Ravendark Holdings Ltd v Natalia Rotenberg
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moylan,Lord Justice Newey,Sir Richard McCombe |
| Judgment Date | 10 November 2021 |
| Neutral Citation | [2021] EWCA Civ 1661 |
| Docket Number | Case No: B6/2019/2286 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1661
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
MR JUSTICE MOOR
FD14F00348
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Moylan
Lord Justice Newey
and
Sir Richard McCombe
Case No: B6/2019/2286
Jonathan Seitler QC and Elizabeth Houghton (instructed by Farrer & Co Solicitors) for the Appellant
Fenner Moeran QC and Sassa-Ann Amaouche (instructed by JMW Solicitors LLP) for the First Respondent
Richard Todd QC and Simon Webster QC (instructed by Grosvenor Law) for the Second Respondent
The Third to Fifth Respondents did not appear and were not represented
Hearing dates: 19 and 20 May 2021
Approved Judgment
Ravendark Holdings Limited (“RHL”) appeals from the decision of Moor J (“the Judge”) of 30 July 2019, finalised in an order dated 13 January 2021. The other parties to the appeal are Natalia Rotenberg (who I will call “the wife”) and Arkady Rotenberg (who I will call “the husband”). The order was made in proceedings brought by the wife for the enforcement of a final financial remedy order which had been made by the Judge on 20 July 2016 (“the July 2016 Order”).
The relevant entities and people are: RHL, a company incorporated in the British Virgin Islands; Olpon Investments Limited, a company incorporated in Cyprus; the husband, the ultimate beneficial owner of Olpon; the wife; and Mr Kalantyrskiy (“DK”), the ultimate beneficial owner of RHL. RHL is the legal owner of a property known as Upper Ribsden, Windlesham, Surrey (“the Property”). The parties to the proceedings, in so far as relevant to this appeal, are RHL, the husband and the wife. Olpon is not a party.
The Judge determined that RHL holds the Property “on resulting trust for” the husband. By his order of 13 January 2021 (“the January 2021 Order”), the Judge declared that the husband is the sole beneficial owner of the Property and made consequential orders for the transfer of the Property to the Wife. The January 2021 Order also declared that, “upon the transfer of the … Property to (the wife), (RHL's) liability pursuant to the Loan Facility Agreement dated 20 March 2012 to Olpon Investments Limited shall be satisfied”.
RHL appeals contending that the Judge was wrong to find a resulting trust because the monies used to purchase the Property were provided by Olpon to RHL by way of a loan. RHL is represented by Mr Seitler QC and Ms Houghton, who did not appear below.
The wife is represented on this appeal by Mr Moeran QC, who also did not appear below, and Ms Amaouche. Mr Moeran accepted, as set out in his skeleton argument, that “this is not a case where a resulting trust can arise, in the strict sense of that term”. This is because, as submitted by RHL, the judge found that “there was a legitimate loan agreement”. The wife has filed a Respondent's Notice seeking to uphold the Judge's determination that RHL holds the Property beneficially for the husband on the alternative basis of a constructive trust.
The husband, represented by Mr Todd QC, who did not appear below, and Mr Webster QC, supports RHL's appeal. He has also applied for permission to appeal, an application which I adjourned to be determined at this hearing.
For the reasons set out below, I would allow RHL's appeal and remit the matter to be reheard before a judge of the Family Division to be nominated by the President.
Background
This case has a long history and I propose only to set out some elements in this judgment.
The husband and the wife were married in 2005 and divorced in Russia in 2013. The wife then made an application for financial provision under Part III of the Matrimonial and Family Proceedings Act 1984, leave to do so having been granted by the Judge.
The parties reached a comprehensive financial agreement. The husband sought “to renege” on this but the Judge acceded to the wife's application that an order be made in the same terms as the agreement. The July 2016 Order has a number of provisions which dealt with the Property. These included that the husband and the wife “agreed that the contents of the … Property shall remain the absolute property of the” wife. The husband undertook and agreed “to procure or carry into effect the transfer” of the Property into the sole name of the wife as provided for in the order. An order was made that the husband “will procure the transfer of (the Property) into” the wife's sole name by 9 September 2016.
As set out in the judgment below, the husband “has simply not complied with virtually any of his obligations under” the July 2016 Order. In particular, the Property has not been transferred to the wife.
The manner in which the Property was acquired is as follows:
“6. Upper Ribsden was purchased by Ravendark Holdings Limited (hereafter “Ravendark”) for £27.5 million on 26 April 2012. Ravendark had been incorporated in the British Virgin Islands on 6 February 2012. The shares in Ravendark were held by professional trustees, Royalmed Management Ltd. The Wife had found Upper Ribsden and the Husband had instructed solicitors, Hogan Lovells, to act in the purchase. On 20 March 2012, Ravendark entered into a loan facility agreement with Olpon Investments Ltd (hereafter “Olpon”) for the provision of a loan to finance the purchase of Upper Ribsden. The agreed chronology says that Olpon is owned/controlled by the Husband.
7. On 3 April 2012, Olpon provided £5.5 million to Ravendark. Of this, £2.65 million was used for the deposit on the property together with a sum of £100,000 previously provided. On 17 April 2012, a further £29 million came from Olpon, making a total loan of £34.5 million. Of this, just under £28,989,010 was sent to Hogan Lovells for the balance of the purchase price, including to cover the stamp duty. The indicative completion statement shows stamp duty of £4.125 million. It also shows the cost of a panic room door and a safe being installed at a total cost of just over £19,500.
8. One of the major issues in the case is who owns Upper Ribsden. On 21 March 2012, a declaration of trust was entered into which declares that Royalmed holds the shares in Ravendark as nominee and on trust for Mr Dmitry Kalantryskiy (hereafter “DK”). On 4 April 2012, Ravendark granted a two-year lease to enable the Wife and children to occupy the property at a rental of £20,000 per month. The Wife and children moved into Upper Ribsden on 13th May 2012 so that the children could attend school in this country.”
The Loan Facility Agreement referred to in the judgment below was between Olpon and RHL (“the LFA”). This had been signed by the same person, Mr Panagiotis Kinanis, as a director of RHL and as a director of Olpon. The LFA included a clause, paragraph 4.3, which provided:
“At any time during the existence of the Loan Facility, the Lender may request that the Company pledge its interest in Real Estate and/or arrange for the pledge of shares in the Company in a form and on terms satisfactory to the Lender.”
Proceedings and judgment below
The wife sought to enforce the July 2016 Order. As part of that she sought a declaration that the husband was the beneficial owner of the Property. It would be fair to say that the legal basis of the wife's case was not always as clearly set out as it might have been. However, it seems from the transcript of the hearing that it was the Judge who first suggested that the Property might be held by RHL on resulting trust for the husband. This is then reflected in the judgment when he said, at [22], that the wife's Points of Claim “plead that the Husband owns the property, presumably by way of a resulting trust”. He later set out his conclusion, at [83], that the Property “is held by [RHL] on resulting trust for the Husband”.
The hearing before the Judge took place in July 2019. At that date the husband was subject to EU sanctions. He was given permission to give evidence remotely but did not do so. Judgment was given in August 2019. The order was initially also made in August 2019 but was not perfected until January 2021.
In the course of his judgment, the Judge referred to a number of features in the arrangements between RHL and Olpon and between RHL and the husband and the wife. These included that, at [63], DK had never been to the Property; at [73], that the purchase price “was negotiated” by the husband and the wife; and, at [65], that not all the monies said to have been lent by Olpon to RHL were spent on the purchase of, or otherwise on, the Property. The total provided was £34.5 million, of which £27.5 million was used to purchase the Property with stamp duty of £4 million. In addition, £4 million was spent on refurbishing the Property, works which the Judge found, at [22], that DK “had no involvement in”; at [76], that they “were entirely done at the instigation of the [Rotenberg] family”; and, at [76], which, “as DK has not shown otherwise, (were) paid for by them, probably in part through the excess from the £34.5 million provided from Olpon”. The Judge also found, at [59], that the husband “approved every invoice for spending on the property”. In addition, monies provided by Olpon were used to purchase furniture for the Property, to buy a Bentley for the use of the Rotenberg family in England and to pay contents insurance premiums (which included the wife's jewellery). The Judge clearly considered it significant that these monies...
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