09 January 2019

November 2018 - Private Law

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A part III claim following an Egyptian divorce by a wife who asserted that her former husband was the legal and beneficial owner of three properties in central London and a yacht which was moored in Egypt

NN v AS & Ors [2018] EWHC 2973 (Fam)

6 November 2018

  • The wife was brought up in Egypt but had dual British and Egyptian nationality. She had a successful career as a freelance journalist.  The husband was born in England and moved to Egypt when he was 5 years old. The parties married in 2007.
  • The husband had pursued various business ventures, which were unsuccessful and landed him with significant debts. The husband’s father had openly disapproved of his lack of business acumen. The husband’s father had been an extremely successful educationalist and entrepreneur in Egypt.
  • In the same year that the parties married, the husband had reconciled with his father. His father paid off his debts. The parties moved back to live in Egypt, where the husband worked for his father.
  • In 2013, the parties had returned to the UK. The wife’s position was that this was a permanent move. The husband’s position was that the stay in the UK was intended to last three to four years and that it was motivated by the wife’s wish to avoid compulsory military conscription for her son.  
  • Under the terms of the Egyptian Divorce agreement, the husband had agreed to pay the wife an additional lump sum of EGP 5 million (then worth about £215,000) and to maintain the financial status quo ante.  This involved her remaining in one of the London properties in which she had lived with their son since 2012. Whilst she remained responsible for his primary care, the husband agreed to continue paying the mortgage on the property from his own resources and to maintain the monthly payments he had been making at the rate of £5,000 per month to cover her expenses.  That agreement has been implemented in terms of the receipt by the wife of the lump sum payment (funded, on the husband's case, by an advance of funds from his own father).  
  • The husband’s position was that he owned a one-third share in two of the London properties with his sisters, the third and fourth respondents. He denied having any beneficial interest in the third London property and the yacht. He stated that he held the entire beneficial interest in each for his father, who was the second respondent.
  • The husband’s father and two sisters were joined as parties to the wife’s Part III proceedings in order that, pursuant to s 14 of the Trusts of Land and Appointments of Trustees Act 1996 they might assert their claim to beneficial ownership which were questioned by the wife.
  • In respect of the Part III claim, it was the wife’s claim that she was pressured into signing the divorce agreement in Egypt. Mrs Justice Roberts ruled that this claim was not made out, as the agreement was fair and likely to pass the Radmacher test.
  • Mrs Justice Roberts made the following findings in respect of the wife’s claims:
  1. Two of the London properties were held on trust by the husband for himself and his sisters in three equal beneficial shares.
  2. One other London property was a gift by the father to the husband, contingent to a condition being fulfilled. The gift was subsequently recalled. The husband was holding the property on trust for his father.
  3. The husband was holding the yacht on a bare resulting trust for his father.
  • Mrs Justice Roberts made an order in line with the husband’s open position. The Court could not exercise its discretion under Part III just because the costs of an unmeritorious Part III application depleted the applicant’s resources and given rise to a need.

 

 

A dispute as to whether a final award should be made on a “needs” or “sharing basis

IX v IY [2018] EWHC 3053 (Fam)

13 November 2018

  • The parties had a total matrimonial assets pot of £38.3m. The husband was a successful software engineer and the wife was a former model. The parties had lived together for 10 years and had been married for 4 years. Both parties had children from previous relationships.
  • The wife sought a lump sum of £16m plus costs of £740,000 on the basis of needs and sharing. The wife argued that the value of the husband’s company, Zebra, was a result of the husband’s work during the marriage.
  • The husband offered £4.5m on a needs basis. He argued that he had made a special and unmatched contribution to the marriage, in that he had established his company Zebra prior to the marriage. He invited the court to find that the company’s value at the time of the marriage should have been excluded from the matrimonial pot. The parties accepted that the wife’s contribution was domestic, whilst the husband’s contribution was by way of unmatched capital.
  • The learned judge was not satisfied with either party’s evidence and found both parties to be unreliable witnesses.
  • Williams J considered the law on the principles of sharing. He observed that in cases where the assets are so substantial that the needs of the parties can be met, the sharing principle applies, and the assets are to be divided equally between the parties.
  • Williams J stated it was acceptable for the court to identify non-marital assets where it was appropriate. He concluded that it was fact-specific when this would be done, stating that the longer the marriage and the more the assets had a mingled character, the less likely the assets were to be seen as non-matrimonial.
  • Williams J also found that the question of whether the latent or passive growth of a company would be taken into account was fact-specific. In principle, the authorities supported an approach which would seek to identify and take into account any latent potential that a business asset had when it was brought into the marriage by a party. 
  • Although Williams J noted the relevance of standard of living to the Section 25 exercise, he reiterated that the parties could not expect to be provided for that standard of living for the rest of their lives.
  • The pre-marital cohabitation period was significant in this case. Williams J reiterated that in such cases the “eight markers” of cohabitation should be considered, determining whether they would take the relationship over the threshold of a quasi-marital relationship. This may be either added to the length of the marriage or become a weightier factor as one of the circumstances in the case.
  • Williams J concluded that he did not have a reliable valuation of Zebra. However, he apportioned 40% of its value as non-marital (15m) and 60% as marital (£22.5m). The learned judge accepted the husband’s additional unmatched contribution.
  • Williams J put the wife’s housing need at £4.5m and £30,000 p/a until age 60 and £100,000 thereafter, capitalised at £4.44m. the quantification of the appropriate award was £9.31 million.
  • H’s housing need was met by a French holiday home and his income needs by his share in Zebra.
  • Williams J concluded that on a need and sharing basis the W was awarded 24.3% of the total assets and 50% of the matrimonial assets.

 

 

Contempt proceedings for assisting the abduction of three children

Egeneonu v Egeneonu (Rev 3) [2018] EWHC 3029 (Fam)

14th November 2018

  • The Applicant is the mother (‘M’) of the three children concerned. The Respondent is believed to be the brother of M’s husband, the paternal uncle (‘U’) of the children.
  • The background is that M and the children’s father (‘F’) are originally from Nigeria. They married in 2001, moving to the UK to live in 2002. They had three children who were born and raised in the UK. In 2013 the family went to Nigeria on holiday. Unbeknown to M, F had conspired with his family to keep the children in Nigeria.
  • M returned to the UK in November, commencing proceedings in this jurisdiction, applying to the Court for the children to be made wards, and their return ordered.
  • Five years later despite multiple efforts to secure their safe return, the children remain in Nigeria cut off from their mother.
  • The Courts have been frustrated in their endeavours at every turn by F and his family. F is currently serving an 18 month custodial sentence for contempt due to continual breach of associated orders.
  • U has previously found himself the subject of Contempt Proceedings. In 2015 U was found to have provided false information in linked proceedings. He was given a suspended custodial sentence.
  • M’s case is that U has continued to do what he could to assist F to defeat Orders, frustrating efforts to locate the children and secure their safe return.
  • There were 11 separate contempt episodes alleged against U by M. They involved, inter alia:
  • misleading the Court regarding the children’s wishes and feelings;
  • providing false information regarding their whereabouts;
  • providing misleading information regarding his ability to assist;
  • producing false letters to the Court;
  • repeated breach of Orders.
  • U made significant admissions. He did not give evidence.
  • Cobb J, sentencing for contempt in accordance with s.14 Contempt of Court Act 1981, applied the principles established in Chrystal Mews Ltd & Metterick & Ors [2006] EWHC 3087 Ch, and Hale v Tanner [2000] EWCA Civ 5570.
  • Outlining the objectives of sentencing for contempt, Cobb J said:
  • Firstly, it is to punish defiance of court Orders;
  • Secondly, and equally importantly, it has a coercive function to encourage future compliance.
  • The aggravating features in the instant case are laid out at paragraphs  [37] and [38]. The mitigating features are summarised between paragraphs [39] – [42] inclusive.
  • Sentencing U to an aggregate sentence of 7 months for all contempt episodes, Cobb J stated [44]:  “Those who assist, materially assist, those who abduct children in this way must also expect lengthy sentences from this Court if found in contempt”

 


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