[2025] EWHC 1460 (Fam)

Father: 1%

BC Ltd: 1%

Paternal grandfather: 94%

Paternal grandmother: 2%

Father’s sister: 2%

By virtue of Article VI(2) the father was appointed as the first trustee. Article VI(3) enables the grantor (the paternal grandfather) to appoint anyone as a trustee. In the event of his incapacity, that power is vested in the family protector, subject to limitations as to who can be appointed. Article VI(5) enables the father to request the appointment of a second trustee ‘with whom he will act jointly’, a request which the family protector is obliged to grant.

Article XI provides for the trust to have one family protector which initially is the grantor. In the event of his incapacity or resignation, the role is conferred upon the father’s sister. Article XII provides for the appointment of a professional protector.

Article XIII(1) specifies that ‘The Family Council’ is ‘a collective body made up of all beneficiaries with legal capacity and the family protector’.

Article VI(7) confers a wide discretion upon the trustee to dispose of trust property ‘in any way’, subject to a general requirement to ensure that the purpose of the trust and the grantor’s will are fulfilled. Unless either the father or the paternal grandfather act as trustee(s), the trustee is required to obtain the written consent of the family protector prior to taking various steps.

Article IX enables the grantor to dismiss the trustee and appoint a new trustee. By virtue of Article IX(7), in the event of the grantor’s incapacity this power of dismissal is vested in the family council, subject to the proviso that ‘The family council may not dismiss [the father]’.

Article XIV specifies who the beneficiaries of the trust are to be. At the date of establishment, the initial beneficiaries are the grantor, his wife and the father’s sister. By virtue of Article XIV the grantor has the power to add or remove beneficiaries. In the event of the grantor’s incapacity this power is vested in the father, save that if he ‘will not act as a trustee’ the family council shall have the power of addition and removal. The family council is obliged to appoint the father as a beneficiary if either (a) he does not act as trustee, or (b) he acts as trustee jointly with another person. The family council is entitled to appoint as beneficiaries any descendants of the grantor.

Article XIV divides beneficiaries into three groups:

Article XV (and the following articles) enables a wide range of benefits to be conferred upon beneficiaries, subject to the terms of those articles. By way of example, Article XIX enables an interest fee loan to be made to buy a home for a beneficiary. Article XX allows a property owned by the trust to be used as a home by a beneficiary. Article XXI contains a clause allowing for educational expenses of a beneficiary to be met up to the age of 30.

Article XXII enables the trust deed to be amended by the grantor. In the event of his incapacity, this power is vested in the father.

Article XXIV deals with the dissolution of the trust fund. Upon dissolution all trust property is to be transferred to the grantor; if he is not alive it is to be transferred to the father. Article XXIV(4) confers an absolute right to decide upon the dissolution of the trust on the grantor or, in the event of his incapacity, on the father. Alternatively, trust fund property may be transferred to a similar legal entity established under the law of Liechtenstein, Switzerland or Great Britain.

I have seen an inventory of the assets of the trust. It shows that all of the trust’s assets were placed into the trust by the father, with the exception of the majority of the shares in BH s.r.o.. These had been held by the father until two days before the trust was created and, as I have found, were transferred to the paternal grandfather and other family members for the sole purpose of creating the appearance of this being a family trust intended to benefit the family as a whole.

In my judgement, notwithstanding the manner in which it has been structured, the T Trust is quite plainly the father’s trust intended primarily to benefit him or to confer benefits on others at his direction. I do not accept that the father would have placed in the trust almost the entirety of his considerable fortune, leaving himself substantially impoverished, were this not the case.

Although notionally it appears from the trust deed that it is the paternal grandfather who is the driving force behind the trust, I do not consider that this reflects the true position. The father has a very close relationship with his father and I am confident that the latter is likely to exercise the powers he has under the trust at the father’s direction. There is no reason for him not to do so, given that it holds assets substantially generated by his son (I am prepared to accept that some of the BX resources, considerably less than 50%, may have been generated by the paternal grandfather but without proper disclosure I cannot go further than this). If this were genuinely ‘a family trust’ set up by the paternal grandfather to pass on his wealth to future generations, it is unlikely that the father’s interests would have been given such primacy over those of his sister. As I have recorded already, in the event of the grandfather’s death or incapacity, the father will acquire substantial control over the trust and have the ability to call for its dissolution with the assets being distributed entirely to him. When I asked the father why such a provision was included, the only answer he could give was that it was his father’s ‘will’. It is also notable that while the father acts as trustee he is incapable of being sacked by the family council and does not need to seek permission before taking steps to dispose of trust property.

The conclusions I have reached about the trust are further corroborated by the failure of the grandfather or any representative of the trust to come to court to give evidence to explain the position. If this trust had genuinely been created to enable the grandfather to pass on his wealth to future generations, one would have expected him to come to court to defend it. Despite having appeared with representation at a case management hearing when he sought to be joined as a party, ultimately he opted to play no role in the proceedings. I infer from this that he judged it likely that the true position would become apparent were he to be questioned in court.

The father was initially appointed as the trust’s sole trustee. In December 2024, he was removed from that position. He asserts that the reason for his removal was his family’s displeasure at his disclosure of trust documents into these proceedings. I consider that explanation to be entirely bogus. In my judgement, it is likely that the father caused himself to be removed as trustee in an attempt to distance himself further from the trust and its assets. The provisions of the trust deed require the father to be made a beneficiary if he is not serving as trustee. He has not, however, been appointed a beneficiary and could offer no explanation as to why this had not occurred. It makes no sense at all that the paternal grandfather would seek to marginalise his son from a structure holding assets wholly or substantially generated by his son. It is wholly inconsistent with the notion that just a year ago it had been the paternal grandfather’s will that following his death his son should be able, if he chose, to cause all of the trust assets to be vested in him.

The mother’s case is that the trust is essentially ‘a sham’ set up for the sole purpose of defeating her financial claims. I would not go so far as this. I accept the point made by the father that the trust is unlikely to have been conceived and formed within days of the mother having issued these proceedings; it is likely to have been planned for at least a number of months before it was finally concluded. I also accept that one of the trust’s purposes was to enable benefits (such as the payment of school fees) to be conferred upon the next generation and to create a structure which would hold the father’s assets following his death so as to prevent substantial riches from becoming vested immediately in his children. This, however, was not the sole purpose of the trust. In my judgement, another substantial reason for its creation and the transfer of assets into it was to enable the father to shield his assets from actual and potential creditors, including the mother. This is consistent with the father’s replies to the mother’s schedule of deficiencies where, in explaining the transfer of a receivable into the trust, he stated “…I did not want to hold any asset on my name back on 2022 so I started this transfer process and also Trust creating process started back that time”. The restructuring of the BH s.r.o. shares was undertaken in an attempt to conceal this purpose and was an essential part of the strategy.

According to the father, earlier this year the assets of the trust were transferred from the T Trust into a new structure, a foundation in Liechtenstein. No proper disclosure has been provided about this. The father’s case is that the step was taken by his father, motivated by a concern about Russian aggression (which I took to be a reference to the war in Ukraine). This explanation makes no sense, given that the Russian invasion of Ukraine took place in 2022 and the T Trust was founded in 2024 (why not set it up in Liechtenstein in the first place?). My conclusion is that the true motive behind the move to Liechtenstein was to enhance the difficulties which the mother would face in seeking to enforce any orders against the assets of the trust.

Other transfers into the trust

I consider it inconceivable that the father would have alienated himself from his wealth to the extent he has done, so as to leave himself owning essentially no assets at all, not even the home in which he lives. In my judgement, the primary purpose behind all of the transactions which have led to the father’s assets being placed in trust has been to defeat the claims of creditors, in particular those of the mother which have loomed large at the time the transactions have been taking place. The assets he has transferred into the trust include various receivables from the BX companies to which he loaned money. I can think of no reason for him to have entered into these loan arrangements with the companies if his true intention was simply to write the money off.

The South West London property

The father previously held a 50% interest in a property in South West London, the other 50% being held by the paternal grandfather. On 3 May 2024, the father transferred his 50% interest to his father. He asserts that this transaction was undertaken as the original purchase had been funded entirely by the paternal grandfather such that he owed him a substantial amount of money. He says that rather than repaying the debt in cash (which, having alienated his assets into the T Trust, he could not afford to do), he determined that he would repay the debt by making a transfer of his 50% share in the property. In my judgement, this explanation is also entirely bogus. I accept that the father was able to demonstrate that the funds to purchase the property came from his father’s bank account. It does not follow from this, however, that the funds originally came from the grandfather. It is probable, in my view, that the father will have made a contribution to the purchase by transferring funds to his father prior to the ultimate transfer being made to the conveyancing solicitors. Even if that did not occur, I reject the suggestion that the grandfather loaned his son money in connection with this purchase. In my judgement, had there been a genuine loan, the father would have repaid it following his receipt of the G proceeds when he repaid other loans, including to his father.

In my judgement, the transfer of the father’s interest in the South West London property (for no consideration) was undertaken for the sole purpose of defeating the mother’s claims in these proceedings. As an asset held within this jurisdiction, the father will have known that the mother could seek easily to enforce her award against it.

ASIC hardware

I also need to consider the father’s gratuitous transfer to his father and his sister of the ASIC hardware he had acquired for €4,000,000. It is the father’s case that the asset in question could only mine Bitcoin profitably if the price of electricity remained relatively low. On his case, following the Russian invasion of Ukraine, electricity prices increased substantially meaning that the hardware became unviable as a Bitcoin miner and essentially worthless. In his oral evidence, he gave what I consider to be a somewhat confused explanation for transferring the asset to his relatives. If it was genuinely worthless, there would have been no reason not to throw this bulky piece of equipment onto a skip. Why on earth, I ask myself, would the grandfather and the father’s sister have wished to burden their homes with something so useless, especially when there is no evidence to suggest that either of them had any prior experience or ability in mining cryptocurrencies? The father purported to give an explanation to the effect that they had access to green energy, but this makes no sense at all. He and his father live in close proximity to each other and will have access to the same sources of energy. The reality, in my judgement, is that the father’s explanation is a nonsense. The reason he transferred this potentially valuable asset to his relatives for no consideration was to shield it from the mother’s claims.

Summary of conclusion in relation to the father’s dispositions

To summarise, therefore, I find that it was either a purpose or the purpose of the following transactions, all of which were undertaken for no consideration or at most minimal consideration, to defeat the claims of creditors, including the mother:

I also find that the mother is a victim of those transactions. By placing assets in the names of others and in trust the father has erected barriers to the mother’s ability to enforce her claims.

Within the mother’s section 423 application, she seeks to set aside the transfer of €2 million by the father to his father. However, no such transaction took place. What this refers to is the disposition by the father of 50% of his interest in the ASIC hardware. Although the hardware was acquired by the father for the total sum of €4,000,000, I decline at this juncture, in the absence of a valuation, to find that it was worth that sum on the date on which the father disposed of it.

The mother’s financial resources

The mother does not have capital of any significance. She has a low six figure mortgage capacity. Her parents have been willing to lend her up to £240,000 for a house purchase, although in my judgement the maximum sum they are likely to be willing to lend will be reduced by the amount which they have advanced for her legal fees.

The mother’s income derives from various sources including her employment, child benefit and universal credit. In total she receives just under £3,300 per month.

The father’s standard of living

Although I have found that the father has presented his financial affairs in a manner which is at best disingenuous and, in at least some respects, dishonest, it does not follow from this that I am bound to reject the entirety of his evidence.

I do consider that he was essentially being truthful in characterising his lifestyle as being relatively modest albeit, in my judgement, very comfortable. This is not a case involving a multi-millionaire who owns multiple luxurious homes and enjoys all of the trappings of great wealth.

The father lives with his partner and her child in a nice but not luxurious property in a rural part of the Czech Republic. It is probably worth a six-figure sum (although I give limited weight to its actual value, given the difference between property prices in England and the Czech Republic). The mother’s reference to the father living on ‘the family estate’ is, in my view, an exaggeration. He and his parents live in neighbouring properties which between them probably have a few acres of land. There appears to be a tennis court on the land, but I would not characterise this as ‘an estate’. The father spent several hundred thousand Euros doing up another property, but I do not consider this a huge sum in the context of his overall wealth. It is notable that the base he chose to acquire with his father in England was a relatively modest flat in South West London.

I also accept the father’s evidence that he does not consider it healthy for his children to be exposed to great wealth. He does give priority to their education and has made arrangements for his older children to be privately educated, with fees being met through the trust. It is notable that the trust deed provides for educational expenses to be made until the age of 30.

I do not accept, however, that the father’s budget appended to his Form E represents the full extent of his expenditure. I consider it likely that he has tailored his budget so as to be consistent with what he claims to be his limited income.

In my judgement, the father has the ability to set his own income in conjunction with his father and/or to cause funds to be extracted from the trust should he need them in order to meet his expenses. It is unnecessary for me to attempt to quantify what these truly are. I suspect that while these proceedings have been ongoing he has maintained an artificially low level of expenditure for presentational purposes.

P’s needs

Within her Form E and her mis-labelled ‘section 25’ statement, the mother has provided particulars of what she says are P’s needs.

In assessing P’s needs, I have regard to all of the circumstances of the case, including the need to avoid too great a disparity between the lifestyle P will experience in the homes of his two parents. I have already made findings about the scale of the father’s resources and his standard of living, which I take into account.

The parents both agree that P should be privately educated (albeit the father says not before the age of 10) and it is relevant to have regard to the fact that he will be mixing with children from relatively affluent families. He needs to live in a home to which he can invite his friends without feeling embarrassed and to be able to enjoy a lifestyle not entirely out of kilter with the social milieu in which he will find himself.

Housing

P’s most significant need is for a suitable home.

I accept the mother’s case that it is reasonable for him to be housed in a three-bedroom property with a garden in a safe area in or around the town where she currently resides. Having three bedrooms will enable P to have friends over to stay or, from time to time, a grand-parent.

The mother’s property particulars range in price from about £900,000 to £1.15 million. The lower end of this bracket would enable the purchase of a three-bedroom terraced house in the centre of town of approximately 1,700 square feet in size with a small garden. Alternatively, a property could be acquired in a more rural location, smaller in size but with a larger garden.

In my judgement, £900,000, is an appropriate figure to meet P’s need for a home. The costs of purchase, such as stamp duty and conveyancing costs, and moving costs would need to be paid on top of this. Stamp duty at 5% would be £45,000. The sum of £15,000 should be sufficient to pay for conveyancing and moving costs.

I do not attach any significance to the fact that the mother previously made an offer to buy a different property (with only two bedrooms) for £350,000. I have accepted her evidence as to the circumstances in which this occurred.

The father’s case is that a property should be acquired for no more than £600,000. He has not provided particulars to demonstrate what could be bought for such a sum.

The mother will need to furnish the property to a reasonable standard and undertake some redecoration. I consider that £40,000 is a suitable sum for this purpose.

Other

The mother seeks provision to enable her to acquire a car. Her present car is 11 years old and I accept her case that she needs a new car. She contends for a sum of £35,000, but in my judgement an appropriate sum would be £25,000. She should be able to buy a new car every 5 years for this sum (index linked), trading in the old one against the new purchase.

I also accept that it is reasonable for P to have a new bicycle. The father may wish to choose one for him as a gift, but in default I consider £250 to be a reasonable sum.

It is reasonable for P to have a piano, but in my view the sum of £12,000 claimed by the mother is too high. £4,000 is a reasonable sum.

Liabilities

The mother has various liabilities which have arisen mainly in the context of these proceedings and the father’s non-compliance with legal services orders.

The mother owes her parents approximately £105,000. This debt arises as a result of her need to make a partial payment to her former solicitors, her counsel’s fees and to assist her with living expenses. I do not accept that this is a ‘hard debt’ in the sense that non-payment will lead to the mother being sued, but equally I do not consider it reasonable for her to carry this level of debt which arises entirely as a result of the father’s failure to provide adequate financial support and his non-compliance with orders.

I do consider that the mother should have been open about her ability to borrow from her parents. Had she been open, the court might well have provided for a lesser sum to be paid by the father under a legal services order, leaving the mother to claim the balance by making an application for costs at the conclusion of the proceedings and/or to argue that her liability should be met as a need. In these circumstances, I do not propose to provide for the debt to be met in full, but will deduct £15,000 leaving a total of £90,000 to be paid.

The mother continues to owe her former solicitors just under £95,000. This is a hard debt for which she could be sued, an outcome that would be contrary to P’s interests. I propose to reduce this sum to allow for a notional taxation and will provide for £80,000 to be met. To the extent that there is a shortfall, I am confident that the mother will be able to borrow that sum from her parents.

The mother owes her direct access barrister approximately £3,500 which needs to be met.

As to her current solicitors’ costs, I will consider these separately when I deal with issues of costs.

The mother’s unpaid rent of £1,500 needs to be met.

The parents agree that P should be privately educated and it is reasonable for him to have this form of education which the father’s older children are receiving.

So far as the mother’s income needs are concerned, I have considered the mother’s Form E budget which is also exhibited to her most recent statement. Overall, I consider the sums claimed for P and for herself under the guise of a carer’s allowance to be reasonable save that I make the following deductions:

I have not made deductions from the clothing budget, the hairdressing budget or the costs of a beautician. I do think the amounts claimed are reasonable and fall within the category of needs the mother is entitled to claim in her capacity as P’s carer.

Applying the deductions I have made, I assess the amount needed to meet P’s needs (including the mother’s needs qua carer) to be £6,581 pm, which I round up to £6,600 pm. It would have been possible to make further deductions to individual items, but on a broad brush basis I consider the sum of £6,600 pm to be a reasonable one.

Conclusions on orders to be made

Housing

For the reasons set out above, I find that P needs a housing fund of £960,000. Given the scale of the father’s resources and the mother’s limited means I do not think it is reasonable to expect her to contribute towards this by borrowing money from her parents or obtaining a mortgage.

The order should enable the mother to choose a property, subject to the father being able to veto the purchase if her choice is manifestly unsuitable as an investment (eg a property with dry rot).

The father should, within 2 months of the mother making her selection, make available the funds necessary to complete the purchase. These can be held in an escrow or designated conveyancer’s account (on terms that they are to be used only for the purposes of the purchase). The property can either be held in trust or, if more tax efficient, be the subject of a long lease (provided, in the latter case, that it is held in the name of the father). The trust instrument or lease must contain terms which provide for the mother and P to be able to live there rent-free until P has completed his tertiary education (first degree only) including a gap year. At this point, the property will revert to the father, or to the trustee if acquired in trust. The property will also revert to the father in the event of the mother’s death or if she ceases to occupy it as a home for P.

The father should have liberty to apply in the event of the mother’s remarriage or cohabitation for six months or more. Neither of these events should be an automatic trigger for the mother’s right to occupy the property to come to an end, bearing in mind that it is to be P’s home. A more likely scenario is that, depending upon the person’s means (and I have no information about Mr C’s means), there would be an expectation that the mother’s partner should make a contribution by paying a 1/3 share of the market rental value of the property and a contribution to the outgoings, with a corresponding reduction in the father’s maintenance. On the facts of this case, it is appropriate for the mother to give the father an undertaking to notify the father in the event of her cohabitation.

The mother should be able to move once to another property during the subsistence of the trust / lease with the costs of the move being met from proceeds of sale of the property. Any further moves would need to be funded by the mother.

The mother should be responsible for routine maintenance and decorative repairs and contents insurance. The father will be responsible for any structural repairs and buildings insurance.

In the event that the father does not co-operate with the purchase of the property, the default order should be that he pays the mother a lump sum of £960,000 subject to undertakings by her as to how the money will be applied and her subsequent occupation of the property.

Other capital

The father must pay the mother a lump sum of £29,250 in respect of P’s other capital needs and a further sum of £173,500 in respect of her liabilities. The order should provide for the purchase of a new car every five years with a trade in of the existing car.

Child Periodical payments

The mother’s income is, in round terms, £3,300 pm. In the context of the father’s resources, I do not think it is reasonable that she should contribute all of it towards P’s expenses. She should be free to spend some of her income as she chooses, including (if she wishes) meeting at least some of those elements of her budget where I have applied deductions and also saving money for her own future, bearing in mind that upon the expiry of the Schedule 1 term she will find herself without a home. I consider it reasonable for her to contribute 50% towards P’s expenses and therefore I propose to ring-fence £1,650 pm for her to spend as she pleases.

This leaves a shortfall of £5,050 pm which I round down to £5,000 pm. In my judgment, this is a reasonable sum which the father should pay by way of child maintenance. The sum should be index-linked by reference to the consumer price index. Pending the acquisition of the new property the father should also make a contribution to the mother’s rent in the sum of £1,500 pm.

The payments should be made until P completes his tertiary education (first degree only). After completion of his secondary education payments should reduce by a third on the basis that during tertiary education that a sum equal to that third should be paid directly to P and/or to meet his living expenses. I will allow for a gap year save that during that year the sum payable will reduce by a third without any element going to P directly. If he chooses to take a gap year, it is appropriate that he works during the year to save up money to pay for any travel he wishes to undertake.

I will also make a school fees order, including provision for reasonable extras. The school would need to be agreed by the parents, both of whom hold parental responsibility. The mother should co-operate in P becoming a beneficiary of the trust so that payment can be made from this source, if the father chooses (although under the order, the obligation to pay will be his).

Security

In circumstances where the father has breached various court orders and is substantially in arrears in respect of his obligation to meet the legal services order, I have determined that it is appropriate to require him to put in place security for the maintenance and school fees. I judge an appropriate amount of security to be £600,000 (approximately 10 years’ worth of maintenance). The sum secured can decrease with each passing year provided that the maintenance has been paid in full.

Section 423 orders

I have made findings which enable the court to make orders under section 423. I do not propose to do so at this stage as I hope that the father, who undoubtedly loves his son, will be able to see the benefit of bringing this unhappy litigation to an end and complying with the court’s decisions. I will adjourn the claim so that it can be reconsidered at a later stage, on the basis of the findings I have made, should there be a need to do so.

Additional legal funding

The mother seeks £150,000 for legal funding in respect of the welfare proceedings. I am not prepared to deal with this in the absence of a proper application. If she chooses to make an application, it does not need to be dealt with at High Court level.

Freezing order

The freezing order made by Cobb J should remain in place until the capital orders have been complied with.