AGS v RKS

This is a reserved judgment following a hearing to determine an application for maintenance pending suit (MPS) and a legal services payment order (LSPO) made by AGS in financial remedy proceedings. This judgment is anonymised to protect the identity of the family.

AGS was represented at the hearings before me by Ms. Huyton of Counsel. RKS was represented by Ms. Hillas of Kings Counsel. I am grateful to both counsel for their assistance.

The hearing that took place on 12^th March 2026 was intended to be utilised to determine the MPS and LSPO applications. However, it became apparent that there was a need for both parties to file further evidence in regard to where AGS lived from May 2018 onwards and as such, the hearing could not be effective to determine the application. In any event, the one hour hearing estimate was woefully inadequate given the nature of the issues in dispute. However, I was invited to make an order providing for RKS to pay AGS a lump sum so that he could discharge his costs to date and for provision for his costs of the further hearing that would be required to determine the application for MPS and LSPO. I read the bundle and heard submissions from both counsel in order to determine the application.

The parties began their relationship in 2013. At the time that they began their relationship, RKS says that she did not know of the criminal record of AGS.

The parties married on 3^rd June 2015. They have three children together, twins aged 10 and another child aged 9. They divorced on 29^th June 2018.

At some point that is unclear to me, AGS was investigated for offences of fraud. His criminal behaviour pre-dated the parties’ marriage. He was arrested and charged with fraud offences. AGS has not provided a record of his conviction. In his first witness statement, he says that he served a prison sentence for “mortgage fraud” between February 2016 and May 2018. He does not say what specific offences he was convicted of or what sentence was passed. He does not set out what his licence conditions were on his release. Given that he was in prison for over two years, he must have been released on licence and subject to probation requirements (see Sentencing Council Guidelines). In his first witness statement, AGS says that he says that he was the subject of a civil POCA (Proceeds of Crime Act). He gives no further elaboration.

In his first witness statement, AGS says as follows;

“We divorced on 29^th June 2018, although the reality is we never separated… We separated in May 2025… Whilst I was in prison, [RKS] would visit me regularly and we discussed applying for a divorce so that any consequences arising from my conviction impacted the family and our children as little as possible… Following my release from prison, I returned to the family home with [RKS] and the children we started to rebuild our lives and work together to build the various projects that have been so successful so as to allow us to enjoy the standard of living currently at play”.

RKS did not file a statement in response to the applications for MPS and LSPO prior to the hearing on 20^th February 2026. Instead, she applied for a stay of the proceedings. In the statement, she says that the parties separated in May 2025 (para 3).

At the hearing on 20^th February 2026, I refused the application for a stay and listed a further hearing to determine the application for MPS and LSPO. I gave directions for AGS to file and serve a statement exhibiting the documents from the Proceeds of Crime Act proceedings (including orders and details of the outstanding amounts). I directed RKS to file a statement in response to the application for MPS and LSPO by 10^th March 2026.

AGS filed the confiscation order that was made pursuant to section 6 of the Proceeds of Crime Act 2002. It is clear from the legislation and from the order itself it was an order made by the Crown Court. AGS was clearly untruthful when he described it as a ‘civil POCA’. The order refers to the date of conviction as being 18^th December 2015 but does not give details of the conviction. The value of the benefit as a result of the offending behaviour was £1,407,503.51 and the amount he was ordered to pay was £506,395.53, which was the amount the Court determined as available. The POCA order records the schedule of realisable assets as follows;

It is factually accepted that RKS ‘bought out’ the interest AGS had in the family home in order to satisfy the confiscation order. The equity in that property was utilised to purchase another property in the sole name of RKS. That property was purchased in 2022, after AGS was released from prison.

AGS informed the CPS of the proceedings. The response of the CPS is as follows;

“As you are aware [AGS] does have an outstanding benefit figure in connection to Proceeds of Crime Act proceedings. At present there are no restraint orders in place as he has no known assets, in fact you have confirmed that the reason for his application is to receive maintenance for living expenses from his ex wife. In order to make the application you are also seeking a “fight fund” of fifty thousand points. That money will be used to make the substantive application and to realise maintenance for your client. At present the CPS has no intention on intervening in these proceedings. If there becomes a point in which your client is to receive a lump sum payment or other asset as part of any settlement then we reserve the right to intervene at that stage and also to apply for orders restraining those assets…”

I have understood from this that the CPS would not seek to take away funds recovered for maintenance or legal services, but anything over and above that, they will seek to recover it.

RKS gives a different account of the relationship. She says that the parties met and married in 2013, within a few weeks of knowing each other. She says that she was the subject of domestic abuse during the relationship, that she was and is terrified of him.

She said that she owned her own companies prior to the relationship and that she has always been financially independent during the relationship. She said that she found out some time into the relationship that AGS was a “con man” and that he was not a businessman as he had presented to her, having been made bankrupt. She became aware of the offences for which he served a term of imprisonment between February 2016 and May 2018 when she was pregnant with their third child. She says that she co-operated with the police in the course of their POCA investigation.

RKS tells me that the parties entered into a separation agreement which said that they would have no claims against each other. She has not provided a copy of that agreement. She says that she applied for divorce; decree nisi was granted on 16^th May 2018 and made absolute on 29^th June 2018. She admits that she did visit him in prison but says that she was scared what would happen if she did not. After his release from prison in October 2019, he would come to the house, and she would be too frightened to turn him away. She says that he would not stay long. She says that the reality is that the parties did separate when he went to prison and that the reason why she refers to the separation as being May 2025 as that was the last occasion he spent time in her home. She vehemently denies any suggestion that she misled the police during their enquiries and vehemently denies that AGS has any interest in any assets she owns. She says that AGS is using these proceedings to continue the domestic abuse she has suffered at his hands.

The Proceeds of Crime Act 2002 sets out a legislative scheme for the recovery of criminal assets. Under section 6 of the 2002 Act, if a person is convicted of offence(s) in the Crown Court and the prosecutor asks the court to proceed under section 6 or the Court does so of it is own initiative, the Crown Court must;

The recoverable amount for the purposes of section 6 is defined as the amount equal to the defendant’s benefit from the conduct concerned. The available amount is determined by reference to section 9(1) of the 2002 Act which defines the available amount as “the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority and the total values (at that time) of all tainted gifts”.

By section 10A of the 2002 Act;

“where it appears to a court making a confiscation order that-

a)

there is property held by the defendant that is likely to be realised or otherwise used to satisfy the order, and

b)

a person other than the defendant holds or may hold, an interest in the property

the court may, if it thinks it appropriate to do so, determine the extent (at the time the confiscation order is made) of the defendant’s interest in the property”.

If such an enquiry is undertaken by the Crown Court, any third parties is given an opportunity to make representations.

AGS is applying for MPS. By section 22 of the Matrimonial Causes Act 1973 provides that;

“On an application for a divorce …the court may make an order for maintenance pending suit, that is to say, an order requiring either party to the marriage to make to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of the making of the application and ending with the date of the determination of the suit, as the court thinks reasonable”.

Both counsel have referred me to TL v ML & Others [2005] EWHC 2860 (Fam), where Mostyn J gave guidance as to the exercise of the discretion to make an order under this section, with particular emphasis being placed upon the reference to “reasonable”, which Mosytn J said was synonymous with “fairness”. He went on to give the following guidance;

“ii)

A very important factor in determining fairness is the marital standard of living (F v F). This is not to say that the exercise is merely to replicate that standard (M v M).

iii)

In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long term expenditure more aptly to be considered on a final hearing (F v F). That budget should be examined critically in every case to exclude forensic exaggeration (F v F).

iv)

Where the affidavit or Form E disclosure by the payer is obviously deficient the court should not hesitate to make robust assumptions about his ability to pay. The court is not confined to the mere say-so of the payer as to the extent of his income or resources (G v G, M v M). In such a situation the court should err in favour of the payee.

v)

Where the paying party has historically been supported through the bounty of an outsider, and where the payer is asserting that the bounty had been curtailed but where the position of the outsider is ambiguous or unclear, then the court is justified in assuming that the third party will continue to supply the bounty, at least until final trial (M v M).”

Under section 22ZA of the 1973 Act, the court may make an order requiring one party to pay the other “an amount for the purpose of enabling the applicant to obtain legal services for the purposes of the proceedings”, a LSPO. The court must not make an order unless satisfied that, without the amount, the applicant wound not reasonably be able to obtain appropriate legal services for the purposes of the proceedings, whether that is by way of a loan or charge over assets. In deciding whether to make an order, the Court is to have regard to the matters set out in section 22ZB(1) of the 1973 Act, which are as follows;

“(a)the income, earning capacity, property and other financial resources which each of the applicant and the paying party has or is likely to have in the foreseeable future;

(b)the financial needs, obligations and responsibilities which each of the applicant and the paying party has or is likely to have in the foreseeable future;

(c)the subject matter of the proceedings, including the matters in issue in them;

(d)whether the paying party is legally represented in the proceedings;

(e)any steps taken by the applicant to avoid all or part of the proceedings, whether by proposing or considering mediation or otherwise;

(f)the applicant's conduct in relation to the proceedings;

(g)any amount owed by the applicant to the paying party in respect of costs in the proceedings or other proceedings to which both the applicant and the paying party are or were party, and

(h)the effect of the order or variation on the paying party”.

In Rubin v Rubin [2014] EWHC 611, Mostyn J made observations as to the applicable principles when considering an application for a LSPO. He said “where the claim for substantive relief appears doubtful, whether by virtue of a challenge to the jurisdiction or otherwise having regard to its subject matter, the court should judge the application with caution. The more doubtful it is, the more cautious it should be” (para 13(iv)). In CW v CH [2022] EWFC B1, Recorder Allen noted that the fact that it is being argued the substantive claim has no merit does not preclude the making of an interim costs allowance (para 42).

An issue that arises in this case as a result of the POCA proceedings is what is matrimonial property. Matrimonial property is defined in para 22 of Miller [2006] UKHL 24 as “property acquired during the marriage otherwise than by inheritance or gift”. Matrimonial property is normally shared, although not always equally (Standish v Standish [2023] EWCA Civ 567, para 5). Non-matrimonial property will ordinarily be retained by the party to whom they belong, absent good reason to the contrary (WC v HC (Financial Remedies Agreements) [2022] EWFC 22. Needs is usually the reason for sharing non matrimonial property.

This application is being determined before the parties have filed their Forms E. In his statement in support of his application, AGS said that he has two bank accounts in his sole name (Monese and Revolut). The balances held in the accounts is negligible. He referred to receiving money from two companies V and B, although he says that he is simply taking money from the businesses because they are not making any money. He has produced a letter from his accountants to confirm the same. He says that he is now in receipt of Universal Credit. As a result of his straightened circumstances, he says he is relying on friends for accommodation. He has also referred to borrowing from a person called Steve. According to the credits to his bank account, AGS has received money from Steve as recently as November 2025. He hasn’t given any further details of this person or any loan agreements he has with him. He hasn’t suggested any reason why Steve would not provide him with further loans in the future.

RKS has produced evidence to show that AGS has interests in other companies that he has not disclosed, including an art dealership which is active in both UK and Dubai. She also asserts he has told her that he has non-fungible tokens, although she says nothing of their potential value.

AGS puts his income needs at £4,160 per month plus a deposit for a rental property for the first month. He seeks a LSPO in his first statement of £57,675. In terms of an interim position, he seeks £17,000-18,585 by way of LSPO to cover one further interim hearing.

RKS owns the property in which she and the children live. There is no indication in her statements as to the equity in the property. AGS puts the value of the property at £1.2 million less a mortgage of about £300,000. RKS has confirmed in her witness statement dated 10^th March 2026 that she has assets tied up in a number of companies. AGS lists a number of the companies that RKS has an interest in in his first statement. The information about the companies is limited to what is published in the publicly accessible accounts. In her note, Ms. Hillas put the net asset value of the business at £608,589. RKS says that she receives an income from her businesses of £12,000 per month plus £500 per month other benefits. She discloses outgoings for herself and the children are £12,739.04 per month. She says that she has an outstanding bill for private school fees of £13,614.44 that she says she cannot pay. She says she cannot afford to pay any money to AGS, particularly as she alone is meeting the needs of the three children.

From what I have seen of the resources RKS has, she will need to borrow to fund her own litigation costs and to fund any payments I direct to AGS.

Having considered the provisions of the Proceeds of Crime Act 2002, it appears to me that AGS will have a considerable hurdle in making a sharing claim against RKS. In particular, it appears to me that if AGS had any interest in any property held by RKS, the CPS would have sought to realise it within the criminal proceedings. The POCA order was made on 18^th December 2015. The parties were divorced on 29^th June 2018. Accordingly, the assets in the sole name of AKS at that time must be non-matrimonial. I am particularly unconvinced by the argument submitted on behalf of AGS that he retained any interest in the family home that was the subject of the POCA order. The effect of RKS buying him out to satisfy the confiscation order must extinguish his interest, that was the point of the confiscation order. To suggest that the property bought out by RKS is matrimonial would result in RKS being punished for the offending behaviour of AGS.

There is then the factual issue about whether the parties lived together as husband and wife after the decree absolute. I was specifically asked not to resolve that factual issue as both parties sought to file further evidence on this issue. However, Ms. Hillas sought to argue that the effect of the decree absolute must be that there can be no matrimonial property after that date. The marriage had ended and so there could be no matrimonial property. I put to her that this was a situation similar to GW v RW [2003] EWHC 611, where Mostyn J said, “[I]n my judgment where a relationship moves seamlessly from cohabitation to marriage without any major alteration in the way the couple live, it is unreal and artificial to treat the periods differently”. Of course, the situation is in reverse in that it is said that the relationship continued after the marriage ended. Ms. Hillas corrected me and reminded me that the effect of a decree absolute ends the marriage, so, as a matter of law, the marriage cannot continue, there can be no matrimonial property after the marriage has ended.

I have considered the decision of Cohen J in MB v EB [2019] EWHC 1649 which deals with the factual dispute as to when the parties separated. In that case, the parties married on 17^th April 2000 (without prior cohabitation). The wife contended that it ended in 2004; the husband said that it ended in 2016. The Court heard evidence from the parties and determined that separation occurred in 2004. However, the legal marriage had continued throughout. This case is obviously very different.

Having thought about this very carefully, Ms. Hillas must be right. A marriage cannot be said to have continued after divorce, whatever the level of contact between the parties. As a result, it is difficult to see in this stage of the enquiry that there is any evidence of any matrimonial acquest.

Accordingly, for AGS to succeed, he must establish need. If he succeeds in recovering capital, the CPS is likely to pursue recovery of capital to make up the difference between the amount they have recovered and the benefit AGS received from his criminal activity. For him to personally receive any capital benefit from this application, he will need to recover at least £901,000. The likelihood of this when RKS is meeting the needs of the children without contribution from AGS must be limited.

At this stage in the proceedings, I recognise I have made no factual findings about their relationship. However, AGS is relying on a lie told to the Police and CPS in order to be successful in this claim. In order for RKS to be successful, she has maintained a truthful position about the end of the marriage. That must affect the merits of this application.

I must also remember that AGS applies for MPS and seeks funding to argue for such an order at the next hearing. He has produced medical certificates to say he is incapable of work and that he is dependent on universal credit. The medical certificate says he is not fit for work because of mixed anxiety and depressive disorder. The current certificate expires on 20^th May 2025. However, there are issues about his involvement in other businesses RKS has provided evidence to suggest they exist.

RKS is legally represented, but she says she cannot afford to continue with representation if required to pay any funds to AGS.

A key complaint by RKS is that AGS did not follow the pre-action protocol for this application. In particular, I have seen a letter sent on behalf of AGS seeking interim provision (including LSPO) sent on 5^th August 2025 and for the parties to exchange Forms E by 5^th September 2025. There is no further correspondence until after the application is issued on 4^th February 2026. RKS complains that there were no suggestion of mediation or any other forms of non-court dispute resolution. I have reached the conclusion that the steps the applicant has taken to avoid all or part of the proceedings have been far too limited. However, I have some scepticism that this was a case that could have been resolved outside the Court arena, but if more steps had been taken prior to the commencement of the proceedings, the issues may well have been narrowed.

I am not satisfied that AGS has provided full, frank and clear disclosure. He has not been open and honest about the POCA proceedings. He referred to the POCA order as a civil POCA, which was clearly a lie. His failure to refer to the outstanding benefit amount in his first statement is a very serious omission. I cannot accept that he did not know of the deficit or the potential for the CPS to seek to recover funds from him given that his case is predicated on the basis that assets were put in the name of RKS to avoid the effect of the “civil POCA” (para 15 of his first statement). I have reached the conclusion that he avoided giving this information because he was concerned about the potential limit on his claim.

I am also not satisfied that he has provided full and frank disclosure of his business interests. Having informed the Court that he has two businesses V and B, it is somewhat surprising that he has not produced any accounts for the businesses given that he has been receiving funds from them. There must be some form of management accounts that should have been disclosed. The bank statements provided for the two companies are limited and don’t show the sources of funds for the payments which were paid from the business accounts to his personal account. I note AGS is not earning anything from those two businesses at present. AGS did not disclose in his first statement what the payments from a third company were referable to (examples; £3,000 on 14^th October 2025 and £5,000 29^th November 2025). I raised that at the hearing on 20^th February 2026 and directed he file a statement explaining the receipts. He said in his second statement that this referred to the loan from Steve. He has not produced any loan agreements to substantiate this. RKS maintains that AGS has a number of registered trademarks, indicating far greater business interests than he has disclosed. Putting all this together, I am not satisfied that AGS has provided full frank and clear disclosure of his business interests or potential resources from Steve.

This is not a relevant factor in this case.

Having looked at the income needs budget prepared on behalf of RKS, there are obvious trimmings; for example, at this interim stage, she can divert £1,000 per month budgeted for holidays to other needs. However, that would need to be applied to the school fees debt. She doesn’t appear to have any realisable funds available at this point and she would need to borrow to fund her own costs and any order I make for LSPO.

RKS alleges she is a victim of domestic abuse. She says that this application is an extension of the abuse she has suffered from AGS and so I have understood her to be arguing that she would feel the court is continuing the abuse. I do not think that that is a finding I can make at this interim stage.

At this stage, I am limited my decision as to whether I should make a LSPO to fund a hearing to determine whether there should be MPS and a further LSPO to fund up to and including the FDR.

I have reached the conclusion that I should not make the legal services payment order. AGS faces substantial hurdles in making out his substantive claim, such that, given the impact upon RKS of the making of a LSPO, it cannot be fair to make such an order against RKS, even if it is just for one further hearing to determine whether there should be an MPS and a further LSPO. Furthermore, the failure on the part of AGS to provide full and frank disclosure from the outset means I cannot be satisfied that he cannot fund the litigation by other means. Accordingly, I refuse the application for a LSPO to pay for the next hearing to determine the MPS and substantive LSPO application.

I invite submissions on costs from both parties. I am mindful of the fact that we approaching the Easter break and I cannot recall specifically what I was told about Counsel’s availability. Accordingly, on the issue of costs, if Counsel can provide bullet point submissions on costs for the hearings on 20^th February and 12^th March by 4pm on 1pm on 13^th April 2026, I would be grateful.