England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		12th January 2007

MR JUSTICE HOLMAN :

1. I have been very grateful to all the advocates, not forgetting Mr Richard Harrison, and to their instructing solicitors for their help during a very well argued and very hard fought hearing. I also thank the adult children, Mr Salem Mubarak and Miss Noor Mubarak, who have appeared in person and attended during parts of the hearing (and who are both present as I speak today), for their courtesy and intelligent clarity. I temper my thanks to the advocates with the qualification that although there is much detail in this case, I do feel that at times there has been over concentration on detail and reliance on make-weight points. There is a real risk in this case of losing sight of the woods for the trees.
2. This case has now become very well known and continuous litigation of great intensity now spans over seven years. It has been before at least thirty different judges in England. There are, in the present bundle, no less than twenty transcribed judgments (and there have been others). Five of those judgments are now reported, or about to be reported, in law reports.
3. To date, the husband has incurred costs and disbursements (including VAT) of £2,030,000. Some of those costs relate to issues concerning the children. Of that total, £1,580,000 has been incurred since the conclusion of the main hearing of ancillary relief in December 1999; and of that £1,580,000 he has paid £1,355,000 and owes £225,000.
4. The wife has incurred total costs, in England, of £1,968,000. In her case, the amount that has been incurred since the conclusion of the final hearing is less clear since I do not know what portion of the costs of Sears Tooth, who acted around that time, precedes, and what portion follows the final hearing. But at least £1,250,000 is since the final hearing.
5. In her case, the amount already paid and the amount still owed is also shrouded in confusion. She apparently owed altogether about £777,970 to her first three solicitors. They collectively obtained and sold her jewellery and the proceeds were credited to the costs, but no-one now present before me seems to know how much those proceeds were and what she may still owe those firms. What is certain is that she owes her present solicitors, Messrs Dean and Dean, over one million pounds, having so far paid them precisely £14,960.
6. I record the deeply regrettable fact that this morning I have been told that the patience, or ability, of Dean and Dean to further extend credit to Mrs Mubarak is now exhausted and that, at the conclusion of this hearing today, they must, and will, withdraw from the case. I have the utmost sympathy with and understanding of their position It illustrates the terrible consequence of the war that has taken place in this case.
7. In addition to these sums, the wife has also incurred a further £19,260 litigating in Bermuda, in her attempts to enforce the order there. So a grand total of the costs incurred by the wife is at least £1,987,000.
8. In the case of both the husband and the wife, the figures were based on an estimate of five days in court for the present hearing. It has actually taken nine days (including today) so the final bills will already actually be higher.
9. There is an estimated net balance of costs owed by the husband to the wife of the order of £1,500,000 (subject to detailed assessment). That figure, of course, does not take account of any costs orders I may make at the conclusion of this hearing.
10. Now, the four children of the family are parties and the estimated costs of the younger, minor, children are already £30,750, if assessed at public funding rates; or £54,380, if assessed on a privately funded basis, following any order for costs made against the other parties. At the moment, the costs of the minor children are funded by the English tax payer. That is exquisitely ironical since the parties, although resident here for tax purposes and liable to English taxation, manage to avoid paying any tax at all; a matter which the husband told me about with an evident sense of satisfaction.
11. A current total for all the costs of the husband and the wife and the children is thus, now, at or close to £4,100,000. Other entities, including the family trust and some of the companies owned by it, have also participated from time to time in the struggle and have incurred costs, but I do not know how much. I have not counted the total amount of court time, or days in court which this case has now occupied. But it must be very great and it is disproportionate to the importance of any one family and is unfair to other, often more needy, court users, such as families whose children (unlike these) have been removed from them.
12. In October 2004, in the Court of Appeal, Lord Justice Thorpe said, now at bundle C page 185:-

"It is in reality a very simple case in which the wife has first established her right to financial independence, and second, established the quantification of that right in a sum approaching five million pounds. That is the reality. It is a reality which has manifestly not been accepted by the respondent, and it is manifest that he has been prepared to go to any lengths since in order to avoid the reality."

13. Lord Justice Thorpe described the, then, overall costs bill (then 2.25 million pounds, now nearly double that amount) as "a perfectly shocking figure"; and said, at bundle C, page 186, that the parties had engaged on litigation which he could "only characterise as insane".
14. I do not believe that "the reality" to which Lord Justice Thorpe referred is any different now from then. I believe that the ruthless determination of the husband "to go to any lengths to avoid the reality" has persisted. And if the words "perfectly shocking" and "insane" were appropriate and justifiable in October 2004, I can only wonder at the appropriate description, two years, a further £1,850,000 and a large number of court days later. All these considerations may have relevance when, and if, I have to exercise discretions, but I stress that they do not in any way impact upon, or affect my consideration of the several points of law which I have to determine.

The background facts

15. I will summarise the essential factual background as briefly as I can. Fuller details may be found in earlier judgments, and in particular, that of Mr Justice Bodey in December 1999. Although there was a decree absolute as long ago as 10 December 1999, I will, for convenience, call Mr Iqbal Mubarik "the husband", and Mrs Aaliya Mubarak "the wife". They were both brought up in prosperous families in the Kashmir area of India, and each remains a citizen of India and India alone. The husband was born in November 1958 and is now aged 48. The wife was born in December 1959 and is now aged 47. They first met in 1977 and theirs was a love affair and their marriage one of their own choosing. Not only was it not arranged by their parents, but the wife's family, at least, strongly disapproved of it. The husband's own father was a successful jeweller and the husband followed in the same business or trade. In 1980 he moved to Kuwait and set up a jewellery business there. They married in August 1983. He was 24, she was 23. She moved to live with him in Kuwait. Their eldest child, Salem was born in July 1984. He is now 22. In 1986 the husband set up a further business manufacturing and trading in jewellery in Hong Kong, and the young family moved to live there for the next eleven years. In 1988 a company owned by the husband, Checkers Ltd, bought a house in Hong Kong which became the matrimonial home. Noor was born in July 1988 and is now 18 and thus adult. Osman was born on 19 October 1991 and is now aged 15. The business continued to expand. In 1993 the husband formed another company which opened a shop in Paris; and in September 1993 he decided also to trade from a shop in London. He incorporated a British company, Dianoor Jewels Ltd, which acquired the lease of premises in New Bond Street. Thereafter, the husband (necessarily and quite appropriately) spent a considerable amount of time staying in London and attending to his new business here. The wife and children remained in Hong Kong. In March 1994 the husband incorporated a holding company, 21^st Century Holdings Ltd, in Bermuda. This came to, and still does, own all the shares in the relevant subsidiary companies of the business. There is one exception, of relevance to some of the discretionary issues I may have to decide, that a business partner owns 35% of the shares in the Paris company. The initial shareholders in 21^st Century Holdings were the husband as to about 98% and the wife the remaining about 2%.
16. The wife says that there was some deterioration in the marriage from as early as late 1994. The husband disagrees, but after hearing oral evidence from each of them on this topic I see no reason to revise the finding of Mr Justice Bodey in December 1999 (now at bundle C page 8) when he accepted the wife's case that there was deterioration, first, in 1994. The wife told me, and I accept, that in about July 1996 she passed through London after visiting her brother in America. She found her husband in what she described as "a disturbed state". When he returned to Hong Kong in the autumn of 1996 (in September or October) she asked him if there was another woman. He said that there was, although he did not admit to any adultery, and indeed, I do not know whether at that stage he had committed adultery. But the husband himself has said in evidence before me that he was indeed attracted to, and, he felt, in love with, this lady, whom I will call KS and who was then an employee of the company in London, and that he had been in a relationship with her for several months before he admitted it to the wife. I am satisfied, therefore, that this important relationship (whether or not then adulterous) was current throughout the summer of 1996. The wife said that by December 1996 "things had improved in the marriage" and she thought the husband was "really making an effort to make it work". He gave her a special birthday party in December 1996.
17. It was also during 1996 that the parties considered moving from Hong Kong to London to live. There were several reasons for this. It would enable them to be together more as a family, since by then the main focus of the husband's work was here. They liked the lifestyle in London, and they felt that education in England was superior to that in Hong Kong. In October 1996 the husband bought a flat (not large enough as a family home) in Chelsea, and instructed estate agents to start looking for a home here. The move was planned and consensual. In the first week of July 1997 the wife and children left Hong Kong and moved for a summer holiday with the extended families in Kashmir. The husband was not there. In mid July 1997, as part of an overall scheme devised by a firm of solicitors, Paisner & Co, the husband incorporated Dianoor Jewels International, as a holding company beneath 21^st Century Holdings.
18. On 5 August 1997 there was a capital reduction by 21^st Century Holdings Ltd whereby most of the shares of both the husband and the wife were bought in by that company and loan accounts established whereby (and continuing to date) 21^st Century Holdings owed and owes substantial sums to each of the husband and the wife. Mr Charles Howard QC makes the point that as part of this process the husband's share holding in 21^st Century actually diminished from about 98% to 90% and the wife's increased from about 2% to about 10%, which he submits is not the mark of a man then bent on deceiving or removing assets from the reach of his wife.
19. In late August 1997 the husband met up with the wife and children and they travelled as a family to London, arriving on Friday 29 August 1997. No home had been, or ever was, bought, and they moved into rented accommodation in Onslow Square, South Kensington.
20. On or before Tuesday, 2 September 1997 – i.e. within days of their arrival here – both parties signed a deed, establishing in Jersey The IMK Family Trust ("the trust"). I say "on or before" because, surprisingly, each party claims not actually to remember where they signed this deed. And if they cannot remember where they signed it, they cannot realistically remember precisely when they signed it. It, and certain associated documents, bear, in several places, the date 2 September 1997 in different and unidentified handwriting (suggested to be that of someone from Paisners). It seems to me that the date actually inserted may not necessarily be the date when the husband and wife actually signed. It may be a separate date when the professional trustees, the Craven Trust Company Ltd signed; or a date inserted by Paisners, so as to make all the transactions co-terminous and to bear a date appropriate to the overall scheme of setting up the trust.
21. At all events, the wife signed very soon after her arrival here. She had no legal advice and no effective opportunity to study the quite lengthy documents herself. By this and various simultaneous transactions the husband and wife transferred into the trust all their remaining shares in 21^st Century Holdings. By this act, ownership of the shares in the whole of the husband's business "empire" world-wide passed to the trust. At that date the range of discretionary beneficiaries were the husband, the wife and their children, born and unborn, and any remoter issue of the settlors (i.e. grandchildren, of whom none have yet been born). I will refer later to some of the terms of the trust and the associated letter of wishes.
22. On 11 December 1997 the wife gave birth to their fourth child, Hamza. He is now aged 9. Sadly, the marriage had now again become very unhappy. The wife says, and I accept, that in November 1997 – i.e. shortly before the birth of Hamza – their "problems really came up again". The husband informed her that he was still seeing KS, which the wife thought had ended. According to the wife, the husband told her that he did not know who he loved. He said he was turning 40 and did not know what to do. There were huge rows. Family members travelled from India to intercede; but on 20 March 1998 the husband left the home and they have never since cohabited. Ten days later, on 30 March 1998, the husband first consulted a very well known matrimonial solicitor, Ms Gill Doran of Withers, about matrimonial matters. But at that stage Withers did not write any letter, or take any other action directed to the wife or anyone on her behalf; and of course, I have absolutely no idea as to the content of any instructions to, or advice from, Ms Doran.
23. Pursuant to a power in clause 10 of the trust, the husband signed an instrument of exclusion dated 20 April 1998 which revocably declared that the wife shall be from that date an excluded beneficiary from the trust "and thus (subject to any later revocation…) shall not be capable of benefiting directly or indirectly from the capital or income of the trust fund in any way whatsoever". On or about the same date, the instrument of exclusion was received by the trustees in Jersey and so, pursuant to clause 10 (a) (iii) of the trust, had "effect". However, no notice, whether formal or informal, was given to the wife or anyone on her behalf at that time. So far as I have been able to ascertain, she and the solicitors whom she later instructed remained blissfully unaware of her exclusion from the trust to which she had contributed 10% of the shares until a letter dated 31 July 1998 from Ms Gill Doran of Withers. This letter referred in a phrase to her exclusion when it said, rather in passing,

"…Mrs Mubarak was recently removed as a potential beneficiary…"

24. The husband followed up the instrument of exclusion with a letter to the trustees, which is undated but is said to have been sent in July 1998, and which "clarified" that any reference to conferring a benefit on the wife in the earlier letter of wishes "should be deleted" and that in the event of his death, the trust assets should be held for the benefit of the children "and not divided between [the wife] and the children as originally stated".
25. The wife presented a first petition for divorce on 29 July 1998, pleading that she is domiciled in England and Wales. The petition included prayers in standard form for all forms of ancillary relief, including "a property adjustment order". I interpose that on 10 November 1998 she presented a fresh petition relying on habitual residence and again praying for all forms of ancillary relief.
26. Meanwhile, Withers had written their letter of 31 July 1998 in which they said they could not give any indication, however broad brush, of what the husband was worth, until Arthur Anderson had "completed a world wide audit". The letter continued with a paragraph that has since been referred to again and again during the course of these proceedings and the present application:-

"Mr Mubarak is one of the beneficiaries of the IMK Family Trust ("the trust") based in Jersey. The other potential beneficiaries are the children, Mrs Mubarak was recently removed as a potential beneficiary. For the purposes of these proceedings, our client accepts that the assets of the trust will be treated as being his, subject as your client knows, to 45% of the business interests being held beneficially for Mr Mubarak's brother-in- law, Mohamed Hussain Wani. The intention in creating the trust was to hold all of the business interests. Some of the businesses are now held within the umbrella (as appears below), others have not yet been transferred."

27. Mr Justice Bodey later held in December 1999 (now at bundle C pages 38 and 39) that he was satisfied that Mr Wani (who is the husband's brother-in-law) did not, and does not, have any interest in the businesses and/or in the husband's assets and that he rejected the husband's and Mr Wani's case in this respect. Further, he said at bundle C page 39:-

"More than that, I am driven to the conclusion that the assertion of a partnership and asset sharing arrangement was used as a device in these proceedings, which involved the husband and Mr Wani……in swearing affidavits which were untrue, the purpose being to impede the establishment or enforcement of the wife's rightful financial claims."

However, Mr Justice Bodey reminded himself that "a person may act foolishly by trying to bolster falsely an otherwise true case" and so the fact of the lies (and indeed creation in 1998 of a bogus document purporting to date from 1996) "does not necessarily mean that other aspects of the husband's evidence are not reliable." I, likewise, remind and caution myself of that proposition and will continue to remind myself of it and keep it firmly in mind.

28. Returning to the paragraph in Withers' letter of 31 July 1998, I note that it says that the husband accepts that the assets of the trust "will" be treated as being his; which is different from saying that he accepts that they "should" be so treated. Strictly speaking, it was a fatalistic acceptance, rather than an unequivocal concession.
29. Before leaving that letter, it is, with the hindsight of eight years, supremely ironical that Withers ended it by saying:-

"Why your client [viz the wife] has decided to take such an aggressive approach to this litigation is beyond us. Our client [viz the husband] has behaved perfectly properly and openly throughout. It would be appreciated if your client could do likewise".

Unbeknown of course to Ms Doran, the husband had already prepared the bogus document with Mr Wani, and Ms Doran could not foresee all that was to come.

30. The main hearing of ancillary relief began before Mr Justice Bodey on Monday 29 November 1999. By then, the wife's solicitors were Messrs Sears Tooth and her barristers Mr Martin Pointer QC and Mr Justin Warshaw, who collectively represented a team of very great experience and distinction in this field. The judgment of Mr Justice Bodey describes why and in what circumstances on Thursday 2 December the husband withdrew his instructions from his equally prestigious solicitors and counsel, and personally withdrew from the case and the court room. Before they withdrew, the husband's counsel, Miss Florence Baron QC, had placed detailed written submissions before the court. In her text and schedules, Miss Baron (following the approach in Withers' letter) clearly treated all the trust assets as being, in reality, personal assets of the husband which she described as being "now held through the usual tax efficient off-shore structure". After the husband's team withdrew, the hearing continued.
31. On Friday 10 December 1999 Mr Justice Bodey gave his judgment. There was clearly a further hearing in the court room on Monday 13 December 1999. No official transcript exists of the course of that hearing on the Monday except the judgment itself, and apparently it is no longer possible to obtain one as (to my surprise) even the master tape no longer exists. It seems likely, however, that the formal order had already been drafted, at least in part, by then. On the Monday, Mr Justice Bodey gave a further judgment (of which an official transcript does exist) on certain further issues which were raised, in particular an application for an order for the delivery up of, and sale of, the jewellery stock of the businesses, and that is reflected in paragraphs 15 to 21 of the final order.
32. I do not know whether those paragraphs (and indeed paragraph 13, which deals with costs) were actually drafted after Mr Justice Bodey gave judgment on those issues on Monday 13 December or had been drafted in advance in the hope of persuading the judge to make the requested orders. But at all events, the order itself was sealed the same day, namely 13 December 1999, so if not drafted beforehand, it was drafted very rapidly after judgment on the Monday. I will, unless the context otherwise requires, refer to it simply as the order, or the principal order. I mention that although sealed on Monday 13 December 1999, the order bears the typed date, 10 December 1999. That cannot be right, since much of the order (namely paragraphs 13 and 15 to 22) was only the subject of adjudication upon the following Monday, 13 December. Insofar as anything may turn on it, I propose to treat the whole order as having been made on the Monday, 13 December 1999.
33. The order required the husband to pay to the wife a lump sum of £4,875,000. The order contemplated that the sum must be paid forthwith, or at any rate, within only a matter of hours, as explained by Mr Justice Bodey in his judgment on 13 December at internal page 2, line 18, to page 3, line 24 (now bundle C pages 65 c - d).
34. In the seven years which have now elapsed since 13 December 1999, the husband has not voluntarily paid one single penny of that lump sum. Under charging orders upon two flats owned by the husband, later made pursuant to paragraph 14 of the principle order, the wife has successfully obtained £266,000, which must be credited to the lump sum (see the language at paragraph 4 of the later order of 20 January 2000, now at bundle A page 60, and paragraph 1 of the order of 14 June 2000, now at bundle A page 122, which each refer in terms to the proceeds of the sales being paid "in partial satisfaction of the lump sum"). So, the husband still owes £4,609,000 of the lump sum. The order also required the husband to make periodical payments both generally to the wife for the benefit of the children, after payment of the lump sum; and also, specifically for the benefit of the wife herself, until payment of the lump sum. The husband has made some payments under the order for periodical payments, but, at the start of the hearing before me last month, there were arrears to that date of £493,519 (which will already have increased and will continue to increase at the rate of £14,733 per month, less anything he may pay). So, the total indebtedness to date is £5,117,252 namely, the balance of the lump sum of £4,609,000 plus arrears of periodical payments of £508,252. During this judgment I may, for shorthand, refer to the husband owing the wife, or the debt as being, 5.1 million pounds, but I do not overlook, and in any order it must be expressed as being, the full and correct figure. In addition, the husband owes the wife the net balance of costs which, as I have said, is estimated as now being of the order of 1.5 million pounds (subject to assessment) before provision as to liability for the costs of the present applications and hearing. So, altogether, he now owes her around 6.6 million pounds.
35. Between December 1999 and now, there has been a long and relentless history of attempts by the wife, both here and abroad, to enforce her order. Sears Tooth ceased to act in late December 2000. Upon many applications since then, she has acted in person, having exhausted any funds of her own. She has not always acted wisely. Mistakes have been made, not only by her and her advisors, but indeed by Mr Justice Bodey. On 13 December 1999 itself, Mr Justice Bodey said there was "no difficulty" in "piercing the corporate veil", as I shall describe later. In October 2000, he realised he had been wrong to do so, and discharged his previous order (viz paragraph 15 of the principal order). In October 2000 Mr Justice Bodey made a suspended order for the committal of the husband to prison, which was later set aside by the Court of Appeal because of procedural errors. So, orders for costs have been made in favour of the husband and against the wife. There has, sadly, been litigation about the children, the father's contact and his holidays abroad with them. Often, the father, rather than the mother, has been successful. So Mr Charles Howard QC says the fault is not all on the side of the husband, and that it is unfair to attribute all the "insanity" and "shock" at the level of costs to the husband alone. I do not accept that submission. Whatever mistakes the wife or her advisors may, from time to time, have made, it has all only been necessitated because of the total failure of the husband to obey or even attempt to obey the lump sum order and much of the order for periodical payments. The wife may have thrashed around, but it has all been in her desperate attempt to enforce payment. I have not informed myself at all as to the disputes about the children, and I am well aware in particular that in his judgment of 17 June 2003, connected with the children, Mr Justice Singer made many comments critical of the wife, as helpfully summarised by Mr Charles Howard QC and Mr Richard Harrison at paragraphs 13 and 14 of their written submissions for the present hearing. But I have little doubt that, without putting it any higher, much which the wife has said or done in relation to the children has been tinged by the failure to pay the money and the depressing effect that has had upon the wife's and the children's standard of living. Further, the position of the now adult children, Salem and Noor, in the present hearing, and the content of their questions to their father, left me in no doubt that they now have massive bitterness at their father's total failure to pay and its effect both on their mother and on themselves. That bitterness must pervade the whole family.

The present applications

36. The present hearing entirely concerns yet further attempts to procure payment. The applications essentially before me, which were all issued by the wife, are as follows:-

(1) An application issued in March 2005 pursuant to section 37 of the Matrimonial Causes Act 1973 or section 423 of the Insolvency Act 1986 to set aside the transfer of the husband's shares in 21^st Century into the IMK Trust in September 1997 (see paragraph 4 of the notice of application now at bundle A page 11(b) ).

(2) An application issued in March 2005 pursuant to section 37 of the Matrimonial Causes Act 1973 to set aside the exclusion of the wife from the trust by the instrument of exclusion dated 20 April 1998 (see paragraph 1 of the notice now at bundle A page 11(a) ).

(3) An application issued in March 2005 for an order under section 24 (1) (c) of the Matrimonial Causes Act 1973 varying the terms of the post-nuptial settlement constituted by the IMK Trust, so as to require the trustees to pay to the wife an amount equal to the amounts now owed by the husband to the wife (see notice of intention to proceed dated 7 March 2005 now at bundle A page 11, and paragraph 2 of the notice of application now at bundle A page 11 (a) ).

(4) An application issued on 6 November 2006 for an order pursuant to RSC order 20, rule 11 (the "slip rule") correcting the principal order so that (as the wife contends) it accords with the judgments of Mr Justice Bodey of 10 and 13 December 1999 and his intention on 13 December 1999 when I treat the order as being made (see notice of application now at bundle A page 41).

There are certain further, essentially consequential applications, but they do not add to the substance of the matter. When, for convenience, I later refer to applications 1 or 2 or as the case may be, it is a reference to the above numbering and not to the different numbering in Miss Laura Harris's document of 5 December 2006.

37. I make a few preliminary comments about these applications. They are all directed to a single goal: getting the money which the husband has already owed the wife for seven years, plus the escalating arrears of periodical payments and costs. None are aimed at getting a penny more for the wife than he already owes her. They are, however, essentially alternative approaches. Application 1 is directed to removing the husband's shares from the trust and re-instating them to the husband, so that the wife can directly enforce against him and them. It would leave nothing in the trust except the wife's own minority shareholding of relatively low value.
38. Application 3, variation of settlement, assumes that the husband's shares remain in the trust and is effectively directed at the trustees.
39. Application 4, amendment of the principle order under the slip rule, has been issued as a precursor to, and in support of, application 3, to make plain, if it is not currently plain, that the variation of settlement powers are still available to the court and have not already been exhausted by already exercising or dismissing them.
40. Application 2, setting aside the instrument of exclusion, invokes the same jurisdiction and power (section 37 of the Matrimonial Causes act 1973) as application 1, and relates to events prior to the 1999 main hearing and order, but really has relevance in support of application 3, variation of settlement, rather than application 1. If application 1 is successful and the husband's shares removed from the trust, then an order under application 2 is of little use to the wife. However, if she is successful under application 3, then it may be helpful (even if not strictly necessary) that she has also been restored as a beneficiary.
41. Miss Harris suggests that if both applications 1 and 3 fail, then at the very least if the wife is restored as a beneficiary under application 2, the trustees will then be under a duty to consider her position as someone once again within the range of discretionary beneficiaries.
42. I must, and will, consider each application separately and discretely. They invoke different statutory powers, different tests and criteria, and different discretions although there is obviously overlap and certain threads are common to them all.
43. The question next arises as to the order in which I should consider them. All counsel chose to deal first with application 4 (under the slip rule); then 3; then 1; then 2. In the case of Miss Laura Harris, for the wife, she suggested this was the more appropriate order since a variation of the settlement is, in her submission, "less draconian" than setting aside the disposition into it of the husband's shares, which would leave the trust in place but devoid of most of its assets.
44. In the case of each application, two distinct issues fall for consideration. First, whether there is jurisdiction or power to make any such order at all. Secondly, and if so, whether I should exercise a discretion to do so. The first question in each case is, can I make the requested order? If so, the second question is, should I make the order?
45. I agree with Mr David Williams, counsel for the minor children, that if there is power to make orders on two or more of the applications, then to some extent the discretions whether or not to do so need to be weighed simultaneously and in the round. A discretionary choice would need to be made whether finally to proceed under application 1 (setting aside the disposition of the shares) or application 3 (varying the post-nuptial settlement). It thus seems to me more logical and more transparent to consider, first, in relation to each of the applications, the issue of power or jurisdiction; and to do so in the chronological order of events. Having decided what, if any, powers are open to me on the various applications, I can then consider whether and how I should exercise them.

Application 1 - to set aside the transfer of the husband's shares into the trust

46. This application has been made in the alternative under section 37 of the Matrimonial Causes Act 1973 and section 423 of the Insolvency Act 1986. section 37 applies only in cases where "proceedings for financial relief [as defined in section 37 (1)] are brought by one person against another". This is such a case. Section 423 is of much more general application. The pre-requisite for an order under section 423 is that a transaction was entered into "for the purpose" as then defined in paragraphs (a) or (b) of sub section (3). Although the statutory language in section 423 differs from that in Section 37 and employs the word "purpose" rather than "intention", no counsel has been able to identify to me any respect in which (on the facts and in the circumstances as they now are of the present case) section 423 enlarges any remedy to the wife, or could in this case lead me to making an order, the substance and effect of which is different to any order I may make under section 37.
47. In paragraphs 54 to 56 of his judgment in Trowbridge and Trowbridge [2003] 2 FLR 231 Mr David Richards QC treated the words "purpose" and "intention" and the two statutory tests as being (on the facts of that, as of this, case) substantially to the same effect; and I agree with him. In short, so far as I can discern the application before me under section 423 of the Insolvency Act adds absolutely nothing to the case of the wife; and this being a matrimonial case firmly in the context of "financial relief", I propose to ignore the Insolvency Act and proceed only under the Matrimonial Causes Act 1973.
48. It is common ground that (i) the transfer of the husband's shares into the trust amounted to a "disposition" within the meaning of, and for the purposes of, section 37; and (ii) as the application to set aside was only issued in March 2005, i.e. many more than three years after the date of the disposition, section 37 (5) and the presumption therein does not apply in this case. Further, this is clearly a case which falls, if at all, within section 37 (2) (c). Miss Harris faintly suggested that it should also be treated as falling within section 37 (2) (b) in that, if she is successful on her argument that the court still has power to make an order under section 24(1) (c) varying the post-nuptial settlement, then the case remains in the paragraph (b) territory before all financial relief has yet been granted and the tail piece to section 37 (2) is satisfied since the proceedings "for the financial relief in question" [viz variation of post-nuptial settlement] are still current. But if she is successful on that application, she will not wish or need to obtain an order under section 37 at all. So, realistically, the section 37 application in relation to the transfer of the shares falls to be considered under paragraph (c) alone. The words "whether before or after the commencement of those proceedings" in section 37(4) make plain that an application falling within section 37 (c) (viz. where an order for financial relief has already been obtained) may still at that stage be made in relation to a disposition which itself preceded the proceedings.
49. Mr Howard QC, for the husband, suggested that the transfer of the shares was actually made "for valuable consideration" and was outside the scope of a reviewable disposition altogether by virtue of section 37 (4) (there being no suggestion or question of bad faith on the part of the professional trustees in Jersey). His argument was that the transfer into the trust in September 1997 was part of a larger overall transaction which included the earlier share reduction in August 1997 and the creation of a loan by 21^st Century Holdings Ltd to the husband, and that in some way that larger transaction involved valuable consideration moving from the company to the husband. I reject the argument. The only disposition under attack is the transfer of the shares into the trust. There is no attack upon any of the earlier transactions as between the husband and 21^st Century Holdings. The stock transfer forms transferring the shares (now at bundle 5 D (ii) pages 243 and 244) clearly state that the "consideration money" was "nil". The simultaneous letter of addition, also dated 2 September 1997, now at bundle H page 334, says in terms:-

"This is to record that I have today transferred to you…[the shares]…by way of gift as an addition to the trust fund…"

No other consideration was given or received and patently the transfer was a gift. The exception within section 37 (4) does not apply. So, the transfer of the shares was, and is, "a reviewable disposition".

50. With those preliminary considerations, I can now limit the citation of section 37 to the following. Section 37 (1) defines references to "defeating a person's claim for financial relief" as being "a reference to preventing financial relief from being granted to that person…or reducing the amount of any financial relief which might be so granted, or frustrating or impeding the enforcement of any order which might be or has been made…."
51. I will read section 37 (2) (c) as if the reference back to "that intention" in paragraph (a) appeared directly in paragraph (c). Read in that way, it provides as follows:-

"Where proceedings for financial relief are brought by one person against another, the court may, on the application of the first mentioned person…

(c) if it is satisfied, in a case where an order [for financial relief] has been obtained…by the applicant against the other party, that the other party has, with [the intention of defeating the claim for financial relief] made a reviewable disposition, make an order setting aside the disposition; …"

52. All the jurisdictional requirements for an order under section 37 (2) (c) are thus satisfied if, but only if, I am "satisfied" that at the time he made the disposition, viz on or shortly before 2 September 1997, the husband made it with the intention of preventing financial relief being granted to the wife, or frustrating or impeding the enforcement of any order.
53. I have been referred to considerable authority which makes clear that:

(i) What matters is subjective or actual intention;

(ii) It must have been the intention at the time or date of the disposition;

(iii) There may be more than one intention and the required intention for section 37 need not have been the sole, or even the "dominant" intention, but it must have been a "substantial" part of the intention even if a "subsidiary" one (the word subsidiary being used by Lord Justice Nourse in Kemmis at page 1331).

54. These propositions are clearly established in Kemmis –v- Kemmis [1988] 1WLR 1307. The later case of IRC –v- Hashmi [2002] EWCA Civ 981 concerned the application of section 423 of the Insolvency Act 1986 and clarified that under that section, too, a substantial, though not the dominant, purpose suffices. It is, I think, helpful and relevant briefly to refer to paragraphs 23 and 25 of the judgment of Lady Justice Arden in Hashmi where she distinguishes purpose and intention from "merely a consequence" or "by product of" or "simply a result of" the transaction; and the important comment at paragraph 23 that:-

"… it will often be the case that the motive to defeat creditors [and here one might interpolate, to defeat a possible claim by the wife] and the motive to secure family protection [and here one might interpolate, to avoid tax] will co-exist in such a way that even the transferor himself may be unable to say what was uppermost in his mind".

In the same case, Lord Justice Laws said at paragraph 32 that:-

"…it is easy to envisage cases where more than one purpose is at hand between whose weight or influence it is on the evidence impossible to distinguish in practical terms."

I bear those two passages firmly in mind and the possibility that the husband had two intentions, whose weight or influence cannot be distinguished or measured. Nevertheless, as Lord Justice Laws said at paragraph 33, I must be alert to see that I am "satisfied that the statutory purpose [here intention] has in truth substantially motivated the donor".

There is, however, a very important reminder in paragraphs 37 and 38 of the judgment of Lord Justice Simon Brown in Hashmi, that the fact that the gift or disposition would have been made anyway with an appropriate intention, e.g to avoid tax, does not preclude on the facts that it was also made with an intention to defeat the claim. Lord Justice Simon Brown said that a gift should not "be saved merely because the debtor would in any event have made it to benefit the donee".

55. Clearly, the question whether the husband had the required intention is a question of fact. I can clearly take into account subsequent behaviour and events and take into account that a possible consequence of his act would indeed be to defeat (as defined in section 37(1)) the wife's claim. But these factors are relevant if, and insofar as, I can relate them to his actual intention in September 1997; and if, and insofar as, they support or reinforce that at that date he did have the requisite intention.
56. Section 37(2) (c) requires me to be "satisfied". The same authorities clearly establish that the standard is the balance of probability and I do not regard the comment of Lord Justice Nourse under the heading (2) on page 1331 of Kemmis as in any way heightening that standard. The comment is technically obiter since he then rejected the underlying submission of counsel, and is not reflected in the other judgments in that case or in any other authority to which I have been referred.
57. On the same day that they signed the deed creating the trust, the parties jointly signed a letter of wishes, now at bundle 5 D (ii) page 290, which included the following:-

"Our general wish is that you should look to Iqbal Mubarak on all aspects concerning the trust during his lifetime. This includes matters of administration and also the distribution (or accumulation) of income and capital to either of us".

It continued later:-

"After Iqbal Mubarak's death…we would like you to hold the trust assets equally for the benefit of Aaliya Mubarak and our children…"

Standing alone, there is nothing unexpected or inappropriate about that letter of wishes. The business and the companies had been established by, and prospered under, the husband. All business and financial matters had always been left to him, and the wife trusted him completely. So, it was no more than a continuation of the previous pattern that the trustees should look to Iqbal Mubarak on all aspects during his lifetime. The letter expressed appropriate provision for equal division between the wife and children on his death.

58. However, the trust itself reserved very wide powers indeed to the husband, but not to the wife and co settlor. He and he alone in his lifetime could appoint a protector and release powers to the protector. Subject to any power so released, the husband alone in his lifetime could add beneficiaries under clause 9 or, critically, exclude a beneficiary under clause 10. It was that power under clause 10 which he exercised in April 1998 by the instrument of exclusion. He later, undated, but apparently in July 1998, wrote a "Clarification of the letter of wishes dated 2 September 1997" (now at bundle 5D (ii) page 292) which said that as the wife was now excluded from benefiting under the trust:-

"It follows that any reference in the letter of wishes dated 2 September 1997 which confers a benefit on [the wife] should be deleted. In particular, in the event of my death, the trust assets should be held for the benefit of my children and not divided between [the wife] and the children as originally stated."

The wife says at paragraph 9 of her statement dated 11 April 2005, now at bundle 4D (ii) page 306:-

"The only beneficiaries under the trust deed were the respondent and I and our children. I cannot understand why the trust deed gave the respondent the right to exclude any of the beneficiaries. I cannot imagine any circumstances in which the respondent would seek to cut our children off financially. Whilst I am loathe to believe it, the only other feasible reason for this would be that the respondent planned my exclusion from the trust from the beginning…" (my emphasis).

In her oral evidence, the wife said with both force and simplicity:-

"I am saying 100% that despite what the September letter of wishes said, he intended deep down to remove me when he set up the trust in September 1997."

59. I perfectly understand and respect how the wife, who has faced this terrible struggle since 1999, must most strongly and sincerely believe that. And of course, she is able to say that she, unlike me, knows very well the character and personality of her former husband; although she did also make plain that she had always trusted her husband in all financial matters and had never, until the separation and its aftermath, had cause to think that trust misplaced.
60. There is, however, very considerable material showing the genesis of the trust, and in particular a series of instructions to, and notes of advice in conference from, specialist tax counsel, Mr David Ewart. This material is now in bundle 5D (ii) pages 204 to 231. I do not propose to make detailed reference to it although it has been much scrutinised and discussed during the hearing and argument. The letter from Simon Phelps of Paisner & Co dated 9 November 1998, now at pages 202 to 203 states that:-

"The suggestion for using a trust originally came from me some time in 1995 when we were looking at succession aspects in the event of Mr Mubarak's death. However the idea of using a trust assumed greater momentum in the autumn of 1996 in view of the increasing amount of time being spent by Mr Mubarak in the UK and the consequent tax risks…"

This, and the later documents, satisfy me that at any rate in all his expressed dealings with Mr Phelps and later with Mr Ewart, the husband was initially concerned to provide for orderly succession in the event of his unexpected death (he was a very frequent traveller); and that later there was a legitimate and obvious concern to avoid the growing risk of liability to UK taxation. By July 1996 (as recorded in the attendance note of 31 July 1996 now at page 204) there was the thought of the whole family moving here to live, which would definitely make him resident here for tax purposes. Everything about all the documents points to, and is consistent with, the twin objectives alone of an orderly succession on death and avoiding UK taxation. But the wife and Miss Harris say that if, subjectively, he also had an intention to defeat the wife's claims, or as it was put, to create an "insurance" against possible separation and divorce, then of course he would be unlikely to have mentioned that to his solicitor or barrister. So they say there is no inconsistency between all that is in the documents and a concealed but real additional intention.

61. The husband very strongly denies this and says that the whole position was as revealed and suggested by the documents. The wife points to the fact that he was already, in 1996 and 1997, in his relationship with KS; that he had enquired of the wife whether she would agree to his taking a second wife (their personal Muslim law in India permitted him to do so) and she had said no; and that he must therefore have at least begun to wonder whether they may be heading for separation and divorce. She points to the very wide powers reserved to him under the deed and to the concern of Mr Ewart (see the telephone reaction of Mr Ewart as recorded at the outset of the note of the conference on 8 August 1997, now at page 230) that the width of those powers might imperil the tax efficacy of the proposed trust. Against that, however, the same note indicates that Mr Phelps had clearly taken instructions from Mr Mubarak and that:-

"Those powers could, however, now be released by IM if counsel thought it advisable to do so".

The note shows that the considered opinion of Mr Ewart was that although the width of the powers was "somewhat unusual" and "verged on dispositive powers" there was, on certain bases recorded in the note, " no reason to amend or exclude them". The powers were described in the note as:-

"merely a comfort mechanism for IM and with no particular issue or situation in mind".

Miss Harris asks the rhetorical question: comfort from whom or what?

62. Miss Harris appropriately and forcefully points to the short period, six months, between execution of the trust and the husband leaving; and the period of only seven months between execution of the trust and the instrument of exclusion, and she suggests that it is simply too much of a coincidence to suggest there was no intention already in September 1997 contingently to defeat the wife's claims if indeed the marriage were to break down. She says that that conclusion can only be fortified by the subsequent ruthlessness of the husband and his determination that the wife should not have a penny, all of which Miss Harris submitted is part of "a continuum…of a totally devious and thoroughly dishonest and ruthless man who is prepared to take any steps at any expense to prevent the wife from receiving her due". However, Miss Harris has not been able to point to any contemporary note, record, document or comment of any kind up to and indeed in the initial period after execution of the trust which gives any clue that the husband had the requisite intention of defeating the wife's claim as any part of his intention or thought processes.
63. Mr David Williams, on behalf of the minor beneficiaries, supported the wife and Miss Harris on this issue and made submissions substantially to the same effect.
64. Despite these submissions I am not at all "satisfied" on a balance of probabilities that up to, and on, the date on which the husband set up and transferred his shares into the trust, he had, as one of his intentions, the intention required by section 37. My reasoning is as follows. I regard the current evidence of the husband himself as to his intention as carrying no positive weight. His credit as a witness in these proceedings is very largely destroyed by: (i) the production and reliance upon the bogus document with Mr Wani (in saying that, I continue to remind myself of the Lucas direction); (ii) the persistence of the husband in claiming that he did not have, and does not have, the means which Mr Justice Bodey clearly found him to have; (iii) his conduct generally since December 1999; and (iv) the obviously self serving advantage of his denial that he had the intention alleged.
65. If this was a case to which the presumption in section 37 (5) applied, the relevant "consequence" would be "impeding the enforcement of any order" (viz the lump sum order) and the evidence of the husband himself could not rebut it. But the presumption does not apply. The fact is that the husband plainly did have legitimate and appropriate intentions, namely orderly succession and, very critically, avoidance of tax, which are capable of fully and wholly explaining and justifying the setting up of the trust and the transfer of the shares. All the available documentary evidence supports those intentions and gives no hint of any other. The fact that when the marriage did later break down he took advantage of the trust to impede enforcement (if nothing else) of the wife's claims, may help justify, but certainly does not require, an inference that he had had that intention all along; nor, in my view, does the width of the powers reserved to him. He is a proud man who had previously, both within the marriage and in the world at large, had complete autonomy over his businesses and all financial matters. He now had to part with his assets into a trust, not through any altruism, but in order to achieve his motives of orderly succession and avoiding tax. It seems to me entirely explicable that he still wished to retain as much autonomy and control as he could, consistent with achieving those motives. The note of the conference on 8 August 1997 precisely bears that out. The "comfort mechanism" need not have involved "comfort" from the wife, or from the impact of separation and divorce, but simply the "comfort" that he was retaining as much as possible of his previous autonomy.
66. I remind myself again of the observations of Arden, Laws and Simon Brown, LJJ in Hashmi, which I have quoted, and in particular that of Lord Justice Simon Brown, to the effect that even if the disposition would have been made anyway (e.g. for a tax reason) that in no way precludes that there was another intention in play at the same time. But I still do have to be satisfied that such an intention was actually in play. When all that happened up to and including September 1997 is, in my view, fully and completely explicable by succession and tax reasons, I am simply unable to infer or conclude that there was another intention in play in the face of the husband's denial. I place no positive reliance, as such, upon the husband's denial, which could so obviously be self serving, but there is simply nothing in the end to pit against it. If I were to conclude that he did have the second intention of defeating the wife's claim, I would simply be inferring, or presuming, intention from later consequence. I ask myself the simple question: am I satisfied on a simple balance of probability that on or before the disposition in September 1997 the husband had the statutory intention? The plain and firm answer is that I am clear that I am not so satisfied.
67. The application under section 37 to set aside the transfer of the shares into the trust (viz application 1) must therefore fail and will be dismissed. At this point of preparing this judgment I have expressly re-read and re-considered section 423 of the Insolvency Act 1986 to see if it might nevertheless provide a remedy to the wife, where section 37 does not. In my view, it does not. Exactly the same evidence and reasoning leads to me not being satisfied that the husband had a purpose in September 1997, even if a subordinate purpose, of "putting assets beyond the reach" of the wife or "otherwise prejudicing the interests [of the wife] in relation to the claim which she...may make".
68. Before leaving this part of this case, I record that in several places in his judgments Mr Justice Bodey has referred to the trust being set up and the shares transferred into it for tax or fiscal reasons. See judgment of 10 December 1999 at internal page 7 (bundle C8) lines 23 to 26; judgment of 19 January 2006 at internal page 4 (bundle C69) at B; and judgment of 23 October 2005 at internal page 30 (bundle C 124) at line 21. Mr Howard submitted that these comments (they are nowhere expressed to be "findings" although the reference at C69B comes closest to being one) in some way raised an issue estoppel. I do not accept that submission for a moment for two reasons. First, this point was never clearly in issue before Mr Justice Bodey, nor the subject of evidence or detailed argument before him. Second, it is not in dispute that the trust was set up for fiscal reasons. The question is whether there was another reason, or intention, as well, which Mr Justice Bodey did not address. The use of the word "merely" at C69B to C cannot bear the weight that Mr Howard would put upon it. The comments of Mr Justice Bodey on this point have not influenced me in the slightest and I have approached the topic entirely from scratch It happens, however, that my conclusions align with the recorded comments of Mr Justice Bodey.

Application 2 – to set aside the instrument of exclusion

69. This application has been made under section 37 alone. I can deal with it more shortly. It must fail, for the making of the instrument of exclusion, whatever in law it was, was not a "disposition" for the purposes of section 37. By the end of the hearing, Miss Harris came as close to conceding this as it is possible to do without actually conceding it. Mr Williams did, I think, expressly concede it.
70. The trust is a discretionary one. The second schedule to the deed of settlement identifies the range of discretionary beneficiaries as being the settlors, viz the husband and the wife, their present three children, and any other children or remoter issue of their marriage. By clause 10, to which I have already referred, the husband had a power to declare that the person…named or specified in such declaration…shall be wholly or partially excluded from future benefit, or shall cease to be a beneficiary.
71. After the creation of the trust until the date of the instrument of exclusion, and indeed to the present time, the trustees have never actually exercised their discretion to pay income or capital or otherwise to benefit either the wife or the husband, or any other of the beneficiaries (viz the four children). However, by the original letter of wishes the settlors had asked that the trust assets be held equally for the benefit of the wife and the children after the death of the husband. In paragraphs 5 and 9 of an affidavit sworn on 29 June 2004, now at bundle 4 D (ii) page 235, the husband had said that under the terms of that letter of wishes, the wife:-

"only became a guaranteed beneficiary on my death when she is to receive an equal share of the trust assets…";

and "her only absolute right arose on my death." (emphasis added).

Miss Harris thus submits that for so long as the wife was a beneficiary under the trust and that letter of wishes remained unaltered, she had some interest in "property" which was well within the scope of the concept of property where that word appears in Part II of the Matrimonial Causes Act 1973 including in section 37. She refers to a number of cases as to the width of the word "property" both generally (see Jones –v- Skinner [1835] SLJ Ch 87) and in the context of ancillary relief (see e.g. Michael –v- Michael [1986] 2FLR 389 at 395 – a mere expectancy or spes successionis; and Rayden at paragraph 16.177).

72. I, for my part, consider (without deciding the point) that there is considerable difficulty in treating whatever right or interest the wife had under the discretionary trust, including as it did, clause 10, and notwithstanding the letter of wishes, as property at all. I cannot see that it falls within the classification of Lord Wilberforce in National Provincial Bank Ltd –v- Ainsworth [1965] AC 1175 at 1247g to 1248a which requires that property:-

"…must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability".

As events showed, clause 10 was fatal to any degree of permanence or stability; and her right or interest was not capable of assumption by third parties.

73. But whether it was property or not, the fatal difficulty that confronts the wife is whether the instrument of exclusion amounted to a disposition. Mr Howard points out that the reach of an application for injunctive type relief under paragraph (a) of section 37(2) may be wider than in relation to a prospective "disposition" alone, since that paragraph refers to:-

"about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property".

Paragraphs (b) and (c) refer to setting aside "dispositions" alone. He submits that while any disposition involves dealing with property, not every dealing with property is a disposition. There is a non-exhaustive definition of disposition in section 37(6) but the meaning of the word in the context of section 37 has been authoritatively considered by the House of Lords in Newlon Housing Trust –v- Alsulaimen and another [1999] AC 313. That case concerned a notice to quit served by the wife in relation to a property in which the husband and wife held a joint assured weekly tenancy. After the notice to quit had expired, the husband sought to set it aside in reliance upon section 37 as a precursor to applying for a transfer of the joint tenancy to him alone. The landlords argued that the notice to quit did not amount to a disposition within the meaning of section 37 "since such a disposition contemplates that what is to be disposed of exists both before and after the act of disposition, not something which ceases to exist by reason of the disposition." (see argument of leading counsel at page 314g).

Counsel for the husband argued that "disposition" in section 37 is not a term of art and is not intended to carry any legal significance beyond its ordinary meaning (see page 315b).

74. Lord Hoffman, with whom the rest of their Lordships agreed, said that in some contexts disposition may include the case in which the property ceases to exist. However, there are contra indications within section 37. He continued at page 317 b:-

"…be all that as it may, I think it is essential to the notion of a disposition of property in this context [viz section 37] that there is property of which the disponor disposes, whether to someone else, or not. It is this property which the court can restore to his estate by setting aside the disposition."

Counsel for the husband had invited their Lordships to give a purposive construction to section 37 (see page 317g) and Lord Hoffman said that he would certainly not wish to give section 37 (2) a construction which defeats its evident purpose. But he was:-

"far from confident that the legislation was meant to have the broad effect for which [counsel for the husband] contends. The difference in section 37 (2) between the language of paragraph (a)… and paragraph (b)…is very striking."

Lord Hoffman then pointed out the contrast to which Mr Howard has also referred between "otherwise dealing with" and dispositions alone. Lord Hoffman concluded that since the tenancy had expired, it could not be revived and there was no disposition which could be set aside.

75. The reasoning in Newlon has since been applied by the Court of Appeal in Bater and Bater –v- Greenwich LBC [1999] 2 FLR 993 which concerned loss of the right to buy which attached to the secure tenancy of the council house in that case. Lord Justice Roch did not reach a concluded view on whether the right to buy amounted to property (see 998 e to f); but he was satisfied that there had been no disposition, saying at 1000 b:-

"To decide otherwise would require a court to resurrect the secure tenancy which ceased to exist…; something which the House of Lords has said cannot be done."

In Newlon, Lord Hoffman expressly expressed no view on whether the giving of a notice to quit could be restrained in advance as a "dealing" with the tenancy falling within section 37(2)(a). In Bater, Lord Justice Thorpe expressed the view that it could be, saying at page 1002h:-

"the stable door can be bolted if, but only if, the bolt is thrown before the horse has gone."

Lord Lloyd of Berwick, sitting as a member of the Court of Appeal in Bater, expressly preferred not to decide that point which had been left open in Newlon (see Bater at 1003e).

76. These authorities leave open the possibility that if the wife had moved quickly after the separation, she might have been able to obtain an order pursuant to section 37(2)(a) against the husband personally, restraining him from exercising his power of exclusion under clause 10. But in my view they render it impossible to treat the actual, and now completed, exercise of that power as a disposition capable of being set aside under section 37(2)(b) or (c). The fact that the instrument of exclusion was expressed to be "revocable" makes no difference. The husband could even now revoke it; but as it was not a disposition, I have no right or power to order him to do so. Application 2 must accordingly fail and is dismissed.
77. If I am wrong on this point, I make clear that in relation to the instrument of exclusion and application 2, I have no doubt, and am satisfied, that the husband made the instrument with the required statutory intention as one of his intentions and that it was a substantial intention. He claims that his intention was to ensure, now that they were separated, that the wife did not benefit under the trust in the event of his sudden and accidental death, eg in an aeroplane crash, and relies upon the last paragraph of the letter from Mr Phelps dated 9 November 1998, now at bundle 5D(ii) page 202, where this account and explanation is given. That may well be true. But by April 1998, in contrast to September 1997, there was actual separation and obvious marital breakdown, and I am sure that the husband, who had already consulted a matrimonial solicitor, Ms Doran of Withers, had the possibility of divorce firmly in mind and that that also substantially influenced his intentions. I completely reject the further evidence of the husband for, and at, the present hearing that his intention in making the instrument of exclusion was to remove any incentive for the wife or her family deliberately to kill him so as to enable her to benefit under the trust. If that was his reason (and it was only first mentioned years later in 2004), then he would have to have informed her at once, which he did not do, that he had excluded her. His oral evidence that he "did not want to be a sitting duck" but only "further down the line, if things went bad and someone in her family might make a nice little accident", showed him at his most devious, unconvincing, and indeed, malicious.

Applications 3 and 4 – to vary the post-nuptial settlement and to correct the principle order under the "slip rule"

78. The gist of the issue is as follows. All parties contend or concede that the IMK settlement was at its inception, and continued after the instrument of exclusion to be, and continued in December 1999 to be, and continues now to be, a post-nuptial settlement which falls within the meaning of that expression where it appears in section 24 (1)(c) of the Matrimonial Causes Act 1973. It is therefore not necessary for me to make any reference to Charalambous –v- Charlambous [2004] EWCA Civ 1030 or any other relevant authorities as to what may constitute a post-nuptial settlement.

The wife says that the principle order neither exercised nor dismissed the power of the court under section 24(1) (c) of the Matrimonial Causes Act 1973 to vary, for the benefit of the wife, that post-nuptial settlement, and that in light of the total failure of the husband to pay anything at all except school fees and a small part of the maintenance, I should now do so. The husband says that the court, viz Mr Justice Bodey in December 1999, either has exercised that power (and it is trite law that a property adjustment power cannot be exercised twice in relate to the same property); or has dismissed the application for a variation of settlement order; or at any rate has made what was intended to be a once-and-for-all final order as to capital, which now precludes making any such order. Clearly, these arguments all focus on, and require a decision as to, what Mr Justice Bodey did, or did not, order and do in December 1999; and that must centre on construction of his actual order, although all relevant and admissible surrounding material may also be considered.

79. In support of her case, the wife and Miss Harris asked me, as application 4, to correct that order under the so-called slip rule, so as to make the scope and effect of the principle order patent and clear. Miss Harris and Mr Howard both made submissions, first, under the slip rule; and secondly and distinctly, as to the construction and effect of the order in its corrected form, if I consider that it requires to be, can be, and should be corrected.
80. I, for my part (and I think Mr David Williams was inclined to agree with me) feel that these two applications and issues cannot really be separated out in this way. In cases where the slip or omission is patent, or where the issue whether there is a slip or omission does not depend on construction of the order itself, then an application under the slip rule may logically fall to be considered separately and first. In the present case, however, the questions, what did the judge intend, what did the order on its proper construction say, and was there an accidental slip or omission, are all inter-linked and inter- dependent. Indeed, if, on a proper construction of the existing order, in its proper context, and taking into account admissible surrounding circumstances, it does still leave open the section 24(1)(c) application and powers, there would not be any need (on the wife's case) actually to correct it; for it would follow that it does say what she contends it should say.
81. I will, for convenience, first set out the relevant slip rule and then summarise the relevant law, both in relation to the slip rule and in relation to construing orders for ancillary relief; but I propose to consider the jurisdictional aspects of applications 3 and 4 together.
82. The relevant slip rule is RSC order 20, rule 11 which provides:-

"Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the court on motion or summons without an appeal."

The more modern rule 40.12 of the CPR is not applicable in this case, but even if it were, there are no differences between the two rules material to this case.

83. There is no suggestion of any "clerical mistake" in this case, but it is suggested that the very experienced counsel and/or judge made an error by an accidental slip or omission. It is clear from the rule itself that the slip or omission has to have been "accidental". It cannot have been deliberate. The rule employs the word "may" and imports a discretion. The correction can be made "at any time".
84. Both counsel pored over the cases of Bristol-Myers Squibb –v- Baker Norton Pharmaceuticals [2001] EWCA Civ 414 and the judgment of Lord Justice Wall (sitting on his own) when refusing leave to appeal in the case of Foenander –v- Foenander [2004] EWCA Civ 1675 and the many other cases cited therein. These include the comment of Lord Justice Robert Goff in Mutual Shipping Corporation –v- Bayshore Shipping Company, quoted at paragraph 24 of Bristol-Myers Squibb, that:-

"the animal [of an accidental slip or omission] is…usually recognisable when it appears on the scene".

The fact that the animal is nevertheless surrounded by so much legal analysis and learning suggests, I suppose, that it may sometimes be quite heavily camouflaged.

85. The essential point from all the authorities is that the court cannot, by the slip rule, have and implement "second or additional thoughts"; and it cannot correct an order under the slip rule because it previously misunderstood, or made a mistake as to the legal effect of, that order. The facts of Bristol-Myers Squibb make plain, however, that an order under the slip rule is not precluded simply because the original order was drafted by counsel, however eminent, or placed before the court itself and approved as to its actual wording by the judge or judges themselves.
86. The scope of the rule in this situation is perhaps most neatly expressed by the comment of Sir John Donaldson MR in the Mutual Shipping –v- Bayshore case as quoted in paragraph 22 of Bristol-Myers Squibb, that:-

"It is the distinction between having second thoughts or intentions and correcting an award or judgment to give true effect to first thoughts or intentions, which creates the problem".

That distinction may sometimes be hard to apply in practice; but it is a very clear one and I keep it very firmly in mind.

87. In relation specifically to the construction of an order for ancillary relief I have been referred in particular to Dinch –v- Dinch [1987] 1WLR 252, and indeed, Mr Howard frequently referred to the whole issue of construction as "the Dinch point". In Dinch, the original order was a so called Mesher order which postponed sale of the home until the younger child had ceased full time education, but required sale then to take place. After that child had ceased full time education, the wife applied for a range of further orders including a transfer of, or at any rate further postponing sale of, the home. The Court of Appeal had acceded in part to the wife's application. In the House of Lords, Lord Oliver of Aylmerton, with whom the rest of their Lordships agreed, made plain that in his (and so, their) view, the order of the Court of Appeal did substantial justice to the parties (see 260 B) and that he (and so, they) reached the conclusion that there was no power to make that order "with the greatest reluctance and regret" (see 264B – C). So, the merits of the case were very strongly with the wife, but on a proper construction of the order it had finally and conclusively determined the rights of the parties in the house and no further order could be made.
88. The speech in Dinch contains the following points of importance to the present case. First, Lord Oliver's very strong words at the outset of his judgment (see page 255B to G), said and reported in 1987, as to the importance of defining:-

"with precision exactly what the parties were intending to do in relation to the disposal of the petitioner's claim for ancillary relief so as to avoid any future misunderstanding as to whether those claims, or any of them, were, or were not to be kept alive"

and the "imperative professional duty" on advisors "to ensure that such appropriate provision is inserted in any consent order made as will leave no room for any future doubt or misunderstanding…"

The same must clearly apply also to a non-consent order; and the parallel duty on the court, to which Lord Oliver also referred, cannot be less and arguably is greater, in the case (such as the present case) of a non-consent order.

In the present case, where the order was made over ten years after Dinch, both counsel stress, as indeed is obvious, that the very experienced counsel and the very experienced judge would have been only too well aware of that duty.

89. Second, at page 260 D to E, once the court has either exercised or declined to exercise its power to make a property adjustment order in relation to a particular property, no further application for an order "in respect of that property at least" can be obtained. Their Lordships cited with apparent approval a passage in the judgment of Lord Justice Ormord in Carson –v- Carson [1983] 1 WLR 285 at 289 – 290 within which he had said:-

"This is a case where an attempt was being made to obtain a second property adjustment order in relation to the same capital asset and it is not necessary in this judgment to consider what the position might have been if some other capital asset was involved."

90. Third, the key question or "essential issue" was whether the parties were agreeing to a once-and-for-all financial settlement (see 62 G). In the present case, the essential issue is likewise whether the judge was making and intending to make such a once-and-for all-order.
91. Fourth, as is clear from what Lord Oliver said at 263 A and 263 F ("Mr Johnson puts the matter too high"), if an application is made for ancillary relief and, whether consensually or otherwise, no order is made, it is not necessarily implicit that the application is dismissed. Rather:-

"It must, in each case, be a question of construction of the order under consideration. One has simply to look at the order and any admissible material available for its construction and determine what the court intended…. to effect by the order. If the conclusion is that what was intended was a final and conclusive once-for-all financial settlement, either overall or in relation to a particular property, then it must follow that that precludes any further claim to relief in relation to that property."

Lord Oliver pointed out that Carson was a case where the order was clearly intended to be final and to preclude any further application for relief, even although it contained no express dismissal of the claim. In Carson itself, Lord Justice Ormord (with whose judgment Lord Justice O'Connor agreed) had, as noted, left open the question whether a later property adjustment order could be made in relation to some other capital asset. Mr Justice Sheldon, however, expressly expressed the view at 358 D that:-

"…in general terms, the fact that an order has itself been made under one sub section of section 23 or section 24…does not itself preclude a later application from [sic but it must mean for] an order under another such sub section".

However, that view is clearly obiter since Mr Justice Sheldon went on to agree that on the facts of that case the original order had been intended to, and did, dispose of all the wife's outstanding claims and to effect a comprehensive settlement so that no further order could be made (358 D to E).

92. Mr Howard QC says that the present case raises for decision what was left open by Lord Justice Ormord in Carson and by the House of Lords in Dinch (the use of the words "at least" by Lord Oliver at page 260 between D and E), namely, whether there can be a later order in relation to some other property after a previous order for ancillary relief, assuming that the previous order was not itself intended to be a once-and-for-all final order.
93. If the original order was intended to be a once-and-for-all final order, then Carson and Dinch clearly establish that that is the end of the matter and there can be no going back and no further order. So if I conclude that the order of Mr Justice Bodey was intended to be such an order, then that, too, is the end of the matter. But if it was not intended to be a final order, and if there has not yet been an order under section 24 in relation to the trust, then I am asked to make one. In my view, I would, as a matter of jurisdiction, be able to do so. First, because section 24(1) begins with the words "or at any time thereafter". Second, because nothing in Dinch or Carson precludes that I can do so. Third, because if a later order in relation to a different property is precluded, even if there has not been a once-and-for-all final order, then all the discussion in Dinch and Carson as to whether there has been such a once-and-for-all final order would be otiose. If it were the law that once there has been one capital order in relation to one capital asset, there simply cannot be a further capital order in relation to any other asset, then that would be conclusive.
94. I now turn to consider the actual order made on 13 December 1999 and the circumstances in which it was made. Apart from the order itself, the main aid to construction is what Mr Justice Bodey had said in the judgment itself on Friday 10 December 1999. At paragraph 22 on internal page 52, now bundle C page 53, he found, even at that stage, that:-

"The husband has demonstrated a firm determination to impede and minimise the wife's financial claims…"

At internal page 55 (now C56) line 20, he anticipated:-

"The likely ongoing problem of enforcement proceedings regarding maintenance with concomitant aggravation and costs".

So, the previous behaviour and forecast problems were already known and in the mind of Mr Justice Bodey. At pages 54 (C55) to 56 (C57) Mr Justice Bodey carefully considered whether he should make an order based on lesser capital provision and continuing periodical payments, or a "clean break" order. He decided on the latter course and considered that in reality the husband had sufficient capital resources to pay an appropriate sum. I stress that the jargon of "clean break" is different from the jargon of "once-and-for-all capital settlement (or order)" and I do not confuse the two. "Clean break" is a reference to whether there be an ongoing liability to pay periodical payments or maintenance. In this case, technically, Mr Justice Bodey made an order for a postponed or conditional clean break, the condition of which (payment of the lump sum) has not yet been fulfilled. It is perfectly possible and very common (and indeed Dinch is an example) to have an order which is not a clean break (because maintenance continues) but which is nevertheless a once-and-for-all capital settlement.

At page 59 (C60) Mr Justice Bodey said:-

"Therefore, the lump sum I order is £4,875,000. I intend this award to be a clean break for the wife."

He did not refer in his judgment on the Friday to any provision for periodical payments for the benefit of the wife until payment of the lump sum. However, there is clear, detailed and express provision for this in paragraph 2 of the principle order itself, and this must have been the subject of some further ruling between delivery of the main judgment and the perfecting of the order itself (NB there is separate provision for periodical payments to the wife for the children in paragraph 3 of the order on the basis recorded in recitals (A) and (B) of the order. This is all explained on internal page 59 (C 60) of the judgment and is not relevant to anything I have to decide.)

95. At the very end of the judgment, internal page 60, now bundle C 61 at line 22, Mr Justice Bodey said very importantly:-

"The basis of this order is that any claim or interest of the wife in or against IMK Trust or Dianoor Foundation for Art Trust, or in or against any of the companies involved in this case is to be regarded as abandoned or withdrawn as and when the husband pays the lump sum; likewise any interest she may have in any bank accounts or land in Kashmir or elsewhere."

For convenience and shorthand, I will refer to this passage as "the as and when basis" or "the as and when passage".

I note, with respect to Mr Justice Bodey, that grammatically or syntactically the passage is a little wayward. A "claim" would be "against" and an "interest" would be "in". Further, although a claim might be either "abandoned" or "withdrawn", it is difficult to speak of withdrawing an interest, although one could clearly be "abandoned". So, properly, the phrase "any claim or interest" where it occurs in line 23 of the transcript should read "any interest or claim". Read in that way, Mr Justice Bodey was clearly saying as part of his obviously carefully pre-prepared and not ex tempore judgment on the Friday, that the basis of the order is that:

(i) Any interest that the wife has in the IMK Trust, or in Dianoor Foundation For Art Trust, or in any of the companies, or in any bank account or land in Kashmir, are all to be treated as abandoned as and when the husband pays the lump sum; AND,

(ii) Any claim that the wife has against the IMK Trust, or against the Dianoor Foundation, or against any of the companies, are all to be regarded as withdrawn as and when he pays the lump sum.

96. There is a transcript of a part of the "discussion after judgment" which took place on the Friday, now at bundle C pages 63 to 65. Within that, Mr Pointer QC said:-

"…your Lordship said it was on the basis that the wife abandons any claim for herself for the land in Kashmir. Of course that is right and we accept and accepted that that should be so. Could I just enquire, therefore, what your Lordship intended to be the case in respect of those parcels of land where it appears she has a joint interest with others…"

Mr Pointer was appropriately seeking clarification whether the benefit of the wife's interest in such land should go to the husband, or to the other people interested in the land. The judge said:-

"If he pays this sort of sum of money, this is predicated on the basis that this is what she gets, as is usually done".

A few lines further on the judge said:-

"…I thought if he is paying a substantial sum of money and actually pays it – which will remain to be seen – then your client is comfortably set up. It seems to me that he [viz the husband] should then gather in the bits and pieces."

I emphasise the underlined words which tend to repeat and reinforce the "as and when basis". If any more was said on the Friday relevant to the construction of the final order and the intention of the judge, there is no transcript of it and I have no evidence about it.

97. On Monday, 13 December, counsel clearly made submissions to Mr Justice Bodey as to: (i) an application under section 24 A of the Matrimonial Causes Act as amended for an immediate sale of the jewellery stocks within this jurisdiction; and (ii) an application for indemnity costs and costs against Mr Wani. This was then the subject of a further relatively short judgment that day. This judgment must obviously have been ex tempore or essentially so. Recognising that the case was " a wholly exceptional case" (transcript page 3 now bundle C65d line 17) and the ease with which very small, but very valuable items of jewellery could be removed (page 2 now C65c lines 6 to 7) and repeating once again that the husband had "manifested a firm determination to impede or minimise the wife's claims" (page 2, now C65c lines 15 to 17), the judge said, at page 3, now C65d lines 25 to 28 "in these exceptional circumstances (although with much anxiety) I accede to the application for an order for a sale of the stock under section 24A…"

He said at lines 22 to 24:-

"I believe there is a very real risk here that, unless draconian steps are taken, this wife will not be able to enforce her order, there being no other assets of any significance within this jurisdiction."

Mr Justice Bodey then dealt with the application as to costs to which I need not refer. Pausing there, the essential submission of Mr Howard is that, by his judgment on the Friday, the judge had deliberately selected a lump sum as the method of making capital provision for the wife; and that on the Monday the wife's lawyers, by their application, and the judge, by his decision, deliberately selected and firmly nailed their colours to the mast of impounding and later sale of the jewellery stock as the method of enforcement if the lump sum was not paid. Mr Howard submits that, whether wisely or not, a deliberate choice and deliberate decision was made to enforce against the jewellery specifically, rather than against the trustees and the trust; and that whatever may have been said by the judge as to the "as and when basis" on the Friday, the lawyers and the judge had deliberately moved on, on the Monday, and before the order itself was sealed and perfected.

98. I now turn to the order itself. Any future court considering this matter, whether on appeal here, or in Jersey, or elsewhere, would no doubt scrutinise the whole order as I have done – now many times. At the risk of over compression, I will only specifically quote the following. It was made:-

"Upon the bases that:" (A) and (B) had to do with periodical payments to the petitioner for the children; then, "(C) This order is in full and final satisfaction of all claims and applications of the petitioner made against the respondent for herself save as set out herein".

Paragraph 1 of the order itself ordered the lump sum. Paragraph 2 provided that "Until payment of the said lump sum" the husband must pay to or for the benefit of the wife periodical payments at the rate of £12,900 per month (viz £154,800 per annum). This figure was later increased to £14,733 per month, which is why I said much earlier that the debt is now increasing monthly at the latter rate.

Paragraph 3 provided that "From payment in full of the said lump sum" the husband must pay periodical payments to the wife at the total rate of £60,000 per annum, for the children on bases (A) and (B).

Paragraph 4 provided for payment of school fees.

Paragraph 5 is critical and reads as follows:-

"5(a) Upon payment in full of the said lump sum the petitioner do transfer to the respondent all such interest as she may have in the IMK Family Trust, the Dianoor Foundation for Art Trust, 21^st Century Holdings Ltd, Dianoor Jewels International Ltd, Dianoor Jewels Ltd, or any of their associated companies, including for the avoidance of doubt any sums standing to her credit on director's loan account;

(b) Upon payment in full of the said lump sum, the petitioner do at the respondent's request transfer to him all such interest as she may have in the parcels of land in Kashmir, that are said by him to be owned jointly by her with the parties' children and their cousins."

Paragraph 6 dealt with transfer to the wife of certain chattels which she has indeed received.

Paragraphs 7 and 8 provided that:-

"7 The claims of the respondent for financial provision and property adjustment orders be dismissed; and he shall not be entitled to make any further claim under the Matrimonial Causes Act 1973 section 23 (1)(a) or (b).

8 Pursuant to section 15 of the Inheritance (provision for family and dependents) Act 1975, the respondent shall not be entitled upon the death of the petitioner to make a claim against her estate under section 2 of that Act."

Those two paragraphs are in entirely conventional terms. They clearly dismissed immediately all claims which the husband might make against the wife, whether for periodical payments or capital, including the whole range of property adjustment claims and powers under section 24 (1); and disentitled the husband immediately from making any claim under the Inheritance Act.

In contrast, paragraph 9 provided that:-

"9 Upon payment in full of the said lump sum, pursuant to section 15 of the Inheritance (provisions for family and dependents) Act, 1975, the petitioner shall not be entitled upon the death of the respondent to make a claim against his estate under section 2 of that Act"

Paragraph 12 provided that:-

"12 In the event of delay in payment of the lump sum ordered under paragraph 1 above, the petitioner be at liberty to apply to vary by way of increase the interim arrangements provided for at paragraph 2 above."

Pausing there, Mr Howard says that paragraph 12 again shows deliberate selection of a remedy "in the event of delay in payment of the lump sum" and that paragraph 12 excludes some later application or order to vary the post-nuptial settlement. I reject that particular argument. Paragraph 12 does no more than give to the wife a "liberty to apply" and makes plain that if payment of the lump sum is delayed, the quantum of the periodical payments may be increased. It does not in any way preclude alternative remedies against capital; and in any event, we are no longer in the territory of "delay in payment" but of prolonged, ruthless and contumacious refusal to pay. I do not think that paragraph 12 impacts on anything I have to decide, nor does the fact that the level of interim periodical payments has already been increased.

Paragraph 14 imposed in principle the charges under which the wife later recovered £266,000.

Paragraph 15 provided as follows:-

"15 Subject always to paragraph 19 hereof:

(a) unless within three hours of service of this order upon him, the respondent shall either (i) have paid the lump sum provided for at paragraph 1 above or (ii) have provided security for it, THEN the respondent do deliver up to the petitioner's solicitors, Messrs Sears Tooth, the whole of the stock of jewellery and artefacts listed in the schedule produced by him pursuant to the order made herein on the 2^nd December, 1999 for Messrs Sears Tooth to arrange its safe keeping and in order to facilitate the sale (if necessary) as referred to in paragraph 15 (b) hereof;

(b) The said jewellery be thereafter sold, but not before further directions as to the details of such sale have first been obtained by the petitioner from the court the proceeds of sale being paid to the petitioner in satisfaction pro tanto of the aforesaid lump sum orders and with any surplus being remitted to the respondent."

Paragraph 15(c) made provision as to the mechanics of sale of the jewellery; and paragraphs 16 to 18 made consequential provision for establishing the whereabouts of, and identifying, all the jewellery in stock.

Paragraph 19 provided that the husband had liberty to apply to vary the provisions as to impounding and the sale of the stock "the court indicating that any such application should be accompanied by firm proposals by the [husband] for the provision of immediate security for the lump sums and for payment of them."

I am unclear why the reference there is to lump sums in the plural. It may have to do with the minor provision in paragraph 10 for a payment of a particular small fund into trust for the children.

99. The remainder of the order deals with service. Before considering the meaning and effect of those provisions, I make the following general comments. First, it might be thought that the best person to know what he meant and intended is Mr Justice Bodey himself and that he, not me, should perform the task of construing the order. At the outset of this hearing, Mr Howard on behalf of the husband strenuously asked me to adjourn it so it could be heard by Mr Justice Bodey, who was not available for the present hearing due to being called for jury service. I refused that application for reasons I gave in a judgment on 6 December 2006; essentially for two reasons. First, it would have meant another intolerable period of delay and no doubt yet further and considerable escalation of costs. Secondly, the essential issue has to be one of objective, not subjective intent. A judge cannot say, especially years later, that what he actually had in mind was so and so, and there would be a real danger of impermissible "second thoughts". As Dinch and Carson and many other cases all show, it is a matter of identifying the true contemporary intent from what was said and done, at the time, in the overall context of the time.
100. The second comment is, as I have said several times during the hearing, I unhesitatingly and fully assume that:-

(i) The primary draftsmen of the order will have been Mr Pointer QC and/or Mr Warshaw. It seems to me very improbable that either the solicitor, or Mr Justice Bodey himself, would have undertaken the primary drafting when counsel of that experience and distinction were at hand. The significance is that (to the extent, if any, that it is relevant) the language of the order is that chosen by the wife's highly experienced counsel, insofar, of course, as it reflected what they understood the judge to have said and to intend; and

(ii) The final draft (if not earlier drafts) will have been carefully read and considered by Mr Justice Bodey personally before it was sealed and thus perfected. I say that for three reasons:-

(a) It would be his duty to do so – see Lord Oliver in Dinch;

(b) There would, as Mr Justice Bodey would certainly have appreciated, have been a heightened duty on him to do so in a situation where, for whatever reason, the husband was no longer present or represented. It is inconceivable that any judge, but least of all Mr Justice Bodey, would, in a case of this detail and complexity, have permitted the lawyers for the wife simply to lodge with the court staff for sealing any draft they chose, without first checking it himself in order, if necessary, to protect the position of the husband; and

(c) As already hinted at, I happen to know, having worked with him professionally for over thirty years, that Mr Justice Bodey happens to be particularly conscientious about matters of drafting and detail.

In short, I must, and do, treat the order itself as if, in the end, it had been deliberately drafted by Mr Justice Bodey himself, with the aim that it accurately expressed his intention. Having said that, even Homer may nod, and the possibility may exist that, through oversight, Mr Justice Bodey failed fully to make clear and express in his order what, at the time it was made, he actually intended and had made clear in his judgments.

101. Both Miss Harris and Mr Howard have sought to rely also on certain comments by Mr Justice Bodey in later judgments. Here, I must be much more cautious, for I cannot permit "second thoughts" to encroach, whether I am considering some application under the slip rule specifically or the construction of the principle order generally.
102. On 19 January 2000 an application was made by the husband, now instructing (as he has done ever since) Mr Howard QC and Mr Harrison, to stay the provisions for sale of the jewellery; and also by the English companies for leave to intervene, again to preserve their stock.
103. At internal page 4E, now bundle C69E of the judgment that day, Mr Justice Bodey said:-

"Further, Mr Pointer QC stated in his submissions at this hearing that, but for the husband's clear concession which I have mentioned [viz Withers' letter of 31 July 1998 which he had quoted on the previous page], the wife would have been advised to apply to vary the IMK Trust as being a post-nuptial settlement. This seems to me a fair and significant point…"

104. There was a further hearing in October 2000 of a number of cross applications. At page 14, now bundle C108 of his judgment of 23 October 2000, Mr Justice Bodey said, after again referring to the "concession":-

"Whilst I have little doubt that the overall impression was to give the wife a false sense of security and to deter her from e.g. applying to vary the trust as a post-nuptial settlement…"

At page 30, bundle C124 of the same judgment, Mr Justice Bodey referred again to the concession and said:-

"Making such a concession prior to the original hearing, as the husband did, is a potent power in the maker's hands and, as this case shows, is capable of abuse. It is quite clear that the wife was grievously misled by it, believing…that the case could be dealt with pragmatically and without resort to legal technicality."

Over the page at page 31, now bundle C128, he said:-

"Had the wife known this sort of thing was going to happen, she would, as mentioned above, clearly have availed herself of the more cumbersome route of applying to vary the discretionary trust as a post-nuptial settlement, or would have sought a transfer to her of… the loan account…"

105. These passages all derive from the year 2000 when the main hearing was no doubt still relatively fresh in the mind of Mr Justice Bodey. Miss Harris submits that nowhere in those various references to varying the post-nuptial settlement does Mr Justice Bodey say that the power to do so had now been lost; merely that it had not been sought to be exercised at the main hearing because of the concession and the "grievous misleading."
106. Mr Howard, however, makes the equal and opposite point that nowhere in any of those passages does Mr Justice Bodey expressly say that, in his opinion, the power is still available. He submits that, if anything, the tenor of the passages is that, however grievously she may have been misled, advantage was not taken of the power and it has now been lost, both to the wife and to the court.
107. I, for my part, consider that all these passages are equivocal. Further, in none of the passages, or the judgments, in question was Mr Justice Bodey expressly considering (nor had arguments been addressed to him as to) the proper construction and scope of the principle order. I cannot, and do not, place any reliance upon any of these passages one way or the other as an aid to construction.
108. Finally, Miss Harris relies upon a further passage in a much more recent judgment of Mr Justice Bodey of 9 May 2006. By then, the applications currently before me (except that specifically under the slip rule – application 4) were already under way and Mr Justice Bodey was hearing an application under the Hadkinson jurisprudence to prevent the husband from participating in the present hearing. Mr Justice Bodey again referred at paragraph 13, now bundle C334, to the "concession" and repeated at paragraph 18, now C336, how the wife had been grievously misled. At paragraph 36, now at C339, Mr Justice Bodey said:-

"[Mr Howard] submits that the wife's substantive applications will raise jurisdictional issues in that (a) the wife has already had what was described in a preamble to the December 1999 order as a "clean break"; and (b) the court has no jurisdiction to consider a variation of the trust as the wife has already had a transfer of property order, for example, regarding the matrimonial furniture, and she cannot have another. (In parenthesis I note as regard point (a) that what I actually said at the end of my 1999 judgment was, that the wife's claims against (among other entities) the trust, were to be regarded as abandoned or withdrawn "…as and when the husband pays the lump sum". As this has not yet happened, any disjunction between the wording of the judgment and the wording of the preamble to the order is something to which the parties' advisors (particularly the wife's) should perhaps be giving further consideration.)" [words emphasised in italics in original transcript of judgment as approved by Mr Justice Bodey].

109. Miss Harris understandably seeks to attach weight to this passage and invites me to do the same. The last sentence of the quote may have been a thinly veiled reference to possible application under the slip rule and did, I assume, trigger the making of that application. I must, however, be very careful indeed as to what weight, if any, I should attach to this passage and/or what inferences I may draw from it. First and foremost, this was said in May 2006, over six years after the December 1999 judgment and order. Second, so much has happened since then, that there is real room for, and therefore risk of "second thoughts". Third, Mr Justice Bodey was very careful merely to "note" what he had actually said in judgment and to refer to "any disjunction". He did not say that there necessarily is disjunction; merely, in effect, that there may be. Fourth, the whole passage in parenthesis is doing no more than flagging up to the advisors a point to which they should "perhaps" give further consideration. In the light of these factors, I wish to make crystal clear that I do not regard and do not treat the passage as being an admissible or relevant aid, at all, to the correct construction of the order of December 1999. The only point which I am willing to draw from that passage, and indeed from the judgment of 9 May 2006 as a whole, is that it presumably did not strike Mr Justice Bodey that an application now to vary the trust is obviously precluded by the order of 1999 or, I presume, he would have said so. That does not in any way at all entitle or justify a conclusion now that the principle order can and should be construed so as to permit such a variation. All it does is indicate the absence of a possible obstacle of the trial judge himself thinking that it was precluded.
110. I return, therefore, to December 1999 and the order itself. The question I have to decide is whether on 13 December 1999, Mr Justice Bodey (in the words of Lord Oliver in Dinch at 260D and 261E) "…either exercised or declined to exercise…" the power or jurisdiction to make an order varying the post-nuptial settlement; and whether the order was intended to be, and was, a once-and-for-all order as to capital. I have to:-

"simply look at the order and any admissible material available for its construction, and determine what the court intended to effect by the order." (Lord Oliver in Dinch at 263G)

Actual exercise

111. I reject the submission of Mr Howard that there was an actual exercise of the power. He argues that as the stock of jewellery belonged to one or more of the companies, and they in turn were wholly owned by 21^st Century Holdings and 21^st Century in turn was owned by the trust, the order made under paragraph 15 for delivery up and ultimate sale of the jewellery must have involved some implied variation of the post-nuptial settlement. He submits that Mr Justice Bodey could only have attacked the jewellery if he had first given the wife some interest in it by varying the trust. In his judgment on 13 December 1999, however, Mr Justice Bodey made quite plain and express that he was acting, or purporting to act, under the powers under section 24A of the Matrimonial Causes Act 1973; and that because of the concession as to the trust, he did "not see any difficulties as to piercing the corporate veil". On 23 October 2000, on the application of the companies, Mr Justice Bodey later accepted that he had not been entitled to pierce the veil in that way, and in fact discharged the whole of paragraph 15. I do not at all accept the submission of Miss Harris that, as paragraph 15 has now been discharged, I should now construe the events and order of 13 December 1999 as if paragraph 15 had never been inserted. In my view, that would be utterly unreal. I have to discern the intention as a whole of Mr Justice Bodey in December 1999, and at that time he clearly intended to, and did, insert the provision of paragraph 15. But it is quite clear from the way that Mr Justice Bodey approached the question of sale of the jewellery in December 1999 that he was not varying the post-nuptial settlement. Rather, he was simply "piercing the veil" and getting to the perceived reality, because of the concession, that the jewellery simply belonged to the husband.

It should be noted that the operative part of the whole of paragraph 15 and the consequential paragraphs (16 to 18) is that "the respondent do deliver up…"; "the respondent do disclose…"; "the respondent…shall identify…" These are not orders made against the companies, nor against the trustees, nor against the trust (which are nowhere mentioned in paragraphs 15 to 18) but, rightly or wrongly, against the respondent personally.

I have said that I treat the comment of Mr Justice Bodey at internal page 4E, now bundle C69E of his judgment of 19 January 2006 that "but for the concession…the wife would have been advised to apply to vary the trust…" as equivocal on the question whether it was still open to her to do so. But Mr Pointer QC could not have stated what he is recorded as stating, and Mr Justice Bodey could not have recorded the comment in the way he did, if either Mr Pointer or he himself thought for a moment that, in making the order for sale of the jewellery in paragraph 15, the court had already actually exercised the statutory power to vary the trust.

Decline to exercise, and once-and-for-all capital order

112. Much more difficult is the question whether Mr Justice Bodey had declined to exercise the power as part of making a once-and-for-all capital order. Standing alone, the "as and when" basis and passage in the judgment of Friday 10 December is, in my view, clear. The wife had applied in both her petitions for all forms of ancillary relief. I have already described how I construe that passage. It dealt separately and discretely both with "any interest in" and "any claim against" various assets including the trust. The judgment was obviously pre-prepared and the words deliberate. In my view, if those words stood alone, then the position at the end of the judgment and close of the Friday is quite clear. The judge had not only not declined to exercise the power, but had expressly and deliberately kept the power open until the lump sum had indeed been paid. He did so precisely because he foresaw, in passages I have referred to, that there was likely to be a failure to pay and problems of enforcement. Mr Howard submits, however, that by, or on, the Monday counsel and the judge had moved, or did move, on, and now deliberately selected paragraph 14 and the charges, and paragraph 15 and sale of the jewellery as the preferred and exclusive methods of enforcement. He relies heavily on the preamble and basis (C):-

"This order is in full and final satisfaction of all claims and applications of the petitioner made against the respondent for herself save as set out herein".

He submits that the words "save as set out herein" are clear and decisive and that, apart from his argument that paragraph 15 actually contains a variation of settlement, there is no provision in the order adjourning or preserving any claim for a variation of settlement or power to make such a claim, and no provision making any such order. He accepts that there is no express dismissal of such a claim; but says that Dinch, Carson and Sandford [1986] 1 FLR 412 all show that even although it is desirable that any dismissal should be expressed, it is not essential that it should be. Miss Harris counters that by saying that experienced professionals and experienced judges have moved on since Dinch and those cases. She emphasises the first paragraph of the speech of Lord Oliver and says that in the ensuing twelve years between then and December 1999 all experienced professionals, as Mr Pointer and Mr Warshaw, the draftsmen, and Mr Justice Bodey, the judge, all unquestionably were, knew that if dismissal is intended that should be, and is, expressly stated. She points to paragraph 72 of the then current fifth edition (July 1998) of the extremely well known and widely used SFLA Precedents for Consent Orders (there is no essential difference in the language, just because it is not by consent) which uses a clause :-

"Save as aforesaid the [petitioner's/respondent's] claims for financial provision and property adjustment orders do stand dismissed…"

She argues that since Dinch an order should not be construed as containing a dismissal unless there is express reference to dismissal.

113. I, for my part, do not regard either of these sets of submissions as decisive. To my mind, there is indeed a lacuna or ambiguity in the order. The words of recital basis (C) are, of course, very clear and very strong; but the operative part is the order itself. If basis (C) was indeed meant to indicate that all other claims, and specifically the claim for a variation of settlement, were there and then dismissed, then, frankly, I would have expected to see an express dismissal within the operative part of the order along the lines of precedent 72. It is not there and Homer did nod either by the breadth of recital basis (C) which may appear to go further than may have been intended; or, if (C) is correct, by failure to include an express dismissal. The question is which way did he nod? So one has to look at other indicators.
114. Mr Howard acknowledges the scope and force of the "as and when passage" in the judgment itself, but repeats his submission that the position of the judge changed and narrowed before making the final order on the Monday. He focuses, next, on paragraph 5 of the order. This refers to the wife transferring "all such interest as she may have in" the stated assets, which include the trust, upon payment in full of the lump sum. So Mr Howard says that it reflects and applies that part of the "as and when basis" and passage that deals with "any interest" the wife has in any such assets. He argues that the failure to make similar provision in paragraph 5, or elsewhere in the order, dealing with "any claim against" those assets must be deliberate. So he submits that the judge, and maybe counsel as well, must deliberately have moved on from the position stated in the judgment. By the time the order was made, the intention must still have been to delay transfer of any interest in the assets until payment in full of the lump sum; but to make dismissal of any claim against those assets immediate (see recital (C) ) and not "as and when".
115. Miss Harris, on the other hand, says that that is unreal. First, she points out that apart from some interest in the Kashmir land (the subject of paragraph 5(b) of the order itself) the wife did not in fact have any interest in any of the assets listed in paragraph 5(a). She submits that paragraph 5 was poorly drafted. It was intended to reflect the "as and when passage" in the judgment, and accidentally failed to do so. She says that, apart from the language of the order itself, there is no evidence and nothing in any of the recorded remarks of Mr Justice Bodey after judgment on the Friday, nor in his judgment on the Monday, to indicate that he intended to narrow the width and scope of what he had said in the as and when passage; and that there is no reason why he should have decided, wanted or intended to do so. He knew that enforcement would be difficult and that is fortified by the further orders he decided to make on the Monday, attacking the jewellery. He was not nailing his colours to that mast alone, but merely making that the first line of attack. If there is "disjunction" between the as and when passage in the judgment and the order itself, it should be resolved by construing the order, absent any express dismissal, as reflecting the as and when passage.
116. Mr Howard counters this by saying that there is no disjunction, there is merely "apparent disjunction"; but that is because both counsel and the judge had deliberately moved on between the Friday and the Monday.
117. Miss Harris further stresses the several provisions in the order which only take effect upon payment in full of the lump sum, viz paragraphs 2, 3, 5 itself and 9. She argues that there is obvious and deliberate contrast between the treatment of the wife's claims and those of the husband. Dismissal of all his ancillary relief claims in paragraph 7 is express, immediate and deliberate. The disentitlement of the husband to apply under the Inheritance Act in paragraph 8 is immediate. By contrast, there is no express or immediate dismissal of the wife's claims and her disentitlement under the Inheritance Act is, by paragraph 9, "upon payment in full of the lump sum.." I agree with Mr Howard that the language of paragraph 9 is not determinative or even a pointer as to construction of the capital parts of the order. It is merely a conventional tie-in with the language of paragraph 2, which kept maintenance (but does not deal with capital) claims alive until payment in full.
118. Mr Howard advanced two further arguments with which I must briefly deal. First, he submitted that if I were to hold that there is still a power to make a variation of settlement and then to exercise that power, it would not have the effect of setting aside the lump sum order already made by paragraph 1; and that there is now no power to set aside that order (it not being an order for payment of a lump sum by instalments). So he submitted that if a variation of settlement order is now made, the husband would be affected by not one, but two, orders and the wife could, at least theoretically, recover twice over and Mr Justice Bodey could not have intended that.
119. With respect to Mr Howard, the argument is absurd and there should be no difficulty in formulating a variation of settlement order so as to make plain that it applies only to the extent that the lump sum remains unpaid and that any payment made out of the varied settlement must be credited in the hands of the wife against the husband's outstanding liability to pay the lump sum.
120. Secondly, Mr Howard referred to paragraph 9 of a statement made by the wife on, I think, 17 May 2004 and now at bundle 4D (ii) 231d. She made the statement in support of an application to set aside her exclusion from the trust. She said at paragraph 9:-

"It is not now open to me to apply to vary the trust as a post-nuptial settlement. The respondent has the power to revoke the declaration of 20^th April 1998 and thus reinstate me as a beneficiary…"

She also said at paragraph 11 that she wished to make it clear that she no longer intended to proceed with an application she had made in Jersey "to set aside the settlement itself…"

121. Her present application is made here, not in Jersey, and is directed not to setting aside the settlement itself, but to varying its terms. The first sentence of paragraph 9 is, of course, clear and unequivocal. Mr Howard says that as the wife alone among everyone now engaged in these applications was present in court on 10 and 13 December 1999, her statement that "it is not now open to me to apply to vary the trust" must reflect that she knows from what took place then that her application has been disposed of. I am unwilling to attach that, or any, weight or significance to a statement made years later by a lay person, who, however intelligent (which she is), must by then have been thoroughly demoralised and thoroughly confused.
122. I have carefully considered all these arguments. I have concluded that:-

(i) Mr Justice Bodey did not on 13 December 1999 actually exercise the power to vary the settlement and did not deliberately decline to exercise it; and

(ii) The order was not intended to be, and was not at that time, a once-and-for-all order as to capital, although it would have become one when and if the lump sum had been paid in full.

123. I have already given my reasons why I consider Mr Justice Bodey did not actually exercise the power. My reasons for considering and holding that Mr Justice Bodey did not intend to, and did not in law "decline to exercise" the variation of settlement power, and did not make a once-and-for-all order as to capital, are that I must look at the events of 10 and 13 December as a whole. The "as and when" passage is clear and deliberate and makes good sense when enforcement difficulties were already forecast. There is nothing outside the four corners of the formal order itself to indicate that Mr Justice Bodey resiled from that position and intention, and no reason why he should have done so. Selection of the charges (paragraph 14) and sale of the jewellery (paragraph 15) as the primary methods of enforcement in no way precludes the as and when basis as a fall back. There is a lacuna or ambiguity within the four corners of the order in that recital basis (C ) is not, as I would expect, reflected in, or given effect to by, an express dismissal. There are repeated references to "upon payment in full of the lump sum" which suggest no closing down of all possible powers until it has been paid. It seems to me that the language selected in paragraph 5, with its references only to "interest in", is more likely to reflect a poorly drafted attempt to express the "as and when basis" in the judgment, than a deliberate choice to restrict the scope of the as and when basis to any interest in the assets and not also to keep it extended to any claim against the assets. It seems to me that the most likely explanation of the "disjunction" is that counsel did not have the judgment in written form when they drafted the order (it was delivered orally and would not by then have been transcribed) and failed to recall, and accidentally omitted to record in the draft order, the breadth of the language deliberately used by the judge in the as and when passage in his judgment. Although, as I have assumed, and am sure, Mr Justice Bodey will have read the draft order with care, there is a difference in practice between actually being the author or draftsman of an order, and checking one to see if it reflects one's intention. It seems to me most likely that Mr Justice Bodey accidentally thought that paragraph 5 dealt fully and faithfully with his "as and when basis" and that it is only under the later spot light of these applications that the disjunction appears.
124. I accordingly hold that on a proper construction of the order, in its context, the court has not disposed of the claim for, or declined for all time to exercise, the power to make a variation of post-nuptial settlement. This, in my view, makes it strictly unnecessary for me to consider application 4 under the slip rule, which is designed merely to make more express that which I have now held. Further, if, conversely, the order does not bear the construction which I have reached, then the effect of any order under the slip rule would indeed be to give effect to second thoughts. I stress only that in my consideration of construction or "the Dinch point" I have focused very much on events on 10 and 13 December, up to the making of the order itself. I have, I hope, been very careful not to allow later or second thoughts to intrude. Rather, I have placed considerable weight on the "as and when passage" as being the first thoughts from which, before the making of the order itself, the judge did not resile.
125. Although unnecessary, I nevertheless think it is appropriate, in order to give effect to this part of this judgment, that I should, pursuant to RSC order 20 rule 11, correct an accidental omission from the order of 13 December 1999 by adding at the end of paragraph 5(a) after the words "director's loan account" the words:

"and upon payment in full of the said lump sum all remaining claims by the petitioner for property adjustment orders including to vary as a post-nuptial settlement the IMK Trust shall hereby stand dismissed".

Discretion

126. I turn, accordingly, to discretion, treating the wife as still having, and now pursuing, an undisposed of claim for an order varying the post-nuptial settlement constituted by the IMK Family Trust.
127. The trustees of the settlement, The Craven Trust Company Limited, are a party to these applications but have made a deliberate decision not to appear on them or to make any submissions as to outcome. As I understand it, they have been directed by the Royal Court in Jersey "to remain neutral in these proceedings".
128. The adult children, Mr Salem and Miss Noor Mubarak, have appeared in person and have urged me very strongly indeed to vary the settlement so as to procure payment to their mother of the full amounts owed to her by way of balance of lump sum, arrears of periodical payments and net costs due from their father to their mother.
129. The manner and content of their questions to their father when he was in the witness box left no doubt that they consider that they have suffered, and are suffering, from the non-payment to their mother, upon whom they continue to depend, and that they very strongly prefer that their mother should now benefit from the trust than that it is preserved intact for themselves and any unborn children they may have.
130. As his closing speech or submissions, Mr Salem Mubarak read out on behalf of himself and his sister (who was sitting beside him at the time) a hand written document which has now been placed on the court file. It is as eloquent as it is painful and requires to be read in full. It says, in part:-

"We are totally convinced that we will never benefit from the trust and even if we do, it will be too late for us anyway."

He expressly incorporated into his document a formal letter dated 21 August 2006 which he, Noor and Osman had signed and sent to the trustees and which is now in the bundle at H339. In that letter, they referred to being:-

"totally dependant on our mother's family and friends for our most basic survival, which is a matter of great shame and humiliation for us."

They continued:-

"If this trust was set up to benefit us why have we not benefited from it and why are we dependant on other people to see us through every day of our life? It is our greatest fear that our father is misusing the trust to suit himself…we wish you [the trustees] to abide by any order that our mother may get from the British Courts in December, 2006. We support her in every way and are absolutely confident that she has our best interests at heart."

131. The litigation friend of the minor children, Mr Simon Blain, was in court and attended the whole hearing. In his most careful and thoughtful written closing submissions, and also his final oral submissions, Mr David Williams, on behalf of the litigation friend, strongly supported all the applications made by the wife. His written document prepared on 13 December 2006 is now on the court file and may be referred to for the full case on behalf of the minor children, Osman and Hamza. I treat it as also appropriately protecting and representing any unborn grandchildren who would become discretionary beneficiaries through their birth to these children. I was very grateful indeed to Mr Williams for his contribution to the hearing generally, and I mean no disrespect to him if I do not refer to his document and submissions in any great detail. The essential point is that the minor children and unborns are independently and very well represented and totally support the application of the wife. In his written document, Mr Williams says the minor children:-

"would invite the court to take whatever steps the court can to extract [viz from the trust] the five million pounds odd owed. It is an irrelevance to them whether this is viewed as enforcement or a substantive order – it is the substance not the form that is relevant to them."

In his oral submissions Mr Williams described the present application as the wife's "last throw of the dice and last chance of getting something". He submitted that the ruthlessness and determination of the husband is so great that the children are unlikely to benefit from the trust so long, at least, as he and the mother both remain alive and there is any chance even of some "peripheral benefit" through the children to their mother.

132. Miss Harris, of course, makes a primary submission that as the husband has so totally failed to pay the lump sum, most of the periodical payments and any costs, I should now exercise a discretion to vary the settlement to enable her to recover by a different route, but stressing that she does not seek a penny more than is already her due, although Miss Harris makes the rueful comment that if the main hearing had taken place after the speeches of the House of Lords in White –v- White in July 2000 the approach of Mr Justice Bodey would have been different and the lump sum would almost certainly have been considerably greater. She points out, too, that a major component of the lump sum was provision for the purchase of what Mr Justice Bodey assessed to be a suitable home, of which he gave a house in Edwardes Square, West Kensington, as an example. In the period since December 1999, the lump sum has remained fixed. London property prices have escalated and even if she now recovers in full, a house in Edwardes Square would almost certainly be beyond her reach.
133. Miss Harris emphasises the "concession," repeated as it was by the presentation by the husband's forensic accountant, Mr Tim Lawrence (of very great renown in this field) and his Queen's Counsel, Miss Baron, and submits that I should still treat the trust as the alter ego of the husband. If I do make an order varying the trust, no-one will suffer but the husband. She submits, further, that the order she now asks me to make is no different from the order that the wife would have applied for in 1999 ("the more cumbersome route") if she had not been "grievously misled".
134. On behalf of the husband (not, I stress, the trustees), Mr Howard submits that even if I have the power, I should not, as a matter of discretion, vary the trust. He makes a large number of points and, of course, appropriately emphasises that I must consider the cumulative effect of these points, even if no point or points individually are decisive. There may be an answer to any one of the points, but he submits that, cumulatively, they are decisive.
135. Mr Howard submits, first, that it is now seven years since the main order which was certainly "meant to be" the final order. Even if, as I have now held, Mr Justice Bodey deliberately left open the possibility of a later order varying the settlement, the December 1999 order was, in the words of Mr Howard, "meant to bring finality". He submits that even if, as I have now held, there may be a further property adjustment order against different property at a later date, such a course is very rare and should not be done by way of "enforcement", rather than to meet a legitimate need for a further substantive order, for example, later serious ill health or some such change in circumstances. He submits that, at the very latest, the application to vary the settlement should have been made soon after the hearing in October 2000, when paragraph 15 and the direct route of enforcement against the jewellery was set aside.
136. I bear this overall point firmly in mind. But there is no rule of law that there cannot be a later order by way of "enforcement" and the very fact that orders are routinely made which express dismissal only from the date that a lump sum is paid in full, shows that a further capital order by way of "enforcement" is contemplated both by lawyers who draft, and judges who make, such orders. The fact of the seven year delay is entirely at the door of the husband. The delay would weigh heavily with me if, during the seven years, the wife had been inactive and had not sought to enforce her order and only now resurrected it. But that is not the scenario of this case. I would also be influenced if, at any stage in the seven years, the husband had made any realistic attempt to pay. By his application for leave to appeal to the Court of Appeal from the principle order, he argued that the lump sum should have been not 4.8 million pounds but 3 million pounds. He has not even paid, or offered to pay, that sum. The order made on 21 December 2000, now at bundle B page 158, records that he stated in court through his leading counsel (viz Mr Howard QC) that he would, by 28 February 2001, make proposals for payment of the lump sum. His solicitors' letter sent at the last moment on 27 February 2001, now at bundle H337, says that he does not make any proposal at all.
137. Next, Mr Howard submits that any order which I may make will not of itself produce any money for the wife, but will merely open the door to the prospect of further litigation in Jersey, where the trust is situated, and possibly further proceedings in Hong Kong and/or Bermuda, to extract capital from, and/or for the liquidation of, the companies which are situated there (21^st Century Holdings is incorporated in Bermuda; a main part of the business still takes place in Hong Kong through subsidiary companies incorporated there). This ties in with a related submission that, precisely because the costs are so enormous already, I should firmly draw a line now, and not permit, let alone encourage or promote, inevitable yet further litigation. All this seems tantamount to a licence to a man ruthlessly and contumaciously to refuse even to attempt to obey an order and then to raise costs as a bar to enforcement. Further, there is in any event the prospect of further litigation in Bermuda where Mr Wani is pursuing current proceedings, number 2002:No.473, claiming his alleged 45% interest in 21^st Century Holdings Ltd. The pleaded position of the husband in those proceedings is one of neutrality, neither denying nor admitting Mr Wani's claim. The effective defendant and target of the proceedings is, no doubt, the wife, who is doing her best to defend them there. Finally, on this point, when I asked him what remedy he suggests the wife alternatively could, and should, take to enforce payment of her due, Mr Howard said "go against the husband's loan account with 21^st Century in Bermuda". That would merely be swapping litigation in one forum for another.
138. Next, Mr Howard submits that the outcome of the inevitable further proceedings in Jersey is very uncertain, in particular because of recent change in the law of Jersey, pursuant to the Trusts (Amendment number 4) (Jersey) Law 2006 which came into force in Jersey on the 27 October 2006. He submits that the parties "should not be launched on further litigation unless there is some degree of certainty of it going somewhere". He submits that because of the change in the law, this would be likely to be a test case with no certainty as to outcome.
139. A new Article 9 has been inserted into the principle law, namely The Trusts (Jersey) Law 1984. In very brief summary, the new article 9 provides that a very wide range of issues concerning a trust, including as article 9 (1) (d) "any question concerning….(d) the administration of the trust" and "the obligation of trustees"

"shall be determined in accordance with the law of Jersey and no rule of foreign law shall affect such question".

Article 9 (4) of the substituted article provides that:-

"No foreign judgment with respect to a trust shall be enforceable to the extent that it is inconsistent with this Article, irrespective of any applicable law relating to conflicts [sic] of law [sic]."

140. Mr James Gleeson of Bedell Cristin Jersey Partnership, the solicitors in Jersey for the trustees, has said in a note dated 30 November 2006 that:-

"The amended Article 9 contains new provisions directed at preventing Jersey Trusts from being attacked upon grounds based on foreign legal principles."

He refers to article 9(4), although I note that he misstates it as saying that no foreign judgment, regarding a trust, shall be enforceable to the extent that it "fails to apply Jersey law." That is different from the words of article 9 (4) itself, which say to the extent that it "is inconsistent with this Article".

141. The wife's expert, Mr Christopher Lakeman, of Sinels Advocates in Jersey, acknowledges in his "further supplementary report" dated 4 December 2006, now at bundle F57 to 60, that any ensuing litigation in Jersey would indeed be a test case. He opines at paragraph 9 that an application in relation to variation of the trust:-

"…could be viewed as falling within Article 9 (1) (d), as they concern the administration of a Jersey law trust. However…it is considerably less probable that Jersey law has of necessity (i.e. not to fall foul of the amended Article 9) to be applied to what is a family law case, where both parties of the marriage are properly before the High Court [viz the English High Court] and the English matrimonial law regime applies."

142. I am well aware, and deeply conscious, that this recent change in the law of Jersey, made by an instrument that was first adopted by the States only in April 2006, long after the present application was underway, may make effective enforcement of any order made by me more difficult and perhaps impossible. But it is not for me to decide matters of Jersey law and the opinion of Mr Lakeman holds out a sufficient prospect of success that I should not, on this ground alone, refuse to make an order, if it is otherwise right to do so.
143. I prepared this judgment in the period between the conclusion of the argument and the beginning of the Christmas and New Year vacation, and so far I have been reading from the text I prepared at that time. On my return yesterday, I saw a letter dated 5 January 2007 from Fisher Meredith, the solicitors for Simon Blain, the litigation friend, of which firm he is a partner, which enclosed and drew my attention to the judgment of the Royal Court of Jersey (Samedi Division) given on 8 December 2006 in Representation of Mourant and Co Trustees Limited In the matter of the B trust [2006] JRC 185. I have read with very great care and respect the judgment in that case of Sir Philip Bailhache, the Bailiff of Jersey, and two Jurats. I have received helpful written "brief submissions" by Mr Howard QC and Mr Harrison on behalf of the husband in relation to that case. In line with the letter from Fisher Meredith they, too, particularly stress what Sir Philip said in paragraphs 30 to 32 under a heading "Post script". Mr Howard continues:-

"The message of the Jersey court is that the extent to which any matrimonial order should be made or enforced against a Jersey trust should be a matter for the Jersey courts alone;…these observations of the Jersey court have particular force in a case such as this, where the variation of settlement order is itself being sought as a means of enforcement and where the trust in question has no liquid assets and the process of extracting any money is likely to be, at best, a complicated one."

144. The factual circumstances of the B Trust case were very different indeed from those of the present case. There, the settlor was neither of the spouses, but a cousin of the husband. Here, both spouses were the settlors. There, the settlor was, at the time of the settlement, domiciled in Jersey (see paragraph 2 of the judgment). Here, neither settlor is, was, or ever has been domiciled in Jersey. There, the trust was clearly designed to benefit fairly (and indeed, equally – see the approach in paragraph 20) the two distinct branches of the family in question. Here, there is only one "branch", namely that of the husband and the wife and their children and any remoter issue. Finally, in that case it seems that Advocate S.A. Franckel represented the husband and all the adult beneficiaries, other than the wife (see the list of representation on the cover sheet). So, all the adult beneficiaries other than the wife opposed that the Jersey court give effect to the English order. In the present case, however, all the beneficiaries (both adult and minor and, as I treat Mr Williams as also representing, unborn) except the husband himself, urge me very strongly indeed – almost begged me – to make the order sought by the wife. Nevertheless, even in that case, the Royal Court did give substantial effect (with certain modifications) to the decision and order of this court.
145. The substantive part of the judgment, before the Postscript, reveals that the Royal Court itself has some difficulty in construing the width and effect of the changes made by the Trusts Law amendment. See paragraph 13:-

"If the purpose of the amended article 9 really is to protect trust assets to the extent that a manipulative spouse can evade the enforcement of a carefully considered judgment designed to do justice between husband and wife on divorce, that would seem to us to be a very unhappy state of affairs. But fortunately, we do not consider it to be the effect of the statutory provisions nor, we trust, do we believe it to have been the intention of the legislature."

Paragraph 14:-

"…we do not find it necessary to construe this rather obscure provision for the purposes of this judgment."

And paragraph 18:-

"We find both these paragraphs of the amended article 9 rather obscure, but we do not need to decipher their meaning."

It is most emphatically not for me to tread into this difficult territory of the scope and effect of the new Jersey legislation, and the expert evidence before me as to Jersey law remains as I have summarised it.

146. However, the language of the Postscript in paragraphs 30 to 32 is more general and is very politely, but also very appropriately, directed precisely at judges of the English courts when faced, as I am, with applications to vary a Jersey settlement or trust. I myself am very respectful indeed of the sovereignty of the foreign State and of the jurisdiction of the foreign court. I hope I do exercise considerable "judicial restraint", but the Postscript does not preclude that the English court may yet, in some appropriate case, exercise its variation of settlement power, even in relation to a Jersey trust; and that in such a case, the Jersey court will not be "insouciant of the reasoned decisions" of this court.
147. The citation in paragraph 30 from the earlier case of In re Rabiotti 1989 Settlement refers to a settlement "which had no connection with England save that some of the beneficiaries resided there."

In the present case, while the settlement is governed by Jersey law and is administered in Jersey by Jersey trustees, the connection with England is much greater. Both settlors were residing in England when it was created, albeit that the wife had only just moved here, and they have resided here ever since. Every single living beneficiary resides here and no settlor or beneficiary has any connection whatsoever with Jersey, save that the husband was advised to create his "usual tax efficient off shore structure" (the words of Miss Baron QC when acting for the husband) there.

148. The quotation from In re the Fountain Trust begins very clearly that

"…as a general rule"(my emphasis) "it would be an exorbitant exercise of jurisdiction for a foreign court to purport… to vary the terms of a Jersey settlement…"

The question arises whether the present case still attracts the "general rule".

149. Paragraph 32 of the judgment is a strong plea for the English courts:-

"…having calculated their award on the basis of the totality of the assets available to the parties, to exercise judicial restraint and to refrain from invoking their jurisdiction… to vary the trust."

That was indeed the primary approach of Mr Justice Bodey; and until now, the English court has indeed exercised restraint. But now that the husband, of whom the trust was conceded to be the alter ego, has so determinedly flouted the orders of this court, the question arises whether that restraint should be maintained, if to do so would perpetuate what Sir Philip himself described in paragraph 13 as "a very unhappy state of affairs".

150. I now resume the text of the judgment which I had already drafted in December.
151. Next, Mr Howard stresses the potential impact on the companies themselves and third parties, including the employees of those companies; other share holders in the case of the French company, Verney Creations, of which Michel Ermelin owns 35%; and creditors of the companies. Mr Howard says that underlyingly there is no liquidity and no assets in the whole empire other than the stock, and that on any forced sale basis the amount realisable from the stock would be relatively low. The stock held within the Hong Kong company, Dianoor International Ltd, alone is shown within the balance sheet of that company for the year ending 31 March 2006 as worth the equivalent of about 13.6 million pounds. The most recently produced accounts (viz for 2005) for the trading companies indicate balance sheet assets within the trading companies as a whole of around four million pounds after provision to the husband of the whole of the sum of about nineteen million pounds (US dollars 36 million), shown in the accounts as owed to him but of which the husband undertook in 1997 not to seek repayment until the company "is financially capable to do". He does not, of course, need to extract all, but only a part of that loan, in order to satisfy all the debts to the wife.
152. I am not at all persuaded that the process of extracting 6.5 million pounds or thereabouts from the companies, whether pursuant to any order I may make, or at the direction of the husband himself, would necessarily bring about the collapse of the empire, or seriously adversely affect any third parties at genuine arms length from the husband himself. Further, in 1999, and repeatedly since then, judges have been satisfied that the husband had the means to pay this order and I remain so satisfied. He claims that he has funded his costs by further borrowings. I do not believe that, but if he can borrow to pay lawyers, I see no reason why he could not have borrowed to pay his wife. In recent years he has given to his sister the half share which he owned in a flat in Bombay. He has paid about £40,000 to the other lady, Miss KS. The company, Checkers Ltd, in Hong Kong has sold the former matrimonial home and, as a minimum, the net proceeds of sale were available as a liquid sum. The husband continues to indulge in expensive holidays (he says financed by his father). There is money available when he wants it for everyone, bar the wife. He is even proposing to embark on further litigation in the European Court of Human Rights, against the government of the United Kingdom (this arises out of the terms of the Hadkinson order made by Mr Justice Bodey last May), and presumably, to commit himself to yet further costs in doing so; not to mention the costs of the litigation he is currently pursuing against his own children in Kashmir.

I believe that the husband has had, and does still have, the means to satisfy the lump sum, maintenance and costs debts and the spectre of collapse of the empire is a smoke screen.

153. Next, Mr Howard submits that any order I may make would, or may, have adverse and severe tax consequences for the husband or the wife. This is a matter to which Mr Lakeman says the Royal Court of Jersey would pay regard and would wish to be satisfied that the tax consequences of enforcement of any order I may make have been adequately considered for [query should this read: by] all parties, but particularly the wife. See his supplementary report at bundle F24.
154. Due to lack of information from the husband, the evidence currently available to me with regard to tax is very provisional and consists of a report headed "Possible tax liability arising from the enforcement of the court order" by Tony Slater of KPMG dated 4 December 2006 and now at bundle F 81 to 87. The note assumes at paragraph 16 that the husband is UK resident "as a worst case scenario" and it does seem that he is indeed so resident. Unfortunately, neither of the "scenarios" described by KPMG are now in point. Scenario 2 considers the position if the original disposition into the trust is set aside, which I cannot do for the reason given, that the husband lacked the requisite intention. Scenario 1 is:-

"AM [viz the wife] is reinstated as a beneficiary and assets are held by the trustees for her benefit absolutely".

155. The first limb of this scenario, in those terms, is also unavailable, since I cannot "reinstate" her as a beneficiary by setting aside the instrument of exclusion. Assuming scenario 1 does broadly continue to have application, much depends upon the domicile of either or both these parties whose domicile of origin is clearly Indian and neither of whom have taken the step of applying to be British citizens. The report indicates that there is potentially a liability to considerable tax, but that it may be minimised if the wife does not remit the funds to the United Kingdom and/or a new trust for the wife is utilised.
156. If I make an order under section 24 (1)(c) then further consideration will clearly have to be given to tax consequences and the method of implementation in Jersey. But I should not be deterred altogether from making an order by possible tax consequences. So far as the husband is concerned, any adverse tax consequences for himself flow from his failure to pay the lump sum, which he could still pay so as to obviate direct recourse against the trust. So far as the wife is concerned, a sum net of tax must surely be better than nothing at all.
157. Finally, Mr Howard submits that I could not make an order under section 24 (1) (c) of the Matrimonial Causes Act 1973 without first considering in some detail all the factors in section 25 of that Act. I do not accept this. The statutory duty on the court is to have regard to all the circumstances of the case and in particular the matters listed in section 25 (2) and to give first consideration to the welfare, while a minor, of the two children who have not attained 18. In December 1999, Mr Justice Bodey considered seriatim and at appropriate length all the matters in section 25 (2). Some of them (e.g the standard of living enjoyed before the breakdown, and the duration of the marriage) have not changed. The needs of the wife certainly have not decreased. In truth, they have increased, in part because of escalating house prices. Her contribution to the welfare of the family has not decreased. Arguably, it has increased by having to support the children through the seven years of, as Salem and Noor described in their letter, "great financial hardship… shame and humiliation."

Mr Howard focuses on paragraph (a) and says, amongst other things, that the burden of costs now impacts upon the husband's financial resources and ability to pay. I ask rhetorically, whose fault substantially is that?

158. Provided I am careful not to provide a penny more for the wife than that which she is already owed under existing orders, I see no reason why I need more fully consider section 25. The stated position of the husband himself in a very recent answer to questionnaire (see bundle 5D (ii) page 169) is that he need only produce limited answers and discovery because "…this application only relates to the enforcement of an ancillary relief order. However, the questionnaire…appears to be geared towards a full investigation of means within main ancillary relief proceedings."
159. I have very carefully considered all the submissions of Mr Howard as to discretion, both separately and cumulatively. I bear very firmly and carefully in mind the observations of Sir Philip Bailhache, the Bailiff of Jersey, in his post-script in In the matter of the B Trust. I do appreciate the very rare and exceptional nature of the course I am asked to take, namely, to make a further property adjustment order years after the "main" order and essentially as a method of enforcement. I deeply appreciate that "as a general rule it will be an exorbitant exercise of jurisdiction for this court to purport to vary the terms of a Jersey settlement." But, as Mr Justice Bodey said many years ago, this is, or has become, a wholly exceptional case. It no longer attracts general rules. I do appreciate, and indeed tremble at the thought of, the long haul and further litigation that almost certainly lies ahead of the wife. But ultimately it is for her to decide whether she has the stamina to face up to it. If I decline to make the requested order, all her past endeavours will almost certainly be rendered wasted. It is indeed, as Mr Williams said, her "last throw".
160. I am not at all deflected by the burden upon the husband of the predicted further litigation. He could have avoided it, and could still avoid it, by doing his duty and simply paying up.
161. In my view, the total failure of the husband to pay anything at all, coupled with the very adverse impact, not only on the wife, but on the children, must predominate. Further, I go right back to the letter from Withers of 31 July 1998 and the "concession" upon which this case proceeded from first to last (as reflected in December 1999 in the documents also of Miss Baron QC and Mr Tim Lawrence). The trust in this case is not at all like the B Trust in the case which Sir Philip Bailhache was considering. In reality, it always has been, and remains, the alter ego of the husband himself, interposed only (on his own evidence and case) as a means of avoiding tax and ultimately enabling orderly succession. I see no reason at all why I should not treat the assets of the trust as being those of the husband himself, as every single one of the other beneficiaries so strongly urged me to do.
162. I therefore propose to exercise a discretion and make an order pursuant to section 24(1) (c) of the Matrimonial Causes Act 1973, varying for the benefit of Aaliya Mubarak the post-nuptial settlement constituted by the IMK Family Trust made on 2^nd September 1997. In essence and aim the variation will be in terms so as to empower and require the trustees of that settlement to pay to Aaliya Mubarak an amount which equals:-

(i) any balance still due from the husband to the wife under the lump sum order; and

(ii) any arrears due from the husband to the wife under the existing order to pay periodical payments to the wife, including any future arrears if he continues not to pay; and

(iii) any balance of costs (after assessment) still due from the husband to the wife under all existing orders as to costs and any order I may make at the conclusion of this hearing.

163. The terms of the variation must make clear that:-

(i) any amounts paid by the trustees to the wife pursuant to the order and variation of the settlement must be accepted by the wife in pound for pound satisfaction of, and reduction of, the above debts from the husband to her; and

(ii) any amount paid by or on behalf of the husband himself to the wife, must be accepted by her in pound for pound satisfaction of, and reduction of, the liability of the trustees pursuant to this order. In that way the spectre of double payment raised by Mr Howard will be avoided.

164. I appreciate that there are no liquid assets within the trust itself and the trustees will need a reasonable period of time before they can be expected to make payment. I will hear further submissions as to what that period should be, or as to whether the question of timing may in some way be referred, delegated or left to the Royal Court of Jersey. The terms of the variation must of course make plain that the trustees cannot ultimately be required to pay more than the total value of the assets in the trust.
165. I will hear submissions as to how the order itself should be drafted, and I currently anticipate that the advice and draftsmanship of a Jersey and/or English trust lawyer may be required.
166. The "as and when passage" in the judgment of 10 December 1999 and the terms at paragraph 5(a) of the order of 13 December 1999, as now corrected by me under the slip rule, kept the variation of settlement claim and power open "until payment of the lump sum in full". It was not kept open for a further period until any arrears of periodical payments and/or costs had been paid. Accordingly if the lump sum itself had, by now, been paid in full, I would not and could not have varied the settlement merely to provide for payment of the arrears of periodical payments and net costs. But the lump sum has not been paid in full, or at all, and the variation of settlement power is, as I have held, still alive. I see no reason why, in these circumstances, I should restrict exercise of it to the balance of the lump sum alone; and accordingly I intend to make the order in the wider terms described above.
167. In order to give practical effect to the variation of settlement order, the wife may need to be released from, or at any rate obtain variation of the terms of, certain undertakings she has previously given not to litigate abroad. I will hear submissions as to appropriate adjustments, but I indicate in general terms that I will make any adjustments necessary to permit her effectively to enforce my proposed order anywhere world wide.
168. I am painfully conscious that this judgment has been very long indeed and that it infringes the strictures of Lords Justices Schiemann and Judge and the Court of Appeal in Re MCA and others [2003] 1 FLR 164 at paragraphs 80 to 84 and 98. For this, I apologise. Nevertheless, I have restricted myself to the evidence and arguments actually presented to me and citation of only a small selection of the many authorities cited to me. I have not, even now, touched upon a number of points considered and arguments deployed during the hearing. But I have dealt with the main ones and enough is enough.
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