Lazaros Panagiotis Xanthopoulos v Alla Aleksandrovna Rakshina

In financial-relief proceedings after an overseas divorce, the court may make a needs-based or needs-light award rather than share assets, particularly where a nuptial agreement, the parties’ connections, family-derived wealth and litigation conduct affect fairness. A nuptial agreement is not automatically disregarded because there was no independent legal advice or financial disclosure. Its weight is assessed against the circumstances at breakdown and the parties’ needs at trial. Housing needs may be met by a life interest, but an international family should not be confined to one country without sufficient justification. Irregular future dividends are financial resources relevant to maintenance. Litigation misconduct may reduce an award and outstanding costs orders may be reflected in it. An appeal court will not retry sustainable findings of fact or admit evidence available at trial.

Following their divorce in Russia, the husband obtained permission to seek financial relief in England and Wales under Part III of the Matrimonial and Family Proceedings Act 1984. Sir Jonathan Cohen ordered the wife to fund a life interest in a property in Greece, furnishings and four years of maintenance, while outstanding costs orders against the husband were not to be enforced without permission: [2023] EWFC 50.

The husband appealed, arguing that the award was too low, left him in real need and debt, and failed to account for the wife’s wealth, housing needs, the post-nuptial agreement, his mental health and alleged fresh evidence. The central issues were whether the trial should have proceeded in his absence and whether the order fell outside the judge’s broad discretion.

Disposition. The appeal was allowed in part. Lady Justice King gave the leading judgment, with Lord Justice Moylan and Lord Justice Bean agreeing.

1. Procedural and appellate issues. The judge was entitled to proceed with the trial in the husband’s absence. The only credible medical evidence established that he was fit to participate, and the judge had provided safeguards under the Family Procedure Rules 2010. The husband had not appealed the refusal to adjourn, had not renewed the application on the first day of trial and had failed to attend or explain his absence. The judge was entitled to assess the evidence critically and draw only proper and reasonable inferences. The husband’s late Birch Legal report was not fresh evidence: it existed before trial, was available to him and had not been disclosed despite several orders. It therefore failed the test in Ladd v Marshall [1954] 1 WLR 1489.
2. Part III and the post-nuptial agreement. The judge was entitled to treat the case as a needs-based, needs-light case. The Part III connection was a relevant factor but was eclipsed by the post-nuptial agreement, the husband’s litigation conduct and the modest matrimonial element of the assets. A needs-light award is not confined to avoiding a predicament of real need. The absence of independent legal advice or financial disclosure did not require the agreement to be disregarded where the parties understood it and entered it freely. Its effect had to be assessed at trial against the backdrop of the provision agreed. A life interest in a property owned by the wife was a permissible way to meet housing needs.
3. Quantum. The judge erred by effectively requiring the husband to live in Greece. The appropriate housing provision was £1 million for a property in either England or Greece, owned by the wife but subject to the husband’s life interest. The furnishing fund was increased to £75,000 and the health and relocation fund to £25,000. Four years of maintenance remained appropriate, but the rate was increased to £115,000 per annum. Future irregular dividends were financial resources likely to be available to the wife under section 25(2)(a) of the Matrimonial Causes Act 1973 and should inform maintenance rather than merely replenish her capital.
4. Conduct and costs. The husband’s litigation misconduct was properly taken into account under section 25(2)(g). The unpaid costs orders caused by that conduct could be reflected in the award. The wife was not responsible for the husband’s approximately £900,000 overspend to his former solicitors. The court expressed no general view on the treatment of overspend above litigation-funding budgets in cases where a capital award would otherwise be appropriate.

• Court of Appeal (Civil Division): In [2024] EWCA Civ 84, the appeal was allowed in limited respects concerning housing, furnishing and health or relocation provision, and the quantum of maintenance. The remaining grounds were dismissed.
• Family Court: Sir Jonathan Cohen made the financial remedies order on 17 May 2023 following his judgment dated 4 April 2023, reported at [2023] EWFC 50.