Al-Baker v Al-Baker

This has been a long marriage by any standard. The husband, Amir Al-Baker, (now 76) was born in Iraq and the wife, Sareh Al-Baker, (now 71) in China. They married in Japan on 5 June 1969 and separated in the autumn of 2014, so that this has been a 46-year marriage. The wife holds Japanese and Portuguese passports and is entitled to apply for British naturalisation. The husband is an Iraqi national and also holds a Portuguese and a British passport. The parties have three adult children: Mohammed (c.46); Yousif (c.44) and Zainab (c.39).

After the marriage the parties lived in Kuwait where the husband worked. The family moved from Kuwait to London in 1987 where they lived until 1994, when they moved to Portugal to enable the husband to work there. However, they retained their home here in London and, thereafter applied for indefinite leave to remain in the UK which was granted. Their home in London, Flat 55, 3-8 Porchester Gate, Bayswater Road, W2, is held in the parties’ joint names, but was rented out for a time by the husband. The wife says that she was unaware of this when she returned to London following the parties’ separation, and initially had to rent an alternative property in London. The tenancy of Flat 55, 3-8 Porchester Gate ended in November 2015, following which the wife moved into the property, where she remains.

The wife issued her petition in England on 6 January 2015 and her Form A followed two days later. The husband filed an Acknowledgment of Service on 27 February 2015 contesting jurisdiction. He says in that document that they have both been habitually resident in Portugal since 1994, and that the wife is not domiciled in England & Wales so that only the Portuguese court has jurisdiction. The wife took issue with this, so the proceedings were transferred to the High Court by Moor J on 6 March 2015. On 12 March 2015 the husband applied for directions and filed a statement in support.

It soon emerged that the husband had issued a second petition in Portugal. The wife’s solicitors wrote to the Portuguese court on 19 March 2015, enclosing a translation, bringing the English petition to the court’s attention and pointing out their duty to stay the Portuguese proceedings under Article 19(1) of Brussels II Revised pending determination of jurisdiction in England. There was a hearing in Portugal on 14 October 2015, which was for the purpose of conciliation. The Judge indicated to the wife’s Portuguese lawyers (I am told) that they could make representations about staying or dismissing the Portuguese proceedings at the next hearing in Portugal. The wife’s Portuguese lawyers then filed an Answer to the husband’s petition, which was done on 16 November 2015. The husband’s Portuguese petition has now been stayed by the Portuguese court, pending a decision of the English court as to jurisdiction.

On 13 March 2015 the wife had applied for maintenance pending suit which came before Bodey J on 21 April 2015. The Husband was present at that hearing and was represented by leading and junior counsel. There was insufficient time for the matter to be heard on that occasion and it was adjourned to be heard on 30-31 July 2015. On 10 May 2015 the husband served his statement in reply on the issue of interim provision. Then on 27 July 2015 he dis-instructed his English solicitors and since then has filed of a number of further statements, discussed below and caused his Portuguese lawyers to write to the Court and the Wife’s solicitors.

Matters took a dramatic turn on 8 July 2015, when the husband’s solicitors served the wife with a Talaq, notwithstanding his Portuguese proceedings. This document states that the husband had divorced the wife by way of Talaq on 20 March 2015, and that the divorce had been confirmed by a Judge of the Sharia court in Sharjah, UAE on 23 March 2015. The covering letter explained that the Iddah (reconciliation) period had expired, meaning that the parties were divorced. It is remarkable that the husband did not see fit to mention this at the first interim hearing before Bodey J on 21 April 2015, at which he was both present and represented. So, despite the fact that the husband had issued proceedings in Portugal, the marriage has now been effectively dissolved by the Talaq process in the UAE at his instance.

At the interim hearing on 30 July 2015 Mostyn J invited the wife to apply for permission under Part III of the Matrimonial and Family Proceedings Act 1984. Mostyn J by all accounts, and understandably, indicated that on the basis that the husband was asserting that the parties were already divorced, and because the wife did not challenge the Talaq divorce, the court was entitled to proceed on the basis that the requirements in the Family Law Act 1986 had been met. The wife then made her actual application under Part III on the following day, on 31 July 2015, without prejudice to her English divorce petition and the jurisdiction thus seized under Brussels II. Since then, the wife’s claim for a financial remedy has proceeded under Part III Matrimonial and Family Proceedings Act 1984. Further to Mostyn J’s order that she have permission to amend her application under Part III in January 2016 on the basis of 12 months’ habitual residence, the wife filed an amended D50F (her application for financial relief after an overseas divorce) on 31 July 2016.

At the hearing on 30 July 2015, Mostyn J among other things provided the wife with interim maintenance of £35,900pcm; ordered £13,333pcm by way of a LSPO; ordered the parties’ interim statements to stand within the wife’s application under Part III; ordered the husband to pay the wife’s costs of £123,288.90; directed the exchange of Forms E by 14 September 2015; and of First Appointment documentation by 16 November 2015. He stayed (but did not dismiss) the wife’s petition and financial applications thereunder until further order. The husband has not made any of the MPS/LSPO payments ordered, although there is no doubt that he is well aware of the orders made. The current arrears due amount to c.£740,000.

The wife was next granted a worldwide freezing order without notice by Roberts J on 19 August 2015 in the sum of £125m. At the return date on 2 September 2015, DJ Aitken continued the freezing order until 14 December 2015. That was extended again to the final hearing. It was further extended on 26 July 2016 to 3 October 2017, to allow for enforcement abroad. Interim third party debt and charging orders and a final charging order were made by DJ Aitken in respect of the costs order and interim maintenance and LSPO orders made by Mostyn J which the husband had then failed to pay in the sum of £284,900. The husband’s English bank accounts then contained minimal sums (approximately £5,000), but the wife was granted a charge of £284,900 over the husband’s share of the matrimonial home.

Paragraphs 8 to 13 of my order of 14 December 2015 set out further directions in relation to financial disclosure, and made provision for the exchange of witness statements in relation to the wife’s Part III claim. The husband did not comply with any of those directions. On 23 March 2016 the wife sought a revised timetable for the provision of disclosure and evidence in light of the husband’s non-compliance, with a penal notice attached to the appropriate paragraphs. On 5 April 2016, the husband’s Portuguese solicitors PLMJ, who have continued to act for him and correspond on his behalf throughout these proceedings, wrote to me directly (via the RCJ Family email), setting out their client’s objections to this course of action and pleading his willingness to enter into negotiations, but making neither a formal application nor an offer. When the wife confirmed to them a willingness to negotiate, no response was received.

The wife then made a further application, dated 28 April 2016, that sought to abbreviate the final hearing, in the face of the husband’s non-compliance with disclosure obligations, avoiding the need for the holding of an FDR, and on the basis of the husband’s expected non-attendance at the final hearing. That application was dealt with by me on 26 July 2016. I directed as follows:

Meanwhile in Portugal, Messrs Abreu (for the wife) sought the recognition and enforcement of the worldwide freezing order of Roberts J dated 19 August 2015. On 12 May 2016, the husband made an application within those proceedings seeking a declaration that enforcement of the freezing order would be unlawful, and a further declaration that those proceedings were null and void because he believed that the freezing order had expired on 14 December 2015; and because he claims not to have been made aware of the existence of those proceedings. The husband then made a further application in those same proceedings, seeking the same remedy, dated 16 June 2016. The Husband’s application of 16 June 2016 was ‘removed from the file’, as it simply repeated the same arguments as previously advanced. The husband’s application of 12 May 2016 was ‘completely overruled’ and it was confirmed that the steps taken by the bailiff to enforce were entirely valid. This was on the basis of his consistent failure to engage fully in the English proceedings, which the court said was the correct forum for these arguments; his being properly notified of these proceedings; and his contradicting himself in relation to his domicile. The husband has now appealed that judgment, and a reply on behalf of the wife has been filed. On any account he is heavily engaged in the process in Portugal.

On 8 August 2016 the wife discovered the parties’ sons Mohammed and Yousif had, on 8 June 2016, filed a new claim. This is a ‘third party opposition’ and therefore requires judicial permission to proceed. The sons’ application was made out of time, and the judge did not allow them to proceed. The sons appealed this decision not to allow their third party opposition claim to proceed, on 25 July 2016. The summons on the wife to respond to this claim was, according to her solicitors, improperly served, and the application to have it declared null and void was allowed. It appears that the sons are claiming that on 10 August 2015, the husband gifted them his shares in both Jalgon Sociedade de Investimentos Hoteleiros, S.A (which owns the Hotel Do Mar, Seisembra) equally (74 shares each) – as to which see below); and Estoril Plage SA (which owns the Hotel Palacio in Estoril – see also below), with 68,235 to Mohammed and 68,234 to Yousif.

What the husband has asserted in these proceedings, on 4 February 2016, was contained in a letter from PLMJ, copying in the clerks to the most recently involved judges, suggesting that he is now ‘continuing’ to transfer an apartment in Portugal to Mohammed, his elder son. It was claimed that this was agreed in 2013 but that the husband had only begun the transfer process then, but that the wife had agreed to this, expressly; and that 24.5% of the shares in United Electronics Co. (LLC) are beneficially owned by his brother Jasem (50% of his holding) and that he now intends to transfer these back to him.

By my order at the PTR (para. 8) I was invited to direct, and did, that:

The wife’s solicitors wrote to Mohammed and Jasem setting out the wife’s position and her claims against the assets in which they purported to have an interest. Those letters are dated 14 September 2016 and addressed to PLMJ, who had confirmed on 9 February 2016 that they acted for both men in respect of those claims. The letter that was sent to PLMJ for the son, Mohammed, dealing with the attempt to transfer the Portuguese property was expanded to deal with the purported transfers of shares which came to light within the Portuguese proceedings, and a separate letter on that issue was sent directly to his brother Yousif. No response has been received from Yousif. In respect of Jasem and Mohammed a letter was sent by PLMJ dated 19 September 2016. It indicates that Jasem will not provide any instructions as he is in hospital, and that Mohammed would be writing directly to his mother. That letter takes the matter no further. None of the 3 men have yet indicated any formal intention to intervene in the proceedings, nor has any of them attended to make representations.

In NG v SG (Appeal: Non-Disclosure) [2011] EWHC 3270 (Fam), Mostyn J provided the following analysis of how the law deals with situations where full and frank disclosure of the parties’ assets has not been made by the conclusion of financial remedy proceedings.

So, it seems to me that in this case I must seek to apply these principles to the determination of what the matrimonial assets can properly be found to be, in circumstances where, despite his manifest engagement with and manipulation of the proceedings in Portugal, this husband has chosen to file a regular stream of statements into these proceedings challenging parts of what the wife has said about his assets, but has never sought to set out in a clear and coherent way his own account of what he owns, still less attach any credible evidence of the value of his wealth. This despite understanding from the outset that this was both required of him by this court, and further necessary to establish the quantum of his wife’s entitlement in these proceedings. It may be that he thought that in the absence of such disclosure no such determination could be made.

The fact that these proceedings come before me under Part III of the Matrimonial and Family Proceedings Act 1984, as opposed to as an application under the Matrimonial Causes Act 1973 should make no appreciable difference to the outcome. This is especially so when the overseas proceedings from which the application flows came about in such circumstances as here, where the husband acted unilaterally, and during the currency of 2 sets of European divorce proceedings, one of which he himself had initiated. King J (as she was then) said this in the case of M v M and Others [2013] EWHC 2534 (Fam):

Mr Todd QC reminds me that Mostyn J, at para. [20] of his judgment in Abuchian v Khojah [2014] EWHC 3411 (Fam), made clear that any Part III application which proceeds before the court should be dealt with like any other. The judge said:

I shall therefore treat this wife as a claimant to whom an application for ancillary relief applies in full, and attempt first to determine in so far as practicable how the available matrimonial assets in this case, built up over a 46-year marriage, may be computed, notwithstanding the husband’s best efforts to thwart that process. I do so, however, being very aware that I must not be uncritical of the evidence which the wife has submitted, and where the husband has himself provided credible evidence as to the extent of a shareholding I will give that appropriate respect. In particular I bear in mind from Mostyn J’s check list at para.16 of NG v SG (above) the following:

I have carefully considered the evidence which the wife has given as to the lifestyle which the parties enjoyed during the marriage. I accept her evidence. It is consistent with the lifestyle of parties with assets with an overall value such as those which I find to exist here below. As such the evidence serves to fortify my conclusions. I will not set it all out here.

The asset schedule produced by Mr Todd QC and Mr Yates for the wife comes to a total of £286,162,581. They essentially seek on their client’s behalf an order that will permit her to share in that amount. Of those assets comprised in the schedule, the vast majority are made up by what are described as the husband’s ‘business interests’ which total some £255,171,478 after a deduction of tax at the general rate of 20%. Before tax, these assets are set out with valued ascribed to the husband of £318,964,347.

Even though the husband in this case has determined quite deliberately as I find not to file a Form E, and so not make straightforward the court’s computational task, it would not be sensible for this court to then slavishly adopt the valuations and business shares which are put to me by Mr Todd QC, without considering whether these are really at least in the first instance reliable or sustainable. I must remember that the husband has himself filed 8 witness statements in these proceedings, the most recent only last month, and whilst he has not provided an overview of his financial position on which I can rely, he has made a number of specific assertions about, for example, the size of his various shareholdings, which are on occasion corroborated, and may therefore be more reliable than the estimates provided for the wife. I will examine each asset in turn.

First, the land and development project in Apostica, held via the company ‘Companhia Agciola da Apostica Lda, itself held in a company called Tidewell NV. W describes this project in her first statement dated 13^th March 2015, and says (in paragraph 47) that she estimates ‘from what he has boasted to friends and family that his interest in the land alone is worth approximately £60m.’ She goes on to state that she believes ‘the land itself to be worth well in excess of £100m, and feels that Amir’s own interest is likely to be approximately £60m given how central to the project I understand him to be’. In her oral evidence she elaborated on this a little. She said that at the end of the 1990s, she heard the husband mention the figure of €60m, and believes that this could have been the value of the land then. Then, she added, that 4 or 5 years ago she heard him mention the figure of £100m in a phone conversation as the value of the land then. She could give me no help with how she derived a value for the husband’s share from those two pieces of information.

The husband himself provided some evidence about the extent of his shareholding in this project in his statement dated 16^th April 2015. At paragraph 44 he disclosed a 16.88% shareholding in the authorised capital of Tidewell, which he accepted held on behalf of itself 98% of the land at Apostica. He went on at paragraph 83 to accept that there may be profit for him from this venture at some point in the future. He denied boasting that his interest was in the region of £60m. Researches undertaken on the wife’s behalf, in the absence of any further meaningful disclosure from the husband, have revealed that the issued share capital of Tidewell NV is some US $40.5m. If the figure for the husband’s shareholding is accurate at 16.88%, this would provide a baseline valuation for the husband’s holding at some $6.836m, without applying any minority discounts or considerations of tax. Whilst I am loath to accept the husband’s assertions in circumstances where he has chosen to offer so little help to the court, that figure is at least based upon the company’s own accounts, and not upon a figure which the wife believes she may have overheard, and which may have pertained to overall value as opposed to the husband’s own holding. I do therefore propose to adopt it.

The same issues arise in relation to the husband’s other corporate holdings. He accepts that he has an interest in the Lisbon Marriott Hotel, through a company called Soteis Societade Internacional de Turismo (‘Soteis’), which owns the property. Soteis is owned as to 74.44% by Tidewell NV (‘Tidewell’), and as to another 9.84% by a company called Jalgon Sociedade de Investimentos Hotelierios SA (‘Jalgon’). The wife says that she believes that ‘Amir is the ultimate beneficial owner and controller of Soteis’. In her oral evidence she made reference to visiting the hotel, and her husband being treated as, and called, ‘the boss’, and in her March 2015 statement she says that he referrers to this and other hotels as ‘his’ (paragraph 49). She confirms in that statement (paragraph 51) that the accounts for the company show shareholder funds for Soteis at $72.6m. The husband in his April 2015 statement admits to a 14.8% shareholding in Jalgon (paragraph 44), and that proportion appears to have been confirmed by the wife’s own Portuguese lawyers, Abreu, who have placed a charge over that shareholding to secure injunctive orders made in these proceedings. The husband holds his interest in Soteis via his interests in Tidewell and Jalgon.

Applying the husband’s 16.88% in Tidewell to that company’s 74.44% in Soteis suggests that through that route, the husband holds 12.565% in Soteis. Applying his 14.8% holding in Jalgon to that company’s 9.84% holding in Soteis gives him a further 1.456%. A total interest of 14.02%. As a simple proportion of shareholder funds this would be around $10.178m. Without more detail, it is impossible to tell whether there may be any double counting and if so how much in the shareholder funds of these interlocked companies.

As for Jalgon, all that can be readily ascertained is that the husband holds 148 shares, each said to be of €2,500. This company, as well as its interest in Soteis, also holds the Hotel do Mar in Sesimbra. The wife asserts a belief that ‘Amir is the ultimate beneficial owner and controller of this company’ but does not support that with any further detail. She estimates the value of the hotel at around $20m, the whole of which value she ascribes to the husband. The husband, in his statement of 11^th December 2015, states that this property is subject to a bank loan of €1.6m, or $1,778,140, at today’s rate, leaving an apparent equity balance of $18.222m. At 14.8%, this would value the husband’s interest at $2.697m.

The next property is the Hotel Estoril Palacio, held by Estoril Plage SA. The husband describes his interest in this company as 6.88% in his December 2015 statement (paragraph 6), but at 6.82% in April 2015 (paragraph 44). The difference may possibly be explained by a further 0.5% of Estoril Plage held by Soteis. The wife sets out the shareholder funds in this company as $53m, describes the husband as the ‘controller and beneficial owner of the company’, values the hotel at £40m, and ascribes that value to the husband in her asset schedule. 6.88% of $53m would value the husband’s interest at $3.646m.

Aquatecnica Sociedade de Construcoes LDA (‘Aquatecnica’) holds the Eden Hotel in Monte Estoril. It is held as to 70% by Soteis, and 20% by Estoril Plage. Another Dutch Antilles company owns the remaining 10%. Again, the wife ascribes complete beneficial ownership of the company to the husband, as she does of the hotel which she values at $20m. The shareholder funds in 2013 were recorded as $25.5m. Applying the proportions held in Soteis (14.75%) and Estoril Plage (6.88%), would give 10.325% and 1.376% respectively, and so approximately 11.7% of the whole, would produce $2.984m as a proportion of shareholder funds for the husband.

The final property in the portfolio is the Cascais Marina, owned by Marcascais – Sociedade Concessionaria de Marina de Cascais SA (‘Marcascais’). The wife here says that she ‘cannot be certain of the amount of the husband’s beneficial interest’, but that she understands him to have the majority shareholding’, so that she ‘does not expect the investment to be less than’ £50m. (of an £80m estimated whole), and this is the value attributed to him in the asset schedule. The husband acknowledges an interest in the company through Soteis, Estoril Plage and Jalgon, but asserts that the company is in severe financial difficulties, and that a sale of the whole for just €1 has been in contemplation (December 2015, paragraph 10). Soteis holds 19.5% of Marcascais, so that the husband’s interest (14.75%) converts to 2.876%. Jalgon holds 12.5%, so that his 14.8% in that company gives him 1.85%. Estoril Plage holds 19.5%, so that the husband’s 6.88% gives him 1.34% - a total interest of 6.067%. Taking the 2013 shareholder funds of $8m, this values the husband’s interest in Marcascais at $485,408.

The next assets are the husband’s holdings in 2 electronics companies. First, United Electronics Co. (LLC), operating across the UAE and Qatar. In this company the husband accepts that he holds 49% of the shares, but says that half of these are held beneficially for his brother Jasem. He also produced a note signed by the wife, and other family members supporting this, and supposedly dated to 2009. The wife acknowledges her signature but says that she does not recall signing the document. The husband also says that a further 14% of his residual 24.5% is held by other family members, but offers nothing to support this assertion. He also offers no valuation for the company. Here, the share capital is worth only £700,000, but there are other clear indicators of more significant value. A distribution statement for the company sent by the husband to the parties’ daughter Zeinab for the year to 31^st December 2010 shows net profit of AED80m., and the statement shows 49% of this as due to the husband – AED39.2m, or £6.53m at the time. By a calculation applying a multiplier of 8.95 (Footnote: ¹) to the worked back profits (paragraph 78 of her 30^th September 2016 statement), the wife postulates a value for the whole company of AED857m, or £179,738,971. The wife ascribes 49% of this to the husband. On the basis of the evidence suggesting a family agreement in 2009 to leave 50% of that amount to Jasem, the residual 24.5% would be worth £44,036,047. The husband’s bare assertion about other family interests I disregard.

As to Kuwait Electronics Co., the wife suggests that the husband may have a 50% ‘ultimate interest’, but does not provide more detail, saying only that he ‘controls’ the company. He says that he has an 18.4% shareholding, but that 6.1% of that belongs to relatives. He provides no more detail, save to say that the company suffered in the late 1980s and early 1990s. He provides no up to date information. The wife believes the company to be on a similar scale to United Electronics, and if this were the case, and the companies were of similar values, then the husband’s 18.4% would be worth some £32.41m. He has given me no opportunity to assess the value of his interest at any other figure.

I appreciate that that this, along with many of the other above calculations, are open to obvious criticism that they are in places over simplistic, or potentially subject to issues of double counting. By the same token, they include no recent valuations of the underlying assets which would undoubtedly serve significantly to increase the values produced in many cases. They therefore appear to be the best that can be done in the circumstances created by the husband’s decision not to engage as fully as he should have done with the court or provide the information which he has been asked for, as opposed to that which he wanted to send. Even if one or more of the above figures is capable of being demonstrated to be an overvalue, others will be at least as significantly undervalued in the opposite direction.

The remaining 2 assets relied on – shares in Millennium BCP Bank, and an interest in Alec Electronica Portugal Lda, are included at the values ascribed to them by the wife in her September 2016 statement - £30,012, and £262,239 (paragraphs 82 and 83). Other putative interests of the husband’s, including an interest in a company owning chemical tankers, have not been valued for the wife, and so I will ignore them for the purposes of this exercise – but again, any complaint about overvaluation in relation to specific assets must be met with the rejoinder that these other interests have not been properly disclosed by the husband at all. The husband has made no assertions about any present or future tax liabilities, and so none can be taken into account. On this basis the husband’s ‘business interests’ can be represented thus: