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ANCILLARY RELIEF: K v K [2008] EWHC 2553 (Fam)

Date:23 OCT 2008

(Family Division; Bruce Blair QC sitting as a deputy judge of the High Court; 23 October 2008)

The American couple had acquired British nationality, and resided in England for the last 5 years of the 8-year marriage. The couple were divorced in England. In the ancillary relief proceedings it was accepted that the total capital was meagre; the husband's share options were treated as valueless. By consent the husband transferred to the wife a lump sum of £55,000, plus a car, in what was intended to be a clean break as to capital. Also by consent the husband was ordered to pay the wife periodical payments of £12,000 pa and to pay £30,000 pa for the child, both payments to be index-linked. A recital to the order stated that neither party expected to seek any variation for at least 5 years, save in exceptional circumstances. A few years later the husband cashed in his share options, which realised over £3 million. Once the 5-year term was up, the husband applied for a variation of the periodical payments order, seeking to impose a term on the wife's maintenance and to capitalise the payment to achieve a clean break. The wife cross-applied for an upward variation of the maintenance and capitalisation. A few weeks before the hearing was due to take place, the husband obtained an adjournment, supposedly to await an Inland Revenue investigation of his affairs. The husband failed to comply with an order requiring him to contribute to the wife's costs and, after the wife obtained a freezing order against the husband's assets up to a value of £1,000,000, the husband moved to Israel. The husband thereafter failed to pay any maintenance due, allegedly because of financial difficulties caused by the frozen assets. Primarily because of her dire financial straits, the wife and the child had now moved back to live with the wife's family in California. The husband had failed to obey or to appeal a series of court orders. The husband was now seeking to stay the English proceedings in favour of proceedings he had issued in California. The husband argued that the Californian court was better placed to decide the issues between the parties. The Californian court had no jurisdiction to order capitalised maintenance.

Notwithstanding that the husband had not issued a summons for his purported application for a stay, and that service of his 'application' in the form of an affidavit had been unacceptably late, the court would consider his case on the merits in order to assist the court in California. Since the husband, on his own account, was worth about £2,800,000, it was impossible to see how the freezing injunction in respect of only £1,000,000 had been as great an embarrassment for him in practical terms as he had suggested. The proper forum for resolution of the financial issues between the parties was England, not California. It would be wholly unfair to the wife not to permit her to proceed to a hearing at which the merit of capitalisation was determined. Unfortunately, one further adjournment was necessary to allow the parties to file updating information, after which the case was to proceed in England.