 After admitting his feelings for her whilst in France, Kathy begins a romance with mechanic Phil Mitchell (Steve McFadden), which manages to survive various revelations about Phil's criminal activity, as well as interference from Phil's wife Nadia (Anna Barkan), who tries to split them up.Phil proposes to Kathy and she accepts, but during their engagement party, Kathy learns that Phil had resumed an affair with his sister-in-law Sharon Mitchell (Letitia Dean) after Grant (Ross Kemp) obtained a tape of a drunken Sharon and Michelle Fowler (Susan Tully), Kathy's niece, discuss the affair.After Grant plays the tape, the revelation ends Kathy's friendship with Sharon, leads to Phil being beaten by his brother Grant, and almost ends Kathy and Phil's relationship.