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England and Wales High Court (Family Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> AP v ALP [2018] EWHC 2758 (Fam) (02 February 2018) URL: https://www.bailii.org/ew/cases/EWHC/Fam/2018/2758.html Cite as: [2018] EWHC 2758 (Fam) |
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Strand, London, WC2A 2LL |
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B e f o r e :
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AP |
Applicant |
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-and- |
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ALP |
First Respondent |
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-and- |
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Krechet Holdings Ltd |
Second Respondent |
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-and- |
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Ardea Ltd |
Third Respondent |
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Mr Robert Peel QC and Ms Helen Williams for the First Respondent (instructed by Mishcon de Reya)
The Second and Third Respondents did not appear and were not represented
Hearing dates: 22 January to 2 February 2018
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Crown Copyright ©
MR JUSTICE MOOR
The Law
(a) The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity, any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b) The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) The standard of living enjoyed by the family before the breakdown of the marriage;
(d) The age of each party to the marriage and the duration of the marriage;
(e) Any physical or mental disability of either of the parties to the marriage;
(f) The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g) The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it; and
(h) The value to each of the parties to the marriage of any benefit which, by reason of the dissolution of the marriage, that party will lose the chance of acquiring.
"Having read the skeleton arguments and the judgment we were at once struck by the security of the result that the wife had achieved in contrast to the risks confronting the husband's economy. The family's standard of living has throughout been dependent upon the fortunes of the husband's business. Had the marriage survived the family would undoubtedly have shared adversity as it had shared prosperity "
"In cases of this kind, where the duty of disclosure comes to lie upon the husband; where a husband has and his wife has not detailed knowledge of his complex affairs; where a husband is fully capable of explaining, and has the opportunity to explain, those affairs, and where he seeks to minimise the wife's claim, that husband can hardly complain if when he leaves gaps in the court's knowledge, the court does not draw inferences in his favour. On the contrary, when he leaves a gap in such a state that two alternative inferences may be drawn, the court will normally draw the less favourable inference especially where it seems likely that his able legal advisers would have hastened to put forward affirmatively any facts, had they existed, establishing the more favourable alternative."
" it is as well to state expressly something which underlies the procedure by which husbands are required in such proceedings to disclose their means to the court. Whether that disclosure is by affidavit of facts, by affidavit of documents or by evidence on oath (not least when that evidence is led by those representing the husband), the obligation of the husband is to be full, frank and clear in that disclosure. Any shortcomings of the husband from the requisite standard can and normally should be visited at least by the court drawing inferences against the husband on matters the subject of the shortcomings insofar as such inferences can be properly drawn."
"A spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to if he had behaved reasonably".
"Mr Molyneux, in closing submissions, argued that there needs to be deliberate, unprovoked and morally culpable conduct. The most obvious example would be where a spouse deliberately dissipates a fund simply to prevent his or her former partner receiving a fair share of that fund. The court cannot permit such conduct. I further accept that there will be other situations where conduct justifies a financial penalty although such cases will undoubtedly be rare.
I am going to have to determine whether or not there was dissipation with a wanton element that justifies intervention by the court. Findings as to motivation are clearly very important. I do, however, accept that a spouse cannot take advantage of all the good characteristics of his or her partner whilst disavowing the bad characteristics. To put it colloquially, you have to take your spouse as you find him or her".
"The only obvious caveats are that a notional reattribution has to be conducted very cautiously, by reference only to clear evidence of dissipation (in which there is a wanton element) and that the fiction does not extend to treatment of the sums reattributed to a spouse as cash which he can deploy in meeting his needs, for example, the purchase of accommodation."
"The Husband was exposed to many, many hours of the most searching cross-examination, an ordeal from which, in my judgment, he emerged substantially unscathed. Almost inevitably, given the mass of complicated financial matters which were being put to him, and most of which he responded to from memory and without going to the documents, the husband on occasions made slips and gave answers which subsequently turned out not to be correct. But having had the opportunity of watching him over many days in court, and not only when he was in the witness box, I am satisfied that the husband was an honest, truthful and, for the vast majority of the time, also an accurate and reliable witness. He did not lie. And on the comparatively few occasions when he was "caught out" it was not for lying but rather, I am satisfied, because, quite genuinely, his memory was at fault."
"Mr Howling asks me to find on the balance of probabilities that various individuals and corporate entities are holding assets on behalf of the husband .it is quite clear to me that I am unable to do so for two reasons, one of which if fundamental. None of these individuals or entities has been joined to the proceedings. Although some of the individuals concerned have given evidence, they have not had any opportunity to be formally heard on the issue. There have been no pleadings, so they would not know the case they faced. They cannot therefore be bound by any finding".
The witnesses
My conclusions
Tranche 1 in 2007 $260,000,000
Less
New Capital Amount ($9,500,000)
Non-Qualifying Asset Payment ($80,500,000)
Escrow Account ($80,000,000)
Commission ($2,400,000)
$87,600,000
Tranche 2 in 2008 $240,000,000
Equity investment in Sokol $30,376,263
Loans made to Sokol $60,896,159
Equity investment in Orel $41,825,648
Equity investment in Pustelga etc $23,169,674
Investment in Milvus $16,214,674
Other Russian investments $ 8,923,232
Western European investments $23,698,881
Business and living expenses $103,601,994
Total $285,101,994
(a) The schedules produced by the Husband were not challenged by the Wife. She did not instruct an accountant to investigate or seek to introduce evidence to dispute the schedules.
(b) Her own evidence was to the effect that she accepted the veracity of the schedules as she trusted the work of Z.
(c) The Wife seems to accept the figures for the investments in the various entities and, in particular, for Sokol and Orel.
(d) Although the $103 million of expenditure is an enormous sum, it does include financing the very large early loses in Sokol which has not been challenged to any great extent.
(e) It follows that, if the schedules are largely accurate, the vast majority of the money is accounted for.
(f) After his initial failure to be full and frank, I am satisfied that he has made reasonable efforts to assist the court. The complexity of his financial affairs and the different jurisdictions involved undoubtedly makes it more difficult and almost inevitably leads to a few defaults that can be seized on.
(g) The Wife has not produced convincing evidence to support a case that there are significant amounts of money in concealed bank accounts. There is no paper trail. The Swiss bank account that she believed the Husband held turned out not to exist. The assets that she has found appear not to be case-changing sums. I recognise that I have not seen the FLB statements, although the current delay appears to lie with FLB not the Husband. The statements she did see do not show millions of pounds in the account and I remind myself that he did say he had a current account at FLB in Paris in his Form E.
(h) I have already said that the Wife appeared half-hearted in suggesting large scale non-disclosure. Mr Peel says that the Husband was "barely challenged as to hidden assets" and that "it was not put to him that he had concealed accounts or other resources". I am not sure that is completely accurate but, whereas I was not satisfied as to the detail of the Husband's current financial position, I did not conclude that he was concealing some enormous hidden pot of money. I accept Mr Peel's point that B was not challenged as to the Wife's assertion in her statement that B could be holding money in a bank account in his name on behalf of the Husband.
(a) Paris flat 15,000,000
(b) Brussels property 2,250,000
(c) London property re-mortgage £ 2,800,000
(d) German Hotel 2,500,000
(e) Perdix loan 3,000,000
(f) Sale of properties £ 434,000
The assets
(a) The Husband has an interest in a commercial property in a company known as Rimski Invest. His Financial Director puts a value on it of Roubles 55 million which is around £680,000. The Husband discloses this in his statement dated 25 October 2016 without caveats but now says it is caught up in the Rimski liquidation and he will get nothing. I do not believe I have seen any documentation to this effect. He says he owns it and it will therefore remain in the schedule but I accept that it may not be easily realisable and I will not be placing great reliance on it.
(b) The Perdix loan is more difficult. The Husband has produced documentation to show he borrowed this money without security from an entity in Riga that appears to be linked to a hotel there. The documentation suggests that he does not have to repay the loan until 2020 but, rather conveniently, the lender commenced proceedings in December 2017. On the balance of probabilities, this money was loaned to the Husband and it will remain as a liability in the schedule at the figure of (£2,683,752).
(c) The Husband claims a small debt of (Roubles 2 million) to TN which funds his expenditure. Given he owns the company and has funded all his companies to such a huge extent, this item cannot remain as a legitimate liability. A simple accounting exercise could wipe out this debt.
(d) The Wife's cost debt of (£100,000) to a friend will remain in the schedule as will the Husband's debt of (£60,522) to his commercial solicitors and his liability to his solicitors in this litigation (£67,555).
(e) I will deal with the Husband's business assets in due course.
(f) I accept that there should be a figure for the chattels held in the warehouse at Milvus. I reject the Husband's half-hearted suggestion that he had given these assets to B. B did not seem to know anything about it. The fact that the chattels are stored on land held by B is irrelevant to ownership of the chattels. It is far more difficult to ascribe a value to the items. I accept the Wife has produced invoices for around 1/3rd of the items showing a cost of £1.15 million but these items were bought at expensive retail establishments. It follows that the cost may well have been in the order of £3 million but it is very difficult to ascribe any accurate sum to their resale value. The same applies to the antique furniture in Moscow and the other items of personal belongings. Doing the best I can, I ascribe a value of £1 million to the items in the warehouse.
(a) Net equity in the London property £3,625,000
(b) Money at FLB, London £ 883,592
(c) Villa Bellissima £5,567,840
(d) Belgian property £ 481,935
(e) Radost £1,209,975
(f) W other properties in Russia £ 743,779
(g) H other properties in Russia £ 725,754
(h) Russian warehouse chattels £1,000,000
(i) Rimski Property £ 708,825
£14,946,700
Wilful dissipation
The business assets and income
Wells sharing
(a) There would be no clean break to the huge disadvantage of both. There would be very significant costs of policing the order if the Wife was to have any chance at all of benefiting from it.
(b) In fact, I am quite satisfied the Wife would never see any benefit from such an order given the presentation of the Husband to this court as to the state of those businesses. His own admission that he is prepared to transfer assets to A to avoid enforcement proves the point of itself. This is reinforced by B's admission as to the fraud in the accounts of Wine FPX.
(c) Sokol is not a business that has been run throughout the marriage as was the business in Wells. The family was not dependant on the fortunes of Sokol whilst they were happily married. Not only that, Sokol is a business that was opposed by the Wife and in which she has had absolutely no say. The Husband chose to invest in it and he must now take the consequences of that.
(d) In consequence, it would be profoundly unfair on the Wife in the circumstances of this particular case to order any form of Wells sharing.
The Husband's assets and needs
(a) Sokol debt £5,000,000
(b) Sokol equity and Crex £2,771,810
(c) Russian plots of land £ 384,150
(d) Apartment £ 263,348
(e) Property in which his mother resides £ 68,506
(f) Milvus warehouse chattels £1,000,000
(g) Rimski property £ 708,825
(h) Half of Villa Bellissima £2,783,920
£12,980,559
The Wife's position
(a) The entire proceeds of sale of the London property £3,549,038
(b) A transfer of the joint FLB accounts £ 883,592
(c) Half of the net proceeds of sale of Villa Bellissima £2,783,920
(d) A transfer of the Belgian property £ 481,935
(e) Radost £1,209,975
(f) Her other properties in Russia £ 743,779
£9,652,239
Indemnity
School fees and periodical payments
Transfer of the Belgium property
Mr Justice Moor
2 February 2018