B e f o r e :
MR. JUSTICE MOYLAN
B E T W E E N :
||NICOLA MAXINE JOHNSON
||- and -
||(1) ZIAD MOUNIR TAKIEDDINE
||(2) WARWICK ESTATES LIMITED
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MR. C. HALE QC and MR. H. CLAYTON (instructed by Withers LLP) appeared on behalf of the Applicant.
THE FIRST RESPONDENT appeared in Person via Videolink.
THE SECOND RESPONDENT did not attend and was not represented.
HTML VERSION OF JUDGMENT (AS APPROVED BY THE JUDGE)
Crown Copyright ©
MR. JUSTICE MOYLAN:
- This is my judgment determining an application made by a former wife under Part III of the Matrimonial and Family Proceedings Act 1984. There is also listed for determination an application by her for the enforcement, by way of a charging order, of a capitalised maintenance order made by a French Court.
- The parties to these proceedings are the wife (as I will call her) represented by Mr. Hale QC and Mr. Clayton; the husband (as I will call him) who has appeared at this hearing in person by video link from Paris; and Warwick Estates Limited ('WEL'), a British Virgin Islands company, which is neither present nor represented. The husband has appeared by video link because, as described later in this judgment, a warrant for his arrest has been issued in the course of a private prosecution brought by the wife against him in England.
- WEL has not participated in these proceedings at all. They were joined as a party by an order made on 2nd February 2015. That order, the wife's Part III application and other documents were served on WEL on 22nd February 2015, as evidenced by an affidavit dated 10th March 2015. WEL was joined because the company is the registered legal owner of a property in London called Warwick House, 8 Addison Crescent, London W14 ('WH'), which was purchased in April 1995.
- At the commencement of the hearing the husband applied for an adjournment. I refused that application for reasons I gave in a short judgment. I did not consider it necessary to adjourn the case to enable a fair hearing to take place. This decision has, in my view, been confirmed during the course of the hearing. The husband has been able to participate fully and, if I might say so, effectively.
- The wife's application is under Part III because the parties were divorced in France. The French court has made an order in the wife's favour of prestation compensatoire, which is a capitalised maintenance award. The remaining financial consequences of the divorce in France have not yet been concluded. I deal with this in more detail below, but, simply stated, under French law the parties are entitled to an equal share of the marital wealth. The manner in which this is to be effected will be determined by the French court on application by either party pursuant to a judicial liquidation process. At present, neither party has made such application.
- Given the absence of a determination, agreed or imposed in France, I consider it important that my decision should not conflict with the prospective process in France. This applies both to the substance of any order I might make as well as to the extent of the issues I address. For example, if an issue is likely, or appears to be likely, to be part, or sufficiently part, of the French process, I consider I should not seek to address it in these proceedings. I make these observations at the start of my judgment, because it brings what I regard as being a necessary focus which has not been a feature of the way in which I consider the wife's case to have been advanced.
- The principal issues are:
(i) whether I have jurisdiction to make a financial order under Part III; and, if so, the scope of that jurisdiction;
(ii) if there is jurisdiction, whether it is appropriate for an order to be made in England;
(iii) if it is appropriate to make an order, what order should be made; for this purpose I would need to determine whether the husband is the beneficial owner of WH.
This is an over-simplification of the issues which arise - for example, the husband also relies on issue estoppel - but it provides a sufficient introductory framework for this judgment.
- The wife seeks an order transferring the beneficial ownership of WH and its contents to her. The husband seeks the dismissal of the wife's application.
- During the course of the proceedings and the hearing the parties have raised a large number of factual and legal issues. I do not consider it appropriate or necessary to address all of these in this judgment. This is, in part, for the reasons given above, but also because they are not all sufficiently relevant to the issues which I must address. I mention this latter aspect to explain, in particular to the husband, why I do not address the historical issues about which he feels very strongly. These include the circumstances in which the marriage came to an end. I do not do so because they are not relevant for the purposes of these proceedings.
- I should add that, in part, so many issues have been raised because the husband and the wife have the misfortune of having been engaged in proceedings for nearly ten years. This has given ample opportunity for different issues to become potentially relevant, or to be considered by the parties to be relevant, because of the developing situation. Further, the inevitable strain on the parties caused by the various proceedings, some of which are referred to in my judgment below, was only too evident during the course of the hearing. I also have no doubt that it has had an effect on the ability of the husband and the wife to give objective evidence. Their evidence is, or has been, in my view, heavily influenced by their developed perspectives of the history.
- I turn now to give a summary of the background. The husband is aged 65. He was born in the Lebanon. He attended the American University of Beirut and the University of Reading, from which he obtained an MSc in 1974. He is a Lebanese and a French national. The wife is aged 55. She was born and brought up in England.
- The husband and wife married in 1985. The marriage came to an end in 2006. There are two children, now aged 19 and 26. The parties spent their whole marriage living in France, where they had their principal matrimonial home. Following the breakdown of the marriage the wife and children moved to live in London in 2007, initially in rented accommodation paid for by the husband. Since July 2010, the wife, and at times the children, have occupied WH.
- When the parties married, the husband was working as the managing director of a French ski resort. This was sold in the early 1990s and the family moved to Paris. The husband began to work as an intermediary in the negotiation of contracts between the French Government and other Governments. As the husband describes it, he was initially an emissary without title of the Kingdom of Saudi Arabia in France. This then expanded so he became an intermediary acting in relations between France and other States, in particular, so it appears, Pakistan, Syria and Libya.
- It is clear that, through his work, the husband became extremely wealthy. The precise extent of this wealth during the marriage is not clear, but some indication can be obtained from the fact that the family had available to it valuable properties in Paris, Cap d'Antibes and London. It is the wife's case that WH was purchased as the family's London home. The husband disputes this, asserting that it was never a home.
- In 2004 the husband sustained serious injuries in a car accident whilst on holiday with the family. The marriage unravelled after this, as set out in the parties' evidence.
- Turning now to the French proceedings, the husband commenced divorce proceedings in France on 25th October 2006. This led to what is called a 'non-conciliation' order on 5th June 2007, which also provided for the husband to pay maintenance to the wife of €5,000 a month for herself, and €1,000 per month for each child.
- On 31st August 2007 the husband filed for divorce. On 2nd September 2008 the husband filed substantive submissions with the French court. This contains the husband's account of the history of the breakdown of the marriage and of events following his commencement of divorce proceedings in 2006.
- So far as maintenance is concerned the husband, in fact, initially paid the wife very substantially more than provided for in 2007 order. He paid for the rental of a property in London at the rate of approximately £12,000 per month.
- The husband, in his submissions to the French court, states that the parties do not own any real property, and have very limited financial resources. Their liabilities exceed their assets, which were put at €80,000. The husband's net income is said to be €164,000 earned as a salaried employee of a Lebanese company.
- On 3rd February 2009 the French court granted a divorce. It also ordered the liquidation and division of the parties' assets to be determined by a notary. It provided for child maintenance.
- The wife appealed from this decision. The wife's case in support of her appeal is comprehensively set out in a brief dated 25th May 2010. It advances a claim for capitalised maintenance of €25 million. It is clear that, in support of this claim, the wife relies on at least some of the evidence which she has relied on in support of her claim under Part III. This includes, for example, a 1997 document from a Lebanese bank to the husband dealing with the transfer of $75 million to "your secret account". The wife also sought an order from the French court that she be given the right to use WH as part of the husband's maintenance obligations.
- On 15th September 2011, the Court of Appeal of Paris dismissed the wife's appeal, but, in addition, it made further orders. I note, in passing, that in the judgment WH is referred to as "one of the parties' homes". The judgment also sets out the argument advanced on behalf of the wife that the husband owns the family homes, including WH, and those advanced on behalf of the husband that these properties were made available to him by his companies, or he had rented them. In respect of those competing contentions, the judgment states that the documents do not establish "with absolute certainty" the identity of the owners of the properties, which, in any event, is "an issue that is not relevant to these proceedings and is a matter of the division of the parties' property". However, based on the circumstances of the case, the court concluded that "the parties enjoyed the benefit of considerable wealth". In doing so, the court clearly rejected the husband's case as to the parties' lifestyle.
- The husband was ordered to pay the wife capitalised spousal maintenance of €3 million. The court also determined that the law applicable to the consequences of the divorce and the matrimonial regime is French law.
- The husband's appeal to the Court of Cassation was dismissed on 20th March 2013.
- As a result of the French court's determination, community of property applies to the marriage and each party is entitled to an equal share of the marital assets determined as at 5th June 2007. I should add that the wife's application to occupy WH was dismissed.
- The notary appointed by the order of 3rd February 2009, to determine the liquidation and division of the parties' assets, failed to procure an amicable settlement. On 19th December 2014 the notary provided an official statement to this effect signed by the parties' respective French lawyers. Following this, it is open to either party to apply for a judicially determined liquidation of the marital assets. Neither, as I have indicated, have done so, although they have continued to litigate in France. It is clear to me that neither have done so because of the ongoing criminal investigation/prosecution of the husband, which is taking place in France, and the consequent freezing of all his assets which comprise the marital wealth in France.
- There have been other proceedings in France, including proceedings brought by wife against the husband for the equivalent of wilful neglect to maintain, and for the enforcement of spousal and child maintenance. Enforcement proceedings have included, for example, the seizure of the contents of the marital home in Paris, a list of which was drawn up by a court appointed bailiff in 2012.
- After the hearing had concluded, I was provided with an unofficial translation of a decision of the Court of Appeal of Paris (Criminal Division) dated 18th November 2015. This determined a further enforcement application by the wife. The ruling contains a breakdown of what is called the wife's receivable debt, which at 1st August 2015 totalled €3 million. This sum includes the award of capitalised maintenance. The husband challenges this ruling in a number of respects, but I am not aware of any appeal.
- As referred to above, the husband is subject to a criminal investigation in France. It appears that this commenced in or about 2010, and relates to payments or commissions arising from the sale of arms to Saudi Arabia and Pakistan. These are in part said to have been paid to French politicians and used to fund a, or various, political campaigns. In September 2011 the husband was placed under formal investigation in respect of potential charges of corruption and fraud. His passport was seized and all his assets in France were frozen. Until February 2015 he was also prohibited from leaving France.
- The husband alleges that these proceedings were caused by the wife disclosing to the French authorities information and documents she had obtained from WH. The wife asserts that she was summoned by the French authorities to provide information. Given the evidence available to me I am not in a position to determine this issue. The wife alleges that the investigations had begun in 2010 before she gained entry to WH. For example, she says that the French financial police searched the property in Paris on 10th June 2010, which predated her entry to WH. However, as I have said, given the evidence available to me, I am not in a position to determine this issue.
- Expert evidence has been obtained for these proceedings from a French lawyer and Professor, Alain Devers. His report is dated 20th July 2015. It is a long, very detailed and in some respects complex report, which is not always easy to follow.
- However, it is clear, in particular from his response dated 26th July 2015 to additional questions that, in his opinion, whilst the jurisdiction of the French court over movables situated abroad is certain, its jurisdiction over immovables situated abroad is "more disputed".
- He also makes clear that the matrimonial property regime applicable to the parties is that of community property. The relevant date for the purposes of determining the dissolution of community property is 5th June 2007. The parties are entitled, as I have said, to an equal division, although the method of calculation and distribution has some variable elements. Professor Devers' view, expressed with caution, is that a French judge will not be seised with the liquidation and division process until a specific application is made by one of the parties. This is because he considers, on balance, that the divorce proceedings and the judicial liquidation process are distinct.
- He also identifies a number of issues concerning the enforceability of orders. If the order is not within Brussels I (Council Regulation EC No. 44/2001), which does not apply to rights in property arising out of a matrimonial relationship, nor within the Maintenance Regulation (Council Regulation EC No. 4/2009), it would have to be enforced under common law rules because the 1934 Anglo-French bilateral Convention would also not apply.
- Professor Devers also says that:
"French law, which has been declared applicable to the matrimonial property regime, is not necessarily intended to govern all the questions that arise in the context of liquidation and partition operations."
- As referred to above, the "community dissolution date" is 5th June 2007. After this, there has existed a "post-community joint ownership of property which should be liquidated and partitioned in the same as the community".
- It appears from pp.19, 20 and 21 of his report that the law applicable to an asset, be it real property or shares, is the law of the place in which the property is located. He gives the example of the French court permitting a spouse to apply for the partition of jointly owned real property in France without waiting for the dissolution of the marriage in another country.
- Professor Devers was also asked whether the French court was able to take into account money or assets moved by the husband from France or England to Lebanon. He confirms that the court would be competent to "rule on their division". He also said that the wife could rely on the "tort of concealment". If she established that the husband had "diverted or concealed" such assets then she would be doubly compensated. First, she would be entitled to an amount equal to the value of the concealed or diverted assets, plus half again as these assets would still be included within the wealth to be divided equally between the parties.
- Prior to the instruction of Professor Devers, the husband had adduced a statement dated 15th April 2015 from one of his French lawyers, Professor Casey, a professor of civil law. His statement appears to support Professor Devers' opinion that the divorce and the judicial determination of the division of the marital wealth are governed by separate procedures. Professor Casey initially comments that the French proceedings have not concluded, "rather they are at the point where the wife is able to progress her financial claims through an application for judicial liquidation of the matrimonial property".
- However, later in his statement he says unequivocally that "at this stage no case is pending before any court in France". Also, following the failure of the "amicable phase" of the liquidation process, either party may apply or file for the judicial liquidation of the matrimonial wealth. French law distinguishes divorce from the judicial liquidation process, the latter being a separate second procedure.
- Professor Casey also exhibits a letter dated 21st February 2014 from a judge at the French First Instance Court to the notary appointed by the court to undertake the liquidation of assets. In this letter, the judge states that the wording of the order of 3rd February 2009 "tends to indicate that the court, when it pronounced the divorce, ended its mission over the file". Accordingly, the letter continues:
"… in the event of an amicable settlement not being concluded you will have to tell both parties that your mission ends with their disagreement which will enable one of them to file before the court in order to start a judicial sharing of assets process."
- Additionally, in a letter dated 24th July 2014 from English solicitors then acting for WEL, it was asserted that proceedings in France "could never result in the wife being given a share in the property or in the shares of the ultimate holding company of WEL". It was, therefore, asserted that the divorce in France "has absolutely nothing to do with the property".
- The effect of this evidence is, in my view, as follows:
(i) Either party can initiate the process for the judicial liquidation of marital property but, as neither has, there are no current proceedings in France.
(ii) The French court has determined that the parties are subject to the community of property regime which entitles them to an equal share of the marital wealth as at 5th June 2007.
(iii) In the liquidation process, the French court would have jurisdiction in respect of moveable property located outside France, but there is a significant question over whether it would have jurisdiction over immovable property located outside France.
- I will deal with the provisions of the various Regulations later in this judgment.
- Before leaving this part of my judgment, in his submissions the husband has pointed to the fact that the wife could have requested the judge dealing with the divorce to grant her an advance against her share of the marital property. This is referred to in Professor Devers' report. I have no evidence of what the likely outcome of any such application would have been, but as the divorce proceedings have been determined this, in my view, is not significant to my determination of the wife's Part III application.
WH and WEL
- The current structure in respect of the legal ownership of WH is as follows: WH is owned by WEL. WEL is owned by Arcos Assets Inc, which is owned by Alveston International SA, both of which are Panamanian companies. The husband accepts that he is the ultimate sole beneficial owner of the structure, although, as set out later in this judgment, this has not always been his position.
- It is clear from the evidence that the husband effectively controls the corporate structure, including WEL. For example, in his oral evidence he accepted that he directs the directors of WEL. Further, in a letter dated 27th December 2008, written by the husband to Barclays Bank requesting the remittance of $4 million, he writes the letter "for Warwick Estates".
- There is no evidence of any of the directors acting independently of the husband. Rather all the evidence points to the directors acting as he has instructed or requested. This applies in respect of the possession proceedings referred to below, the family's occupation of the property during the marriage, and the process by which borrowings were secured against WH. As to the first, it is clear that these proceedings were effectively managed by the husband. It must have been he who engineered the false case advanced by WEL in those proceedings. There is no one else who would have had any interest in doing this. The answer to the question, "Who benefits?" is the husband and only the husband. I deal with the family's occupation of WH below.
- The husband obtained borrowings of £6 million secured against WH by dealing directly with the bank on the basis that WH was one of "his assets". Indeed, it was clear from the husband's evidence that, because he is the sole owner, he considered the extent of his control unexceptional.
- WH was purchased on 7th April 1995 in the name of Fitzroy Estates Limited, a BVI company. The husband accepts, indeed asserts, that he provided the purchase monies which he had generated or earned from his work as an intermediary or emissary, and he refers to a specific contract in his evidence. The total cost was approximately £4.6 million, £3 million being the purchase price, and £1.6 million being spent on building works and decorations. The husband says in his statement dated 12th November 2015 that WH was acquired in the name of Fitzroy Estates for "good commercial planning and commercial reasons". He also states that the structure was set up for "tax efficiency reasons".
- Legal title was transferred on 21st April 1998 to Silvano Properties Limited, a Republic of Ireland company. Silvano changed its name to Warwick Estates Limited in 1998, and transferred title on 30th September 1999 to Warwick Estates Limited BVI. It appears that until 2007 WEL was owned by a Liechtenstein trust called Readwick. It is not clear precisely when this trust was established, although in his oral evidence the husband said it was in the late 1990s.
- From a chart, which is dated 11th March 2003, it would appear that a significant part, if not all, of the family's wealth was then held through this trust. In 2007 this structure was dismantled. A memorandum dated 13th March 2007 refers to "a weakness with the present structure", namely that "control rests with one entity, attack that and you have control of everything". Pursuant to the restructuring, the assets within the trust were first, so it would appear, distributed to the husband. At some point, the current structure in respect of WH was created. It was certainly in place by October 2008.
- As I have said, in his statement dated 12th November 2015, the husband states that he provided the "initial funds" to Fitzroy Estates for the purchase. As a result of monies he received from a specified contract, "I was able to invest". There is no evidence of how the monies were accounted for by that company or indeed by any of the subsequent companies, although the husband's statement refers to his having received monies from the companies as "part reimbursement of shareholders' advances … a normal practice by companies". This is a reference to a facility obtained in December 2007 and secured against WH. Payments from this facility were made "on behalf of or on account of Alveston".
- In his oral evidence the husband said, first, that he sent the purchase monies to the solicitors acting in the purchase. He then said that the monies had gone first to Fitzroy Estates and then to the vendor.
- In or about December 2007 WH was mortgaged to Standard Bank (Jersey) Limited to secure a facility totalling £7 million. £4 million was drawn in December 2007, of which £2.9 million was paid to Concerta SA, a Luxembourg company, and £1.1 million to Alveston. The former was sent to an account in Switzerland, and the latter to an account in Lebanon. Both of these companies were the husband's corporate vehicles. As referred to above, in his statement the husband said that the use of these funds was part reimbursement of shareholders' advances.
- In his oral evidence the husband gave a different account. He said that these funds had been used to pay for works to WH. If there had been anything left over then the monies would have gone to repay shareholders' loans. I regret to say that this was, in my view, a clear example of the husband making up his evidence to seek to fit, what he thought at the time, would best suit his case. I have no doubt that these funds were transferred to the Concerta and Alveston accounts for the husband's use. Indeed, in his statement the husband specifically states that the sums of £1.1 and a later sum of £2.5 million, to which I refer next, are identified in the summary of bank statements as transfers to "Comte ZT".
- A further part of the facility, namely the sum I have just mentioned, of £2.5 million was transferred to Alveston in February 2008. The letter requesting the transfer from the director of WEL stated that these funds were needed "for the financing of the balance of the investment for Concerta SA and to finance works to" WH. In his oral evidence the husband said that he could not recall what the sum of £2.5 million had been used for.
- In or about February 2009 the Standard Bank mortgage was replaced with a Barclays Bank mortgage for £6 million. At the same time the family home in Paris was charged to secure a loan of €6 million, also from Barclays. The funds were to be used in part to finance the purchase of a Boeing aeroplane that the husband was buying at a cost of $8 million. $4 million was transferred in respect of this purchase, and a sum of €1.2 million appears to have been transferred to Alveston's account, again in Lebanon with Bank Ahli in Beirut.
- Prior to Barclays providing these loans, a manager had a meeting with the husband in Paris. Following this, the manager prepared a detailed report dated 18th November 2008. This contains an extensive exposition of the husband's resources, which are given a total value of £67 million. The author's view is that the husband probably has other cash investments, but that, because of his tax position, he is cautious when discussing his taxable income and assets.
- The husband is described as seeking an equity release from his residential properties in London and Paris. It notes that:
"… as is to be expected of a client of the husband's nature, his assets are owned by way of offshore SPV structures, although he, and not a trust, is the direct beneficial owner of all of them."
- The Barclays mortgage has not been paid for some time, so that the amount now due is probably in the region of £6.4/6.5 million. In 2012 Barclays indicated that they was taking steps to sell WH. They have not yet done so, but there must be a significant question over how much longer they will be prepared to wait.
- WH has been estimated to be worth £15 million, so the net proceeds of sale, subject to tax, are in the region of £8 million. Informal advice was provided to me, received on behalf of the wife, which indicates that there is unlikely to be any tax payable on the sale of WH following the changes to the legislation with effect from April 2015.
- As referred to above, WEL has taken no active part in these proceedings. They have given no disclosure nor have they filed any evidence. On occasion, letters have been written by English solicitors on behalf of WEL. Letters have also been written by a Swiss lawyer, Mr. Bonnant, acting as director of WEL. Some of these latter letters have demonstrated a confusing perspective of the corporate structure - for example, on 19th March 2015 Mr. Bonnant signed a written resolution as the sole shareholder of WEL. Letters have also been written by a Lebanese lawyer, Mr. Bouchaaya, acting as director of WEL in succession to Mr Bonnant.
- WEL has never been represented at any hearing nor has it complied with any order as to the filing of evidence. No accounts or any financial statements have been provided. No evidence has been provided dealing with the purchase of WH.
- Assertions have been made in correspondence that WH is "owned 100 per cent by" WEL, but these have been made without elaboration and without any supporting disclosure. This was stated in a letter from Mr. Bouchaaya sent to the court in response to the order dated 16th April 2015. This letter purports to set out WEL's current assets and current liabilities. The Barclays' loan is included as a liability, but there is no reference to any debt owed to the husband.
- When asked in his oral evidence to explain this absence, the husband replied that it is normal practice not to refer to such a liability. This is another aspect of the husband's case which is confusing and contradictory. In his oral evidence, the husband also said that evidence of his loans to the company would be in the company's statement of assets or accounts. He first asserted that these had been produced, but when told that they had not, he said that "maybe" they had not been requested. When pointed to the order of 2nd February 2015, he replied that neither he nor the company were aware of that request. He then said that he would attempt to correct this omission immediately as the documents are public records which could be obtained easily. The loans would all be registered in the official records of the company. He also said that the wife has the documents from the criminal process or proceedings in France.
- Further, at the conclusion of his oral evidence, the husband said that he had lent all the money to the company and that it had never been repaid. WEL owes the shareholder, and, he added, "maybe me" all the money. This included all costs incurred by WEL, as it had never had any income or revenue. He - that is the husband - had paid all its costs until 2007. All these sums were owed to him personally by WEL, then adding, puzzlingly, via Alveston. This was not consistent with other parts of his evidence, nor, as was pointed out, was there any reference to such a debt owed to him by WEL in his Form E.
- During his oral evidence the husband also struggled consistently to maintain that WH was owned beneficially within the corporate structure. I do not consider that this was due to any language difficulties. At one point he said that he was the direct beneficial owner; at another, he agreed that WH was always intended to be beneficially owned by him. At other times he was clear that it was beneficially owned by the company.
- Turning now to the issue of whether WH was a matrimonial home, I propose to deal with this relatively shortly.
- The wife's case is that WH was purchased as the family's London home. She has given a considerable amount of evidence on this issue. It is the husband's case that WH was purchased as an investment; it was not the parties' marital home, which has always been in France. He accepts that the family stayed at the property for short periods during the marriage.
- It is clear to me that WH was a marital home. A family can have more than one matrimonial home, and the evidence as to its creation as a family home, through an expensive building and refurbishment project, and as to its use clearly demonstrates that WH was one.
- I also note that, when the property was being mortgaged in 2008/09, solicitors acting for WEL stated in reply to preliminary enquiries that there were no leases, tenancies, licences, or other rights of occupation but that the husband and his family occupied the property when in London. No one else has occupied the property since its purchase, save for the family's housekeeper, who was employed for something over ten years.
- I also accept the wife's evidence to the effect that there was never any suggestion that the family occupied the property as licensees or tenants. I mention this last point because, during the course of previous proceedings, the husband relied on occupancy agreements, to which I refer in my judgment of 21st December 2010. The first such agreement is dated 3rd January 2000 and purports to be made between WEL and an entity called Select Investment, situated in Lebanon, which was represented for the purposes of the agreement by a Mr. Yared and the husband. Select Investment is called the "tenant" and is given a "licence to occupy" WH.
- The second agreement is dated 28th June 2001, and purports to be made between Select Investment and the husband. Under this, Select Investment "grants and permits occupancy" of WH to the husband.
- Neither of these agreements provides for any payment to be made in respect of the licences to occupy. Despite this, on 29th August 2007, a Mr. Takla, purporting to be acting as a director of WEL, signed a document confirming that the husband had rented WH from 3rd January 2000 to 25th November 2006, and had paid all the rent due to WEL in accordance with a rental agreement.
- I am satisfied that these documents are not genuine, and that no rent or other payment was ever made in respect of the family's occupation of WH. As referred to above, the husband said in his oral evidence that WEL had no income or revenue so he had to pay all its costs. This was not an oversight on his part and is fundamentally inconsistent with the suggestion that rent had been paid for six years.
- The husband also said in his oral evidence that he had the right to occupy WH, but never exercised it. This is inconsistent with other evidence, not only from the wife but also from solicitors, as I have mentioned, that the husband and the family occupied the house when in London.
- The wife first registered a Matrimonial Homes Rights notice or charge against WH in about November 2007. She then agreed to remove it at the husband's request. This was followed by the property being mortgaged on 21st December 2007, as referred to above. The wife again registered a charge on 10th March 2008. She again removed this at the request of the husband, following which the property was remortgaged to Barclays. The wife registered a further Matrimonial Home Rights Notice on 17th February 2010.
- As for the contents of WH, in his oral evidence the husband said that they belonged mostly to the company. They had been purchased with monies he had provided, and although his evidence was not entirely clear, he had purchased some directly. Given the evidence, I can see no reason to distinguish between the property and its contents when determining the issue of beneficial ownership.
- The husband raises a separate issue in respect of the contents, and that is that the wife has removed and/or has sold some of the more valuable items from WH. On 24th July 2014, solicitors acting for WEL wrote to the wife's solicitors asserting that she had removed items from the property and asking for a list of those items. The wife's solicitors replied on 31st July 2014 stating that no items had been removed. That assertion was incorrect. Although the letter added "when the wife took occupation", it was clear that the question was broader and, in my view, that the answer would be taken as broader. Although not disclosed in detail until the hearing, by then - that is by July 2014 - the wife had sold five valuable paintings realising, according to documents disclosed during the hearing, just under £100,000. The wife did not disclose that she had removed any items from WH until her statement of 6th July 2015, in which she said she had sold a number of items for which she had received considerably less than £100,000. When asked by the husband why the July 2014 letter does not refer to the pictures, the wife could only reply that she did not know.
- The wife's position on this was initially inaccurate, and I am not persuaded that, even now, she has necessarily given a full account on this issue. At some point an inventory may well need to be taken to clarify what contents remain at WH.
Other English Proceedings
- In addition to proceedings in France, there have been proceedings in England apart from this Part III application. These include:
(i) Proceedings for an occupation commenced by the wife on 16th July 2010;
(ii) Breach of confidence proceedings commenced by the husband against the wife on 13th August 2010;
(iii) Possession proceedings commenced by WEL against the wife on 26th October 2010; and
(iv) A private prosecution commenced by the wife against the husband for perverting the course of justice. On several occasions I have questioned the purpose of these proceedings, but they remain in existence. As I understand it, on 31st December 2013 a warrant for the husband's arrest was issued because of his failure to attend a hearing or hearings in respect of those proceedings.
- The breach of confidence proceedings, in which the husband was seeking an order preventing the wife from making use of documents she had obtained from WH, were dismissed on 8th April 2011. The husband was ordered to pay the wife's costs, with a payment on account of £250,000 within 14 days. This sum has not been paid. The wife's total costs were assessed, or have been assessed, at just under £410,000.
- Turning to the occupation order proceedings, an occupation order in respect of WH was made in favour of the wife on 16th July 2010. Following the order, the wife gained entry to WH by, I believe, pretending to estate agents to be a potential purchaser. The wife has remained in occupation since then. The husband challenged the court's jurisdiction to make an occupation order, and also asserted that WH had never been a matrimonial home. I determined the issue of jurisdiction on 21st December 2010. I decided that the English court did have jurisdiction to make an occupation order under the Family Law Act 1996.
- I turn now to deal with the possession proceedings and the wife's counterclaim in those proceedings for declarations. On 26th October 2010 WEL commenced possession proceedings against the wife alleging that she was a trespasser. She defended those proceedings on the basis that they were an abuse of process and in breach of the occupation order because WEL was owned and controlled by the husband.
- The history of those proceedings is set out in my judgment of 1st February 2012, and I only propose to set out a brief summary in this judgment. By the date of that judgment WEL had discontinued the possession proceedings. Accordingly, I determined only the counterclaim brought by the wife for declarations. WEL did not appear at the final hearing. It had failed to comply with a number of case management orders, including in respect of disclosure, and had failed to file any defence to the counterclaim. This was despite Mr. Bonnant having said in June in 2011 that WEL accepted that, "it must act with all due haste to make up time to make the matter ready for trial".
- The declarations I made were:
(i) that an alleged share sale agreement dated 16th February 2009 was not genuine or otherwise of any legal effect; and
(ii) that the husband remained the owner of Alveston and all its assets.
- The essential factual issue, the "core fact" (as I refer to it in my judgment), which I determined was whether the sale agreement was genuine or a false creation. If it was not genuine it followed that the husband remained the owner of the corporate structure because no other case had been advanced by WEL as to a change of ownership. It is clear from my judgment (in para. 61) that I dealt only with beneficial ownership of the corporate structure. The wife sought declarations in respect of the alleged change of ownership effected by the sale agreement so that this could not be relied on to defeat her occupation order, or in support of future possession proceedings.
- These earlier proceedings and my judgment are relevant, in particular, because the husband asserts that an issue estoppel is raised from those proceedings in respect of the wife's current claim that WH is beneficially owned by him.
- The initial evidence in support of the possession claim was a statement from Mr. Takla dated 3rd November 2010. In this he asserted that he was the ultimate beneficial owner of WH through a corporate structure. By the sale agreement the husband was said to have transferred ownership of Alveston to a company called Perford International SA, of which he, Mr. Takla, was the beneficial owner. The consideration was subsequently stated to have been £2.4 million.
- The wife asserted that the share sale agreement was bogus and had been concocted by the husband and Mr. Takla. She relied on a number of matters. In her counsel's written submissions for the final hearing of her counterclaim, the grounds on which the wife relied were summarised under seven headings. They included conduct by the husband and Mr. Takla which was inconsistent with the existence of the sale; a "whole series of transactions" after the date of the alleged sale which indicated that the husband rather than Mr. Takla remained the ultimate owner of corporate structure, including the deployment of funds held within the structure; the failure by WEL, if then owned ultimately by Mr. Takla, to challenge the wife's Matrimonial Home Rights Notice or a charge registered by solicitors in respect of costs owed by the husband against WH; and the fact that, if genuine, the sale would have been effected at a significant undervalue given the value of the assets owned by Alveston, including WH.
- This last assertion is plainly inconsistent with the wife's current case, namely that WH is beneficially owned by the husband. This was one of the matters which led me to conclude that the agreement was not genuine. In para.57 of my judgment I said, "It is manifest to me that the share sale transaction was effected at a very considerable undervalue", even if it was confined to WH. The issue I must decide is whether this creates an issue estoppel in respect of the wife's current assertion that the husband is the beneficial owner of WH. I deal with this later in this judgment.
- Finally, in respect of other applications, on 27th September 2012 the wife obtained a freezing order against the husband which covers WH.
- As a result of costs orders made in proceedings in England, including the breach of confidence proceedings, the wife is owed a substantial sum, the total of which is not entirely clear to me, by the husband. She is also owed a significant sum in respect of a costs order made against WEL, which is of the order of £225,000.
Part III Application
- Turning now to the Part III application, the wife's application for leave is dated 29th September 2014. She was given leave by His Honour Judge Heaton QC, sitting as a High Court Judge, on 20th October 2014. The wife's substantive application was issued on 24th October 2014. It seeks an order transferring WH into her sole name, or an order for its sale with the proceeds of sale being paid to her.
- Directions were given by His Honour Judge Heaton which required the parties to file Forms E by 1st December 2014. The husband was served with the proceedings on 12th November or 25th November 2014.
- As described earlier in this judgment, by an order dated 2nd February 2015, WEL was joined as a party to the proceedings. It was ordered to file a sworn statement setting out the company's assets and liabilities, with documentary evidence, and company accounts/financial statements since 1st January 2006.
- On 15th April 2015, the husband, then acting through solicitors, filed an application seeking the setting aside of the grant of leave, the dismissal of the wife's application and the discharge of all other orders. This application was based on the existence of proceedings in France.
- On 16th April 2015 further directions were given at a hearing at which both the husband and the wife were represented. The order recites that the husband asserts:
(i) that the French court is first seised and has exclusive jurisdiction over divorce and financial matters; and
(iii) that the English court has no jurisdiction to make an order under Part III.
The time for the husband to file his Form E was extended, and the date for WEL to serve its evidence was also extended to 14th May 2015.
- On 23rd June 2015, the husband filed a notice of acting in person, which was followed on 26th June by new solicitors filing a notice of acting on his behalf. They continued to act for him until November 2015.
- On 29th June 2015 the husband was ordered to file his statement of evidence by 20th July.
- On 16th July 2015, the wife issued an application for a charging order over WH in respect of arrears of maintenance due under French orders. The sum given as being due was just over €3 million.
- On 30th July 2015 I adjourned the wife's substantive application and the husband's set aside application to be determined at this hearing. This was, in part, because I did not consider that either the husband or WEL had had sufficient time to deal with the wife's case as set out in her statement of 6th July 2015. I also considered it appropriate to order the wife to file points of claim in respect of her case as to the beneficial ownership of WH. I ordered her to do this by 30th September 2015, and ordered the husband and WEL to serve defences and evidence in reply by 30th October 2015.
- The husband was represented at that hearing by Mr. Scott QC. I will deal with his submissions in more detail later in this judgment. At present I just record that I rejected his submissions (a) that the wife's application should be adjourned until the conclusion of all proceedings in France; and (b) that a fair trial could not take place if the husband was unable to attend the hearing in person.
- The wife's points of claim is a confusing document. It first asserts that the court has already declared the husband to be the beneficial owner of WH. This is not correct, as referred to above. It also relies on a broad range of factual matters in an unfocused manner. However, the essence of the wife's claim is that WEL holds WH on trust for the husband as beneficial owner under a resulting trust.
- The husband's defence makes plain that this was how the claim was understood. In para.6 it is asserted that none of the facts relied on by the wife advance her case of an alleged resulting trust. This document is headed "Defence of the first and the second respondents", although WEL has never had anyone acting for them in the proceedings.
- The defence makes a number of preliminary points, including that this court does not have jurisdiction or, alternatively, should not exercise jurisdiction. It also raises issue estoppel and the principle in Henderson v Henderson. As to the latter, it is asserted that the wife could have, and should have, asserted the resulting trust in the possession proceedings rather than an inconsistent case. In respect of the former, it is asserted that para.57 of my judgment of 1st February 2012, as referred to above, is a finding of fact which gives rise to an issue estoppel.
- In para.11 of the defence it is pleaded:
"This is a finding of fact which gives rise to an issue estoppel that the value of Warwick House to WEL was substantially greater than the consideration in the share sale, namely $2.4 million. If, as the applicant now contends, Alveston and thus WEL held Warwick House on resulting trust for H, Warwick House would have had no value to WEL. Accordingly, the applicant is estopped from asserting the resulting trust for which she now contends."
- The parties have filed a number of statements. As with other aspects of this case, these have covered a wide range of matters, and included on the wife's part a considerable and inappropriate element of argument. I propose only to summarise parts of the evidence, including the oral evidence.
- The wife's first statement in her Part III claim is dated 24th September 2014. Based on documents found at WH she contends that the husband was worth at least, approximately, €100 million in 2008. One document is a list of assets/properties signed by the husband and dated 23rd October 2008, which gives the total value of the assets listed in the document as €97 million. The assets include WH and the properties in Paris and Cap d'Antibes. The owners of these properties are given as companies. The owner of WH is listed as Arcos Assets, Panama.
- The wife's substantive Part III statement is dated 6th July 2015. This exhibits a substantial volume of further documents, relating to the husband's financial affairs, which appear either to have been obtained by her from WH or from proceedings in France. They range widely and cover a number of transactions and prospective transactions between 1997 and 2013 or 2014. This evidence seeks to address the extent of the husband's worldwide wealth. The statement also exhibits the Barclays report referred to above, which records the husband stating, as I have indicated, that he owns assets valued in total at £67 million. Specifically, the wife alleges that since the parties separated, and more particularly since June 2007, the husband has transferred sums totalling €41 million to Lebanon.
- In my view, this evidence is far broader than is either necessary or appropriate for the purposes of determining the wife's Part III claim. It clearly raises issues which will form part of any liquidation proceedings in France, and which, in my view, it would not be appropriate for me to address given the difficulties that this would be likely to create for those proceedings. For example, the report of Professor Devers makes clear that the French court has power to deal with the assets transferred by the husband to the Lebanon as diverted or concealed assets. Further, the documents and the evidence relied on by the wife duplicate that relied on by her in France. I have already referred to the letter dated 4th March 2007. Some of the other documents also feature in her French claim.
- The husband's Form E is dated 28th May 2015. In the summary of his capital he is said to have no assets and liabilities of £22 million, which include a tax debt of £17 million and the maintenance award of €3 million. This position is in part based, or appears in part to be based, on the fact that all the husband's assets in France are frozen.
- The husband's substantive statement is dated 12th November 2015. This deals in some detail with the breakdown of the marriage and the French proceedings. It contains his evidence in respect of the purchase of WH as referred to above. In respect of his other assets he simply states that all his other assets have either been seized by the French authorities, or sold to pay his lawyers. In his oral evidence the husband said that he is now worth nothing. In his statement, he also refers to the 'extreme strain' and the health problems that he has had since 2004.
- Dealing with two specific parts of the evidence, namely the list of assets dated 23rd October 2008 and the Barclays report. As to the list of assets, the husband agreed in his oral evidence that he had signed this, but he did not agree with its contents. He could not recall how it had been produced. He suggested at one point that it might have been fabricated, before then saying, it was just to remind him of the names of the companies he owned. None of this evidence was credible.
- The list of assets is broadly consistent with the contents of the Barclays report. The husband also challenged this report asserting that it must have been written by the manager to impress his superiors. As for the total of £67 million, he said that this could have been correct at the time, or might have been exaggerated. He gave other possible figures.
- I am confident that the report accurately records what the husband told the manager and, given its consistency with the list of assets, provides good evidence of the extent of the husband's wealth in 2008.
The Wife's Case
- Turning now to summarise the wife's case, Mr. Hale submits:
(i) that this court has jurisdiction to make an order under Part III;
(ii) that it would be appropriate to make the order he seeks;
(iii) that issue estoppel does not arise; and
(iv) that the husband is the beneficial owner of WH under a resulting trust.
- As to (i), Mr. Hale submits that neither Brussels IIA nor Brussels I nor the Maintenance Regulation have the effect of excluding this court's jurisdiction. He does, however, accept that the French court's award of capitalised spousal maintenance means that it would not be appropriate for this court to exercise any potential maintenance jurisdiction.
- As to (ii), Mr. Hale submits that it would be appropriate for this court to exercise jurisdiction, (a) to determine the beneficial ownership of WH; and (b) in the event of determining that the husband is the beneficial owner, to make orders for its distribution as between the parties, including by way of an order for sale.
- Although in his written submissions Mr. Hale refers to the wife's needs, he made clear in his oral submissions that the wife seeks a share of the marital wealth, not by reference to her needs, but by reference to her entitlement to an equal share of the marital wealth, as determined by the French court. He submits that the wife is effectively seeking interim implementation or enforcement of the French court's determination that the parties are equally entitled to the marital wealth. In support of the wife's claim to the husband's share of WH (so, the whole of WH), Mr. Hale submits that this is fair in order to reflect the assets transferred by the husband to Lebanon, or otherwise dissipated by him.
- As to (iii), Mr. Hale submits that no issue estoppel arises in this case. The parties are not the same, and the issue which is said to constitute the issue estoppel is not the same. Further, the principle in Henderson v Henderson does not apply in this case so as to prevent the wife seeking a determination as to beneficial ownership of WH. He submits that it would not be an abuse to permit this, rather it would be an abuse not to permit her to do so. He refers to Chai v Peng  2 FLR 412 and Johnson v Gore-Wood & Co  2 AC 1.
- As to (iv), Mr. Hale submits that WEL holds WH under a resulting trust for the benefit of the husband. He provided the purchase monies, and there is no evidence which rebuts the presumption of a resulting trust. He invites me to reject the husband's oral evidence that this was a loan. Mr. Hale relies on the absence of any documentary evidence from either the husband or WEL in support of the husband's case. He relies on passages from Lord Sumption's judgment in Prest v Petrodel  UKSC 34.
- In respect of the wife's application to enforce the French award of capitalised maintenance, Mr. Hale was somewhat equivocal in his submissions as to how I should determine this. In his final oral submissions he submitted that, if the wife did not otherwise receive the whole of the equity, then this award should be enforced.
- After the conclusion of the hearing, as I have mentioned, I was sent an informal translation of the Court of Appeal Paris's decision of 18th November 2015.
The Husband's Case
- The husband's case was set out at some length in the submissions made by Mr. Scott QC for the hearing in July 2015. It is also set out in the defence prepared while solicitors were acting for him. Additionally, the husband has made submissions at this hearing. His case is that the wife's application should be dismissed.
- I deal first with the submissions made on his behalf by Mr. Scott. Mr. Scott submitted that the grant of leave should be set aside or that the Part III application should be dismissed on the following grounds:
(i) The wife's application to the court was misleading. If she had given the full picture, leave would not have been granted;
(ii) Her application is impermissible as a matter of EU law;
(iii) Her application is an abuse of the Part III jurisdiction, which was never intended to be, and cannot properly be, used in circumstances such as these where the French court is fully seised of the matter, and England is manifestly not the appropriate jurisdiction;
I addressed additional points, seeking an adjournment, in my judgment in July 2015 and I do not propose to deal with them again.
- In support of (i), Mr. Scott submitted that the wife had given a selective and misleading presentation, when she applied for leave, in respect of the French process dealing with the division of the marital wealth.
- As to (ii), Mr. Scott submitted that as a matter of EU law and/or English public policy it is not permissible for the wife to start satellite proceedings in England. He relied on Prazic v Prazic  2 FLR 1128, and EA v JP  EWHC 2344 (Fam), and what he described as "fundamental principles of EU law", including the avoidance of irreconcilable judgments. Mr. Scott, to be fair to him, made these submissions having only had a brief opportunity to address Professor Devers' report, which had only been received in translation shortly before the hearing.
- As to (iii), the wife's maintenance claims have been finally determined in France. Accordingly, any claim under Part III is confined to a claim under the sharing principle. However, he submitted that the wife's application is an abuse of Part III as she is seeking an order here, before proceedings have been concluded in France, purportedly on account of her entitlement in those proceedings. Mr. Scott submitted that the wife is seeking to exploit French procedural rules by making her application after the conclusion of the divorce, but before the judicial liquidation process has commenced.
- He submitted that an application under Part III might become appropriate either if the French court were to determine that it does not have jurisdiction in respect of WH, or if the French court awarded WH to the wife and she needed to enforce that order. Accordingly, in the circumstances as they now are, he submitted that it was not appropriate for any order to be made by this court under Part III.
- I have already referred above to the issues raised in the husband's defence.
- In his submissions, the husband raised questions about the wife's credibility. He pointed to what he submits are inconsistencies between her case as advanced in France, as to there having been a reconciliation, and her case as advanced in England, as to his behaviour in support of her application for a non-molestation order.
- The husband also disputes the wife's case as to his wealth. He asserts that he has no hidden wealth. If he had, it would have been discovered through the substantial investigative process to which he has been subject in France. This included all his accounts in Lebanon being disclosed with the assistance of the Governor of the Lebanese Central Bank. He said that there is nothing which the French authorities have not been able to obtain, and the wife has access to that information in France. In his submission, the wife's Part III should be dismissed, and any claim she has in respect of WH should be dealt with within the French liquidation process, which it is open to the wife to initiate.
- The husband also contends that the wife has received substantial sums through the enforcement measures she has taken in France, and from the items she has taken from WH.
- I turn now to my determination.
- Dealing first with the application in respect of the grant of leave. I am not persuaded that the grant of leave should be set aside. Given all the circumstances of this case, it is clear to me that leave was granted appropriately. The wife's statement could, perhaps, have been clearer as to the judicial liquidation process in France but any omission is not, in my view, sufficient to undermine the grant of leave. Further, although the position is more nuanced, solicitors then acting for, or writing on behalf of WEL, were asserting that the French divorce proceedings had absolutely nothing to do with WH.
- I propose next to address the issue of jurisdiction.
- I should first record that s.15 of the 1984 Act, which deals with jurisdiction, is satisfied because the wife was habitually resident in England for the requisite period pursuant to s.15(1)(b).
- Does any Regulation or other instrument and/or does any principle of EU law apply so as to exclude this court's jurisdiction under the 1984 Act? In summary, in my view, there is nothing which prevents this court from having jurisdiction to make an order under Part III.
- I should first analyse the nature of the wife's claim. In my judgment, it is not a claim for maintenance applying the broad definition, as set out, for example, in Van den Boogaard v Laumen  2 FLR 399. It is a claim for a share of the marital wealth. As out in Moore v Moore  2 FLR 399, at paras.30, 94 and 95, if the essential object of an application and orders is to achieve a sharing of property, rather than an order based on financial need, then they do not relate to maintenance.
- Is the claim, therefore, a claim within any European Regulation? It is clear that Brussels IIA does not apply because it does not apply to maintenance obligations (Article 1.3(e)); nor does it apply to "the property consequences of the marriage or any other ancillary measures" (para.8 of the preamble). The Regulation only applies to "the dissolution of matrimonial ties".
- The Maintenance Regulation does not apply because the wife's claim is not, in my view, for maintenance. If relevant, given the duration of the proceedings, the Maintenance Regulation only applies to England and Wales from 18th June 2011.
- Brussels I (Regulation 44/2001) also does not apply to rights in property arising out of a matrimonial relationship. It would not apply, equally, to the wife's claim because it is not one for maintenance.
- Further, the above instruments do not apply because there are no pending proceedings in France. As a result, the provisions of, for example, Article 12 and Article 13 of the Maintenance Regulation would not apply; nor would the similar provisions in the other instruments.
- As a result Prazic v Prazic does not apply, because in that case there were pending proceedings in both France and England. I note in passing that, as Mr. Scott accepted during the course of the hearing in 2015, the question of whether Brussels I applied at all, given, as I have said, that it does not apply to rights in property arising out of a matrimonial relationship, was not considered in that case.
- Nor, in my view, does EA v AP apply. If I have understood the circumstances of that case correctly, namely that there were pending proceedings because the issue of jurisdiction in respect of child maintenance had yet to be determined by the Italian Supreme Court. Because the Italian court was the court first seised, that issue needed to be determined before this court could exercise its potential jurisdiction. This accords, or this interpretation accords, with Mr. Scott's submissions as to the circumstances of the decision during the course of the hearing in July.
- I also do not consider that any principle of EU law applies so as to deprive this court of jurisdiction. Mr. Scott submitted, very broadly, that the English court is not permitted as a matter of EU law to entertain a case which gives rise to a risk of an irreconcilable judgment in respect of ongoing proceedings in another Member State. In the absence of any applicable lis pendens or related actions provisions applying, this submission, in my view, adds nothing to the arguments I have already considered.
- Other arguments advanced by Mr. Scott were made on the basis that the French court is properly seised. As there are no proceedings pending in France, the French court is not currently seised at all.
- I should perhaps add, for the avoidance of doubt, that if the wife was seeking to make a claim for spousal maintenance there could be a debate about whether this court lacks jurisdiction, or whether it retained jurisdiction but it would not be appropriate to exercise it, given the French court's order for capitalised spousal maintenance. If, as it appears, the order for capitalised maintenance conclusively determined the wife's right to maintenance under French law, I would have decided, if it was necessary for me to do so, that it would not be appropriate to make a further maintenance order, even if, theoretically, I had jurisdiction to do so. The right course, in my view, would be for the wife to seek to enforce that order.
- The next issue I address is the husband's reliance on the principles set out in Henderson v Henderson and on issue estoppel. Both of these principles were considered by the Supreme Court in Virgin Atlantic Airways Limited v Zodiac Seats UK Limited  AC 160. This was not an authority referred to during the course of the hearing, but it provides recent guidance on these points.
- Under the heading "Res judicata: general principles", Lord Sumption considers the "different legal principles with different juridical origins" (para 17) within this term. Issue estoppel arises when, even though the causes of action are not the same, "some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties". The principle in Henderson v Henderson "precludes a party from raising in subsequent proceedings matters which were not, but could and should have been, raised in the earlier ones".
- In my view, neither of these principles apply to the present case. There is no issue necessarily common to the possession proceedings and to the current proceedings. In the former case the issue was whether the corporate structure had been sold by the husband pursuant to a share sale agreement. This was a contention which had been raised by WEL in its possession proceedings and was an issue which the wife wanted to have determined, notwithstanding the discontinuance by WEL of its claim. This was, as I have indicated, so that a right to an occupation order could be established, and so that the issue could not be raised in any future proceedings by WEL.
- The declarations which I made on 1st February 2012 addressed this issue and the consequence that, because the agreement was of no effect, the husband remained the owner of the corporate structure. To adapt the words of Lord Keith of Kinkel from Arnold v National Westminster Bank Plc  2 AC 93, p.105D/E, as quoted by Lord Sumption, there is no issue, which formed a necessary ingredient in the previous proceedings and which has been decided, which is relevant in the Part III claim and which the wife seeks to reopen.
- The wife's cases are, in some respects as referred to above, inconsistent, but there is no issue estoppel and no issue which should have been raised in the previous proceedings. This is because, put simply, the issue of the beneficial ownership of WH has not yet been determined. In my view, the wife's claim that the husband is the beneficial owner of WH is not a claim which could and/or should have been raised in the previous proceedings. The wife was seeking to meet WEL's case that the husband had sold his interest in the corporate structure to Mr. Takla. In support of her case that the agreement was not genuine, she submitted, and I accepted, that if it was genuine the transfer would have been at a significant undervalue. This is very different from a determination as to the beneficial ownership of WH.
Beneficial ownership of WH and its contents
- I now turn to deal with the beneficial ownership of WH and its contents. In my view, it is appropriate for me to determine this issue as part of the wife's application under Part III. I will consider later whether it is appropriate for me to make an order in the event that I do find the husband beneficially owns WH. Clearly, if I do not so find, there is no basis for my making any order under Part III.
- I consider it appropriate to decide the beneficial ownership issue because it is an issue which this court is well placed to determine, and, if I can say so with all due respect, considerably better placed to determine than the French court in potential marital liquidation proceedings. The issue involves the application of English trust principles, and all the relevant persons are parties to these proceedings. Additionally, there is a significant question over whether the French court would have jurisdiction in respect of WH. In my judgment, it is neither necessary nor appropriate to leave the issue unresolved and to require the parties to test the scope of the French courts powers and jurisdiction in prospective proceedings. This court clearly has the power to determine beneficial ownership and, if appropriate, to make effective orders in respect of the property under Part III.
- The wife's case in respect of the beneficial ownership of WH seeks, as its broadest, to rely on many of the matters that were deployed on behalf of the wife in Prest v Petrodel under the Matrimonial Causes Act. They were not relevant ultimately to the determination in that case, and I do not consider that they are relevant to my determination. As Lord Sumption makes clear in, for example, para.40, ownership and control of a company and unrestricted access to its assets does not equate to beneficial ownership.
- However, in addition, the wife asserts that the husband is the beneficial owner under a resulting trust. I first propose to summarise the legal principles applicable in respect of resulting trusts. As set out in Lewin on Trusts, 19th edition, para.9-021 to 9-022:
"The general rule is that, when real or personal property is purchased in the name of a stranger, a resulting trust is presumed in favour of the person who paid the purchase money if he did so in the character of purchaser."
This rule was established in relation to land before the 19th century. In Dyer v Dyer (1788) 2 Cox 92 at 93, the principle was set out in the following terms:
"The clear result of all these cases … is that the trust of a legal estate … whether taken in the name of the purchasers and others jointly, or in the name of others without that of a purchaser … results to the man who advances the purchase price ..."
- In Prest v Petrodel Lord Sumption addressed some aspects of that case which are similar to the present case. In para.47 he said:
"The judge's findings about the ownership and control of the companies mean that the companies' refusal to co-operate with these proceedings is a course ultimately adopted on the direction of the husband. It is a fair inference from all these facts, taken cumulatively, that the main, if not the only, reason for the companies' failure to co-operate is to protect the London properties. That in turn suggests that proper disclosure of the facts would reveal them to have been held beneficially by the husband, as the wife has alleged.
48 Turning to what is known about the acquisition of the disputed properties, PRL acquired the legal interest in six London properties (including the matrimonial home) between 1995 and 2001. All of these properties were acquired by PRL before it began commercial operations and began to generate funds of its own. This was the main basis on which the judge found that the matrimonial home was held on trust for the husband from its acquisition in 2001. Since, as the judge found, no rent was paid to PRL for the family's occupation of the matrimonial home, this is a particularly clear case of the husband using PRL as a vehicle to hold legal title on trust for himself."
- In respect of two of the properties in issue, Lord Sumption inferred that their purchase in the name of a company had been funded by the husband. In the absence of evidence to the effect that the money was provided to the company by way of a loan or capital subscription, Lord Sumption was not willing to presume that it had been so provided.
- Finally, he said in para.52:
"Whether assets legally vested in a company are beneficially owned by its controller is a highly fact-specific issue. It is not possible to give general guidance going beyond the ordinary principles and presumptions of equity, especially those relating to gifts and resulting trusts. But I venture to suggest, however tentatively, that in the case of the matrimonial home, the facts are quite likely to justify the inference that the property was held on trust for a spouse who owned and controlled the company. In many, perhaps most cases, the occupation of the company's property as the matrimonial home of its controller will not be easily justified in the company's interest, especially if it is gratuitous. The intention will normally be that the spouse in control of the company intends to retain a degree of control over the matrimonial home which is not consistent with the company's beneficial ownership. Of course, structures can be devised which give a different impression, and some of them will be entirely genuine. But where, say, the terms of acquisition and occupation of the matrimonial home are arranged between the husband in his personal capacity and the husband in his capacity as the sole effective agent of the company (or someone else acting at his direction), judges exercising family jurisdiction are entitled to be sceptical about whether the terms of occupation are really what they are said to be, or are simply a sham to conceal the reality of the husband's beneficial ownership."
- What does the evidence establish in the present case? In the present case the funds used to purchase WH and its contents were provided by the husband. That is his clear evidence and, indeed, there was no other source. The property was a matrimonial home and was occupied by the family as such. I have rejected the so-called occupation agreements as shams, as well as the assertion that the husband paid rent in respect of the family's occupation. The property was occupied by the family rent-free.
- Apart from the husband's oral evidence, there is no evidence that any of the funds provided by the husband were by way of loan or capital subscription or shareholders' advance, as asserted by him. In his oral evidence, the husband said that documentary evidence of the existence of such loans could be easily obtained. None has been provided. Having regard to my conclusion that WEL is owned and controlled by the husband, this means, as in Prest v Petrodel, that the company's failure to participate in these proceedings or to provide any disclosure is a course adopted at the direction of the husband. Further, as in Prest, it is, in my view, a fair inference that this is because proper disclosure of the evidence would reveal that WH is held beneficially by the husband.
- Following also Lord Sumption's tentative suggestions in para.52, in my judgment, again as in Prest, this is a "particularly clear case" of the husband using WEL to hold legal title on trust for himself. This applies both to the property and, in so far as any of the contents do, in fact, belong to WEL, to the contents as well.
- In reaching this determination I take fully into account that an element of the wife's case in the possession proceedings was inconsistent with the husband being the beneficial owner of WH. I have decided this issue on all the evidence now available to me, and, in my view, by application of the relevant trust principles.
Part III Claim
- Turning finally to the wife's substantive claim under Part III, this requires me to consider the provisions of ss.16, 17 and 18 of the 1984 Act. Section 16 is headed "Duty of the court to consider whether England and Wales is appropriate venue for application". Section 16(1) requires the court:
"Before making an order for financial relief [to] consider whether in all the circumstances of the case it would be appropriate for such an order to be made by a court in England and Wales …"
Section 16(2) contains a list of particular factors to which the court must have regard.
- Section 18 sets out the matters to which the court must have regard when deciding whether to exercise its powers under s.17. Given that these are "inter-related duties", as explained by Lord Collins in the leading authority on applications under Part III, Agbaje v Agbaje  1 FLR 1813, I propose to consider the sections together. This also enables me to consider whether it is appropriate to make an order in context, namely in the context of a specific proposed order.
- Lord Collins addressed the proper approach to such applications in paras.71 to 73 of his judgment. Quoting para.71:
"… the proper approach to Part III simply depends on a careful application of sections 16, 17 and 18 in the light of the legislative purpose, which was the alleviation of the adverse consequences of no, or no adequate, financial provision being made by a foreign court in a situation where there were substantial connections with England. There are two, inter-related, duties of the court before making an order under Part III. The first is to consider whether England and Wales is the appropriate venue for the application: section 16(1). The second is to consider whether an order should be made under section 17 having regard to the matters in section 18. There are two reasons why the duties are inter-related. First, neither section 16(2) nor section 18(2) and (3) refers to an exhaustive list of matters to be taken into account. Section 16(1) directs the court to have regard to 'all the circumstances of the case' and section 16(2) refers the court to certain matters 'in particular'. Second, some of the matters to be considered under section 16 may be relevant under section 18, and vice versa. An obvious example would be that section 16(2)(e) refers the court to the financial provision which has been made by the foreign court. Plainly that would be relevant under section 18. So also the direction in section 18(6) to the court, in considering the financial resources of a party, to have regard to whether an order of a foreign court has been complied with would plainly be relevant in considering whether England is the appropriate venue."
At the end of para.73 Lord Collins highlights the flexibility provided by the jurisdiction under Part III so that it can be "tailored to the needs of the individual case". He also said specifically in respect of s.16 that:
"The whole point of the factors in section 16(2) is to enable the court to weigh the connections of England against the connections with the foreign jurisdiction so as to ensure that there is no improper conflict with the foreign jurisdiction."
- Turning now to consider some of the specific factors in s.16 and, more briefly, in s.18.
- The parties clearly have a significant connection to England and Wales. There is a matrimonial home here, and the wife and children have lived here since 2007. However, the parties clearly have a greater connection to France, given that this was the centre of their marriage.
- The French court has determined that the parties are entitled to an equal share of the marital wealth as at June 2007. The financial benefit which the wife is likely to receive in the judicial liquidation process in France, as a result of this determination, is not currently quantifiable. Until the conclusion of the criminal process in France and perhaps other processes as well, it is not known which of the currently frozen assets will be available to the parties. It is also not known what determination the French court will make - for example, in respect of the wife's allegations that the husband has concealed marital assets in Lebanon.
- The French court has awarded the wife capitalised maintenance. The most recent order of the French court determined, as referred to above, that the husband owes the wife €3 million as at 1st August 2015. This sum does not appear to take into account sums received by the wife from the sale of items from WH, as referred to above.
- The wife has the right to apply for the commencement of the judicial liquidation process. The wife has not done so because, until the determination of the French criminal and other process, there is, in my view, clearly no point, or little point, in her doing so. I also note that the husband has also not activated this process although it would also be open to him to do so.
- As for paras.16(2)(g) and (h), an order can be made in this jurisdiction in respect of Warwick House.
- I do not propose separately to consider the matters referred to in s.25, save as follows: I am satisfied that the marital wealth as at June 2007 is sufficiently broadly reflected in the schedule dated 23rd October 2008 and the Barclays Bank report. I am not in a position to determine the extent of the wealth now available to the husband, save that it is clear that he has transferred significant sums to Lebanon over the years, including from the mortgages obtained against WH. I do not, however, consider that I should become engaged in these issues because they are likely to be the subject of determination in France. If I were to do so, I would, in my view, be creating a significant and unnecessary risk of what Lord Collins referred to as being an "improper conflict".
- What, in my view, would not create an improper conflict would be an order awarding the husband and wife a notional half share in the equity of WH. The wife has an argument that the deployment by the husband of the mortgage proceeds which were obtained after June 2007 should result in the mortgage being deducted only from his half share. However, in my view, a more prudent and appropriate exercise of this court's powers would be to permit the wife to enforce against the husband's notional half share the costs orders obtained against him in this jurisdiction, and I will hear submissions on this in due course, and also potentially in respect of the costs orders obtained against WEL, and for the enforcement against the husband's notional share of the outstanding amount due in respect of the French court's award of capitalised maintenance. In this way I consider that I would not be creating any risk of conflict and I would be exercising this court's powers, in applying the French court's current determination and award, in a fairer and more appropriate manner than that proposed by the wife.
- Further, in my view, by taking this course, I am avoiding, or, if not avoiding, making it unlikely that this will result in either party having received in excess of a fair allocation. I acknowledge that the precise extent of a fair allocation will not be known until the conclusion of the French judicial liquidation process. However, I see no real prospect of the wife receiving less than a half share of WH, and I certainly do not consider it necessary or fair to delay determination in respect of the wife's claim under Part III until the French process has concluded. This is unlikely to transpire in the near future, given the complexity of the husband's financial affairs and the need for the resolution of other investigations in France. I would, in essence, as submitted by Mr. Hale, be permitting the wife an interim implementation and enforcement of the French court's determination and award.
- In coming to this decision I bear well in mind what Thorpe LJ said in Jordan v Jordan  2 FLR 1069, at 1081, about the use of this court's powers under Part III to enforce orders. The general principles and guidance he gave do not resonate with the very different and very unusual circumstances of this case.
- In conclusion, in the circumstances of this case, I consider it appropriate to make an order pursuant to and applying the provisions of the 1984 Act. I further consider that the order I propose to make is a fair award and one which is tailored to and properly reflects the specific circumstances of this case.