Case No. RS20D03594

27.In early 2022, both parties filed their section 25 statements. The Wife’s is dated 7 January 2022. She made the point that the Husband has had an extremely successful business career, increasing the number of ABC Inc stores out of all recognition during the marriage until the business was eventually sold. She adds that the business was one of the largest privately owned retailers in Country X when sold. She says that the dispute in relation to Child D’s education and an application made by the Husband to remove Child D from this jurisdiction to reside in Country X will be heard at the end of March 2022 with a time estimate of three days. I am not hearing that application but I will have to say a little about it later in this judgment. I was told that the independent social worker instructed to report on the application has recommended that Child D return to Country X and attend a particular school there, based, as I understand it, on Child D’s wishes and feelings. Understandably in my view, the Wife said in oral evidence, that, if this was the decision of the court, she would also have to return to Country X with Child E as well, even though she does not believe such a move is in the best interests of either child. Her statement then deals with Property W. The Husband has proposed that this is her home in City Y. She responds in her statement by saying that this property has been promised to Child B, although the Husband’s reply to that is to say that Child B doesn’t want it. She adds that she would like to retain the West London property and buy a property in the English countryside near the schools currently attended by Child D and Child E, but I am clear that this depends on both children attending those schools. She reminds the court that she has dual citizenship. She says that the Husband underplays his role in the business. She asserts that he was responsible for renaming the company “ABC Inc” from its previous name, and that he coined a marketing phrase that was extremely successful. She adds that it was the Husband who rolled out the JVP model, which enabled the business to expand so rapidly. She then says that she was responsible for the “project management” of the many property refurbishments and developments undertaken during the marriage. She says she found all the properties. In relation to DEF Inc, she says that there are now approximately 30 stores. The business had been discussed and planned by both spouses together. She says that the decision to sell ABC Inc was taken as neither parent wanted the children to feel pressurised to work for it. She refers to the purchase of a spectacular property on a private island in 2011; the two yachts and the private jet. She makes the point that neither party has yet lived in the Z Street Property or, indeed, Property J since their respective renovations although the Husband has spent a few days at both very recently. She describes Property J as a “phenomenal” property set in 73 acres with a huge lake. There is no doubt that the pictures of the property are very impressive. She says that, since the sale of ABC Inc, money had been “no object”. She accepts that she has used the proceeds of sale of the Flat 2, in the sum of £4.29 million, to meet her legal costs and day to day expenditure. She was told by the solicitor acting for the Husband in Country X in relation to DEF Inc, that the business would be sold “if not now, then shortly”.28.The Husband’s section 25 statement is also dated 7 January 2022. Again, he gives his address as the Z Street Property. He confirms that he has one sister, CR, who is now in her 50s. He says that the Wife was an estate agent when they met. She did not work after the birth of Child A. The properties in London were placed in her name solely due to tax advice. He ascribes the concept of JVPs to his father, JR and says that JR remained “hands on” well into his late 70s. JR was his mentor and strategic advisor. The business was sold as the JVPs were finding it more and more difficult to adhere to the ever growing requirements of running a workplace, such as more and more stringent employment and consumer laws. The market place was becoming increasingly competitive and this led to greater risks. The business therefore called in all the JVP agreements. The sale took 12 months. He says that he co-founded DEF Inc with Mr E in 2007 and invested c. $20 million followed by a further c. $10 million. In 2012, the PE Company came onboard. As part of the introduction of the PE Company into DEF Inc, the original structure was sold to a new holding company for c. $20 million and he received c. $10 million. He refers to the divorce being a default event and leading to a notice of default on 11 October 2021. He says the Side Deed was effectively forced upon him, with his voting shares reduced to 40% and the PE Company moving up to 60% but this does not affect the equity interests at all. If it had not been done, there would have been a forced sale which would have been catastrophic. He says that the Wife spends 95% of her time in London. The Trust for the children is now worth $50 million. The parties loaned c. $4 million to Child A in May 2019 to enable Child A to buy a property and he would like to do so the same for the other children. He says that the total matrimonial pot is worth £183 million gross of which £66 million is personal assets and £117 million is held in the R Group Trusts. He adds that he intends the Z Street Property to be his primary home but that is very controversial as the Wife seeks the transfer of the property to her as well. He then deals with a tax audit that has been going on in Country X since the mid 2010s and relates to a couple of tax years. He says that the latest figure he has for the potential tax arrears, including interest and penalties, is a liability of between c. $40 million to c. $70 million, if the claim succeeds. He adds that there will be tax payable if all the money has to be removed from the trusts by way of dividend, after all the loans he is owed are repaid. He quantifies this liability as being between $38.1 million and $37.7 million. He then says that the Wife has made it clear that she will make her primary home in England but I am satisfied that is only if both the youngest children are at school here. In such circumstances, he will need to rent a property in London and in vicinity of the schools as well. He adds that it costs $7 million per annum to maintain all the assets and, even though this is funded through the trusts, it is unsustainable in the long term. He told me in oral evidence that he had come to the conclusion that he would have to sell both the property on the private island and the private jet, particularly as the latter has been used primarily to get to the island. He describes the Wife’s budget of £1.85 million per annum as aspirational and that she could manage on £400,000 per annum. His case to me, however, was that she required a budget of approximately £645,000 per annum. Although his spending between 2007 and the sale of the business a few years ago was $106.7 million, the vast majority of this had been spent on the accumulation of assets. He had received c. $420 million on the sale of ABC Inc, as well as c. $90 million from the commercial properties that were sold separately, but he paid tax of c. $90 million. 29.Both parties filed short statements in reply. The Husband’s is dated 20 January 2022. He says that it was his father, JR who changed the name to “ABC Inc” following a business trip. Equally, the Husband says that he did not come up with the successful marketing slogan to which she refers. That was coined by a JVP. He says that the Wife does not need the Z Street Property as she will be based in England, whereas he needs it to parent Child D. She had lost her interest in the property during its conversion and refurbishment. She has recently incorporated an art business and rented a studio for five years. The valuations that were agreed at the time of Property J at $51 million and the one on the private island are far higher than their true value. He puts these at $35 million and $20 million respectively. The DEF Inc concept was entirely his. Finally, he complains that the Wife has threatened him with publicity if the case proceeds. I believe this refers to proposed changes to the rules on anonymity in financial remedy proceedings but they are not in place yet. I am clear that, until I am told I have to permit publication, litigants are entitled to their privacy in the absence of special circumstances, such as where they having already courted publicity for the proceedings which is not the case here. 30.The Wife’s statement in reply is dated 25 January 2022. The Husband had suggested that the proceeds of any sale of DEF Inc should be assigned to the children but she is clear that this is not appropriate as they have already been handsomely provided for. In any event, I am clear that, in the absence of agreement, I cannot direct such provision is made for the children as it would be in breach of established legal authority. 31.A final statement was filed on behalf of the Husband. It is dated 25 January 2022 and is from his former business partner in DEF Inc, Mr E. Mr E says that the business was the Husband’s idea, although Mr E did the research. The relevant market was under-contested. The Husband financed it and Mr E ran it. He was given 25% of the equity, although he owed his share of the cost of the shares to the business. He was entitled to 50% of any net profit. The first store was opened in 2007. The business needed further capitalisation, so they approached the PE Company. An enterprise value for the business was agreed at $22 million. The Husband received back part of his funding. The net result of the reorganisation was that the PE Company had 50% of the equity, whilst the Husband had 33% and Mr E had 16%. He was the Managing Director from 2012 to 2014. In 2019, he left the Board and cashed in his shares which, as far as I can see, were purchased by the Husband as his share went up correspondingly. The Wife’s lawyers indicated that they did not wish to cross-examine Mr E so his evidence is agreed.