Determination of preliminary issues as to the extent of the third parties’ beneficial interest in a holding company and the husband’s beneficial interest in a holding company and/or any of the underlying companies or assets
- The applicant (wife) and the first respondent (husband) were married for c. five years; there were no children of the marriage.
- The first respondent was a highly successful businessman. The business was structured over around sixty different entities split across holding companies and subsidiaries.
- In 2008, the business was held in a Panamanian structure, which included the use of bearer shares (‘the 2008 structure’).
- In 2012, lawyers and trustees expressed concerns about the lack of clarity in respect of the business structure and requested Know Your Client documentation. The ownership of the business was then transferred to a BVI holding company (‘the 2012 structure’).
- The preliminary issues to be determined were:
- the terms on which the second and third respondents held the shares in the BVI holding company;
- the extent of the first respondent’s interest in the BVI holding company, the business itself and/or any of the underlying companies or assets.
- The applicant’s position was that the first respondent was the driving force behind the business and its ultimate beneficial owner .
- The first respondent’s position was that he had never had any legal or beneficial interest in the business . He argued that under the Panamanian structure, he had held one-third of the business on trust for the third respondent .
- The second and third respondents’ position was that since the 2012 restructure, all legal and beneficial interest in the business was vested in them via the BVI holding company .
- Moor J was “absolutely clear” that the first respondent never held his interest in the business within the 2008 structure on trust for the third respondent .
- The first respondent was the ultimate owner of the business under the 2008 structure .
- Although the legal title had been transferred to the second and third respondents via the BVI holding company, the first respondent remained the beneficial owner of the business under the 2012 structure .
- This was a nominee or bare trust situation . It was not necessary for the applicant to prove that the 2012 structure was a sham in order to conclude that the first respondent was the ultimate owner .
- In order to come to these conclusions, Moor J applied the principles from:
- R v Lucas in relation to the first respondent, third respondent and their father lying to the court   [67(h)]; and
- Wisnieswki (a Minor) v Central Manchester Health Authority in relation to drawing adverse inferences from the failure of the second respondent to file evidence or attend court  [67(h)].