13 March 2025

DF v YB [2025] EWFC 46 (B): A £1.3 Million Litigation Bill and Lessons on Efficiency, Conduct, and Transparency

At first glance, DF v YB [2025] EWFC 46 (B) appears to be a straightforward financial remedy case—a 19-year marriage, an agreed equal division of assets, and no significant conduct arguments. But beneath the surface, this case highlights several key issues for family law practitioners:

  • The staggering cost of litigation—a combined £1.3 million in legal fees.
  • The consequences of inefficient case management, particularly non-compliance with the Efficiency Statement.
  • The continued judicial push for greater transparency, with the judgment being published despite objections.
  1. The £1.3 Million Legal Bill: A Case That Should Have Settled Earlier

The headline figure? £1.3 million spent on legal fees.

  • The wife (W) spent £566,289 on the financial remedy proceedings and an additional £220,148 on private law children proceedings.
  • The husband (H) spent £378,611 on the financial remedy case and £115,703 on the children proceedings.

This raises an important question: Why did a case with no major disputes over legal principles end up costing so much?

Both parties agreed from the outset that:
The assets should be divided equally.
There was no need for a maintenance claim—it would be a clean break case.
The assets were sufficient to meet both parties’ needs.

The disagreement? How to calculate the final asset pool and who should pay whom.

  1. The Efficiency Statement Breach: Non-Compliance and the Court’s Frustration

The judgment makes clear that the parties failed to properly comply with the Efficiency Statement (11 January 2022), particularly regarding the Chronology.

  • The applicant (W) failed to produce a neutral composite Chronology in line with paragraph 21(c) of the Efficiency Statement.
  • Instead, the court was presented with two competing versions, which wasted time and resources.
  • Recorder Allen KC explicitly referenced Peel J’s warning in GA v EL [2024] that such breaches are "wholly unacceptable."

Why does this matter? Because courts are increasingly focused on efficient case management. Non-compliance with procedural rules can lead to judicial criticism, wasted costs, and delays.

  1. Conduct: When Bad Behaviour Doesn’t Affect the Award

W presented evidence that H had engaged in abusive and offensive conduct post-separation, including sending misogynistic and threatening messages.

  • H’s own barrister admitted his behaviour was “wholly unacceptable.”
  • W’s team tried to use this to frame the case, even though they never formally pleaded conduct as a factor.

But did it impact the financial award? No.

The court ruled that bad behaviour alone is not enough to adjust the financial split unless:
It is of a "highly exceptional nature" (N v J [2024] EWFC 184).
There is an identifiable financial consequence (Tsvetkov v Khayrova [2024] 1 FLR 937).

Since W could not prove a financial link, the court ignored H’s misconduct in the final asset division.

  1. Transparency: Why This Judgment Was Published Despite Objections

H objected to publication, arguing that:
There were no novel legal points in the judgment.
There was no wider public interest in the case.
The children’s privacy could be affected.

W did not oppose publication, provided that the judgment was fully anonymised.

The Court’s Decision: Publish It.

Recorder Allen KC applied the balancing test from Re S (A Child) [2005] 1 AC 593, weighing:

The public interest in open justice (ECHR Article 10).

The privacy rights of the family (ECHR Article 8).

Ultimately, the court ruled that:

  • There is a presumption in favour of publication, even where no legal precedent is set.
  • Public accountability matters in financial remedy cases, particularly where litigation conduct is an issue.
  • The judgment should be fully anonymised, but the public has a right to see how financial disputes are resolved.

This aligns with the 2024 Transparency Practice Guidance, which encourages greater publication of financial remedy judgments.

  1. Final Financial Outcome: The Court’s Decision

After lengthy disputes over asset valuation, tax liabilities, and loan repayments, the court ruled:

  • H to pay W a lump sum of £510,000 (far lower than her £780,000 claim but higher than his £60,000 offer).
  • The couple’s £13.8 million in assets to be split equally.
  • A contested loan to be subject to “Wells sharing”, meaning W would get a share only if it was repaid.
  • H’s tax liabilities were NOT deducted from the asset pool, as the court was unconvinced he would actually pay them.
  • Both parents to contribute £200,000 each to the children’s education fund.
  • Child maintenance of £7,500 per year per child, replacing a previous CMS order.

Final Thoughts: A Case Study in High-Conflict Divorce Litigation

At its core, DF v YB [2025] EWFC 46 (B) is a cautionary tale about the cost of financial disputes, inefficiency in litigation, and the limits of conduct arguments.

For family lawyers, the key lessons are:

  • Early settlement is crucial—protracted disputes over asset valuation can be ruinously expensive.
  • Procedural compliance matters—courts expect efficiency, and failure to comply can waste costs and time.
  • Conduct rarely affects financial awards—without a financial impact, even extreme behaviour may be ignored.
  • Transparency is here to stay—clients must expect their financial disputes to be public, unless they have strong reasons to argue otherwise.

With £1.3 million spent in legal fees, this case proves that even “straightforward” financial disputes can become complex, high-stakes battles. Practitioners should take note—and advise their clients accordingly.

11 March 2025

Costs, Anonymity, and Open Justice in Family Law: Lessons from Culligan v Culligan [2025] EWFC 26

The follow-up decision in Culligan v Culligan [2025] EWFC 26 deals with two contentious post-judgment issues: who should pay the costs of the financial remedy proceedings and whether the judgment should be anonymised. With £1.3 million in legal fees, disputed disclosure, and an argument over the principle of open justice, the case is a valuable study in how courts approach litigation misconduct and the growing shift away from anonymisation in family proceedings.

For family law practitioners, this decision serves as a clear warning about the risks of aggressive litigation tactics and a reminder that financial remedy judgments are not guaranteed anonymity.

The Costs Battle: Who Pays for the Litigation?

The wife sought a costs order against the husband, citing his poor litigation conduct, particularly:

  • Repeated disclosure failures (including the non-disclosure of Bitcoin assets and tax liabilities).
  • Delays in responding to court orders and failing to engage with the disclosure process.
  • Refusal to negotiate reasonably, including rejecting mediation attempts.

The husband, however, fought back, claiming he was not the only one guilty of litigation misconduct. He argued that:

  • The wife had also failed to disclose key financial arrangements, particularly regarding the sale of her football club and consultancy agreement.
  • She had structured financial transactions in a way that hid assets, misrepresenting £3 million as post-separation income rather than part of the settlement.
  • She pursued baseless conduct allegations that added to the length and cost of the trial.

The Court’s Approach: Misconduct Cuts Both Ways

Mr Justice MacDonald ruled that both parties were at fault, but the wife’s litigation misconduct was more significant. The court ordered her to pay £84,540 towards the husband’s legal costs, finding that:

🔹 Her financial structuring artificially reduced the settlement pot (particularly regarding her football club sale).
🔹 She exaggerated claims of coercive control and financial misconduct, which the court found had no merit.
🔹 Her conduct made settlement harder to achieve, prolonging litigation unnecessarily.

🔹 However, the judge also acknowledged that the husband had failed to comply with disclosure requirements, leading to additional costs—but these were deemed delays rather than deliberate concealment.

The Anonymity Debate: Open Justice Wins

The wife sought anonymisation of the judgment, arguing that:

  • The case was heard in private, and there was no significant public interest in revealing the parties' names.
  • The judgment included details of financial and business dealings, which should remain confidential.
  • Publication would cause unnecessary reputational harm.

The husband opposed anonymisation, arguing that:

  • The general rule is open justice—family law litigants are not entitled to special treatment.
  • The wife’s conduct findings should be public, as the case involved significant misrepresentation of assets.
  • The financial details were not commercially sensitive, as key business transactions had already been completed.

The Court’s Decision: No Anonymisation

Mr Justice MacDonald ruled that the judgment should be published in full, without anonymisation, applying the principles from Xanthopoulos v Rakshina [2022] EWFC 30 and Re PP (A Child) [2023] EWHC 330 (Fam).

  • The default position is open justice—litigants are not automatically entitled to anonymity.
  • There was a legitimate public interest in this case, particularly due to the findings on litigation conduct and financial structuring.
  • The wife’s embarrassment was not a sufficient reason to override the principle of open justice.

Practical Lessons for Family Law Practitioners

  1. Costs Orders Are Becoming More Common in Financial Remedy Cases
  • While the general rule in FPR 2010 r.28.3 is no costs orders, courts are increasingly penalising litigation misconduct.
  • Parties must engage reasonably with disclosure and negotiation—or risk costs penalties.
  1. Anonymisation Is No Longer the Norm
  • Family lawyers should warn clients that judgments may be published with full names.
  • If anonymity is sought, it must be justified with clear evidence of harm (not just reputational concerns).
  1. Non-Disclosure and Creative Financial Arrangements Will Be Scrutinised
  • Courts are willing to look beyond surface-level transactions to determine whether assets are being hidden or misrepresented.
  • Clients should be advised to be fully transparent, as delayed or incomplete disclosure can result in adverse costs orders.

Final Thoughts: The Shift Towards Accountability in Family Law

Culligan v Culligan [2025] EWFC 26 reinforces a shift towards greater accountability in financial remedy proceedings. Courts are:

  1. More willing to make costs orders where one party unreasonably prolongs litigation.
  2. Less inclined to grant anonymity, ensuring that bad litigation conduct is exposed.
  3. Taking a robust approach to non-disclosure, scrutinising creative financial structuring.

For family law practitioners, this case is a clear signal that the courts expect transparency, cooperation, and reasonable litigation conduct. If a client drags out proceedings, makes exaggerated allegations, or misrepresents financial information, they risk both financial penalties and public exposure.

10 March 2025

From Bitcoin to Football Clubs: The High-Stakes Divorce of Culligan v Culligan [2025] EWFC 1

The financial remedy case of Culligan v Culligan [2025] EWFC 1 is a textbook example of a high-net-worth divorce gone awry. With £27 million at stake, a disputed Bitcoin fortune, a women’s football club sale, and complex tax liabilities, the case raises key issues for family lawyers dealing with long marriages, illiquid assets, and corporate shareholdings.

Here’s what family law practitioners need to know about this decision and the practical lessons it offers.

The Case: A Wealthy but Messy Divorce

Diane Liza Rosemin-Culligan (the wife) and Anthony David Culligan (the husband) had a marriage spanning 40 years. While both agreed that a broadly equal division of assets was appropriate, the fight was over how that division should be structured.

The key issues before Mr Justice MacDonald included:

  1. The valuation and division of the husband’s shares in Colendi, a fintech company.
  2. Whether the wife’s consultancy agreement—paying her £750,000 a year—was actually deferred consideration for the sale of her football club.
  3. Who should bear the significant tax liabilities, including those arising from the husband's U.S. citizenship.
  4. The treatment of the Bitcoin fortune, which had been used to fund both parties’ business ventures.
  5. Allegations of litigation misconduct and non-disclosure by both parties.

Despite the eye-watering sums involved, this case illustrates familiar legal issues: the treatment of illiquid assets, the challenge of attributing hidden income, and the impact of conduct on financial remedy claims.

Key Legal Issues & Lessons for Practitioners

  1. Valuation of Illiquid Assets – The Colendi Shares

A major dispute centred around the husband’s 3.6% shareholding in Colendi, a fintech company that had recently acquired his previous business, SETL Limited.

  • The single joint expert valued the husband’s Colendi shares at £19 million.
  • However, the shares were held via a nominee company, meaning they were subject to transfer restrictions that complicated their division.
  • The court had to determine whether a direct share transfer to the wife was possible—or whether a contingent lump sum should be ordered instead.

When dealing with business assets, transfer restrictions and nominee structures can limit enforceability. Ensure early expert valuation and consider alternative forms of division (e.g., deferred lump sums).

  1. Was the Wife’s £750,000 Salary a “Disguised Asset” in the Football Club Sale?

The wife had built and sold ELSA Sports Services Limited, which owned the London City Lionesses football club. She agreed to a £6 million sale price, but:

  • She also entered into a consultancy agreement, earning her £750,000 per year for four years.
  • The husband argued that this was not genuine post-marital income but deferred consideration for the club’s sale, designed to shield the money from the divorce settlement.
  • The court found that while the consultancy payments were partly legitimate, they should be treated as part of the matrimonial assets.

Courts look beyond the surface of financial transactions—if a deal artificially defers income, it may be reclassified as an asset for division.

  1. The Tax Nightmare of the “Accidental American”

The husband was an “accidental American”—born in the U.S. but with no real ties there. However, this triggered massive U.S. tax liabilities, including:

  • Capital gains tax on Bitcoin sales.
  • Tax on U.K. property disposals.
  • A potential U.S. tax charge on any asset transfers in the divorce.

The court accepted expert evidence that the husband’s tax liabilities ranged from £1.4 million to £1.7 million. The wife sought to avoid any responsibility for these debts, arguing that she should not suffer from her husband’s citizenship status.

The court ruled that:

  • The husband must bear his own U.S. tax burden.
  • The wife should not be exposed to unpredictable foreign tax risks.

International tax exposure can drastically affect financial remedy settlements. In cases involving U.S. citizens, specialist tax advice is essential.

  1. Bitcoin Fortunes & Hidden Assets

The case revealed a Bitcoin goldmine:

  • The husband had purchased over 1,000 Bitcoin in 2012 for £10,000, which skyrocketed in value to £20 million in 2017.
  • The funds had been used throughout the marriage to finance both the husband’s fintech ventures and the wife’s football club.
  • The wife accused the husband of hiding additional cryptocurrency wallets, which he later disclosed contained £371,000 in undisclosed Bitcoin.

The court ruled that while the missing Bitcoin was not enough to justify an inference of wider concealment, the husband’s failure to disclose it earlier was litigation misconduct.

Cryptocurrency assets are notoriously difficult to track, making full disclosure essential. Consider early forensic tracing of crypto transactions.

  1. Litigation Misconduct and the Cost of Delay

Both parties accused each other of bad litigation conduct:

  • The husband was penalised for delayed disclosure of assets, including the Bitcoin wallets and Colendi shareholding structure.
  • The wife was criticised for a lack of transparency in the football club sale, failing to disclose documents until compelled by court order.

While neither party’s conduct met the high threshold for reducing their financial award under s.25(1)(g) MCA 1973, the court did impose costs penalties on the husband for disclosure failures.

Non-disclosure and litigation misconduct won’t necessarily affect the final award, but they will increase costs exposure. Ensure early compliance with disclosure obligations to avoid judicial criticism.

The Court’s Decision: A “Wells Sharing” Approach

Given the illiquid nature of the Colendi shares, the court adopted a Wells sharing approach (Wells v Wells [2002] EWCA Civ 476), ensuring that both parties shared the risks and rewards of future value fluctuations.

The final order included:
The wife retaining the £7 million former matrimonial home.
The husband keeping his Colendi shares but paying the wife 15% of any future proceeds.
A lump sum payment to equalise liquid assets.
Each party keeping their own businesses and pensions.
The husband bearing his own U.S. tax liabilities.

Final Thoughts: Key Takeaways for Family Lawyers

  1. Illiquid business assets require creative structuring – Courts are increasingly using Wells sharing to divide risky corporate holdings.
  2. Disguised income can be reclassified as a matrimonial asset – Consultancy agreements, bonuses, or deferred deals should be scrutinised.
  3. International tax liabilities can derail settlements – Clients with U.S. citizenship need specialist tax advice early.
  4. Cryptocurrency must be fully disclosed – Courts take non-disclosure of Bitcoin seriously.
  5. Litigation misconduct leads to costs penalties – Delays and strategic non-disclosure can backfire badly.

Culligan v Culligan is a case study in complex asset division—and a reminder that transparency and careful planning are key in high-net-worth divorces.

23 July 2024

Litigation Misconduct and the Court’s Quasi Inquisitorial approach: VS v OP [2024] EWFC 190

Background: In the case of VS v OP, the court was confronted with severe litigation misconduct, non-disclosure, and breaches of court orders by one of the parties. The husband, appearing as a litigant in person, faced numerous challenges, including the wife’s persistent failure to comply with disclosure requirements and non-attendance at hearings. This case highlights the court's quasi-inquisitorial approach in financial remedy proceedings.

Key Issues:

  1. Litigation Misconduct and Non-Disclosure:
    • The wife repeatedly failed to comply with court orders for disclosure.
    • The husband, unable to afford representation, struggled to meet procedural requirements, including the preparation of a proper hearing bundle.
  2. Court's Quasi-Inquisitorial Role:
    • The court had to take an active role in investigating the issues due to the lack of compliance and full disclosure by the parties.
    • The judge emphasised the need for fair outcomes, considering all relevant factors under s.25 of the Matrimonial Causes Act 1973, despite the procedural challenges.

Court's Findings:

  1. Non-Disclosure and Inferences:
    • Due to the wife's non-disclosure, the court had to draw reasonable inferences about the parties’ financial positions.
    • The court avoided speculation and sought to base its findings on the available evidence, ensuring the inferences were properly drawn and justified.
  2. Assets and Liabilities:
    • The court assessed the visible assets and liabilities of both parties, considering the husband's disclosure and the limited information from the wife.
    • Despite the wife's non-attendance and lack of disclosure, the court made findings on the net equity of properties, investments, and liabilities.
  3. Procedural Challenges:
    • The absence of a proper bundle and the fragmented nature of the documentation made it difficult for the court to get a clear picture of the case.
    • The judge decided against adjourning the final hearing, given the low asset nature of the case and the improbability of the wife complying with future orders.

Conclusion: The judgment in VS v OP underscores the court's duty to ensure a fair resolution in financial remedy cases, even when faced with significant procedural non-compliance and misconduct by the parties. The quasi-inquisitorial approach adopted by the court aims to achieve justice by actively investigating and drawing reasonable inferences from the available evidence, ensuring that the parties’ conduct does not unduly prejudice the outcome.

The case illustrates the complexities and judicial responsibilities in managing financial remedy proceedings, particularly when one party engages in litigation misconduct and non-disclosure. The court’s ability to adapt and ensure a fair outcome, despite these challenges, is critical in maintaining the integrity of the legal process.

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