Wife’s claim adjourned where husband tried to defeat it

Divorce|August 13th 2019

Experienced family lawyers will have seen it many times: one party, usually the wife, makes a financial claim against the other party, usually the husband, only to be told by the other party that, despite their standard of living, they actually have no assets to satisfy the claim. Yes, I realise that some may think I’m stereotyping husbands as (a) the cash-cow for wives and (b) being devious, but the simple fact of the matter is that husbands are still more likely to be the asset-holders, and therefore the ones seeking to defeat claims against those assets. I will therefore assume that the claimant is the wife and the respondent to the claim is the husband.

Now, obviously, if the husband does actually have assets but is merely trying to hide them then the wife may succeed in proving that he has them, in which case her claim can proceed. If she can’t prove that he has assets, however, her claim will fail. But what if there is evidence that the husband has deliberately had assets put out of reach in order to defeat the wife’s claim? What if the husband clearly has no present access to those assets, but may do in the future? Is there then a third way?

Now, before I go any further I should explain that the court will normally expect capital financial remedies claims (i.e. lump sum and property claims) to be dealt with. In other words, the court will make a decision on the claim, and that will be the end of it (apart from any enforcement issues). The court expects the claim to be concluded, as quickly as possible.

But sometimes it is just not possible, or at least fair, to immediately terminate a claim, as was seen in the recent High Court case Joy v Joy.

The case concerned a wife’s financial remedies application. The parties began living together in 2003 and were married in 2006. They separated in 2011 and the wife commenced divorce proceedings. The substance of the family’s wealth derived from the husband’s business activities, which began after the parties first met and continued during the period of cohabitation and marriage. The bulk of it originally came from operations conducted through an offshore company, the shares in which had always been registered with a trust that the husband established in the British Virgin Islands, and never in the husband’s name. The company was incorporated in June 2004 as the vehicle through which the husband conducted “an innovative and in due course very lucrative commercial airline leasing business.” In May 2013 the husband estimated the trust’s assets to be £70 million, subject to borrowing liabilities of £21 million.

The wife sought a lump sum of £27 million, in the hope that she could prove that assets which the husband had placed, or caused to be placed, in the trust were an available resource to him. The husband claimed to have no assets available to him, notwithstanding his lifestyle. He said that he had been, since November 2013, permanently excluded from the trust.

The judge dealing with the case, the late Sir Peter Singer, formed a dim view of the husband’s evidence. He took the view that the husband’s exclusion from the trust was a deliberate device to try and defeat the wife’s claims. Accordingly, he adjourned the capital claims of the wife, and made a maintenance order in her favour, in the sum of £120,000 per annum.

Sadly, Sir Peter Singer passed away in December 2018. The case was therefore passed to Mr Justice Cohen, who recently had to decide whether the wife’s capital claims should be determined (almost certainly by being dismissed), or whether they should be further adjourned.

The husband claimed to have received nothing from the trust, nearly four years on, and indicated that there was no reason why that should change. However, Mr Justice Cohen said that he was not so pessimistic about the future ability or likelihood of the husband receiving funds that he was prepared to dismiss the wife’s claims. He therefore further adjourned the claims, with the proviso that that they are to be dismissed unless an application to restore them is made by the 31st of July 2022. Meanwhile, every April until then the husband is to provide the wife with details of any and all changes to his capital income and financial status.

The full report of the judgment can be found here

John Bolch often wonders how he ever became a family lawyer. He no longer practises, but has instead earned a reputation as one of the UK's best-known family law bloggers.

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