The recent case of HKW v CRH sheds light on how courts treat cohabitation, marital assets, and post-separation gifts in financial remedy proceedings. By examining pre-marital cohabitation through the lens of the Kimber factors and scrutinising financial gifts made during and after the marriage, the court ensured a fair division of assets while emphasising the importance of transparency in financial matters.
Cohabitation and the Kimber Factors
One of the central issues in the case was whether the parties' cohabitation (1993 to 2007) should be included in the relationship’s overall duration. The husband argued that cohabitation began much later, in 2004, seeking to limit the classification of assets as matrimonial.
To resolve this, the court applied the Kimber factors (Kimber v Kimber [2000] 1 FLR 383), which assess whether pre-marital cohabitation should count as part of the marriage. Key evidence included shared property investments, photographs of family milestones, and the presence of children during this period. Judge Rose found that cohabitation indeed began in 1993, significantly extending the marital timeline and classifying a greater portion of the assets as matrimonial.
The Role of Gifts in Financial Remedy
Gifts also played a pivotal role in the case, particularly in the context of post-separation financial transfers. The husband made significant payments to the couple’s adult children, claiming these were either loans or legitimate gifts. Key points from the judgment include:
- Scrutiny of Post-Separation Gifts:
The court closely examined transfers such as €80,000 to ARC and £26,689 to ARD. These transactions were deemed deliberate attempts to diminish the marital pot rather than genuine acts of generosity. - Addback for Dissipation:
When the court identifies that financial transfers unfairly reduce the assets available for division, it can “add back” these amounts into the marital pot. Here, the disputed gifts were added back, ensuring fairness in asset division. - Intent and Documentation:
The lack of clear documentation supporting the husband’s claims weakened his case. The court emphasised that financial transparency is essential, particularly when large sums are transferred to third parties.
Property and Pension Disputes
Other contentious issues included the treatment of properties and pensions:
- Properties: Assets, initially purchased by the wife under a right-to-buy scheme, were later sold, and the proceeds reinvested jointly. The court classified these as matrimonial assets due to their integration into the family’s finances.
- Pensions: Despite the husband’s argument to exclude part of his pension as non-matrimonial, the court included its entirety, reflecting its accrual during the extended marital timeline.
Key Takeaways for Practitioners
- Cohabitation Evidence Matters:
Clients should prepare detailed evidence to establish the nature and timeline of their relationships, particularly for disputes involving the Kimber factors. - Gifts Require Transparency:
Any financial gifts or transfers made during or after the marriage must be clearly documented. Otherwise, they risk being treated as dissipation and added back into the marital pot. - Fairness Prevails Over Categorisation:
The court’s approach to properties, pensions, and gifts underscores its focus on achieving fairness rather than strict adherence to labels like matrimonial or non-matrimonial.
Conclusion
HKW v CRH highlights the court’s commitment to fairness and transparency in financial remedy cases. From scrutinising cohabitation through the Kimber factors to addressing dissipation through post-separation gifts, the judgment emphasises the importance of a full and honest disclosure of assets. For family lawyers, this case serves as a valuable guide for managing complex financial disputes involving cohabitation, gifts, and asset classification.
