Overview
In Loh v Ardal Loh-Gronager (following earlier reported judgments in Loh v Ardal Loh-Gronager [2024] EWFC 241 and Y v Z [2025] EWFC 221), Cusworth J heard a heavily contested final financial remedy hearing arising from a short childless marriage.
Cusworth J described the husband’s actions as amounting to “the most serious level of litigation misconduct that may be seen in these courts”. While the judge was swiftly able to conclude that the husband’s deplorable conduct merited significant sanction, he had to contend with whether this should solely be addressed in the arena of costs or also in the substance of the award made.
Background
The wife was extremely wealthy, with substantial business assets and trust interests. The husband, a former investment banker, entered the marriage with comparatively modest assets. The parties entered into a comprehensive pre-nuptial agreement in March 2019, expressly disapplying the sharing and compensation principles and defining “Separate Property”, “Joint Property”, and a limited “exceptional one-off fund” of £100,000 intended to provide short-term security on separation.
Although the parties had been living together for a few years before their marriage the marriage lasted approximately four years, and they had no children.
Under the pre-nuptial agreement, the husband’s accrued entitlement at separation was agreed to be £6,449,802, subject to accounting for sums already received.
Disputed Issues
The court was required to determine whether several substantial payments taken by the husband during the marriage were:
- Gifts or Separate Property, as the husband contended; or
- Unauthorised withdrawals, to be treated as advances against his entitlement under the pre-nuptial agreement.
The disputed sums comprised:
- £655,000 withdrawn from joint accounts (2020–2021);
- £750,000 withdrawn later to fund the running costs of the husband’s investment business;
- £2.05m taken from mortgage funds under a power of attorney (November 2022); and
- £1m transferred shortly before separation (April 2023).
Central to the husband’s case was his reliance on three emails said to evidence the wife’s knowledge and consent.
Key Findings
Creation and/or doctoring of emails: Cusworth J found that on the balance of probabilities, that the husband had created and/or doctored three emails relied upon to support his case. The originals had been deliberately destroyed, and the PDFs produced were found to be unreliable. This was described as serious litigation misconduct, undermining the integrity of the court process.
Joint Accounts and Separate Property: Cusworth J stated that even if the husband had understood that the money in the joint account was now joint property, he could not have sensibly thought that by taking it for himself it would become his Separate Property. The judge also rejected the husband’s case that those funds had been converted from joint to Separate Property by the husband taking them. He stated “the wife had made them available to meet joint expenses. If they were not so employed, but were removed from the joint accounts, then they would revert to being notionally hers in the absence of any different express agreement”.
Individual sums: In relation to the individual sums the judge found the following:
- The £655,000 was systematically removed and invested by the husband without consent. The judge therefore treated this as sums taken on account of his pre-nuptial agreement entitlement.
- The £2.05m that the husband was taken from the mortgage account was found not to be a gift. They were funds that were intended to continue to service the mortgage account. This was also treated as an advance on his entitlement.
- The £1m that the husband took during the marital breakdown was found to be done under false pretences and again treated as an advance on his entitlement under the pre-nuptial agreement.
- In relation to the £750,000 that was transferred for business running costs, although unauthorised, the court accepted that had the wife known that they were being used for this purpose she would probably have approved of that use.
Conduct and Fairness
Applying s.25(2)(g) MCA 1973 alongside the fairness test in Radmacher v Granatino [2010] UKSC 42, the court held that the husband’s conduct plainly crossed the threshold at which it would be inequitable to disregard it.
The conduct included systematic unauthorised withdrawals, concealment of financial activity, attempts to intimidate and distress the wife (including posting personal photographs of the wife on Instagram and instructing a private investigator to loiter outside of the wife’s London home on her birthday and pose as a member of the press).
While the judge declined to extinguish the husband’s entitlement to a settlement entirely, he found that fairness did require a partial substantive sanction beyond costs alone.
Outcome
Starting from the PNA entitlement of £6.45m, the court deducted:
- £655,000
- £2,050,417
- £1,000,000
- plus 50% of the £750,000 business costs (£375,000) to penalise the husband for his conduct.
This resulted in a final award of £2,369,385 to the husband.
The court indicated that there would be an indemnity costs order made against the husband, to be determined separately.
Key Takeaways
Conduct is rarely taken into account in financial remedy proceedings, reflecting the court’s consistent reluctance to allow litigation to descend into moral judgment or satellite disputes about behaviour.
Section 25(2)(g) MCA 1973 sets a deliberately high threshold, providing that conduct will only be taken into account if it is so serious that it would be inequitable to disregard it. This case is a striking example of that threshold being met.
The court found that the husband had engaged in egregious litigation misconduct, including the fabrication of evidence and deliberate attempts to intimidate and distress the wife during the proceedings. In those exceptional circumstances, the judge held that fairness required the husband’s entitlement under an otherwise valid pre-nuptial agreement to be adjusted, demonstrating that while conduct arguments will usually fail, they will succeed where behaviour fundamentally undermines the integrity of the process and the court’s confidence in the party advancing them.
Every case is different and will turn on its own specific facts. There is a question over whether a judge would take the same approach to this conduct if there was no pre-nuptial agreement or if the funds in the joint account had not all so clearly emanated from one party, in this case the wife. At Edwards Family Law we frequently act for clients who raise conduct issues within their financial proceedings, and we are able to advise you on the merits and prospects of any potential conduct claim. We can guide you as to whether such arguments are likely to be relevant, proportionate, and effective in the context of your case.