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Judgment Analysis: HKW v CRH [2024] EWFC 358 (B)
Cohabitation, marital assets, and post-separation gifts in financial remedy proceedings.
Case Background
The parties married in 2007. The wife (W) asserted that they began cohabiting in 1993, while the husband (H) contended that cohabitation started in 2004. Both parties had children from previous marriages and two children together (‘ARC’ and ‘ARD’).
W earned approximately £22,000 per annum, whereas H, a contractor, had a variable income but was assessed at £82,000 per annum for the proceedings. Four properties were relevant to the case, including “No. 11”, which W purchased in 1996 under a right-to-buy scheme and subsequently rented out. The rental income was received by W.
Issues in Dispute
- Cohabitation and the Kimber Factors
One of the central issues was whether the period of pre-marital cohabitation from 1993 to 2007 should be included in the relationship’s duration. H argued that cohabitation began much later, in 2004, seeking to limit the classification of assets as matrimonial.
The court applied the Kimber factors from Kimber v Kimber [2000] 1 FLR 383, which assess whether pre-marital cohabitation should count as part of the marriage. The factors include habitual living together, sharing daily life, and mingling finances.
Findings:
- DDJ Rose found that cohabitation began in 1993, significantly extending the marital timeline.
- The court classified a greater portion of the assets as matrimonial, ensuring a more equitable division.
- Property Disputes
No. 11 was a key asset in dispute. H argued it should be classified as non-matrimonial property because he allegedly funded its purchase and later bought out W’s interest at market value.
Findings:
- The court held that No. 11 was woven into the fabric of the relationship and classified it as matrimonial property.
- The court rejected H’s attempts to ringfence this asset.
- Post-Separation Gifts and Financial Transfers
The court examined several post-separation financial transfers made by H to the couple’s adult children:
- €80,000 to ARC in December 2022, purportedly a loan.
- £26,000 to ARD between February and May 2024, purportedly for home renovations.
- Transfer of a Mercedes-Benz van and Volkswagen Golf to ARC.
H claimed these transfers were legitimate gifts or loans. However, W argued they were attempts to diminish the marital pot.
Findings:
- After hearing evidence, the court found that the transfers to ARC and ARD were made with the sole intention of defeating W’s financial remedy claim.
- These transactions met the requirements for addback under Section 37 of the Matrimonial Causes Act 1973, meaning the amounts were added back into the marital pot for division.
- The lack of documentation supporting H’s claims weakened his position.
Costs and Conduct
The court determined that H’s conduct was unreasonable. Judge DDJ Rose described H’s behaviour as controlling, citing F v M [2021] EWFC 4 (Fam), and awarded W costs due to the delays, deceitful conduct, and unreasonable behaviour demonstrated by H throughout the proceedings.
Conclusion
The judgment in HKW v CRH highlights the court’s commitment to fairness and transparency in financial remedy cases. A key takeaway being that any financial gifts or transfers made during or after the marriage must be clearly documented. Without proper documentation, such transfers risk being treated as dissipation and added back into the marital pot. From scrutinising cohabitation, through the Kimber factors to addressing dissipation through post-separation gifts, the court emphasised the importance of full and honest disclosure of assets.
