XO v YO & Anor [2022] EWFC 114

Background

  • HHJ Hess (“the judge”) dealt with W’s financial remedies application.
  • H was 60. W was 48. Both were Nigerian citizens. H was a successful businessman, who was brought up in a family of wealth due to his grandfather’s successful business. H inherited the family business, and it continued to be successful.
  • The parties married in March 2002, and W’s divorce petition was lodged on 13th October 2020, notwithstanding the relationship breaking down in 2018.
  • There were 2 children of the marriage (CO aged 18 and DO aged 16). Relationships broke down between H and the children in 2018 and he has not seen them since.
  • The following properties were owned by the parties:
    1. A Southeast England property, where W currently resides, worth £2,000,000;
    2. A Miami property, used as a holiday home, worth £7,964,602 and subject to a mortgage of £292,773; and
  • A property in Lagos, owned by W and worth £153,000.
  • W’s wealth and assets:
    1. Shares - W owned a number of shares in a number of companies in Nigeria, England and the USA in which H is not involved. The total of these shares were worth £3,797,086;
    2. Chattels – a Porsche Cayenne worth £20,000;
  • Cash – updating disclosure showed cash assets of £222,776; and
  1. Debts – costs liability of £219,388.
  • As a result of H’s disengagement with proceedings shortly after March 2022, H’s assets and wealth were difficult to assess:
    1. Corporate assets – W sought a net figure of £180,000,000;
    2. Chattels – 3 motor cars worth a total of £70,000; and
  • Cash – disclosed in H’s form E at £63,790.
  • In May 2022, AA Limited (a corporate entity in Nigeria, almost certainly owned and controlled by H) issued an action in Florida in which they sought to assert themselves as 100% beneficial owners of the Miami Property and asked for the legal property to be transferred to themselves.
    • Do the English courts have the jurisdiction to determine a claim in respect of immovable property situated outside of England where the claim is based on equity?
      • If yes, should English or Florida law be applied?
    • What steps should be taken by the court when a party will not engage, and in what circumstances can adverse inferences be drawn?Issues
    • Do the English courts have the jurisdiction to determine a claim in respect of immovable property situated outside of England where the claim is based on equity?
      • If yes, should English or Florida law be applied?
    • What steps should be taken by the court when a party will not engage, and in what circumstances can adverse inferences be drawn?
  • HeldJurisdiction in regard to the Miami property
    • The judge found that the Court in England did have jurisdiction to determine the claim in relation to the Miami property, as it was a claim based on equity.
    • In determining the jurisdictional issues, the judge considered the Hague Convention on the Law Applicable to Trusts and their Recognition 1958, Articles 4 and 7, imported into domestic English legislation through the Recognition of Trusts Act 1985, and was persuaded that the principle of lex situs should be given precedence within an analysis of Article 7.
    • Notwithstanding the lex situs determination, the judge was satisfied that the result would be the same under English law, the lex fori. That is, that the claim made by AA Limited should be dismissed, and the Miami property placed within the joint column of the asset schedule.

    Adverse Inferences

    • In reminding himself of the cases of J v J [1955] P 215; and the more recent Moher v Moher [2019] EWCA Civ 1482, the judge approached the matter of inferences from a position of at least some information which removed his assessment from falling into Lord Sumption’s forbidden category of “pure speculation” (Cf Wisniewski v Central Manchester Health Authority[1998] PIQR p.324, p.340) and allowed him to make inferences which were “properly drawn and reasonable”(as per Otton LJ in Baker v Baker [1995] 2 FLR 829).
    • Through a range of information acquired by W’s legal team, and the broad assessment of the business given to the court by H prior to his disengagement, the judge was persuaded to accept Mr Warshaw’s (counsel for W) broad analysis of the value of the husband’s corporate interests at a net figure of £180,000,000.
    • Final Outcome and Division of Assets
      • The judge discounted the value of H’s business assets by 50% to acknowledge their non-matrimonial origin. On the basis that W transferred to H all the shares that she retained in what was effectively H’s businesses, the judge concluded that he should treat W as having a strong sharing claim to 50% of H’s business assets. This division is reflective of: -
        1. the significant work contribution W made to the marriage;
        2. W’s potential role in turning around the company’s fortunes (which the judge addressed with caution);
      • W’s receipt of shares, and the fact that the family lived off the companies, was indicative of a mingled operation; and
      1. some of the business operations were developed by investments made in the course of the marriage.
      • The judge’s equal division of the remaining joint assets was achieved by: -
        1. ordering a transfer to W of the Miami property;
        2. ordering a transfer to W of the property in South East England (her current home); and
      • ordering H to pay a lump sum of £39,156,843 in return for (and simultaneously with) W transferring to H all of her shares in his business (as above).
      • W to receive c. £400,000 (precise figure to be later calculated by W’s legal team) to account for unpaid maintenance, legal services, and unpaid costs orders.
      • The judge added a costs order of £150,000 on to the aforementioned lump sums to reflect H’s litigation misconduct.