A case of destructive litigation: Just before Christmas, I wrote here about the case Read v Panzone, which I described in the post title as “another case of lengthy, destructive and disproportionate legal proceedings”. I now find myself almost copying that post title, with reference to a different case.
The case is TT v CDS, which concerned claims by a husband and a wife for financial remedies following the breakdown of their marriage. The claims were heard last November by Mr Justice Cohen in the High Court.
The first notable thing about Mr Justice Cohen’s judgment in fact comes before the first paragraph. We are told to “See also the Schedule of significan[t] assets/liabilities”. Clicking on the link in that sentence downloads an Excel spreadsheet setting out the schedule. I don’t recall ever coming across this before in a judgment. It seems a good idea, although obviously it won’t work quite so well in a law reports book, where the link would have to be copied into a browser.
Okay, so what was the case about? These are the relevant facts:
- The parties began living together in 1995.
- They married in 2005.
- They have two children, now aged respectively 13 and 9.
- During their time together the parties built up a successful business. The business, we are told, provided them with “a very good but not opulent standard of living.”
- All of the assets were built up during the course of the marriage, although the husband sought to argue that a significant part of the assets was owned by his mother (another similarity with the Read v Panzone case), but a claim to ownership made by the mother, supported by the husband, was “decisively rejected” by Mr Justice Mostyn.
- The parties separated in 2016 in “highly acrimonious circumstances.” Divorce proceedings ensued, and both parties issued financial remedy claims.
- Mr Justice Cohen described the following litigation as being “on a massive scale”, and said that it included conduct allegations by the wife against the husband, which the wife argued should be taken into account by the court when deciding the case. I will not go into details, but the husband’s conduct included instigating unnecessary litigation and failing to comply with court orders.
- The primary assets comprised three flats in London with equities of about £199,000, £210,000 and £168,000 respectively, a property in Miami worth £1,253,000, a ‘Cabana’ adjoining the Miami property, worth £143,000, and the business, which was valued at £1,850,000. There were also substantial debts
So what was the outcome of the case?
Before he came to that, Mr Justice Cohen had the following to say:
“It is obvious that this has been the most destructive litigation. There is no avoiding the fact that [the husband] is very largely responsible for the situation that has arisen. Since the breakdown of the marriage he has acted destructively and throughout the litigation without any regard to the normal rules.”
As to the business, which had been run by the wife since the separation, he had this to say:
“It is inconceivable that the parties could work together in the business and … the only way that I can be confident that [the wife] and the children are properly looked after and do not find themselves deprived of funds is if the beneficial interest in the business is transferred to [the wife]. Thus it will be that she is provided with an income which will permit her to run her home, pay the children’s school fees and maintain an appropriate standard of living for the children.”
As to the flats, the wife would keep the first two, and the husband would keep the third.
The Cabana would be transferred to the wife.
Lastly, the Miami property would remain in the sole ownership of the husband, but the wife would receive a lump sum from the husband which was to be secured upon the property, in the sum of £250,000.
An unusual and unfortunate case
The net effect of all of this was that the wife would have the business, but would be left with debts that exceeded her other assets by a small amount; the husband would be left with net assets of about £634,000. Mr Justice Cohen concluded thus:
“The effect of this is that neither party will end up with much, if any, capital but [the wife] will end up with the business. [The husband] has brought this upon himself. In so far as there is a departure from equality it is necessary so as to meet the needs of the children and to meet [the wife’s] debts which he has created in significant part.
“I have attempted to reach what I regard as a fair outcome to both [the husband] and [the wife] in this unusual and unfortunate case.”
You can find the full judgment here.
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