Financial Remedies Case Law Update
June 2026

Background

The parties began their relationship in 2013 and married in June 2015. They divorced on 29 June 2018.

The husband ("AGS") had previously been convicted of fraud offences and was the subject of confiscation proceedings under the Proceeds of Crime Act 2002. The confiscation order identified criminal benefit in excess of £1.4 million and imposed a recoverable amount of over £500,000. The assets identified within the confiscation proceedings included the former family home, land, a property in Cyprus, cash and various personal items.

It was accepted that RKS “bought out” AGS’s interest in the former family home to satisfy the confiscation order and used the equity to purchase another property in her sole name in 2022.

A central feature of the husband's case was his assertion that, notwithstanding the decree absolute in 2018, the parties had continued to live together and function as husband and wife until 2025. On that basis, he sought to argue that assets bought by the wife after the divorce should properly be regarded as matrimonial property available for sharing.

The wife strongly disputed that position. She maintained that the marriage had ended years earlier, that she had rebuilt her financial position independently and that any wealth accumulated following the divorce was entirely non-matrimonial. She further alleged that the proceedings represented a continuation of the domestic abuse she had experienced during the relationship.

Maintenance Pending Suit and Legal Services Payment Orders

The court reviewed the statutory framework governing MPS applications under section 22 MCA 1973 and LSPO applications under sections 22ZA and 22ZB MCA 1973. In doing so, District Judge Guirguis referred to the familiar guidance in TL v ML & Others [2005] EWHC 2860 (Fam) and Rubin v Rubin [2014] EWHC 611.

Given particular importance was the principle identified by Mostyn J in Rubin, namely that where the substantive claim appears doubtful, the court should approach an application for litigation funding with caution:

"where the claim for substantive relief appears doubtful ... the court should judge the application with caution. The more doubtful it is, the more cautious it should be."

POCA Proceedings and Financial Remedies

One of the more unusual aspects of the litigation was the impact of the earlier confiscation proceedings.

The husband sought to advance a sharing claim notwithstanding the fact that his interest in the former family home had been realised in order to satisfy some of the confiscation order. The wife subsequently used the equity released from that property to purchase another property in her sole name.

The court was sceptical of the husband's attempt to revisit issues that had effectively been resolved within the criminal proceedings. District Judge Guirguis observed:

"if AGS had any interest in any property held by RKS, the CPS would have sought to realise it within the criminal proceedings." [28]

The judge further rejected the contention that the husband's former interest in the family home somehow survived the confiscation process:

"The effect of RKS buying him out to satisfy the confiscation order must extinguish his interest, that was the point of the confiscation order." [28]

Perhaps most strikingly, the court concluded that accepting the husband's argument would effectively penalise the wife for the husband's criminal conduct:

"To suggest that the property bought out by RKS is matrimonial would result in RKS being punished for the offending behaviour of AGS." [28]

Additionally, capital recovery awarded through the proceedings may itself be vulnerable to enforcement action by the CPS:

“For AGS to succeed, he must establish need. If he succeeds in recovering capital, the CPS is likely to pursue recovery of capital to make up the difference between the amount they have recovered and the benefit AGS received from his criminal activity. For him to personally receive any capital benefit from this application, he will need to recover at least £901,000. The likelihood of this when RKS is meeting the needs of the children without contribution from AGS must be limited”.  [32].

Matrimonial Property After Divorce?

AGS further argued that assets acquired after decree absolute had nevertheless become matrimonial property because the parties continued to function as a couple. The court considered whether this argument could be analogous to the principle recognised in GW v RW [2003] EWHC 611, where Mostyn J observed that:

"where a relationship moves seamlessly from cohabitation to marriage without any major alteration in the way the couple live, it is unreal and artificial to treat the periods differently." 

However, the Judge ultimately accepted the wife's submission that this does not work in reverse given the position following decree absolute was fundamentally different. The  "the effect of a decree absolute ends the marriage, so, as a matter of law, the marriage cannot continue, there can be no matrimonial property after the marriage has ended." [29].

This is a robust rejection of attempts to characterise post-divorce asset accumulation as matrimonial acquest simply because parties remain emotionally connected or continue some degree of cohabitation following decree absolute. The grant of a final divorce order is not merely symbolic. It marks the legal termination of the marriage.

The Importance of Full and Frank Disclosure

The judgment also contains a reminder of the importance of full and frank disclosure, particularly where interim relief is sought. The Judge was critical of the husband's evidence. The court found that he had failed to provide a complete and accurate picture of both the POCA proceedings and his financial circumstances.

The husband had described the confiscation proceedings as a "civil POCA" despite the order having been made by the Crown Court. The court found this description was "clearly untruthful". He had also failed to disclose important information regarding the outstanding confiscation liability, business interests, company income and alleged loans from third parties.

The court found that these omissions materially undermined the application and prevented the judge from being satisfied that the husband was unable to fund litigation through other means.

Decision

The application for an LSPO and MPS was refused. The Judge concluded that: 

“AGS faces substantial hurdles in making out his substantive claim, such that, given the impact upon RKS of the making of a LSPO, it cannot be fair to make such an order against RKS, even if it is just for one further hearing to determine whether there should be an MPS and a further LSPO. Furthermore, the failure on the part of AGS to provide full and frank disclosure from the outset means I cannot be satisfied that he cannot fund the litigation by other means. Accordingly, I refuse the application for a LSPO to pay for the next hearing to determine the MPS and substantive LSPO application”. [43]

Practical Significance

Although a first-instance decision, AGS v RKS provides several useful reminders for financial remedies practitioners. 

LSPO applications are merits sensitive. Where the substantive claim appears doubtful, caution should be exercised before requiring one party to fund the other's litigation. In AGS, the combination of the husband's POCA history, the apparent extinguishment of his interest in the former matrimonial home and the difficulties surrounding post-divorce matrimonialisation led the court to conclude that he faced "substantial hurdles" in advancing his substantive claim. The decision draws a clear distinction between pre-marital cohabitation and post-divorce cohabitation, which cannot revive the legal concept of matrimonial property.

The hurdles faced by AGS arose cumulatively from (i) the use of equity in the home for POCA, (ii) the legal issue in respect of post-divorce matrimonial acquest, and (iii) the likelihood that any capital recovery would be vulnerable to CPS enforcement.

Disclosure issues may be determinative. The judgment is a reminder that applicants seeking interim relief must provide clear and truthful disclosure. The court's findings that AGS had mischaracterised the confiscation proceedings and omitted relevant financial information ultimately undermined his position that he was unable to fund litigation by other means. The disclosure deficiencies formed part of the basis upon which the LSPO application was refused.

Effect of POCA proceedings on financial remedy claims. Whilst the court was not determining the substantive claim, the judgment demonstrates how confiscation proceedings can alter the landscape. Realisation of AGS's interest in the former matrimonial home through the confiscation process substantially weakened any later attempt to assert a continuing interest in assets derived from that property. Assets affected by confiscation proceedings, and steps taken to satisfy confiscation orders, may have important consequences for subsequent sharing claims and the viability of interim applications.

AGS v RKS is an addition to the body of authority concerning interim financial remedies, litigation funding and the distinction between matrimonial and non-matrimonial property.