Financial Remedies
Setepmber 2022
Judgment of His Honour Judge Hess determining the domicile of a husband and wife who have resided in the UAE for over 12 years.
- W is 42 years old and was born in South Africa. She moved to England when she was 18. W currently resides in the UAE with the two twin children of the marriage who are now 11.
- H is 47 years old and was born in England.
- The parties cohabited from 2005, engaged in 2007 and moved to the UAE in February 2008 due to a position H was offered there (H being a solicitor). They returned to the UK in May 2008 for their marriage however they have remained in the UAE since.
- In September 2021, W petitioned for divorce in England. On 13 October 2021, H filed an answer challenging the jurisdiction on the basis both are habitually resident and domiciled in the UAE.
- There was common ground that both parties were habitually resident in the UAE, but the question of domicile (as per section 5(2) Domicile and Matrimonial Proceedings Act 1973) came before HHJ Hess to be determined across a three day hearing.
- At paragraph 9 of his judgment, HHJ Jess sets out a very lengthy quote of what he considers the ‘most helpful summary of the relevant law’ as per Arden LJ in Henwood v Barlow Clowes International Ltd [2008] EWCA Civ 577.
- Having considered these principles and the evidence read and heard, the Judges’ determinations on domicile were as follows:
- At least until 2008 H had a domicile of origin - England.
- At least until 1998 W had a domicile of origin - South Africa. At some point after 1998 but before 2008, W acquired England as her domicile of choice.
- The move to UAE was a move for the purposes of carrying out paid work in a way which was advantageous in terms of tax and other matters; but (at least at the outset) it was a common assumption that there would be a return to England.
- W did not abandon her English domicile at all between 2008 and 2021; the situation was less clear regarding H, whilst he currently wants to remain permanently in the UAE, as of 21 September 2021 his domicile remained as England. The Judge’s reasoning is at paragraph 16.
- Having answered the question of domicile in the positive, the Judge then had to consider whether the UAE (that is the Non-Muslim Family Court in Abu Dhabi where the husband issued proceedings on 30th August 2022) provide a more appropriate forum for the divorce and the financial applications than the courts of England and Wales? If so, should I order a stay of the proceedings in England? (Power to order a stay s.5(6) and Schedule 1, para 9 of the Domicile and Matrimonial Proceedings Act 1973).
- At paragraph 20 of the Judgment, HHJ sets out the application of the statutory provisions and principles as per De Dampierre v De Dampierre [1987] 2 FLR 300, Spiliada Martitime Corpn v Cansulex Ltd [1987] AC 460 and Chai v Peng [2014] EWHC 3519 (Fam).
- The Judge concludes that the appropriate forum for the case is the UAE and that he should grant a stay of the English divorce proceedings. His reasoning is at paragraph 24 onwards, to include that both had been habitually resident in the UAE from 2008 onwards; H had offered undertakings to support W’s ongoing presence in the UAE (financially) and to pay W’s reasonable costs of prosecuting these proceedings.
HHJ Hess deals with a financial remedy final hearing involving multiple properties, corporate assets and conduct in a situation where the Husband and second respondents neither engage nor attend.
- These proceedings arose out of W’s application for financial remedies. W is 48 years old and was born in Nigeria, she had a comfortable life but not the level of wealth that H had benefitted from. Following separation in March/April 2018, W moved to England.
- H is 60 years old and was born in Nigeria. H was born into a wealthy family arising from family businesses; in due course he inherited those businesses. H sought to challenge jurisdiction but such challenge was unsuccessful.
- The parties married in 2002 and separated in March/April 2018. There are two children of the marriage, the oldest being 18 years old and the youngest 15 years old. Both study in England.
- H engaged in proceedings until a judgment of HHJ Hess on 6 December 2021 whereby the Judge made various orders including a LSPO, MPS of £15,000 a month and a schools fee order. H did not and had not complied with these orders at the time of final hearing.
- In March 2022, due to H’s failures to comply, the Judge made a conditional order for sale of a jointly owned luxury property in Miami. As a result of that AA Limited issued an action in Florida to assert themselves as a 100% beneficial owners of that property. AA Limited were a corporate entity almost entirely owned by H. On W’s application AA Ltd were joined in August 2022. They then made applications including for disjoinder. Such application was refused and AA have not engaged with the proceedings since.
- Within the judgment, the Judge deals with AA’s claim on the property. The Judge concluded he did have jurisdiction to determine the claim in respect of the Miami property and applied Florida law. The Judge noted that during the proceedings both H & W had asserted joint legal and beneficial ownership of the property and when considering whether a constructive trust was established (both under Florida and E&W law) he concluded in the negative.
- The Judge sets out a comprehensive analysis of the s.25 factors, much of which involves careful analysis and calculations as to what the asset schedule should contain (not helped by H’s lack of compliance, disclosure and engagement within the proceedings). The Judge referred himself to the law on adverse inferences for H’s lack of disclosure and engagement, referring to J v J [1955] p 215 and the more recent, Moher v Moher [2019] EWCA Civ 1482. Much of the Wife’s valuations were accepted by the Judge.
- In relation to the H’s business assets, the Judge considers whether this is matrimonial or non-matrimonial due to the origin being inherited. Following a careful analysis and consideration of the case law, the Judge concludes 50% discount of H’s business assets was appropriate in recognition of the original source of these.
- This therefore meant the asset schedule looked as follows: Joint – Miami property: £5,921,929; Wife - £3,958,174 and Husband - £92,073,790
- The Judge made an order for an equal division of the assets that could be achieved by: a transfer to the wife of the Miami property; a transfer to the wife of the property in South East England (her current home); and the husband to pay a lump sum of £39,156,843 in return for (and simultaneously with) the wife transferring to him all her shares in his businesses (as above).
- The Judge also addresses conduct towards the conclusion of his judgment, including H’s failure to engage and litigation conduct, ordering a further lump sum of £150,000 from H.
Application by wife for financial provision after an overseas divorce, including consideration of pre-marital agreement entered into in Germany and a post-matrimonial agreement entered into during these proceedings.
- These proceedings followed an application made in February 2021, by W for financial provision after an overseas divorce pursuant to Part III of the Matrimonial and Family Proceedings Act 1984. Mr Justice Moor whom presided over this hearing, granted W permission to make the application.
- W is 72 years old and was born in Germany. She now lives in London. H is 76 years old and was born in Germany but now lives in Switzerland.
- The parties cohabited from 1983, married in 1985 and separated in 2017. There is one child of the marriage V who is now 35 years old.
- H had a substantial amount of wealth due to inheritance including the family business that he sold in 1986; inheritance of some 63 million euros in 2000 and the maturity of an insurance bond providing him 70 million euros in 2005.
- H did not attend this final hearing although he was represented.
- There was a pre-marital agreement between the parties which essentially provided for W to receive no financial provision on divorce (actually as a result of W’s request). In Germany, H had attempted to uphold the pre-marital agreement and W basically had no entitlement to any financial provision except for a small amount of maintenance.
- In W’s open offer of 30 May 2022, W sought a lump sum of £15,785,000 (housing needs), capitalised maintenance in the sum of £8,000,000 and £280,000 to cover her liabilities, since reduced to £238,000.
- However, during the course of these proceedings on 7 May 2022, the parties met (with their son V) in Zurich to discuss the terms of a financial settlement. The parties agreed that neither of them would contact their respective lawyers about this meeting. The parties and V met again in Dusseldorf on 20 May 2022 and an agreement as to financial matters was made, reduced to writing and signed. There were factual disputes about this agreement with W alleging it was not supposed to be an agreement, and, pressure was placed upon her.
- Once the agreement had been reached, H’s lawyer Dr Rainer Maschmeier converted this into a typed document in German. Both parties signed this document in his presence and the presence of his secretary. The Court heard evidence via Microsoft Teams by Dr Maschmeier during this hearing.
- The Judge had the benefit of an English translation of the document which contained.
- A week or so after the agreement, W spoke to her solicitors and sought to repudiate the agreement.
- Within his judgment, the Judge considered Edgar v Edgar [1980] 1 WLR 1410 and Xydhias v Xydhias [1998] EWCA Civ 1966 to decide the correct outcome of the case. Following a careful analysis of the evidence heard (including W, V and Dr Maschmeier) the Judge found the W was keen to conclude an agreement; she did so without pressure and the lack fo legal advice was not fatal if W had an appreciateion of the agreement, which she did (Radmacher v Granatino [2010] UKSC 42.
- In respect of how a Court should approach claims pursuant to Part III, the Judge referred to the case of Agbaje [2010] UKSC 13. The Judge then goes through the terms of the agreement and cross-references as to whether this was within the remits of an Order he would make. The Judge concluded that it was and that absent the agreement (no longer enforceable) he would make an order in the same terms.