Thiry v Thiry

In financial remedy proceedings, the court may make a personal lump-sum order to restore assets improperly diverted or debts incurred through one spouse’s dealings with the other spouse’s property. The exercise is restorative rather than necessarily redistributive. Under section 25 of the Matrimonial Causes Act 1973, a magnetic factor may dominate the assessment but cannot dictate the result. The court may also make a contingent provision for future litigation costs where the evidence establishes a real risk that one party will use further litigation to frustrate or delay enforcement.

The wife applied for financial remedies following the breakdown of her marriage. The husband failed to comply with disclosure and other orders, was committed for contempt, and did not attend or participate in the final hearing. The principal issues were whether the husband should be ordered personally to meet an inter-company debt owed to the wife’s corporate structure, whether he should reimburse money invested in a jointly owned hotel venture, whether a contingent litigation fund should be provided, and the appropriate costs order.

1. The court proceeded in the husband’s absence because he had received notice of the issues, had repeatedly failed to comply with orders, and had been warned that final orders could be made without him.

2. The pre-nuptial agreement preserved the parties’ separate property but did not exclude an accounting needed to unscramble mingled property or to recover debts properly brought into account. The husband’s own statements and conduct established that he treated the companies and their liabilities as effectively under his personal control.

3. Section 25 of the Matrimonial Causes Act 1973 requires the court to consider all the circumstances and the listed factors. A magnetic factor may dominate the balancing exercise but cannot dictate the outcome. An unlisted consideration may also be magnetic. The case was appropriately approached as one of restoration rather than redistribution.

4. The husband was ordered to pay €17,586,028 representing the inter-company debt, approximately €1.3 million interest, and €2.6 million for the wife’s investment in Hotel Odette. Transfer of the wife’s hotel shares was ordered as part of the relief.

5. Following the approach in Al-Khatib v Masry and Minwalla v Minwalla, the court made a contingent £500,000 provision for future litigation costs. The provision addressed the real risk, arising from the husband’s conduct and threats, of further attritional litigation. It was payable only after the principal lump sum and costs orders had been met and was subject to later variation.

6. Summary assessment by the trial judge was permissible in a case of this kind. Costs of £456,000 were awarded against the husband on the indemnity basis.