Mr Recorder Day’s judgment in a case involving complex procedural history, intervenors, non-disclosure and a ‘fragile’ business valuation. Of note is Recorder Day’s inclusion of his earlier decision to refuse a Hadkinson order. Recorder Day determined that debarring a respondent from addressing the court was very different to placing an application on hold until an applicant complied and refused W application for a Hadkinson order; see [23]–[28]. Generally, the judgment sets out the law of financial remedies clearly and succinctly: it should be mandatory reading for pupils/trainees.

Background

W 50s, H 50s. Intervenors: H’s mother, H’s sister and H’s brother. Cohabitation and marriage approx. 20 years. Long marriage. One adult child, financially independent.

Procedural background summary

Significant procedural history, including a failed final hearing. W had previously sought a Hadkinson order due to H’s repeated and continued non-compliance. When determining the issues of the Hadkinson order Recorder Day determined that debarring a respondent from addressing the court was very different to placing an application on hold until an applicant complied. No Hadkinson order was made, however there was robust case management that utilised unless orders and penal notices; see [23]–[28]. There were two committal applications before the effective final hearing.

Preliminary issues at final hearing

H’s application for relief from sanctions: refused, consideration given to Tarn Insurance Services Limited (in Administration) v Kirby [2009] EWCA Civ 19 and Williams v Williams [2023] EWHC 3098. Recorder Day determined that as per the case management order H’s evidence should be limited to oral evidence in chief that identified and verified of evidentiary documents within the bundle, and that there should be no re-examination, save with the judge’s express permission; [51]–[56]

Intervenors’ application for relief from sanctions: allowed, the judge identified the tensions between the Supreme Court in Barton v Wright Hassall LLP [2018] 1 WLR 1119 and subsequent guidance published by the Civil Justice Council in November 2021 as to the ‘leeway’ properly to be afforded to litigants-in-person. The intervenors’ late witness statements were admitted and two gave evidence; [57]–[60]

Relevant law

The relevant law is set out clearly, succinctly and in a very easy to read way in [66]–[74] as is the duty of full and frank disclosure in [75]–[81]. The case law relevant to business valuations is set out in [82]–[85]. There is a reminder of the proper treatment of liabilities in [86]. Finally, in [87]–[88] the Recorder sets out the current case law on litigation conduct and costs. Supervisors should make this judgment mandatory reading for pupils/trainees.

Outcome

W retained all the copper-bottomed assets. H’s non-disclosure led to the Recorder finding that H had undisclosed assets/resources of undetermined value which justified W having the benefit of the assets with greater liquidity; [172].

W retained 100% of the equity in the FMH, with an order for sale in 18 months if H not released from the mortgage.

No lump sum was payable to W by H – the inference drawn that H had undisclosed assets/resources of undetermined value was not enough to satisfy the judge that W’s entitlement stretched to a lump sum in addition to 100% of the equity in the FMH; [176].

Costs

Unusually costs formed part of the substantive judgment, primarily as the argument was based on OG v AG [2020] EWFC 52 litigation conduct. The judge was satisfied that H must be required to pay a large contribution towards the applicant’s costs, in recognition of the extent to which those costs had been increased by his conduct.

Respondent H was ordered to pay a contribution of £40,000 towards W’s costs because of his litigation conduct; [192]

Intervenors, no order for costs; [198].