Dmitry Tsvetkov v Elsina Khayrova
[2023] EWFC 130
DH v RH (No3) (Final Hearing)
18 April 2024
[2024] EWFC 79
Family Court
A couple divorced after a long marriage, and fought over money. The wife said her husband hid millions, but the judge didn't believe her. The wife spent way too much on lawyers, so the judge made her pay some of that back. In the end, they split most of their money roughly in half, to start fresh.
Key Facts
- •High-value financial remedy proceedings following a 29-year marriage.
- •Significant dispute over undisclosed assets, primarily cryptocurrency.
- •Wife spent £1.9M in legal fees, husband spent £987,000.
- •Wife alleged non-disclosure related to Coinbase shares, Gemini, and XAPO accounts.
- •Husband’s investments included a $75,000 investment in Topanga Canyon Holdings LLC (holding Coinbase shares), which significantly increased in value.
- •Wife initiated litigation in the US concerning Wyoming properties, resulting in costs against her.
- •Significant allegations of misconduct by both parties, including non-disclosure, litigation conduct, and asset dissipation.
Legal Principles
Section 25 of the Matrimonial Causes Act 1973: Court considers all circumstances, welfare of children paramount, and various factors including income, needs, standard of living, contributions, and conduct.
Matrimonial Causes Act 1973, s.25
Add-back jurisdiction: Assets wantonly and recklessly dissipated can be added back to the asset schedule. This includes excessive legal costs.
Martin v Martin [1976] Fam 335, M v M [1995] 2 FCR 321, OG v AG [2020] EWFC 52, Rothschild v De Souza [2020] EWCA Civ 1215
Litigation conduct: Generally reflected in costs orders, but in exceptional cases, can be considered when determining the distribution of assets. Fairness is paramount.
Rothschild v De Souza [2020] EWCA Civ 1215
Non-disclosure: Burden of proof on the party alleging non-disclosure. Findings must have a sound evidential foundation. Court can draw adverse inferences but should avoid speculation.
AF v SF [2019] EWHC 1224 (Fam), Moher v Moher [2019] EWCA 1482, Crowther v Crowther and Others [2021] EWFC 88
Equal sharing principle in financial remedy cases: Equality is the starting point, departing only with good reason.
Miller v Miller; McFarlane v McFarlane [2006] UKHL 24
Outcomes
Matrimonial assets were determined to be those set out in the husband's ES2, rejecting the wife's claim of significantly undisclosed assets.
Insufficient evidence to support the wife's allegations of undisclosed cryptocurrency assets or a hidden balance sheet. Expert evidence supported the husband's disclosure.
£800,000 added back to the wife's side of the asset schedule due to her reckless spending on legal fees.
Wife's legal costs were deemed excessive and disproportionate, despite initial legitimate concerns due to late disclosure by the husband. An add-back was considered fairer than solely a costs order.
Assets were distributed approximately equally (52% to wife, 48% to husband), with specific provisions for properties, investments, pensions, and a clean break.
Court considered the welfare of the children, ages of parties, duration of the marriage, contributions, needs, and earning capacities. Despite the wife's lack of alternative submissions, a fair and clean break was achieved.