MA v SK

JurisdictionEngland & Wales
CourtFamily Division
JudgeMr Justice Moor
Judgment Date13 March 2015
Neutral Citation[2015] EWHC 887 (Fam)
Docket NumberCase No: FD14P00733; FD14F00365

[2015] EWHC 887 (Fam)

IN THE HIGH COURT OF JUSTICE

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Moor

Case No: FD14P00733;

FD14F00249;

FD14F00365

Between:
MA
Applicant
and
SK
Respondent
S Investments NV
Claimant
and
MA
Defendant

Mr Martin Pointer QC, Mrs Rebecca Carew Pole and Miss Kyra Cornwall for the Applicant (instructed by Schillings)

Mr Tim Amos QC and Miss Laura Heaton for the Respondent (instructed by Stephenson Harwood LLP)

Hearing dates: 10th to 18th November 2014

Mr Justice Moor
1

I have been hearing four separate claims, three by the Applicant, MA (hereafter "the Wife") against the Respondent, SK (hereafter "the Husband") and one by S Investments NV against the Applicant. The claims are:-

(a) The Applicant's claim dated 17th March 2014 for a declaration pursuant to section 17 of the Married Women's Property Act 1882 relating to the ownership of various properties. The only relevant property is now a property in Northwest London (hereafter "the London Property") The London Property the London Property as Sir Paul Coleridge, sitting as a deputy High Court Judge on 13th May 2014, stayed the application in relation to a number of overseas properties/the proceeds of sale of overseas properties.

(b) The Applicant's application dated 18th March 2014 for orders pursuant to Part IV of the Family Law Act 1996 in relation to the London Property.

(c) The Applicant's application, initially dated 17th July 2014, for financial remedies following an overseas divorce, brought pursuant to Part III of the Matrimonial and Family Proceedings Act 1984.

(d) The claim of S Investments NV against the Applicant for possession of the London Property.

The relevant history

2

The Husband was born in 1925 in Saudi Arabia. He is therefore aged ninety. He is a Saudi Arabian citizen and national. He is undoubtedly very firmly rooted in that country. He lives in Jeddah in a home which is, on any view, a spectacular property whether valued at £16.7 million as he contends or £26.7 million, as the Wife contends. I am told that around 40 staff are employed to maintain this palatial residence. It was undoubtedly the main matrimonial home.

3

The Wife was born in Beirut, Lebanon in 1951. She is therefore aged 6Her parents came from Syria. Her first language is Armenian. She is a national of the Lebanon and also of Saudi Arabia. She resides at the London Property. She has a three year investor's visa to remain in this country. I am satisfied that, at the end of the three year period, she will be able to renew the visa. After five years, she can obtain permanent residency.

4

The Husband was married twice before he met the Wife. His first marriage took place in 1953 and produced a son, MS, now aged 59. His second marriage took place in 1959 and produced two daughters, AK (now aged 53) and LK (now aged 50) as well as a son, FK (aged 45). Indeed, in total he has had five wives, although numbers four and five post-date his marriage to the Wife in this case and can only have been very short marriages on any view.

5

In 1969, the Wife moved from Lebanon to Saudi Arabia to work as an air hostess. The parties met in 1975 and commenced a relationship. I am satisfied that, by that time, the Husband was already immensely successful and wealthy. He is a self-made man. His main business, the K Group, is primarily a property development business in Saudi Arabia.

6

I have had some difficulty in establishing exactly when the Husband purchased the constituent parts of what is now the London Property. The evidence is all over the place. There seems little doubt that he purchased three flats separately, namely Flats A, B and C. It may be that he acquired Flat A on 18th November 1969, although he also gives dates of June 1975 and January 1980. Flat B is equally unclear, with dates of purchase given in August 1970, late 1970s and December 1984. The same pattern appears with Flat C, where the dates given are March 1971, late 1970s and June 1980. In any event, Flat B was registered in the name of AK Investments Ltd, whilst the other two were registered in the name of HM Ltd and then A Investments NV. On 22nd October 1979, S Investments NVS Investments") was incorporated in Curacao in the Dutch Antilles.

7

The parties married in 1979. Interestingly, they did so at the Central London Mosque. The Wife said it was because she was living here at the time. The marriage was pursuant to Sharia law but was recognised in Saudi Arabia.

8

By mid 1980, Flat C was registered in the name of S Investments. Bearer share certificates were issued for S Investments on 15th April 1981 and are now held by SGG (Curacao) Custodian Foundation. In March 1988, the other two flats were also transferred to S Investments, although A Investments may, for a time, have owned S Investments. The three flats were directly above and below each other on three separate floors. The flat was made into one very large maisonette with an internal staircase in about 1985. It has superb views over a London Park. There are six bedrooms and two staff flats. The Single Joint Expert, Justin Mason of Knight Frank, values it at £14,500,000. This figure must have been a considerable disappointment to both parties, who had previously believed it was worth up to £22 million.

9

The parties had two children, both boys. The elder, IK, was born in August 1981 in Cannes. Tragically, he died in April 2010 in Jeddah. I have no doubt that this tragedy has been a significant factor in the breakdown of the parties' marriage. The younger, EK, was born in May 1985, at the Portland Hospital. He is therefore now aged 29.

10

In 1999, the parties divorced in Saudi Arabia. The Husband performed a Talaq. The Wife says it was due to a disagreement over IK but I have not investigated this. She continued to live in Saudi Arabia. She received financial support from the Husband although she said it stopped at some point. During 2000, the Husband was staying in London for a number of months. The reason (which is disputed) is irrelevant. I find that the Wife came to see him in London. There is a dispute as to why she came. She says he contacted her sister and asked her to contact him. He says that his Mother died whilst he was in London. The Wife came to see him to offer her sympathies. Both say that the other proposed remarriage. The Wife says that the Husband promised to transfer to her five properties. The first was the London Property. The second was the Jeddah home. The third was a property in Cannes. The fourth was a property in Paris. The fifth is described in her pleadings as "a property in Beirut". The Wife says that she feared conflict with the Husband's family from his other marriages and was not prepared to remarry without security. The Husband denies the promise. He argues that the Wife would be in a far stronger financial position by remarrying him. He asks, rhetorically, why would he agree to give away all his homes for no good reason? I will obviously have to return to this aspect.

11

In any event, the parties agreed to reconcile. They remarried in 2002 in Jeddah. The remarriage does appear to have resulted in a power shift in the Husband's business interests. Previously, his eldest son, MS appears to have been playing a very significant role in the management of the K Group. Gradually, IK began to manage the Group, despite his tender age, although he had the assistance of professional employees such as Mr AH, amongst others. The Husband's case is that IK along with another employee, WAS, subsequently mismanaged the business badly.

12

It is the Wife's case that the Husband is worth some $1 billion overall. She says that he has generated his fortune by buying and developing property and land in the Kingdom of Saudi Arabia. It does appear that he has made a speciality of acquiring land that is subject to rival claims and sorting out the dispute in his favour. I can entirely understand that such investments may be spectacularly successful but they may equally founder hopelessly and, in some circumstances, lose their value entirely.

The Standard of Living

13

It is clear that the standard of living during the marriage was lavish and exceptional. I have seen photographs of the London Property and the Jeddah home that clearly show the opulence involved. In addition, the apartment in Paris had a gross value, when sold, of €15,750,000. The Cannes villa is said to be worth around €17 million. Both were acquired around 1983. Mr Pointer QC for the Wife was able to show the Husband a schedule of projected expenditure for the year 2010 showing spending, after excluding loan repayments, of some £13 million. Even the Husband's case is that his current spending is over £2 million pa.

14

The Husband's case is that the money has, in effect, run out, due primarily to the difficulties his real estate business is facing in Saudi Arabia. This is, of course, seriously in dispute. I will have to make findings, doing the best I can. The Wife says that the Husband's standard of living shows no reduction. The Husband points to the very large mortgages on all the properties and the fact that he has had to sell two properties in the last few years.

Alleged transfers to the Wife

15

Another important issue on which I will have to make findings is whether or not the Husband activated the alleged promise to transfer the properties to the Wife. The Husband's case is that he did nothing to effect any transfers until over three years later when he did make some transfers but these were solely for tax planning reasons. He says he always ensured that the ultimate beneficial interests in the properties remained with him.

16

The Wife says that he made good on his promise by gradually transferring the properties to her. The only document on which she can rely in the period from the remarriage until 2005 was a request...

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