DH v RH  EWFC 1115 July 2023
Published: 21/08/2023 11:08
MacDonald J. Determination of the W’s application for a legal services payment order (LSPO) and maintenance pending suit (MPS).
The parties were both in their 50s and had married in 1995. They have two daughters, born in 2005 and 2007. The H had produced a schedule showing assets of £13.2m, which was not agreed by the W.
Both parties worked in the financial services industry. In 2014 the H began investing in cryptocurrency. At the FDA, the court dismissed the W’s application for an expert to examine the H’s cryptocurrency holdings.
In his Form E, H listed an investment in Topanga Canyon Holdings LLC at $75,000. Just prior to the private FDR, the H disclosed that Topanga was a vehicle for holding shares in a cryptocurrency platform and as a result of the public listing of that platform a week after the FDA the value of the investment had increased to c.$7m. The value stood at $5.28m by the time of FDR. The W applied again for an expert to examine the H’s crypto holdings, which was dismissed. The W’s third application for such an expert was successful. The W asserts that following the instruction of that expert, the H revealed further crytpocurrency assets. As a result of delays in the provision of information to the SJE, the final hearing was adjourned. The SJE produced three versions of their report, as further information regarding the H’s holdings became available.
Both parties gave undertakings at the FDA to refrain from diminishing the balance of the funds in joint accounts in the US, save for paying the mortgages on the properties owned in New York and Wyoming. The H later made significant overpayments to the mortgage from that account without recourse to the W. The W then applied for a freezing order which was resolved by consent with the parties agreeing not to dispose of, deal with or diminish the value of (including by way of borrowing against) any of the properties and a number of US registered companies.
By the time of this hearing, the parties had incurred some £2m in costs. Part of the W’s costs had been funded by a litigation loan of £800,000 with an interest rate 11.98% p.a. The loan provider sought to attach conditions to the extension of that loan (i.e. to provide security) which would have resulted in the W breaching her undertakings. She sought to be released from those undertakings or, alternatively, she suggested that the H reverse the payment of $675,000 to the mortgages and that sum be used to meet her outstanding and ongoing legal fees.
The W sought an LSPO of £531,343 intended to repay fees she owes to her current and previous solicitors and fund the remainder of the litigation. The W also seeks MPS of £370,000 p.a. to include rent as she is seeking to return to rented accommodation in central London.
MacDonald J granted both applications. In respect of the LSPO, he was satisfied that without such funds the W would not reasonably be able to obtain appropriate legal services. However, he was not satisfied that the LSPO should encompass the fees the W had already incurred and were still owing, relying on the case of Rubin and Holman J’s judgment in in LKH v QA AL Z that LSPOs encompassing historic costs should only made sparingly and on proper evidence. MacDonald J found that the inclusion of historic costs owed to a former solicitor would be unprecedented, not just unusual. The court considered it must pause when granting the LSPO as the W’s legal fees were already £1.33m and were mostly incurred accusing the H of non-disclosure, the allegations of which were yet to be properly particularised. Nonetheless, the LSPO was made.
In granting the W’s application for MPS, MacDonald J was not able to accept the W’s submission that the court should assess the reasonableness of her MPS budget against the position set out in her Form E. The parties’ financial position had changed considerably from that point. The W had plainly established her need for MPS as she had no employment and was maintaining the children of the family. MacDonald J had regard to the property particulars provided by the H and determined a reasonable budget for rent to be £7,000 (not the £9,945 claimed by the W). The W’s remaining budget was then examined and reduced to £141,154 p.a (down from the £250,660 claimed by the W).