David Lee Rapp v Francoise Margueritte Marie Catherine Sarre (formerly Rapp)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Black,Mr Justice Baker,Lord Justice Patten |
| Judgment Date | 18 February 2016 |
| Neutral Citation | [2016] EWCA Civ 93 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 February 2016 |
| Docket Number | Case No: B6/2015/0749 |
[2016] EWCA Civ 93
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE FAMILY COURT SITTING AT THE CENTRAL FAMILY COURT
HIS HONOUR JUDGE EVERALL QC
FD11D01285
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Patten
Lady Justice Black
and
Mr Justice Baker
Case No: B6/2015/0749
Mr Brent Molyneux (instructed by Mishcon De Reya LLP) for the Appellant
Howard Shaw QC (instructed by Lloyd Platt & Co) for the Respondent
Hearing date: 16 th December 2015
This is an appeal against an ancillary relief order made by HHJ Everall QC on 21 January 2015. The appellant is the husband, who contends that the judge was wrong to divide the capital assets unequally between himself and the wife, giving her a greater share and, on his case, giving her assets which were more liquid and less risky than those which he was to have. He also advances some more detailed points about the judge's quantification of the assets and thus the net effect of the award. In addition, he is critical of the judge for relying on his drug addiction as a factor in the assessment of the appropriate order.
The history
The parties began to live together in 1993 and married in September 1994. The wife is in her late forties and the husband is in his mid fifties. They separated in December 2009 and were divorced in 2014, although for convenience I have continued to refer to them as husband and wife in this judgment. There are no children.
The wife is a French citizen but has lived in the United Kingdom for many years. The husband is a citizen of the United States. When they met in 1990, the wife was working as a cashier and teller in a bank in Monte Carlo, where the husband was also living. He told her at that time that his assets were worth approximately $1m.
In August 1993, the husband moved to London to work as an oil broker and lived in a flat provided by his employer. The wife joined him there a few months later. Her role was to look after the household and she has not worked since then.
A two-bedroomed flat in central London, with study and through living room/dining room, was purchased in May 1994 and became the matrimonial home. It was financed by the husband but conveyed into the wife's sole name. In the early years of this century, the husband started to rent a flat in Monte Carlo and the parties spent nearly every weekend there. From what he told the wife over the years, the husband has always been treated by the authorities in the United Kingdom as not domiciled in this country and the wife understood the Monte Carlo arrangement to be related to this.
The marriage ran into difficulties in about 2003 when the wife discovered that the husband was taking cocaine and drinking excessively and suspected that he was using female escorts. Attempts to address the problems, including attendance by the husband at rehabilitation clinics, were unsuccessful. In 2009, in the light of the husband's addictive behaviour, the wife concluded that the marriage was over and the parties separated in December 2009. Since then, the wife has lived in the London flat and the husband has lived in the flat in Monte Carlo.
In 2010, the company for whom the husband worked, Tullett Prebon, discovered his addictive behaviour and engineered his departure. He sought treatment again, but this does not appear to have been a success and his addictive behaviour continued.
The husband has not been employed since he left Tullett Prebon. He is apparently not currently authorised professionally to carry out oil trading. However, he has continued to have business interests, which I will describe later. Since the separation, each spouse has received monthly sums from the assets to cover outgoings, the husband receiving an average of £48,000 per month and the wife an average of £20,000 per month.
The husband's non-engagement with the proceedings
Proceedings for ancillary relief were started by the wife in April 2011. The husband did not engage in the process as he should have done. He did not formally instruct solicitors at any stage. He did not comply with his duties as to disclosure. He did not attend any interlocutory hearing after the FDR hearing on 2 October 2012. His engagement with the final ancillary relief hearing in December 2014 was extremely limited. The day before it was due to start, he wrote to the court in terms which Judge Everall interpreted as an application for an adjournment for health reasons. That was refused and the hearing began on 8 December 2014 in the absence of the husband. The evidence concluded on 10 December and the judge reserved his judgment, hoping possibly to deliver it the following day, although that did not ultimately prove feasible. On 11 December, the husband attended court in person, seeking an adjournment of the proceedings for two months. Judge Everall again refused to adjourn.
The extended period between the commencement of the ancillary relief proceedings in 2011 and the hearing in December 2014 was partly taken up in negotiations between the parties, but a lot of time was lost because of the husband's neglect of his obligations in the proceedings. He failed for a long time to file a Form E. When he did, it was incomplete; the judge described it as a "woefully inadequate document". Notably, the section dealing with the husband's financial requirements was simply crossed through, the section requiring details of business interests was left blank, and his liabilities were said to be nil. The accompanying documents were confined to what the judge described as "a few partly photocopied and unhelpful bank statements" plus three UK tax returns and forms P11D. The husband failed to reply to the wife's questionnaire. He never provided a narrative statement. In short, the information available to the court about his financial position and needs was severely limited by his own failure to comply with his formal duties in respect of disclosure.
Such particulars as were available came by indirect routes and without much documentary support. The husband imparted some information about his circumstances orally to the wife's advisors during negotiations. The rest of the information that was available about his situation came from the wife or via Mr Huggins, who is a business colleague of the husband's and whom the judge described as "a trusted friend of both of the parties". Mr Huggins has looked after many of the financial affairs of the parties, since at least their separation. In the ancillary relief proceedings, he represented the husband informally in dealing with the wife's solicitors and with the wife. The judge said that he accepted the information given by Mr Huggins to the wife as a reliable source of evidence from which to make findings as to the husband's financial situation.
The parties' assets and needs
Capital assets and liabilities
Mr Shaw QC has represented the wife throughout, both in front of Judge Everall and on the appeal. He produced to the judge a schedule of capital assets which showed the total of the property owned by both parties to be worth just over £13.5m. The judge found the assets to be as set out on that schedule.
Real property accounted for just under £7m of the £13.5m. It comprised:
i) the London flat which had attributed to it a value of £3,395,000 net of notional costs of sale;
ii) a property in St Tropez, owned through a French company in which the wife owns (or controls) the entirety of the shares, and with a value net of notional costs of sale of £1,057,827;
iii) two adjoining properties in St Tropez in the wife's name, with a total value, net of mortgage and costs of sale, of £2,389,907.
The husband's investments were shown on the schedule as worth £1,920,702. They comprised shares in Stars and Bars (a restaurant business in Monaco) estimated as being worth approaching £1m, plus shares in two other businesses together worth £ 1/2m, and an investment in another venture estimated to be worth £ 1/2m. The husband was shown as having credit card debts of £53,000 but no other liabilities.
Leaving aside money in bank accounts (approximately £19,000), the wife's investments were shown as worth £6,531,660. They were arranged by the husband and Mr Huggins and the wife had only a limited knowledge of them. The larger assets included in this category were:
i) a Gonet Nassau portfolio account, in the name of a BVI company called Balzac, worth just over £1m;
ii) just under £1.9m in a Julius Baer Bank account, also in the name of Balzac;
iii) just over £3.5m in another Julius Baer Bank account, this one in the wife's name.
There were tax liabilities in relation to the French properties of nearly £1.7m which were taken into account in the £13.5m calculation as liabilities of the wife. The sum was therefore as follows:
| Real property net of mortgage and costs of sale | £6,842,734 |
| Wife's bank accounts and investments | £6,551,361 |
| Husband's bank accounts and investments | £1,920,702 |
| Wife's tax liability in relation to the French properties | £1,678,131 - |
| Husband's credit card debt | £53,000 — |
| Total | £13,583,667 |
By way of a footnote to this resumé of the capital position, I should perhaps explain one or two of the details about the assets and liabilities:
The London flat
i) The value of the London flat was agreed for the purposes of the FDR and the parties also then agreed that that valuation would be used for the final hearing.
The French properties
ii) Similarly, pursuant to a...
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