H v M (No. 1)

This is an application under Part III of the Matrimonial and Family Proceedings Act 1984 for financial provision after a foreign divorce between H and M. I intend no discourtesy to the parties if I adopt the usual convention of simply referring to the parties as “Husband” and “Wife”, even though they are divorced. I hope the parties will understand that it is possible to be an applicant and a respondent at the same time, which can be confusing and is why the convention has grown up.

This matter that came before the court on 25, 26 and 27 March and now returns on 3 April for some further argument about directions and the giving of this judgment.

There are four areas in which I am required to provide a decision for the parties. The first one, which we have not spent much time on, is the husband’s application that the proceedings be adjourned in order to encourage the parties to undertake non-court dispute resolution. The second is whether or not the court should grant leave for there to be the continuation of an application for financial remedy under Part III of the 1984 Act and, if so, whether the ambit of that enquiry and any subsequent order should be confined to a sharing claim or not circumscribed at all. Third, the determination of the wife’s application of 21 February of 2025 for interim maintenance, and included within that interim maintenance, provision for her legal services. The fourth, is in respect of the many contested directions; the draft directions order extends to some fifteen pages.

The background of this case. The wife is fifty-three years old. The husband is fifty-four years old. The parties married in 1999. They separated as long ago as May or June of 2018. The parties have three children: ADB, who is twenty-three, BDB, who is nineteen, and CDB, who is sixteen.

The parties met in English City X as long ago as 1993. Shortly afterwards, the husband began a nightclub business in English City X; the company is referred to in this Judgment as “A”. “A” ended shortly afterwards, but it set the pattern for the Husband’s involvement in night entertainment; a business interest which he took to Country Z.

In 1994, the parties began their relationship. This was a little while after A had ended. They then summered in Country Z. It was then that the parties began to investigate the possibilities of starting a business there.

In February of 1997, the parties purchased P1. That is a property which the wife has indicated she wishes to live in for the longer term. But, at the moment, the property remains in the husband’s sole name and the wife has had some difficulties with getting access to the property. The dispute about access to the property is not material to the current decision.

The husband’s case is that he permanently moved in May of 1997, to Country Z. In the summer of 1997, the parties spent time together in Country Z. In November 1997, according to the wife, the parties began their cohabitation in Country Z. Their 1999 wedding took place in USA City Y.

Both of the parties are British in that the wife originates from England and the husband’s extended family originally came from Northern Ireland, although his family moved over to England due to the husband’s work with the Royal Air Force.

In 2000, the parties purchased a family home in Country Z (“P2”). In 2001, ADB was born. This was followed by BDB, born in 2005 and CDB who was born in 2009.

In the meantime, a hospitality business had been launched in about July of 2005. The company (“B”) was incorporated in 2006. There then followed the incorporation of a number of the other corporate companies which form the core businesses through which the parties traded. This included “C” in 2008, “D” (a hotel “H1”), in 2009, and “E” in 2009. An additional business was then established in 2010 (“F”). A second hotel (“H2”) was first rented in 2011. The incorporation of the brands associated with A was undertaken in 2012 (“AI”). H2 itself was purchased in 2015. There then continued further incorporation of companies within the group. The husband owns the majority of the shares in D, which is the trading company for the H1.

H1 and H2 are the two successful hotels which are the core of the businesses. H2, I am told, is famous for, [detail redacted].

The companies are structured so that the husband owns 100% of the shares in the two main trading companies, “G” (which is very much associated with the Country Z [detail redacted] scene) and “J”, which owns H2. (There is a small difference between the parties on the chronology; the husband saying this occurred in 2015 but the wife suggesting it might have been 2012; nothing turns on this today). It might be that the confusion is with when it was rented rather than bought. The Wife says she only discovered it was not to be in their own names subsequently, when the parties separated.

The company has a turnover of some €10 million. It has been the subject of some discussion between the parties as to its value. The parties’ provisional views as to the value of the businesses is extremely far apart. The husband places the value at between £10 million and £20 million, whereas the wife says that a more realistic figure is €80 million.

Each of the parties owns 47.59% of the shares in the main trading and holding company, which is “K”. They also have 49.93% of the voting rights.

One of the matters that I have been invited to look at in the course of this case has been some board meetings dealing with the question of dividend policy. Mr Howard KC, on behalf of the wife, invites me to find that there has been a majority of directors appointed to the board who are loyal to the husband and, in effect, do his bidding. I decline to make that finding at this stage. I can make no findings as to the politics of the board for a number of reasons. First, there is a paucity of evidence about that; for example, no witness statements from any of the directors. Second, it strikes me it is an invasion of the corporate management of what is, at law, an entirely separate entity. I do not know why the directors might have been motivated to work in the way that they did, or indeed what the directors did. I cannot proceed with this dispute any further at this time.

Irrespective of disputes about control, the parties have equal shareholdings, they have therefore have also had equal dividends. It is proposed that that will continue. At the moment, the wife receives approximately €10,000 per month. There is some discussion about whether or not that should be gross or net of tax. But whatever she gets, the husband will get the same dividend.

The value of the company has become the subject of separate proceedings. The wife brought section 994 Companies Act 2006 “unfair prejudice” proceedings to complain that she has been unfairly treated as a minority shareholder. Section 994 provides a remedy for company members to seek court intervention when the company's affairs are conducted in a way that is unfairly prejudicial to their interests, either by ongoing conduct or a proposed act or omission. To make a successful claim, a member must demonstrate that the conduct has caused financial harm and that this harm is unfair. The court has the power to make various orders, such as the repayment of shares or other relief, in response to a successful petition.  Let me say now that I cannot conceive of it being sensible of those section 994 proceedings having a separate life independent of these proceedings; the two matters should either be consolidated or heard consecutively but either way by the same Judge in the same court.

I have tried to discern from the papers whether or not any proceedings have actually been issued; that is, as opposed to the letters before action and the discussions which then led to the BDO valuation. Mercifully, it looks as if no proceedings as such have been issued. I say “mercifully” because it would have been a wasteful duplication of a process that this Court is well able to undertake without the necessity of separate proceedings in a separate court with all that that entails for cost for the parties. Instead there has simply been an advertisement of a claim, with the parties submitting to various forms of without prejudice discussion to try and resolve those differences.

If those section 994 proceedings were to be issued, they should be transferred to be heard with these financial remedy proceedings. It would be a waste of the parties’ and the courts’ resources to have such parallel proceedings. It would be a duplication of that which this court is trying to do. It would be a breach of the overriding objective in that it would constitute a misuse of limited court resources. The matters should be dealt with together with joinder of any third parties if need be.

I appreciate that the significance of the origin of assets as opposed to the title of assets, and that includes shareholdings, is currently being reviewed by the Supreme Court in the case of Standish v Standish, in which I understand there is going to be argument at the end of this month, on 30 April. But whatever the outcome of that case, there is a hierarchy within litigation whereby the matrimonial court is better placed than a commercial court. The commercial court can only determine rights; whereas the family court can determine those rights and, if need be, redistribute them. As such, it will almost always be best placed to deal with all issues. So, should anyone be so unwise as to bring any such company proceedings, then they ought to be transferred to be heard together with these proceedings.

P1 is described in the papers before me to be worth between £1.3 million and £1.5 million. Today, I have been told that that is over-optimistic, in the light of recent changes in the property market. £1.1 million might be a more realistic figure.

P2 is a five-bedroomed property set in 28 hectares. The parties are agreed, and it should be recited in the order that they are agreed, that that property should be marketed for sale as soon as reasonably possible. It should be marketed with an asking price of €5 million or more. The husband shall be at liberty to choose the marketing agent from a list of five which the wife has presented to him. That looks to be a very sensible move by both the husband and wife in this case. The parties consent to this sale and so I do not have to consider whether I have jurisdiction to direct such an interim sale of property under section 24A of the Matrimonial Causes Act 1973 (which, without further argument, appears not to provide an available interim remedy) or the Married Women’s Property Act 1882 (See Short v Short [1960] 1 WLR 833) or the Trusts of Land and Appointment of Trustees Act 1996 (see WS v HS [2018] 2 FLR 528).

Notwithstanding that the parties made their primary home in Country Z; they retained their connection with the United Kingdom generally and England in particular. There was the property which I have already referred to in London. They also would come to London about one week in each month. ADB was educated in England, BDB attended University in England.

The main company, K, is based in London. If there were to be needed what is commonly known as a Wells-based order for an in-specie sharing of those shares, then the natural jurisdiction for that would be England. It is also said that the business was largely run from London; its directors were UK-based and, prior to the Covid crisis, meetings were held in London. There were offices in London between 2001 and 2020. In 2019, an offer was made to purchase property for a London office, but that was not proceeded with albeit one was proceeded with subsequently.

After the parties’ separation, sometime in the early summer of 2018, the wife maintains that the husband dissuaded her from issuing proceedings in England. It is her case that this was on the basis that everything was going to be divided equally between the parties. I have seen a number of references to this in a long statement from the wife where she quotes the Husband as having said:

“U will of course have half of everything ...”

“It is all half yours.”

“I am openly suggesting a complete fair 50:50 split on everything.”

“I am fully agreed to a 50:50 and always have been.”

“I have no intention of not ... Honouring your right to half.”

And so on.

Thereafter, the parties’ relations began to deteriorate. The husband applied for a divorce in Country Z. The wife makes some complaint about this, saying that this was done in a pre-emptory and unilateral way. As relations continued to sour, in 2021, the wife was suspended from the business. That eventually provoked, in 2022, the letter before action which referred to the unfair prejudice claim under the Companies Act, section 994, which I have already referred to.

The Country Z proceedings proceeded apace with the judgment being given in respect of the divorce and what I am going to call a “maintenance application” in Country Z in 2022. The wife appealed that judgment. The appeal was dismissed in Country Z later that year.

The original order in 2022 had dismissed the wife’s claim for maintenance. That was a decision of Judge X. He began by reciting the facts of the case. First of all, it was held that the case was brought in accordance with local legal requirements; that the application had been admitted and it had involved the summoning of the parties. The legal grounds of the Country Z application were to include a request for the dissolution of the marriage, which was granted. It also included a request that there should be continued sharing of custody of the under adult age children, and then, at (3), it was said:

“The applicant maintains in his position ----”

(The applicant in Country Z being the husband.)

“-- that he receives the same income as the respondent as they are both co-owners of various businesses. The approximate amount each of them receives per month is €9,700.”

The Judge X continued:

“Regarding the attribution of use of what was, until now, P2 is owned by both parties pro indiviso, as is the family furniture, belongings and other items at that residence. The applicant argues that this address should be attributed to him until the youngest child, CDB, comes of age, i.e. until 2027, as H moved to a new address over two years ago.”

The court then dealt with the question of subsistence maintenance. Just pausing there, it was suggested by Mr Horton KC on behalf of the husband that it might be argued that his client should be treated as the judgment creditor because that provision of the family residence and his right to remain there, in the first instance for two years, but reduced to one year on appeal, represented a claim; a claim made by him. As I understand it, he would say the provision of housing on a classic Van den Boogaard basis would be in part maintenance and that there is therefore an argument for him to be a judgment creditor.

I have not seen this dealt with within the Country Z law experts’ reports. I am reluctant for him to be treated as a judgment creditor particularly in circumstances where he is not actually seeking anything in respect of that property. But I will return to the question of judgment creditor later.

A little later in Judge X’s judgment, he says this:

“Although it is true that it is M who holds the role of sole director of the company, this does not in any way prevent H [the wife] from utilising her right to information which protects her as a shareholder to find out about her contract, state of the accounts and salaries and other matters relating to the companies to which she has access and if she has not exercised this right earlier that is because of her own wishes and not because anybody in the company has prevented her.

“Finally, the applicant argues that the respondent is currently working and has demonstrated that she can perform within the job market in a position with a high salary and that, to date, the divorce has not caused her any financial imbalance.”

Moving on a little later into the judgment, it is recorded that,

“Finally, the applicant has stated that the companies were established with contributions from both parties.”

And then the court concludes:

“Having stated the above and moving on to an assessment of the situation and the evidence provided, we can establish the following undisputed facts: the parties have been separated since at least 2018, i.e. some two years before the application for divorce was brought by the husband, that following separation the husband remained in P2, which they own jointly, while the wife went to live in another rental property for which she pays €3,500 in rent, that both spouses are partners in various companies and businesses in which the applicant performs the role of sole director and the woman(?) performs the role of creative director, that both parties receive the same monthly incomes from these companies, which are paid partly using a joint account and partly into their individual accounts.”

And then this conclusion:

“Now, having reached this point, there are no aspects that allow us to see a financial imbalance between the parties, either at the date of the breakdown of the marriage or in the present. In this regard, what is inferred from the situation described is that the spouses have been receiving the same incomes from the same origin, a situation they have maintained following their de facto separation to the present, therefore neither the subsistence maintenance requested by the respondent for the benefit of the children nor the compensatory maintenance in her favour are justified as both of their incomes are the same.”

I have had the benefit also of expert Country Z opinions. Their conclusions and analysis are not very different. There is the report from Expert T, and there is then a reply from Expert W, and then a report in reply from Expert T.

The husband complains that Expert T’s report was presented to the court without there being any leave. That is a well-made complaint. Expert evidence should only be advanced to the court with leave but it is unnecessary for me to rule on this as, as it turns out, there is very little between the experts in terms of their exposition on Country Z law.

The courts in Country Z, having been satisfied that there was no, what was described as “imbalance” between them and having declared that five years had passed without any financial requests at all, that there was no necessity for making any further provision. That was particularly so in the light of them both being, as the Country Z court held, joint shareholders.

There was some discussion between me and leading counsel as to whether or not the Country Z court was working on the basis of an assumption that the business was already owned 50/50. It does seem to me that that is what the Country Z court was doing. One sees that by references throughout their judgment to things such as “joint shareholders”, “joint incomes”, which look as if they must have referred to joint dividend incomes, and of course dividends are reflective of shareholding that are held. The fact that those dividends were then going to be equally suggests the shareholdings are also equal. In any event, the court in Country Z ended up by concluding that compensatory maintenance to alleviate financial imbalances was not going to be appropriate.

The Country Z law experts agree that the marriage has been dissolved. It is plainly a dissolution this court should recognise. The experts also agree that the wife has brought all the claims that she can make in Country Z arising on the breakdown of the marriage, with the possible exception that the wife could (perhaps) have sought the immediate sale of the family home and she has not done so. There is a slight disagreement as to whether the marriage was subject to a regime of separate property.

Dealing very briefly with the point about this court’s jurisdiction in respect of a property in a foreign jurisdiction; that is to say a property located in Country “Z”. One of the matters raised by Mr Horton KC was whether or not it was possible for this court to make an order in respect of the Country Z property, at all. The short answer is it cannot make a property order in rem against the property itself. The exclusive jurisdiction for that must vest in the Country Z authorities. However, following the long-established authority of Razelos v Razelos [1969] 3 All ER 929, the court can make an order personally against individuals who are within this jurisdiction and subject to this court’s in personam jurisdiction. It can order them personally to effect transfers of property. If it did so, this Court would not be acting in vane; the order would be enforceable via the individual.

The Wife then issued proceedings under Part III of the Matrimonial and Family Proceedings Act of 1984. This is the application before this Court. She issued that in the proper form, with Form D50E on 22 July of 2024. The matter was reviewed by HHJ Evans-Gordon on 10 September of 2024. On 2 October of 2024, there was a consent order made by HHJ Hess in which, with the approval of Peel J, the matter was allocated to a judge at High Court level. Permission was given for the filing of evidence by the experts with that being expressly subject to being without prejudice to any other applications that might be made in the future. The matter was then set down to be heard before me.

That is the background. The first of the issues is whether leave should be granted under the provisions of Part III of the 1984 Act. Part III of the Matrimonial Family Proceedings Act 1984 allows a spouse to apply in England and Wales for financial relief, which includes maintenance and/or lump sums, after a foreign divorce, annulment or legal separation. It was enacted to alleviate the hardship that can arise when no or no adequate financial provision is made by a foreign court, despite substantial connections to England. In order to invoke Part III an applicant must satisfy certain jurisdictional requirements which are set out in the Act at section 15. It is not in dispute that those jurisdictional requirements have been met and that the matter is validly before the court.

In this particular case, the wife has relied on her domicile. One of those matters which I was interested to know for the purposes of the 2007 Regulation (Footnote: ¹), was what the status of the parties’ habitual residence was. The answer I was given was that the husband’s habitual residence has been in Country Z at all material times. The wife’s position is she was habitually resident in Country Z at the time the Country Z court dealt with the question of the divorce and the compensatory maintenance. She reserved her position as to whether or not she was habitually resident in addition to being domiciled at the time that she issued these Part III proceedings. But said that there was no doubt that she was habitually resident here, certainly since December of 2024.

Once the jurisdiction is found to have existed, an applicant must then obtain the Court’s leave to pursue an application. This is a filter process which has very few analogues in law; ordinarily it is sufficient to establish jurisdiction in order to bring a claim. This additional filter is a gateway which could otherwise bar access to justice; the rationale being that justice has already been obtained elsewhere. There are very few examples of such a gateway in English law. It is also justified by respect for the principles of comity, because what is potentially contemplated is an attack on another court’s jurisdiction. There is a balance to be struck between finality of another Court’s decision and achieving fairness here. How this balance is achieved was a conundrum considered by the Law Commission in 1982; see Law Commission, “Family Law: Financial Relief After Foreign Divorce (HC 514)” (1982) (Law Com. No.117).

I have been given the benefit of a considerable bundle of authorities. They raise a very important point in terms of the conflict that arises between Part III proceedings and the operation of what is known as the Hague Convention of 2007 which according to Mr Horton KC should operate to exclude the operation of Part III in this case. On the face of it, there looks as if there is an incompatibility between the two in that the Hague Convention does not allow for the review of cases where maintenance has been determined in certain other jurisdictions whilst, on the other hand, Part III expressly does allow for such a review.

I pause here to observe that both leading counsel rightly agreed that, on a Van den Boogaard basis, the word “maintenance” is equivalent or coterminous in English law with what we understand as being the strand of a needs claim. “Maintenance” can include the provision of a property for the maintaining of somebody; its object is to meet the needs of an applicant. There is an equivalence between “maintenance” as understood in Van de Boogaard and a needs claim as understood in English law.

So, where a maintenance order has been made then, on one reading, the 2007 Regulation would operate so as to prevent there being a review under Part III. The Regulation of 2007 is put on a statutory footing by operation of the Civil Jurisdiction and Judgments Act 1982 (as amended). That Act incorporates it and gives it a statutory force on a par with the 1984 Act.

In order to resolve this potential conflict, I agree with Mr Horton that I need to go back and look at the origins of this legislation. Unlike the decision of Moor J in TY v XA [2024] EWFC 96, where Moor J was invited by Mrs Carew Pole KC to go and study Hansard, I do not believe that I need to find guidance from the Parliamentary debates. Instead, the Law Commission, it seems to me, provides the answer. The Law Commission began by expressing the problem as (from paragraph 1.1 of their Report):

“Where a marriage is terminated by foreign proceedings in which no financial order is made, a court in this country has no power to grant financial relief. In recent years there has been a steady stream of cases coming before the courts which has both highlighted this gap in the law and illustrated the hardship to which hit may give rise. The view that the law is in need of reform has been widely expressed.”

The Law Commission thought that there was a balance to be struck. Paragraph 1.3:

“Serious though this hardship is, there are formidable problems in formulating satisfactory proposals for reform. The advantage of giving a person who has been divorced abroad a right to apply to the English court for financial relief has to be balanced against two different kinds of risks. First, to confer such a power on the courts would, in the absence of sufficient guidance as to the principles to be applied, pose problems which it might be difficult for them to resolve; secondly, serious injustice might be caused to persons who reasonably assumed that the financial consequences of divorce had been conclusively regulated according to the law of a foreign country if the other party were able to re-open the matter here – all the more so if the parties had very little or no real connection with this country.”

The Law Commission decided that the matter could be resolved by the introduction of what they called “the filter mechanism” (paragraphs 2.1 to 2.6 of that report).

The filter mechanism aimed to balance the competing needs of finality and fairness. At paragraph 2.1 of their report:

“... we came to the conclusion that rules wide enough to allow deserving applicants to have access to the English courts would, in the absence of some further ‘filter’, permit applications to be made in circumstances which might well be thought to be wholly inappropriate. We therefore proposed that the leave of a judge should be required for an application to be allowed to proceed ----”

This is in their Working Paper. It contemplates ultimately leaving matters to the Court; a “trust the Judges” attitude which has been so patently successful in the similarly discretionary jurisdiction found in Part II of the Matrimonial Causes Act 1973. They continue:

“-- and we set out guidelines designed to assist the court in exercising this discretion.”

They concluded not only that the court’s powers should only be exercised where a Judge thought it appropriate, but also that potential respondents should be adequately protected against being vexed with the same matter twice. They concluded that the effect should be given to what they describe as:

“We believe it to be right to provide some measure of protection against the possibility of applications under the proposed legislation being used to exert improper pressure on respondents to settle in order to avoid the expense of contesting an application.”

But necessary delays with the filter should not prevent interim relief; see at 2.4, that:

“... on granting leave the court should be empowered to make interim orders for maintenance, in favour of the applicant ...”

And that (at [2.7]):

“... the policy to be pursued in formulating jurisdictional rules was, on the one hand, to prevent persons whose marriage was insufficiently connected with this country from being able to invoke the court’s powers to adjudicate on financial matters, whilst on the other, not making the criteria so strict that meritorious cases would be excluded.”

The competing imperatives of doing justice after a foreign divorce and having respect for those foreign proceedings were to be remedied by the filter. Importantly this filter did not have a geographical filter. It might have been thought that jurisdictions with a strong common law tradition such as the United States, Hong Kong (which was still then a Crown Colony and regularly had English judges sit in its courts), Gibraltar, the Cayman Islands, India, Kenya and so on might be considered for automatic recognition. But no, the whole matter was to be entrusted to the discretion of the Judges. There would be no geographical limitations. When the Commission’s report was adopted by Parliament in the form of the Matrimonial and Family Proceedings Act 1984 this broad discretion was adopted.

The filter even permitted parties with “very little connection with this country” (see 2.10 of the report) to invoke the Court’s jurisdiction albeit to a much more limited extent. These “birds of passage” as the Law Commission termed them, might be regulated by limiting claims to, for example, where there had been only a matrimonial home here.

As indicated above, the ultimate conclusion of the Law Commission bore fruit in the Matrimonial and Family Proceedings Act of 1984, Part III. That legislation gave effect to the recommendations (summarised at Part III of the Law Commission’s report) which were:

“(1)

The High Court should have power to entertain applications for financial provision and property adjustment orders notwithstanding the existing of a prior foreign divorce, annulment or legal separation.”

But:

“(2)

A person seeking an order must first apply to the High Court for leave to make the application; and the court is only to grant the application if it considers that there is ‘substantial ground’ for the making of the application for financial relief.

“(3)

The High Court may grant such leave whether or not a foreign court has made a financial order. However, its powers are only to be exercisable if the foreign divorce etc. is entitled to be recognised in this country.

(4)

The High Court may grant leave subject to such terms and conditions as it thinks fit.

(5)

On granting leave, the court may make an interim order for maintenance if the applicant or any child of the family is in immediate need of financial assistance.

But it did also recognise that there might be countervailing treaty obligations. Thus (6):

“(6)

The High Court should have jurisdiction to entertain applications in the following circumstances:

(i)

In cases not [original emphasis] falling within the provisions of the European Judgments Convention, if:

(a)

a party to the marriage was domiciled in England and Wales either at the date of the application for leave to institute proceedings or on the date on which the divorce obtained overseas took effect in that country;

(b)

a party to the marriage was habitually resident in England and Wales throughout the period of one year ending with the date of the application for leave or was so resident throughout the period of one year ending with the date when the foreign divorce became effective; or

(c)

a party to the marriage had at the date of the application for leave a beneficial interest in possession in a dwelling house situated in England and Wales which was at some time during the marriage a matrimonial home of the parties.

(ii)

In cases falling within the scope of the European Judgments Convention, the jurisdictional rules therein contained will apply to the exclusion of the above.”

This recommendation and the subsequent legislative scheme has remained largely unchanged in the intervening thirty years. The principle qualification was and remains:

“However, its powers are only to be exercisable if the foreign divorce etc. is entitled to be recognised in this country.”

(As such it would not apply to meretricious marriages).

At no time since the passage of the 1984 Act has Parliament seen fit to impose any derogation from that fundamental objective of a Judge having a wide discretion to do justice in each case and from every jurisdiction (subject to the caveats above). There have been very obvious examples of where Parliament might have chosen to have done so, particularly in respect of the Brussels II type of protections which existed in English law and, of course, the Maintenance Regulation which was revoked on the implementation of the Brexit legislation.

There are cases where European Union jurisdictions have made orders and yet still the cases have then proceeded under Part III, without challenge. One particular example is the case of Traversa v Freddi [2011] EWCA Civ 81, which was a case of Italian parties and where there had been Italian proceedings. The English Court of Appeal still felt that permission should have been granted.

It has been suggested to me that there is a conflict between Part III and the 2007 Regulation whereby if the 2007 Regulation is engaged then this Court may not invoke the Part III jurisdiction. I am in no real doubt that there is not such a bar. If there had been it would have been made expressly clear by Parliament in an amendment to the 1984 Act. In fairness to Mr Horton KC, he does not posit that as a key part of his argument but instead that in the exercise of my discretion I should decline to permit a Part III application. If there is no bar and I have a discretion then I would be minded to exercise that discretion to permit this case to proceed. in this case.

Mr Horton KC’s position is nuanced. He says that whilst the matter of a Part III financial remedy might properly be before this court, what this court should do is exercise its subparagraph 3 exception to impose conditions that mean I should only let go forward to the substantive hearing the question of a sharing case and, instead, say that anything to do with maintenance or perhaps more particularly a needs-based award should not go forward to the substantive claim, his justification being that this is a matter already dealt with in Country Z. (This is an interesting departure from the more common dispute where a respondent is heard to say that a needs case should be permitted but not a sharing one). It seems to me that there is much in what Mr Horton says in that we should have regard to the Country Z provision as made because, as has often been said, the English court should not act as a court of appeal for Country Z. But is now the time for this or should this be determined as part of the general merits at the final hearing? The real question is when (and not if) there is appropriate time for dealing with the issue of sharing and / or needs.

The leave stage is essentially an access to justice application. It is necessarily much shorter and the evidence more imperfect that at the substantive hearing stage. I have had considerable assistance in the first instance decision of Moor J reported a TY v XA [2024] EWFC 96 and, in particular, paragraph 35 where Moor J was also dealing with a submission from Mr Horton KC about the ambit of the leave. Moor J in turn relies on Lord Leggatt’s speech in the case of Potanin v Potanina [2024] UKSC 3. What he says is this:

“Lord Leggatt JSC emphasises, at paragraph 89 of his judgment, that he casts no doubt on the primary guidance given in Agbaje...”

This is to the effect of that a “substantial” test is required.

“He does give some clarificatory guidance about the threshold of the test for leave, in the subsequent paragraphs.  He indicates that an application for leave should only fail if it is of insufficient merit to avoid a summary dismissal.  To put it another way, the court should perform a reverse summary judgment. The threshold test is whether the prospective applicant can show a real prospect of success, but, at the same time, the court must continue to guard against the leave or set-aside hearing becoming a proxy for the final trial.”

Having given this case a great deal of thought, I have performed that reverse summary judgment test. There is not insufficient merit. I have concluded that Mr Horton is trying to make this leave application a proxy for the final trial. There are many reasons why that should not happen, the most significant being that there are factual issues, as well as matters of law, which are much more appropriately dealt with at the substantive hearing than they are at this leave hearing.

It was at one stage said, although no longer the case, in the case of Traversa v Freddi, for example, that these hearings should be very short. That is no longer the received wisdom. But they should not be very long either. Certainly this case, now going into its fourth day, is a good example of how these cases should not proceed. It should ordinarily be the case that the issue of whether it is a needs case or a needs and sharing case (or as here, a pure sharing case) should be dealt with at the substantive hearing.

So, in not imposing those conditions, I am not shutting out the husband from arguing that the court should not be looking at the maintenance and/or needs basis at a substantive hearing, but what I am saying is that the time for doing so is then and not now.

I would add straightaway though that it does seem a little unlikely, if the wife is right that she has a substantial sharing claim in a case of €80 million of assets, that we would ever get to that needs-based argument. It might be that if, at the other end of the scale, the husband’s valuation is shown to be right (in that the assets are £10 million) that her needs might exceed her sharing case but that is for another day. So, I in no way pre-judge what her sharing case might be, but the fact that those valuations will be known at a substantive hearing and are not remotely known now augers strongly in favour in deciding the matter then and not now. At this stage we have not even got to the stage of agreeing who the valuation experts are.

In that same judgment, TY v XA, Moor J goes on to deal at paragraphs 44 and 45, with Mr Horton KC’s submissions as to adopting an approach of applying some censor of the future proceedings at the leave stage. Paragraph 44 of Moor J’s judgment reads:

“Mr Horton KC then refers back to the Law Commission Report No 117. He reminds me that the report took an unusual course.  Ordinarily, the report would set out the provisional recommendations from the Working Paper, the notable features of the consultation exercise and justify the final recommendations.  On this occasion, the report simply annexed the Working Paper and only addressed areas where the Commission's views had changed from the earlier provisional recommendations. 

“He submits that the notable features of the Report and Working Paper are:-

“(a)

The English Court should not be invited to act as a court of appeal from the courts of another country ...”

That is plainly right.

“(b)

The leave filter was necessary because of the wide primary rules of jurisdiction.  Without it, because the jurisdiction test could be satisfied not just at the time of the foreign divorce, but also at the time of the Part III application, claims might be made where the marriage had no connection with this country (WP at [37]) ...”

Pausing there in the judgment of Moor J, it seems to me that Mr Horton is entitled to say at this stage, “Well, when then would the court impose conditions (if ever)?”. I think the answer is found within the Law Commission itself and found within the facts of TY v XA and cases like Traversa v Freddi. The answers are variable but would include (a) restrictions in respect of specific property claims and (b) where the parties are foreign nationals and where there is perhaps a much less impressive connection with this jurisdiction, then it may well be that those conditions ought to be applied (such as a limit to a needs case). Those conditions are less likely to be applied in a case such as this where the parties are British but as with all discretionary jurisdictions, “it all depends”. (I appreciate the husband is both a British and an Irish citizen, but both of the parties harken from the United Kingdom.)

The quotation carries on at paragraph 45(c) of TY v XA, where an example is given:

“(c)

He quotes from the Working Paper at [47] where it was said:-

‘Take, for example, a case where a couple of German nationality, domicile and residence were divorced in Germany ... Let it be assumed, for the sake of argument, that the German court made no financial order because both parties were in comparable employment. Suppose that some years later the husband, having remarried, comes to this country in such circumstances that he can be said to have assumed habitual residence here. Is his former wife, who has no connection with this country at all, to be entitled to pursue him here for financial provision and property adjustment orders?’.

“(d)

The leave filter was designed to protect respondents from serious injustice where they had 'reasonably assumed that the financial consequences of divorce had been conclusively regulated according to the law of a foreign country' ...”

Moor J, faced by that, concludes, at paragraph 51, first of all:

“The first point raised relates to the Maintenance Regulation.  I am absolutely clear that this is a matter for a final hearing, not this application.”

He then goes on to say:

“As Mrs Carew Pole KC submits, there would need to be expert evidence from Germany.  Moreover, Moylan LJ referred to the fact that it raises issues of fact as well as law.  The Wife makes a number of significant allegations in relation to the circumstances of both the Pre-Nuptial Agreement and the notarised Separation Deed. I have not heard oral evidence.  I cannot say that her claims are hopeless or doomed to fail.  In relation to the law, the suggestion that the German court does not retain jurisdiction is pretty fundamental and would need clear evidence from Germany.”

He then concludes, at paragraph 54:

“I am entirely clear that factual matters of this kind ----”

And that includes the question of what was done in Germany.

“-- are not suitable for determination at this hearing.  I cannot say that the Wife would be bound to fail even if she proves all her contentions.  More importantly, I cannot say that her case is ‘fanciful’.  Having said that, I am by no means convinced that this dispute is at the centre of the real issues in this case.

“I do take the view, however, that I should consider whether the Wife has a reasonable prospect of success, given that I am, in effect, conducting the leave application again.”

And the view that I take is that the proper time, as it was in TY v XA, for dealing with this is at that substantive hearing, where all of these matters can be properly weighed in the context of the parties’ evidence and also with the assistance of any expert evidence as to values.

So what Mr Horton KC’s application to me consisted of was not that I am shut out because of a jurisdictional concern borne of the Hague Convention 2007 but that, instead, in my discretion, I should exercise self-restraint. Having revisited all of the facts of this matter, I am strongly of the view that I should not exercise the restraint that Mr Horton asks me to do. One of the great strengths of what was originally known as the “ancillary relief regime”, now known as “financial remedy proceedings”, is that it does give such a wide discretion to the court, which enables a great variety of outcomes. I am loath in a case such as this, where both of the parties originated from the United Kingdom, to restrain them from being able to pursue that financial remedy. That is not, however, to say that they are guaranteed the same outcome as what would have happened had this matter been litigated originally in England. As has often been said, this court should not be acting simply as a court of appeal for Country Z.

Mr Horton does agree that leave should be granted; he does, however, say that it should be limited. Mr Howard, by contrast, says leave should be given with no conditions attached and, on balance, I favour the position adopted by Mr Howard on behalf of the wife.

Once leave is given, the court then has to consider, at that next hearing, whether it is appropriate to make an order. The court, at that next hearing, will have a broad discretion in deciding what, if any at all, relief it will grant, and that discretion is then going to be guided by statutory factors, in particular those found in section 16 of the 1984 Act, which includes this court is to consider whether or not England and Wales is the appropriate venue for the claim, for example, by examining the parties’ connections with England, with the country of the divorce, with any relevant country, and also the court may weigh any benefit or financial provision that the applicant has already received, or is entitled to by virtue of that foreign divorce. All of those section 16 matters are ordinarily properly heard within the substantive hearing and that is where I direct these matters should be dealt with.

In so doing, I would, if I am the judge dealing with the substantive hearing, consider what rights the applicant has had to seek relief before, how those rights have been exercised, what they have yielded by way of award and also the reasons for the outcome. I have already touched on how the Country Z courts seem to have approached this case on the basis of there being an equal shareholding.

The balance does, I think, reflect the international principles of comity, that there should be respect for the foreign court and that there should also be an avoidance, where possible, of duplicative litigation.

In so doing, I am not proposing that this wife should simply have a second bite of the cherry or a top-up of whatever award she received in Country Z. I would be looking at all matters afresh with what is a very broad discretion, and one of those matters that would guide this court at the substantive hearing is that mere disparity between a foreign award and what an English court might have awarded is not of itself sufficient to make an award at that substantive hearing. Part III is intended to remedy a case of no provision or inadequate provision having regard to all matters.

It seems to me that the court is not acting as an appellate court when it reevaluates the merits of what a foreign court has done provided it has regard to those strong safeguards in place which are set out, amongst other places, in section 16.

The question of whether or not the 2007 Hague Maintenance Convention applies is, I have decided, a matter of weight to be weighed in the balance at that substantive hearing. All those arguments which Mr Horton has advertised he is going to put, he is not shut out from putting at that substantive hearing. He can still make complaints, if he believes them to be appropriate, about there having been forum shopping; that it is unjust to his client; all those matters remain open for argument. It is simply that they should not be dealt with at this leave stage, which would be, as I say, to shut matters out.

I would add, for completeness, lest there be no doubt about it, that it is only the 2007 Hague Maintenance Convention that applies to this case because this is a matter which postdates the revocation of the former Maintenance Regulation. It relates to decisions given in proceedings instituted after 11.00 p.m. on 31 December of 2020 and, as such, what remains in force is the part of the Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance of 23 November of 2007. I read that as being something which exists alongside Part III of the 1984 Act and it does not act to exclude its jurisdiction for those countries which are signatories of the 2007 Hague Maintenance Convention. As Mr Howard KC rightfully said, it would have been open to Parliament, when it was amending the legislation, to have amended the 1984 Act to impose further restriction and it chose not to do so.

I have had regard to both Article 18 and Article 22 of the 2007 Convention, which both leading counsel have taken me to. I am of the view, having reconsidered those, that it would not be appropriate to bar, at this time, a claim for a maintenance-based claim.

It is therefore not necessary for me to deal with the minutiae of Article 18. Article 18 is the only direct rule of jurisdiction in the 2007 Convention which survives. It is in marked contrast to the Maintenance Regulation, which provided a very comprehensive jurisdictional code. The Maintenance Regulation, of course, as I have already referred to, does not apply after 31 December of 2020.

The decision to just have the restriction of Article 18 reflects a deliberate policy choice by Parliament and that is why there is no further amendments seen elsewhere Article 18.1 provides:

“Where a decision is made in a Contracting State where the creditor is habitually resident, proceedings to modify the decision or to make a new decision cannot be brought by the debtor in any other Contracting State as long as the creditor remains habitually resident in the State where the decision was made.”

On the facts of this case, I agree with Mr Howard KC that the judgment creditor is the Wife. She is now habitually resident in England and not Country Z. Second, the proceedings are not brought by the debtor at all; they are brought by the Wife and there is no restriction on where the creditor may litigate. (Third, if there was simply no order at all in Country Z (or a “drop hands” clean break) then it is hard to see that there was any judgment creditor or debtor, but I leave argument about that conundrum to the final hearing, save for my commentary on the Ramadani exception below.

I think Mr Horton, hesitantly, was also coming to accept that the wife was the judgment creditor. She is the person who is bringing the Part III application.

The effect of this is that the reconsideration of the Country Z matter is something that can be considered on its merits in the substantive hearing.

One other matter which Mr Horton encouraged me to take into account was what he called the “Ramadani exception”. This comes from the case of Ramadani v Ramadani [2015] EWCA Civ 1138, and in the Ramadani case, which, at first instance, was anonymised as AA v BB, the Court of Appeal had to address the scenario of an earlier foreign maintenance outcome and a subsequent Part III claim. There, the wife had moved to England after the marriage had been dissolved in Slovenia, a country subject to the EU Maintenance Regulation.

In the Slovenian proceedings, the wife initially claimed spousal maintenance, but withdrew that claim. The Slovenian court’s orders recorded that, due to the withdrawal, the spousal maintenance proceedings were stopped; therefore no spousal maintenance had been awarded. The wife then obtained leave to bring a Part III application in England and the husband applied to set aside that permission, arguing that the English court lacked or should decline jurisdiction because of the EU Regulation. I emphasise that that regulation is the Maintenance Regulation as opposed to the 2007 Hague Regulation.

The husband’s argument was formulated in four stages. He said: (1) the Slovenian outcome (no maintenance) was a decision and, as such, it should be recognised under the Maintenance Regulation; (2) that, as such, it had to be recognised in England with no examination of the substance; (3) that the effect of Slovenian law was to terminate the wife’s maintenance rights; and (4) therefore the wife could not resurrect the maintenance claim in another Member State once her entitlement had been finally extinguished in Slovenia. In other words, the husband was contending that the English court was absolutely precluded from giving the wife a second chance at maintenance.

The Court of Appeal rejected the husband’s appeal but did so on a relatively narrow ground. The court held that, on the facts, the Slovenian court had not actually given a decision on spousal maintenance at all, it had simply noted the wife’s voluntary withdrawal of that claim. McFarlane LJ reasoned that the outcome was as a result of the wife’s decision, not a judicial determination of her maintenance rights and thus did not count as a decision or enforceable court settlement under the Maintenance Regulation. He held this because the threshold first stage of the husband’s argument failed, the Court of Appeal did not need to go on to deal with the later stages.

Ramadani therefore left open the question of what would happen if there had been a clear form of adjudication on the merits of denying spousal maintenance, the implication of the husband’s untested stages 3 and 4 being that if the foreign court had affirmatively decided that the spouse was not entitled to maintenance, an English Part III claim might be deemed an inadmissible challenge to that decision. However, since that case was resolved on the no decision given premise, it is not a binding English authority on me. It is not a case which determines that a foreign refusal of maintenance bars a Part III application or that I should feel it is of such strongly persuasive force that, at this leave stage, I should propose it as a condition.

But more importantly, Ramadani concerned the Maintenance Regulation which, since Brexit, no longer binds English and Welsh courts. Instead, it is simply the adherence to the 2007 Hague Convention, which I am concerned with. Ramadani raises similar, but by no means identical issues. Indeed, had it done so, then in TY v XA, Moor J would not have been considering whether or not he should be imposing a condition, but whether or not he was completely barred. Of course TY v XA was a case which pre-dated the Brexit event so that it was under the old Maintenance Regulation.

In TY v XA, it having been contended that the Hague Convention precludes an English court from making a fresh maintenance order, when there had been a binding arrangement, Moor J refused to determine at that preliminary stage that he must refuse leave. He was plainly right to do so. The same fundamental principles apply in this case. I hold that the Regulation does not preclude me from granting leave to continue with the Part III application.

The overarching question is one of the balance to be achieved between comity/finality on the one hand and fairness on the other. That is an exercise which can be achieved at the substantive hearing and, by shutting out part of those claims at the leave hearing, there is a real risk of injustice. It must be a matter for Parliament if there are to be bars to jurisdiction. In a matter of closing out access to justice, it can be assumed that Parliament would be explicit. But despite having been faced with this debate on several occasions, it has not chosen to amend the 1984 Act so as to restrict this. Instead, the section 16 checklist explicitly provides that these matters should be taken into account and reviewed as part of the discretion, as indeed they will be in due course.

So, for all those reasons, I decline to impose any conditions on the leave. The general leave itself is agreed to by the husband and wife, but as regards the husband only in respect of the sharing claim. I do not accept that it should be so restricted.

I then come to the next issues which I have to consider. Having granted leave, there is jurisdiction under section 14 of Part III of the 1984 Act for there to be interim maintenance, however, the jurisdiction which I exercise under section 14 is expressed to be in these terms:

“Where leave is granted under section 13 above for the making of an application for an order for financial relief and it appears to the court that the applicant or any child of the family is in immediate need of financial assistance, the court may make an interim order for maintenance, that is to say, an order requiring the other party to the marriage to make to the applicant or to the child such periodical payments, and for such term, being a term beginning not earlier than the date of the grant of leave and ending with the date of the determination of the application for an order for financial relief, as the court thinks reasonable.”

Mr Howard says I can make provision for matters such as legal services provision prior to the date of the granting of the leave by simply ordering a lump sum. Mr Horton complains that that is no more than a cynical device to get around the plain words of the statute. I have no doubt at all that Mr Horton is right and that what is being proposed is to try and backdate the legal services part of any interim maintenance to prior to the date of the giving of leave and, as such, would be impermissible as legal services provision.

I should add that the legal services provision is simply a species of interim maintenance. It is not necessary for there to be a separate statutory provision such as that found within section 22ZA of the Matrimonial Causes Act. It is a necessary expense which the husband and wife are both incurring and one which either of them could have applied for by way of interim maintenance.

I have very much in mind the recent decision which I handed down in the case of HA v EN [2025] EWHC 48 (Fam), where I referred at some length to the difficulties with obtaining historic costs. Mr Howard KC’s rejoinder (and his instructing solicitor’s rejoinder) is, “Ah, yes, but we can apply for an order for costs if we are successful in respect of a leave application or an interim maintenance application or any other application that might be before the court”. I agree. Those claims are not similarly constrained when it comes to making any sort of provision. So, were there to be an application for costs which have been incurred to date (including before the application was issued) then that is a matter which stands in its own right and independent of a claim for interim maintenance (albeit I must be on my guard against double counting). But, for the purposes of looking, first of all, at the legal services themselves, I then have to consider what is the reasonableness of the claim that has been made. That requires me to look at the costs which are going to be incurred from now and what resources are available in order to meet those costs.

The costs breakdown is most recently found at page 335 of the bundle. That is the wife’s letter of 24 March of 2025. It refers to two sets of costs: first, the historic costs, and then the predicted costs to the conclusion of a two-day private FDR. The parties, having agreed that there should be a two-day private FDR, which I understand is going to take place before Mr Nicholas Allen KC, it seemed to me that this was an inappropriate case for there to be a stay pending Alternative Dispute Resolution. (Mr Horton did not really push the application for a stay with any real vigour.) It certainly will assist Mr Allen KC in knowing that this court has not decided to stay this case, pending that ADR, as Mr Horton invited the court to do. More importantly, as there is not a stay, this Court has found it easier to give directions that will enable that FDR to be effective.

But the legal services provision, as I am going to call it, is really aimed at providing for the wife from the date of leave, which is today, to the conclusion of that two-day private FDR to fund her representation. I am told that dates for the private FDR are being posited for November of this year. I hope those are now agreed.

The predicted costs which the wife puts forward on the basis of incurring a half liability for the experts that might be instructed are, as I say, set out in that proposal, and I particularly look at the schedule which she has put in that letter. The schedule provides for a total figure of £490,980. That is made up of (including VAT) a figure of £275,460 which is from LSPO schedules, which the wife has produced, on 12 November and 17 February, which I am going to come back to. There is then an estimate of costs for a business valuer to answer her questions, for an additional valuer for H2 to answer her questions and a shadow expert, which totals £60,000. Then there is an estimate of costs relating to a letter of 21 March which is £145,620 and, finally, half the costs of Mr Allen KC, which are estimated, (again including VAT) to be £9,900.

This necessitates me to consider the reasonableness of the expert evidence which needs to be before the FDR judge. In order to understand where we have got to there, one needs to be reminded that the section 994 proceedings in respect of a minority shareholding and unfair prejudice have resulted in the preparation of a jointly instructed expert from BDO. M says the basis of that instruction was a without prejudice instruction and it was intended to be a non-binding valuation. It is in his statement of 5 December of 2024. At page 16, paragraph 43 (sic), he says, as part of the NCDR (Non Court Dispute Resolution) exercise:

“... we jointly instructed BDO LLP ... on a without prejudice basis, to produce a without prejudice and non-binding valuation, to facilitate NCDR. The letter of instruction was sent to BDO on 15 February 02024. H and her solicitors liaised with BDO throughout 2024.

“On 10 June 2024, despite the fact that the BDO valuation was in progress, I received an initial letter from H’s family law solicitors ... indicating her intention to make a Part III claim.

“After her application for leave was issued in July 2024, and as late as mid-October 2024, H continued to work with BDO to enable them to finalise their report, which was released on 31 October 2024. The cost of that report is £91,770, plus our respective solicitors’ costs.”

He goes on to complain in these terms at paragraph 45:

“H chose to include the letter of instruction to BDO with her statement, despite that I had not agreed to waive the without prejudice privilege attached to this document and other documents focused on resolving the civil litigation dispute. On 19 November 2024, I made a proposal to H and confirmed that I was willing to be pragmatic and not take the issue further at this stage, so we could focus on trying to resolve matters and benefit from the work already done by our civil litigation/corporate teams and not waste the BDO report. I suggested that we should use the without prejudice BDO report for the purposes it was originally commissioned, to facilitate NCDR by way of an early without prejudice private FDR to see if we could reach a settlement.”

The letter is at pages 44 to 48 of Exhibit ‘M1’. H has rejected that proposal, choosing instead to incur vast costs to a contested

leave application and insisting on an exhaustive disclosure process to

And then it says the letter, which he then exhibits.

“H has rejected that proposal, choosing instead to incur vast costs to a contested leave application and insisting on an exhaustive disclosure process to inform a fresh open valuation of the businesses.”

The position is then found in correspondence where the position has now evolved so that the husband is now saying that, in respect of the BDO report, it could be used at what he calls the “NCDR process” (which must include a private FDR) but certain conditions should be met. Those conditions are set out in his letter of 17 February of 2025. (Page 200 of the core bundle). At paragraph 5, he says:

“As regards the businesses, assuming BDO agrees to this mechanism, and subject to the specified conditions below:

(a)

BDO has produced a WP report. BDO will be asked to finalise the report after our clients have raised any appropriate queries with BDO through their civil litigation teams.”

There are then comments about this being actioned. Then:

(b)

Upon receipt of the final BDO report each of our clients to have permission to raise written questions on the report for the purposes of clarification, in line with FPR 2010, Part 25.10. The costs associated with BDO answering the written questions will be borne by the party raising them.”

After this, the husband says this:

“My client is prepared to agree to waive privilege on the BDO report such that becomes open and admissible. Of course, in order that the BDO report becomes open your client will also need to waive privilege.”

Just pausing there, so far, I have made no comment about the without prejudice privilege that is being claimed. An expert opinion as to value would ordinarily be disclosable within these proceedings. What I understand the husband to be relying on is a special form of privilege related to the mediation process, and which is referred to in the textbooks as a form of mediation privilege. So if at, say a private FDR, the husband had produced this expert report and had said that, then arguably that might be privileged. But I have to say I have had some difficulty with understanding how it is that this report, longer term, might attract that privilege.

Happily for the court and for today, that does not need to be an issue because the purview of this court need only be to the private FDR.

Carrying on with the husband’s position, he does not need to waive his claimed privilege today and the Wife is not making that an issue; at least not today. It may well be that it will be very contentious in due course as to whether or not that privilege was ever properly claimed at all, but he does not need to deal with that today because he can refer to it at the private FDR and everything said at that private FDR will continue to be covered by that same mediation privilege which that BDO report may be within.

He goes on to say that each party should have permission to raise their own supplemental report from an expert of their choice and they should deal with it. It seems to me that that is a matter for another occasion. As matters stand, there is this BDO report. It might be the subject of some questions, but it should be of the very greatest assistance to Mr Allen KC in discharging his functions on the private FDR, and it looks as if the parties are very close to agreeing that that is what should happen. But then M instructs his solicitors to say this:

“My client’s agreement to proceed in this manner with the BDO report is strictly conditional on the following:

“A Both our clients give formal undertakings, to reinforce their implicit duty of confidentiality, to maintain confidentiality in respect of the BDO report and any information provided to or from BDO or other parties in connection with the report.”

That is the first of two conditions. It strikes me as unnecessary. It demands a confidentiality which is already present in these proceedings. If one party was to breach the confidentiality of these proceedings and breach the implied undertaken, then they could face severe sanction by this court. That can include them being sent to prison.

The second part of it is that the information provided to the BDO should not be disclosable for any other purpose. There is a duty of full and frank disclosure within these proceedings and it is simply lost on me as to the justification for such a restriction; for example, the parties might agree at the FDR and then need some clarification to be found in the BDO report. Also what can that additional material be? If there is such material, let us say the husband has volunteered the advice that he has had from his solicitors and wishes to claim legal professional privilege, or alternatively one party has said something which might be tantamount to the admission of an offence which means that they would be entitled to privilege against self-incrimination, then those are all privileges which are properly claimed, but he is not entitled to go so far as to say that information provided per se is not then capable of being used in any subsequent proceedings.

As part of the operation of the companies, one would have thought that the wife, as a director, on a simple Oxford Legal Group v Sibbasbridge Services PLC [2008] EWCA 387 basis, would be entitled to see these papers. In any event, I would need some persuading that they are not disclosable within these proceedings at a substantive hearing.

The second condition is this:

“B Neither of our clients will become entitled to any information provided to BDO by or on behalf of the other party in respect of which hit has been agreed they will not be entitled to be privy to. We understand this has already been agreed explicitly with BDO. Both our clients will undertake not to seek to go behind this explicit agreement.”

Again, this is baffling. If there are documents which are relevant to the value of assets in this case, then I simply do not understand how it is that the wife is not entitled to see those unless they fall within a recognised category of privilege, in which case that privilege may be claimed, and the wife, having seen them, to be able to rely on them at a substantive hearing.

So what I propose to direct is that the BDO report should be made available, that there should also be made available the parties’ documents, and that that should be made available ready for the private FDR. Raising of questions and any updating may also be sensible. In an indulgence to the husband, I am prepared to agree that if there is subsequently a dispute about the documents and whether or not they are privileged, then that can be referred to a different judge for a discrete determination as to whether privilege properly applies in respect of those documents. This is not a trespass on the mediation process which has been indulged in so far, because this is simply in the nature of the disclosure of the valuation exercise, which was always intended for use in NCDR, which would include a private FDR.

As a second indulgence to the husband, I would also be prepared to accept that the BDO report and its attendant information, having been used at the private FDR, should not be disclosed to this court, neither should any information which the husband objects to in respect of that should be disclosed to this court without there being the further leave of this court. At that stage, the husband could explain more clearly why it is that there should be any restriction, and I propose that that will be dealt with at a hearing after the private FDR. No steps should be taken to disclose the BDO other than to the FDR judge, but it needs to be full disclosure and it certainly cannot be subject to the condition that it would never in any circumstances whatsoever ever be disclosed again. It can be the subject of an application at which the husband will be able to defend his position, but the wife would not be forever shut out from referring to it in the future. I remind myself that had there been another valuation prepared, say, for the purposes of IPO or a management buyout or anything of that sort, then that certainly would have been disclosable.

That, I think, deals with the valuation evidence which is needed for at least part of the company for the purposes of the private FDR. That then has an impact on the wife’s claimed costs, which are currently said to be £490,000. Straightaway, it seems to me that there is not the need for the costs which were referred to in the wife’s letter of 21 March, which is at page 226, where she breaks down Ms Kellie Gread of PwC to be able to provide further assistance. I take the higher of what is estimated to be Ms Gread’s costs at PwC, which is £180,000 plus VAT. The £180,000 is the higher of the estimates, because that is what she referred to, and so it is the £180,000 plus VAT which represents £180,000 of the £242,700 plus VAT which is said to be the summation of those expert costs.

However, BDO on their own might not be able to deal with the question of the value of the hotel business and what is involved, and there are two elements to this: first of all, the value of the property itself. Mr Stoyle of Savill’s has been proposed at a figure of £18,500. It is said that BDO might have some difficulty in working with that valuation. I would be surprised if that was the case because once they have the value of the building, once they have the accounts for the business, then it would seem that the parties were of the view, for the purposes of, certainly the section 994 claim, that BDO were able to deal with it. I am loath to encourage further expert evidence until it has proven to be necessary to deal with it. However, should it be the case, that it is essential that there needs to be additional valuation evidence in respect of the business, then the time for that arising is after questions have been raised of the BDO expert (including any necessary updating) and what I would suggest is that if then an application needs to be made after BDO, have made their position clear, then that should go to a separate judge with a view to that being the preparation of an additional valuation to assist Mr Allen at the private FDR. The reason why I say it has to be a separate judge is because, at that stage, we will still be indulging the husband in respect of his desire that the BDO report should only be disclosed for private FDR purposes, so it may be that that judge then is not able to deal with the case any further, having seen the BDO report. But whilst I agree with Mr Howard that Ms Kellie Gread is extremely experienced in valuing businesses for the High Court and has some experience in the hotel industry, it strikes me that it is premature; certainly before we have seen how BDO are going to deal with any particular disputes.

The practical effect of that is the £121,350 in the letter drops down by some £90,000 (half of £180,000), so that is now £31,350. The other valuations which are proposed, which include valuation of P1, P2, the valuation of the hotel itself, H2, the advice in respect of tax and those matters, it seems to me that those matters are going to be matters which are going to need to be incurred, but with the withdrawal of those expert costs, certainly at this stage, then the total figure which is expressed to be for the wife drops down to £382,980, including VAT.

Some of those other costs, I think, are also the subject of further commentary, in particular the expenses that are going to be incurred as regards a shadow expert, said to be £25,000. It might be that those costs are capable of being reduced.

The 12 November 2024 suggests that £275,460 represents the costs from the granting of leave to include the two-day private FDR but excluding the FDR adjudicator’s fee and any costs associated with the experts. Part of those costs, and I have not been able to discern from the papers how it breaks down, must have been incurred prior to the granting of leave today. This must be obviously so, because they relate to the first three days of this hearing. They relate to things such as counsel’s fees and so on. It is not obvious to me what exactly that figure is. But applying a broad brush, indeed applying the broadest of brushes, the view that I have taken is, somewhere between £80,000 and £100,000 will have been incurred in respect of the costs of preparing this, instructing leading counsel and all those pre-leave matters. I appreciate that they might be the subject of a separate costs application, but it seems to me that there is good reason to discount down what had started as a figure of £382,980, having taken off the costs of the expert, and it seems to me that there is a good reason to discount that down to a round figure of £300,000, which is what I take to be the reasonable LSPO costs figure which I should be awarding and, as I say, without prejudice to any arguments as to other costs which might be the subject of particular orders.

How is that to be met? It is not open to this court to make an interim order for a sale of the property and then distribution of the proceeds of sale (certainly not absent an MWPA or ToLATA application as referred to above). However, the parties have been discussing how matters might be dealt with in respect of the London property, P1, and all I can do is express the view of this court, which should be recorded as a recital, and the view of this court is, in line with the husband’s very sensible proposal, it is possible for an arrangement to be achieved whereby a bridging loan is taken out against that property. It is thought that the property is worth £1.1 million, although, until Wednesday, when an email was sent, the position was £1.3 to £1.5 million. Erring on the side of caution, it looks as if, by bridging finance, a figure could be extracted from the property which, after the paying of legal fees, (inaudible) fees, administration costs, Land Registry fees and also twelve months’ of interest at 0.95% per month, after all those things are paid, it is believed that £645,000 could be extracted, and that is employing a 70% loan to value.

M, rightly, is concerned about the implications of CGT. The answer to this is twofold. First of all, there would still remain a considerable amount of equity in the property should it be sold, with that 30% of the equity. Second, the CGT does not need to crystalise now. It can be achieved in this way: the husband makes the property available to the wife for her exclusive occupation, that then deals with her rental costs. It also means that she has started in a property of which she intends to be a long-term owner. So, on the basis that he then makes that property completely available to her, she would then of course be responsible for the costs of running it, if it needs some maintenance or repair, she is the person who is going to benefit from it, so she is the one who is going to have to be responsible for it.

Where they disagree is how that £645,000 should then be distributed. What Mr Howard says, on behalf of the wife, is once takes into account the wife’s historic costs and also takes into account the fact that she has needs which might not otherwise be met, then she needs 100% of that £645,000.

Mr Horton strongly resists that. He says this is a case for an equal playing field. The husband does not know where he is going to finance his own costs from. Initially, it sounded to me that when he said, “I do not know”, what he meant was he was going to resolve it but he had not actually worked out the mechanics of how he was going to pay his costs. It became clear from Mr Horton’s advocacy that what he actually meant was he did not think it was a problem that could be resolved at all. That it may well result in a situation where he is simply not going to be able to pay his own legal costs, and that would leave him in the terrible position whereby he would be unable to afford representation in what is a case where, plainly, both of the parties need the quality of representation that they have.

Mr Howard replied, saying it is a case for a principled approach and looking at what it is that the wife should need by way of legal services provision. I have already alighted on a figure for that.

Having listened very carefully to Mr Horton’s advocacy and having put various hypotheses to him, and also faced with the limitations that there are on the court’s powers, I have come to the conclusion that the right course of action is to accept the husband’s undertaking that he should ensure that the property is made available for the exclusive occupation of the wife and that he should take out that bridging finance. That bridging finance should then be distributed equally as between the husband and wife so that each of them get £322,500. That is money which they are able to deploy towards their legal costs going forwards. That is, of course, on the basis that each of them is going to share the expert costs that might be incurred.

It might be said that that is rough justice. It is not rough in the sense that it is unfair; it is rough in the sense that it applies a very broad brush, but that is necessary in this case and the remedy will be found at the substantive hearing when all these matters can be taken into account. It can then be argued how these funds ought to be treated. All matters remain open. This payment is wholly without prejudice to either party’s contentions as to how this money should be dealt with in the longer term.

Mr Horton KC says that his client is going to need six weeks to organise moving out of the property and make it fully available to the wife. I remind myself that the minimum period that courts should be giving to evict even people who are licensees from a property is twenty-eight days, and although Mr Howard urges me to make an order that there should be a more pre-emptory departure from the property, I am against him. I think six weeks ought to be the period which is provided for within the husband’s vacation.

When he vacates, he is of course going to take his possessions. He should not be taken the major items of furniture, such as beds, sofas, televisions and large furniture items. They should remain in place. If there is going to be a dispute about them, they ought to remain in place so that that dispute can be dealt with. Again, I make it clear that, although the husband is not to remove major furniture, he can obviously take heirlooms and items of value to him. If he has, for example, a painting which is of particular value, then he can take that, but things like sofas and beds should stay.

It goes without saying that he must make available passwords and the keys so that the property is available for the wife’s occupation.

I therefore am not going to make a legal services provision order because, on this basis, the wife will have achieved funding which enables her to meet that £300,000 which she needs.

The LSPO, as is perhaps the best way of shorthand describing this part of the interim maintenance, will then be adjourned so that it can be restored should matters evolve or change.

I come to the other part of the wife’s claim for interim maintenance. The wife has produced a schedule which is found at page 204 in the core bundle. Mr Howard, entirely properly, did not seek to take me through all those items and seek to justify them; they stand on their own merits. I begin by saying what I think is a truism, and that is the most helpful schedules of outgoings are not born of what parties may wish for, and perhaps not even by those referencing the parties’ standard of living during the marriage; but those which are informed by is the money which is available now to meet the parties’ needs. That said, when I look at that schedule of outgoings, I can see straightaway that there are economies that can sensibly be made, some of which have already been conceded. For example, the rent of £4,250 per month, that is wholly unnecessary in six weeks’ time when the wife takes exclusive occupation of P1.

Some of the other items look to me as if they are on the very high side, such as computer supplies of £1,000, computer maintenance of £1,000 – I pause to observe that it is actually possible to buy a replacement computer for £1,000 – replacement of furniture at £5,000 – that is not going to be necessary – replacement of other household goods, linen, china, homeware – I assume that a good part of the linen, china and homeware at P1 is not going to be taken unless it is of some particular sentimental value, and so, again, those are all items that are never going to be incurred.

I do not think it is reasonable for the wife, if she is now living in England and certainly founding the application under Part III and so on, to maintain the property in Country Z. I appreciate that she says that is useful for her storage, but the storage cost is simply too expensive and if she is going to be living long-term in England, then it is a case of moving over sooner rather than later, but the Country Z property outgoings, which net £23,000 per annum, are not justified.

Similarly the car items look to me to be high, particularly for someone living in London. Parking charges of £5,000, fuel of £5,200, again, they seem high. On the housekeeping items, again, I would have been looking to make some economies there. Bearing in mind that food and groceries and household goods are included, it is surprising to see a total of a need of over £2,000 per month.

Holidays and travel. During the course of this litigation, as is often the case, people are simply going to have to economise, and so an item there of £56,000 would be whittled down very substantially, perhaps even to zero, whilst this litigation is pending, and whilst companies are being liquidated and properties are being sold. Once that has happened, of course, greater freedom is going to be allowed.

Similarly, in respect of some of the other items, such as kennels costs for animals and pets, £2,000 sounds high. Pet food at £4,500. Again, that sounds a very high figure.

I imagine the wife already has a wardrobe of clothes. It is certainly not going to need refreshing to the tune of £24,000 per annum between now and an FDR in November, so that seems to be on the high side.

I do not know the circumstances in which a PA is retained or indeed many of the other items which are included, such as the personal trainer at £10,400. All of those items can be very heavily discounted down for the purposes of interim maintenance.

Ultimately, the lodestar is what is available. The primary source of income is dividends and the parties are deriving the dividends equally. I have come to the conclusion that the interim maintenance application by the wife should not be allowed at this stage. She should continue to receive, and the premise of my order is that she is going to continue to receive, her dividends. Those are about €10,000. If they go down because of tax then they will go down because of tax for the husband. If there is an inequality in the dividends, then that is going to need explaining at a substantive hearing but, on balance, I have decided that there should be no further interim maintenance provision for the wife in respect of her own claim.

The last matter which I come to is in respect of the directions which are contentious as between the parties, and I have heard the parties in respect of these. I will work from the draft order that was emailed to me. As is required by FPR Rule 5.7, any emails which are sent to the court must be copied to the other side. So I assume that, in compliance with that very important rule, both parties have had the same emails and so are following the same order. It is quite a lengthy order and I will deal with it in a summary way. [Directions dealt with on the order]

Costs. I am going to deal first with the costs of the maintenance pending suit and the legal services provision order. In respect of the legal services provision order, the wife has succeeded to some extent but not to the full extent that she had aimed for. She has similarly succeeded to a limited extent in that, by coming to court, she has been able to get back into her home, which has cut down her interim maintenance expenses and with those other matters.

That limited success is then set against a corresponding and equal success by the husband who has been very substantially successful in respect of the wife’s interim maintenance application and not quite so successful in respect of the legal services provision, although that has involved some movement in respect of property concessions.

After much careful thought about this, I have reached the conclusion that the fair conclusion is no order for costs is appropriate in respect of maintenance pending suit and the legal services provision order.

In respect of the main issue, which was the dispute about whether or not there should be a limited grant of permission to pursue a Part III application, the wife has plainly been successful and I see no reason why costs should not follow that event.

In respect of the first appointment and directions’ issues, those were relatively small as part of the overall contest. In the way that first appointment costs should ordinarily be dealt with, I order that they should be costs in the application.

The overwhelming majority of the dispute has focused on how it is that the future hearing should be restricted, and it is right to say that the wife has succeeded in respect of that. So, the order that I make is:

I make it clear, that this costs order is not the usual fourteen day requirement for the interim payment of the costs. It is to be paid only on each party receiving their share of that bridging money. I hope it goes without saying that both need to cooperate in respect of that or neither will get their money.

Permission to appeal. I am not minded to give Mr Horton KC permission to appeal. The reasons why I am not minded to give you permission to appeal in respect of the leave application is primarily it is an exercise of discretion, as you rightly said. I do not think there is an issue of law which the Court of Appeal needs to be troubled with. In any event much of which you wish to contend for can be argued at the substantive hearing. But ultimately whether or not the conditions you sought are imposed, it is purely an exercise of discretion, dependant on the facts of the case. This is a case where the parties’ connection with this jurisdiction is obvious and strong. It would be unusual, as well, for us to have a case going to a substantive hearing on just a sharing basis. Most of the disputes have been about whether a Part III should be on a needs basis or a needs-light basis and so on. But in any event you are not shut out from arguing that it should only be a sharing case at the substantive hearing. Permission to appeal is refused.

Also I refuse permission to appeal the costs’ award. Mr Howard has succeeded on the conditions points. It is a matter of discretion.