Petrodel Resources Ltd and Others v Prest

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Thorpe,Lord Justice Rimer,Lord Justice Patten
Judgment Date26 October 2012
Neutral Citation[2012] EWCA Civ 1395
Docket NumberCase No: B6/2011/3168
Date26 October 2012

[2012] EWCA Civ 1395

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM

THE HIGH COURT OF JUSTICE FAMILY DIVISION

MR JUSTICE MOYLAN

FD08D01163

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Thorpe

Lord Justice Rimer

and

Lord Justice Patten

Case No: B6/2011/3168

B6/2011/3170

Between:
P Resources Limited (1)
P U Limited (2)
V Petroleum Limited (3)
Appellants
and
Yasmin Aishatu Mohammed Prest (1)
Michael Jenseabla Prest (2)
Elysium Diem Limited (3)
Respondents

Tim Amos QC and Ben Shaw (instructed by Jeffrey Green Russell) for the Appellants

Richard Todd QC and Stephen Trowell (instructed by Farrer & Co LLP) for the First Respondent

The second and third Respondents were not represented

Hearing dates: 2nd and 3rd July 2012

Lord Justice Thorpe

Introduction

1

On 4 th October 2011 Moylan J delivered judgment in the financial provision case of Prest, a truly extraordinary case even within the breadth and depth of family division bounds.

2

The husband and wife are both about 50 and both have dual Nigerian and British citizenship. The husband was born in Nigeria, the wife in England, both are highly educated. The husband was called to the Nigerian Bar. The wife graduated from Thames Polytechnic and subsequently obtained an MBA from Cranfield.

3

They met in 1992 and married in 1993. They have four children who are teenagers. Throughout the marriage they lived principally in London but with properties in Nigeria and the Caribbean. They lived to a very high standard. Both came from affluent backgrounds. At all material times the husband has been prominent and successful in international oil development and trade. The final matrimonial home at W Avenue is worth about £4 million and there are a number of other properties that the husband has acquired in London, most in the name of three companies.

4

As well as the husband and the first respondent, there were seven corporate respondents. None of the corporate respondents took any part in the proceedings until the final hearing when the second, fourth and fifth appeared by leading counsel.

5

In paragraph three of his judgment Moylan J thus recorded the principal issues in the case:—

"(a) The extent of the husband's wealth including the nature and extent of his interest in the respondent companies; and

(b) Whether I can make orders directly against properties and shares held in the name of some of the respondent companies."

6

Continuing with his introduction, the judge recorded the husband's case that the net excess of his liabilities over assets equalled £48 million.

7

The wife's case was that the husband's assets net of liabilities equalled "tens if not hundreds of millions of pounds".

8

Thus on issue (a) the gulf between the respective positions of the husband and wife could hardly have been wider.

9

As to issue (b) Mr Todd QC, for the wife, stressed the extent of the court's power under s.24 (1) (a) of the Matrimonial Causes Act 1973 which enabled orders to be made against alter ego companies. Mr Todd relied on Nicholas v Nicholas (1984) FLR 285. He distinguished Ben Hashem v Al Shayif [2009] 1 FLR 115. Alternatively if Ben Hashem was not to be distinguished Mr Todd asserted impropriety in respect of the companies. Mr Todd further submitted that the companies held the shares and assets as bare trustee for the husband.

10

Mr Pointer QC for the husband and Mr Wagstaffe QC for the companies disputed the assertion that the properties and shares in the company were held on trust for the husband and they further submitted that the authority of Ben Hashem prevented the judge from making orders against the properties or the shares.

11

As to outcome the wife sought an overall award of £30.4 million. The husband proposed a package that amounted to a little over £2 million.

12

As is not uncommon in this specialist field of litigation the husband had repeatedly flouted his duty to give full frank and clear disclosure of his finances. He was in breach of many orders for disclosure; he had been repeatedly condemned in costs which he had not paid. At trial his evidence was both deceitful and shambolic. In paragraph 12 of his judgment Moylan J stated:—

"….I have sought to make sense of the husband's factual case. Ultimately I have decided that this has been a vain task because the husband has failed so comprehensively to comply with his obligation to provide full and frank disclosure and to give clear evidence that his case does not permit of such an exercise (words omitted). The result of the way in which the case has developed is that a great deal of energy has been expended by the husband on seeking to establish what he is not worth rather than the more conventional focus being on seeking to demonstrate what he is worth (words omitted). His evidence consisted significantly of obfuscation and dissembling."

13

This introduction to the case illustrates what a difficult and frustrating task the judge faced. Responsibility for that state of affairs rested squarely with the husband and his companies.

The Proceedings and the trial

14

The proceedings have not run smoothly. In paragraph 34 of the judgment below Moylan J recorded:—

"The husband has not voluntarily paid any part of the maintenance pending suit order in respect of costs. This is not a minor breach of the order; it is a significant failure. It is made the more significant when contrasted with the fact that the husband has paid in excess of £760,000 towards his own costs".

15

In a manoeuvre which I have not previously encountered the husband's brother issued against the husband and one of his companies an application in the High Court in Nigeria which produced an order unopposed restraining the husband from:—

i) Disclosing any information concerning the accounts or affairs of the company.

ii) Asserting or disclosing information that he is sole owner of the company.

16

As to this device the judge recorded at paragraph 142 of his judgment:—

"Notwithstanding the terms of the Nigerian order the husband has been able to produce documents which would appear to be covered by its terms. They have been produced at random and in a manner which has given me the clear impression that the husband does so when he considers it might help his case… Such attempts to manipulate the process have been a recurrent feature of the husband's conduct during the proceedings."

17

In like manner when the Senior Master directed a letter of request to judicial authorities in the Isle of Man, a director of the Manx company avoided production, asserting concerns about claims that would be made against the board by shareholders or commercial partners for breach of confidence. Of that Moylan J aptly said:—

"Given the husband's control over the corporate structure it is hard to understand how these concerns could be genuine. It is not difficult, in my judgment, to see the hand of the husband behind this obstructive line which is also reflected in letters written on behalf of the company by Manx advocates."

18

These sort of manoeuvrings in the interlocutory stages gravely impede the court and waste large sums of money. The trial judge faced a formidable task when he sat between 13 th and 30 th June 2011 to conduct the final hearing. He heard extensive oral evidence. As well as the husband and the wife there were two accountants whose evidence was of very limited value since they at least agreed that neither had received the information and documents that would enable them to make any worthwhile assessment or valuation. However, there was a strong card in the wife's hand given that she was able to call as a witness Mr Le Breton, a former business associate and fellow director of the husband.

19

The interval between 30 th June and 4 th October resulted from the judge's struggle to make sense of the evidence and some thirty lever arch files of documents.

20

Between paragraphs 55 and 78 of his judgment the judge wrestled with the incomplete, inadequate, confused and conflicting evidence as to the husband's activities through the corporate vehicles. The husband sought to rely on the evidence of a director of the companies, Mr Murphy. Mr Murphy chose not to appear. In paragraph 69 the judge concluded that Mr Murphy was unwilling rather than unable to attend.

21

In this section of his judgment the judge made two crucial findings. This is the first:—

"I am satisfied that the directors of the group, including Mr Murphy, act in accordance with instructions given by or on behalf of the husband. The husband was unable in his oral evidence to provide details of any specific occasion when the directors had not acted in accordance with his instructions."

22

Here is the second:—

"I have no doubt at all that the husband does, indeed, just draw from PRL whatever he and his family need, as and when they need it."

23

In the next section of his judgment the judge reviewed the London properties. Apart from the final matrimonial home there were eleven. Apart from one they were all in the name of one or other company. BNP had a loan charged against the properties. As to that the judge said:—

"However, as a result of the husband's failure to give clear disclosure, the evidence is not sufficient for me to reach any firm conclusions as to what the true net position is in respect of the loan due to BNP."

24

The judge then reviewed the overseas properties and recorded the evidence that had been given by the husband and the wife. He also recorded the evidence of Mr Le Breton. In his evidence Mr Le Breton asserted that the husband was the ultimate owner of the companies. This is the judge's record of...

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