Rose v Rose & Ors [2022] EWFC 19225 November 2022

Published: 07/06/2023 06:49

His Honour Judge Booth (sitting as a Judge of the High Court pursuant to s 9 SCA 1981).

How should the court ‘deal with a respondent husband who has been dishonest throughout, has failed to comply with court orders, has failed to provide relevant financial information and documentation, has flagrantly breached undertakings given ot the court, and who has given no encouragement to others with relevant information to assist the process’?

Both parties were 59. They married in 1985 and separated in 2010 but H did not issue his divorce petition until 2018 and W filed her Form A in January 2020. They had three children, two of whom were adult.

H’s conduct meant that it was virtually impossible to compute the assets. For example:

  1. Bank statements from 2010 shows the a trust’s business account was indebted to the sum of £949,893.95. A month later, £1.048m was paid the account by international transfer, the provenance of which remained unexplained;
  2. various debts worth £150,000, some of which were secured against the FMH, were owing to a “family vehicle” related to H’s solicitor;
  3. that family vehicle lent £240,000 to two Cypriot companies for which H pledged *all* of his assets as security, gave personal guarantees, company debentures creating a floating charge over company assets plus charges against two properties owned by the Cypriot companies;
  4. H was able to act on both sides of transactions creating profit for himself from the sale of assets within the trusts. E.g. in 2012 a trust-owned property was sold to a Cypriot company for £1.2m and, on the same day, resold to another company for £1.5m. H was on both sides of the transactions and benefitted from the c.£300,000 ‘profit’.
  5. the sale by one of the trusts of commercial property produced £1.6m, of which only c.£630,000 was accounted for. The residue seem to have been transferred to companies owned by H, and others owned by H’s girlfriend and her father. Almost two years after the commercial property sold, monies were sent to H, by a company he owned, representing the proceds of sale. This is just one example of the circuitous transactions in which H engaged; and
  6. it later transpired H was using the (unaccounted) proceeds of sale of the commercial property to create loans to other companies, including loans to a company run by H’s girlfriend’s father.

W issued her Form A in January 2020 after which H’s non-compliance with court orders was unwavering and his conduct continued. Committal proceedings followed, as did more breaches, and more committal proceedings. The trustees were joined, but even that proved fruitless. H failed to attend the trial, as did the trustees, and the court refused permission for it to be heard remotely.

W sought:

  1. Variation of the trust holding the FMH to enable her to live there for life;
  2. £2.3m lump sum (half of what had been calculated to have been disposed by H, until the day W’s counsel filed her note, after which the dissipation of a further £999,000 was discovered);
  3. To enforce the lump sum, to restore W as a beneficiary (H having removed her), replace the current trustees with W and her eldest child and to allow her to receive the benefits from the trust by transferring and/or selling trust assets; and
  4. A declaration that the assets owned by various companies and trusts were for H’s benefit, therefore nuptial settlements, and for those to be varied by ordering a sale of their assets and payment to W.

H argued that neither W nor their dependent child should receive anything and there should be a clean break. HHJ Booth drew adverse inferences from H’s conduct as all three of the bases for doing so, set out in Moher v Moher [2019] EWCA Civ 1482, applied. On the basis that the assets were at least £5.5 million, and all matrimonial or matrimonialised, the judge concludes that W was ‘entitled to everything she asks for’.

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