Case No. BV20D07073

59.There are certain factual issues that I must determine before I consider how my findings impact on the correct division of the assets in this case. The only evidence I heard was from the two parties. The first to give evidence was the Husband. He is clearly an immensely able and intelligent man, who had a stellar career, rising to the very heights of Firm H and earning very large sums of money in consequence. As with so many of the cases I hear, his determination to save tax has caused him nothing but difficulties. I find it quite remarkable that he transferred what is now £80 million to the Wife without any clear understanding of what was to happen thereafter. He accepted, in answer to questions from Mr Todd, that he made the transfers with free will and they had to be gifts to satisfy HMRC. He added, however, that the rationale was that the assets would then be put into trust by the Wife. It was clear that he expected to be able to live off the assets, even after they were placed in trust. I find that a difficult concept for a number of reasons. If it is a genuine discretionary trust, the trustees decide how to deal with the assets. A trust is definitely not a quasi-bank account of the settlor/the settlor’s spouse. Moreover, in this case, there was the added complication of the position of HMRC. In answer to the discretionary trust point, the Husband said that the Protector, namely the Wife, could sack them if they did not do what the parties wanted. Whilst true, the next trustees should, in theory, also exercise their discretion appropriately. Putting assets in trust is very different from transferring them from one bank account to another.60.He was asked about being a beneficiary himself. He said that Mr P told him he could not be a beneficiary at the time the trust was established, but he could be added later. He relied on an email from Mr P but that email only said that “further beneficiaries” could be added. If the Husband could not be a beneficiary on the date of settlement, I do not see how he could be joined later unless it was with the intention of misleading HMRC. Perhaps more importantly, it is the height of folly to transfer £80 million to a trust without having the exact legal position set out clearly and authoritatively. Moreover, he left himself with such little cash that he has had to ask the Wife to support him and pay his costs, during the currency of these proceedings. He accepted that he was not calling Mr P to give evidence, despite the written warning of possible adverse inferences being drawn from this failure. He then said that he was not disputing that he divested himself of all his interest in the assets. I have to say that the advice received at the time in relation to the Wife’s position was equally unclear. A memorandum from Firm M to her dated 20 June 2016 raises a number of issues but does seem to suggest that she can be a discretionary beneficiary, or a life tenant, so long as she remained non-domiciled. Having said that, she gave clear evidence to me that she did not wish to return to Country C even after the children finished their education, although I accept that she might have thought differently in 2016/2017. Moreover, I would have thought that it would have been necessary to consider her becoming deemed domiciled in due course. It does appear as though none of this was properly explored or considered by the parties.61.In any event, I accept Mr Todd’s submission that the Husband is now estopped from arguing that the money did not legally and beneficially become the property of the Wife. Equally, I am not going to make any findings that he acted under a mistake, given that he has abandoned the mistake/recission claim. He blithely says that he could have benefited from the money once it was placed in trust but I am not nearly so sure. He has not called Mr P of Firm M to give evidence, despite having been warned by the Wife’s solicitors that I would be invited to draw adverse inferences if he did not do so. There is therefore absolutely no evidence that the Husband could have been a beneficiary of the trusts. I take the view that he was giving the assets to the Wife without reservation of benefit as, if he had reserved benefit, the scheme would not have worked. He might, therefore, easily not have been able to be a beneficiary of the trusts. Parties must understand that saving large sums in tax comes at a price. If the Wife had transferred these assets to Jersey trusts, the money would have been gone forever. It is perhaps very fortunate for these parties that she did not do so. Moreover, if she had done so, the trustees would have decided who benefited, not the parties and certainly not the Husband. It is possible that they would have taken the view that it was the children who should benefit. For a man so astute in business, this whole transaction was a monumental folly.62.Earlier in his evidence, the Husband had told me that he did not feel it necessary to have a pre-nuptial agreement or a post-nuptial agreement at the time of the 2017 transfers, as he trusted the Wife and he did not consider it necessary. He added that there was never any intention that the assets should be shared between them. Mr Todd asserts that the refusal to have a nuptial agreement is clear evidence that the parties were opting for a partnership marriage but I do not agree. The Husband meant that he considered the marriage would work but, if it did not, he trusted the Wife not to be greedy and that she would only take a fair share. Indeed, suppose the marriage had broken down after only six months. It could not possibly be suggested, at least in this jurisdiction, that the assets, including the Husband’s pre- marital assets, would then all be divided equally. Mr Todd asked the Husband about the date of engagement. In this regard, I cannot accept the Husband’s response. It was put to him that, on 26 September 2003, he got down on one knee at BT and proposed to the Wife. He denied this happened but I am satisfied it did. After all, in a draft letter about tax to the Country D authorities dated December 2003, his lawyer specifically refers to his fiancé (sic); that he may be getting married again; and that the Wife and her three children will join him in Country D. I accept that no engagement ring was then bought. Indeed, the ring referred to as an engagement ring appears to have been bought after the marriage and the birth of X. I will have to factor these findings into my assessment of the date on which I should find settled cohabitation commenced.63.There was a significant amount of evidence directed to the exact quantum of the assets brought into the marriage by the Husband. It is right to say that the documents are slightly inconsistent and confusing. There is no doubt that, on 30 June 2003, the Husband reached an agreement with his first wife as to the division of their assets. Their assets were divided on a clean break basis. A document dated 29 May 2002 shows him retaining assets of C$48.5 million, which is said to be 60% but the June 2003 agreement shows his first wife receiving/retaining C$42.4 million and the Husband C$43.64 million. The Husband is adamant that this did not include his POC portfolio or shares in Firm H, Ibut the document does specifically refer to “retention of his vested and non-vested work-related entitlements of approximately $13,700,000”. Moreover, I find it difficult to understand why it would not include his Firm H assets. Having said that, Mr Bishop has taken me through his client’s detailed disclosure, which certainly appears to show that, on 30 June 2004, the Husband had assets of C$139,648,065. There is also a schedule dated 29 May 2002 which shows assets of C$103,285,797. In both cases, the Firm H share options and investments are shown as being very significant. Indeed, in the 2002 schedule, they amount to C$54.8 million, leaving other assets of C$48.5 million, which is close to the figure disclosed in the divorce. In the June 2004 document, the same figures are C$70.6 million for the UBS assets and C$69 million for the other assets.64.Mr Todd asked the Husband about his earnings in Country D. He was earning US$11 million per annum from his arrival there to the date of his retirement in 2007, after which he received a basic salary of D$1 million for a year. Mr Todd categorises this as total earned income during the settled relationship of US$45 million. The Husband responded that this ignores tax and the fact that he was investing heavily in Firm H stock, on which he said he had to pay 80% tax up front but which lost all its value in the financial crisis shortly after he left Firm H. My findings are that these last years in Country D were likely to have been the Husband’s best earning years of his career, given his promotion to such a position of importance. He lost a very significant share of his wealth during his first divorce and he would have been keen to have rebuilt his finances. It is impossible to do an audit but I am satisfied that there was marital accrual during this period.65.Unlike the Husband, the Wife is not well versed in the ways of business. I felt that, at times, she did tailor her evidence to suit her case today, rather than as the position was at the time. She did, however, tell me that she got engaged to the Husband on 26 September 2003. Her description of him getting down on one knee in BT was specific and I accept that it occurred. I equally accept that she lost her maintenance entitlement from her first husband by marrying the Husband. Nevertheless, it is clear that her first husband was not a wealthy man at the time of their divorce as she only got the former matrimonial home, then worth C$2.75 million but subject to a mortgage of (C$1.75 million), although it is right to note that the property did eventually sell for C$5.6 million. The proceeds of sale were not placed into joint names, consistent with what I find the arrangements to be, namely that, other than NN, these parties kept their assets separate. The Wife did, however, contribute to the family expenses from the proceeds of sale and from the sum of C$720,000 that she inherited from her parents. She did suggest to me that the parties did their investments together, referring in particular to investments in Investment B and Investment A, but this was not what she said in her Form E, where she said her Husband “has historically managed family finances and I have had very limited involvement”. I prefer the account in her Form E.66.Mr Bishop then asked her about BT. She told me that the Husband had said to her that “this is ours”. Mr Bishop was very critical of her for this, saying that she had not mentioned this previously and it was not in her statements, which, he said, would have been the case if it was true. I do not know if this was said, but I do not consider it would mean very much even if it had been said. It is the Wife’s case that BT has been matrimonialised because they stayed there during the marriage as a holiday home. I have already mentioned that the accommodation there was barely adequate. I am surprised that these parties were prepared to stay there for any length of time, even if the surroundings were wonderful. I am satisfied that they did not go there a great deal during the marriage. There was one trip whilst they were in Country D. They visited for approximately 6-7 weeks per annum during the period they were back in Country C before they moved to this country. Since they have been here, there was one trip to BT over Christmas/New Year but that is basically all. The Wife may have been there alone once or twice: she produced a schedule showing more trips than that, but the schedule proved to be inaccurate. The Wife was completely inaccurate when she said that she convinced the Husband to farm sheep there as well as cattle, as it transpired that there were some 12,000 sheep when he bought the farm. She then changed her evidence to say it was a different type of sheep that she had recommended to him. All in all, I found her evidence in relation to BT unsatisfactory.67.I do not have a valuation for the various buildings on the farm but it is absolutely clear to me that this is a working farm. It is most certainly not a significant matrimonial home. Of the value of the land at a gross figure of C$55,180,000, I doubt the properties capable of occupation are worth more than tens of thousands of pounds. The parties did have some vague idea of building a better home there but nothing ever came of it. The Husband bought the farm as a long-term investment because he considered that the demand for meat would increase significantly, thus increasing the value of the farm equally significantly. He was entirely right, notwithstanding the two natural disasters. The farm had been owned jointly with his first wife. He did not transfer it into joint names following his second marriage. All in all, I cannot be clearer that this farm was not matrimonialised. It was purchased before the marriage and has, in essence, remained the same throughout the marriage. A very small piece of land amounting to 81 hectares, with a better property, was acquired during the marriage, but the parties have never even stayed in that property and, out of a total land of 6,000 hectares, the addition land was inconsequential. The Wife was able to point to approximately 100 km of refencing being undertaken during the marriage. I accept that the fencing was a high quality product costing between C$20,000 and C$25,000 per km but I assume this was paid for out of the farm profits. In fact, much of it was destroyed by the natural disaster and will have to be rebuilt with the aid of the insurance money.68.The Wife was, of course, asked about the 2016/2017 transfers. Nothing that she said changed my provisional views of these transactions following the Husband’s evidence. She did say that, after the money was given to her, nothing further was said about the trusts. I do not accept her evidence in this regard. I find that the Husband did mention it once in 2018 but, as he said, she fobbed him off. I do not know whether she was considering divorce already at that point. She said she would have put the money in trust if he had asked her. For reasons that are unclear to me, he did not raise it again. She told me she did not like the lady from the trustees they selected, but I do not consider that makes any difference. She did concede that the transfers to her were pursuant to estate and trust planning. She further accepted that this was the reason why the money went into her sole name and not into joint names. She reiterated that the Husband controlled the financial side of things, which I accept. She said that she had been told that the Husband could not have been a beneficiary of the trusts. I accept that evidence as it seems inherently likely to me. She was then asked about changing her will to exclude him in early 2019. Given that the Husband had transferred the best part of £80 million to her only two years earlier, I do consider this was a very mean spirited thing to do, made worse by her not telling him. Mr Bishop, not unreasonably, asked her why she would not leave him half if this was, indeed, a partnership marriage where everything was shared. Her completely lame response was that the Husband would have contested it in any case so there was no point. I find that this action was completely inconsistent with her oral evidence, repeated on a number of occasions, that it was a partnership marriage from the very outset built on love and trust.69.She was then asked about NN. She said that it is a lovely home and I do not doubt that. She added that she can afford to stay there so why should she have to sell it. She was asked about the expenditure she has incurred. She said that the previous owner had completely redone the roof at the property before he sold it but the sealants were inadequate and, each time she repaired the roof, there was damp ingress again. I have to say the pictures of the damp are a sorry sight and the damage is not reflective of a superb estate worth £21.6 million. Moreover, the valuer refers to the damp ingress becoming worse between his two visits. The Husband blames the guttering not being properly cleared but I find it difficult to accept that so much damage could result from that. Either way, the work needed to be done although it appears it cost £70,000 in April 2021, which is a very small portion of the total amount spent on the property. I was told the total work done in 2021 cost around £930,000. It is clear that this included some fencing for Y’s horses; work to a dilapidated greenhouse; a new stable block; the fitting of security cameras; and planting trees following storm damage. I can well understand how these works would cost that sum. I accept Mr Todd’s point, however, that without an expert report telling me the effect of these works on valuation, it is impossible to say that any part of this money should be added back. Moreover, with the possible exception of the stables, given that I was told there were already stables at the property, it is difficult to say that any of these works was unjustified. The Wife’s defence that she could spend as she liked, as the Husband had given the money to her, is far more debatable.70.She was then asked about her expenditure on Y’s horse riding and eventing activities. I always find these arguments difficult. On the one hand, the amount spent at £450,000 is a huge sum of money. Moreover, the Husband was not informed. On the other hand, these parties have wealth of at least £130 million so why should their daughter not be able to indulge in what is, undoubtedly, a very expensive hobby. I accept that horse boxes are particularly expensive, even if the cost of £204,000 was considerably more than the figure of £120,000 to be found in the Wife’s Form E.71.The final issue was the spending on the Wife’s adult children in the sum of £900,000. Again, there are arguments on both sides. The Wife has accepted that the sum of £470,000 spent on one of her older children’s rehab should be added back. The Wife’s adult children are not independent and are still engaged in higher education. Moreover, they were children of the family from a very early age and the Husband undoubtedly took on considerable financial responsibility for them. On the other, they inherited approximately £3 million each from their father. The Wife has accepted that the Husband should have no further responsibility for them. They are, of course, no longer minors.72.Other than these matters, however, Mr Bishop was quite unable to put his finger on any item of expenditure that could truly be described as wanton dissipation, notwithstanding very careful consideration being given to the Wife’s disclosure by his team. In many cases, it is possible to show wanton dissipation. Examples would be giving money away to a new partner; or to friends and family; or spending huge sums on gambling, drugs or prostitution. I have encountered examples of all of these types of dissipation. Sometimes, it is necessary to say that you must take your spouse as you find them; in other words, the applicant cannot seek to benefit from the successes of their spouse but not share equally in their failings. I do not even need to consider that here as, despite the very high level of expenditure, there is nothing of that sort established.