Z v Z
| Jurisdiction | England & Wales |
| Judgment Date | 03 November 2011 |
| Neutral Citation | [2011] EWHC 2878 (Fam) |
| Docket Number | Case No: FD 08 D 03064 |
| Court | Family Division |
| Date | 03 November 2011 |
[2011] EWHC 2878 (Fam)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Moor
Case No: FD 08 D 03064
Mr Timothy Scott QC leading Mr Jonathan Tod (instructed by Levison Meltzer Piggott) for the Applicant
Mr Lewis Marks QC leading Miss Katie Cowton (instructed by Withers) for the Respondent
Hearing dates: 10 th—13 th October 2011
This is an application dated 26th September 2008 in Form A for financial remedies by the Petitioner (hereafter "the Wife"). The Respondent is referred to hereafter as "the Husband".
Both parties are French. The Wife was born near Paris in August 1961 and is therefore 50 years of age. Prior to the birth of the children, she was employed in the cosmetics industry and then in an advertising consultancy. Since the arrival of the children, she has been a full-time housewife and mother.
The Husband is of Armenian descent but he was born in Paris in March 1958 and is therefore 53 years of age. He worked in his family's business until 1987 when he joined VCF. He has steadily risen up the ranks and is currently Managing Partner, private equity, based in Paris.
Both parties are highly intelligent and very well educated. The Wife obtained an MA from Dauphine University in Paris. The Husband also attended Dauphine University where he obtained a Masters Degree in Finance and a DEA. He later obtained an MBA from INSEAD.
They met whilst the Husband was working in his family business. They commenced a relationship in around 1985 and began to cohabit in the Wife's flat in Paris in 1990. The relationship did not run entirely smoothly as there was a period in 1986 when the relationship was broken off and another in 1992, when the parties separated. On each occasion this was for approximately six months. These two periods of separation were both at the instigation of the Husband, who was not ready to commit fully to the relationship. I accept that this was in part because of his parents' wish that he should settle down with an Armenian girl but I have no doubt it was not the only reason.
Nevertheless, on both occasions, the parties got back together and on 18th February 1994, they purchased their only matrimonial home in Paris, an apartment in the 17 th arrondissement in their joint names, to the acquisition of which they contributed equally. The Wife sold her flat to assist with the apartment's acquisition and the Husband additionally paid for the majority of the quite considerable refurbishment works. The property is now valued at €1,685,775 and is free of mortgage.
On 27th June 1994, they entered into a marriage contract under the "separation de biens" regime before two notaries and in accordance with French law (hereafter "the Agreement"). This is a very important feature of this case, to which I will return in due course.
They married on 5 th July 1994 in a civil ceremony in Paris. Two years later, on 6 th July 1996, they had a religious marriage at the Armenian Church in Paris with a Catholic Priest taking a part in the ceremony.
They have three children, now aged 14, 12 and 9, all of whom attend school at the Lycée in South Kensington.
During the marriage, the parties purchased one further property, namely an investment property in Suresnes in January 1997. The legal title and beneficial interests are held as to 85% to the Husband and 15% to the Wife. This reflects the proportions of the purchase price that each contributed. The purchase contract specifically refers to the marriage contract.
The family lived in the Paris apartment until the Husband was posted to Amsterdam in November 1998. After the second child was born, the Wife and two elder children joined him in the Netherlands in around May 1999. They lived in a rented property financed by VCF. The youngest child was born in Holland.
In May 2002, the Husband's work in Amsterdam finished and the family returned to Paris. In November 2006, the Husband was offered a promotion by VCF to Managing Partner, based in London. Nevertheless, he remained in Paris until the end of the school year.
In June 2007, the parties discussed separation. The Husband had formed a relationship with another woman but it is clear that he was undecided as to what he wanted for the future. The Wife, on the other hand, was keen for the marriage to continue. Nevertheless, both parties instructed French Avocats. Draft separation agreements were prepared and exchanged by the parties themselves but no agreement was reached.
On 31st August 2007, the parties moved to live in England. They resided in a serviced apartment in one of the premier streets in London, SW7. The rent was paid by VCF as part of the Husband's relocation package.
In November 2007, the parties discussed a three month trial separation, although it was not until February 2008 that the separation commenced. Even then, it was a secret separation in the sense that the children were unaware of it. The Husband moved into another apartment in the same building but returned to the family home every other week-end and, in April 2008, the family had a holiday together in Mauritius. To explain the Husband's absences, the Wife told the children that their father was travelling more than before. The Husband wanted to use the three months to decide on what he wanted to do in the future. Before he left, he signed a letter dated 4th February 2008. It is clear that there was a draft of this letter before it was signed. The signed letter is in a slightly different form to the draft. I will have to return to this letter in due course as its true meaning and importance have been in issue in the case.
On 2nd July 2008, the Husband told the children that their parents had separated. This marked the end of the marriage. The Husband moved to rented accommodation in Chelsea in August 2008. The Wife had already instructed solicitors in May 2008 in case they should ever be needed. On 3 rd July 2008, she issued a divorce petition here. This led to a contested jurisdiction dispute. The Husband filed an answer on 18th August 2008 pleading that there was no jurisdiction as both parties were domiciled and last habitually resident in France.
The matter came on for hearing before Ryder J on 21st October 2009. The judgment is reported as Z v Z [2010] 1 FLR 694. It was held that the parties were both habitually resident in this jurisdiction on the date on which the Wife presented her petition, as it had been both parties' intention to reside in London at the time of the family's move here, even though the Husband had subsequently changed his intention. Although there was no order as to costs, Ryder J indicated that he would have ordered the Husband to pay the Wife's costs had he not already done so and that, in consequence, the amount of the costs should be added back to his assets for the purpose of the hearing I am now undertaking. Following on from this order, a Decree Nisi was pronounced on 4 th March 2010. It has not, as yet, been made Absolute.
The Wife's application for financial remedies, which had been stayed pending determination of the jurisdiction dispute, was restored and, on 28 th April 2010, Roberts DJ transferred it to the High Court for determination.
Fortunately, there is complete agreement as to the capital position of the parties. This is a great tribute to both the parties and their advisers. If only this was the situation in every case. An Agreed Schedule of Assets has been prepared by the Husband's junior counsel, Miss Cowton. It shows total assets of £15,088,419. Of this total, the wife has £1,285,488 with the husband having the balance, namely £13,802,930. The Schedule can be summarised thus.
|
| Husband | Wife |
|
| Matrimonial Home | £723,509 | £723,509 |
|
| Investment Property | £234,936 | £41,459 |
|
| Banks | £399,065 | £19,432 |
|
| Investments | £11,176,072 | £329,592 |
|
| Debts | -£136,305 | -£3,465 |
|
| Unpaid costs | -£184,122 |
|
|
| Costs add back | £157,845 |
|
|
| Deferred Compensation | £324,802 |
|
|
| Co-investments | £587,060 |
|
|
| Inherited Properties | £520,069 | £174,961 |
|
| Overall Total | £13,802,930 | £1,285,488 | £15,088,419 |
Of the Wife's total, over half comprises her one-half interest in the former matrimonial home in Paris (£723,509). Her 15% share in the investment property in Suresnes is worth £41,459.
The remainder of her assets consist almost entirely of various savings and French properties that she inherited during the marriage. The properties are subject to French usufruct (effectively a life tenancy) in favour of her mother and her late father's girlfriend. Whilst these are clearly non-matrimonial assets that would be excluded from a sharing division, the Husband has also inherited a French property which is subject to usufruct for the life of his mother. Although the value of the Husband's inheritance is slightly greater than that of the Wife, they effectively balance each other out and can be ignored for all practical purposes.
The Husband's assets are, of course, considerably more extensive and diverse than those of the Wife. Other than his half share of the Paris apartment, his 85% of the Suresnes apartment (worth £234,936), and his inherited property, the rest of the assets form the fruits of his work at VCF. The remuneration arrangements for senior management in private equity and venture capital businesses are fiendishly complicated. They consist of a mixture of salary, bonus, carried interest schemes and co-investments in the various companies acquired by the private equity business. In good economic times, the rewards can be very high indeed.
The Husband reached sufficient seniority to participate in the various carried interest and co-investment schemes in November...
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