequently readers contact me about the differences in assets and are concerned about this, as well they might.

In this particular case, it was considered not a Wells case as the husband was left with properties in the USA which he could sell without difficulty.

But if you are looking at a balance sheet and deciding how to divvy up the assets, do bear this in mind.

Photo of Red Square in Moscow, Russia by Dom McIntyre via Flickr

Author: Stowe Family Law

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