case law Archives - James Thornton Family Law

26 January 2026

When Conduct Changes Everything: Fraud, Coercive Control and Financial Penalties

In financial remedy proceedings, the court is famously reluctant to allow “conduct” to influence outcomes. The bar is deliberately set high. Most behaviour — even unpleasant, unfair or morally questionable conduct — is excluded from the financial equation.

But LP v MP [2025] EWFC 473 is one of those rare cases where conduct was so serious, so sustained and so financially consequential that it fundamentally altered the distribution of assets. The result? The wife’s financial award was reduced by 40%.

This judgment is an important reminder that while conduct arguments are rarely successful, when they succeed, the impact can be dramatic.

The Legal Test: Why Conduct Rarely Matters

Under section 25(2)(g) of the Matrimonial Causes Act 1973, the court may take account of conduct only if: “it would be inequitable to disregard it.”

This is an exceptionally high threshold. The authorities make clear that:

Bad behaviour during the marriage is usually irrelevant
Emotional wrongdoing rarely qualifies
Financial misconduct must be gross, obvious and directly linked to financial outcomes

Most conduct arguments fail. But not this one.

The Allegations: Fraud and Coercive Control

The husband alleged that throughout the marriage and financial proceedings, the wife had engaged in:

Fraudulent financial behaviour
Systematic deception
Coercive and controlling conduct
Manipulation of financial structures
Deliberate obstruction of disclosure

The court undertook a detailed forensic examination of:

banking records
company accounts
financial transfers
patterns of behaviour
credibility across multiple hearings

The findings were stark. The wife had, over a prolonged period:

hidden and manipulated assets
misrepresented her financial position
exerted coercive control to dominate financial decision-making
and attempted to distort the litigation process itself

This was not incidental misconduct. It was a sustained financial strategy.

Why This Crossed the Conduct Threshold

The court found that the wife’s conduct:

Directly affected the asset base, and
Deliberately undermined the court’s ability to achieve fairness

This was not simply unpleasant behaviour — it corrupted the financial exercise itself. As the judge made clear, allowing the wife to benefit fully from sharing principles in these circumstances would: “offend the court’s sense of justice”. That is the precise point at which section 25(2)(g) is triggered.

The Outcome: A 40% Reduction in Award

Ordinarily, this was a case that would have produced an equal division of assets. Instead, the court imposed a 40% reduction in the wife’s entitlement. This is an enormous adjustment by family law standards. The court was explicit: this was not punitive, but corrective — designed to:

strip out the financial advantage gained through fraud,
neutralise the economic effects of coercive control, and
restore fairness to the overall outcome.

Cusworth J’s Restatement of the Law on Conduct

In setting out the legal framework, Cusworth J drew together the leading modern authorities on conduct in financial remedy proceedings. He adopted the structured approach in OG v AG [2020] EWFC 52, where Mostyn J identified four distinct categories in which conduct may become relevant, and emphasised the need to avoid double-counting. He further relied on Tsvetkov v Khayrova [2023] EWFC 130, in which Peel J confirmed that conduct must be strictly proved, must cross a high statutory threshold, and must have a clear causative financial consequence. That approach was reinforced by the Court of Appeal in Goddard-Watts v Goddard-Watts [2023] EWCA Civ 115, confirming that conduct is not punitive and ordinarily requires measurable financial impact, with litigation misconduct normally addressed through costs. Finally, he noted Peel J’s clarification in N v J [2024] EWFC 184, which reaffirmed that even where misconduct is serious, it should only affect the substantive award where there is a demonstrable financial consequence.

Coercive Control: A Growing Theme in Financial Remedies

This judgment is particularly significant for its treatment of coercive and controlling behaviour in the financial context. Traditionally, coercive control has featured primarily in:

domestic abuse cases
child arrangements proceedings

LP v MP shows how coercive control can also be highly relevant to financial remedy proceedings, particularly where it:

distorts financial decision-making
suppresses the other spouse’s autonomy
and drives unfair financial outcomes

This reflects a broader judicial recognition that financial dominance can be a powerful and abusive dynamic, deserving serious scrutiny.

Why This Case Matters

LP v MP is exceptional — but that is exactly why it matters. It confirms that:

Conduct arguments remain alive — but only in extreme cases

The threshold is high, but not unreachable.

Fraud and coercive control are now firmly within the court’s financial radar

This is not just about hidden bank accounts — it is about financial power and manipulation.

Courts will impose heavy financial consequences where fairness demands it

A 40% adjustment is rare — and speaks volumes.

Litigation conduct and marital conduct can overlap

Where behaviour corrupts the financial process itself, the court will intervene.

The Bigger Message

Family law is fundamentally a jurisdiction of fairness. While it avoids moral judgment, it cannot ignore deliberate financial wrongdoing. LP v MP sends a clear warning: those who manipulate, deceive or financially dominate their spouse risk losing the protection of the sharing principle altogether. In extreme cases, conduct does not merely influence the outcome — it reshapes it.

Published by James Thornton in Blog

Tags: case law, conduct, financial misconduct

19 December 2025

When the Court Can’t Yet Make an Order: Indications of Outcome, Adult Dependent Children and Financial Needs

VP v SP [2025] EWFC 447 (B) is a quietly important reminder of two things family lawyers sometimes take for granted: first, that jurisdiction in financial remedy proceedings is still anchored to decree nisi (or conditional order), and second, how profoundly adult dependent children can shape outcomes on “needs”, even after childhood has long passed.

An “indication” rather than an order

The most striking procedural feature of this case is that the court could not make a financial remedy order at all.

Despite a fully contested final hearing, the divorce had stalled. This was a pre-2022 fault-based petition, initially defended, and no decree nisi (or conditional order) had yet been pronounced. That created a hard jurisdictional stop. As the judge reaffirmed, any financial order made before decree nisi would be a nullity (Munks v Munks).

The solution was pragmatic but important: the judgment was framed expressly as an indication of outcome, to take effect only once decree nisi is pronounced, relying on the approach endorsed in JP v NP and FPR 29.15. No rehearing would be required; the court had done the work, but the order would wait for jurisdiction to crystallise.

For practitioners, this is a useful illustration of what happens when divorce procedure lags behind financial remedy proceedings. The court will not rescue parties from basic sequencing errors — but it may, where appropriate, indicate the result to avoid wasted costs and duplication.

Needs still dominate — even where sharing might suggest equality

On the substance, this was not a “big money” case. The net assets were modest, largely tied up in the former family home. Both parties broadly accepted that this was a needs-driven case rather than one involving surplus wealth.

Yet the outcome was far from equal. The wife ultimately received around 71–73% of the assets, a substantial departure from equality in a 12-year marriage.

Why? Because needs here were not theoretical. They were real, long-term and immovable.

Adult dependent children: not first consideration, but still decisive

The parties’ son was 18 — legally an adult — but profoundly disabled and extremely unlikely ever to live independently. He lived with the mother, who was his full-time carer and would be so indefinitely.

The judgment is careful on the statutory framework. Section 25’s “first consideration” (children under 18) no longer applied. But the court made clear that adult dependent children remain highly relevant when assessing a party’s financial needs, obligations and responsibilities.

This was not treated as a marginal factor. The mother’s caring role effectively extinguished her earning capacity, shaped her housing needs, and justified a much larger capital share to provide long-term security — not just for her, but for her son’s future care.

The court also recognised an uncomfortable reality: as the mother ages, her own ability to care will diminish, increasing future costs rather than reducing them.

Housing reality over housing theory

Another notable feature was the court’s realism about housing. Even with a majority share of the equity, the wife could not realistically buy suitable accommodation — particularly one capable of being adapted for her son’s needs. Renting with a substantial capital buffer was therefore treated as a legitimate and necessary outcome.

By contrast, the husband’s position was softened by the possibility (though not the certainty) of remaining in the former family home with the assistance of his adult son. That potential safety net mattered — even though the court was careful not to treat it as guaranteed.

Needs were assessed not in isolation, but in the context of what each party could realistically do with the resources available.

A reminder about conduct — and restraint

Although the background included findings of domestic abuse in children proceedings, and the litigation history was lengthy and fraught, this was not ultimately treated as a conduct case under s.25(2)(g). The judge drew a clear line between serious background issues and conduct so inequitable it should affect distribution.

That restraint is instructive. Even in emotionally charged cases, the court remains slow to weaponise conduct unless the statutory threshold is met.

Why this case matters

VP v SP is not a headline-grabbing decision, but it is an excellent example of careful, disciplined financial remedy decision-making:

it shows how courts deal with jurisdictional roadblocks without derailing proceedings;
it reinforces that needs still trump sharing where the facts demand it;
and it underlines the enduring significance of adult dependent children in financial outcomes.

Above all, it reminds us that family law outcomes are not driven by abstract percentages, but by lived reality — and sometimes, the most important orders are the ones the court is not yet allowed to make.

Published by James Thornton in Blog

Tags: case law, conditional order, decree nisi, dependent adult child, needs

15 December 2025

Arbitration, Confidentiality and Court Orders: Lessons from Spencer v Spencer [2025] EWFC 431

Family law arbitration has long been promoted as a private, efficient alternative to litigation. But what happens when an arbitration award collides with parallel High Court proceedings — and the losing party wants to use confidential arbitral material to defend their reputation in open court?

Mr Justice Peel's judgment in Rt Hon The Countess Karen Anne Spencer v Rt Hon The Ninth Earl Spencer [2025] EWFC 431 provides a rare and important look at the interface between family arbitration, confidentiality, media litigation, and the extent to which an arbitration award can be deployed outside the financial remedy arena. It also illustrates, in stark terms, that converting an arbitral award into a court order is usually straightforward — until external litigation and reputational concerns push against the protective walls of confidentiality.

The backdrop: Arbitration meets the King’s Bench Division

The Spencer divorce was referred to arbitration under the Family Law Arbitration Scheme (ARB1FS) in 2024. The parties chose arbitration for one obvious reason: privacy.

However, shortly afterwards, the husband’s partner, Professor Jarman, issued King’s Bench proceedings against the wife for alleged misuse of personal information. Offers were made, including a Part 36 offer, and these became entwined with the arbitration because:

the arbitrator expected the wife to accept the Part 36 offer,
the husband was required to indemnify her against any sums owed,
and the financial outcome of that separate litigation would directly affect the arbitral award.

The arbitrator permitted a limited set of paragraphs from the award to be disclosed to the parties’ media lawyers and, if needed, into the King’s Bench proceedings. These paragraphs explained why the wife was being encouraged — financially incentivised, even — to accept the offer.

This limited disclosure would later become the battleground.

The problem: How much of an arbitration can you reveal?

When both parties applied to convert the arbitration award into a financial remedy order, the wife sought to go further. She wanted:

disclosure of additional portions of the arbitral award,
disclosure of the arbitrator’s explanatory email in full,
permission to use arbitral material publicly to “defend her reputation”,
and, at one point, permission to place the entire award in the public domain.

This was a bold request — and one that pushes directly against the foundational principle of family arbitration: confidentiality.

The law: Confidentiality is the rule, but not an absolute one

Peel J surveyed the key authorities:

Emmott v Michael Wilson & Partners — arbitration is private and confidential.
Article 16.1 of the Family Arbitration Rules — confidentiality applies unless disclosure is necessary to challenge, enforce, or implement an award.
The well-recognised exceptions: consent, court permission, necessity to protect legitimate interests, or the interests of justice.

He also analysed the competing Article 6, 8 and 10 rights:

fair trial,
privacy/reputation,
freedom of expression.

In short: the court had to balance the wife’s right to defend herself in open litigation against the husband’s right to the private process both parties contracted for.

The decision: The award can become an order — but disclosure remains tightly controlled

Peel J allowed:

the conversion of the arbitration award into a court order (uncontroversial),
disclosure of the already-authorised paragraphs,
and disclosure of parts of the arbitrator’s 24 July 2025 email, as they were “reasonably necessary” for the King’s Bench judge to understand the context of the settlement.

But he firmly refused:

wider disclosure to the media,
use of confidential arbitral material for general reputational management,
disclosure of the full award into the King’s Bench proceedings,
and any pre-emptive publication of arbitration documents before they were aired in open court.

To grant such requests, he said, would "drive a coach and horses through the confidentiality central to the arbitration process."

The message is unmistakable: arbitration confidentiality means something — and courts will defend it.

The wider lessons for family practitioners

This case is particularly important because it is unusual. Most arbitration awards sail smoothly into orders without any satellite litigation. But when reputational disputes spill over into open court:

Arbitration confidentiality is not absolute, but the threshold for breaching it is high.
Disclosure will only extend as far as is strictly necessary for fairness in linked litigation.
Parties must think carefully about the interaction between arbitration and parallel civil claims, especially where media allegations are involved.
Arbitration does not give licence for publicity battles. The court will not permit parties to weaponise confidential material to manage their public image.

Conclusion

Spencer v Spencer is a reminder that arbitration remains a robust and confidential alternative to court — but privacy is not invincibility. When external litigation forces its way in, the family court will allow disclosure only to the minimum extent required for justice, and no further. For separating couples considering arbitration, this judgment reinforces both its strengths and its limits: you can choose privacy, but you cannot always control the world outside it.

Published by James Thornton in Blog

Tags: arbitration, case law, confidentiality, privacy

12 December 2025

When Litigation Conduct Crosses the Line: Lessons from RKV v JWC [2025] EWFC 430 (B)

If family law has a recurring theme, it is this: the financial remedy process works best when both parties engage honestly, promptly and proportionately. When one spouse turns the proceedings into a prolonged, combative campaign, the court’s patience wears thin — and the outcome can shift dramatically.

RKV v JWC [2025] EWFC 430 (B) is a stark illustration of litigation conduct at its very worst. Despite a net asset base of around £4 million, the husband’s behaviour throughout the litigation was, in the judge’s words, “absolutely appalling”. The judgment reads as a reminder — and a warning — that litigation conduct is not a mere sideshow. It can affect credibility, disclosure findings, and, in extreme cases, even the final division of wealth.

A Case That Should Have Been Simple — But Wasn’t

On paper, this was a straightforward case: a long marriage, a comfortable lifestyle, and an asset base that called for a broadly equal division.

But the husband’s conduct derailed everything.

The judgment records:

Persistent failures to disclose documents
Late evidence, often served only after repeated orders
Aggressive, obstructive correspondence
Missing deadlines without justification
Attempts to relitigate settled issues
Unfounded allegations, adding time and cost
A general refusal to cooperate unless forced by the court

This was not a one-off lapse in compliance — it was a pattern.

As the judge noted, the husband “treated the court process with contempt,” driving up the wife’s costs and obscuring the real financial picture.

What Litigation Conduct Actually Means

Litigation conduct is not simply “being difficult.”
It must be:

serious,
unreasonable, and
have financial consequences for the other party.

In financial remedy work, the court distinguishes between:

Bad behaviour during the marriage — not usually relevant

and

Bad behaviour within the litigation itself — can have costs and fairness consequences.

Where conduct impedes the court’s ability to determine the true financial position, it becomes relevant to both costs and the overall award.

That is exactly what happened in RKV v JWC.

The Outcome: Equality Survived — But Not Because the Husband Deserved It

Despite the husband’s conduct, the court still upheld an equal division of the £4 million asset base.

Why?

Because the wife did not argue that the husband should be penalised via a departure from equality. Instead, she sought — and received — a substantial costs order to reflect the damage his conduct had caused.

Had she pushed for a distribution adjustment, the judge signalled the door was open.
Indeed, the judgment makes clear that in an appropriate case, litigation conduct can justify a shift away from 50/50.

The reasoning is simple:
If one party forces the other to incur enormous avoidable expense, a costs order alone may not put them back in the position they should have been.

The Real Lesson: Costs Are Not the Court’s Only Tool

Courts are increasingly willing to:

Draw adverse inferences where disclosure is obstructed
Accept the evidence of one party where the other is unreliable
Penalise parties with costs orders running into the hundreds of thousands
Depart from equality where conduct has financial consequence
Condense hearings or bypass unnecessary litigation steps to prevent manipulation of process

In other words, litigation conduct now functions as a material factor in the fairness assessment, not a footnote.

RKV v JWC is part of a growing line of cases — including OG v AG, MRU v ECR, OO v QQ and Azarmi-Movafagh v Bassiri-Dezfouli — demonstrating that parties who abuse the process will not succeed.

Closing Thoughts

The message from RKV v JWC is clear: Litigation conduct isn’t just about manners — it’s about justice.

A spouse who obstructs disclosure, ignores court orders, or inflames proceedings may find that the supposed “tactics” cost them far more in the end. The Family Court will not allow one party’s misconduct to distort the process or drain the other’s resources unchecked.

In a jurisdiction built on fairness, transparency and cooperation, RKV v JWC is a strong reminder that how parties behave in litigation can be almost as important as what they own.

Published by James Thornton in Blog

Tags: case law, litigation conduct, litigation misconduct, og v ag

4 December 2025

Fraud, Delay and Final Orders: Lessons from Silberschmidt v Richards [2025] EWHC 2841 (Fam)

Setting aside a final financial order is one of the most serious steps the Family Court can take. It disrupts finality, unravels what the parties thought was settled, and reopens litigation that may have been dormant for years. Because of this, the bar for reopening a case is high — but not insurmountable, particularly where there is fraudulent non-disclosure.

The recent decision in Silberschmidt v Richards addresses a question that regularly troubles practitioners: If a spouse discovers fraud years after the final order, but waits before issuing their application, can delay alone defeat an otherwise meritorious claim?

The answer from the High Court: Yes — in theory. But only where the delay makes a fair trial impossible. And on the facts of this case, the appeal against reopening the order was dismissed.

The Background: Fraudulent Non-Disclosure at the Heart

The wife applied to set aside a consent order years after it had been made, arguing that the husband had suppressed key financial information during the original proceedings. The judge at first instance accepted that her application had merit and that there was a real prospect that the husband had fraudulently failed to disclose significant assets.

The husband appealed, but not on the fraud issue. Instead, he argued:

The wife waited too long to bring the application once she suspected wrongdoing;
This delay meant the court should not have reopened the final order; and
The judge had not properly addressed whether the delay was, in itself, fatal.

This made the case a perfect vehicle for clarifying the law on delay in fraudulent non-disclosure set-aside claims.

Fraud Still Trumps Finality — But Only If a Fair Trial Is Possible

Mr Justice Poole, dismissing the appeal, reaffirmed the classic starting point:

Fraud “unravels all” — but not at any cost.
Delay may defeat a set-aside application, but only where it renders the litigation unfair or the evidence impossible to evaluate.

The High Court emphasised three guiding principles:

The Court Must Balance Finality Against Justice

Finality is important, but it cannot be used as a shield for a spouse who deliberately misled the court.

Delay Is Not Determinative Unless It Causes Irredeemable Prejudice

The key question is prejudice, not simply the passage of time.

The court looks at:

Has evidence been lost?
Are witnesses no longer available?
Has the factual landscape changed so much that truth can no longer be established?
Would the fraudster suffer unfairness if the matter is reopened?

A Meritorious Claim Should Not Be Shut Out Without Good Reason

Even if delay is long, the court will not bar a claim where:

the fraud can still be fairly investigated;
the spouse did not reasonably discover the fraud earlier;
the alleged wrongdoer caused or contributed to the delay;
the integrity of the original order is fundamentally compromised.

In Silberschmidt v Richards, despite the gap in time, none of the husband’s alleged prejudice was enough to prevent a fair hearing. The wife’s application was therefore properly allowed to proceed.

Why the Appeal Failed

The High Court held that the judge at first instance had:

applied the correct legal test,
acknowledged the delay,
weighed it appropriately within the overall justice of the case, and
concluded (rightly) that a fair investigation was still possible.

In other words, the husband could not convert his own alleged fraudulent non-disclosure into a procedural shield.

Why This Case Matters

This appeal provides valuable clarity for lawyers and clients alike:

Delay can be fatal — but it usually won’t be.

Only where delay makes a fair trial impossible will the court refuse to reopen a consent order tainted by fraud.

Fraud remains the highest-ranking threat to finality.

The overriding objective remains doing justice, not preserving an order built on deceit.

Applicants must act promptly once they have evidence.

A meritorious application will not automatically succeed if a party sleeps on their rights.

Respondents cannot rely on delay they contributed to.

A spouse who has hidden assets cannot complain when the truth eventually emerges.

Closing Thoughts

Silberschmidt v Richards reinforces a simple but crucial principle:
Final orders matter — but honesty matters more.

Where fraud is alleged, the court will look carefully at whether the truth can still be uncovered. If it can, delay will rarely be decisive. For anyone facing the discovery of non-disclosure years after the ink has dried on a consent order, this decision offers clarity — and a fair chance to put things right.

Published by James Thornton in Blog

Tags: case law, fraud, non disclosure, set aside

1 December 2025

Risk, Liquidity and Fairness: Key Lessons from BY v GC (No. 2) [2025] EWFC 397

How should the Family Court divide extremely high-value assets where one spouse’s wealth is tied up in high-risk, illiquid ventures, and the other needs long-term financial stability?
In BY v GC (No. 2) [2025] EWFC 397, Nicholas Allen KC, sitting as a Deputy High Court Judge, tackled exactly this problem — ultimately valuing the asset base at £89.5 million and departing from equality to award the husband 55%.

The reasons why make this a compelling judgment, and an important one for family law practitioners.

A Case Built on Risky Wealth and Unreliable Disclosure

The husband’s financial world consisted of:

high-risk investments,
significant debt exposure,
uncertain company valuations, and
assets whose value fluctuated dramatically.

Much of his claimed wealth was bound up in ventures described as speculative or volatile, with no guaranteed return and no easy route to liquidity.

The wife’s financial circumstances could not have been more different. She needed:

stable capital,
reliable income,
and long-term security for herself and the children.

The mismatch between risk appetite (his) and financial vulnerability (hers) shaped the outcome.

Finding the Real Number: £89.5 Million

A central feature of the judgment is the computation of the husband’s wealth, which Nicholas Allen KC found was not presented transparently.

The court identified:

gaps in disclosure,
inconsistencies, and
a financial narrative that was not fully credible.

Where evidence was unreliable or missing, the judge drew adverse inferences and adopted the valuations that best reflected the documentary record and expert analysis.

The final finding — £89.5 million net assets — was higher than the husband contended, and it formed the basis for the sharing exercise.

Why 55/45 Was Fair: The Modern Risk-Weighted Approach

The starting point in a long marriage would ordinarily be a 50/50 split.
But this was not a straightforward “pots of cash” case.

Nicholas Allen KC accepted that:

The husband had accumulated his wealth by taking significant financial risks.
Those risks still attached to many of the assets he would retain.
The wife should not be forced into an unstable investment landscape she had never participated in.

The judge therefore applied a risk-weighted distribution:

Husband – 55% (but almost entirely in high-risk, illiquid assets)

Wife – 45% (in more secure, accessible funds)

This approach reflects an increasingly recognised principle:
a numerical percentage is only meaningful if you also examine the risk profile of the assets each spouse receives.

A strict 50/50 split would have been numerically equal but functionally unfair, because it would expose the wife to volatility she could not withstand.

The Wife’s Needs Remained Central

Even at nearly £90 million, this was not a pure sharing case.
Nicholas Allen KC still anchored the award in the wife’s reasonable needs:

secure housing,
reliable income,
financial stability for the children,
and protection from the husband’s investment volatility.

The judgment confirms that needs remain a vital cross-check, even in “big money” cases.

The wife required certainty, not a seat on a financial rollercoaster.

Credibility Still Matters — Even at £89 Million

A major influence on the computation exercise was the court’s view of the husband’s credibility.
Where figures lacked clarity or explanation, the judge preferred:

expert valuation,
contemporaneous documents, and
logical inference.

The message is clear: even in the wealthiest cases, the court’s patience for incomplete disclosure is short.

Why BY v GC (No. 2) Matters

This judgment is important because it illustrates:

Modern risk-adjusted sharing

Courts will depart from equality to prevent the financially weaker spouse inheriting speculative or unstable assets.

Disclosure remains paramount

Where a party’s financial picture is unreliable, the court is willing to reconstruct it.

Needs still matter — even in “big money” cases

Stability for the economically weaker spouse is a core objective.

Asset composition matters as much as the headline figure

£10 million in a risky venture is not the same as £10 million in cash or secure investments.

Ultimately, BY v GC (No. 2) shows the Family Court at its most pragmatic: willing to depart from equality, willing to draw firm inferences where disclosure falls short, and willing to prioritise stability over abstract arithmetic. In an era where wealth is increasingly tied to complex and risky investment structures, the case is a reminder that fairness is not just about the size of the pot, but about the real-world security each party walks away with.

Published by James Thornton in Blog

Tags: business valuations, case law, illiquidity, liquidity, risk laden, valuation

28 November 2025

When “Set in Stone” Isn’t: Varying Maintenance and Escaping Old Undertakings in ABC v XYZ [2025] EWFC 370 (B)

Many clients think that once a financial order is made on divorce, that’s it forever. ABC v XYZ is a reminder that things are more flexible than that – but also that fighting over variation can be ruinously expensive.

District Judge Maddison in Birkenhead was asked to decide two linked questions:

Should a former husband be released from undertakings given in a 2020 consent order?
If so, how should the spousal maintenance now be set?

The case is a good opportunity to look at Birch v Birch, variation of periodical payments, “over-provision” through index-linking, and the sheer cost of taking a relatively narrow dispute all the way to a final hearing.

The original deal: tax planning dressed as maintenance

ABC (husband, now 61) and XYZ (wife, 59) had a long marriage of about 24 years, separating in 2016 and resolving finances by consent in 2020.

Key parts of that order:

The wife kept the former matrimonial home (a five-bed, three-reception property).
She also kept shares in the family company, F Limited, and received £50,000 per year in discretionary dividends, index-linked to RPI.
The husband undertook to use his “best endeavours” to make sure F Limited paid those dividends.
If the company didn’t, he undertook to “top up” via a nominal periodical payments order – effectively guaranteeing her income.
There were share transfers the other way and a pension share in her favour.

Everyone understood this as a continuation of a tax-efficient marital income structure: using her lower tax rate and allowances while he sacrificed salary.

Fast forward to 2025, and the picture looked different.

Back to court: when the company falters

By 2025, F Limited had had a very bad year – a seven-figure loss, redundancies, and a halt to bonuses and dividends. The husband argued that:

The dividends paid to his ex-wife were, in reality, simply being carved out of his own package.
With the business under pressure and his own debts rising (including a director’s loan and borrowing from his father), he couldn’t afford to keep propping up the arrangement.
He asked to be released from all undertakings and for the nominal maintenance to be replaced with £1,000 per month, non-indexed, on a joint lives basis.

The wife’s position was simple: the 2020 order should stand. She said:

The dividend structure was what he proposed at the time;
Her needs hadn’t gone away; and
The company’s poor year looked more like a blip than a permanent collapse.

However, she did accept one important point: if maintenance switched from taxable dividends to tax-free spousal maintenance, her income need would reduce by about £753 per month (which is what she currently paid in income tax on the dividends).

The legal framework: Birch, undertakings and variation of maintenance

The court can’t “vary” an undertaking in the way it can vary a periodical payments order – but it can:

Release a party from an undertaking; and
Impose different undertakings or a revised maintenance order in its place.

The Supreme Court in Birch v Birch confirmed that the court should approach release from undertakings via s.31(7) Matrimonial Causes Act 1973, i.e.:

Has there been a significant change in circumstances?
Looking again at the s.25 factors, what is now fair?

District Judge Maddison also applied the modern guidance on varying income orders, including:

The focus is on needs, not relitigating capital.
The court can look at amortising capital, but it’s not automatic.
The burden is on the payee (here, the wife) to justify ongoing dependence and the level of provision.

What did the judge actually do?

First, the judge was not persuaded that F Limited had irreversibly collapsed. The 2024 accounts showed respectable performance; 2025 looked more like a bad year than a permanent new normal.

Second, the judge accepted:

The wife’s income needs were around £3,500 per month after some trimming of her budget (including council tax discount and modest economies).
She receives no earnings, has real health and age-related vulnerability and no realistic earning capacity.
She should not be required to start eating into her modest capital or pension to subsidise current living costs.

Third, the judge held that the wife was currently over-provided for:

The original £50,000, now RPI-linked to over £67,000 per year, plus tax effects, meant she was receiving more than she needs on her own case.
This justified a downward variation.

The final order:

The husband is released from all undertakings in the 2020 order.
The nominal periodical payments order is varied to £2,900 per month,
Index-linked going forward (but to CPI, not RPI),
On a joint lives basis.

In other words: the tax-driven dividend machinery is dismantled, but the wife keeps a secure, needs-based income stream for life.

The sting in the tail: £175,000 in costs

Perhaps the most striking passage in the judgment is the judge’s comment on costs:

Between them, the parties had spent £175,287.10 over less than 10 months.
That equates to about five years’ worth of maintenance at the newly ordered level.

This was, in the judge’s words, a “relatively simple dispute” about the level of maintenance and the form it should take. It was “eminently capable of settlement”, but both sides adopted rigid and unrealistic open positions, which blocked compromise.

Practical lessons

For practitioners and clients, ABC v XYZ underlines:

Undertakings are not untouchable – they can be revisited where circumstances significantly change.
Index-linking (especially to RPI) can drift into over-provision and may justify variation.
Tax-driven structures may work well in the marriage, but can become distorted or unfair post-divorce.
Courts are slow to force a non-earning, vulnerable spouse to live off capital where maintenance was plainly intended.
And above all: the cost of litigating modest variations can very quickly outstrip the value of what’s in dispute.

For many separating couples, the smarter option is often to renegotiate sensibly with early legal advice, rather than spending years’ worth of maintenance arguing over the decimal points.

Published by James Thornton in Blog

Tags: birch v birch, case law, spousal maintenance, undertaking, variation

19 November 2025

Liquidity, Needs and Transparency: Key Lessons from NI v AD [2025] EWHC 2997 (Fam)

High-value divorce cases often turn on complex business valuations, competing expert evidence and sharply differing narratives. But in NI v AD [2025] EWHC 2997 (Fam), Mr Justice Trowell had to wrestle with something more fundamental: a family whose financial prospects were shaped not just by wealth, but by illiquidity, delay, mistrust and the long shadow of coercive control.

With net assets of around £6.5 million — but only £2.7 million in liquid funds — this case offers a clear illustration of how the court balances needs, liquidity, and transparency when the bulk of the wealth is tied up in an unlisted family business.

A Marriage of Eight Years, a Six-Year Separation, and a High-Value Dispute

The parties, now aged 37 and 47, separated in 2019 after an eight-year marriage. They share three children, now 11, 9 and 8. The wife, who had followed the husband to the UK from abroad, was the primary carer and had recently completed a psychology degree. Her earning capacity — and how realistically she could build a teaching career while caring for three children — became a live issue.

The husband, meanwhile, was one of three brothers behind a highly successful family business linked to “Product A”. His income came entirely through dividends, and the business structure involved a web of subsidiary companies, side ventures and inter-company loans.

This was not a simple asset schedule.

A Central Problem: Wealth That Exists on Paper, But Not in Cash

Although the overall asset pool was close to £6.5 million, the vast majority was locked inside the family company, Company A, where the husband held a one-third share.

Two features complicated matters:

Illiquidity — A significant proportion of the husband’s wealth was in business shares that could not be realised without a sale agreed by all three brothers.
A vast director’s loan account (DLA) — Standing at £5.6 million, funded by living costs, renovations, legal fees and business reinvestment. The court repeatedly pressed the husband on how he intended to repay it. His answers lacked clarity, and the judge concluded he was “not being open” on this issue.

These two features heavily shaped the eventual outcome.

The Non-Disclosure Issue: A Hidden Company Sale

Midway through the proceedings, the wife’s legal team discovered that a subsidiary company — Company C — had been sold for £6 million on 1 October 2025.

The husband had:

Failed to mention the sale in his section 25 statement (filed the day before the sale);
Failed to mention it in a later statement filed after the sale;
Failed to tell the court or the jointly instructed accountant.

The judge was blunt: the husband had concealed the sale because he believed it would harm his case.

This finding significantly impacted credibility and valuation.

Valuation Battles — and the Court’s Practical Approach

The two forensic accountants disagreed sharply on:

Multipliers for valuing the main operating company
The value of various subsidiaries
The treatment of the director’s loan
Whether the husband’s income was £168,000 or £1.1 million per year

Justice Trowell adopted a pragmatic middle-ground. He:

Placed £6 million on the sold company
Applied an EBITDA multiplier of 8 for the core trading company
Discounted certain loss-making subsidiaries
Rejected a full 30% minority discount, describing it as an illiquidity indicator rather than a real-world reflection of what the husband would receive

This resulted in liquid assets of £2.7m and illiquid business interests of £3.8m.

Needs Drive the Outcome

Despite the wife arguing sharing, the judge concluded this was a needs case. Key reasons:

It was a short marriage
Most of the wealth arose post-separation
Liquidity constraints made equal sharing artificial

The wife needed £2.2 million to buy a home near the children’s schools, plus her outstanding legal fees. She was therefore awarded:

£2.23 million in capital (including a lump sum from the husband)
Spousal maintenance of £73,300 per year for three years, then £57,800 per year until June 2036
Child maintenance at £10,000 per child per year
School fees

The husband kept the illiquid business assets — and the DLA problem.

Why This Case Matters

NI v AD is a cautionary tale that highlights:

Liquidity matters as much as headline wealth

£3.8 million in shares is of little use in paying rent or school fees.

Transparency is non-negotiable

Failing to disclose the sale of Company C materially damaged the husband’s credibility.

Needs remain the touchstone

Even in high-net-worth cases, the court will prioritise housing and income needs for the primary carer and children.

Courts will scrutinise business structures — firmly

Opaque company arrangements and unclear director’s loan arrangements invite judicial scepticism.

Published by James Thornton in Blog

Tags: business assets, business valuations, case law, illiquidity, liquidity

11 November 2025

When Time Is Short: Terminal Illness and the Court’s Discretion in Financial Remedy Cases

In OO v QQ [2025] EWFC 310 (B), His Honour Judge Hyde faced one of the most delicate balancing acts in family law: how to achieve fairness when one party is terminally ill. The case is a poignant reminder that behind every financial remedy judgment lies a human story — and that the court’s wide discretion under section 25 of the Matrimonial Causes Act 1973 allows justice to be shaped by compassion as well as calculation.

The Background

The parties were married for almost 20 years. Both were in their mid-50s, with total assets just under £1 million. Tragically, the wife had been diagnosed with terminal cancer. Her prognosis was poor, and medical evidence suggested she had limited time remaining.

The husband argued that the court should recognise this by limiting her award, since her financial “needs” would be short-lived. The wife, however, sought security and dignity — not only for her remaining life but also to ensure her affairs were settled with stability and her adult children were not left with uncertainty.

The Court’s Approach

Under section 25, the court must consider all the circumstances of the case, including each party’s needs, resources, age, and health. Health is often relevant in assessing earning capacity or ongoing expenditure — but where a party faces terminal illness, it becomes central.

HHJ Hyde accepted that the wife’s needs were immediate and pressing. She required a secure home, funds for care, and the ability to live her remaining time free from financial anxiety. The judge also noted that the husband, in good health and with ongoing earning capacity, was better placed to recover financially.

Accordingly, the court divided the assets 56% to the wife and 44% to the husband — a departure from equality justified by her exceptional health circumstances and the need to ensure her welfare and peace of mind.

Balancing Fairness and Humanity

This judgment demonstrates that “needs” are not purely mathematical. They must be understood in context. A party with a limited life expectancy has needs that are immediate, intensive, and deserving of priority.

HHJ Hyde’s decision reflects the broader principle that fairness in family law is not confined to equal division. It also encompasses empathy and recognition of personal circumstances. As the court observed, the aim is not to achieve actuarial precision but a just and humane outcome.

Why OO v QQ Matters

OO v QQ reinforces several key principles:

The court’s discretion under section 25 is wide enough to reflect human realities.
Health and life expectancy can justify a significant departure from equality.
“Needs” in family law extend beyond duration — they include intensity, security, and dignity.

Ultimately, this case captures the compassionate side of family justice. It shows that even in cases governed by figures and percentages, the court’s true task remains to do what is fair — especially when time is short.

Published by James Thornton in Blog

Tags: case law, needs, terminal illness

6 November 2025

Can You Redact Payee Details from Bank Statements in Family Proceedings?

One of the most common disclosure disputes in financial remedy cases concerns redactions — particularly when a party removes payee details from their bank statements before producing them to the other side. Some claim these details are “irrelevant” or “private.” But is it actually permissible to do that?

The Duty of Full and Frank Disclosure

The starting point is simple and absolute: each party in financial remedy proceedings owes a duty of full and frank disclosure. Practice Direction 9A to the Family Procedure Rules (FPR) makes clear that parties must provide a complete and honest picture of their finances so that the court can achieve a fair outcome.

That duty extends to every material document, including 12 months of bank statements for all accounts disclosed in Form E. The Form E statement of truth is not just a formality — it’s a personal confirmation that the disclosure is “full, frank, clear and accurate.” Any attempt to conceal or withhold information undermines that duty.

The Rules on Redaction

Redacting payee details amounts to withholding part of a document. The FPR don’t allow a party to decide unilaterally which parts of their disclosure the other side can see. If a party genuinely believes they have a right or duty to withhold part of a document — for example, to protect legally privileged information or a third party’s confidentiality — there is a formal process to follow.

Under FPR 21.3(3):

“A party who wishes to claim a right or duty to withhold inspection of a document, or part of a document, must state in writing (a) the right or duty claimed, and (b) the grounds on which that right or duty is claimed.”

That written statement must be sent to the other side, who can then challenge the redaction under FPR 21.3(5). If the matter is disputed, the court may inspect the document itself and decide whether the information can properly be withheld.

In short: there is a mechanism for limited redaction, but it must be done transparently and — if necessary — with the court’s approval. Simply blacking out names or transactions because they are “personal” or “irrelevant” is not permitted.

Why Payee Details Matter

Payee information often provides vital context: who a party is paying, whether assets have been transferred, or whether money has been dissipated. Even regular spending patterns can help the court assess lifestyle and credibility. What one party views as “irrelevant” may in fact be highly significant to the other or to the court’s assessment of needs and fairness.

Consequences of Improper Redaction

Unjustified redactions can amount to non-disclosure. The court may draw adverse inferences, order further disclosure, or even make a costs order against the party responsible. In serious cases, non-disclosure discovered after judgment can justify an application to set aside the final order.

As the Court of Appeal emphasised in Imerman v Tchenguiz [2010] EWCA Civ 908, disclosure in family cases must be handled through proper procedures — not through unilateral decisions about what should or should not be revealed.

The Bottom Line

Unless a party follows the proper process under FPR Part 21, it is not procedurally permissible to redact payee details from bank statements before disclosure. The default position is clear: full, frank, and open disclosure is the rule — not the exception.

Where genuine confidentiality concerns exist, the right approach is to raise them transparently and, if needed, invite the court to decide. Anything less risks serious procedural and evidential consequences.

Published by James Thornton in Blog

Tags: case law, fpr part 21, practice and procedure, redact, redaction

Older Posts ›

When Conduct Changes Everything: Fraud, Coercive Control and Financial Penalties

When the Court Can’t Yet Make an Order: Indications of Outcome, Adult Dependent Children and Financial Needs

Arbitration, Confidentiality and Court Orders: Lessons from Spencer v Spencer [2025] EWFC 431

When Litigation Conduct Crosses the Line: Lessons from RKV v JWC [2025] EWFC 430 (B)

Fraud, Delay and Final Orders: Lessons from Silberschmidt v Richards [2025] EWHC 2841 (Fam)

Risk, Liquidity and Fairness: Key Lessons from BY v GC (No. 2) [2025] EWFC 397

When “Set in Stone” Isn’t: Varying Maintenance and Escaping Old Undertakings in ABC v XYZ [2025] EWFC 370 (B)

Liquidity, Needs and Transparency: Key Lessons from NI v AD [2025] EWHC 2997 (Fam)

When Time Is Short: Terminal Illness and the Court’s Discretion in Financial Remedy Cases

Can You Redact Payee Details from Bank Statements in Family Proceedings?

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