Family lawyers always urge divorcing couples to negotiate a financial settlement openly and sensibly, and those who fail to do so are their own worst enemies. In one case, a wealthy couple's uncompromising attitudes earned them a judge's stinging criticism and legal costs bills totalling more than £1 million.
During their 25-year marriage the couple established a business that the husband described as a money-making machine. They lived comfortably but not lavishly, and generated more wealth than they knew what to do with. They invested in pensions, private schooling for their children and an international property portfolio, but almost £10 million remained in the company as surplus funds.
Following their acrimonious divorce, however, they were unable to agree on almost anything. Although the wife had full charge of the financial and administrative side of the company, the husband said that he was the technical brains behind the business and that without him it would not be sustainable. Serious difficulties arose because they continued to owe duties of fidelity to the company as directors, but no longer owed a duty of love and care to one another.
Ruling on the financial aspects of their divorce, the judge noted that the husband had engaged in dishonest attempts to conceal various transactions. He had also serially failed to disclose the full extent of his assets. Such conduct was futile and frankly inexplicable in that the truth was bound to come out. It appeared to have been prompted by pure bloody-mindedness.
The wife was more sinned against than sinning but was not above criticism. Taking an unreasonable stance, she had herself been guilty of non-disclosure and had put forward an untenable proposal that she should receive two thirds of the marital assets, heavily discounted in her favour, and the husband one third.
The judge valued the marital assets at £16,371,669 and ruled that it was a paradigm case for the application of the equal sharing principle. However, the husband's share was reduced to £7,316,094 – or 44.7 per cent of the total – because he had set up a business in competition with the company. As a reflection of his abysmal litigation conduct, he was also ordered to make a substantial contribution towards the wife's legal costs.
If you are divorcing, a number of issues may arise on which sound legal advice is essential. We can ensure that you are expertly advised and represented, contact Karen Moores, Head of Family Law at Sydney Mitchell LLP 0808 166 8860 k.moores@sydneymitchell.co.uk
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