Financial Remedies
August 2022

The parties separated in 2019. H is the surviving twin of the famous brothers who had divided their fortune in 2014 into a web of highly complex trust arrangements. He spent in the region of £128million between 2014 and 2019. In 2019, the funds were cut off and H had received nothing from the trusts since then. W’s case that it was all a sham to defeat her claims and that his family members would provide him with funds if he wanted - notwithstanding the fact that there had been separate court proceedings between H and his family.

(1) The first admitted breach was that following an order in March 2021 to pay W two lump sums of £50million by June 2021 and April 2022, H had paid nothing.

(2) H had not paid by November 2021 the £185,000 LSPO ordered the previous month.

(3) From January 2022, H had unilaterally halved the maintenance of £60,000 per month he had been ordered to pay.

H was 87 and has cognitive impairment. He had delegated the investigating of available funds to his solicitor - ie. someone who was not a family member and could also hide behind professional privilege. The nephews alleged by W to be withholding the funds were not called to give evidence. The learned Judge accepted that H's solicitor had done what he could to obtain evidence from them and that he was constantly blocked by their lawyers.

For a judgment summons to be granted, the Court must be satisfied to the criminal standard that H had the means to pay at any point since the orders were made and that he has refused or neglected to pay up.

W argued that, as H accepted he was in breach, the burden was on him to prove his defence. The learned Judge considered the authorities on this subject and concluded the burden of proof remained on W. All H needed to provide was some evidence why payment was not possible.

(1) Re. the lump sums: Despite the Judge's concerns about nephews, he was not able to find on the evidence or infer from their conduct that H has or had since the March 2021 the ability to pay the lump sums to W.

(2) and (3) Re. LSPO and maintenance: The second and third judgment summons were dealt with together. W argued there were two assets from which H could pay W. H's nephews paid to H's solicitor significant sums into their client account to cover his legal costs. The Judge found it would not have been proper for H's solicitor to pay the money to W when the money had been received for a different purpose.

However, there was also the €1.575million paid into the trust in March 2021 from the sale of a yacht by H in September 2020 at the insistence of H. In the original proceedings, H had failed to properly disclose this sale. As at December 2021, £453,000 remained in the trust account to meet ongoing expenses and by February 2022 when the second maintenance default occurred, there was still over £338,000. The balance was now down to £154,000.

The funds were held by the trust and not by H and the Judge therefore had to consider if they would be made available to him. H was the primary beneficiary of the trust - it had only ever paid out to H and had never refused a request from H if it had the funds. The sums owed were modest compared to the money received from the yacht sale and H had previously used the trust as his bank account. The Judge considered Thomas v Thomas [1995] 2 FLR 668. There was no evidence that the nephews would have hindered this payment as they said they wanted to keep H out of prison and had paid over £1million of his legal fees to do so. The learned Judge could therefore find that H only had to ask for the funds to pay the LSPO and the maintenance sums and that he had neglected to do so.

A consent order in January 2021 settled the original claims and decree absolute had been granted in July 2021. The parties had agreed to an equal division of their capital, with each party receiving c.£500,000 and W was to receive 51% of H's Shell defined benefits pension, which was already in payment and which had a cash equivalent of more than £1million. W died in August 2021 - having been diagnosed in June 2021 - prior to the pension share being implemented.

Regulation 6 of the Pension Sharing (Implementation and Discharge of Liability) Regulations 2000: provides the circumstances in which a pension provider must still implement a pension sharing order in the event on a transferee's death.

Had W’s death invalidated the basis upon which the PSO was made (Barder v Barder [1988] AC 20)? The learned Judge determined that the purpose of the PSO was to ensure the parties had sufficient income during retirement, and had it been known that W pass away so soon after the order was entered into then the pension share would not have been agreed: “it is the intention of the parties at the time that the order was approved that is important, rather than any intention that was formulated thereafter” [51].

The Judge considered reasons for the PSO and the agreed upon percentage of the share within solicitors correspondence at the time. All Barder criteria were met, and the order should be set aside.

The Judge went on to determine that the appropriate PSO was 25% of H’s pension to reflect W’s “earned” share and providing a discount for the future years when W would no longer require her the income to meet her needs. Even if it had been known at the time that W would die within six months of the PSO, it would not have been a fair to have granted her no pension share due to the disparity in the parties’ pension provisions and the long marriage.

After living in H's home country to had a high standard of living, H and W - both foreign nationals - had lived in England with their two children since 2015 after H persuaded W to give up her job and move to England. She had originally been reluctant to do this but he had shown her a draft sale contract which supposedly proved that his company was to be sold to Company X for £80million. He had also given her a bank statement in 2014 which showed a down payment of £8million had already been paid. W retained the statement, which appeared to be genuine, and the family moved to London. They continued to have a good standard of living, including privately educating their children, expensive holidays, and renting a home £10,250 per month.

After separation in 2018, H left the family home and stopped paying the rent and the school fees. Both children suffered from M.E. exacerbated by their parents’ separation divorce and having to leave their school. The eldest child was 19, although due to the severity of the M.E. required a huge amount of care with a poor prognosis for improvement. W was their primary carer and lived on benefits with debts of over £300,000, most of which she had borrowed for H's benefit at a time when it was thought H had the resources to meet the borrowing.

H did not provide full and frank disclosure. The FDA was adjourned three times and H filed an inadequate Form E only two days before the fourth FDA making the hearing ineffective. H failed to engage with the process for the first FDR and did not attend the adjourned FDR. The final hearing came before the learned Judge and had to be adjourned part-heard.

H said the deal with Company X had fallen through and had returned the £8million down payment. Bank disclosure included a genuine bank statement from 2014, which did not show any credit of £8million from Company X, or other transactions included in the statement W had in her possession. H said this had ceased to appear on the statement once it had been returned. A finding of forgery by H was not far away and the learned Judge duly made that finding. Was there ever really an offer of £80 million for his business? One of the reasons for publishing the judgment was to highlight the issue of forged bank statements.

The Judge referred to Dodgy Digital Documents: Where are we now? Where are we going? by Helen Brander [2022] 2 FRJ 139 which addresses this issue.

H claimed that he had no income at all, no job and debts of £2million - half of which was tax owed to his native country because of possible future income even if such income never materialised. H said this was the tax law in his native country.

W produced various online posts of H’s expensive lifestyle and which referred to H having grown his business turnover to £2million in 2020 and a role as "full time Principal/Chief Technology Officer" in April 2022. H said these were faked by him to portray success and wealth as many people will do.

Still, there was no evidence of any assets in H's name from which a lump sum could be paid. W asked the court to leave open her capital claims pending further information coming to light in the future.

Considering the authorities of AW v AH [2020 EWFC 22], Quan v Bray & Others [2018] EWHC 3558 and Joy v Joy-Marancho and Others (No 3) [2015] EWHC 2507, the Judge noted there are cases where fairness and justice must prevail over the normal desirability of finality of litigation. Considering the needs of W and the children, this was such a case.

The Judge adjourned W's capital claims and her claims for costs for a period of 10 years. Ongoing maintenance of £5,000 per month for an extendable 10 years was ordered as being reasonable in view of the standard of living during the marriage and needs of W and the children. H could get a Chief Technical Officer-type role in the region of £300,000 per year, but H was allowed 9 months to get such a job, and the periodical payments to W would only start in May 2023. With clear evidence he was earning less than that figure, H could apply to vary this order.