A recent financial remedies divorce case, OG v AG (2020) highlights the importance of the obligation for both husband and wife to fully disclose their financial position, and to negotiate reasonably. If they fail to do so, they could be penalised financially. This guest article has been provided to us by Trinity Chambers
Trinity Chambers was established in 1997 and is a highly regarded local barristers’ chambers covering East Anglia and London courts. Trinity has a strong reputation in Family Law particularly complex and high value financial remedies, public and private Children Act cases and has a a strong civil department.
Financial Remedies: OG v AG [2020] EWFC 52
This case concerned cross-applications by husband (OG) and wife (AG) for financial remedies following divorce. Mostyn J emphasised the importance of complying with disclosure obligations and considered the value of a business affected by COVID-19 and a no-deal Brexit.
During their marriage the parties established a ducting company (X) valued at £13.8m, with trading assets of just under £4m, and amassed a property portfolio in Dubai. After OG resigned as director of X, company AB was formed with the help of loans from Dubai based company TT, which it turn had received a substantial loan from OG’s sale of the matrimonial home. The husband was found to have set up the competitor AB, practised extensive non-disclosure and fraudulently altered emails.
Prior to the discussion of OG’s conduct, the court applied a number of discounts to the value of the business. Mostyn J addressed the novel issue of the impact of COVID-19 on global business and potential impact of a no-deal Brexit on X, which operated largely in the EU, by applying a 10% discount to the companies trading value (the Single Joint Expert had agreed a discount should be applied but had declined to nominate a figure). Mostyn J applied a further 30% competitor business discount to the value due to the husband’s role in setting up AB.
Although the husband had only given full and honest disclosure very late in the day the wife was criticised for adopting an unreasonable stance in negotiations before trial when she sought a 2/3 : 1/3 split in her favour. Mostyn J considered such a departure from equality to be disproportionate. The equality principle still applied due to the length of marriage and the fact that all property was matrimonial. However, Mostyn found that the almost £1 million in costs was largely due to the husband’s litigation conduct. He was therefore ordered to pay 90% of his wife’s costs accompanied by a stark reminder to litigants that if they ‘do not negotiate reasonably you will be penalised in costs.’
