MRU v ECR (Financial Remedies)

I have had sight of a bundle of 274 pages, a skeleton argument on behalf of the applicant, and heard oral submissions from both parties. I have had the benefit of written notes from the respondent in terms of her closing submissions.

References to the bundle are rendered as [page] or [paragraph/page]. This judgment has been prepared without representations being made on costs.

Following the President’s Transparency in the Family Courts: Publication of Judgments PracticeGuidance of 19 June 2024, I anticipate that this judgment will, in due course, be released to the National Archives for publication as a reserved judgment. Given that, and in order to preserve the confidentiality of the parties, I have assigned random three-letter markers for both the applicant husband, being MRU in this judgment, and the respondent wife, denominated ECR, and have prepared the judgment anonymously from the outset. This means that I have referred to the parties as ‘the applicant’ and ‘the respondent’ throughout, rather than calling them by name; no discourtesy is intended. I have not sent a draft of this judgment to the parties prior to today, as the respondent is a litigant in person.

In addition to the parties, there are three children of note who are the biological children of both parties. The children are all girls, reside with the applicant, and at the time of the hearing ‘A’ is 9, ‘B’ is 7 and ‘C’ is 5. They are referred to collectively, and I do not refer to them other than as ‘the children’, with the specific exception of the youngest child ‘C’ who is in receipt of Disability Living Allowance and has issues with her sight, speech, and language, and she is registered as severely sight impaired.

As the parties currently reside in places in which they are readily identifiable, due to the small and close-knit nature of the same, I have referred to the applicant’s home as ‘the applicant’s home’ without reference to its locale. Likewise, the respondent was, at the time of the hearing, living in supported bail accommodation at an undisclosed address, which I have referred to as ‘the respondent’s home’. I accept that the latter is something of a misnomer; however, for ease of reading, I have used this phrase. The properties identified as suitable for the parties by themselves, and each other, are referred to in the terms of ‘the applicant’s properties for themselves’, ‘the applicant’s properties for the respondent’ and so on.

For the same reason as that given in the paragraph above, the children’s schools and childcare providers are simply referred to as ‘the children’s schools’.

After the conclusion of proceedings and before formulating this judgment, I was emailed by the court on 22 April 2025 at 17.56, with a request from the respondent that I consider some further evidence. I refused to do so, on the basis that to do so would be materially unfair to the applicant, as all evidence had been heard, closing submissions had been made, and there was no opportunity for the applicant to consider or rebut the evidence.

As the respondent is not represented, I have simply listed a hearing to hand this judgment down, without the usual time for corrections, I shall deal with corrections and costs arguments at the conclusion of this judgment.

On the second day of these proceedings, an application for the press to attend was made by three accredited reporters from ITV News. I granted their application and made a transparency order on 18 March 2025 in respect of these proceedings. The terms of that order were a standard Transparency order insomuch as any person served or with knowledge of that order was prohibited from disclosing the following;

I have not discharged that order, and the prohibitions shall remain in place, save that any publication may now refer to the parties under the randomly assigned letters within this judgment, and the content of this judgment may be reported in full.

This matter is a final hearing for financial remedies arising from the dissolution of a marriage contracted between the parties on 23 December 2009. A detailed chronology is found at [A8] of the bundle.

The parties lived together in a small commuter town in the East Riding of Yorkshire, initially with the applicant being employed as a telecommunications IT engineer for well-known companies, through his own umbrella company, and the respondent being employed in various roles within the executive agencies of the civil service.

The parties separated on 16 June 2021, and the conditional order in the divorce proceedings was pronounced on 7 December 2021. This is a long marriage with some 20 years in total of seamless cohabitation and marriage.

The parties have been subject to intense media scrutiny throughout the latter stages of their marriage and their divorce, due in no small part to the published stories documenting the long-term abuse of the applicant by the respondent. These stories documented the long-term abuse of the applicant by the respondent, including threats and actual violence, domestic abuse, and controlling and coercive behaviour. ECR pleaded guilty, and was sentenced at the Kingston-upon-Hull Crown Court in February 2023 to an immediate 4-year term of imprisonment for these offences. She has now been released on licence and, at the time of the hearing, was living in supported accommodation, which was at a confidential address. There were further restrictions placed upon the respondent by virtue of her licence, including zonal restrictions.

The children of the parties reside with their father, due to the incarceration of their mother, and pursuant to concluded proceedings under the Children Act 1989 in which an order was made for the children to reside with the applicant and for there to be indirect supervised contact with the respondent. On the first day of the hearing, I was invited to consider a C100 application lodged by ECR which would have varied the arrangements for the children, as she said that this would have a material impact upon her needs in this matter as she wanted to apply for overnight stays with the children.

I declined to hear that application within this matter for two simple reasons; the first being that I do not hold the requisite authorisation to deal with matters pertaining to children, and secondly, because the application had been lodged only a short period before the hearing, and whilst it had been issued, it had yet to be served upon the applicant or his solicitors.

Unusually, there are no properties of note to be dealt with within these proceedings as the former matrimonial home has already been sold for £217,600.46 net of costs, and the funds remain in trust with the applicant’s solicitor, save for a modest disbursement having already been made to each party. This property is referred to as the ‘FMH’, the address is, for the purposes of this judgment, inconsequential as neither party now resides there.

Each party received an interim payment of £30,000 from the sale of the FMH, a further £3,210 was deducted from the balance to meet the cost of the jointly instructed PODE, with the balance of £153,210 being held by the solicitors. This was flagged as being the correct sum, and that upon the ES2 as being slightly incorrect.

The only other assets of note were the parties pensions, all other chattels having either been disposed of, or used to furnish the applicant’s home with the children.

Therefore the marital pot is limited to the equity held to order by the applicant’s solicitor and the CETVs of the parties’ own pensions.

The applicant has the following pensions, as detailed in the PODE report of Richard Pinder of EPS dated 8 October 2024 at [F21], an Occupational Pension from his former employer valued at £136,410.00, and a Standard Life pension valued at £69,547.00. Jointly they are valued at £205,957.00. It is the recommendation of the PODE that 98% of the applicant’s Standard Life pension be transferred to the respondent to allow for equalisation.

The respondent has an occupational pension and it is valued at £127,831.00.

The ES2 notes debts for both parties and therefore this is, unfortunately one of the myriad cases before the courts, where the needs of the parties far outstrip the assets available to them.

The applicant has hard or commercial debts of £14,086 made up of a Tesco credit card and finance for a Samsung telephone. There are also disputed debts in the applicant’s name, particularly the High Income Child Benefit charge, being a tax upon those with an income over £50,000 who still claim the state-funded Child Benefit. The applicant states that he must repay this as the respondent did not make him aware that if one earned above £50,000 then the entitlement ceased, and the child benefit was in his name. He accepts that only £1,712 of the total debt of £8,797 arose during the marriage. The respondent denies the same, and denies that this is a marital debt. In addition, the applicant has a debt to his father of some £81,600. It is said that this was advanced for mixed purposes both pre-and post-separation, and that this is a true debt, subject to repayment. The applicant’s total claimed marital indebtedness is £97,383, with his overall indebtedness being some £104,478.00. The overall net position of the applicant is therefore, excluding pension assets, a negative balance of £102,415.00.

It is the applicant’s case that his sum from the sale of the FMH and some of the familial loan was to clear marital debts of £45,020.63, as detailed at [11/4] of the position statement of Mr. Rowe.

The respondent has declared commercial debts of £8,816 being a loan with Barclays and a credit card with MBNA. There are also two contingent debts, in that they only become payable upon a trigger being engaged; that is her Student Loan of some £12,012 and her legal fees, which were from the criminal proceedings, and are subject to a statutory charge, in the sum of £3,300. The final debt is, similar to the applicant, a consolidation of loans from friends and family, in the sum of £68,801. The respondent’s total claimed indebtedness is £100,501.00, with a net negative position of £99,287.00 on her own case, and a negative position, albeit not as severe upon the applicant’s case, of £92,118.00.

There are some issues with the figures advanced within the ES2, not least that some of these are hard or commercial debts, whereas others are soft or familial, and there are issues with the respondent’s costs of criminal defence for acts perpetrated against the applicant, being apportioned as ‘marital debts’; I deal with these later in this judgment. In addition the applicant disputes some of the respondent’s claimed debts.

During the marriage, the applicant worked for his own company, predominantly working from a home office, and contracted with large telecommunications companies. He was the sole director of his company ‘N Ltd.’, and held all of the shares. It is the applicant’s position that the respondent was registered as the company secretary pursuant to the requirements of the Companies Act in force at the time of incorporation, but that she carried out no work for the company, and therefore took no remuneration. It is the respondent’s position that she carried out work which allowed the applicant to grow his business but was not remunerated for this. This company has since been dissolved and the applicant is in standard or ‘PAYE’ employment.

It is the applicant’s case that, due to being the sole carer for the children, his caring responsibilities mean that his earning capacity is curtailed, as he is required to provide a regular and stable homelife for the children, including being at home for the youngest who has additional needs. He indicated that he works during the usual hours of a school day with ‘top-up’ hours worked early in the morning and late in the evening, when the children are asleep.

The applicant earns £43,657 per annum from his employment, and is in receipt of £2,856 Child Benefit, and £5,208, which is Disability Living Allowance for C, which will become payable to the child directly upon their majority. Whilst it is unclear to what extent the proposed changes to the benefits system will have upon this payment, at some point it is likely that this will be converted to Personal Independence Payment or PIP.

The respondent points out that her incarceration, licence conditions, and the widespread publicity, has necessarily impacted upon her earning ability in the future, and she will not be able to achieve comparable levels of income to those that she previously enjoyed, she presently is in receipt of Universal Credit in the sum of £4,571 per annum.

The applicant has a mortgage capacity of approximately £153,000.00 [C3] and has provided particulars for properties that would be suitable for him and the children, close to their schools, and whilst not luxurious or opulent, would meet their requirements. They are all within 3 to 5 miles of the children’s schools and are valued at between £290,000.00 and £305,000.00 [C33-34]. It is proposed that the applicant utilise the entirety of the remaining net proceeds of the FMH and his mortgage capacity to purchase a property for himself and the children.

The respondent has indicated that she requires a property for herself and her children to stay, in order that she may have overnight time with them. She has indicated that she requires a three or four bedroomed house, and has supplied particulars of a number of properties in a market town in East Yorkshire, all within the price bracket of £240,000.00 to £260,000.00, alternatively to rent in the region of £1000.00 to £1100.00 per month. She is unable to obtain a mortgage based upon her current position [D43], however seeks £56,244.00 as a deposit to enable her to purchase or rent a property, whilst allocating £100,000.00 to the applicant to rehome himself and the children [G2].

The governing principles for matters before the Financial Remedies Court are well known, and the case law complex and extensive. The underpinning legislation is s.25 of the Matrimonial Causes Act 1973, or the ‘s.25 Checklist’ which details the various factors that a court must consider when dividing matrimonial assets and debts. Since it’s inception the act has been interpreted by the courts and developed further, rendering a detailed, and sometimes conflicting, scheme of dealing with the matters.

This is one of the few cases where a detailed examination of the case law is not required; there is but one liquid asset, the monies held to order in respect of the FMH, supplemented by the illiquid pension assets. There are relatively few cases that need to be explored to explain why I have come to the decision I have.

The starting point is White v White [2001] 1 AC 596; this case established that the yardstick to which all judges ought to measure their consideration is that the parties should have an equal share in the matrimonial assets. This does not create a presumption, and Nicholls LJ was keen to emphasize this in White. This case dealt with a so called ‘sharing’ case, where the assets of the parties outstripped their respective needs and created a surplus to be shared.

The instant case is not such a case and falls to be decided under the auspices of Miller v Miller: McFarlane v McFarlane [2006] UKHL 24, where the court again considered the division of assets, however in the situation where the assets do not meet the needs of both parties, and it falls to the court to exercise it’s discretion in establishing what a fair division is, with reference to the s.25 Checklist. The judgment of Nicholls LJ at paragraphs 11-13 clearly explains how fairness is to be considered, and that is to stretch the often finite resources in favour of the party who has the obligation of child rearing.

Paragraph 138 of Miller states “The most common rationale is that the relationship has generated needs which it is right that the other party should meet. In the great majority of cases, the court is trying to ensure that each party and their children have enough to supply their needs, set at a level as close as possible to the standard of living which they enjoyed during the marriage” (emphasis added)

I do not slavishly reproduce the entire s.25 checklist, and only deal with the factors which I deem significant; if I have not mentioned the specific factor then, for clarity, I have considered it, but do not deem it to be relevant to this matter.

s.25(1) confirms that the welfare of any child of the family shall be the first consideration of the court; in this instance the children all reside with the applicant and therefore the needs of the applicant and his ability to provide a home for the children outweigh those of the respondent when I considers the court’s exercise of its discretion.

s.25(2)(a) deals with the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future; the respondent states that she is unable to work due to the media scrutiny; I am satisfied that the applicant is maximising his income, around the obligations he has in respect of childcare. I am not satisfied and do not find that the respondent is unable to work, or increase her income in the medium to long term.

s.25(2)(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has is a key consideration in this matter as the applicant has sole residential care of the children and requires the entirety of the net sale proceeds to ensure he and the children are rehomed. The ‘marital pot’ being the value of all assets within the pot are limited to the remaining value of the FMH, and the pensions mentioned in paragraphs 18, 21, and 22 of this judgment. The total sum is however largely made up of illiquid pension assets. The only liquid asset is the £153,210.00 net proceeds of sale.

There is a deficit between the total value of the assets held, and the needs of the parties, therefore this case is plainly a ‘needs’ case. That is to say that the apportionment of the assets will be based primarily upon the needs of the parties. Even upon the most conservative view, the applicant requires £290,000.00 to rehome himself and the children, the respondent states that she requires over £56,000.00 of this, leaving £97,000 for the applicant. The applicant is only able to raise a mortgage of £153,000.00; this would leave a deficit of £30,000.

s.25(2)(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family; the applicant has sole care of the children, the respondent has, at the time of the hearing, indirect supervised contact. There is little prospect of the respondent contributing to the home or care of the children as at the time of the hearing.

s.25(2)(g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it; I am bound to take note of the findings of the Crown Court, and the subsequent incarceration of the Respondent. It would be wholly inequitable to do otherwise, pursuant to the comments of Peel J in the matter of Tsvetkov v Khayrova [2023] EWFC 130, at paragraph 40, echoing the words of this clause.

As noted earlier in this judgment, the Respondent pleaded guilty to various charges of violence and domestic abuse against the Applicant. They have been dealt with by a court of competent jurisdiction, and I do not need to look behind the convictions in any way.

The only manner in which this impacts upon my judgment is as to how the subsequent arrangements for the children impact upon the parties' respective needs for housing. This is the type of conduct discussed by Mostyn J, as he then was, in paragraph 34 of his judgment in OG v AG [2020] EWFC 52, which stated that there were four types of conduct, and that this would fall under the situation of the first in that,

“…there is gross and obvious personal misconduct meted out by one party against the other, normally, but not necessarily, during the marriage. The House of Lords in Miller v Miller [2006] UKHL 24, [2006] 2 AC 618 confirmed that such conduct will only be taken into account in very rare circumstances. The authorities clearly indicate that such conduct would only be reflected where there is a financial consequence to its impact. In one case the husband had stabbed the wife and the wound had impaired her earning capacity.”

This conduct meets the three-stage test expounded by Mostyn J in OG v AG at paragraph 43 of his judgment as the allegations are already admitted, are sufficiently serious or exceptional to warrant consideration, and are quantifiable.

It is clear that the commercial debts attributable to the marriage must be paid, as and when they fall due. There is not a surplus of funds, once a property is purchased by the applicant to enable either party to do so, these must continue to be met from income, or formal debt management.

Both parties have familial loans, or soft loans, neither have evidenced a loan agreement, the terms of a loan, its repayment or interest details, and consequently I do not consider these to be true debts for the purposes of this calculation.

It is plainly unconscionable for the applicant to have to pay towards the defence costs of his abuser, and consequently, this debt is likewise excluded from this calculation.

For all of the reasons given above I make the following orders;

I subsequently heard argument on costs from the parties, the applicant applied for an element of costs to be paid, the form H1 filed included £30,164, but did not include the return hearing or today. The applicant seeks £7,200 inclusive of VAT, in respect of the three days of a final hearing and judgment. The FPR allows an order for costs based upon conduct, within the bundle, the applicant’s open proposal of 21 November 2024, post-dating the FDR on 4 November 2024 but pre-dating the initial day of the final hearing. He sought the order made at paragraph 52 of this judgment, made 8 months before this judgment. Recoverable costs have been incurred due to not accepting this open offer pursuant to FPR 28.3(6)(b). He accepted that some costs would be incurred in any event, however the hearing costs, when one considers the findings made, have not placed the wife in any better position but have incurred significant costs and meet the threshold to depart from the usual cost position.

The respondent confirmed that she is not able to make payment of a costs order due to her financial circumstances, she indicated that she did not want to go to a final hearing, I am having direct contact with the children now and this would impact upon the children. The second hearing was due to media scrutiny and I was unable to carry out the court hearing.

I asked the respondent what her position was on as my orders mirrored the open offer made in November 2024, the respondent confirmed that without the benefit of legal advice, and other events in the early part of 2025, meant that timing has played a large factor.

Consequently having heard the argument above, I make the following costs order;