TL v ML & Ors

Factual and Procedural Background

The case concerns the claim of the Plaintiff ("W") for ancillary relief against the Defendant ("H"), alongside an appeal by H against a maintenance pending suit order made by District Judge Maple on 7 July 2004. The parties have total assets approximating £560,000 before liabilities for costs, with significant legal costs incurred by both sides and related family members amounting to nearly £474,278. The Plaintiff asserts beneficial ownership claims over assets held by H's brother and offshore companies valued at around £2 million, which have been strongly resisted by H and his family.

The Plaintiff, originally from Serbia, emigrated with her family to Austria and later moved to London where she met and married the Defendant. They have two children and lived together in London until their separation in 2004. The Defendant is part of a wealthy Greek shipping family, with family assets held through various offshore companies and properties. The dispute includes the beneficial ownership of a London property ("24 AL") legally owned by H's brother but claimed by the Plaintiff to be beneficially owned by H. The case involves complex family and business asset arrangements, significant legal proceedings, and claims regarding the nature of ownership and resources available for ancillary relief.

The procedural history includes multiple hearings, appeals, and interlocutory applications, with the court addressing disputes over property ownership, maintenance pending suit, and the availability of family resources, including those held offshore or by third parties.

Legal Issues Presented

1. Whether the Plaintiff can establish beneficial ownership of the London property ("24 AL") despite legal title being held by the Defendant's brother.
2. The extent to which offshore companies and family assets constitute resources "as of right" of the Defendant for the purposes of ancillary relief.
3. The application and limits of the doctrine of "judicial encouragement" of third parties to provide financial support under Thomas v Thomas.
4. The appropriate calculation and award of ancillary relief, including capital and maintenance, based on the parties' assets and income.
5. The correctness of the maintenance pending suit order and the principles governing such awards, including costs allowances for litigation funding.

Arguments of the Parties

Appellant's Arguments (Defendant)

• Denies beneficial ownership claims over the disputed London property, asserting it is the sole property of his brother.
• Rejects Plaintiff's assertions that offshore companies (SMCFSA and GE) are beneficially owned by him, maintaining they belong to his parents or other family members.
• Challenges the basis of the Plaintiff's claims as speculative, hearsay, or wishful thinking unsupported by credible evidence.
• Contends that the maintenance pending suit award was excessive and that the costs allowance was not properly evidenced or reasoned.

Appellee's Arguments (Plaintiff)

• Claims that the London property ("24 AL") is beneficially owned by the Defendant despite legal title being in the brother's name, relying on the rule in Rochefoucauld v Boustead to admit parol evidence of an oral trust.
• Asserts that offshore companies and assets are beneficially owned by the Defendant and should be included in the calculation of resources.
• Argues for the court to "judicially encourage" the Defendant’s parents to provide financial support to meet ancillary relief claims, invoking the principles in Thomas v Thomas.
• Seeks a capital award and maintenance reflecting a high standard of living, including school fees and housing needs.
• Contends that the maintenance pending suit order, including costs allowance, should be upheld or increased.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully examined the factual and evidential basis of the Plaintiff's claim to beneficial ownership of the London property ("24 AL"). The court found that the Plaintiff was aware throughout that the property was legally owned by the Defendant's brother and rejected her late assertions of an oral express trust under Rochefoucauld v Boustead. The evidence was deemed unreliable and inconsistent, and the claim was dismissed accordingly.

Regarding offshore companies, the court found no credible evidence that the Defendant beneficially owned the companies SMCFSA or GE. Instead, these companies were held by the Defendant's parents or other family members, with the court expressing scepticism about the complex and ambiguous arrangements designed to perpetuate uncertainty. The court rejected Plaintiff's claims that expenditures from these companies evidenced ownership by the Defendant.

On the issue of judicial encouragement under Thomas v Thomas, the court distinguished between trustees, who have fiduciary duties to beneficiaries, and mere donors, who have no obligation to provide funds. The court emphasized that it would be improper to place undue pressure on the Defendant's parents, who are not trustees but donors, to provide financial support beyond what is "as of right" to the Defendant.

The court accepted the Defendant's offer of a lump sum of £500,000 capital and £81,420 annual income for maintenance, noting this represents a fair share of the Defendant's resources. The court declined to make any award extending beyond the Defendant's absolute entitlement, rejecting the Plaintiff's unrealistic budget claims and emphasizing fairness and reasonableness.

In relation to the maintenance pending suit appeal, the court found that the original award was largely appropriate except for the costs allowance. The court recognized the modern approach allowing costs allowances to fund litigation in exceptional cases where the applicant lacks assets and cannot secure other funding. The appeal was dismissed in respect of general maintenance but allowed in relation to the costs allowance, remitting arrears for calculation.

Holding and Implications

The court DISMISSED the Plaintiff's claim to beneficial ownership of the disputed London property and declared it to be the sole property of the Defendant's brother.

The court REJECTED the Plaintiff's claims that the Defendant beneficially owned offshore companies and related assets, finding these belonged to the Defendant's parents or other family members.

The court AWARDED ancillary relief to the Plaintiff consisting of a lump sum capital payment of £500,000 and annual income of £81,420, reflecting the Defendant's resources "as of right" and excluding reliance on third-party bounty beyond judicial encouragement.

The court UPHELD the maintenance pending suit award except for the costs allowance, which was increased to better reflect the Plaintiff's litigation funding needs, with arrears remitted for assessment.

Implications: The decision reinforces the principle that ancillary relief awards must be grounded in the parties' absolute rights and resources, limiting the court's ability to impose financial burdens on third parties who are mere donors rather than trustees. It also clarifies procedural and evidential expectations in disputes involving beneficial ownership claims against third parties in ancillary relief proceedings. No new precedent was established beyond the careful application of existing authorities.