Court of Appeal overturns Russian wife’s ‘top up’ award

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The Court of Appeal has allowed an appeal by a Russian husband against an award of £1.4 million made by the High Court in favour of a Russian wife, ‘topping up’ an award that she agreed to in divorce proceedings in Russia.

The husband and wife are Russian nationals. They were married in Moscow in 1997. The family moved to London in 2004, where the wife still lives. The marriage broke down and the husband issued divorce proceedings in Russia. A financial settlement was agreed and made into a consent order by the Russian court in 2009. Under the order the wife retained investments in her own name and a flat in Moscow, to a total value of $10 million, out of total assets of $13.3 million. It was agreed between the parties that the settlement was equivalent to £5.1 million, when converted to sterling using the exchange rate applicable at that time.

In 2014 the wife issued proceedings in the High Court in London under Part III of the Matrimonial and Family Proceedings Act 1984, seeking a ‘top up’ to the settlement. In 2016 Mrs Justice Roberts ordered the husband to pay to the wife a lump sum of £1,148,480, together with provision for the children of the marriage. The husband appealed.

The Court of Appeal allowed the husband’s appeal. Giving the leading judgment, Lady Justice King said that it was not appropriate for Mrs Justice Roberts to have made an order, for the following reasons:

a) The Russian provision was made by agreement, and the agreement was fair. Mrs Justice Roberts did not consider whether in those circumstances it was right for the court to go behind the public policy principle that there should, if at all possible, be finality in litigation and that agreements freely reached should be upheld.

b) There had been no change in the wife’s circumstances. The application could properly be regarded as a wife seeking a ‘second bite of the cherry’.

c) The wife had delayed making the application, and Mrs Justice Roberts had made the serious finding that the delay had in part been tactical.

d) It has previously been held that in order to sustain a case of need, at any rate if made after many years of separation, a wife must show not only that the need exists but that it has been generated by her relationship with her husband. Here, the husband had adequately provided for the wife in 2009 – the wife’s needs were generated by her decision to embark upon the litigation.

e) That it was hard, if not impossible, for the wife to advance a case that she had, or would, suffer injustice or hardship without the making of an order. Whilst such a finding would not inevitably have led to the dismissal of her application, the absence of hardship or injustice must still be an important consideration for a judge when considering whether in all the circumstances an order should be made.

f) That the financial benefit provided by the husband was adequate in 2009 and remained adequate. The order made by Mrs Justice Roberts in effect amounted to no more than a contribution by the husband to the wife’s costs of the litigation.

Accordingly, the husband’s appeal was allowed and the lump sum award to the wife was set aside.

Family Law Cafe welcomes this decision. Part III of the Matrimonial and Family Proceedings Act 1984, which gives the courts in this country the power to make financial awards in favour of spouses who have divorced abroad, was surely never intended to enable a wife in such a situation to have a ‘second bite of the cherry’, as this wife sought to do.

You can read the full report of the Court of Appeal’s decision here.

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Image of St. Basil’s Cathedral, Moscow by Rich Bowen, licensed under CC BY 2.0.