Amidst the emotional and financial destruction that can arise from divorce, keeping a sense of proportion is crucial. The Court of Appeal made that point in lamenting a former couple’s expenditure of more than £500,000 in legal costs fighting over an asset worth less than £300,000.

At the start of the couple’s 12-year marriage, during which they had two children, they both had highly paid jobs. However, by the time of their separation, their circumstances were greatly reduced and the only asset that was potentially available for division between them was an overseas flat.

The flat was owned by a company, the sole shareholder of which was the husband’s mother. However, following a hearing, a judge found that the husband was the flat’s beneficial owner. He was ordered to pay the wife £150,000, that sum representing roughly half of the flat’s value. After the mother appealed, the judge’s orders were upheld.

In upholding the mother’s further appeal, the Court noted that the case was yet another sad example of a highly educated former couple engaging in emotionally bruising, destructive and disproportionately expensive litigation in relation to money and the young children of the marriage.

The Court found that the initial trial of the action had been infected by serious procedural irregularities and that the mother had been denied a fair hearing. There was no basis for that part of the judge’s order which set aside any transactions that had led to the flat’s title being vested in the company and ultimately the mother. She thus continued, via her shares in the company, to be the flat’s legal owner.

The Court, however, went on to uphold the judge’s conclusion that the flat was and remained in the husband’s beneficial ownership. That finding was almost inevitable on the evidence. The lump sum order made against the husband was therefore justified. The Court noted that it was a matter for the husband whether to require his mother to sell the flat in order to raise the necessary funds.

Source: Private Client Library Content