JK v LM [2024] EWHC 1442 (Fam)23 May 2024

Published: 16/06/2024 22:12

https://www.bailii.org/ew/cases/EWHC/Fam/2024/1442.html

Cobb J. The case concerned four applications by the mother for an LSPO to cover the costs of her legal representation in ongoing proceedings under Schedule 1 (where she sought financial provision for the six-year old child) and s 8 CA 1989; a freezing order in relation to the father’s assets in this jurisdiction; an order that a restriction, pursuant to s 46(1) of the Land Registration Act 2002, be entered against the title to property in Richmond that the father has or may have an interest in; and directions in relation to the Schedule 1 claim. The net assets of the parties were in the region of £25m–£50m. There was no financial disclosure.

The mother was of modest means, whereas the father was an extremely wealthy businessman. The father sought to persuade the court that the mother lived or is likely to live a luxurious lifestyle, and that he did not have access to very significant wealth; [17]. She sought a global sum of £236,080 by way of LSPO, which was made up of outstanding and unmet legal costs and ongoing/future legal costs provision; [14].

Held:

The LSPO application was granted. The judge was satisfied that the father has or appears to have had access to very significant wealth arising from the sale of his majority interest in an online payment platform to a third party. Although he had not disclosed the extent of the proceeds of sale, the judge considered the publicly available information, which placed the sale proceeds over £30m. Public assertions available on the website about the company and the existence of significant capital reserves were also considered, as well as the seven-bedroom property in which he had an interest in Czech Republic.

As to past costs, the court was satisfied that without payment the mother would not be reasonably able to obtain appropriate legal services for the proceedings in the future. The father had been unforthcoming in his financial disclosure, and the judge was entitled to make robust assumptions about his ability to pay. A deduction of 15% across the board of the LSPO was made to reflect a modest notional detailed assessment, as the mother’s solicitors should not be entitled at this stage to benefit from what would essentially be an indemnity against all their costs incurred, which would be an unusual outcome.

The application for the freezing order was granted as there was evidence of the father dealing with his assets in such a way as to give rise to the conclusion that there is a real risk of dissipation of those assets, and any such dissipation would be likely to the disadvantage of the mother in the Schedule 1 proceedings. It was just and convenient to make the order to preserve the father’s assets in this jurisdiction, particularly his interest (if any) in the Richmond property and his shareholding. This was plainly a case where security for any Schedule 1 Award was justified, as the father lived outside of the jurisdiction and most of his wealth was likely to be held in offshore structures and/or by third parties. An order was also made in respect of the Richmond property under s 46(2) LRA 2002, and whilst the application for the restriction was being processed the terms of the restriction were to take priority over any official search with priority that is pending.

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