Magali Moutreuil v Peter Richard Andreewitch
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cobb |
| Judgment Date | 29 July 2020 |
| Neutral Citation | [2020] EWHC 2068 (Fam) |
| Date | 29 July 2020 |
| Docket Number | Case No: FD19F00024 |
| Court | Family Division |
[2020] EWHC 2068 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
IN THE CENTRAL FAMILY COURT
THE HONOURABLE Mr Justice Cobb
Case No: FD19F00024
Case No: ZC18P04081
James Weale (instructed by LSGA) for the Claimant
Francesca Dowse (instructed by Penningtons Manches Cooper) for the First Defendant
The Second Defendant (in proceedings FD10F00024) was not separately represented
Hearing dates: 17 to 19 June 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HONOURABLE Mr Justice Cobb
This judgment was delivered in public. The judge has given leave for this version of the judgment to be published.
| 1 Introduction: the applications | 1–5 |
| 2 The issues: burden and standard of proof | 6–12 |
| 3 Factual background | 13–39 |
| 4 The transfer of Pier shares to the Claimant (31 July 2000) | 40–67 |
| 5 ‘Notes to Declaration of Trust’ (February 2018) | 68–87 |
| 6 The purported transfer of Pier shares to B (28 February 2019) | 88–91 |
| 7 The Claimant's case | 92–101 |
| 8 The Defendant's case | 102–107 |
| 9 The law | 108–123 |
| 10 Ownership proceedings: Discussion and Conclusion | 124–150 |
Introduction: the applications
There are two applications before the court:
i) A claim issued on 15 March 2019 under Part 7 of the Civil Procedure Rules by which the Claimant, Magali Moutreuil (“the Claimant”) seeks determination of her beneficial interest in shares in a company, Pier Investment Company Limited (‘Pier’), and in freehold property owned by the company (the “Ownership Proceedings”); and
ii) An application issued on 11 September 2018 by Ms Moutreuil pursuant to Schedule 1 of the Children Act 1989 (‘ CA 1989’) (the “ Schedule 1 Proceedings”).
Although the Schedule 1 proceedings were issued first in time, it is logical, and agreed, that I should deal with these applications in the order set out above.
The Defendants to the ‘ownership proceedings’ are the Claimant's former partner and cohabitee Peter Richard Andreewitch (although he is the first of two Defendants, I shall refer to him as ‘the Defendant’ as he is the only defendant to have taken an active part in the proceedings) and the company itself, Pier. Mr Andreewitch is the sole respondent to the Schedule 1 proceedings.
The hearing and determination of these applications immediately follows the hearing and determination of welfare proceedings under Part II of the CA 1989 concerning the five children of the Claimant and Defendant (the “welfare proceedings”). It is unnecessary for me to share any details of the issues or outcome of the welfare proceedings in this judgment, as (in the event) they have no bearing either on the ownership or the Schedule 1 proceedings. I reserved judgment in the welfare proceedings, and that judgment is being handed down simultaneously with this.
This is the second substantive judgment I have given in these proceedings; on 22 May 2020 I delivered judgment on the Claimant's application for sanction for breach of a freezing order Moutreuil v Andreewitch (Contempt: No.2) [2020] EWHC 1301 (Fam). The hearing on sanction has been adjourned, pending delivery of this judgment.
This hearing was conducted remotely, but was listed as if in Open Court, and was conducted on that basis, following the guidance in V v TA [2014] EWHC 3232 (Ch) at [14]. For a limited period, a representative from the Press Association attended. I have made a reporting restriction order to protect the minor children of the family. A sizeable bundle of material had been lodged for this hearing; I heard the oral evidence of the parties, and submissions from able counsel instructed in this case. I reserved judgment at the conclusion of the hearing.
The issues: burden and standard of proof
It is an agreed fact that on 31 July 2000, the Defendant facilitated, or procured, the transfer of all of the shares of Pier from his business associates (Mr OH and Mrs FH) to the Claimant. This was concluded by way of a contract of sale. It is further agreed that the Claimant now legally owns the shares 1.
I deal more fully below with the way each party puts its more detailed case (see [92]–[107]) but, for a consideration of the issues of burden and standard of proof, the following should be noted.
The Claimant asserts that at the time of the transfer of the shares, and up to the point of the breakdown of the relationship, it was understood and intended by the parties that she would become the outright owner of the shares. She maintains that the reason for the transfer was the Defendant's determination that he should divest himself of any interest in the shares, so as to avoid the claims of creditors and potential creditors; he was at the time of the transfer ‘embroiled’ (her word) in commercial litigation in Austria. The Claimant asserts that the Defendant made clear that he preferred for her, rather than a business partner, to be the owner of the Christchurch Street home in which they lived (a corollary of her taking ownership of the shares, as this was the main asset of the company). Further, or alternatively, the Claimant asserts that at the time of the transfer, and thereafter, the Defendant made clear, through unequivocal representations to the Claimant, that the shares (and the property in which they lived) belonged to her, and the Claimant acted to her substantial detriment in reliance upon those representations. In the further alternative she asserts that a constructive trust has been established by virtue of their common intention that she should have a sizeable proportion of the shareholding, and hence the property. If the claim fails on all of these bases, the Claimant seeks relief under Schedule 1 of the CA 1989, inter alia for a housing fund for herself and three of the parties' five children.
For his part, the Defendant emphasises that the company, Pier, was incorporated, and the principal asset (the Christchurch Street property) purchased, some years before he and the Claimant had even met. When he procured the transfer of the shares to the Claimant, he intended, and he asserts that the parties both so intended, that she would be no more than a ‘bare trustee’ or ‘nominee’ of the shares, and that at no time did she acquire beneficial ownership of the shareholding. He claims to have told her this at the time. His case therefore is that at all times he has been the beneficial owner of the shares. He points to the fact that in 2018 the Claimant signed a document headed ‘Notes to the Declaration of Trust’ which confirmed this arrangement. In the Schedule 1 proceedings, the Defendant's open offer is the provision of a capital sum (£200,000 2) as a deposit for a property (to revert to the Defendant upon sale when the youngest child is 18), on the basis that the Claimant purchases accommodation out of London for herself and the children in the sum of c.£300,000; alternatively he offers her an annual allowance (£12,000) by way of child maintenance.
Although the Claimant brought the claim in order to clarify the position in relation to the ownership of the shares (and the property), it is common ground between the parties that the burden lies with the Defendant to show that the Claimant is not the sole beneficial owner of the shares, i.e. it is for him to demonstrate that equity does not, in this instance, follow the law.
It is submitted by Mr Weale, for the Claimant, that had the Defendant brought the claim, or a counter-claim, he would have run into difficulty in doing so; he argues that I would have had to consider whether the public interest in the due administration of justice would have been served in enforcing an essentially illegal or immoral claim. He urges me to the view that even though defending the claim, I should not permit him to profit from his own deception (i.e. in transferring the shares to the Claimant so that they appear to third parties to not belong to him, while asserting privately that he owns them beneficially). In this regard he pointed me to the Supreme Court's decision in Patel v Mirza [2016] UKSC 42, [2017] A.C. 467 3, and to the more recent decision in Knight v Knight [2019] EWHC 915 (Ch). While I accept the force of this point, I have not found it necessary to rely on it in reaching my decision.
Where I make findings of fact (as I do through the judgment), I do so on the balance of probabilities. I have treated each piece of the evidence carefully, and have not assumed that because one or other party may have misled me over one or more issue, that they have misled me throughout on all points 4.
Factual background
The Claimant is aged 44, and is a French national. She was educated to tertiary level in France before coming to England in 1997, initially as an au pair, with the intention of improving her English. Her aspirations for a career in this country were put on hold when she became a mother, ultimately with five children, thus limiting her prospects of pursuing a career out of the home. That said, in 2014, in order to support the family (the Defendant was not working), she took part-time work as a shop
The Defendant is thirteen years older than the Claimant, at 57, and...
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Magali Moutreuil v Peter Andreewitch Pier Investments Company Ltd
...and her claim under Schedule 1 Children Act 1989. That judgment is also publicly available as Moutreuil v Andreewitch & Another [2020] EWHC 2068 (Fam). PA sought permission of the Court of Appeal to appeal that decision; on 16 October 2020, permission to appeal was refused. I have further c......