B v B (Ancillary Relief)
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE MOYLAN |
| Judgment Date | 19 June 2009 |
| Neutral Citation | [2009] EWHC 3422 (Fam) |
| Court | Family Division |
| Date | 19 June 2009 |
| Docket Number | No.FD07D02445 |
[2009] EWHC 3422 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Before: Mr. Justice Moylan
(In Private)
No.FD07D02445
Mr. P. Cayford QC And Ms. L. Cade Davies (Instructed By Mishcon De Reya) Appeared On Behalf Of The Petitioner.
Mr. P. Marshall (Instructed By Payne Hicks Beach) Appeared On Behalf Of The Respondent.
This judgment follows the hearing of the wife's ancillary relief application. The wife is represented by Mr. Cayford QC and Ms. Cade Davies. The husband is represented by Mr. Marshall.
The wife raises a number of issues as to the extent of the husband's wealth but the principal issue is the extent to which, if at all, assets held within a Jersey trust (in A and B funds) are financial resources available to the husband within the meaning of section 25(1)(a) of the Matrimonial Causes Act 1973. The husband's resources, absent the A and B funds, are delineated by him as being worth just under £6 million.
Absent the trust issue I have identified, this total is broadly accepted by the wife. The wife seeks to aggregate with this amount the assets within the A and B funds which have a total value of approximately £14.5 million.
The wife seeks a total award of £6.5 million, whilst the husband proposes an award totalling £3 million. Both sides contend that the respective orders they seek provide for the wife's financial needs at an appropriate level and therefore represent a fair outcome.
Background
The husband is Swedish and is now aged 42. He has been resident in the United Kingdom since 1993. The wife is English and is now aged 37. The parties met in 1995 or 1996, started living together in 1996 or 1997, became engaged in 2000, and married in 2001. The marriage came to an end when the parties separated in 2007. There are two children, aged 2 and 6. The elder child goes to school in Chelsea. The former matrimonial home is a property in Belgravia which the husband purchased in 1994. Its current gross value is £1.7 million. The husband still lives there, the wife and children currently living in rented accommodation.
In the mid 1980s a company founded by the husband's father was sold. The shares were then held by the husband's father and mother, the husband, his sister and a charitable family foundation. In her affidavit of 4 th July 2007, the wife, in response to the husband's assertion that the family received £60 million from the sale, asserts that early in their relationship the husband told her that the family had sold its shareholding in this company for £600 million. She said: “This is not a detail I would confuse”. In her affidavit of 20 th November 2008, the wife's evidence changed. She said that the husband did not mention the currency denomination and she simply assumed it was sterling. In her oral evidence, the wife moved towards accepting that the 600 million probably referred to krona.
On 18 th February 1993 the husband set up the W (now the C) Trust in Jersey. The trustee is a professional Jersey company. The beneficiaries are the husband, his sister, his parents, the charitable family foundation and the RNLI. The husband says that the assets settled into this trust derived from his share of the proceeds of sale of the family business in the mid 1980s. He accepts that he has always been the principal beneficiary of this trust. By a letter of wishes dated 1 st May 1995 the husband requests the trustees to act in accordance with his wishes during his lifetime, and after his death in accordance with his father's and his sister's wishes. A schedule has been produced showing the financial history in respect of this trust from January 1998 to December 2008. At the beginning of this period, the trust had assets of approximately £28 million, which had grown to almost £34 million by February 2000. By December 2008 the trust's assets had all been dissipated, very largely in funding two businesses set up by the husband in 1997 and 1998, but also in funding the family's living expenses.
On 8 th November 1994, the husband set up the F Trust in Jersey. The trustee is the same professional Jersey company. The named beneficiaries are the husband and the family foundation. The husband says that the assets settled into this trust derived from his father's share of the proceeds of sale of the family company which were gifted to him by his father prior to being settled by the husband into the trust. Although the evidence is not as clear as it could be, I accept, for the purposes of this judgment, that these funds do come originally from the husband's father. The husband's letter of wishes dated 1 st May 1995 is effectively in the same terms as the letter of wishes for the C Trust. He also requests the trustees to add his father and sister as beneficiaries of the trust. This has never in fact been undertaken. In January 2006, the assets of this trust were settled into the C Trust and form what is now called the A fund. These assets are now worth just over £7 million. It is the husband's case that these assets are not held for his benefit but for the benefit principally of his family in Sweden.
On 29 th April 1996, the husband set up the O Trust, again in Jersey, and again with the same trustee. The named beneficiaries are the same as for the C Trust. The husband says that the assets settled into this trust derive from a Liechtenstein foundation set up by his father. This assertion is unsupported by any documentary evidence. However, again for the purposes of this judgment, I accept that these funds originally derived from the husband's father. No letter of wishes in respect of this trust has ever been produced. In January 2006, assets of this trust were also settled into C Trust and form what is now called the B fund. These assets are also now worth just over £7 million. It is the husband's case that these assets are also not held for his benefit but for the benefit principally of his family in Sweden.
In 1997 the husband purchased a 75 foot yacht at a cost to him of just over £1 million. In the same year he also purchased a property in the USA at a total cost to him, including land acquired subsequently, of just under £2.9 million.
In 1997 and 1998 the husband set up two businesses. Between then and 2008, he invested approximately £27 million in these businesses, broadly half this sum in each. The wife's brother worked as the managing director of the M business. Both businesses have failed. Indeed, apart from a short period when the M business was successful, neither business has generated any income. The whole of the £27 million has effectively been lost. The wife seeks to argue that at least some of this spending has been “reckless and irresponsible”. The focus of this argument, as I understand it, is on the period principally since March 2008. In addition, the wife relies on the rate at which the husband was investing money into these businesses as supporting her contention that he must have been relying on the A and B funds as being available to him.
On 14 th November 2001, the parties entered into a pre-nuptial agreement. This was first raised by the husband with the wife less than two weeks before the wedding and was not the product of any discussion. It makes no financial provision for the wife at all but expressly states that its terms will be reviewed on the occurrence of a number of events, including the birth of a child. However, it also, rather strangely, provides that the terms will remain valid even if no such review takes place. The wife obtained very brief advice from a solicitor who indicated that in his view it was wholly unfair. Mr. Marshall—very sensibly, in my view—has not sought to rely on this agreement during the course of this hearing.
The wife does not, of course, rely on the agreement, save for the schedule setting out the husband's property which was attached to it. This schedule included all of the trusts settled by the husband without distinction and under the headings “Irrevocable discretionary trusts where the husband has beneficial interest”. The husband says that he went through this schedule with the wife telling her the distinction between those trusts of which he was the principal beneficiary and those which were for the benefit of the rest of his family. I do not accept the husband's evidence on this point. His account of this was wholly unconvincing.
In 2003 the parties contemplated moving to live outside London. They looked at a number of properties and made offers to buy at between £3.1 million to £3.9 million. None of these proposed purchases proceeded.
In November 2003 the family went on holiday with the husband's parents. The wife says that the husband's father raised with her his concern at the rate at which the husband was spending money on the businesses. The wife raised this with the husband. Both parties accept that there was some conversation between them along these lines. The wife says that the husband told her that both he and his sister had received £50 million on the sale of the family business. The husband accepts that he might have mentioned the figure of 50 million but this would have been euros and it would have referred to the amount to which his wealth had at one stage grown.
In August 2006 the parties rented a property in Buckinghamshire at a cost of £114,000 for one year.
The marriage, as I have said, came to an end in 2007. Initially the husband moved out of the former matrimonial home. He then rented accommodation for himself at a cost of £1,500 per week. Subsequently the wife and the children moved into this...
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