This is the final hearing in relation to the application for Financial Remedies between the Applicant and the Respondent. The Applicant is represented by Mr Collins of counsel and the Respondent has represented herself throughout this hearing although she has been represented by solicitors and counsel for large parts of this litigation.

This litigation has been ruinous for the parties with many applications having been made and proceedings in country B having taken place as well. The Applicant’s total costs are stated as £506,805 and those of the Respondent amount to £419,754. That is a total in excess of £925,000 in a case where the total asset base is in the region of £3m if the non-matrimonial assets are included.

In preparation for this hearing, I have read all of the relevant documents within the court bundle together with the note prepared by counsel for the Applicant and a document prepared by the Respondent which effectively amounts to her position statement. The Respondent also provided a huge amount of documentation last week which was attached to that statement running to over 600 pages. I have not given permission for those documents to be admitted into this hearing and I have not considered the same. The only two witnesses have been the Applicant and the Respondent although there is an expert report as to the valuation of the hotel owned by the parties. That report was agreed and consequently it was not necessary to hear oral evidence from the author of the report.

Factual Background

The parties met in London in 1998 at a time when both were working in this country within the financial sector. At this stage the Respondent was a biological male. They commenced cohabitation in 1999 and married in country A in 2002. There are two children of the family one of whom is in a gap year prior to university and the other is presently studying at university. The family have lived a very international lifestyle living in several countries in different continents and purchasing properties in various countries. A property was purchased in the UK in 2019 when the children of the family commenced education in this country.

The Applicant states that in 2022 the Respondent informed her that she was intending to “transition” to a woman, and she commenced hormone therapy at that stage. The Respondent is of the view that the Applicant was aware that she was a Trans-person prior to their marriage. The Applicant issued a divorce petition in 2022 and shortly thereafter the Respondent issued divorce/separation proceedings in country B. There were jurisdictional issues that were raised by both parties, but it was agreed by the end of 2022 that the Respondent would not challenge the jurisdiction of this court. The Conditional Order was pronounced in June 2023.

The Applicant made an application for Maintenance Pending Suit and an order was made in December 2022 that the Respondent was to pay the Applicant the figure of £6,000 per month, being a global amount for both herself and the children. This was backdated to August 2022. The Respondent was also ordered to meet the outgoings of properties in the UK and country B. The Respondent did not make the payments required within this order, it being her case throughout that she was not financially able to do so.

In October 2023 the Respondent received a sum in excess of £1.2 million through her business endeavours and at a hearing in November 2023 a freezing order was made in relation to that sum on a without notice basis. An order was also made for the payment out to the Applicant in the sum of £127,340 in lieu of the arrears of periodical payments for a period of 16 months and other costs. The Respondent applied for these funds to be released and I made an order following a hearing in January 2024 that the Respondent should receive the sum of £250,000, in part to meet the costs of her upcoming gender reassignment surgery and also that each party should receive £50,000 on account of their costs. The Respondent underwent the surgery in March 2024.

The Applicant is aged 60 and runs the hotel in country C. She is a dual national of 2 countries, neither of which are the UK and has resided in as many as 8 different countries through her life. The Applicant worked in corporate finance and in 2005 she commenced a role as a Non Executive Director for an investment company, which role continued until 2020. Since that date the Applicant has concentrated on running the hotel. The Applicant obtained UK residency in 2020.

The Respondent is aged 58. The Respondent was highly successful in the financial world and operated in private equity and consulting where she was able to command very substantial incomes from such endeavours. The work involved living in many different countries and sometimes separately from the rest of the family. She states that she believes it would be very difficult to break back into that world as a trans woman. The Respondent states that she has retrained as a massage therapist and is a qualified Reiki practitioner. The Respondent intends to set up her own practice in due course, although has only had one paying client to date.

The Assets

These are fully set out within the ES2 and the majority of the valuations are accepted by the parties. The assets are made up of a number of properties in various jurisdictions some of which are jointly owned, and some are in the sole name of the Respondent. There are also substantial liabilities in relation to which there is considerable dispute.

The assets can be summarised as follows:

The Open Offers

The Applicant seeks for there to be a sale of all of the assets save for the non-matrimonial assets above. it is stated that this would equate to each party being left with £1.45m. Thereafter adjustments are sought in relation to the order to pay the £127,340 made in November 2023, the costs of the reassignment surgery (at a figure of £160,000) together with further figures relating to costs and payment of legal fees from joint assets. The effect of this is that prior to considering the liabilities of each party the Applicant would receive £1.67m and the Respondent would receive £1.23m. there would be a clean break.

The Applicant then has her liabilities of £268,750 which would reduce her total to one of just in excess of £1.4m as well as continuing to own her land in country D which is valued at between £24,000 and £97,000. The Respondent states that she has a debt to her stepmother which now stands at £360,000 and once that is taken into account her net figure would be £867,500. The Respondent would also continue to own her property in country E with a value of £433,590 to £533,500. This would mean that the total assets held by Respondent would be £1.3m to £1.4m depending on the true value of the property in country E. The Applicant seeks to persuade the Court that the other liabilities in the Respondent’s name should be ignored as they were amassed by the Respondent in the years following separation and were as a result of her overspending. These further liabilities (chiefly credit cards) total £34,340 and there is also a sum of £67,933 owed to her former legal team. These total £102,000 and once paid would leave the Respondent with total net assets of £1.2m to £1.3m, under the Applicant’s offer.

The Respondent has provided a number of options for the Court to consider and I do not intend to set out each of these. In December 2024 the Respondent’s solicitor set out an offer by the Respondent in the following terms:

The schedule that accompanied the offer sets out the net effect. In essence the total assets were calculated as being in the region of £3.34m. The joint liabilities were stated to be £522,311, with the Respondent’s liabilities totalling £337,342 and those of the Applicant set out as £92,245. The total held by each party after all of these sums are paid would amount to £1.195m. The inherited assets would also be available to each party which would leave the Applicant with a sum in the region of £1.25m and the Respondent with £1.65m.

The Respondent made reference to 3 alternative offers within her closing submissions. I do not intend to set out those positions herein save to state that in some of those offers she was seeking for the Applicant to pay £20,000pa per child for a period of 5 years. In general, however, the offers were on a similar basis to that set out above.

In essence the parties both state that there should be a 50/50 split of the assets but there are a number of matters upon which they disagree as to how the figures should be considered. There have been many issues raised by each of the parties which have been fully aired within their statements and in their oral evidence. I do not intend to comment upon all such issues but that does not mean that I have not considered them. I only refer to the matters that I consider necessary in order to resolve the issues between the parties. These are primarily:

The Law

The approach to be taken by Courts when considering how to approach Financial Remedy cases was perfectly set out by Peel J in WC v HC 2022 EWFC 22. It is difficult to improve on this exposition of the law and as a result it is oft repeated within financial remedy judgments, and I set it out in full:

The Hotel

This is located in country C and was purchased by the parties prior to their marriage, and they have subsequently increased the size of the property. It is accepted between the parties that it was jointly run by the two of them for many years with each having defined roles. The Respondent was in charge of the finances. It is now accepted that the hotel will need to be sold. In that respect there is a valuation that has been provided and that is accepted by all, it is in the gross sum of £2,117,107. There are certain debts owed by the business which are agreed, although there is a dispute as to how and why these arose. It does not seem to me that I need to make any findings in relation to how such debts accrued as the figures are agreed. It is certainly not a matter that could be considered as the type of conduct that would be taken into account within financial remedy proceedings whichever version of events was preferred.

The debts total £443,005. There is also CGT to pay, if sold at the assessed valuation, in the sum of £549,689. The parties obtained a tax report during this hearing which indicates that certain steps could be taken to mitigate CGT and, as I understand it, both parties are willing to agree to take such steps in due course, which is entirely sensible.

The only issue relating to the hotel which requires any consideration relates to whether or not it has been generating sufficient profit in recent years for the Applicant to have received a substantial income. The Respondent argues that the hotel would have been generating substantial sums to enable the Applicant to receive sums in excess of the £6,000pm that she had been ordered to pay for maintenance pending suit. On that basis, it is argued that the sum of £127,340 should not have been awarded to the Applicant and should be brought back into account. The Applicant argues that the debts of the hotel are so large that it has not been possible to generate sufficient profit to draw down any substantial income.

It was the Respondent’s case that she was responsible for the financial issues relating to the hotel up until 2015 (the Applicant states that this continued for many years after that) and that the parties were able to draw substantial sums from the profit generated by the hotel each month. This would be in excess of £5,000 and sometimes over £10,000. In her oral evidence, the Applicant accepted that the parties did receive monies from the hotel but was unable to state the level of such funds as the Respondent was responsible for this occurring. I note that in her s.25 statement the Applicant states that “at this point I understood that we were living off the hotel’s income and the Respondent’s income as an independent consultant”. No figures were provided as to the amounts within that statement.

The fact that it is accepted that the hotel was making sufficient profits in or about 2015 to permit monthly withdrawals to be made is no evidence upon which a finding can be made that this has remained the position since that date. There have been obvious issues that have occurred since then, including the pandemic, natural disasters within Country C and the accumulation of the debt which requires regular payments.

The accounts which have been produced for the hotel for 2023 were exhibited to the Respondent’s conduct statement and show that the business was running at a loss on a month by month basis. The Respondent does not accept that these accounts are accurate. It is her case that the Applicant has deliberately locked her out from the business and has failed to disclose many documents which has prevented her from being able to calculate the true income position. It is accepted that the Applicant did create a separate account, but she would say that this was in reaction to the Respondent attempting to remove £15,000 of company funds from the account in December 2022.

The Applicant sets out within her statement that following the initial closure of the hotel during the pandemic it opened for a short period in 2021 but then closed down again and consequently it was out of business almost permanently from February 2020 until March 2022. There followed a natural disaster within the area in which the hotel is situated as well as the accrual of debts referred to. This has all led to the inability of the hotel to make substantial profits in the view of the Applicant.

The Respondent states that the Applicant had informed the staff including the accountant not to talk to the Respondent when she visited the hotel and that the reasoning behind this was to ensure that she was not able to discover the truth. The Applicant states that she has provided full access to all of the information required and that any further information and documentation would have been far too onerous as it was dealing with very small amounts and for transactions which were carried out by cash.

In terms of the documentary evidence, the accounts that have been produced must be the starting point. They do not show that there was any profit in 2023 and it is accepted that the business is now carrying substantial debt. The valuation which has been prepared did not delve into the profitability of the business. As was pointed out by Mr Collins, there has been no application for a report from a forensic accountant to analyse the true profitability of the business and in a case where the parties have not been slow to make applications this could have occurred at any point if it was the respondent’s case that the figures were incorrect.

There is also reference made to a WhatsApp message sent by the Respondent to the Applicant in the summer of 2022 which reads “We do need to make money in country C. We’ve been losing money there for over a decade.” The Respondent sent a further message which reads in August 2022 that “I cannot cover Country C losses now”. This is not consistent with the view that the hotel was making substantial profits.

I am satisfied on the evidence that is before me on the balance of probabilities that the hotel has not produced any substantial profit in recent years. There have been significant disruptions to the hotel business and significant debts have been accrued in excess of £400,000. These would all lead to a reduction in overall profitability. The mere suspicions on behalf of the Respondent are not sufficient to justify any alternative finding. I accept that the Applicant did take steps to prevent the Respondent “interfering” in the business bearing in mind the litigation in which the parties were involved and the complete breakdown in trust. That does not equate to proof that the Applicant is in fact hiding any profits. It follows that I am satisfied that the Maintenance Pending Suit order was made on the correct factual basis as far as the income of the Applicant is concerned.

The Funding of the Respondent’s Gender Reassignment Surgery.

It is not surprising that this issue has generated significant emotions from both of the parties. It is the Applicant’s position that it is as a result of the Respondent’s decision to transition to a woman and undergo the surgery that the marriage has broken down and that in the words of counsel’s opening note “it cannot be right that the Applicant should have to pay half the costs from her share of the matrimonial funds”. It is submitted on the Applicant’s behalf that these costs were not relationship generated and they should be met from the Respondent’s share of the assets.

The Respondent argues that the costs of the gender reassignment surgery should be treated in the way of any other medical costs which would ordinarily be met from the joint assets. Prior to surgery the Respondent had to satisfy strict guidelines and in her case she was suffering from gender dysphoria and experiencing suicidal ideation. The Respondent would wish to undergo further facial reconstruction surgery and has provisionally booked herself into such an operation but that is dependent upon having sufficient funds.

The Respondent, surprisingly, has never produced any final documentation as to the precise costs of the surgery. Estimates were provided prior to the hearing before myself in January 2024 at which the Respondent was seeking the release of funds that were required to pay for this surgery. The Applicant has used the figures within those documents to suggest that the cost was in the region of £160,000 and I am satisfied that this is a reasonable figure to use for these purposes. I accept that there were ancillary costs such as renting properties during the recovery period after the surgery but the Respondent would have required to be spending money on accommodation in any event. The question therefore is whether or not the Applicant should receive a further £80,000 in order to equalise the monies that were spent by the Respondent on this surgery.

The medical evidence produced by the Respondent to support her position includes a document from a nurse practitioner which stated that the Respondent had undergone appropriate clinical evaluation for a person diagnosed with Gender Dysphoria and that she had fully socially transitioned in 2020 and had been consistently on hormones since August 2022. The document states that the surgery was an “ appropriate next step in the transition process.” There is also a letter from a Licensed Mental Health Counsellor dated January 2023 which states that the Respondent has been living in a gender role concurrent with their affirmed gender since February 2022 and they report significant anxiety depression and distress due to their experience of dysphoria. The counsellor diagnosed the Respondent with Gender Dysphoria. The letter adds that the Respondent has more than met the WPATH criteria for a full range of male to female surgeries and the vaginoplasty surgery was considered the next appropriate step. There is a further letter from another nurse practitioner confirming the same information which is also dated January 2023.

There is also a letter from a doctor which states that the diagnosis is one of gender dysphoria. This letter is dated March 2023. One further letter dated March 2023 in support of the Respondent undertaking the surgery is provided by a licensed Clinical Social Worker. This letter refers to the Respondent as living in the female gender since October 2021. There is also a letter from the Respondent’s treating physician dated January 2024. This states that she has been treated for gender dysphoria and had full discussions about the surgical options. It is stated that the Respondent understood the risks involved and had gone through psychiatric assessment and been cleared for the surgery. It is set out that the Respondent is aware of the irreversibility but still wishes to proceed with the procedure. It is added that the Respondent had rather severe dysphoria in regards to her genitals which caused a great degree of mental anguish and that delaying her care further would be detrimental to her mental health and probably her physical health as well.

In short, the Respondent had the full support of her counselling and medical team. She had satisfied all of the criteria of the World Professional Association for Transgender Health as prerequisites for gender affirming surgery. These include: gender dysphoria, informed consent, psychological assessment, living in the desired gender role, age requirement, stable mental health, hormone therapy and the postsurgical care and follow-up.

The Applicant has not sought to question any of the medical issues and although I note that all of the documents referred to above are letters as opposed to witness statements, I am satisfied that it is appropriate to take them into account as they simply have not been challenged. If the Applicant had challenged the position no doubt, there would have been an application for properly adduced medical evidence or evidence from a Single Joint Expert.

In her evidence the Applicant accepted that the Respondent had indicated that she was suicidal in October 2021, but she stated that she did not connect those suicidal feelings to her wishing to transition to being a woman. The Applicant was adamant that she was not aware that the Respondent wished to transition until the end of the marriage. She recalled having read the documents from the therapists which are referred to above, but she indicated that she did not wish the Respondent to transition. The Applicant referred to it as devastating and a big surprise when the Respondent stated that they would start hormone therapy. It is the Applicant’s position that in April 2022 she was informed by the Respondent that she now identified as a transgender woman and would be commencing hormone therapy to transition from male to female. She stated that she intended to live her new life as a lesbian woman. The Applicant states that she was deeply shocked and divorce proceedings were commenced two months later in June 2022.

In an earlier statement within the proceedings the Applicant stated the Respondent “ is not seeking to fund the surgery from the sale of her own assets. She wants me to use my share of the matrimonial funds being held by solicitors to pay for this and I object. If the Respondent wants to have this surgery, then that is her choice, but it must be paid for from the Respondent’s own funds, so once the matrimonial assets have been divided or from her non matrimonial funds, but not from joint matrimonial funds before they have been divided.”

The Respondent put the matter simply in her evidence. She stated: “You marry a trans person. You live with a trans person. You benefit from a trans person. They are suicidal and you support them.” The Respondent added that it would be like saying someone who had cancer should not have the surgery and that accordingly the cost of that surgery should be met from joint funds.

On behalf of the Applicant, counsel stated in his closing submissions that the Respondent has shown no understanding whatsoever that her decision to transition to a woman has had an impact on anyone else, and particularly the Applicant. That appears to be an accurate reflection of the position. There is no doubt that this has been a hugely difficult and emotionally draining experience for the Respondent and it is not surprising that it has had a huge impact upon her. However, it is also obvious that it would have a significant impact upon the Applicant who had been married to the Respondent as a man for 20 years. The lack of empathy from the Respondent is striking. However, it is difficult to see how that lack of empathy is something which can be or should be taken into account when considering the distribution of the assets between the parties.

How are such costs to be considered? It is difficult to see how the costs of the gender realignment surgery cannot come under the heading of “needs”. There is no suggestion, nor could there be, that the costs could be considered as conduct. Further, it could not come under the heading of “wanton or reckless” expenditure that could warrant an add back consideration. This is clearly not akin to cosmetic surgery which, it may be possible, could fit within such a heading. Gender realignment surgery could not possibly be considered in such a light.

In terms of what amounts to needs, that was fully considered within the Family Justice Council “Guidance on Financial Needs on Divorce” document which was specifically referred to by Peel J in WC v HC 2022 EWFC 22 above.

As is set out within that document “Needs” is “a very broad concept with no single definition in family law” . Reference is made to White v White [200] UKHL 54 where Lord Nicholls set out at paragraph 36 “ Financial needs are relative. Standards of living varied. In assessing financial needs, a court will have regard to the person’s age, health and accustomed standard of living ” (my emphasis). It is also made clear that the measure of needs must always be considered against the level of the assets that are available.

The argument put forward by the Applicant is that it would not be fair for the Applicant to contribute to the costs of the Respondent’s surgery. There was a suggestion that this would be due to the fact that it was the Respondent’s decision to transition that caused the end of the marriage. It is accepted jurisprudence that the court will not consider the reasons that a marriage broke down within financial remedy proceedings as to do so would be to open up each and every case to a slew of allegations and counter allegations. It is precisely for that reason that the test for conduct to be taken into account has such a high bar.

The alternative argument that was set out was that the costs of the surgery were not a relationship generated cost. In a case involving any health need it would not be one that is relationship generated. If this was a regular health issue such as cancer, as referred to by the Respondent, then it is difficult to see how that would be a relationship generated cost, but it is also hard to state that such an expense would not be a “need” that should be reasonably met from joint resources.

I am satisfied, having considered all of the evidence, albeit provided in letter form rather than as witness statements, that the Respondent’s surgery was meeting a genuine and deep felt medical/psychological need for the Respondent. This cannot be, and has not been, said to have been carried out as a whim when all of the effort and time that the Respondent has invested in the process is considered. This is a need of the Respondent which is not matched by a similar need for the Applicant. As such it is reasonable for the money to have been spent meeting that need out of joint resources and no accounting exercise to reconsider that expense is required.

What is the correct approach as to the £127,000 paid to the Respondent by order of the court in November 2023?

The order of District Judge Rahman on 6 th November 2023 dealt with the freezing order application and also ordered payment out to the Applicant of the following sums:

The subsequent clause in the order states that that sum shall be released from the frozen funds and it is added that “5. The payment to the Applicant of the aforementioned sum shall be deducted from any share of the parties’ resources that the court may determine the respondent is entitled to or should otherwise receive by agreement between them. ” That is to say that the sum is to be reimbursed in whatever order I make.

It is not clear to me the legal basis upon which clause 5 can be correct. It appears to be suggesting that at an interim stage a Court can decide that a particular sum must be paid by one party to the other even though at that stage there can be no understanding of the overall financial picture. I do not consider that a Court hearing this matter at a final hearing where all of the evidence has been considered can be so restricted. I am satisfied that an earlier court can state that consideration should be given as to how those sums are to be considered but it is not possible to bind the judge that is making the final decision.

It has always been the position of the Respondent that the order made on 6 th November 2023 was based on an incorrect understanding of the facts. The Respondent has already stated that she was not in a financial position to make the payments that had been ordered and also that the Applicant was earning very significant sums from the hotel. If those two positions were factually correct, then one can see a strong argument to say that the £127,000 should not be paid back to the Applicant.

I have already considered the issue of the income generated by the hotel above. As stated, I am satisfied that the Applicant has not been in receipt of any substantial income from the hotel. The other side of the equation that I need to consider is the income generated by the Respondent during that period.

In her oral evidence the Respondent accepted that she was in receipt of an income up to September 2023. She stated that most of the money that she received at this time was already accounted for and as a result she was not able to pay the Applicant. A schedule of sums received by the Respondent for the period July 2022 to December 2024 was produced. This shows that the total paid into her account was in excess of £1 million. This figure is accepted by the Respondent. It breaks down to disclosed income of £427,880 with the remainder coming from loans from her stepmother, payments relating to shares held by her and other resources.

I do not intend to go through the payments that she made out of the sums that she received but I note that they include:

It is possible to argue that some of these expenses were incurred as a result of business but the bulk do not appear to be so. It is simply not necessary to drill down these figures with any precision as I only have to consider whether the Respondent was in a position to make the payments that had been ordered of £6000 per month. I am satisfied that the Respondent did have such funds available to her but made a conscious decision that they would be utilised elsewhere rather than funding the Applicant.

It follows that I am satisfied that if there are sufficient funds to do so the Respondent should be able to be reimbursed with this £127,000 which should have been met out of income rather than the capital of the parties.

Liabilities to Family

The level of family debt in this case is substantial. The Applicant states that she owes her brother the sum of £225,155 and the Respondent states that she owes her stepmother £380,000.

The enforceability of these type of debts have frequently been an issue before the court. Although it is not a binding authority, the test that was set out by HHJ Hess in P v Q (Financial Remedies) [2022] EWFC B9 is often relied upon as the correct approach in such cases. The approach was set out in paragraph 19(x):

The Applicant has produced a loan agreement with her brother, which is dated 3 rd January 2025. It includes the following terms:

The Applicant was not questioned about this money within the hearing. I therefore assume that it is accepted that it has in fact been borrowed. I note that according to a previous ES2 that the amount outstanding as at November 2023 was £105,000 but I have not seen a breakdown of the actual payments that have been made. The Applicant states that she did in fact pay sums back to her brother after receipt of the £127,000 ordered by District Judge Rahman. To that extent there is an obligation upon the Applicant for it to be repaid. However, this is a sum that relates purely to costs and the terms of the agreement are far from those that one would expect in a normal commercial loan. The monies are to be repaid as and when the Applicant is able to do so and there is a backstop position of it being paid out of her estate on her death. There is no witness statement from her brother to suggest that any proceedings would be brought in order to enforce this debt, and there is nothing to suggest that the Applicant and her brother are not still on good terms.

In the circumstances I am satisfied that the money provided by the Applicant’s brother is to be deemed as a “soft loan” as it is realistically within the discretion of the Applicant as to whether she repays it immediately after the conclusion of these proceedings and the sale of properties or at a later date or at all prior to her death. It follows that it may well be a liability that simply does not have to be repaid by the Applicant within her lifetime and it would be inappropriate to include it within the asset schedule for the purposes of distribution.

The Respondent sets out in a witness statement dated 30 August 2024 that “ Since last August, I lived first on credit cards and subsequently loans from my stepmother who also allowed me use of her credit card. She has lent me $265,000. ” In a later paragraph within the same statement the Respondent states that “ I owe my stepmother $270,000.” The Respondent attached a breakdown of the funds provided by her stepmother in a document attached to what the respondent referred to as an “Addendum to respondent’s s.25 Statement of Truth and explanatory note in relation to the appendices and supporting evidence.” There was no permission such a document to be filed.

The breakdown of the loan shows that following the original statement in August 2024 there have been further substantial sums provided by the Respondent’s stepmother. Indeed, a further $176,000 had been provided within the last three months bringing the total to $448,669. This equates to a sum in excess of £350,000. In her s.25 statement she states that “ I owe my parents money for their lending to me during this process. The full detail of the money they have lent to me and how it has been used is detailed in the appendix to this document. 55% of the money went to legal fees, 18% to gender transition (including accommodation and travel to get there and be there, 17% covered joint property expenses, 9% was for personal items and 1% was for mine in the children’s and my caregivers food during my time in city Q for surgery. ”

There is no loan agreement within the bundle nor is there any statement from the Respondent’s father or stepmother. The Applicant accepts that some loan agreements have been disclosed but argues that they would amount to soft loans/early inheritance. It follows that there is no evidence as to the precise terms upon which these monies were provided and as to whether they would be enforced. When the substantial sums that are involved are considered it is surprising that there is no formal document accompanying the same. In oral evidence the Respondent stated that the money is a hard debt. She added that she was one of five children she added that she believed all of the notes have been provided although this was disputed. As I state, I have not been provided with any documentation whatsoever. The Respondent stated that her parents did not have the same resources that were available to the Applicant’s brother.

It appears to be accepted that these monies were provided to the Respondent by her stepmother but the real question to consider is whether this is a hard obligation or a soft loan. The evidence of the Respondent referred to her siblings about her being able to get anything in advance. This suggests that the sums involved would otherwise be provided to the Respondent on inheritance. As there are no documents disclosed or evidence provided as to how the funds would otherwise be recovered I am not able to say anything other than this must be considered as a soft loan. There is no evidence to suggest that the Respondent’s stepmother could enforce the loan or indeed would attempt to do so. The evidence of the Respondent herself suggests that she may be entitled to this level of financial provision on the death of his father and/or stepmother and consequently I am satisfied that these are not sums that should be included within the computation part of the exercise which I must undertake.

I also accept the point made on behalf of the Applicant that significant sums have been paid to the Respondent’s legal fees and it is not for the Applicant to be responsible for half of such outgoings. The Respondent set out a breakdown of where these monies were utilised but I have seen no documentary evidence to support that.

Computation

There is no dispute between the parties as to the level of the assets in this case. Indeed, the parties have been able to agree that they will take all appropriate steps that have been suggested in order to minimise the incidence of taxation on the sale of the hotel. There has also been agreement as to the Applicant providing the Respondent with the sum of $15,000 in relation to sums that she received from the sale of a property being half the sum that she provided to her solicitors for her legal fees.

The only adjustment that I need to make in relation to the above asset schedule which I produce at paragraph 13 above relate to liabilities to the Applicant’s brother and the Respondent’s stepmother should not be included for the reasons set out above. The impact of that is significant as it means that the applicant’s liabilities are reduced to £45,000 and those of the Respondent to £36,100. The joint liabilities included a figure of £46,000 for a bounceback loan which it appears the parties both agree will not be required to be repaid. If that is the case the joint liabilities are reduced to £45,641. I would add that if the bounceback loan is pursued it should be paid equally by the parties.

The parties have also agreed that certain monies should be paid out of the sum that is presently frozen. The total stands at £245.003, but it is agreed that the Respondent’s US tax bill of £34,012 should be paid from this sum. The parties also agree that they should each receive a sum of 23,000 CHF (£20,634) to meet their living costs until the hotel sells. This would reduce the available sum down to £169,723. The Applicant would also wish for the sum of £25,000 to be utilised towards meeting the mortgage on the UK property but this is not agreed by the Respondent. I shall not include that in the summary below.

There has been much discussion about the ability to liquidate the shares in Company X. It now appears that this is capable of occurring, but the incidence of taxation is not agreed. The Respondent would wish for these shares to be retained and only be sold once it is advantageous so to do. It is not known when this may be. The parties have used a tax figure of 25% corporation tax although this is by no means a certain figure. That would reduce the sum to £325,193 which is the figure that I shall adopt.

Once these figures are taken into account the bullet point assets are:

Conduct

Each party has made allegations against the other in respect of their conduct which they consider is “such that it would in the opinion of the court be inequitable to disregard it” as is required by s.25(g) MCA 1973. The parties have each filed a statement setting out the conduct upon which they rely.

The Applicant makes complaints against the Respondent that she commenced divorce proceedings in Country B needlessly after the proceedings had been commenced in this jurisdiction. The Respondent clearly did commence such proceedings, but it is not for this court to reconsider what occurred in a different jurisdiction and it was for that jurisdiction to make whatever order it considered appropriate including any order as to costs. There are complaints about the Respondent under-declaring her income which I have considered above, and this was considered within these proceedings when the order was made by District Judge Rahman and I have already indicated that the lump sum should be paid back to the Applicant if the funds allow.

The other allegations made by the Applicant refer to the sale of a particular property in which it is said the Respondent was particularly awkward and also a failure to pay the mortgage on the property in this jurisdiction. I am satisfied that they cannot possibly amount to the type of conduct which would justify any altered order. The final point raised by the Applicant refers to the Respondent’s dealing in shares in a particular company which I accept took place in a somewhat clandestine manner. However, the reality is that all the assets generated from those shares have been made available and/or are still available for distribution between the parties and as such is not conduct that should be further taken into account. It follows that I am not satisfied that any further steps need to be taken in regard to the Applicant’s allegations of conduct.

The points raised by the Respondent include allegations that the Applicant has failed to disclose the income from the hotel. This is a matter that has been considered above and I am not satisfied that the Respondent has proved this point. She has set out all of the figures that she relies upon, but these are based on assumptions, and I am satisfied with the documents that have been disclosed. The Respondent also raises issues as to access to the management systems and changing the banking systems for the hotel without her being informed. These parties have no trust in each other, and it was the Applicant who was responsible for running the hotel. It is not surprising in those circumstances after the Respondent made an effort to withdraw certain funds from a hotel account that the Applicant would take steps to avoid that occurring again. This is conduct which undoubtedly increased the costs but is a byproduct of the bad faith by which each of the parties considers the other.

The Respondent also complains about the sale of a property in country A and what occurred to the proceeds of sale. The Applicant in fact now accepts that a sum should be paid to the Respondent in relation to those proceeds and no further consideration of that issue is required. There is further an allegation that the Applicant broke into the home of the Respondent and ransacked the office. If that occurred, it is clearly inappropriate behaviour, but it is not such that reaches the threshold required to be taken into account as conduct.

It follows from all of the above that I am not satisfied in this case that any allegations of conduct are of a sufficient nature to justify any alteration in the final distribution of the assets.

Distribution

In considering the correct distribution that should occur in this case I must take into account the s.25 factors. Many of these have been considered above to a certain degree and all of those findings must be borne in mind in the final decision. The other relevant s.25 criteria include the matters set out below.

Income of the Parties .

The Applicant states that she has not been in any paid employment since 2020 when her non-executive directorship ceased, and she does not consider it likely she will be able to work in the financial world in the future. The Applicant has generated her income by running the hotel in recent years and considers that the most realistic income stream for her would be some other owned project in the future. The Applicant is not in a position to state what that project would be at present whilst she awaits the outcome of these proceedings. I accept that the Applicant’s future income stream is limited but she is clearly a highly intelligent and resourceful woman, and I am confident that she will be able to turn her hand to whatever is required to make herself an income in due course. If it is to be a project along the lines of running a hotel then she would require access to capital.

The Respondent suggests that the hourly rates for massaging range from $100-$200 per hour. A slightly higher figure could be obtained for Somatic Therapy. The Respondent suggests that it would take time for that business to be established. It is added that she has a successful track record in developing real estate and she would hope to be able to do that once more but that requires capital. The Respondent also hopes to be able to make some money from writing, especially cookbooks but does not consider that to be a likely large income source.

I consider that the Respondent is not being unrealistic in her likely future income. It is difficult to see that she will be able to return to anywhere near her former level of income and that working for herself is her most likely way forward. As she states, if this is to include property development then she would also require access to capital funds.

I note that neither party seeks an order for periodical payments in this case and I consider that to be a realistic approach. The reality is that each party is going to have to consider all of their options once these proceedings are concluded and all of the assets realised. They will then be in a position to decide precisely what steps they need to take in order to generate an income. They are both hugely resourceful individuals but will need to adjust accordingly.

Needs .

It is customary within Financial Remedy cases for the parties to be ordered to produce property particulars detailing the likely level of costs of accommodation for both themselves and the other party. That has not taken place in this case due to there being complete uncertainty for both parties as to what level of assets are available for distribution and which country or indeed continent either of them will be living in at the conclusion of this case. As a result, there is little evidence as to the cost of housing for either party.

The Applicant states within her section 25 statement that “ given that this is clearly a clean break case then the question of what we both need to meet our income to live on is irrelevant as we have a finite pot of capital to be divided between us….. We have to live on our capital going forward .” The Respondent states that “ I wish to take capital from the sale of property and to buy a new family home, in country B .”

The parties also both state that they require capital in order to be able to earn their respective incomes. For the Applicant, this could be a sum required to purchase a small hotel or some other similar business. For the Respondent, she would wish to be able to develop real estate as she has done in various countries during the marriage (often jointly with the Applicant) and requires capital funds to be able to pursue such an income stream.

The sums required to enable each party to be able to invest in such projects is undefined, but clearly it would need to be substantial to be able to be sufficient to generate an income either from real estate or some other business project.

The parties also have a need for capital to fund their living costs up until the time when they are able to realise their assets. They have agreed to receive just over £20,000 each from the frozen funds to enable them to live until the hotel sells. This is an unrealistically low figure. The reality is that it is likely to take a considerable time for the hotel to sell – certainly it would not be surprising if it took 12 months. The parties are each going to have other significant costs such as moving from one country to another, or possibly one continent to another, storage costs, and costs associated with searching out possible business projects to provide income streams in the future. Again, it is difficult to be precise as to such overall costs, but I would not consider a figure of £100,00 each as being unrealistic.

The Needs of the Children.

The “children” of the parties are now both over 18 but still dependent upon the parties as they are still in education (or will be after the completion of a gap year for the youngest). The parties will both be caring for the children when they are not at university. This feeds into their needs as they will both require accommodation sufficiently large to accommodate 3 people.

The Standard of Living during the Marriage.

There is no doubt that the parties were able to afford a good standard of living when they were together. They funded the children in private education, purchased multiple properties in many different countries and funded a highly international lifestyle. The combined income of the family was substantial.

Age of the parties and the Duration of the Marriage.

The parties are close in age, being 60 and 58 respectively. This has an impact upon their ability to continue earning for much more than the next 10 years, and they will also both be hampered by the need to create a new business through which they can each earn an income. This was plainly a long marriage of 20 years with a couple of years of cohabitation prior to marriage.

Contributions.

There has been no dispute that each party has made a full contribution. They have each provided income, albeit that the Respondent earned more than the Applicant and they have each provided care for the children at different times. There are some disputes over the details of what precisely each party has provided but there is no need to examine those issues in any depth as the parties have undoubtedly both made their full contributions.

Conclusion.

This is a long marriage in which each party made a full contribution and there are no issues of conduct which would alter the approach of the Court in how the marital assets should be distributed. The starting point is therefore one of an equal split of the marital assets and the parties retain their non-matrimonial assets if they are not required to be taken into account to meet the needs of the parties.

On the figures set out in the computation section above the total assets are £2,953,004 which would equate to £1,476,502 for each party. As I set out above, the Applicant should receive the further sum of £127,430 following the order of District Judge Rahman as the Respondent should have made such payments out of income and her failure to do so has depleted the capital available accordingly. This would provide the Applicant with a sum of £1,603,932 and the Respondent with a corresponding sum of £1,349,072.

It is agreed that the Applicant should pay the Respondent a further sum of £12,300 following the sale of a property in country A as that reflects half of the sum that the Applicant paid towards her own costs out of the amount she received. There is also £12,000 to be paid by the Applicant to the Respondent pursuant to a costs order made by myself following the application to release funds from the frozen account. The Applicant also seeks a counter payment of £38,250 being half of the sum that the Respondent paid her lawyer out of the sums she received that were released by my order in January 2024. I am satisfied that this is a reasonable figure to be reimbursed as it was effectively a payment made out of matrimonial funds that would otherwise be available for distribution. Once that figure is factored in then the Applicant should receive a further £13,950 (£12,000 + £12,300 - £38,250) which would bring her total to one of £1,617,882 and the Respondent would have £1,335,122. This breaks down as a 54.7/45.3 split.

The Applicant would have to meet her liabilities of £45,000 which would leave her with £1,572,882 before she was responsible for 50% of the joint liabilities which total just over £45,000 meaning that the Applicant would retain a total of just over £1,550,382. The Applicant would also retain her inherited property worth £60,000 bringing her total to one of just over £1.6m. Is this sufficient to meet her total needs?

As was set out above, it is particularly difficult to accurately predict the housing costs of the parties as they have not been able to commit to any particular country in which they may settle in the future. However, bearing in mind the assets available and the standard of living enjoyed by the parties during the marriage I would consider a housing fund of £700,000 to be in the appropriate range. As stated above, each party also has a need for capital to provide their daily living costs for some time until they are able to adapt to obtain their own income streams and I would estimate that need to be one of £100,000. The parties have already factored in a sum of £20,000 each from the frozen funds and consequently require a further £80,000 to be factored into the overall figure.

That leaves a further need for capital to fund a future business from which the Applicant could generate an income. The amount needed is very difficult to estimate as, again there is simply no business plan to consider and not even a suggestion as to the nature of the business project which would be pursued. If the net figure retained after housing costs and living costs of £100,000 are deducted, then the Applicant would retain a further £800,000 or thereabouts. I am satisfied that this is a sum that is sufficient for a suitable project. As her needs can be met out of the matrimonial funds it is not appropriate and/or necessary to utilise any of the Respondent’s non-matrimonial assets to meet such needs. Indeed, even if the Applicant decided to pay off the debt to her brother, then she would still have a fund in the region of £575,000 which would reduce her options but still be sufficient.

The Respondent would retain the sum of £1,335,122. Her liabilities amount to £36,000 and a further £22,500 for her share of the joint liabilities. This would leave the Respondent with £1,276,622 plus the £483,000 from her non-matrimonial asset which would bring her total to £1,759,622. I assess the Respondent’s needs as the same as the Applicant in relation to housing costs, living costs and an investment fund. The Respondent would retain a sum of £959,622 which would mean that she could repay her stepmother some or all of the amounts provided and still have a substantial sum to invest in a business. The Respondent has stated that she would wish to undergo further surgery and other transition work and I am satisfied that she has the capital available to undertake such work if that is what she decides to do in the future. The Respondent’s needs are also met by the distribution that I set out above.

There are no pension assets available for division in this case, with the Applicant having a small pension on one country. The parties will have to marshall their funds carefully in whatever business projects they invest into in due course as they will have to use those assets subsequently as a form of pension. The Court has no further ability to create a pension for either party.

The Mechanics of the Order.

There is significant mistrust between the parties, and it is in the interest of them both for their financial relationship to be brought to an end as swiftly as possible. This is not a case in which the Court would have any confidence in the parties being able to agree on the important issues that would need to be agreed if each and every asset was to be sold. It is more realistic to ensure that properties are simply transferred into the name of one party where that is feasible. The valuation of the real property is sufficient to enable this course to be taken with all of the properties owned by the parties and their corporate identities.

There are however many questions over the figure that will be realised upon the sale of the hotel and also the sale of the shares in Company X. It would be highly risky to transfer those assets into the name of either party on the basis of the figures that have been used in the ES2 as they could be subject to significant revision in due course. The only safe action is to order their sale and divide the proceeds accordingly.

I appreciate that each of the parties will have a particular wish to retain certain assets and I do not wish to make orders in relation to certain assets with which both parties may disagree. I would ask that now that the parties are aware of the final outcome, that they each set out their proposals as to how this should be achieved. Each party is to provide a short breakdown of what should occur in relation to each of the assets to ensure the outcome which I have set out above. These are to be provided to the Court within 10 days of receipt of this judgment and I shall adjudicate upon how the stated outcome should be achieved if the parties have not been able to reach agreement on the matter.