Tsvetkov v Khayrova [2023] – Shaping Law & Practice in International Divorce

A team at Family Law in Partnership led by director, David Allison, represented the wife on a long running and complex case involving the financial entitlements on divorce of a British/Russian couple.

The judgement handed down by Mr Justice Peel is likely to become one of the leading authorities on the relevance of conduct in financial remedy proceedings, and the latest in the recent line of authorities dealing with anonymity in financial remedy proceedings. The judgement can be found here.

Describing the lifestyle and assets enjoyed by the couple, the judge, Mr Justice Peel, said:

“There is no real dispute that the parties enjoyed what most people would describe as a fabulous standard of living; they deployed their wealth to acquire properties in multiple jurisdictions, they acquired high end cars and expensive jewellery and art, they flew regularly in private jets, and enjoyed luxurious holidays”.

Yet it is the legal issues that arose rather than the facts of the case which will shape law and practice in this area.

The Relevance of Conduct in Financial Remedy Proceedings:

In financial remedy proceedings the court will take into account conduct “such that it would in the opinion of the court be inequitable to disregard it” – s25(2)(g) Matrimonial Causes Act 1973.   Conduct in this respect requires considerably more than poor behaviour by one or other of the parties.  In OG v AG [2020] EWFC 52 the court set out four circumstances where conduct is relevant as follows:

1. Gross and obvious personal misconduct meted out by one party to the other. Such conduct is very rare and will only be reflected where there is a financial consequence to its impact;
2. Add-backs. This arises where one party has wantonly and recklessly dissipated assets which would have otherwise been available for division;
3. Litigation misconduct. Such conduct may result in a costs order but does not usually affect the substantive disposition; and
4. The evidential technique of drawing adverse inferences as to the existence of assets from a party’s conduct in failing to give full and frank disclosure.

In Tsvetkov v Khayrova Peel J referred to these four circumstances, and he went on to say that a party asserting conduct must prove:

1. The fact/s relied upon;
2. That the facts meet the high or exceptional threshold; and
3. An identifiable financial impact.

In Tsvetkov v Khayrova the husband had alleged conduct against the wife but he failed to meet the high bar required for conduct to be relevant, except in relation to litigation conduct.  As such, the judge divided the assets equally between the parties. The judge set out in some detail the procedural requirements for conduct to be determined which we will examine in a future FLiP blog on this case.

Anonymity of Financial Remedy Proceedings:

The question of whether financial remedy proceedings should remain anonymous is a hot topic amongst family lawyers, and one where there is a divergence of opinion amongst the family law judiciary. Peel J quoted heavily from Xanthopoulos v Rakshina [2022] EWFC 30, a recent international financial remedy case which was also led by Director David Allison, and which covered this point in detail. A summary of the case can be found here. Peel J also referred to the leading authority of Clibbery v Allen, a case which was led by FLiP Director Elizabeth Hicks, demonstrating the depth of FLiP’s expertise in this developing area of family law.

The issue that Tsvetkov v Khayrova deals with is not whether the starting point is that proceedings can be reported or not (as was the case in Xanthopoulos v Rakshina), but whether, assuming the starting point is that financial remedy proceedings should remain anonymous, exceptions exist which will lead to the judge authorising publication.  Peel J said that there are four such exceptions, notably:

1. Where there has been litigation conduct;
2. Where anonymisation would be effectively impossible because of the prominence of one or both of the parties;
3. Where material is already in the public domain; and
4. Where one or both of the parties court publicity.

In Tsvetkov v Khayrova Peel J said that all four exceptions applied to a lesser or greater extent.  Accordingly, he decided to name the parties in his judgement.

David is a director at Family Law in Partnership. He acts for a wide range of individuals including business owners, entrepreneurs, bankers, other lawyers and their partners. The focus of his practice is financial claims on divorce, particularly those with an international element, but he is also well known for his expertise in the legal issues affecting cohabitants, same sex couples and civil partners.