Linda Pope unravels complex finances in a clean break divorce settlement

Linda Pope acted for a lady who had applied for a divorce from her husband in 2019 after a marriage of 17 years.  The breakdown of the relationship had been very acrimonious, with allegations of domestic and financial abuse by the husband. Two children, aged 20 and 15 at the time, lived with their mother in the family home.

The couple had met while she was training to be a manager in the hospitality industry. After becoming pregnant with their first child, she stopped working to support his high-income career which took them to France and Germany before relocating to London.

Money was never an issue during the relationship and they enjoyed a comfortable lifestyle, with their own cars, the children attended private schools, and the family enjoyed holidays abroad each year.

But when the marriage broke down in 2018, the comfortable financial situation took a turn for the worse.  An inheritance which the husband had received in 2015 had disappeared and had been replaced with a substantial amount of debt, which he asserted was incurred by supporting the family during the marriage.

After the parties separated, the husband alleged that he was unable to work due to family bereavement and other mental health issues. This put the family in a desperate position, as despite having had high earnings of circa £150k per annum previously, there was now little income and liquid capital available.

During the marriage, a pension pot had been amassed by the husband in his sole name, in addition to property interests in India, the UAE and Switzerland, which were estimated to have a combined value of around £1 million. The net equity in the former home, due to a substantial re-mortgaging and arrears amounted to less than £600,000.

As the wife had no income and no capital aside from her interest in the home, any decision about how the home would be shared had to be based upon the needs of the wife and the children.

The husband was unwilling to make disclosures about his financial circumstances voluntarily, so Linda Pope recommended issuing proceedings for financial relief in order to progress matters.

Unfortunately, the husband did not cooperate and throughout the proceedings and he either ignored the directions of the court or failed to provide proper disclosure.  As a consequence of this poor conduct, the court made a costs order against him.

The husband asserted that, despite 20 years of being a stay-at-home mother, our client would be able to do much more and could easily find work to support herself and the children financially without any contribution from him – estimating that she had an earning capacity of between £18,000 and £20,000 per annum.

Linda was able to show that this was highly unlikely, as his wife would need to retrain to achieve that level of income and this would be difficult during the covid pandemic.

The husband, who had not tried to mitigate his losses by seeking new employment, also claimed that he was obliged to share his inheritance with two siblings.  However, with a background in business, Linda was able to show that this was not the case by requiring the court to consider copies of the will and the deeds of property ownership.

Alongside this evidence, counsel was successful in convincing the court that the husband’s capital and income was much higher than disclosed by him, which resulted in adverse inferences being made against him.

Due to the husband’s poor conduct, Linda argued that a Financial Dispute Resolution hearing would be a waste of time, and it was agreed that the court should proceed directly to a Final Hearing.

Parallel to the financial case, there was substantial correspondence regarding joint debts, arears of private school fees, non-payment of the mortgage account and various personal belongings.

In the face of unreasonable demands, controlling and bullying behaviour, a number of robust letters were written to the husband’s solicitor, threatening injunction proceedings if his behaviour and campaign of intimidation should continue.

Linda, with the support of her assistant Kimberley Duah and counsel, prepared meticulously for a 2-day final hearing to present a strong case that the husband was wrong about his wife’s earning capacity, and to outline her needs.

The wife sought a modest provision to allow her to purchase a small property for herself and the children with little or no mortgage; a contribution towards her legal expenses; that the husband should be responsible for all the liabilities, including the arrears on the school account which would allow the children to start again.

There was no request for periodical payments, as due to his past misconduct it seemed unlikely he would honour those, and a clean break would be preferable.

After the first day of the Final Hearing in court, the husband agreed to:

• provide the first £450k of the net sale proceeds of the family home, with any surplus split equally between the husband and wife;
• pay the mortgage until the sale was completed;
• to be responsible for discharging the unpaid private school fees;
• to contribute a lump sum of £50k towards his wife’s legal expenses; and
• a clean break.

For more information on negotiating a financial settlement when you separate or divorce, please contact Linda Pope on 020 7426 0400 or email Linda.Pope@MilesandPartners.com.

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.