username

password

Hind CourtHarcourt Chambers1 Garden CourtCoram ChambersDNA Legalimage of 4 Paper Buildings logoGarden Courtsite by Zehuti

Home > Judgments > 2014 archive

L v M [2014] EWHC 2220 (Fam)

Application by wife for husband to show cause as to why he should not be held to a concluded separation agreement reflected in a draft consent order signed by both parties. Husband held to the fundamental terms of the agreement.

This case concerned an application by the wife for the husband to show cause as to why he should not be held to a concluded agreement entered into by the parties as set out in a separation agreement and reflected in a draft consent order signed by both parties.

From the commencement of the proceedings until a hearing before Keehan J in June 2014, the husband was represented. Thereafter, the husband ceased to participate in the proceedings, save for two emails sent on 13 and 22 June 2014; the latter being sent to the court by a firm of Zimbabwean lawyers. Despite the husband's absence Bruce Blair QC (sitting as a Deputy High Court Judge) fully investigated the merits of the case during a hearing lasting 5 days.

The parties, both British, commenced cohabitation in the Spring of 2006, and married in January 2008. Their only daughter is now aged 6. The husband has substantial connection, both business and personal, with Africa, and these were maintained during the marriage. The parties' principal matrimonial home was in Harare, and they had a holiday-type home in Kenya.

 On 5 May 2010, having come to believe that the husband was contemplating issuing divorce proceedings in Zimbabwe, the wife instructed lawyers to issue in England. During that period in email correspondence with the wife, the husband wrote of having had an introductory meeting with "the divorce lawyer" as he "wanted to find out what was involved if there was a split" and to a previous introduction to a Zimbabwean lawyer with whom he had an introductory meeting. The husband stated that he would like to "start a process of settlement going".

Thereafter, the parties entered into a dialogue. On around 13 May 2010, the wife sought to instruct Mishcon de Reya and left telephone messages which went unanswered. The wife asserted that the next day the husband informed her that she could not consult Mishcon de Reya as he already had. In any event, towards the end of May 2010, with the assistance of a solicitor friend of theirs whose services they engaged, a draft agreement was produced which culminated in a separation agreement signed on 6 August 2010, and a consent order. The principal terms of the agreement are set out in full at paragraph 11 of the judgment. In a nutshell, the husband was to pay the wife a lump sum of £2,000,000 in four instalments and global maintenance on a decreasing scale until the child completed university or attained the age of 25, whichever occurred earlier.

The husband had paid the first instalment of £100,000 in part-payment of the lump sum, and interim maintenance at the rate prescribed by the agreement until May 2012. Thereafter, he reduced the payments until December 2012, and ceased to pay for a period, re-starting payments at a further reduced rate at a later date.

The husband sought to resile from the Agreement and defended the application to show cause on the following grounds:

a.  Insufficient financial disclosure at the time of the agreement;

b. Lack of any legal advice rendered to him as to the terms or implications of the agreement or consent order;

c. The fact that there are elements of the consent order which are beyond the court's jurisdiction (these are my words; but they better reflect, I think. what he meant to say); and

d. In any event he is simply not in a financial position to make the payments agreed.

The husband's case is set out in paragraphs 14 to 21 of the judgment. In brief, the husband also contended that, in any event, there had been a change in his financial circumstances and sought to argue that any order made should take into account not only the change, but also the brevity of the marriage; his very limited assets, and the funds already passed to the wife.

The wife's contentions were that the agreement was freely entered into on both sides with ample knowledge of the other's financial situation, and that each party eschewed the need for detailed and documentary formal disclosure. Further, both parties knew the full consequences and implications of the agreement, and as the agreement itself records both parties had "had legal advice or the opportunity to take legal advice".   In fact, she said, it was the former of these alternatives: the husband received legal counsel both in Zimbabwe and in England, although she cannot know its scope or precise substance.  It was the wife's case that the husband told her that he had received advice from Mishcon de Reya.

The parties exchanged Forms E in February 2014. Both parties served substantial questionnaires in March 2014. The wife answered the husband's questionnaire and it was noted that the husband had not complained about the answer nor had he served a further questionnaire or a schedule of deficiencies. Following a hearing at which MPS was in issue, the husband was ordered to reply to the wife's questionnaire, and in particular to provide information and documentation requested concerning a Mauritian Foundation. The wife was given liberty to apply for directions if the husband failed to provide the documentation requested by a certain date. At the same hearing, it was recorded that the husband was also requested to provide an undertaking to the wife's solicitors to obtain his entire solicitors' file from Mishcon de Reya, but he declined to do so.

The wife's questionnaire remained totally unanswered. The wife made an application before Moor J for the Mauritian Foundation to be ordered to disclose the information she requested. Moor J granted her application, and recited that it was likely that the judge hearing this case will draw adverse inferences against the husband as to his financial circumstances if this information is not provided.

The judge considered the relevant section 25 factors at paragraphs 35 to 37 of his judgment. He found that the level and detail of the husband's current income remained a mystery. He then considered the parties' case concerning the main assets at paragraphs 46 to 62 of the judgment, noting throughout that the husband was twice ordered by the court to answer the wife's questionnaires and that he remained in breach of the orders, having given no answer or documentary evidence at all.

Mr Blair QC summarised the relevant law at paragraphs 66 to 70 of his judgment.

Turning to the husband's contentions, the learned judge found that it was hard to fathom what the husband meant by insufficient financial disclosure partly because he had not particularised any assertion that the wife's disclosure was inadequate, and the agreement contained a recital that recording the parties' the lack of disclosure and the parties' acceptance thereof.

Of the lack of veracity in the wife's Form E, it was noted that this allegation had not been particularised or forensically pursued.

Concerning the lack of legal advice, the judge concluded that in light of the evidence, on the balance of probabilities, the husband did have at least some legal advice as to the financial consequences of divorce, and he had ample opportunity to take such advice. If that is wrong, the lack of advice would have been the husband's decision  "uncontaminated by any lack of knowledge, inequality of bargaining power or other vitiating factor", and the agreement was in any event freely entered into by the husband with a full appreciation of its implications. Further, the learned judge made a finding that the husband was wholly content with the agreement's provisions in 2010, and that they sat comfortably with the worth and substance of his financial resources.

When considering the brevity of the marriage the core quantum of the settlement was not such as to offend judicial sensibility so as to render intrinsically unfair especially when fairness is judged with one eye focussed on the fact of the parties' consensus and the finding that the husband was content with the agreement.

The husband's assertion that there had been a change in his circumstances and the current funds were insufficient had consumed most time in the course of the hearing. The wife's case that the husband's disclosure is wholly unreliable was inescapable. The wife was, with justification, able to go as far as asserting that the statement provided by the husband was highly unconvincing and false. Mr Blair QC concluded that had this been a conventional financial remedies case, on the evidence before him, applying the relevant standard of proof, his finding would have been that the husband was worth many millions of pounds and his assets included the main assets considered in this judgment. The husband had fallen short of persuading the court to find the change of circumstances for which he contended.

The husband was held to the fundamental terms of the agreement, having not shown just cause why he should not be. Some modifications were made to the agreement in respect of issues which the court lacked jurisdiction to order. These are set out at paragraph 79 of the judgment, and the rate of interest was varied. Periodical payments were ordered premised on the agreement, and the husband was ordered to make good his default to set up a trust for the child as agreed.

Summary by Katy Chokowry, barrister, 1 King's Bench Walk
_____________________

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION


Case No: FD 10D00213
2014 EWHC2220 (Fam)

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 01/07/2014


Before :

MR . B. G. D. BLAIR QC
SITTING AS A DEPUTY  HIGH COURT JUDGE

- - - - - - - - - - - - - - - - - - - - -

Between :

L Applicant
- and - 
M Respondent
- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -

Simon Calhaem (instructed by Moss Fallon Solicitors Limited) for the Applicant
The Respondent was neither present nor represented

Hearing dates: 23, 24, 25, 26 June & 01 July 2014
- - - - - - - - - - - - - - - - - - - - -

Approved Judgment
This judgment was delivered in private.   The judge has given leave for this version of the judgment to be published on condition that, subject to any order hereafter to the contrary, in any published version of the judgment the anonymity of the parties must be strictly preserved.   All persons, including representatives of the media, must ensure that this condition is strictly complied with.   Failure to do so will be a contempt of court.

Judgment of the court
L v M

INTRODUCTION
1. I have been hearing an application by L ("the Wife") that her Husband M ("the Husband") "do show cause as to why he should not be held to the concluded agreement set out in the Separation Agreement between the parties dated 6th August 2010, and reflected in the [draft] Consent Order, signed by both parties [and attached to the Application]; and for such other Orders as are necessary to hold [the Husband] to his concluded agreement".  As I shall explain, the Application gives rise to a number of subsidiary issues which it is necessary for me to determine.

2. The Wife is represented by Mr Simon Calhaem of Counsel, instructed by Moss Fallon Solicitors Limited.  The Husband has not been represented before me, nor has he deigned to appear at what was originally fixed as a 5 day, subsequently extended to 7 day, hearing.  Even that, I suspect, would have been an underestimate, had the Husband been present.  He was represented by solicitors (Stewarts Law) from the commencement of the proceedings in 2013 until 3rd June 2014, the date of his filing a Notice of Acting in Person (and at various interlocutory hearings by Counsel instructed by Stewarts Law LLP).   Since the date of that Notice he has sent two principal written communications to the Court. One is an email from himself personally dated 13th June, 10 days before the commencement of trial.   The other is an emailed letter dated 22nd June from a firm of Zimbabwean solicitors making certain representations on the Husband's behalf. In so far as the Husband appeared to be asking for an adjournment of the hearing so as to obtain legal aid, such application could only meet with summary rejection.  Not only is there no entitlement to legal aid, but the Husband, who as I shall explain is in serious contempt of court, has no grounds at all for seeking to delay the outcome of this case.

3. I emphasise my recognition, indeed conviction, that, notwithstanding his absence and his  contempt, the Husband is entitled to rely upon the Court to ensure that the merits of the case are fully and carefully considered and that the end result  of the proceedings, in terms of any financial remedy order that may be made, is in all the circumstances (one, but only one, of which is the fact of the Agreement) fair and reasonable.  I have cautioned myself accordingly.

4. The seminal authority in this area of the law is now Radmacher v Granatino [2010] 2 FLR 1900, in which the Supreme Court addressed the three types of compromise agreement between spouses which commonly fall to be considered by what is now the Family Court, including separation agreements reached in contemplation of divorce.  I return to Radmacher later in this judgment; but it is worth recounting even at this early stage the overarching principle enunciated by the Supreme Court:- 

"The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement."

5. Finally, by way of introduction, where direct speech is quoted in this judgment it generally appears for ease of reference in italic type.  Where the $ sign appears, all references are to United States dollars.

THE BACKGROUND HISTORY, PRIOR TO THE SHOW CAUSE APPLICATION
6. The parties are both British, the Wife being aged 46 and the Husband 60.  They met in the spring of 2006 and by the summer of that year had forged an intimate relationship leading to their marriage in January 2008.  They have one daughter, aged 6.  The Wife had not been previously married and, having graduated from Oxford University in Politics, Philosophy and Economics, has always had a professional career.  She qualified as a Chartered Accountant when working for an international accountancy firm, from whom she moved to work for an American bank in London as a banker.  Later, having attained a Masters Degree in Environmental Technology at a London university, she has worked variously in venture capital finance and as a consultant specialising in the assistance of start-up companies.  At the time of the marriage she lived in an excellent area of Chelsea in London, owning a 3 bedroomed maisonette. She had various unquoted investments worth between £150,000 and £200,000. 

7. The Husband was previously married, but unhappily his first wife died.  He has 3 adult children by that marriage.  When one turns to his career background, it becomes immediately clear that both parties may be described, as to their financial acumen, as being extremely aware and knowledgeable.  Whilst British, the Husband, who was born in the Far East, has spent many of his years outside the United Kingdom and most particularly in Africa, where he has for many years had substantial business interests.  The Wife describes the Husband (in the context of his execution of the Separation Agreement into which they entered) as a highly sophisticated and intelligent businessman.   It is the sort of label which, I am satisfied, it is apt to attach to both parties. Moreover, it is clear on the evidence that during their relationship there was much dialogue between them touching upon their personal finances.   In her initial Statement in the show cause proceedings the Wife stated: "We were ... well aware of each other's respective financial circumstances as we had a transparent approach to finances during our relationship and marriage and we regularly sought each other's advice on business matters", a description to which the Husband did not take exception. 

8. The Wife kept her London home until it was sold in 2009, she says when the market was at a low ebb and at the suggestion of the Husband.  The equity was c.£620,000, which was divided into almost equal portions, one half being invested in the Husband's name in a fund named Fund B (as to which see paragraph 51ff. below) and the other half in an investment, also in the Husband's name, in an unquoted company in which the Wife had an active professional interest, named Company C, in the United Kingdom.  The Wife has also invested in this company. The Husband, whilst having business interests partly administered in London, does not spend much time in England in any given year, for legitimate fiscal (and no doubt other) reasons.  The centre of his interests geographically is very much in Africa and in particular in Zimbabwe, Zambia, Kenya and the Democratic Republic of Congo ("DRC").  In the short marriage the parties' principal matrimonial home was in Harare, with holiday-type residence at times in a property known as K House in Kenya. 

9. As to lifestyle, the evidence is of limited scope, but demonstrates a conflict between the parties which has not been addressed at this hearing.  The Wife describes what she terms a very high standard of living throughout the course of the parties' relationship, the occupation of two salubrious homes (three until 2009, when her Chelsea maisonette was sold) and the employment of a full-time nanny, a driver, a cook, a maid and a gardener. Typically, she says, travel was business class, with several holidays each year e.g. at luxurious hotels.   In Form E the Husband says that, on the contrary, they always lived modestly and, as he puts it, within his means.   He accuses the Wife of profligate expenditure. Reference is made to the upkeep and training of 25 race horses, whereas the Wife, to the contrary, puts forward a 50% interest in a racecourse stud as one benchmark of high lifestyle.  A fortiori in the absence of the Husband, there was no investigation in this area of the case; nor was enquiry necessary. The Husband cannot, however, escape the observation that his, albeit general, depiction of a "modest lifestyle out of necessity" does not sit well not only with the Wife's evidence but with his agreement, at which I arrive shortly, to pay maintenance for the benefit of the Wife and [the child] in the sum of £160,000 per annum, albeit for a finite term.

10. Sadly, the marriage broke down within 2-2½ years.  From the Wife's viewpoint, the catalyst for its demise was the Husband's admission at the end of March 2010 of an extra-marital affair.  In the first week of May, in the course of (generally amicable) dialogue between the parties the Wife came to believe that the Husband was contemplating the initiation of proceedings in Zimbabwe. She does not seek to disguise that that was not to her liking; and on 5th May 2010 she filed a divorce petition in London upon the basis of the Husband's adultery, which was served upon him on 12th May at Heathrow Airport.  The dialogue between Husband and Wife which was already initiated and continued over a long period, as I shall describe. Its culmination arrived on 6th August 2010 when they signed the Separation Agreement ("the Agreement"), and the attached Consent Order, which are the subject-matter of the current proceedings.

The terms of the Agreement

11. It is trite to say that these key documents must be referred to for their full terms and effect. In summary, the parties negotiated a financial settlement of which the principal terms were:-

A. The Husband to pay the Wife a lump sum of £2,000,000 in four instalments; 

(i) £100,000 on signature of the Agreement;   

(ii) £300,000, to be offset by a loan repayment by the Wife to the Husband of £61,000, to be paid by 30th December 2010;

(iii) £600,000 to be paid by 30th June 2011;

(iv) 1,000,000 to be paid by 31st December 2011.

B. The Husband to pay global maintenance (RPI linked) for the Wife and [child], as follows: 

(i) £13,333 pcm until full payment of the £2,000,000 lump sum; 

(ii) £9,000 pcm for the following 4 years;

(iii) £6,000 pcm thereafter until completion by [the child] of her University education or her attaining the age of 25, whichever be the earlier.

C. Payment by the Husband of all of [the child]'s education costs until the end of first degree level.

D. The Husband to establish a trust for the benefit of the Wife and the child (the "[the child's] Trust"), into which he should import certain specifically identified assets / investments.

E. The maintenance was to continue to be paid (for the specified terms) notwithstanding the event, if ever it were to occur, of the Wife's remarriage or cohabitation. 

F. Neither the Wife nor the Husband was to apply for increase or reduction respectively of the level of maintenance.

G. In the event of default by the Husband, whether in relation to capital or periodical payments, the sum(s) outstanding were/are to carry interest at the rate of 1% pcm.

H. The Husband was to facilitate the use by the Wife and/or [the child] of K House "while he is a part owner thereof" for two weeks or more each year.

There were other terms all of which, needless to say, I bear in mind, by way of example as to personal property, security in the event of the Husband's death and contact. 

12.  Having identified the terms of the Agreement, I turn to examine the parties' competing positions as to its genesis.  In chronological sequence the story goes like this:-

a. Having instructed her then solicitors, Manches, by telephone on 5th May 2010 to file a petition for divorce, the Wife went to stay with friends in Zimbabwe until 12th May, when she flew to London. 

b. On 5th May the Husband wrote reflecting on the sad breakdown of their relationship and expressing pessimism as to its recovery.  He referred to previous mention by the Wife that she had taken some legal advice (this was in fact in March) from a solicitor friend of the parties ("N"), and said that a few days later he had introduced himself to a Zimbabwean lawyer with whom he had had an initial meeting.  It is notable in light of subsequent events that in this email the Husband mentioned that liquidity was tight.

c. In an email the next day (6th May) he referred to his having had an introductory meeting with "the divorce lawyer", observing that he "wanted to find out what was involved if there was a split".  He clearly meant involved financially.  He said that he would like to start a process of settlement going and that he would get more advice when he returned to Harare. He made clear that the lawyer had advised him that, as he put it, "any settlement must be pitched at a monthly [omission; but presumably "payment"] that the paying party can always meet"; and later than "in the long term he would want to provide in a settlement a home for [the Wife] and [the child] and enough cash for [her] bring up [the child]".

d. The Wife arrived in London on 13th May, having left [the child] in Zimbabwe with the above-mentioned friends (the husband of the couple concerned is in fact the child's godfather).  According to her, between 13th and 17th May she and the Husband had several meetings in London.  On 13th May she spoke to N.  She wanted to change solicitors, and he recommended as a possibility Mishcon De Reya ("Mishcons"). She left telephone messages with Mishcons which, she says, were unreturned. Then, on the following day, she was confronted by the Husband, who she says was somewhat angry and told her that she could not consult Mishcons, because he himself had seen a partner there, Ms Melissa Lesson.   In her show cause Statement the Wife says that the Husband sought legal advice both in Zimbabwe and in England after he was served with her petition.  She says that he consulted Mishcons in London who, according to the Husband, gave him some advice concerning the likely parameters of any financial settlement.  That presentation was marginally corrected in the course of the hearing.  The Wife's position is, first, that the Husband told her in terms during the course of their many meetings that he had indeed had advice as to the parameters of financial settlement in England and, secondly, that it is an established fact that the Husband did go to Mishcons on one occasion (at least).  She therefore logically assumed (and understandably continues to contend) that the advice had been received from that firm of solicitors.

e. The Husband, however, has stated repeatedly in the proceedings that he did not have any legal advice. He has not, however, explained how or why it would be that, by his own account, he wanted to find out from a Zimbabwean lawyer (at a time when he was no doubt contemplating the possibility of Zimbabwean divorce proceedings) what the financial consequences of divorce might be, and yet did not want analogous advice as to the potential regime in England.  As to his contact with Mishcons, I shall describe later (paragraph 30ff.) how the position has been reached where he declines to produce Mishcons' file pertaining to his affairs (or potentially an appropriate extraction therefrom) and has not sought to produce any evidence from that firm.

f. Between 17th and 19th May the Wife was back in Zimbabwe collecting the child (and her nanny).  On her return meetings with the Husband continued, as did written communications between them.   The Wife describes how their many meetings from early May onwards took place at several different venues, including by way of example a Mayfair Hotel, a private members' club, a Mayfair restaurant and a coffee shop in the St. James' area. The specific meeting at which the Husband told her that he had had legal advice as to the financial consequences of divorce in England was, she says, at the private members' club. 

g. The Husband, according to the Wife, was anxious to achieve financial settlement, not a proposition which the Husband would dispute, having regard to the terms of his email correspondence.   Towards the end of May both parties were engaging N to produce a draft of a possible financial settlement in the form of a separation agreement. There was an exchange of emails between the Husband and N on 26th/27th May.  On 26th May N wrote to the Husband stating that the Wife had informed him that she and the Husband had largely agreed the position and that the Husband was ready to review a first draft prepared on a consultancy basis and as objectively as possible which, as N put it, could be tweaked as necessary before being placed before the parties' solicitors for final sign-off.  He gave an estimate of prospective charges and asked if the Husband was happy for him to proceed.   On the following day the Husband agreed N's quotation of fees and stated that the Wife thought that he might have a draft of the document by Friday a.m., which would be excellent.

h. The following day, 28th May, N sent a first draft of what he termed the Deed of Settlement and of a side letter.  In brief summary, had the parties settled on the terms embraced within those documents, they would have been agreeing:-

• a lump sum from Husband to Wife of £2,000,000 payable by 30th March 2012 in prescribed instalments, with interest of 2% per annum on any outstanding balance arising from default;

• maintenance of £13,300 per month (RPI linked) for wife and child in combination, to reduce to £9,000 per month and to be payable until any court order by way of variation, until [the child] attained the age of 25 or ceased full-time education, including University (there was also a term as to [the child]'s possible death before the age of 25);

• financing by the Husband of [the child]'s educational expenses;

• provision by the Husband of the use of K House for 2 weeks per annum and the use of a car by the Wife whilst in Zimbabwe.

i. On 8th June the Husband emailed the Wife stating that he wanted to avoid briefing an expensive lawyer if there was an agreement and asking whether there was "any timing on the important of aspect of talking to the lawyer, the draft settlement?".   He did refer in that email to Melissa (presumably Lesson) in the context of, as he put it, "holding off proceedings under a different jurisdiction".   I am not sure to what he was referring; but on 15th June, in any event, he was writing to the effect that he was no longer worried about UK process.  He was anxious in this email and an email written the following day that lawyers' costs should be contained and stated that the task of the Wife's then solicitor was to draft a settlement which he and she could review and when appropriate sign.

j. The Husband was apparently in Africa for part of the English mid-summer.  I do not know the detail, save that the Wife said that he was at K House in July.   In any event, the negotiations continued until they arrived, in terms of their end product, at the terms in the executed Agreement to which I have referred.  The Wife states unequivocally, and I accept, that the corner-stone terms of the settlement (£2,000,000 lump sum; £160,000 p.a. maintenance, reducing as described; [the child]'s educational costs; and the [the child's] Trust were terms which initially emanated not from her but from the Husband back in May. 

k. She further says, and there is no reason to suppose that the Husband would disagree on this point, that all negotiation about her prospective settlement was premised upon consideration of her and [the child]'s needs as the pre-eminent consideration. 

l. She asserts that the concept of 1% pcm interest emanated too from the Husband, not from her.  The rationale of the settlement was based upon the propositions that the Husband should acquire for the Wife and [the child] a home broadly equivalent to her Chelsea 3-bedroomed maisonette (which it was thought would, when the lump sum was finally paid, cost approaching £2,000,000, inclusive I assume of stamp duty and ancillary costs); that delay in payment by the Husband might severely prejudice the Wife in terms of intervening increase in the London property market; and that the initial maintenance would need to include many tens of thousands of pounds per annum to enable the Wife to pay rent in Central London.

13. The Wife's contentions as to the genesis of the Agreement are thus simply stated.  It was, she says, freely entered into on both sides with ample knowledge of the other's financial situation. Each party eschewed the need for detailed and documentary formal disclosure. Both parties knew the full consequences and implications of the Agreement.  The Husband, as the Agreement itself records  "had legal advice or the opportunity to take legal advice".   In fact, she says, it was the former of these alternatives: he received legal counsel both in Zimbabwe and in England, although she cannot know its scope or precise substance. 

14. How has the Husband formulated his lines of defence against the Application to show cause?  The answer is that different points of defence have been taken at different times and, therefore, that there is some element of inconsistency. However, the overall picture is tolerably clear. In the concluding paragraph of his show cause Statement the Husband invited the Court to reject the Wife's Application for the following reasons:

a. Insufficient financial disclosure at the time of the Agreement;

b. Lack of any legal advice rendered to him as to the terms or implications of the Agreement or Consent Order;

c. The fact that there are elements of the Consent Order which are beyond the Court's jurisdiction (these are my words; but they better reflect, I think. what he meant to say); and

d. In any event he is simply not in a financial position to make the payments agreed.

15. This last subparagraph was his way of summarising in a few words an assertion made previously in the Statement of adverse change in financial circumstances. In the Statement he claimed that he had a liquidity problem when he entered into the Agreement, that the Wife knew that and that the terms agreed were set optimistically, now proven to be very over-optimistically.  In summary, he seeks to claim that now he and his business interests are in a very different place financially as compared with 4 years ago. 

16. In his maintenance pending suit Statement, referred to below, the Husband put it differently. He having ceased making interim maintenance payments, and the Wife having applied for maintenance pending suit, contending that the Court should make an order reflecting the figures contained in the Agreement, the Husband invited the Court to reject that approach given –

(a) the change of financial circumstances;

(b) passage of time elapsing since the Separation Agreement; [and] the brevity of the marriage (which he said must call into question whether the maintenance provisions of the Agreement could ever have been considered appropriate); and

(c) the fact that the Wife's disclosure in Form E indicates that she continues to have access to considerable funds and resources and demonstrates financial transactions which call into question the veracity of her disclosure.

Later in that Statement he said he would be asking the Court to consider what orders might be appropriate in the context of;

(i) the brevity of the marriage;

(ii) the funds already passed to the Wife;

(iii) the "very limited assets" held by him;

(iv) the significant reduction in the funds received with which he had funded payments to the Wife (effectively, again, the point re change of circumstances); and

(v) his retirement.

17. In his email to the Court dated 22nd June 2014 the Husband asked the Court, if denying him a postponement, to take into account various points in reaching its decision, which it is needless to say I shall do.  They include the alleged lack of legal advice and inclusion of terms in the Agreement which exceeded the Court's jurisdiction. The Husband said that the Agreement was flawed commercially and legally, there being, as he put it, no money to pay the capital sum at that time (viz. 2010) nor today.  He insisted that the Wife recognised a lack of cash when the Agreement was concluded, that fact being reflected in the deferral of payments within the document.  He did also refer to allegedly illegal abduction of [the child] by the Wife from Zimbabwe upon which issue, he said, he hoped that he might obtain Legal Aid. This was an echo of what had been said by his Zimbabwean lawyers in a communication of 13th June.  There is, however, no evidence that abduction was in issue in 2010.

18. It is beyond doubt that the time arrived when the Husband repented of the bargain which he had forged with the Wife and reached a decision to resile from it.   It is uncertain, on the evidence before me, just when this occurred; but it is of importance to realise that on the Wife's case she had no inkling that the Husband regarded himself as other than bound by the Agreement until solicitors' correspondence was initiated in 2013. It is true that the Husband, having paid the £100,000 first instalment, sought further time in respect of the subsequent 3 instalments; but that did not unduly worry her, because of the favourable interest provision in the Agreement and also because of her conviction that, whatever the Husband's liquidity / cash flow problems, real or contrived, he had the underlying capital base which would ultimately facilitate implementation of the Agreement.  She also explains, predictably, that she felt vulnerable given the virtual absence of resources on-shore in the United Kingdom and the consequent spectre of enforcement proceedings overseas. 

19. The Husband was professing lack of liquidity as early as December 2010, although it might be said that that could hardly be categorised as an unforeseen change of circumstances in so far as he had stated during the negotiations (e.g. in his email of 5th May 2010) that there was a liquidity problem.  He now goes so far as to claim that the Wife was aware of his illiquidity and to infer that in those circumstances his non-payment is fully excusable and that the current situation is the misfortune not only of himself but of her also. 

20. In any event a cash flow problem is one thing, but an implosion of capital base quite another.  The Husband refers inter alia to the world recession and to lack of commercial progress in recent years, stating, with insufficient particularisation, that his business interests have not prospered as anticipated.  He refers to such collateral factors as the unfavourable exchange control regime in certain African countries.   Nowhere, however, does he vouchsafe what, according to him, he was worth in terms of his total (directly or indirectly held) wealth when the Agreement was negotiated and concluded in 2010. Apart from a general duty to address this issue, he has been under an express court mandate to do so, as I shall explain.  

21. At times the Husband has seemingly asserted that his very ability to pay what he had agreed to pay was dependent upon enhanced future prosperity.  This makes no sense.  Moreover, the Wife, however, has testified that he told her in terms that his net worth was c. US$ 25-30 million, an allegation not expressly denied by the Husband in his Statement in response, even if he might be taken to have been saying by implication that his wealth fell short of that figure.  What is more, she says, the Husband was well placed to look after himself in the 2010 negotiation, being a man of palpable financial acumen who in any event had told her that he had wanted to find out what the financial consequences of divorce would be; had initiated that step in Zimbabwe; had met with a specialist family law firm in London; and, as will emerge, has declined to throw more light on his connections with that firm.  To take the pre-eminent element of the settlement, the passage of £2,000,000 by way of lump sum, it defies credibility, says the Wife, that he would agree to pay that amount, and to pay it within 1¼ years, unless he perceived his own capital worth, whatever his liquidity, to be worth many million pounds more than (and a substantial multiple of) the lump sum agreed.

THE LITIGATION HISTORY
22. As to interim maintenance pending full payment of the lump sum, the Husband paid at the rate prescribed by the Separation Agreement (£13,333 pcm) for 1¾ years, until May 2012.  He also paid certain extras such as travel costs.  The Wife provides the detail (including some narrative as to occasional lateness of payment) at paragraph 45 of her show cause Statement.  In the period until December 2012 the payments were reduced to £10,000 pcm; and then the Husband turned the tap its full revolution and ceased any payments at all until, in April 2013, he reinstated payments at £6,000 pcm.  The finer detail need not be recounted: litigation became inevitable, and the Wife, after a flurry of correspondence, initiated her show cause Application on 9th May 2013.  The situation then, as now, was that, whereas Decree Nisi had been pronounced on 4th November 2010, the decree has not been made absolute. 

23. In August 2013 the Husband again terminated maintenance provision, and in the same month (14th August) HHJ Harris gave directions. The Wife's initial Statement in support of her Application had been perfunctory and she produced a comprehensive Statement on 3rd October 2013, to which the  Husband responded on 8th November.  The Wife having filed an application for maintenance pending suit on 13th November with Statement in support, His Honour Judge O'Dwyer became involved in the case for the first time and gave directions of which the most significant was an order that the parties file Forms E to include financial disclosure from the 1st March 2010 to date and also details and documentary evidence of any transfers of real property since 1st January 2010. The reason for this unusual direction is obvious.  The Husband was asserting change of circumstances as one ground for escaping the Agreement. The onus was on him to establish such change of circumstances; and it would be necessary, axiomatically, to establish not only his current means but also his financial position at the time when the Agreement was concluded. 

24. The Forms E were exchanged in February 2014.  The Wife's does not seem to me to cause any great surprise, although I am mindful of the Husband's suggestion (which he has, however, not pursued) referred to in paragraph 16(c) above.  The Husband's Form E, to which I return shortly, asserted, that apart from Company C his net worth was only £678,982. 

25. On 19th February 2014 the Husband produced his Statement in resistance to the Wife's application for maintenance pending suit, in which he contended that the interim provision now to pass from him to the Wife for herself and [the child] should be confined to £4,000 pcm.  On the same day the Wife served upon the Husband a significant number of documents, only a few of which I have been asked to consider in detail but which, on her case, give the lie to the Husband's Form E disclosure and establish its grave unreliability. Inevitably, in such situations, some documents will be more powerful in their impact than others.  The Wife's position is that, when it comes to some of the Husband's resources, the documents per se establish her case that his presentation is untruthful; and in the case of other resources they have the effect of raising serious doubts, to the extent that the Husband has much explanation to give and the duty to answer a series of penetrating questions (and to disclose relevant documents) before his Form E presentation can possibly be accepted.

26. In a Statement undated but apparently conveyed to the Wife's solicitors on 27th February 2014 ("the February Statement") the Husband gave his initial response in respect of the documents served by the Wife 8 days previously, and to certain submissions already made by her Counsel on the first day of the maintenance pending suit hearing (19th February), which was adjourned part-heard to 28th February.  The Judge, HHJ O'Dwyer, then reserved his judgment, which in the event was handed down on 11th April.

27. Both parties served substantial Questionnaires on 11th March.  The Wife answered the Husband's Questionnaire on 10th April.  The text of the Answer runs to 17 pages and the documents exhibited to no less than 951 pages.    The Husband has never to my knowledge complained about the Answer or its content: certainly, he has served no further questionnaire or Schedule of Deficiencies. 

28. On 11th April HHJ O'Dwyer delivered judgment in the maintenance pending suit application.  He ordered the Husband to pay the Wife maintenance pending suit at the rate of £9,000 per calendar annum (RPI'd) with effect from 13th November 2013, plus any sums required to fund [the child]'s travel for contact with the Husband.  The arrears were agreed to stand at £43,833 as at 30th April 2014.  On the same day the question of further directions in the main proceedings arose for consideration.  Leaving aside purely procedural matters, the Judge's directions had three important components.  First, the Husband was ordered to reply by 9th May to the Wife's Questionnaire (as amended: there was the usual issue as to the scope and relevance of certain questions, which the Judge resolved).  Secondly, focus was specifically cast upon Question 39.   This related to Foundation E in Mauritius.  There had been a previous trust in the Channel Islands, which (and there is nothing sinister about this fact) was migrated to Mauritius.  The Foundation, through a holding company Company C (Mauritius) holds various assets, many of them per the Wife of great value, and the Husband is on his own account one of the class of beneficiaries of the Foundation.  At the apex of the Foundation is its Council, which is the decision-making body.  It consists, according to the Husband's Form E, of his 84-year-old mother and an (unnamed) member of the administration company.  Question 39 read as follows:- 

"The Respondent is required to request the following:

a. Foundation Deed, including any subsequent variations. 

b. Foundation accounts, covering the period 01.03.10 to date. 
  
c. Details of all Council Members during the period 01.03.10 to date.
 
d. Invoices relating to the establishment and annual running costs of the Foundation, and evidence of payment of such invoices.

e. Details, including estimated value, of all assets held by the Foundation during the period 01.03.10 to date. 

f. In the event that any assets have been transferred in, or out of the Foundation in the period 01.03.10 to date, please provide details, by reference to documentary evidence, of such transfers and an explanation as to why. 

g. In the event that any cash has been transferred in, or out of the Foundation in the period 01.03.10 to date, please provide details, by reference to documentary evidence, of such transfers and an explanation as to why."

29. Counsel for the Wife emphasised to the Judge the key importance of this line of enquiry; and the Judge provided that, in the event that the Husband did not confirm by 1st May 2014 that the documentation requested under Question 39 would be forthcoming, the Wife should be at liberty to apply on short notice for directions. 

30. Thirdly, there was a recital to the Court Order of 11th April as follows:

"... it [is] recorded that the [Husband] was requested to provide an undertaking to the [Wife's] Solicitors to obtain ... the entire solicitors' file in respect of Messrs. Mishcon De Reya as referred to in his November Statement at paragraph 13 but that he has declined to do so and that the Court is at liberty to draw inferences from this refusal."

I have been informed that at the inception of the maintenance pending suit hearing the Wife's Counsel had referred to the said paragraph 13 in which the Husband stated: 

"I did not have any legal advice in England at the time [of negotiation of the Agreement] about what would be an appropriate settlement of [the Wife']'s claim, nor of the implications of the agreement we reached, or the detail of the "Consent Order" prepared by her lawyers.  I had a very brief meeting with Mishcon De Reya regarding the divorce before [the Wife] and I discussed any settlement but did not involve them further given the vast costs involved. ..."

He invited disclosure of the Mishcons file; but it was said on behalf of the Husband that his instructions would have to be taken.  The invitation was renewed in April, but declined: hence the Judge's decision to import the said recital.

31. The Wife says that this Statement of the Husband re Mishcons is untruthful, for several reasons. To repeat, the Husband told her that he had received such advice.  That he did not do so is on any view a highly unlikely proposition.  There is no suggestion that he went to English solicitors other than Mishcons, and therefore any such advice received was presumably imparted by them. In any event, she was suggesting to the Court and continues to contend, that if the Husband's presentation is true, then surely he would have no objection (indeed, the contrary) to adducing evidence to that effect by producing the file (it could be redacted, if necessary and appropriate, by a third party appointed by the Court if any passage remained private and confidential).  

32. Time moved on; but the Husband showed no sign of answering the Wife's Questionnaire. It remains totally unanswered, thus putting the Husband in contempt of Court and making a mockery of the principle that, where in financial remedy litigation there are substantial issues as to the extent of financial resources and as to the veracity of a party's disclosure, the interrogatory process consisting in part of the service of a questionnaire containing searching, albeit proportionate, enquiries is one of the cardinal processes designed to assist the Court in arriving at the truth and thus making a fully informed decision. On 29th May the Wife made an Application to HHJ O'Dwyer to the effect, first, that the requirement upon the Husband to answer her Questionnaire be endorsed with a penal notice and, secondly, that pursuant to the Court's powers under Rule 21.2 of the Family Procedure Rules Foundation E be ordered to make the disclosure which I have already described. His Honour made the first order requested, and adjourned the second limb of the application to be heard by a High Court Judge. 

33. Both Keehan J. and Moor J. were then involved, on 3rd June and 6th June respectively.  The crucial order was that of Moor J., which bore the following recital:

"It appearing to the court that if the information requested herein is not provided the judge hearing the Wife's Notice to Show Cause is likely to draw adverse inferences against the Husband"

Moor J ordered that the Council of Foundation E do provide the documents identified in Question 39 above, with liberty to the Council or any other person or entity affected by the order to apply to discharge it on 24 hours' notice in writing.  The Husband was ordered to pay the Wife's costs of the application on an indemnity basis.  Moor J.'s judgment was short and concise.  By way of extract:

"6. Clearly the burden is on him to show that there has been such a significant change of circumstances that he should be released from the obligations that he agreed to on 6th August 2010.  That is a heavy burden.  Mr Calhaem has satisfied me prima facie that he is well short of his obligations in that regard.  It may well be that that of itself is enough to be fateful to his defence of the application. ... ...

9. The Husband's defence in relation to all of this is the normal one.  He says he has no control whatsoever over the Foundation.  He says the Foundation is analogous to a Liechtenstein Anstalt and says that he cannot therefore obtain the information requested, even if he wished to do so. He does not produce any documentary evidence in support of that contention from Mauritius.  He accepts at various points in the papers that he is a beneficiary of this Foundation.

10. The information sought is clearly central to his case.  If he does not provide it, I find it very difficult to see how he can possibly avoid an order being made in the terms of the Agreement that he himself reached in 2010. Nevertheless, clearly it is necessary for the courts to have this information.  The Wife is right to do everything she can to attempt to get the information before the court. 

11. [Gives the Foundation/Council of the Foundation liberty to apply].
 
12. It seems to me, however, that the Husband, if he wishes to succeed in this case, must produce this information.  I therefore propose to include a recital to the order to the effect that, if this information is not provided, the court considers it likely that the judge hearing this case will draw adverse inferences against the Husband as to his financial circumstances.  Therefore I propose to make the order in those terms."

34. I make two collateral observations at this stage. The first is that I am not influenced by these observations of the learned judge in the sense of their instilling in me any pre-conception as to the merits in this case.  I of course have become familiar with a great deal more material than could be presented to Moor J. at a relatively short hearing.  My conclusions will be based upon the parties' evidence (or lack of it), on the submissions I have heard on behalf of the Wife, on the Husband's case as I have been able to collect it, viewed at its optimum, and on the applicable law.  Secondly, it is worth putting the hearings of 29th May and 6th June in their context.  The Wife might well (she must have considered it as a serious alternative) have sat on her laurels in the absence of any answer to her Questionnaire, knowing that she would be able to invite the Court to draw a powerful and damning inference against the Husband arising from his non-cooperation.  In the event, she kept pressing, effectively saying to the Husband that she wanted still to invite him to flesh out his case, because she was confident that, whatever documents or other information he might produce, he would not be able to make good his Form E presentation.  Now, she would say, she is in an even stronger position, owing to his absence and refusal to submit himself to cross-examination.

SECTION 25 OF THE MATRIMONIAL CAUSES ACT 1973
35. I turn now to the relevant Section 25 factors which, although this is not a hearing of a financial remedy application as such, it is nevertheless necessary for me to survey.   This was clearly a "needs case", it being incontrovertible that the brevity of the marriage was of central importance and that the Wife had in its currency made no real contribution to the acquisition of the Husband's wealth which, substantially, was in place when the marriage took place. Under the contribution heading, it was relevant too to take account of the funds which the Wife herself brought into the marriage.  All this is uncontroversial, and the Wife was at pains to emphasise that it was treated as such by the parties in their negotiations. 

36. I have already made reference to standard of living, and have nothing to add.  As to capital and income needs, there is no reason to doubt the Wife's evidence that the jointly agreed objective was that the Husband should from his resources confer upon her ownership in London of a property of a standard broadly equivalent to her Chelsea 3-bedroomed maisonette and that they further agreed that in 2011/12 it was likely to cost an all-inclusive sum of c. £2,000,000.  It is plain that the Husband was willing to finance that acquisition. 

37. The Wife's income needs were variously stated.  In her show cause Statement those needs were put at c. £195,000 per annum, inclusive of c. £73,000 per annum rent (until purchase of said property).  Shortly afterwards the figure was elevated to c. £260,000 per annum, a startling increase which in the absence of the Husband was not investigated at the hearing.  It seems to me that the higher figure is to be treated with due caution.

38. I then arrive, out of its statutory sequence, at the factor which in fact appears first in Section 25. 

Financial Resources

39. As to the Wife, in Form E she asserted assets which she valued at £831,108 and an estimate (now reduced) of income over the next 12 months just in excess of £45,000 net per annum.  Her assets now are depleted, amounting as they do to £ 646,172 (before legal costs), per the Schedule of Assets put to the court by Mr Calhaem in closing and attached hereto marked Appendix A.

40. Of greater significance in the context of the show cause Application is the Husband's disclosure of his financial resources.   I say at once that the level and detail of his current income is a mystery.  The Wife says that he told her in 2010 that he had an income of $750,000 from his agricultural ranch businesses alone and she estimates his income to have been at a figure of £700,000 per annum.  Certainly, the current documentary evidence is exiguous, and the Husband would, I have no doubt, been subject to rigorous questioning on this as well as countless other subjects had he been present. Whatever income he has or has had, he pays no income tax in any jurisdiction.

41. As to capital assets, in Form E, dated 12th February 2014, some 3½ years after the Agreement, he admits to assets which, apart from an uncertain value to be attributed to his investment in Company C (the Wife puts her almost identical shareholding at c. £170,000), amount to a mere £678,982:-

Bank accounts

£91,043.00

Monies owed (Company H director's

loan etc $270,000.00 /

                Fund B directors fees

etc $78,000.00)

 

£216,879.00

Cash

£769.00

Pension funds

£370,291.00

 

£678,982.00


 
42. The Husband denies any proprietary entitlement in respect of the two substantial African homes which both he and the Wife occupied during the marriage, and in which the Wife always understood he held a beneficial interest, J House, and K House.  K House, it will be recalled, is the property as to which the Husband conceded in the Agreement that he would arrange for the Wife and the child to stay there for 2 weeks each year.  In the Form E it is unmentioned.

43. Under Section 2 Part 5 of the Form E ("Capital: other assets") the Husband mentioned various other assets in which he has a direct beneficial interest if the Wife's contentions are valid, and/or an indirect interest depending upon whether they fall under the umbrella of Foundation E, of which he is an admitted beneficiary.  He ascribes no value to any of them whatsoever.  His presentation contrasts not only with his alleged statement to the Wife to the effect that he was worth between $25 million and $30 million and with his willingness in 2010 to pay her capital of £2,000,000, but also with certain documentary material which the Wife, as already described, produced post his Form E.

44. I shall now consider in turn the principal assets in question, which appear at Appendix A.  It emanates from the Wife's Counsel, Mr Calhaem and, it is to be emphasised is not in fact exhaustive of all the assets and resources which the Wife would be investigating and potentially asserting were this a financial remedy hearing.  In the Schedule of Assets attached to his Opening Note, Mr Calhaem made reference to a significant number of other entities, many of them corporate, which emerge from the documentation as having some possible connection with the Husband. But the assets to which I refer below are what might be termed the headline assets, of which it can be said, according to the Wife, that the evidence relating to them demonstrates that the Husband is not presenting a full, frank and clear picture of his wealth.

45. In summary we are talking of:

• J House;

• K House;

• Fund B Investments;

• Company F;

• The proceeds of the disposal of Company G;

• Company H Limited.

J House
46. I understand J House to be the Husband's principal residential home. It is a substantial property, as to which there is evidence that it was or may have been worth in the region of £1,245,000 in 2007, although it may have decreased in value since that date.   In his show cause Statement of November 2013 the Husband stated that the property, purchased 18 years previously, was held by a Zimbabwean Trust of which he and his 3 children by his previous marriage were beneficiaries. 

47. In Form E, however, (February 2014) the Husband said that contrary to his previous evidence he was not a beneficiary of what is apparently called the Family Trust in Zimbabwe: only the three children were beneficiaries. He acknowledges, however, that he bears the running costs of the property. 

48. The Wife did not believe him (in this and numerous other aspects of his disclosure) and made extraneous enquiries, in this instance of the Zimbabwean Land Registry. She obtained an official document which demonstrated that J House had been transferred by the Husband to the Family Trust on 8th December 2011 – at a time, the Wife would say, when he was in breach of the Agreement and probably contemplating resiling from it.   In the February Statement the Husband said that he was surprised that the transfer had taken place as late as December 2011 and adduced evidence of a CGT saving in the sum of $15,500 arising from the transfer into the Trust. The Wife believes that this is one of several instances of the Husband seeking to distance assets from her and points out that the Husband's Form E failed to disclose that at the time of the Agreement J House had indeed been held in his sole ownership, disclosure which he was obliged to make by virtue of the Order of HHJ O'Dwyer.  She also  argues with some force that it is seems strange that the Husband would go to the cost and trouble of setting up such a trust and having it administered, and thus alienate the home he had owned for so long, simply to achieve such a relatively modest tax saving.

K House

49. Again, this is a substantial property.  The Agreement referred to the Husband being its part-owner (paragraph 11H above).   That is consistent with an email produced by the Wife sent by him to his daughter in 2009 which included the following passage:

"Also I offered you K House at my expense, although you pay for all drinks and any breakages. As well as taking advantage of a beautiful place while we owned it, a trip would be a way to thank people who may have had you to stay in UK etc. ...."

This email was produced by the Wife after the filing of the Husband's Form E, which omitted mention of K House.   In seeking to explain himself in the February Statement the Husband said that, when he read and signed the Agreement, he did not pick up on what was an error in respect to K House.  According to him, although he was involved in the purchase of the property in 2004 and provided funds for its purchase and renovation, the property is owned by a company whose shares are held by nominees on behalf of his sister and her husband beneficially, although he presumably concedes an element of control, given his promise to make the property available for the Wife and [the child] for 2 weeks each year. The Wife discovered that the company in question is named Company K.  When it was acquired in 2003, Company K was owned as to 99% of its shareholding by the Husband.  There is now a document dated 7th March 2014 from the Department of the Registrar General in Nairobi which recounts that according to Company K's last Annual Return dated 14th April 2011 the names of the directors/shareholders of Company were the Husband and his sister, the Husband holding 1,980 out of 2,000 issued shares, 99%.

50. When the Wife produced her Questionnaire of the Husband dated 11th March 2014, she asked some well chosen questions about both properties, J House and K House.  The Husband was (twice) ordered by the Court to answer the Questionnaire.  He remains in breach of those Orders, having given no answers or documentary information at all.

Fund B

51. The Wife's contention is that the Husband has a very substantial beneficial interest in Fund B.  One would not think so reading his Form E, which describes how the Fund was established by Fund A Limited for the purpose of investing in property in Africa and that Company D, which is the holding company under the umbrella of Foundation E, owns 27% of Fund B, the remainder being owned, as he put it, by some 80 other private and institutional investors (impliedly having nothing to do with him).  He described how unfortunately the underlying investments of the company in DRC and in Zimbabwe had not performed as anticipated (although giving little detail).  The data he tendered as to Fund B attached to his Form E consisted principally of a spreadsheet purporting to summarise six years' accounts for the years 2008 to 2013 inclusive in terms of providing an Income Statement and Balance Sheet figures. He did not produce (as he was obliged to do) any actual company accounts.  

52. The Wife, however, laid her hands upon, inter alia, the full audited (by Ernst & Young) Accounts for Fund B Investments Limited for the years ended 31st December 2009, 2010 and 2011.  An extract from the Accounts for 2011, which substantially echoes the information in the Accounts of previous years, reads:

"Directors' Interests: At 31 December 2011, Trust E (a family trust of M) holds 5,190 redeemable participating shares in the Fund ... .   M (a director of the Investment Manager [i.e. Fund A]) holds 1,995 redeemable participating shares (1,797 – 2010) and Company D (a company owned by M) holds 100 redeemable participating shares (Nil – 2010). ..."

53. A document headed "Monthly Investor Report" focussing upon Fund B (January 2014 Review) demonstrates that the net asset value per share in the Fund was then $2,309.90.   This was an increase from $2,119.26 from the previous year; and a graph produced in the Report shows, not insignificantly, that the net asset value of Fund B shares had increased, not fallen, between late summer 2010, when the Agreement was executed, and the commencement of 2014.

54. In £ sterling terms 1,995 shares x $2,309 is the equivalent of approximately £2.88 million.  As to Trust E, of which the Husband is a beneficiary and from which he has had distributions in the past and says that he hopes for support in the future, 5,190 shares is worth in the region of £7.5 million.  

55. In the February Statement the Husband still denied that he owned shares in Fund B, saying that in the very limited period available for his response he had not had full access to the information and documents necessary comprehensively to deal with the allegation, but that he never considered himself to be the beneficial owner of units in Fund B, any interest always being held "within the family structure".  He said that his best guess was that the Fund B Accounts of December 2011 refer to his holding an interest in the Fund in that year and in 2010 due to units having been allocated to him during the period in which Trust E (Channel Islands) was wound up and its assets migrated to Foundation E in Mauritius.  This is difficult to follow, given that according to the Accounts in the period referred to by the Husband, shares were held directly by E.  But in any event the Husband's retort was clearly preliminary, even on his own case; and there was more explanation to give. 

56. It has never been forthcoming.  As to the Wife's Questionnaire, what is now becoming a familiar refrain has to be uttered. She asked some penetrating questions about Fund B, but the Husband refuses to answer them. 

57. A final point on Fund B arises from the agreement as to the creation of the Child Trust.  Amongst the assets to be imported by the Husband into the trust were (and still are) 320 Units in Fund B.  How that was to be arranged if the Husband held no such units is yet to be explained.

Company F
58. This is a Cayman Islands company, incorporated by Fund A Limited with the objective of investing in agriculture in Africa.  In Form E the Husband stated that Company D held 30% of the company shares, the remainder again being held by private and institutional investors.  The underlying assets of Company F are said to be a tobacco plantation and a rubber plantation in DRC: again, the Husband said that they had not performed as anticipated.  Save in so far as he might have some indirect interest via Foundation E, the Husband made no admission as to any ownership of equity in Company F.  The data he produced about the company was confined to a spreadsheet again purporting to summarise, in this instance, 5 years' Accounts.  The Wife, however, having made enquiries, produced copies of the actual Accounts for the years ended 30th September 2010, 2011 and 2012.  The most recent state, under the heading "Directors' Interests", "M has an indirect interest in 5,800,000 ordinary shares in the company and in 3,706,362 warrants with an average price of US$ 1.07 per warrant".   This information echoed what had been said in the 2011 Accounts.  But the 2010 Accounts, signed by the Husband on 22nd December 2010, said something very different, namely that he owned 5,800,000 ordinary shares in the company, in other words that he had a direct rather than indirect interest.   It bears repeating that all this information, back to 2010, was disclosable by the Husband. 

59. The Husband's explanation in the February Statement re Company F was almost non-existent.  He stated:

"Again, I have not in the few days available to me had access to the documentation or information necessary to produce a comprehensive response  to the assertions and allegations made. At this stage, I anticipate the position with Company F to be as per Fund B and refer the court to my comments above in this regard."

Nothing further has been forthcoming from the Husband. No explanation has been given for the apparent alienation by him of direct ownership of shares in Company F in 2010; and accordingly the Wife's Schedule of Assets ascribes the value of the Company F holdings to the Husband personally.  One is talking of a total in excess of £8,000,000.  The Wife's Questionnaire on the subject again remains unanswered.

Company G

60. In his Form E the Husband stated that what he describes as the Family Group had a 50% interest in a company Company G, which owned agricultural land in Zambia. It was, per the Husband, sold in 2013, the net proceeds of sale being $3,500,155.  He says that he received, by way of distribution from the Family Group, a mere $242,155, and that in his capacity as a director of Company D he directed the relevant accountants, BDO, to distribute the balance of the proceeds of sale to various other family entities, including Company D itself, Company E and Fund A.  The Wife, however, produced data from the Zambian Patents and Companies Registration Agency ("PACRA"), which demonstrates that of the 4,000,000 issued shares in Company G the Husband had himself held 2,000,000 shares, namely 50%.   In the February Statement the Husband said: "The family structure's 50% interest in Company G was held in my name in my capacity as "trustee" of Trust I (Zambia) ...the vast majority of the $3.5 million funds generated from the sale were channelled into different elements of the family structure as was required to support and sustain them". The Wife inevitably followed with some penetrating questions posed in her March 2014 Questionnaire, both as to Company G directly and Trust I.   The Husband has refused to answer.  Accordingly, the Wife asserts that, in reality, the Husband gave instructions to BDO with the intention and effect of distancing assets of his from her potential claim against him.

Company H
61. This is a Zambian company which trades in the agricultural sphere and owns a large ranch.  Per the Husband's Form E, he owned a 5% minority share (corrected from 4.5% stated in his show cause Statement) and Company D held a 90% interest. The Wife, however, obtained a computer print-out from PACRA in respect of Company H, which suggests that the Husband in 2013 held two short of 10,000,000 shares.  To judge from this document, there is some doubt as to whether the total issued share capital is in the region of 21,000,000 or 23,000,000 shares;  but either way the Husband would appear, failing contrary explanation, to hold around 45% plus of the shares in the company. It is thought that the value of each share of $8.75, based on the Wife's belief that the size and value of the ranch corresponds broadly to the ranch disposed of by Company G:  thus the Wife ascribes to the Husband's interest a sum approaching £2,500,000.

62. The Husband says in the February Statement that the documentation produced by the Wife is out of date and inaccurate.  He describes the investment in Company H and says that the development of the company has been essential but has resulted in capital depletion without current returns.  The fact remains that he has refused to participate in the subsequent interrogatory process initiated by the Wife.

OTHER RELEVANT MATTERS

63. My references to the Wife's pivotally relevant Questionnaire and the Husband's failure to answer it have become legion, and irksome; but they are unavoidable.  One section of the Questionnaire which I have not yet mentioned obliged the Husband to identify certain credit/debit entries in his bank statements.  Those highlighted by Mr Calhaem by way of example included a figure of £150,000 credited to his NatWest Isle of Man bank account on 26th August 2010 with the rubric "Distribution to H".   One speculates that the figure might have emanated from Trust E, although of course it may not have done.  There were then certain credit entries pertaining to the Husband's NatWest account in Jersey, including:-

 

08.12.2010               

Fund A Management        

£160,000

15.12.2010

Fund A Management

£100,000

30.03.2011               

Fund A Management

£250,000

11.03.2011

Fund A Management

£500,000

20.03.2011

Fund A Management

£44,962

21.06.2011

RFB Dividend      

£169,975

13.12.2011               

Fund A Management

£250,000

11.01.2012               

Fund A Management

£100,000

24.04.2012               

Fund A Management

£600,000

On the following day, 25th April 2012, £500,000 appears as a debit entry with the rubric: "To Zambia".  It is fair to assume that this sum may have been paid into the Husband's Zambian bank account.  The Husband has not produced any Zambian bank statements, apparently claiming that he would have to go to Zambia to achieve that objective and in any event that his accounts there are effectively dormant. 

To repeat, the above are only examples: it is axiomatic that such bank statement entries require investigation and clarification, but that has not happened.

64. There is then Question 39.  I have said sufficient to demonstrate the fundamental duty of the Husband to assist the Court in giving chapter and verse about his precise status in and entitlement pursuant to Foundation E (previously trust) structure.  It is an elementary principle of English law that the Court will look beneath and beyond the veneer and formality of trust (and analogous) structures so as to identify the extent to which their assets may properly and in reality be considered a marital financial resource.  There is a plethora of authority for this proposition.  It is, for example, neatly put by Lewison J in Whaley v Whaley [2012] 1 FLR 735 at 761:-

"[113] As I have said, a discretionary beneficiary has no proprietary interest in the fund. But under s 25 of the 1973 Act the court looks at resources; not just at ownership. Thus whether a beneficiary under a discretionary trust has a proprietary interest is not relevant. The resource must be one that is 'likely' to be available. This is the origin of the 'likelihood' test. No judge can make a positive finding about the future: the best that can be done is to assess likelihood. What is relevant is the likelihood of the trust fund or part of it being made available to him, either by income or capital distribution. If the husband were to ask the trustees to advance him capital, would the trustees be likely to do so: Charman v Charman [2005] EWCA Civ 1606, [2006] 2 FLR 422; A v A [2007] EWHC 99 (Fam), [2007] 2 FLR 467?. The question is not one of control of resources: it is one of access to them.

[114]
In deciding that question the court must look at the facts realistically. The court will not put 'undue pressure' on trustees to exercise their discretion in a particular way, but may frame an order which affords 'judicious encouragement' to provide one spouse with the means to comply with the court's view of the justice of the case: Thomas v Thomas [1995] 2 FLR 668. The cases do not say what amounts to 'undue pressure'. But in Thomas Glidewell LJ said what would not be undue pressure (viz if:

(a)  the interests of other beneficiaries would not be appreciably damaged; and

(b)  the court decides that it would be reasonable for the husband to seek to persuade trustees to release more capital to enable him to make proper financial provision for his former wife).

Even if the court makes such an order the trustees are not bound to comply with the husband's request; but it is 'plainly proper for the trustees to take it into account … and commonly it will be decisive': Lewin onTrusts (Sweet & Maxwell, 18th rev edn, 2007), at para 29¬157."

65. As I have said, the Council of Foundation E consists of the Husband's mother and a  person who may well be a figurehead Council member without a true decision-making function.  The Husband could clarify such matters if he wished to do so.  As Appendix A demonstrates, the Wife asserts that Foundation E holds assets possibly exceeding £20,000,000.   The Husband's failure to assist the Court with regard to E is a grave omission, as Moor J. predicted it may prove to be.

THE LAW

66. Before coming to the recent and now pre-eminent judicial authority on agreements (ante- and post-nuptial), including separation agreements, Radmacher v Granatino [ibid], it is worth recalling a well-known and much cited passage from the judgment of Ormrod LJ in Edgar v Edgar [1980] 1 WLR 1410:-

"To decide what weight should be given, in order to reach a just result, to a prior agreement not to claim a lump sum, regard must be had to the conduct of both parties, leading up to the prior agreement, and to their subsequent conduct, in consequence of it. It is not necessary in this connection to think in formal legal terms, such as misrepresentation or estoppel; all the circumstances as they affect each of two human beings must be considered in the complex relationship of marriage. So, the circumstances surrounding the making of the agreement are relevant. Undue pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, an important change of circumstances, unforeseen or overlooked at the time of making the agreement, are all relevant to the question of justice between the parties. Important too is the general proposition that formal agreements, properly and fairly arrived at with competent legal advice, should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement. There may well be other considerations which affect the justice of this case; the above list is not intended to be an exclusive catalogue."

67. In Radmacher Lord Phillips cited various passages from the decision of the Privy Council in MacLeod v MacLeod [2009] 1 FLR 641.  One was an extract of the Board's advice which was clearly consonant with the Supreme Court's rationale in Radmacher:

"The Board would also agree that the circumstances in which the agreement was made may be relevant in an ancillary relief claim. They would, with respect, endorse the oft-cited passage from the judgment of Ormrod LJ in Edgar v Edgar [1980] 1 WLR 1410, 1417, in preference to the passages from the judgment of Oliver LJ, both quoted above, at para 25. In particular the Board endorses the observation that "It is not necessary in this connection to think in formal legal terms, such as mispresentation [sic] or estoppel". Family relationships are not like straightforward commercial relationships. They are often characterised by inequality of bargaining power, but the inequalities may be different in relation to different issues. The husband may be in the stronger position financially but the wife may be in the stronger position in relation to the children and to the home in which they live. One may care more about getting or preserving as much money as possible, while the other may care more about the living arrangements for the children. One may want to get out of the relationship as quickly as possible, while the other may be in no hurry to separate or divorce. All of these may shift over time. We must assume that each party to a properly negotiated agreement is a grown up and able to look after him- or herself. At the same time we must be alive to the risk of unfair exploitation of superior strength. But the mere fact that the agreement is not what a court would have done cannot be enough to have it set aside."

68. In the current case there is no suggestion of any inequality of bargaining power or imposition of superior strength by the Wife.  The point taken by the Husband as to the negotiation of the Agreement is the (alleged) lack of any legal advice received by himself.  As to legal advice, the better view (although the point is not in my view entirely free from argument) is that, prior to the decision in Radmacher, the actuality of independent legal advice for each of the parties was a pre-requisite for an agreement to be afforded any significant weight.  At the very least, there would have to be exceptional circumstances if, in a given case, lack of legal advice was not to have a profound impact.  However, at paragraph 69 of Lord Phillips' speech there appears this passage, which brought about significant change:-

Sound legal advice is obviously desirable, for this will ensure that a party understands the implications of the agreement, and full disclosure of any assets owned by the other party may be necessary to ensure this. But if it is clear that a party is fully aware of the implications of an ante-nuptial agreement and indifferent to detailed particulars of the other party's assets, there is no need to accord the agreement reduced weight because he or she is unaware of those particulars. What is important is that each party should have all the information that is material to his or her decision, and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end.

Mr Granatino had no independent legal advice (and he did not take up the notary's suggestion that he should), but he was held to his agreement, which he entered into freely, fully understanding its implications, the Supreme Court explaining that

"The reason why the court should give weight to a nuptial agreement is that there should be respect for individual autonomy. The court should accord respect to the decision of a married couple as to the manner in which their financial affairs should be regulated. It would be paternalistic and patronising to override their agreement simply on the basis that the court knows best. This is particularly true where the parties' agreement addresses existing circumstances and not merely the contingencies of an uncertain future."

69. The final passage to which I draw attention in the context of the current case appears at paragraph 75 of Lord Phillips' speech, where the seminal proposition to which I made reference in paragraph 4 above is included:-

"White v White and Miller v Miller establish that the overriding criterion to be applied in ancillary relief proceedings is that of fairness and identify the three strands of need, compensation and sharing that are relevant to the question of what is fair. If an ante-nuptial agreement deals with those matters in a way that the court might adopt absent such an agreement, there is no problem about giving effect to the agreement. The problem arises where the agreement makes provisions that conflict with what the court would otherwise consider to be the requirements of fairness. The fact of the agreement is capable of altering what is fair. It is an important factor to be weighed in the balance. We would advance the following proposition, to be applied in the case of both ante- and post-nuptial agreements, in preference to that suggested by the Board in MacLeod:

The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement."

70. In V v V (Pre-nuptial Agreement) [2012] 1 FLR1315 Charles J confirmed the interpretation that, as he put it: at p 1329

"a nuptial agreement is capable of affecting the overall balance of what is fair as one of the factors or rationales to be taken into account in the application of the statutory discretion"

For avoidance of doubt the emphases in bold in the above authorities are added by me.

CONCLUSIONS
71. I have identified the grounds relied upon by the Husband for rejection and abandonment of this Agreement (paragraph 14ff. above) and will now deal with them in the sequence which I perceive to be both convenient and logical:- 

(i) Insufficient financial disclosure at the time of the Agreement
72. It is hard to fathom what precisely the Husband is saying.  The Agreement itself recites: "The parties have not formally provided to each other financial disclosure of their income, capital and other financial resources ..., but both parties accept and acknowledge that they each have a general understanding of the other's financial resources and upon that basis believe that the financial provision contained hereafter is reasonable in all the circumstances and represents fair provision for [the Wife] and [the child]".  The Wife makes no complaint about the Husband's disclosure during negotiation of the Agreement, and the Husband has not particularised any assertion that the Wife's disclosure was inadequate.
 
(ii) Lack of veracity in the Wife's Form E disclosure
73. In the same vein, the allegation has never been particularised and forensically is unpursued.

(iii) Lack of legal advice
74. As to what, if any, legal advice was sought and/or taken by the Husband during the negotiation of the Agreement, I adopt what I have already said in this judgment.  The Agreement recites that "The parties have taken or have had the opportunity to take independent legal advice before signing this Agreement".  My conclusion is, on the balance of probabilities analysed in light of the evidence before me, that the Husband did have at least some legal advice as to the financial consequences of divorce not only in Zambia, but also in London, a fact of which the Wife is adamant he informed her.  Certainly, he had ample opportunity to take such advice, and not merely over the distance of several thousand miles, for he was in London a good deal in the summer months of 2010.

75. Even if that be wrong, however, I am satisfied that the Agreement was freely entered into by the Husband with a full appreciation of its implications.  The Wife says, and I have no reason to doubt, that it was the Husband who made the early proposals for settlement, which included at the outset the core provisions of £2,000,000 capital provision and substantial maintenance subject to limitation as to time.   My conclusion on the evidence is that he was wholly content with the Agreement's provisions in 2010, and that they sat comfortably with the worth and substance of his financial resources.  If it were true that he had no legal advice as to the financial consequences of divorce in England, that would have been very much his decision, uncontaminated by any lack of knowledge, inequality of bargaining power or other vitiating factor. 

(iv) Brevity of marriage
76. Moreover, as to the core quantum of the settlement, it was not to my mind at a level which would offend judicial sensibility so far as to render it intrinsically unfair, still less when it is borne in mind that fairness has to be judged with one eye focussed on the fact of the parties' consensus and further that, as I have said, I feel confident that the Husband was content with the Agreement's provisions at the time; and indeed those provisions have been part performed.

(v) Change of circumstances and insufficiency of current funds
77. It is this ground which consumed most time in the course of the hearing; and much of what I have said above is relevant to this issue and should be taken as repeated.   The Wife's case is that the Court would be driven to the conclusion that the Husband's disclosure is wholly unreliable, even absent the documentation which she has produced, because the adverse inference to be drawn from his contemptuous refusal to answer a single question or produce a single document as ordered by HHJ O'Dwyer, and from his failure to present himself for cross-examination, is inescapable:  plainly, he feels unable to sustain that disclosure and has secrets to hide.  But the Wife is able to go much further and to contend, in my view with justification, that the February Statement of the Husband is highly unconvincing and that the documents which she has produced constitute in the instance of each of the assets identified strong prima facie evidence that the Husband's evidence has been false and that the figures which she puts upon those assets are valid, at least in substantial measure; and further that the Statement puts in its proper context the Husband's plea that there has been radical change of circumstances since the Agreement and that he should be relieved of its consequences.

78. If I had been trying conventional financial remedy proceedings, and the only evidence before me had been that which I have been surveying over the last few days, my finding, applying the relevant standard of proof, would have been that the Husband's total worth, both directly and indirectly, amounts to many millions of pounds and that the Husband's assets, held directly and indirectly, includes those itemised in Appendix A. That is my conclusion. However, the matter has also to be put another way.  This is the Wife's Application to show cause, which confers upon the Husband the burden of demonstrating that he should not be held to the Agreement and the Wife should be awarded financial relief which departs substantially from its terms.  For the reasons set out in this judgment, he has fallen far short of persuading me to find the change of circumstances for which he contends.
 
79. In the above circumstances I conclude that, as to its fundamental terms, the Husband should be held to the Agreement, he not having shown just cause why he should not be.  That said, there are modifications/variations of the Agreement which will be incorporated in my financial remedy order, several of which the Wife herself concedes:-

(1) There will be no provision that seeks to reflect the parties' agreement that maintenance provision for the Wife should continue notwithstanding her re-marriage or cohabitation  during the term of maintenance prescribed. In this and other respects, the Husband is justified in his emphasis of the Court's lack of jurisdiction so to order.  The Wife concurs.
 
(2) There will no provision in any way purporting to restrain the parties from their right to apply for variation of periodical payments.  Again, the Court's power in this respect cannot be ousted, nor should it be; and again the Wife concurs.
 
(3) At the Wife's invitation, and because the parties' agreement in this respect raises the spectre of insuperable problems of a practical nature, there will no provision providing for future occupation by the Wife of K House. 

80. There is then the question of interest payable by the Husband in the (currently established) event of non-payment, whether of capital or income provision.  As to income, there is no power in the Court to award interest upon unpaid periodical payments, and I am not prepared to countenance any attempt to achieve such an objective.  As to the £2,000,000 lump sum provision, it is true that the parties agreed interest at 1% per calendar month, and that the Wife has conveyed that it was the Husband himself, not she, who suggested this term of the Agreement.  Be that as it may, 12% per annum can properly be described as punitive, particularly given that interest rates have remained stagnant (Bank Rate 0.5%) over the last 5 years.  The Wife says that she has been told that the costs of a property equivalent to her Chelsea 3-bedroomed maisonette now would be approaching £3 million; but there is no primary evidence to that effect.  In any event 12%, in respect of the past or the future, appears to me simply unfair, even taking into account the fact that the parties did agree it. 

81. What is more, it is to be realised that, if the Husband had paid the interest owing, the Wife would have had to pay income tax upon it, substantially at the rate of 40%.  Now we are considering what lump sum should be incorporated in the order of the court payable in the near future.

82. The interest rate in respect of High Court judgments is at the rate of 8%, as it has been for many years.  In my discretion I am minded to order the Husband to pay a lump sum whose quantification is based upon a core element of £2,000,000 with credit for what has been paid, plus a notional calculation of interest at that rate, 8%, in respect of his default to date under the Agreement (as to capital, not periodical payments).  Having heard Counsel as to the consequential arithmetic, I order the Husband to pay the Wife, by 1st September 2014, a lump sum of £2,682,573.54, calculated as per Appendix B to this judgment.

83. As to periodical payments, I see no reason not to make an order premised on the Agreement, modified to suitable round figures by way of commencement.

84. Finally, the Husband will be ordered to make good his default in so far as he has only part performed his obligations as to creation of the [the child] Trust.
 
Bruce Blair QC
01/07/2014