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England and Wales Family Court Decisions (High Court Judges) |
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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (High Court Judges) >> AF v MF & Ors [2016] EWFC 65 (20 October 2016) URL: http://www.bailii.org/ew/cases/EWFC/HCJ/2016/65.html Cite as: [2016] EWFC 65 |
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FAMILY DIVISION
IN THE FAMILY COURT
Strand, London, WC2A 2LL Cardiff Civil Justice Centre |
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B e f o r e :
____________________
AF |
Applicant |
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- and – |
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MF |
First Respondent |
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- and – |
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OF |
Second Respondent |
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- and – |
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AB |
Third Respondent |
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Miss Deborah Bangay QC and Ms Emma Hargreaves for the First Respondent
Mr Jonathan McDonagh for the Second Respondent
The Third Respondent did not appear and was not represented
Hearing dates: 10th to 20th October 2016
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Crown Copyright ©
Mr Justice Moor :
The Parties
The matrimonial home
The children of the family
The development of the businesses
Property purchases
Difficulties in the marriage
The transfer of shares in Y Plc
The economic crash
Financing the children
The breakdown of the marriage
The litigation
The pleadings
Subsequent statements
The open proposals
Expert evidence
(a) Hilary Evans valued the Wife's property at AYC on 11th May 2016 at £180,000. In fact, it has now emerged that it is on the market for £269,000 which does cast considerable doubt on the valuation. She valued the 47.6 acres of land at £360,000 but reducing to £200,000 if it is subject to an agricultural tenancy in favour of the Wife's brother. No formal tenancy document has been found but it is said that the tenancy is verbal.
(b) The artwork in the matrimonial home was valued on 18th May 2016 by Anthemion Auctions at £210,810. Of this, the artwork owned by X is valued at £83,050 so that owned by the parties is £127,760.
(c) The Country E apartment was valued by ERA on 25th August 2016 at SEK 14.5 million.
(d) Geoff Mesher, a Chartered Accountant, valued K Ltd at £800,000 on 16th September 2016. He valued M2 Ltd at nil to £3,000.
(e) Finally, there was a report on Country E law by Mr A dated 14th September 2016. Country E law does not recognise a trust or proprietary estoppel. Although there is a concept of "hidden ownership", it relates, almost exclusively, to spouses or cohabitees. In relation to the Country E property, the ownership is quite clear and is 90/10.
The Law
The approach to trusts
(a) Assets held in a trust or foundation may constitute a "resource" under section 25(2)(a) to the extent to which they are likely to be made available to the relevant spouse either now or within the foreseeable future (RK v RK [2013] 1 FLR 329). The court will have regard to the circumstances of the trust or foundation, how it came into being, who the beneficiaries are, what duties the trustees have, the relevant terms and how it has been administered in practice (Whaley v Whaley [2011 EWCA Civ 617).
(b) A distinction must be drawn between a relative providing bounty on the one hand and a fiduciary or trustee relationship on the other. In the former case, the payee has no more than a mere hope of bounty which may, at the election of the relative, reasonably or unreasonably be withheld (TM v ML [2006] 1 FLR 1263).
(c) The court will not put improper pressure on a third party but may frame its order in a manner which affords judicious encouragement to provide the relevant spouse with the means to comply with the court's order (Thomas v Thomas [1995] 2 FLR 668 (CA)). The general practice is that, even if the court is prepared to proceed on the basis that a relative or trust is likely to "backfill", it is very unusual to make an order that the outside person or entity produce fresh money directly to meet an award, ie an award in excess of the total value of the visible matrimonial resources (AM v SS [2014] EWHC 865 (Fam).
(d) When considering the issue of whether the assets held by a trust constitute post-nuptial settlements, it is necessary to consider whether the arrangements have an element or character of nuptiality. In other words, are they arrangements making continuing provision for the parties to the marriage in their capacity as such? If so, what is the property or right that forms the settlement? I was referred to the judgment of Coleridge J in N v N and F Trust [2005] EWHC 2908 (Fam); [2006] 1 FLR 856 where he found that a matrimonial home was subject to an ante-nuptial settlement capable of variation by the court. I was told, however, that the judge varied the settlement to enable the wife to reside in the property indefinitely rather than to transfer the property to her outright. I was also referred to the decision of Roberts J in NR v AB [2016] EWHC 277 at Paragraph [120] where she found the nuptial settlement to be a revocable licence to occupy the properties terminable on reasonable notice. In Ben Hashim v Ali Shayif [2008] EWHC 2380; [2009] 1 FLR 115, Munby J found that one property was not subject to a settlement and that there was merely a revocable licence to occupy it. A second property was subject to a nuptial settlement but, again, it was a licence determinable on reasonable notice which he assessed as being six months.
(e) I was referred to the law on sham but I do not need to consider it as sham has not been pleaded and I am quite satisfied that it is not open to Mr Warshaw to do so in any event on the facts of this case.
Lies
Language issues
The Wife's evidence
The evidence of the Husband
The Father's evidence
My findings of fact
The former matrimonial home
Country E apartment
The children's loans
The Wife's inherited assets
Chattels
Liabilities
Company interests
CW Trust
X
(a) The Bahamas timeshares £ 133,587
(b) The artwork in the matrimonial home £ 83,050
(c) The artwork in Country E £1,605,000
(d) The land surrounding SM £ 500,000
£2,321,637
(a) Shares in Y Plc £51,427,920
(b) Assists used by the parties £ 2,321,637
(c) Other shareholdings £ 67,143
(d) Portfolio £ 7,500,000
£61,316,700
Overall computation of the assets
Income
Costs
APPENDIX
SUMMARY OF ASSETS
Liquid
H
W
Total
SM
678,250
678,250
1,356,500
Summerhouse
127,871
127,871
255,742
Boathouse
40,000
40,000
AYC (3 bed, 0.1 acres)
102,358
102,358
47.6 acres at AYC
156,000
156,000
Boat
18,209
18,209
Joint debts
(51,796)
(51,796)
(103,593)
H's funds (excluding M2 Ltd debt)
(247,956)
(247,956)
H's Y Plc shares
1,344
1,344
W's funds
73,939
73,939
565,922
1,086,622
1,652,544
Illiquid
Art in matrimonial home
63,880
63,880
127,760
Country E Flat 10% & loan
(671,963)
(671,963)
M2 Ltd debt (illiquid per SJE)
533,000
533,000
U's home
261,900
261,900
H's interest in Country E cos
409,002
409,002
50% K Ltd
320,000
320,000
Pension W
139,563
139,563
Pension H
16,841
16,841
915,819
203,443
1,119,262
1,481,741
1,290,065
2,771,806