Case No. RS20D03594

2.Both parties are nationals of Country X, although the Wife is also a British citizen through her father. The Husband is in his early 60s. He resides primarily in Country X but, when he has been in London, he has been staying at the Wife’s property in West London. The Wife is in her early 50s. She resides primarily in London at present. She has rented accommodation in Prime Central London. They began to cohabit in Country X in 1996 and married there in December 1997. 3.It is clear that, shortly before the marriage, the Husband approached a family lawyer, Mr B to prepare a Pre-Nuptial Agreement. I have seen a draft of such an agreement but it has been impossible to locate a signed copy, even though both parties are clear that they did sign such a document. They dispute, however, whether it was signed at the solicitors’ offices or informally at home. Unfortunately, Mr B cannot assist as he has since passed away and the file cannot be located. On the basis that it is agreed that the document was signed, it seems likely it was signed in the same form as the draft that has been disclosed. The draft provided, in essence, for separation of property, with particular reference to the Husband’s family business. It says that both parties have taken legal advice although it is clear that the Wife did not do so. I am sure, however, that she was advised to do so. There is financial disclosure attached to the draft, although it does not give any value for the R Family business assets. Given that the Wife had virtually no assets at the time of the marriage, this agreement did not provide for her to have even her reasonable needs met, in the absence of voluntary provision by the Husband or his family. At first sight, I believed that the agreement, at clause 12, provided that it was only to last for three years, or until the birth of a child of the parties, if earlier, with provision for a review at that point. Clause 13, however, states that, in the absence of a new agreement following the review, the existing agreement “shall continue in full force and effect”. Having said that, the Husband accepts that the only potential relevance of this Pre-Nuptial Agreement is the way in which it excludes the R Family business from sharing. 4.The parties have five children. The eldest, Child A is in their mid 20s and lives independently in Country X in a property owned by Child A but financed by the parties and subject to a loan in their favour. Child A is midway through an undergraduate degree. Child B is in their early 20s and is undertaking a degree in mainland Europe. Child C is adult and is in the first year of an undergraduate degree in England. Child D is aged 13 and is currently a boarder in England. Child D’s future education is not agreed and will be determined by a Judge at a hearing due to start at the end of March 2022. The Wife wishes Child D to attend a public school in England. The Husband wants Child D to return to Country X and attend a fee-paying boarding school there. Finally, Child E is aged just nine and is a flexi-boarder at a school in England (not the same school as is currently attended by Child D). I have seen a delightful photograph of all five children taken last Christmas. They are clearly a great credit to their parents.5.In the 1950s, the Husband’s father, JR, established a retail shop in Country X. At the time, JR was aged about 23. I am sure he was a very determined and able retailer but there is not much doubt in my mind that this was a small operation for many years. On 26 June 1975, the R Family Trust was established by JR.6.The Husband graduated from university in 1983 with a degree in economics before obtaining a postgraduate diploma in financial management the following year. He worked as an accountant from 1984 to 1987 before joining the family business in 1987, initially as an accountant. The business was renamed again in 1992 and the Husband became Chief Executive Officer in 1993. The business undoubtedly began to grow at a fast rate. I will have to determine exactly when and why this occurred. It appears that a major part of its success was an arrangement called a “joint venture partnership” in which new stores were opened as partnerships with the local manager of the store on a profit sharing basis with that manager. This clearly gave the manager a significant incentive to ensure the store was profitable. There is a dispute between the parties as to the extent that the Husband was involved in this development. His case is, broadly, that everything was down to his father, whereas the Wife’s case is that he was instrumental in transforming the business (“ABC Inc”) from a small local chain of shops to a very large and successful brand operating throughout Country X. Indeed, I was told that, by the time the business was sold several years ago, it had the highest turnover of any retail store chain operating in this field in Country X.7.On 25 June 1993, JR established the Investment Trust. At the time the parties married in December 1997, the business had nineteen stores. Three of these were solely owned by the business, whereas the other sixteen were joint venture partnerships (“JVPs”). On 30 June 1998, the Property Trust was established, followed, on 30 June 1999, by the Distribution Trust and the IR Family Trust. The IR & OR Family Trust is dated 4 July 2003. This one is significant in that it is named after the two parties, who are beneficiaries. Further Trusts were established on a fairly regular basis. It is clear to me that the exact details are not material to this judgment but, other than the Family Trust and the Investment Trust, all post-date the marriage.8.In 2005, the Husband became the Executive Chairman of ABC Inc after Mr C was appointed as Chief Executive Officer. The Husband told me in oral evidence that Mr C was appointed “to get the business ready for sale”. He added that Mr C brought in a “new sophisticated management team” and the Husband put much of the subsequent growth in the business down to this. There was a dispute as to how many stores were operating when Mr C was appointed. The Husband said it had increased from nineteen at the date of the marriage to approximately forty five but the Wife suggested it was sixty by then. 9.On 29 March 2006, a “family succession plan” was drafted for JR by a Mr D of a firm of business advisors and Chartered Accountants. By then, JR was aged 76. The memorandum describes him as the “family patriarch” and “the ultimate controller of the majority of the R family assets”. Whilst personal assets were to pass from JR to his wife, KR, on his death and then equally to the Husband and his sister, CR, the business assets were to be treated differently. Overall, an indicative value is given in the memorandum for the business of between c. $210 to c. $260 million. The capital value was to be allocated as to 60% to the Husband, increasing to 75% on the death of his parents, with the remaining 25% being allocated to CR. JR, KR, the Husband and CR all signed this document. It ends by saying that “IR is the family member who is the key family member in the ongoing management of the family business assets”. JR was “no longer involved in the day to day management of the family business assets” and was soon to resign his directorships.10.In May 2007, a sum of $340 million was distributed to JR as part of the succession planning exercise, although it was structured as a loan. JR then gifted half of this sum, namely $170 million to the Husband. It is clear that, until then, the Husband had received a relatively modest salary of $150,000 per annum but with further distributions on an ad hoc basis when required. During the same year, the Husband set up a new business called DEF Inc, with a business partner, Mr E. He wanted to do something entirely independently of JR but in the area of his expertise. The concept, however, was slightly different, and the original stores were often in the same locations as ABC Inc shops. The Husband loaned c. $30 million to get the business up and running. It is clear that, for a long period, the business struggled to move into profit until the Covid-19 pandemic led to a surge in interest in the field in which the business operates with resulting profits. The expert valuer was told there are now more than 30 stores in operation but this seems to exclude a further total of around 15 acquired a few years ago when another existing business was acquired. 11.JR died just over ten years ago. In his Eulogy at JR’s funeral, a family friend paid tribute to the man who “revolutionised the retailing industry in Country X”. He added, however, that “in the 1980’s, JR and (the Husband) developed the most revolutionary concept that had taken place in the industry. The concept of JVPs was introduced where ABC Inc would invite selected individuals to jointly own and operate each store. The concept was brilliant and its implementation was efficiently developed. ABC Inc was born”. JR’s Will was dated shortly before his death. Subsequently, KR divested herself of her remaining loan accounts, assigning 75% of these to the Husband. These loans assigned to the Husband had a value of $94.5 million.12.In 2012, the Husband sold half of DEF Inc to a private equity company (“the PE company”). He received c. $10 million. At the time, the business had eleven stores. Mr E was subsequently bought out. As at today’s date, the Husband holds 46.55% of the equity shares due to shares being granted to management. The voting rights are slightly different. I will return to this in due course. The Husband also set up a further business in 2016. This business has, so far, not been successful. Indeed, it does not appear to have generated any revenue to date but has accumulated losses of c. $10 million with further forecast losses of c. $2 million for 2022. 13.In 2015, the Wife and two youngest children moved to England to educate the two youngest children here in school. There is a dispute as to the extent that the Husband moved here as well. A couple of years later, ABC Inc was sold for a net figure of c. $590 million. At the time, the business had more than 100 stores but I am clear that the price achieved was excellent. In addition, commercial premises were sold for c. $130 million. The Husband received a total of c. $420 million gross, which was c. $330 million net. Of this sum, c. $310 million was paid into GHI Capital, whose shares are held by the IR Holding Trust, established by the Husband in June 2015. This money was used to buy and refurbish a whole series of very high quality but expensive assets. Indeed, these acquisitions had really commenced the previous year, in 2015, with the purchase of a boutique hotel in City Y (“the Z Street Property”) for $8.5 million, after which c. $20 million was spent on converting it to a luxurious private home. The previous family home was sold for c. $30million. 14.In January 2017, a private jet was purchased for $6,950,000, although this was the second private plane owned by the family. It had running costs, after income generated from hiring it out, of $1,918,000 in 2019, $1,677,000 in 2020 and $1,745,000 in 2021. In May 2017, a country property near City Y (“Property J”) was purchased for c. $20 million. Since then, a further $44 million has been spent on renovating the property. In 2017, the property in West London was purchased for £11.24 million. It was purchased in the Wife’s name due to her British citizenship. In 2018, a more modest property was acquired in City Y (“Property W”) for c. $5million in the IR & OR Family Trust No 2. This was purchased primarily for the parties’ use whilst the Z Street Property was being renovated. Two further flats in the same building in central London were purchased in the Wife’s name in 2018. Flat 1 cost £8.5 million and Flat 2 cost £4.4 million, although Flat 2 was sold in 2019 for £4.4 million and the proceeds paid to the Wife. In June 2019, the parties purchased a property in City Y for Child A for c. $4 million. Very sensibly, they secured the purchase by making a loan of this money. It is, however, clear that the intention all along was to forgive this loan when the time was right.15.The parties had previously owned a motor yacht which was used in the resort where they owned a property in Country X. This yacht was relatively modest in comparison to the other assets in the case and was sold in 2018 for c. $3million. It was replaced by a luxury yacht in 2019 at a purchase cost of $24.6 million. The running expenses of this yacht were $1,801,882 in 2020 and $1,897,184 in 2021. Unlike its predecessor, this yacht is based in the Mediterranean Sea and used by the family primarily during the summer months.