TP v OP & Anor

This is a preliminary issue hearing within financial remedy proceedings ancillary to the divorce of TP (the husband) and OP (the wife). This hearing involves as a second respondent the wife’s brother ST (the brother).

The husband is represented by Paul Mitchell KC, the wife is represented by Hannah Jones, and the brother by Simon Webster KC leading Samuel Cathro.

This hearing was listed to determine what has been called the ‘civil dispute’; that is defined as the status of alleged loans owed by the wife to the brother and the status of a mortgage secured over a property in London (the former matrimonial home) to secure repayment of those loans.

To this was added at the pretrial review the application under section 37 of the Matrimonial Causes Act 1973 brought by the husband asking that the charge against the matrimonial home be set aside.

The civil dispute has that name because the brother had brought a claim in another court following a failed financial dispute resolution appointment between the husband and the wife at which he had attended seeking declarations that the wife owed him money due under the loans (£3.5m) and that that debt was secured by a mortgage of the former matrimonial home. Within the financial remedy proceedings between the husband and the wife, to which the brother had already been made a respondent, I determined that I would deal with the civil dispute (as defined) and invited the relevant court to stay the brother’s proceedings. I understand that has happened.

Put shortly, the wife accepts the brother’s case that she owes the brother £3.5m and that the mortgage on the former matrimonial home is valid. The husband does not. He sets out in his fifth statement (dated the 12 February 2026) that the brother has taken steps to enforce his ‘newly acquired rights’ against the wife because (i) he (the husband) is seeking financial orders ancillary to their divorce requiring a contribution from the wife and (ii) the mortgage substantially reduces her ability to make such payment.

Unquestionably he is right to this extent, the £3.5m will have a material effect on the assets available in this case to deal with both parties’ financial remedy claims ancillary to their divorce. I have not had schedules before me but I note that both Forms E put the parties’ respective resources in the range of £2m to £3m (and that includes obvious double counting: the husband’s assets are largely represented by a half share in the former matrimonial home and the wife’s assets include the former matrimonial home as hers alone – which legally it is).

I have received forms H for each of the parties. The husband’s costs are £128,525 for the civil dispute only. (His solicitors do not act otherwise in the ancillary relief.) The wife’s costs are £517,860 (which includes the ancillary relief). The brother’s costs are £458,012. It is entirely likely that the best part of £1m has been spent on a fight over £3.5m.

The wife’s father (the father) had been a successful business man in Northern Ireland, prior to the global financial crisis.

In late 2005 and early 2006 the wife’s case (and the brother’s case) is that she borrowed money from her parents to buy 2 apartments (Apartment 1 and Apartment 2) in a London residential development. The money was documented by way of a note (referred to as a ‘promissory note’ – but I will need to say more on that below) in 2010 saying that the wife owed £3.5m to her mother (the mother). I am told that this documentation of the loans was prompted by a freezing injunction brought against the brother which had extended to Apartment 1, because of prior involvement the brother had had in that property.

There was a second ‘promissory note’ for £1m in 2011, again between the wife and the mother. The brother says that this was in fact his share of the proceeds of a helicopter. He says it was paid to the wife by the father because the father was at this stage worried about proceedings that Bank A were intimating, they might bring against him and he wanted the wife to hold the money given that he and the brother had different views as to how to deal with Bank A.

The apartments were sold in 2011 and 2014. The loans were not repaid to the parents. The money was instead invested in further properties, a house in London and subsequently the former matrimonial home. It is the wife’s case that the former matrimonial home was not a ‘forever home’ but a development project which was to help her repay her parents. The husband disagrees – he says it was meant to be the family’s long-term home.

The litigation between the father and Bank A reached a settlement agreement in the third quarter of 2015, requiring the father to pay Bank A a nine-figure sum, which was stayed pending certain conditions. This however was not the end of the litigation: it resumed in 2017 on the basis that the father had allegedly not met the terms of the settlement.

The mother held a power of attorney in relation to the father from the third quarter of 2017, because the father had developed an advanced cognitive impairment. The father is now in a care home. The power of attorney has come to an end, because the mother herself died in the fourth quarter of 2025. She had Parkinson’s disease.

In February 2024 after the litigation between the father and Bank A was concluded, and after the brother had pressed for a repayment of loans he said were owed to him by members of his family since at least January 2023, the brother issued letters of claim through his solicitors, Withers, against the mother, the wife, and another sibling and his wife (the other brother and the sister-in-law), relating to various monies, including the proceeds of sale from a helicopter, money advanced to the mother to meet legal fees to deal with the Bank A litigation, and a loan he advanced at the mother’s request to the other brother. The total amount was in excess of £7.3m including interest.

On 17 December 2024 there was a meeting between the brother and the mother when it is said the brother’s claim was compromised between them by the mother assigning to the brother the benefit of the ‘promissory notes’ with the wife, recording and agreeing that the amount outstanding was £3.5m (some repayments having been made). There was to be no further interest chargeable on this debt. It was apportioned as to £2.75m in respect of the first note and £750,000 in respect of the second note.

The wife was told by her mother on the 17 December 2024 what her mother had agreed. On the 20 January 2025 the brother demanded repayment and in February 2025 he agreed to accept a charge over the former matrimonial home. The mortgage was created on the 8 April 2025. It put off sale to August 2026, with the possibility of an extension.

The brother issued his proceedings for declarations in another court in summer 2025.

The husband and wife married in late 2012. They have three minor children.

Their marriage was in difficulties in 2023. The first letter from matrimonial solicitors on the husband’s behalf is written in April 2024. They separated in June 2024, when the husband moved out of the home. There was a joint divorce petition filed on the 27 September 2024.

There was voluntary financial disclosure made by the wife in July 2024. The wife provided a draft Form E. That, notably, makes no reference to the wife’s debts to the mother. The wife points out that the Form E is handwritten (it is) and was prepared by her as a first draft following an introductory mediation session, on the basis that the mediator had required them both to fill in a Form E before the next session. It was not done with lawyers, and she says she had not referred to the loan agreements because she understood they were confidential. (The ‘promissory notes’ record that they are confidential on their face.) She says she would have wanted to discuss the ‘promissory notes’ with the mother before recording them on the form, and she would have discussed the debts at the mediation session had it taken place, but the husband withdrew from mediation. I note that the draft Form E contains no signature page.

In August 2024 the husband was contacted by the brother saying that he was pursuing the wife for more than £3.5m and that he wanted that money accounted for in the division of assets between the husband and the wife in their divorce and then, in September, his solicitors, Withers, contacted the husband’s (then) solicitors, in relation to the debt.

On the 30 September 2024 there was an application for Financial Remedies by way of Form A filed by the husband. Forms E from both parties followed in January 2025. This time the wife refers to the debt.

On the 23 December 2024 the wife’s solicitors informed the husband’s (then) solicitors of the settlement agreement. On the 6 February 2025 the husband’s (then) solicitors were informed of the plan for the legal charge. On the 14 April 2025 the wife’s solicitors informed the husband of the legal charge.

On the 10 February 2025 there was a First Appointment before the District Judge. That provided for a private FDR on the 30 April 2025. Following that appointment there was a directions hearing before another District Judge on the 10 June 2025, which joined the brother to these proceedings and transferred the matter to be heard by me.

It came before me on the 14 October 2025, when I provided for this issue to be heard as a preliminary issue, and came before me again at the PTR for this hearing on the 16 February 2026. I am also to hear the financial remedy proceedings themselves which are listed for 2 days on the 16 June 2026. I have asked for directions to be agreed as between the husband and the wife to enable that hearing to happen. I have not at this hearing had the time to consider whether or not the case will be ready. I will deal with that in a subsequent short judgment once I have received written submissions from the husband and the wife as to what directions are required.

Further, I record at this stage that I have been asked to rule on the papers as to the costs of an MPS application which the husband withdrew (shortly before the issue was to be heard) and a LSPO application which he made and I rejected at the October 2025 hearing. I will need to do so in another short judgment.

I note for completeness, that the husband had contended in his third statement (dated 21 May 2025) that the ‘promissory notes’ were either (i) a forgery, or (ii) true but the debt repaid, or (iii) soft loans, and that (iv) the settlement agreement was either a forgery or a sham. He has now withdrawn that statement.

There was in existence from the proceedings in another court particulars of claim brought by the brother. I required the husband to file a defence to them in these proceedings. He did so on the 18 November 2025. I had required him in my directions order of October 2025 to set out with clarity the positive case advanced by him. He set out in paragraph 4 of that document that ‘the approach taken generally in this defence is to put [the brother] to proof in respect of the substantive matters and facts pleaded in the Particulars of Claim’.

At the PTR I gave the husband leave to amend his defence in two regards to set out his case:

I record here that Mr Mitchell sets out in his written opening submissions a number of points that he says point to the settlement agreement being a very bad deal for the mother. They include:

Further, he said in his written opening submissions that the ‘promissory notes’ are really only IOUs and not, properly considered, promissory notes by application of the Bills of Exchange Act 1882. In the light of that he says:

Further he says, with reference to the section 37 application that if the father did make loans to the wife they would have been considered so soft as not to have been taken into account in financial remedy proceedings. That the wife is to be presumed to have made the charge over the former matrimonial home with the intention of defeating the husband’s claim. And that the brother acted with notice of that intention and it was also his intention to defeat the husband’s financial remedy claim.

I shall consider the arguments on the capacity issue and undue influence below.

As to the attack on the ‘promissory notes’, Mr Webster objected to this point being pursued. He said it is brought too late (i.e. in the written opening submissions for the husband) and to allow it to be pursued would place his client at an unfair disadvantage in that (i) it required expert evidence because the law governing the ‘promissory notes’ was the law of Northern Ireland, (ii) if his client had known it was to be taken he would have dealt with points arising in his written evidence, and (iii) his side have not had notice that they needed to consider this issue.

Mr Mitchell told me it was a matter of law and he was entitled to pursue it. As a matter of law he said it needed no amendment to his pleadings.

In the light of the parties accepting that I could determine the argument as to the nature of the ‘promissory notes’ at the end of the case after closing submissions, and on Mr Webster saying that I would need to hold in mind that the quality of his client’s evidence on points arising from the late taking of this issue would be bound to be affected by the point being taken so late, and in light of the very tight timescale for this hearing, I agreed to not deal with the issue at the beginning of this hearing. I did say to Mr Mitchell that my preliminary view was this issue was not a matter of law, but one of fact, given that the law in question is that of Northern Ireland, which is not the law of this court.

The hearing over ran, and I needed to find an extra half day to accommodate it. I did so, by squeezing the matter into court on the afternoon of the 26 March 2026, when I had been due to deal with another matter. There was no time provided for me to draft a judgment and this is being written during the Easter Vacation.

The bundles in this case have been (for me) electronic and way over-sized. The core bundle is 820 pages. Further I have a non-core bundle of 1062 pages, a supplementary bundle of 125 pages, a joint authorities bundle of 486 pages, and a supplementary authorities bundle of 351 pages. Further still during closing submissions I was sent a chapter from Chitty and part of a chapter from Byles on Bills of Exchange and Cheques. The parties need to understand that it is not possible for me, with a 4-day listing, to read this volume of material. I will approach this judgment bearing in mind the need to deal with all cases expeditiously and fairly, allotting to this case an appropriate share of the court’s resources while taking into account the need to allot resources to other cases as required by the FPR 2010, r 1.1 (2).

I shall deal with points of detail on the facts in my analysis below. Here I will give my impression of the witnesses.

The brother was very keen to give me the background and often a variant foreground before giving me an answer to nearly all of the questions asked of him. He was difficult to confine. He was however loquacious rather than evasive. He was confident in his presentation and not startled by any of Mr Mitchell’s questions. I was impressed by him when he agreed without equivocation that in relation to two payments for his parents’ legal fees which he had said in his solicitors’ letter of February 2024 he had met on the wife’s behalf (and therefore formed part of his 2024 claim against her) he was wrong. She, he agreed, had met them herself.

His account that his father had considered it necessary to record the debt of the wife to him in a document following the freezing injunction against the brother extending into Apartment 1 made sense, namely that the loan might otherwise be lost. His account as to why the ‘promissory note’ recorded the debt as owing to his mother rather than his father made sense, namely that his father at that time feared his assets might fall to Bank A. His account of wanting to sort out family debts, following the conclusion of the Bank A litigation against his father, made sense, namely that he resented having funded his parents, the other brother and the sister-in-law. (Although, I record, that while it made sense it showed a marked lack of familial affection, and that the ‘sorting out’ was pursued unusually aggressively.) The brother’s difficult relations both with the wife, and the mother were not only credibly reported by him but linked to a number of contemporaneous documents.

I also record that he made no attempt to hide his low opinion of the husband. He told me he considered the husband to be a disgrace. Further he made no attempt to conceal his view that the husband should not be bringing a claim for financial relief ancillary to his divorce from the wife.

The brother came across as a forceful, difficult character who was used to being listened to and used to getting his own way.

The wife gave evidence for an extended period. She impressed me as someone who had once been charming, and assured, but now found her old presentation difficult to maintain after the confidence of success and money had gone. There were moments when she melodramatically looked at the events of her adult life as one disaster after another.

She was cross examined about a loan application to Bank B that she had made (and when the loan was offered she had taken) in which she had not declared the ‘promissory notes’ or the loans from her parents. After an initial querying by me she accepted the charge that, if her account of the loans was correct, she had misled the bank. It was her case that she was desperately trying to find the money to complete her development project on the former matrimonial home: her brother would not assist her; she needed to repay money to her parents; and she knew if she told the truth about her liabilities she would be refused. It was clear that an admission, which Mr Mitchell labelled as an admission of fraud, was not something that fell comfortably within her old self-image but she acknowledged that what she had done was to deceive the bank to obtain the loan. Mr Mitchell says to me that the real deceit was not to the bank then but to me now and of course puts to me that the wife’s evidence cannot be trusted.

I will need to consider this in the round, and of course remind myself of all of the complexities in assessing evidence of a witness who has lied.

The husband came across to me as being very scared. It is not surprising that he is. There is a large costs claim that is likely to be made against him if he loses this preliminary issue as well as the dramatic reduction on the assets available for distribution at the end of this marriage.

In contrast to the brother he was short and direct in answering questions. His evidence started unpropitiously. In chief he had related to Mr Mitchell that in December 2022 he had been with the wife and her parents in Northern Ireland when the brother rang, and, because the mother took all her phone calls ‘hands free’ he had heard the brother berate her. The brother, he said, compared her and the father unfavourably to his friends’ parents who had money to provide for themselves. (This evidence followed on from oral evidence of the brother that he had been phoning his mother, wanting his money returned from his parents, his brother and his sister.)

When the husband was taken to WhatsApp messages between him and the wife on the 31 December 2022 (the relevant date) it did appear that he was not with the wife in Northern Ireland at the time of the call. The wife had asked the husband by WhatsApp message whether she should raise with the brother what she had heard (which on her case was criticism of her for not repaying debts and criticism of her for wanting to borrow more) and he responded by WhatsApp message. When the husband was asked in evidence why they were texting if they were in the same house he said that was because it was a big house. That was an odd answer given the texts were emotional and so much more likely to have been part of a face-to-face conversation, and made odder by the fact that the wife wrote: ‘you are with the kids, [the brother’s]in Thailand, [the other brother] is with his kids and I am hear (sic) and listening to shit’. It very much appears that the wife was in a different location to the husband – she was here ‘listening to shit’, he was elsewhere. It was put to the husband that he was in Scotland (at his parents’ house) with the children. He accepted that he had been in Scotland with the children on one occasion but denied it was this.

On the balance of probabilities I conclude that his answer on this point was not truthful. It might just have been a mistake as to timing on his part, but it very much appeared that he was trying to give evidence of a conversation in which the brother had overwhelmed the mother as part of his argument that the mother was not able to stand up to the brother.

Having made that finding as to honesty I will again have to caution myself as to the complexity of dealing with a witness who does not always tell the truth.

I will deal with the issues I need to resolve in the following order:

Mr Mitchell contends that this is not a new issue at all. He points to the fact that in paragraph 10 of the husband’s defence he had said that where certain circumstances (listed from a to j) [apply] ‘both the validity and enforceability of the Notes, and [the brother’s] rights (…) to enforce against [the wife] for sums purportedly advanced thereunder, are not admitted and [the brother] is put to proof of the same.’

I record that I have inserted the word ‘apply’ above. ‘Apply’ must however logically be implicit in the drafting.

The reason that Mr Mitchell now says the notes are not promissory notes is that they are not for a sum certain because it is common ground that the notes have been partially repaid. (This is not a defect in the drafting of the notes. There is no partial repayment clause in them. It is in the way they have operated.) Mr Mitchell says that it is a matter of basic law that a promissory note cannot be partially repaid because it must be for a certain figure. He refers me to the Bills of Exchange Act 1882, section 83(1) which says that a promissory note must be for ‘a sum certain in money’. He accepts that interest can be charged, and acknowledges that appears to conflict with that principle but tells me it is accepted as a matter of law. In response to my observation in opening that this is not a matter of law but a matter of fact because the relevant law here is the law of Northern Ireland he tells me (i) any failure to set out the law in Northern Ireland is a failure on the brother’s part and absent evidence as to that law I can work on the basis of English Law, and (ii) that the law in Northern Ireland is in any event the same as the law here as the 1882 Act extends to Northern Ireland, and a case that he has put before me from Northern Ireland makes that clear.

None of the circumstances (a) to (j) in the husband’s defence mention this partial payment point at all. A sharp contrast can be drawn with what occurred at the PTR, when Mr Mitchell wanted to call evidence as to the law in Northern Ireland on capacity, which I allowed on the basis that the husband’s pleadings needed to be amended to reflect the fact a point on capacity was being taken, at which stage Mr Mitchell also raised the issue of undue influence and the pleadings were amended to reflect that point was being taken too.

Mr Webster says it is unfair to allow this late point to be taken (i) because he has not been able to consider the position in Northern Ireland, (ii) because if he were aware the point were being taken he may have put in further evidence, and/or amended his pleading to make reference to the underlying debt which had been subsumed by the ‘promissory notes’ and (iii) because he has not done the legal research that he would have undertaken if he knew this point were being taken.

I raised with Mr Mitchell that I have a duty under the Family Procedure Rules to identify the issues at an early stage in the proceedings and to manage the case, including expert evidence accordingly. I am inevitably being thwarted in the exercise of that duty if parties spring issues on the court at the very last minute.

Mr Mitchell’s response, namely that this was a point of law and he is always entitled to take a point of law – indeed that one can take fresh points of law all the way up to the Supreme Court – is an inadequate response. Litigation is not a game in which cards can be held back to be played at critical moments. Litigation is a matter of significance in the parties’ lives which requires each side to have fair notice of what is in issue and be able to prepare for it.

It is a matter of particular concern to me that I have been deprived of the opportunity to consider this matter with the benefit of informed submissions on both sides. I speculate, for instance, that it might be that given the defect asserted by Mr Mitchell appears not to be in the drafting of the notes but in the operation by the parties of the notes, that the proper impact of his observation that there cannot be partial repayment of the note is that the brother in fact holds loan notes of £4.5m and has effectively made a concession only to enforce them up to £3.5m. This possibility was not explored before me, perhaps because of the late taking of the partial payment point.

Mr Webster’s secondary position, should I allow the late point to be taken, is that it does not matter in that the ‘promissory notes’ stand if not as promissory notes but as clear evidence and acknowledgement of the debt that existed between the wife and her parents, and that the debt was agreed to be owed to her mother.

It is my primary duty to deal with cases justly. This issue puts into conflict procedural fairness and substantial fairness. Given that (i) Mr Mitchell has raised a powerful point that a promissory note should be for a fixed sum, and (ii) there is good reason to believe that the law in Northern Ireland is the same as here, and (iii) Mr Webster takes the position that ultimately this point does not matter, I determine that (i) I shall allow the point to be taken, (ii) that given these notes were operated to allow for partial repayment they were not operating as promissory notes, but (iii) I am not going to be constrained by the drafting of the brother’s particulars of claim or the wife’s defence, and instead consider whether there are underlying loans for which the so called ‘promissory notes’ are, as Mr Webster contends, clear evidence.

I have been provided with a helpful spreadsheet by Mr Webster (though my thanks on this point should perhaps go to his junior, Mr Cathro) which takes me through the transactions. I will set them out briefly, and take the figures rounded.

There were effectively 3 payments used for the purchase of Apartment 1: £274,000 and £325,000 which were immediately funded by the brother but ultimately funded by the father as the payments were applied to reduce a debt the brother had to the father, and a payment of £830,000 from a joint account in the father and mother’s name. This was reduced by £1m when the wife repaid that to the father and mother having taken a mortgage on the property. The father was liable for the mortgage as well as the wife, but given it was ultimately paid off from the proceeds of sale of the property, and the property was the wife’s it makes sense to consider this as a payment from her. That gave rise to a potential debt (if the advances were considered loans as the wife and the brother contend) from her to her parents of £429,000. The advances were made in 2005.

In relation to Apartment 2, this was purchased by way of a bank loan taken in the name of the father and the wife in March 2006 for £2.6m. This was then discharged by payments from the father (on one occasion the payment is made by the brother, but reducing a loan that he has to the father) over the course of 2006 with the last payment in 2007. Further, stamp duty was paid by way of another joint loan between the father and the wife in March 2006, which the father paid off in December 2006. The amount is either £107,000 or £108,000 – it does not matter. Further still there was a payment of £420,000 from the father to the wife which was used to buy a carpark space also in 2006. The fact that the bank loans were paid off by the father undermines Mr Mitchell’s point that there was no debt just a joint loan.

The money advanced for these properties (£429,000 + £2,708,000 +£420,000 = £3,557,000) was according to the wife and the brother considered a loan, and this was rounded down a little to give rise to the first ‘promissory note’ of £3.5m.

The second loan note arose because the wife received a further £1.04 m (on the exchange of €1.2m) from the father in 2011. This was a sum that the brother considered to be his half share of the helicopter that his father had used and had then sold. That was received by the wife on the 8 August 2011 and the second ‘promissory note’ for £1m was entered into on the same day.

The wife gave four written acknowledgments of her liability under the ‘promissory notes’, 2 for each one: 9 October 2015 and 8 September 2020 for the first one and 21 September 2016 and 8 November 2021 for the second one.

The wife’s evidence during cross examination remained that these monies were advanced to her as loans. The ‘promissory note’ of 2010, albeit a few years after the advance of the monies for the purchases, provided me with firm evidence that the money was considered a loan. The second ‘promissory note’ entered into on the same day as the funds were received made perfectly clear that the money was a loan.

It might of course be in other circumstances that money provided by a parent to a child is a gift. The oral evidence of the wife, supported by the brother, and the written historical evidence made clear that in this family the money was a loan.

The wife was in cross examination asked why she did not repay these sums – or some of the sums – when the properties were sold and she had funds. Her answer was that in the context of her father’s litigation with Bank A it made sense for her to hold onto the money. That does provide a credible explanation.

The wife said that she knew that she had this debt that needed to be repaid, and to that end she met the care costs for her parents, made repayments directly to her mother, and made payments on her mother’s behalf – leading to the repayment of £840,000. The wife was clear in her evidence that she knew the litigation with Bank A was coming to an end and the debts would be called in so she was under great pressure to complete her project on the former matrimonial home to repay the debt and provide enough for her to rehouse.

I do note that Mr Mitchell, in taking the point that the notes are not ‘promissory notes’ appears to work on the basis that there have been repayments. There was no cross examination to suggest that there had not been repayments. I accept that it is entirely possible that the wife wanted to support her parents and made payments to them because they are her parents rather than as the repayment of a loan, but that she did so in circumstances where she was needing money for herself without pressing for a substantial rearrangement of her parents’ situation or more assistance from her siblings does appear to me to be evidence that these were repayments and that therefore there was a debt.

When pressed as to what the husband knew about these debts and the ‘promissory notes’, bearing in mind that the parties married in December 2012, so after the advances and the ‘promissory notes’ were drawn up, it was her case that he knew that she owed ‘many millions’ to her family but he did not know about the ‘promissory notes’.

It was the husband’s case that he did not know about the debts or the ‘promissory notes’ until the events leading up to these proceedings. Indeed, it was his case that the former matrimonial home was not being developed as a project but as a ‘forever home’.

I consider it strange, in general terms, that one spouse would not have informed the other about ‘promissory notes’ such as these. I consider it odd that one spouse would not have quantified to the other the amount of their debt. I do note that the husband’s written evidence was ‘[the wife] never shared details of her finances (or the finances of her family) with me.’

It is clear however from the WhatsApp messages between the husband and wife that he was aware that the wife was struggling to manage financially and was very stressed about it. Indeed, he proposed that if the parties could not manage they should look for a house south of the river. He criticized the wife (in a message of January 2024) for spending money on leasing an expensive car when she knew money was tight, and writes to her, ‘you said yourself that you need to ask your mother before spending funds’.

In cross examination the following run of messages were put to him:

It is easy to see this exchange, with the benefit of hindsight, as in part arising from one spouse not telling the other spouse what is really going on. It does make clear that the wife did consider herself under financial pressure. It does make clear that the relationship with the brother can be difficult (he did indeed refuse to make a loan). And it is good evidence of the wife’s case (and the brother’s) that he had been pushing for some time to get his money back from his mother. On a human level however what stands out is that the wife is all but overwhelmed and the husband is trying to respond without knowing what the problem is really.

I do on balance prefer the wife’s case that she had told the husband that she had significant debt to her family. It would otherwise be inexplicable that she had to consult her mother before spending money and that she (rather than she and the brother and her other brother) had to meet the costs of looking after her parents. As to the figure she put on that debt when telling him about it, it is difficult to make any finding, but I see no reason to depart from the wife’s vague, ‘many millions’.

It is after the failure of the wife to get a loan from the brother that she made the application to Bank B in which she did not mention her debt to her mother, to which I have already referred.

It is appropriate that I stand back and consider whether the loans documented in the ‘promissory notes’ had become soft, or should be treated as having been forgiven in the light of (i) the wife’s failure to be full and frank about them to her husband and (ii) the fact that she did not reveal them to Bank B, (iii) she did not mention them in her draft Form E, and (iv) the husband’s disputed case that the former matrimonial home was to be their forever home.

I consider it appropriate to add to these factors a fifth point, which was not at the forefront of the hearing but to which reference was made and on which questions were put. Namely in 2013, which is after the sale of the apartments and before the purchase of the first house, the wife bought her parents’ home in Northern Ireland for some £1.4m on the basis that they could still live there. It was her case that she bought it at value. When put to her in cross-examination that she was in fact giving away her money because the value was very substantially reduced by the parents’ right of occupation her response was that the first she knew that the value was reduced by the right of occupation was in these proceedings.

Dealing with the fourth point first, I preferred the wife’s evidence on this. Before moving to the former matrimonial home the wife had owned and the family had lived at another house nearby. After her development of the former matrimonial home it is identical (in terms of layout) to the previous house. It was not necessary to move to the former matrimonial home to make a ‘forever home’ if it were to be identical to the previous house. The move was motivated by the need to have a project – to make money. The husband relied on the wife’s plans to design the children’s bedrooms for their children in the former matrimonial home and on the cost that she had been prepared to meet in its development. The wife’s answers had force: the property needed to be a family home so it needed attractive children’s bedrooms; that they would inevitably live in it for a period until it was sold; and that the cost of the development had gone up not because she was spending on it at the high end to make it their forever home but because Covid shutdowns and the war in Ukraine changed timetables and costs.

There were a series of text exchanges in May 2024, when the parties were separating and the wife was pushing for the husband to leave her and the children in the house while he moved out, in which the wife expressed outrage about the husband seeking half the house (making a point that she had paid for it) and saying that he was trying to take the children’s inheritance. I put it to her that given her case is that the property would need to be sold to meet debt it might have been thought she would have said to the husband that he could not have half the house because it would need to be sold, and that the reference to inheritance seemed odd. She could not explain that to me, but on reflection, looking at the context of the messages, namely, that they were emotional and related to occupation rather than long term finances this point does not outweigh the factors above.

In relation to the second point the wife made the very strong response that she did not tell Bank B about the debt to her mother and the ‘promissory notes’ because she wanted to get a loan from them. This is dishonest but it is entirely credible and casts no doubt on the continuing existence of the debts.

In relation to the first point I have found that the wife did tell the husband that she had debt to her mother. Her response as to why she was not clearer to him as to how much the debt was, and why she did not tell him about the ‘promissory notes’ was that the notes were expressly confidential. I have already remarked that I find this odd. And, although it is not relevant to the decisions I need to make for this hearing, I consider that the lack of openness in the marriage will have made the marriage more difficult. I do not consider that it points to the debts being forgiven or soft. The wife, as the husband accepts, kept her family affairs to herself. The reason she did so, I find, is that she felt there was some impropriety, or to use a more value-laden word, shame in the way she was acting so as to keep funds away from her father while he was engaged in litigation in Ireland. That worried her.

The third point, the omission of the debts from the draft Form E, I have considered in my introductory remarks about the wife’s evidence above. It is odd in that the loans were bound to be central to sorting out her financial claims with the husband ancillary to the divorce. It does cause me to pause and reconsider matters. On balance I accept her explanation that the ‘promissory notes’ did say that they were confidential and she did not want to record the debt in a draft form E without checking with her mother. I come to this conclusion because of her fear of the impropriety referred to in the paragraph above.

The fifth point, the purchase of the parents’ home while affording them a right of occupation, I consider was primarily motivated as a step taken in the light of the Bank A litigation. I can only speculate as to what part it played in that litigation (producing funds but protecting their home perhaps) but it does appear to me to be evidence of a quid pro quo relationship between the wife and her parents. She did not just give them money: she gave them money in return for the house. The short-term fall in value until they vacated it was something which I accept she did not consider. It is not a matter which should weigh against me considering the alleged loans as loans.

I reflect and consider these points cumulatively and conclude that they are not sufficient for me to conclude that the loans recorded in the ‘promissory notes’ came to be forgiven or had become soft.

It is convenient to take these points together.

As to capacity it is agreed by the parties that the law in Northern Ireland is the English common law before the introduction of the Mental Capacity Act 2005.

That means that there is a presumption of capacity: it is to be assumed that the mother had capacity unless it can be proved that she had not. Mr Webster relies on Chitty on Contracts which in turn relies on Imperial Loan Co Ltd v Stone [1892] 1 QB 599 to this effect. Miss Jones and Mr Mitchell refer me to the judgment of Mr Nourse QC (as he then was) sitting as a deputy High Court Judge, in Re Beaney Deceased [1978] 1 WLR 770, and the following passage in particular:

“In the circumstances, it seems to me that the law is this. The degree or extent of

understanding required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration or a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in relation to the donor’s other assets a low degree of understanding will suffice. But, at the other extreme, if its effect is to dispose of the donor’s only asset of value and this, for practical purposes, to pre-empt the devolution of his estate

under his will or on his intestacy, then the degree of understanding required is as high

as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of.”

As to undue influence, or ascendancy, Mr Webster tells me uncontroversially that the burden is on the person alleging the undue influence to prove it. Mr Mitchell refers to the judgment of Lewison J (as he then was) in Thompson v Foy [2009] EWHC 1076 (Ch). For the sake of completeness I include the relevant paragraph below:

The thrust of the husband’s case is that:

In broad terms the response to the capacity ground made by the brother and the wife is that while it is accepted that the mother had Parkinson’s there is no evidence advanced to suggest lack of capacity. There are a number of pieces of evidence on the mother’s capacity relied on:

As to undue influence, the brother says:

I record (it being a point that might go either way but is relied on by Mr Mitchell as set out above) that on the 1 March 2024, i.e. after the letters sent by Withers on the 16 February 2024 in which the brother set out his claims for £7.3 m and before the change of her will, the mother sent an email to the brother in which she said:

I must bear that in mind when considering the argument that the pleaded claims in the letter from Withers on the brother’s behalf in February 2024 are very weak, that I am in fact considering litigation at a significant remove from that which is before me now. Two elements (the claim against the mother and the claim against the other brother and the sister-in-law) involve people who are not even witnesses before me.

Further, although there are points raised in the husband’s defence which do foreshadow the detailed criticisms that Mr Mitchell has made in his written submissions to me, those written submissions and the questions put are substantially more exacting in terms of the answers they require than the husband’s case as previously advanced. Evidence from a witness when being cross examined will be less full than the evidence that can be obtained if detailed questions are asked in advance.

Holding these points in mind I will consider Mr Mitchell’s arguments on a rough and ready basis. What follows is not meant to be findings (which I could not make) but an attempt to assess the force of Mr Mitchell’s argument that the agreement was so bad it must give rise to concern about the circumstances which caused the mother to agree to it.

Finally, I would add that the husband gave clear evidence that the brother was an aggressive litigator, a view which was echoed by Mr Mitchell when he described (in a different context) loans in the brother’s hands as so far from being soft, as being ‘diamond edged’.

My overall assessment therefore is that I cannot consider that the claims were so weak as to reach the conclusion that the mother passing to the brother the ‘promissory notes’ owed to her by the wife was an obviously silly thing for her to do, save, and I shall consider this below, to the extent that they might have been her only asset.

Turning back to capacity: the points made by the brother and the wife are powerful. The mother had an assessment of testamentary capacity in March 2024. She was considered to have such capacity. The wife’s evidence on this assessment was not that it took place because she doubted the mother’s capacity but because she considered the brother to be so litigious that the assessment was a necessary precaution given, he was being disinherited. The mother remade her will in March 2025 in the presence of two solicitors. Neither of them raised any issue as to her capacity. There is therefore some good reason to assume that she had capacity then too. Further when she takes the step of endorsing the ‘promissory notes’ on the 12 February 2025 she does so in the presence of her solicitor. Again, no concern is raised about her capacity. There is a presumption of capacity. I have very good reason to find that she had capacity to the extent necessary to make a will in March 2024 and good reason to believe that she had capacity to the same extent in March 2025, so on the balance of probabilities it is likely she had capacity to enter into the settlement agreement in December 2024.

The analysis in Re Beaney does require me to consider whether there is capacity to consider the particular transaction. I do not consider that the transaction in the settlement agreement was more complex than a will. So, I find she had capacity to enter into the settlement agreement in December 2024.

Turning to undue influence: I consider the most helpful way of considering this is by working through the relevant points listed in Thompson v Foy, noting that the issue is one of fact, and that the burden on this point must be on the husband who is making the assertion:

Considering the matter in the round, I find that the points which would cause me to determine that the agreement was obtained by undue influence are outweighed by the points against so determining and so I conclude that the husband has not discharged the burden on him to show that the settlement agreement was obtained by undue influence.

The application made by the husband is to set aside the mortgage.

This aspect of the case did not receive much attention in either the hearing or the parties’ written submissions. It had been added to this list of issues to be dealt with at this hearing on the husband’s request at the pretrial review.

Section 37 of the Matrimonial Causes Act 1973 provides as follows:

I pause here to remind myself of some of the basic facts of this case in accordance with the findings that I have made. The husband, at a time of strain in the marriage, discovers that a claim is made against the wife and her family by her brother for something over £7.3 m. He is then told that the brother’s initial claim has gone away but a debt of the wife to her mother, for £3.5m, is now being pursued by the brother – a man who he knows to be an aggressive litigator (‘diamond edged’), and who clearly does not want him to benefit from any financial remedy claim. He had been aware that the wife owed money to her parents, but not that the debts were documented as ‘promissory notes’.

It can be readily understood why the husband is suspicious that behind these developments there is a scheme to ‘do him down’, by which I mean to defeat (at least by reduction) his claim for financial relief.

We are not however anymore in the realms of suspicion. We have written evidence, contemporaneous documents, and oral evidence. I have found that the wife did owe her parents money, which was assigned entirely to her mother. We have the settlement agreement entered into by the mother which transferred the outstanding debt to the brother. I have not found in favour of the arguments that I should reject that agreement. I have therefore found that the brother is owed £3.5m by the wife.

It was put to the brother by Mr Mitchell that he would not leave his sister and his nephews and niece homeless. The brother answered that he did not think the wife and his nephews and niece would be homeless in any event – his answer was that he thought that they would live with the wife’s new boyfriend. That person has met the children’s school fees. The wife, I record, did not think that likely. I am not in a position to consider whether she will live with her boyfriend, or indeed what alternative accommodation might be available to her (and to the husband) from the resources that remain after the debt to the brother is met from the sale of the former matrimonial home (noting that there are some other assets, including the property in Northern Ireland, but I can see they will be relatively limited). I did not however form the impression that save for a possible extension of time before a sale the brother would be minded to be generous to the wife. As I have said already, he is a difficult man.

Mr Mitchell refers me to section 37(5) namely where an application is made with respect to a disposition which took place less than three years before the date of the application then an intention of defeating the claim shall be presumed.

Mr Mitchell tells me that the wife agrees that this disposition would defeat the husband’s claim. I do not consider that is a fair observation – my recollection is that she agreed that there would be less for the husband and the wife on their divorce if £3.5m needed to be paid to the brother – but precisely what she said does not matter because it is a matter for me to consider whether the disposition defeats the husband’s claim. Mr Mitchell tells me:

Mr Webster draws my attention to section 37(1). That tells me that ‘defeating a person’s claim for financial relief is a reference to preventing financial relief from being granted to that person … or reducing the amount of any financial relief which might be granted, or frustrating or impeding the enforcement of any order which might be or has been made.’

He says to me that in the light of this clause the section 37 application must fail. The securing of the mortgage does not defeat the claim for financial relief. There is a debt for £3.5m whether or not there is a charge. That debt will necessarily need to be taken into account in any financial relief award ancillary to the husband and wife’s divorce, whether it is secured by a mortgage or not.

I pause to note at this stage that there is no issue raised before me that the wife has other hidden money. In cases where undisclosed assets are a material issue then it might be said that by securing a charge on a visible asset the financial relief claim is being defeated because it is the only asset against which recovery might reasonably be made. This I note was the situation in the circumstances underlying the decision of Moor J in ABC v PM and another [2015] EWFC 32.

Miss Jones says further that the wife can rebut the presumption that arises by section 37(5) that she executed the mortgage to defeat the husband’s financial relief claim. It is her case that the wife, knowing that she owed the brother money, entered into the mortgage because it gave her more time to settle that debt. She points to the following:

She draws my attention to the case of ABX v SBX & DX [2018] EWFC 81 in which Francis J refused to set aside transfers made by a son to his father on the basis, amongst other things, that they were transfers to meet genuine debts. The transfers in that case were made within the 3-year period relevant to section 37(5).

Where I find her argument leaves me with questions is that while buying time may have been in the wife’s mind, she clearly was aware when she allowed the mortgage to be secured on the property that it would have ramifications within the financial relief claim. The husband, she well knew, did not accept that her brother had a valid claim against her.

To consider where that takes me, now I have made the findings that I have made, it is necessary for me to go to the relevant parts of section 37(2) (the principal operative part of section 37):

I note that there are two conditions that need to be met before the court has the power to set aside under section 37(2) (should it chose to exercise that power): (a) the other party (here the wife) must have made a reviewable disposition with an intention to defeat a claim for financial relief and (b) if the disposition were set aside financial relief or different financial relief would be granted.

In the light of that section, I conclude that in this case I do not have the power to set aside the mortgage because those two conditions are not met.

The second point is the easiest. I am satisfied that if the disposition were set aside, it would not make a difference to the financial relief that would be granted to the husband. The debt still needs to be paid whether or not there is a mortgage securing it.

The first point is harder. Ultimately, I agree with Miss Jones, the wife in granting the mortgage did not act to defeat the husband’s claim for financial relief. Given the findings that I have now made about the existence of the debt, and the point of agreement that the brother is an aggressive litigator, the granting of the mortgage, while she almost certainly expected that it would have enraged the husband, was not done to defeat a financial relief claim.

The declarations sought by the brother are that:

Mr Webster has referred me to the case of Bank of New York Mellon v Essar Steel India Ltd [2018] EWHC 3177 (Ch) and derives from that the following as the relevant principles:

The argument against the declarations advanced by Mr Mitchell turned on my finding for him in relation to either the debts not being properly considered debts or granting the section 37 application. Given I am against him on those points, I consider that this matter falls within the principles set out above and will grant the declarations.

I look to counsel to draft the order.

Should there be matters arising, including any costs applications, I would direct counsel to agree a timetable for short written submissions.