XO v YO & Anor

This case concerns the financial remedies proceedings arising from the divorce proceedings between XO (to whom I shall refer in this judgment as “the wife”) and YO (to whom I shall refer in this judgment as “the husband”). AA Limited (to whom I shall refer in this judgment as “AA Limited”) have been joined as the Second Respondents in circumstances which I shall describe further below.

This final hearing in the financial remedies proceedings came before me over three days on 20^th, 21^st and 22^nd September 2022.

The wife attended the hearing and appeared before me by Counsel, Mr Justin Warshaw KC and Mr Joshua Viney (instructed by Farrer & Co LLP).

The husband did not appear before me, nor was he represented at this hearing, although he did appear and was represented in earlier parts of these proceedings and he was well aware of the hearing proceeding in his absence. I shall discuss below in detail his lack of engagement with these proceedings, and also his lack of compliance with previous court orders, and I shall consider what flows from his failures in this regard.

AA Limited were, on 9^th August 2022, on the wife’s application, joined by me to these proceedings as Second Respondents. On 23^rd August 2022 they made certain applications, including an application for dis-joinder, via their Solicitors Taylor Rose MW. On 5^th September 2022 I heard representations from Counsel (Mr Dominic Cooper) on their behalf at an urgently convened hearing of their applications; but I declined their application for dis-joinder. Since then (and notwithstanding my directions to engage them with the current hearing) they have taken no further steps, they have ceased instructing their Solicitors and disengaged from the proceedings. They neither appeared nor were represented at this hearing, although were well aware of its proceeding in their absence.

I shall first set out in a little detail a history of the events which have led up to this hearing.

The husband was born in Nigeria on 5^th April 1962 and is, therefore, now aged 60. His father was ZO, a successful businessman in Nigeria. His own father, AO, had much earlier invented and successfully marketed a medicine which is to this day very popular in Nigeria for those feeling unwell, and had built a family business around it, which in due course came to be owned by ZO. The husband’s step-mother was BO (who also features in this story). As a result of this family business, the husband was born to a family of some wealth and was brought up against this background. His parents owned real properties in England and the USA as well as business and property interests in Nigeria. He was educated in England, at least for part of his education, at a private school and then Cambridge University. Having completed his English education, the husband returned to Nigeria and worked in the family business and, in due course, as we shall see, acquired ownership of the family business from his parents. He continues to live in Nigeria. He had a first marriage in Nigeria which ended in Divorce and there is one (now adult) child from that marriage.

The wife was born also in Nigeria. Her date of birth is 28^th September 1973 and she is, therefore, now aged 48, very nearly 49. She describes her upbringing as comfortable rather than wealthy, but she accepts that, as she entered adulthood and as she entered the marriage, she had little wealth and what wealth she has, has come from financial activities during the marriage. She was, however, university educated in Nigeria and (before and after meeting the husband) had remunerative employment, working for an airline and for an international body in Nigeria. On her case she has also played a significant part in the development of the family business in Nigeria during the marriage; but she was also a home-maker and the primary carer for her children and in recent years she has been attracted by life in England with them and has been living in England since 2018 and hopes and expects to remain (and it is unlikely that there are any substantial impediments to this from an immigration law perspective).

The husband and wife met in the year 2000 and married (for the husband a second marriage) on 27^th March 2002. They married in Lagos, Nigeria and, for many years, that is where they largely lived, although they did engage in a good deal of international travel. My impression is that the marriage was a happy and loving one, for a period at least, but sadly appears to have deteriorated over the subsequent years.

There were two children of the marriage:-

By at least 2018, the marriage was plainly in very real difficulty. There was an incident on 6^th March 2018 which was, on any view, a bad-tempered one and an unpleasant one. I do not think it is appropriate for me, in the context of this application and this hearing, to make any particular findings about what happened; but whatever happened certainly triggered the separation and really from shortly after that moment the marriage had ended and the parties went their separate ways. They have not lived together since then and have spent very little time together since that day.

Shortly after that, in April 2018, the wife moved to England. That did not come out of the blue because both the parties had always spent a great deal of their time travelling around the world, often the USA, but more particularly in England. They had access to pleasant homes in Nigeria, USA and England, so they were able to do that. From April 2018 the wife has spent almost the whole of her time in England and there has been little contact between her and the husband. The last time that they were together at all was, I believe, in February 2019.

Notwithstanding the breakdown of the marriage in March 2018, and the fact that the wife was spending almost all of her time thereafter in England, the divorce proceedings did not get underway for quite some time.

The first step was the issue of divorce proceedings by the wife in England on 13^th October 2020. In early 2021 the husband challenged this divorce application by issuing a jurisdiction and forum conveniens challenge, opposing any involvement of the courts of England and Wales, and he issued his own divorce proceedings in Nigeria. The husband’s applications went through various interim/directions hearings, at some of which inter partes costs orders were made against him; but for the most part the husband and his legal team were properly engaged in these proceedings and filed a number of statements and other documents.

These applications came before me and, after hearing evidence and submissions, I delivered a judgment on 5^th November 2021 in which I rejected the husband’s jurisdiction and forum conveniens challenge and ruled that the divorce and financial remedies proceedings should continue in England and Wales (a full transcript of my judgment on 5^th November 2021 is available in which I explain my reasons for this decision). The husband did not appeal this decision, indeed I was told that he had accepted it, and he began to engage in the linked financial remedies proceedings.

A pronouncement of Decree Nisi quickly followed in the English proceedings on 8^th November 2021 and a Decree Absolute was ordered on 14^th January 2022, thus ending the marriage.

On 30^th November 2020 the wife issued a Form A, seeking financial remedies within the English Divorce. In its early stages the husband engaged with these proceedings and instructed Solicitors (Setfords, Solicitors) and Counsel (Ms Suzanne Syme).

On 26^th February 2021 a direction was made (notwithstanding the ongoing jurisdiction dispute) for the exchange of Forms E and this direction was (to an extent anyway) complied with – the husband producing a Form E on 9^th April 2021 and the wife on 12^th April 2021.

Since the jurisdiction hearing in November 2021 I have been the allocated judge for these financial remedies proceedings. This was initially as a Circuit Judge in the Central Family Court. On 25^th March 2022 (with the approval of Mr Justice Peel) I re-allocated the case to be dealt with at High Court level and Mr Justice Peel allocated me to deal with it as a Deputy High Court Judge. I have accordingly dealt with directions and interim hearings on 6^th December 2021, 25^th March 2022, 19^th July 2022 and 5^th September 2022.

At the hearing on 6^th December 2021 (at which the husband was fully represented by Solicitors and Counsel and in relation to which the husband had filed a full statement dated 2^nd December 2021 in response to the wife’s statement dated 15^th November 2021) I delivered a judgment (a full transcript of my judgment on 6^th December 2021 is available) and accordingly made various directions and orders, including the following:-

Shortly after this order was made the husband disengaged from the financial remedies proceedings. His Solicitors went off the record and nobody replaced them. He gave no further disclosure. He did not answer the questionnaire. He did not cooperate with the valuation directions. He did not cooperate with the arrangement of a private FDR. He made none of the payments required by my order or the earlier costs orders against him.

The husband surfaced briefly, just before the hearing on 25^th March 2022, to ask (in writing, and as a litigant-in-person) for an adjournment of that hearing; but he did not appear at the hearing to argue for its adjournment and I was not at all satisfied that there were good reasons to grant the adjournment. At that hearing, however, I made timetabling directions which gave the husband the opportunity to re-engage. If he did re-engage then the case would proceed to a private FDR in June/July 2022, after which a further directions hearing would be listed. If he did not re-engage then the case would be dealt with at a three day final hearing in September 2022. There was, at this stage, hope that he might re-engage; but an anticipation that he would not. In addition, I made a further LSPO order against the husband in the sum of £120,000.

I need to say something at this stage about a property in Miami (to which I shall refer in this judgment as “the Miami property”):-

In contrast to the husband’s non-engagement, the wife has filed answers to the husband’s questionnaire dated 22^nd April 2022 and a full narrative Section 25 statement dated 2^nd September 2022.

The final hearing of the financial remedies proceedings has accordingly taken place over three days on 20^th, 21^st and 22^nd September 2022 (the hearing was put back by one day as a consequence of the bank holiday on 19^th September 2022 resulting from the funeral of HM the late Queen). Because of the non-engagement and non-appearance of the husband and AA Limited, and the limited amount of oral evidence resulting from that, there has been time within the three day time estimate for me to write this judgment, which I will be handing down on the afternoon of the third day of the hearing.

The hearing has been an attended final hearing in the Royal Courts of Justice. I have been presented with a core bundle running to 896 pages, a supplemental bundle (mainly the statements in the jurisdiction proceedings) running to 106 pages, an authorities bundle and various other documents, including a letter from Mr Manuel Farach dated 15^th September 2022.

I want also to record that, notwithstanding his general non-engagement and non-appearance at the hearing, on the first day of the hearing on 20^th September 2022 the husband sent me a number of emails in which he made various assertions about certain matters arising in the case. I have decided to treat these emails as being admissible and I have read them and noted their contents. I am bound to say, however, that in deciding what weight to attach to these documents I need to bear in mind the substantial absence of normal cooperation and engagement from the husband, his failure to answer the questions put to him in the questionnaire and his failure to attend the court to be cross-examined or to cross-examine the wife.

I made the decision to proceed with the final hearing, notwithstanding the absence of both the husband and AA Limited. I made this decision because both of them have been well aware of the final hearing, have had ample opportunity to prepare for and be represented at the hearing and, in both cases, have made a positive and deliberate decision not to attend or be represented and not to engage in proceedings or comply with directions orders. No reason, certainly no adequate reason, has been advanced as to why they have both decided to conduct themselves in this way. The overriding objective in FPR 2010 Rule 1 requires me to deal with cases expeditiously and fairly and in a way which saves expense for the parties and which takes into account the need to allot a fair share of court resources both to the present case and to other cases. It would in my view be unfair to the wife, and would certainly increase her costs significantly, for me not to proceed to determine the case in the three days allotted to this case. It would certainly introduce more delay and be less expeditious for me to adjourn. In so far as proceeding in the absence of the husband causes him any unfairness, this is entirely of his own making. An adjournment would waste precious court resources and potentially affect future listings of other cases if this case had to be relisted. None of this absolves me from making a proper judicial determination of the outcome on the facts as I find them. It is my duty and task to scrutinise the facts and arguments put forward on behalf of the wife and this I propose to do; but it would be quite wrong for me not to proceed with the hearing.

In dealing with the financial remedies applications, I must, of course, consider the factors set out in Matrimonial Causes Act 1973, Sections 25 and Section 25A, together with any relevant case law.

Matrimonial Causes Act 1973, Section 25, reads as follows:-

Matrimonial Causes Act 1973, Section 25A, reads as follows:-

Accordingly, I bear in mind that I must give first consideration to the welfare while a minor of any child of the family who has not attained the age of eighteen. In this case, one of the children of the family, DO, is under 18. His welfare is therefore to be factored in as a ‘first consideration’. The needs and welfare of CO, although she is no longer a minor, remain a circumstance of the case. Any order I make needs to ensure that both children are reasonably suitably housed, educated, fed and generally looked after until they respectively cease their tertiary education.

In relation to the “property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future” a large number of issues arise and I shall now endeavour to make findings, albeit in the context of the limited disclosure and valuation exercise which has taken place in this case.

I start with the property in South East England. This is the wife’s current home in England and was used by the family as a base when they visited England for some years before that. The property was formerly owned by ZO, the husband’s father, and BO, the husband’s step-mother. On the death of ZO in June 2005, his interest passed to BO and she became the sole owner. On her death on 26^th May 2008 the property effectively passed to the husband as the sole beneficiary of BO’s Will. Documents produced for this case show that the changes in ownership have not yet been executed at HM Land Registry, but it has not been in dispute in this case that the husband could call for the transfer of the legal and beneficial title to himself as sole beneficiary if he so wished and, accordingly, it is appropriate for me to proceed on the basis that the husband is, in effect, the sole legal and beneficial owner of this property. The property was valued (by Purple Bricks) at £2,000,000, a figure which was not controversial at the stage when the husband was engaged in the proceedings and there is no reason for me to take any different view now. It is unencumbered by borrowings. For my purposes I shall proceed on the basis that the net value of this property is £2,000,000 less sale costs at 3%, i.e. £1,940,000. It seems likely that there will be some Capital Gains Tax (and/or query Inheritance Tax) to pay on any formal disposal of this property; but the husband has not at any time sought to calculate or otherwise put forward a figure and, for the purposes of this judgment I can do no more than note the likelihood of some unidentified liability.

I have been invited to include in an asset schedule the real property currently occupied by the husband as a home in Lagos, Nigeria. The only figure I have for the value of this property is the wife’s assessment that it is worth N600,000,000. The husband has not cooperated with the valuation directions and has produced no other figure. For this purpose, and for all other conversions of Nigerian currency (Naira or N), I shall use the conversion rate of N1 = £0.002 or N1,000,000 = £2,000. Accordingly, assuming the above value, this property is worth £1,200,000. Whilst noting that this is the husband’s home, I do not think it is appropriate to include this on the asset schedule as the husband’s asset because it is not owned directly by him, rather it is in fact owned by a company, BB Limited, albeit that this company is owned as to 75% by AA Limited and another 24% by the husband himself. I shall in due course be making an assessment of the value of the husband’s corporate interests and I do not think it would be appropriate for me to double count this asset as if it was his personal asset, albeit that it is his home and he is, for all practical purposes, the controller of what happens to the property.

I now turn to the Miami property and wish to make the following comments and findings:-

I now turn to a property owned by the wife in Nigeria at Lagos, Nigeria. This was asserted by the wife in her Form E to be a property worth N76,500,000, now £153,000. This is really just an assertion by the wife, but there is no better evidence and I propose to adopt it. Likewise in very broad terms a 10% deduction is proposed to reach net equity, possibly to include any costs of sale and tax arising on a disposal. Again, I have no better evidence, and I propose to adopt the figure and will place a net equity figure of £137,700 in my asset table.

The wife owns shares in a number of companies in Nigeria, England and the USA in which the husband is not involved:-

If I turn to the other assets owned by the wife and debts to which she is subject, the situation is relatively straightforward, and I am content to adopt the figures put forward:-

I now turn to my assessment of the husband’s wealth. This is a much more difficult assessment to carry out because the husband has been very obstructive and unhelpful in his disclosure.

Largely as a result of the work of the wife and her legal team (who have plainly made a huge effort in their investigative work on this) I have been presented with a schedule which contains details of the ownership of a very large number of companies in Nigeria (also some in England) in which the husband has an interest. Some of the companies are broadly part of what is loosely termed the II Group, in which II Group Limited holds an interest, sometimes a controlling interest. Others are part of what is loosely termed the CC Group, in which AA Limited holds an interest, sometimes a controlling interest and sometimes a 100% interest. Some of this work resulted in the production of two organograms, which the wife annexed to her Form E and the husband appeared to adopt them, or at least confirm their broad correctness, by annexing them to one of his later statements.

As far as the headline companies are concerned:-

The underlying companies are identified as performing a very diverse collection of business activities. The husband personally owns shares in many of them. The wife personally owns some shares in others of them. In a few the children hold a small interest or a third party has an interest.

One striking feature of the husband’s Form E of 9^th April 2021 is that it contains very little information indeed about the asset values or the income accruing from these corporate interests.

The wife’s MPS statement of 15^th November 2021 flagged up the deficiency, and flagged up the sort of figure she would be contending for, when she said:-

“I do not know the total value of the Nigerian entities, or the total profit they generate. However, what I can say is that throughout the marriage these entities were extremely profitable and we wanted for nothing. I am confident that remains the case. My view is that it is likely that the total value of the business assets, including the underlying properties (which include business premises such as investment properties, numerous plots of land and factories) will be in the hundreds of millions of pounds, but I await YO’s full disclosure.”

By the time of the MPS hearing on 6^th December 2021, there had really been no further information. I commented in my judgment on 6^th December 2021, which would have further flagged up to the husband broadly the allegations which he was likely to be facing which he needed to deal with:-

“The Wife has suggested to me that the Husband must be earning at least £1 million a year. I am not sure whether it is stated that that is net or gross of tax, but I suspect she has in mind £1 million coming into the family kitty net per year.  Certainly, a large sum of money funding a very expensive lifestyle. I have asked Ms Syme on her instructions whether that is about right, and she has not certainly suggested to me that that is an absurdly high figure.  She has rather put a barrier up to giving any information on the subject at all. It seems to me that on the information that I have and with the absence of very much information from the Husband at all on this subject in comparison with quite a lot of information from the Wife on the subject, it seems to me that I can and should make the robust assumption that that is the sort of level of income that we are dealing with.  If that turns out in due course not to be correct and to be an exaggerated figure, and the Husband as a result suffers interim payments of more than he thinks is fair, then he really has himself to blame to a significant extent for that by not really making much of an effort to inform the court about what the situation was. Likewise, the Husband has produced almost no information about the company revenues or balance sheets or what they pay to him in terms of expenses or dividends. It seems that he owns most of the shares of most of the companies. It seems inexplicable that he has not been able to give some sort of assessment, even if it was a very broad one, of what we are talking about here. Again, I have only therefore the Wife’s assertion that the value, when it comes in, will be measured in the hundreds of millions of pounds. I do not know whether that is right. I cannot be sure that it is right, but it is pretty much all I have got to go on at the moment. The Husband has not attempted to put forward any figure at all or give any meaningful response to this assertion”.

It was with these thoughts in my mind that I made the valuation and questionnaire directions on 6^th December 2021. By disengaging from the proceedings shortly after that the husband has effectively prevented and thwarted any meaningfully detailed investigation into his corporate asset base and sustainable income.

Mr Warshaw has thus properly and helpfully reminded me about the well established law in relation to adverse inferences. As far back as in the case of J v J [1955] P 215 Sachs J (as he then was) said:-

More recently the law in relation to adverse inferences was considered by the Court of Appeal in Moher v Moher [2019] EWCA Civ 1482 where Moylan LJ held as follows:-

“My broad conclusions as to the approach the court should take when dealing with non-disclosure are as follows. They are broad because, as I have sought to emphasise, non-disclosure can take a variety of forms and arise in a variety of circumstances from the very general to the very specific. My remarks are focused on the former, namely a broad failure to comply with the disclosure obligations in respect of a party's financial resources, rather than the latter…(i) It is clearly appropriate that generally, as required by section 25, the court should seek to determine the extent of the financial resources of the non-disclosing party; (ii) When undertaking this task the court will, obviously, be entitled to draw such adverse inferences as are justified having regard to the nature and extent of the party's failure to engage properly with the proceedings. However, this does not require the court to engage in a disproportionate enquiry. Nor, as Lord Sumption said, should the court ‘engage in pure speculation’. As Otton LJ said in Baker v Baker, inferences must be ‘properly drawn and reasonable’. This was reiterated by Lady Hale in Prest v Petrodel, at [85]:"… the court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the facts are. (iii) This does not mean, contrary to Mr Molyneux's submission, that the court is required to make a specific determination either as to a figure or a bracket. There will be cases where this exercise will not be possible because, the manner in which a party has failed to comply with their disclosure obligations, means that the court is ‘unable to quantify the extent of his undisclosed resources, to repeat what Wilson LJ said in Behzadi v Behzadi. (iv) How does this fit within the application of the principles of need and sharing? The answer, in my view, is that, when faced with uncertainty consequent on one party's non-disclosure and when considering what Lady Hale and Lord Sumption called ‘the inherent probabilities’ the court is entitled, in appropriate cases, to infer that the resources are sufficient or are such that the proposed award does represent a fair outcome. This is, effectively, what Munby J did in both Al-Khatib v Masry and Ben Hashem v Al Shayif and, in my view, it is a legitimate approach… This approach is both necessary and justified to limit the scope for, what Butler-Sloss LJ accepted could otherwise be, a ‘cheat's charter’. As Thorpe J said in F v F, although not the court's intention, better an order which may be unfair to the non-disclosing party than an order which is unfair to the other party. This does not mean, as Mostyn J said in in NG v SG, at [7], that the court should jump to conclusions as to the extent of the undisclosed wealth simply because of some non-disclosure. It reflects, as he said at [16(viii)], that the court must be astute to ensure that the non-discloser does not obtain a better outcome than that which would have been ordered if they had complied with their disclosure obligations.”

I propose to follow the above approach in this case.

In making an assessment against these principles, there are a number of features of this case which, as Mr Warshaw has suggested, enable me to approach the matter from a position of at least some information which removes my assessment from falling into Lord Sumption’s forbidden category of “pure speculation”, and allows me to make inferences which are “properly drawn and reasonable”:-

Mr Warshaw has accordingly advanced the wife’s case on the basis that it is reasonable to assert that the husband’s corporate assets (including the minority holdings owned by the wife or others) are worth c £200,000,000. Her case is that I should deduct 10% from this figure to represent disposal costs and make a finding that the corporate interests are worth a net figure of £180,000,000.

Mr Warshaw accepted that there was no mathematical calculation behind this figure. It is rather a broad assessment, taking into account all the matters I have set out above. He suggested that, if the husband had really believed that this was an outrageously high figure, he would have engaged with the court process to prove that he was correct. It is, he suggests, broadly consistent with the lifestyle of the parties during the marriage and the relatively small pieces of information which we do have. He has suggested that, applying the ‘cheat’s charter’ principles discussed above, this value should be accepted by the court.

I should say, before reaching a conclusion on this, that in his email to me of 20^th September 2022, the husband strongly took issue with Mr Warshaw’s valuation suggestion, saying: “According to the applicant the total assets in the case is worth £196,000,000 (without even scant documentation or proof). I am perplexed as to how many businesses in Nigeria are worth even £5,000,000. I shall neither admit nor deny whatever assertions the applicant may have cooked up from her imagination”. The difficulty for me in placing any significant weight on this assertion is that it is made by somebody who has chosen to ignore and/or obstruct almost all of my disclosure and valuation directions and chosen not to come to court to cross-examine the wife or challenge any of her assertions in the proper way. He is absolutely the obstructive non-discloser that the judgments set out above on adverse inferences were designed to meet. He only has himself to blame if he considers the assessment to be incorrect.

In all the circumstances discussed above I have been persuaded that I should accept Mr Warshaw’s broad analysis of the value of the husband’s corporate interests at a net figure of £180,000,000 and I shall place this figure in my asset table.

The husband’s Form E deposed to his personally having three motor cars (two Porsches ands a Mercedes) worth a total of £70,000. In her recent narrative statement the wife has asserted that he may in fact own cars worth more than £2,000,000. I note this comment, but my feeling is that the wife’s assessment runs the risk of conflating personally owned cars with company owned cars (which should properly be included in the corporate assessment I have carried out above and should not be double counted). On this issue I am proposing to give the husband the benefit of the doubt and I propose to place in my schedule only the £70,000 worth of cars included in the husband’s Form E.

I shall also include in my schedule the cash at bank which was disclosed in the husband’s Form E in the sum of £63,790.

The husband has asserted that the wife owes him the sum of N80,000,000. This fact has not been established before me and I do not propose to include this within my asset schedule.

Having made these determinations I am now able to set out my assessment of the assets and debts for potential distribution in this case. The situation can be summarised as follows:-

Joint

Wife

Husband

In relation to “the income, earning capacity…which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire” and “whether it would be appropriate to require periodical payments to be made or secured only for such term as would in the opinion of the court be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party” I have the following observations:-

There is an issue in this case as to the extent to which the wife’s claims against the husband should be approached on sharing principles or on needs principles.

I need to analyse the extent to which the husband’s corporate assets should be treated as matrimonial property (to which the sharing principle should strongly apply) or as non-matrimonial property (to which the sharing principle should apply less strongly or not at all).

As far as the law is concerned the principles are well established. I need to bear in mind the principle that fairness and equality often ride hand in hand. As was said by Lord Nicholls in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24:-

  and by Mostyn J in JL v SL [2015] EWHC 360:-

“Matrimonial property is the property which the parties have built up by their joint (but inevitably different) efforts during the span of their partnership. It should be divided equally. This principle is reflected in statutory systems in other jurisdictions. It resonates with moral and philosophical values. It promotes equality and banishes discrimination.”

On the other hand, if assets are from an external source, this can be a good reason to depart from equality, depending on the facts of the case: see Charman v Charman (No 4) [2007] 1 FLR 1246; Miller v Miller; McFarlane v McFarlane [2006] 1 FLR 1186. The court should approach the assessment of the sharing principle in a flexible way, with the degree of particularity or generality appropriate to the facts of the case. The extent to which assets from an external source should be shared: ‘depends on questions of duration and mingling’: N v F [2011] 2 FLR 533.

Mr Warshaw has argued, and I broadly accept his analysis, that “the process of mingling can occur in a number of ways:-

I also accept Mr Warshaw’s proposition that: “The impact of the twin factors of mingling and duration on the treatment of assets brought into a marriage from an external source is an exercise which is both (a) ‘evaluative’ and (b) ‘discretionary’ viz ‘the weight he considers just’ (per Lord Nicholls in Miller; McFarlane) or a ‘fair overall allowance’ (per Wilson LJ in Jones v Jones [2011] 1 FLR 1723). The discretionary element can be introduced by the Judge either at the stage when the court is divining the matrimonial and non-matrimonial property or later when determining the weight to be attached to the fact that assets were derived from an external source: Martin v Martin [2019] 2 FLR 291.”

In considering the sharing principle, the assets which arguably fall outside the category matrimonial property are, of course, the husband’s business assets, which I have just assessed as having a net value of £180,000,000. The following matters seem to me to be relevant in making a decision as to the extent to which I should regard these assets as non-matrimonial:-

Mr Warshaw has invited me to agree with his conclusion: “The wife acknowledges that there was a non-matrimonial origin to the assets in the case and as such she discounts her sharing claim immediately to 30% of the assets in the case”. As with many other figures in this case, the 30% suggestion is not based on any mathematical calculation, but a broad assertion of fairness; but that is the currency of this case because of the absence of any proper accountants’ evidence by reason of the husband’s litigation conduct.

My overall conclusion on this point, in trying to reach a fair and balanced result, is that I should discount the value of the husband’s business assets by 50%. For me this gives a fairer recognition of the initial source of these assets, though I acknowledge that it is no more mathematically based than Mr Warshaw’s figure. On the basis that the wife transfers to the husband all the shares that she retains in what are effectively the husband’s businesses (i.e. specifically not including the shares that I have entered on the asset table separately as the wife’s own shareholdings, but including all other shareholdings) I have concluded that I should treat the wife as having a strong sharing claim to 50% of the husband’s business assets.

I want now to identify how that outcome would look, before cross-checking this outcome against my needs analysis and other factors. If I were to include a 50% discount in the husband’s business assets my asset table would read as follows:-

Joint

Wife

Husband

An equal division of assets on this table would be achieved by:-

my ordering a transfer to the wife of the Miami property;

my ordering a transfer to the wife of the property in South East England (her current home); and

my ordering the husband to pay a lump sum of £39,156,843 in return for (and simultaneously with) the wife transferring to him all her shares in his businesses (as above).

The following table sets out the outcome from such an exercise:-

I need to cross-check this outcome against a needs assessment in the context of the “financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future”, which of course has to be considered in the context of the standard of livingthat the parties jointly enjoyed during the marriage, the ages of the parties, the duration of the marriage. I have the following observations:-

I want to deal now with some allegations of conduct. There are a number of different categories of conduct allegations which I need to address.

I shall first deal with the sequence of criminal activity complaint allegations which are made in each direction and which are perhaps two different sides of the same coin. The husband believes and has asserted that the wife (in concert with her sister and brother-in-law) has removed certain monies from the husband’s businesses, dishonestly and without proper authority. He has reported these allegations to the Police in Nigeria and they are, apparently, being investigated. Amongst other things which have happened, the wife’s brother-in-law has been arrested and has had his passport confiscated and is being held in Nigeria against his wishes. The wife is concerned that the allegations against her may make it difficult for her to return to Nigeria in that she might be subjected to similar treatment as her brother-in-law if she returned. The wife believes that these allegations have been made maliciously and that the husband has the ability to influence police behaviour in a dishonest and corrupt way. Mr Warshaw has invited me specifically to determine these issues in the wife’s favour, but I decline to do so, save to say that neither of these allegations has been established in the course of this hearing to the requisite standard of proof, that I do not need for my purposes to investigate these matters or make any findings, and that I do not propose to adjust my order on the basis of these allegations.

I next deal with the category of conduct allegations which could be described as non-compliance with court orders to make payments to the wife or for her or the children’s benefit. Mr Warshaw has listed and quantified this non-compliance as follows:-

Mr Warshaw has calculated that the husband owes the wife “over £400,000” in unpaid maintenance, legal services orders and unpaid costs orders from the above orders.

I see no reason why my order should not include a calculation of the precise figure in this regard, declare it as a figure which is outstanding and order that it should be paid. It should be paid in addition to the lump sum I have referred to above. I invite the wife’s legal team to propose a precise figure for insertion in my order.

I next deal with conduct allegations which relate to the husband’s litigation misconduct. As I have set out in some detail above the detail of the husband’s non-engagement with this litigation, which is almost total from December 2021 to the present. In my view it is reasonable for me to reflect this conduct by adding on to the lump sum referred to above a costs order for a portion of the wife’s legal costs bill (said to be a total of £515,526) which can be said to be attributable to the husband’s failures. Taking a broad approach, and noting that some costs would have been incurred anyway, and that some costs and LSPO orders have already been made which are included in the figure above and should not be double counted, I propose to add a costs order of £150,000 on to the lump sums referred to above.

I shall say for completeness that neither pensions nor disability play a role in this case.

I have been provided with a draft order by Mr Warshaw and Mr Viney for me to consider.

I first comment that (although the lump sum I propose to order is smaller than that contended for which appears in the draft order, and will need to be changed) the broad structure of the order is consistent with the orders that I have indicated above that I propose to make; but I want to make a number of comments about the detail.

Counsel have addressed me in writing on the issue which we discussed orally on 20^th September 2022, that is the extent to which it is relevant or important for me to make a finding that the husband ‘submitted’ to the jurisdiction of England and Wales. This issue arises in particular in the context of the obvious fact that the wife will need to enforce a substantial part of this order in Nigeria. Given the husband’s lack of cooperation with the proceedings in England it is reasonable to anticipate that enforcement in Nigeria is likely to be resisted as far as is legally possible. In this context the wife’s English lawyers have sought assistance from the wife’s Nigerian lawyers and been informed:-

“The Reciprocal Enforcement of Judgments Ordinance 1958 provides that one of the grounds on which an application for the registration of a foreign order/judgment can be refused is where the judgment debtor, being a person who was neither carrying on business nor ordinarily resident within the jurisdiction of the original court, did not voluntarily appear or otherwise submit or agree to submit to the jurisdiction of the foreign Court.”

This proposition originates from Foreign Judgments (Reciprocal Enforcement) Act 1933, Section 4(2)(a)(i) (as amended by Civil Jurisdiction and Judgments Act 1982) which reads:-

“For the purposes of this section the courts of the country of the original court shall, subject to the provisions of subsection (3) of this section, be deemed to have had jurisdiction—

(a)in the case of a judgment given in an action in personam—

(i)if the judgment debtor, being a defendant in the original court, submitted to the jurisdiction of that court by voluntarily appearing in the proceedings… “

The draft order provided invites me to make a finding that, in this context, the husband did submit to the jurisdiction of the English court by voluntarily appearing in the proceedings. The draft includes a number of examples of the husband’s engagement in these proceedings, all of which are accurate. I am content to make the finding sought and include the recital proposed.

The draft order suggests that the lump sum should be paid by 1^st January 2023, just over three months away. Whilst it is correct that the husband has not made any particular representations about the date of payments, I consider that the requirement to raise a very large sum of money so quickly may be unreasonable. To deal with this, I propose to order that one half of the main lump sum (and the whole of the costs and arrears based lump sums) should be paid by 1^st January 2023 with the remaining one half to be paid buy 1^st April 2023.

The draft order suggests that, in addition to transferring the property in South East England and the Miami property to the wife, the husband should pay the entirety of any costs or tax arising out of the transfers. Given the way I have dealt with the assets I do not think this appropriate. My order should say that the parties should cooperate to minimise such costs or tax arising, but any such costs or tax should be paid equally. For the same reason, the mortgage on the Miami property (on my mathematical logic) should fall to the wife not the husband.

The provisions for the signing of documents by the court (i.e. me) need to be amended to follow the proper procedure under Senior Courts Act 1981, Section 39: see Welch v Welch [2017] EWFC B32. An order can only be made once the documents which are required to be signed have been sent to the husband and he has failed to sign them. At that point the court can order him to sign them or in default a without notice application be made to the court.

I need to be persuaded that paragraph 23 of the draft order (relating to the Anchor Bank mortgage) and paragraph 33 (relating to interest on non-payment of maintenance) are appropriately drawn.

The interim orders I have made for MPS/interim maintenance should specifically come to an end on the making of the new order; but I agree that it is appropriate for a fresh order to be made for spousal periodical payments pending the payment in full of the lump sum order (or death, remarriage or further order). I agree that the proposed figure of £180,000 per annum is appropriate for these purposes.

I am content to make a child periodical payments order which includes CPI linked payments of £15,255 per annum per child until the end of tertiary education, including a gap year. This figure should be paid two thirds to the child and one third to the wife as a ‘roofing allowance’ from the end of secondary education (in CO’s case this has already occurred). I am content to add to this the payment of school fees or university costs in the way drafted. I have decided not to include any provision in my order for the capitalisation of the child periodical payments. These payments should ordinarily be made on an ongoing basis to reflect the payer’s ongoing commitment to the child. I recognise that, in this case, the husband has been non-cooperative at a high level and that enforcement issues are likely to arise and that there is little or no father/child contact taking place; but I have, on balance, decided not at this stage to capitalise these payments. My hope and expectation of the husband is that (whatever he may think about the wife) he will acknowledge his duties to his children and that the situation will move forward to a position whereby some mutual trust can be rebuilt between the husband and the children.

I note the provision of paragraph 39 in relation to disclosure of the order, including to the wife’s Member of Parliament. I have no difficulty with this, but I am thinking that this judgment should, in any event, be published and I seek any submissions on the issue of whether it should be published in a redacted or anonymised way.