division of assets

Division of assets in divorce proceedings influenced by husband’s litigation misconduct

The issue of jurisdiction is unavoidable in complex financial provision in divorce cases where the parties involved have international assets, and will always be considered carefully by the family court. This is made yet more complicated when one of the parties fails to engage with the proceedings.

In the recent case of XO v YO [2022] EWFC 114, the English court considered whether it had jurisdiction to determine an equitable claim over foreign property and whether adverse inferences could be drawn from a party’s failure to engage in proceedings.


The parties, who were both Nigerian citizens, married in 2002 (having met in 2000) and separated in spring 2018. The wife’s divorce application was issued in October 2020, and the parties were divorced in January 2022.

The parties had two children together (now aged 15 and 18). The family lived in Lagos, Nigeria, for most of the marriage but owned homes in Nigeria, England, and the USA and spent considerable time there.

Shortly after the parties separated, the wife moved to England with the children, and the parties have had little contact with one another since.

The husband was a successful businessman, having acquired ownership of a family business. The wife was primarily a homemaker, although she contended she had a role in the development of the family business.


This was a multifaceted case with various interim proceedings.

Prior to the financial remedy proceedings, the husband challenged the jurisdiction of the English court as the appropriate forum for the case and issued divorce proceedings in Nigeria. His challenge was rejected. The court decided the divorce and financial remedy proceedings should continue in England and Wales.

In December 2020, the court made several interim orders against the husband. These included ordering him to pay maintenance pending suit of £15,000 per calendar month, a legal services payment order of £60,000 and a school fees order. The husband failed to comply with these orders, disengaged with the proceedings (failing to answer the wife’s questionnaire, engage in valuations or attend hearings) and disinstructed his solicitors. A further legal services payment order of £120,000 was made, but again, the husband failed to comply.

As a result of the husband’s failure to comply with the interim orders, a conditional order for the sale of a jointly owned property in Florida was made in March 2022.

A limited company in Nigeria, AA Limited, which clearly the husband controlled, issued a claim in Florida in which it sought to assert itself as the 100% beneficial owner of the property and alleged it was held on constructive trust for the parties. AA Limited was joined to the financial remedy proceedings but, save for applying for a disjoinder, did not engage.

Judgment and judicial analysis

The matter was heard by His Honour Judge Hess (sitting as a Deputy High Court judge) on 20th, 21st, and 22nd September 2022.

Jurisdiction in relation to foreign property

Hess J found that the English court did have jurisdiction to determine the claim in relation to the property in Florida as it was a claim based on equity. However, AA Limited’s claim was dismissed on the basis that none of the matters that give rise to a Floridian constructive trust applied in this case and the property in Florida was therefore treated as a joint asset.

In determining this issue, the judge considered the Hague Convention on the Law Applicable to Trusts and their Recognition 1958, Articles 4 and 7 (which was imported into English domestic legislation through the Recognition of Trusts Act 1985) and held that the applicable law was Floridian law. The most significant connection feature was the property’s location, and the judge was persuaded that the principle of lex situs (ie the law of the location where the property is situated) should be given priority. The judge was also satisfied that the same outcome would be reached under English law.

Adverse inferences

Despite the fact the husband had failed to engage with the proceedings or appear at the hearings, he sent several emails to the judge on the first day of the hearing making assertions in respect of certain matters in the case. While the judge treated the emails as admissible, the weight given to them was in the context of his failure to cooperate and engage. Hess J commented:

“By disengaging from the proceedings… the husband has effectively prevented and thwarted any meaningfully detailed investigation into his corporate asset base and sustainable income.”

In light of the husband’s non-compliance and non-engagement, the judge drew several inferences and was persuaded to accept the wife’s broad analysis of the value of the husband’s corporate interests of £180m.

Final outcome and division of assets

Hess J discounted the value of the husband’s business assets by 50% to reflect their non-matrimonial source (ie inheritance) but acknowledged that the wife had a strong sharing claim to 50% of these assets (as valued by the judge). The wife’s sharing claim arose because of her contribution to the business, the mingling of the assets and the fact that some of the business operations were developed by investments made during the marriage.

To achieve an equal division of the other assets, the judge ordered that the property in Florida and the property in England (where the wife was living) be transferred to the wife. He also ordered the husband to pay a lump sum of £39,156,843 to the wife in return for the transfer to him of all her shares in the businesses.

The husband was also ordered to pay around £400,000 in respect of the unpaid maintenance, legal services and unpaid costs orders and a further £150,000 in costs to reflect the husband’s litigation misconduct.


Partner Carly Kinch comments:

“While it can be incredibly frustrating for the compliant party to endure the other side’s failure to engage in proceedings, this case reminds us of the court’s ability and willingness to draw adverse inferences from a party’s litigation misconduct. It also highlights an increased tendency of the courts to punish such misconduct in making orders for costs.”

By Francesca Carrington-Hughes, Associate, Divorce and Family, Stewarts

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