Matters consolidated by Order of Mr Justice Bennett dated 20 November 2006
Strand, London, WC2A 2LL
B e f o r e :
|Case No: FD04D08191
| FAIZA BEN HASHEM
|- and -
|(1) ABDULHADI ALI SHAYIF
(2) RADFAN LIMITED
|Case No: FD06F01064 (previously HC06C01508)
|(1) RADFAN LIMITED
(2) FIRAS ABDULHADI SHAYIF
(3) ISAM ABDULHADI SHAYIF
(4) ALIYAH HADI SHAYIF
(5) ABEER ABDULHADI SHAYIF
|- and -
|FAIZA BEN HASHEM
||Defendant (Part 20 Claimant)
|- and -
|ABDULHADI ALI SHAYIF
||Part 20 Defendant
Miss Jane Evans-Gordon (instructed by Radcliffes Le Brasseur) for the Claimants/Second Respondent
The First Respondent/Part 20 Defendant was neither present nor represented but gave evidence by video-link on 14-15 April 2008
Hearing dates: 7-11, 14-18 April 2008
Further written submissions filed 29 April, 1 May 2008 and 12 May 2008
Crown Copyright ©
Mr Justice Munby :
i) First ("the ancillary relief proceedings"), there is the wife's application against the husband. The wife's petition, as I have said, was issued on 20 December 2004. She served her Form A at the same time.
ii) Secondly ("the Chancery proceedings"), there is an action by the Company and the children against the wife. The Company seeks declarations that 17 Kensington Heights and 57 Forest House are owned by the Company beneficially, an order for possession of 17 Kensington Heights and the usual consequential relief. The children seek a declaration that they are the beneficial holders of the shareholdings in the Company registered in their respective names. The Chancery proceedings were issued on 7 April 2006. The wife's defence and Part 20 claim were filed on 19 May 2006. Despite strenuous objection from the Company, the proceedings were transferred to the Family Division by Master Moncaster on 7 June 2006.
The wife's claim
The husband's stance
The stance of the children and the Company
The factual background in more detail
The Properties 64 St John's Wood Court
The Properties 215 The Quadrangle
The Properties 32 Forest House
The Properties 17 Kensington Heights
The Properties 57 Forest House
The husband's approach to the litigation
i) Even assuming that, despite an order made by Bennett J on 17 October 2005 requiring him to serve a Form E within 28 days (his appeal against this order being dismissed by the Court of Appeal on 26 January 2006), the husband was justified in not serving his Form E until his 'strike out' application (see below) had been dismissed on 11 April 2006, there is and can be no justification for his failure to do so thereafter. Yet the husband has never filed a Form E, despite being ordered to do so by Bennett J on 19 October 2006 (in an order which was endorsed with a penal notice) and despite the wife's application dated 26 February 2007 to commit him for contempt. The husband's only response was to write a letter to Bennett J on 27 March 2007 seeking to justify his stance. I set out this extraordinary document in an Appendix. In these circumstances, not surprisingly, no order was made on the wife's committal application when it came before Bennett J on 29 March 2007. The only disclosure the husband has ever made is in a manifestly inadequate affidavit which he swore on 8 February 2006 in response to the wife's application for maintenance pending suit (see below). As Miss Parker justly observes, the accuracy of that affidavit as a purportedly full and accurate statement of his means can be measured against his complaint, in the letter to Bennett J, against having to provide "extensive details of every single asset I have."
ii) On 8 February 2006, as we have seen, Bennett J made an order, backdated to the date of service of the petition on the husband, requiring the husband to pay the wife maintenance pending suit at the rate of £48,000 per annum. And the same order required the husband to pay the wife's costs in the sum of £13,500 and a further £12,000 towards her future litigation costs. No payment has ever been made by the husband under that order. The husband's failure to comply with this order is, as Miss Parker points out, aggravated by two features. In the first place the husband had made an open offer in a letter from his solicitors dated 7 February 2006 to pay the wife £36,000 per annum (in addition to meeting the running costs of 17 Kensington Heights) yet he has paid nothing. Secondly, in the affidavit which he swore on 8 February 2006 the husband deposed to the fact that as well as an annual income of £160,000 he had £500,000 cash in bank accounts in Saudi Arabia so he can scarcely plead poverty yet he has paid her nothing. In the circumstances Miss Parker, in my judgment, is well justified in describing the husband's refusal to comply with this order as wilful and contumacious.
iii) By a further order dated 11 April 2006 Bennett J, as I have mentioned, required the husband to continue paying the mortgage and service charge in relation to 17 Kensington Heights. He has not done so.
iv) By an order made by Bennett J on 29 March 2007 the husband was ordered to attend the final hearing for cross-examination. On 16 July 2007 Holman J directed that the husband should attend the trial, though he also directed that arrangements should be made to receive the husband's evidence by video-link if he refused to attend. As we have seen, the husband did not attend the trial and tried to evade being cross-examined on matters to do with the ancillary relief proceedings.
i) At the outset the husband adopted the stance that he should not be required to file his Form E pending judgment in the main suit.
ii) When on 17 October 2005 Bennett J gave judgment in the suit and ordered the husband to file his Form E, the husband's immediate response was two-fold: first, he sought permission to appeal against Bennett J's findings (seeking a rehearing on fresh evidence) and, when that was refused by Bennett J, renewed his application to the Court of Appeal; secondly, he sought an order staying the order requiring him to file his Form E and, when that also was refused by Bennett J, renewed his application to the Court of Appeal.
iii) When the Court of Appeal dismissed all his applications on 26 January 2006 the husband responded five days later (on 31 January 2006) with an application to strike out the wife's ancillary relief application on the ground that her participation in the bigamous marriage disentitled her to ancillary relief. On 8 February 2006 Bennett J listed that application for hearing on 11 April 2006. A matter of days before the hearing, the husband's solicitors wrote to the wife's solicitors on 3 April 2006 saying that the husband would be placing himself on the record and that "he does not propose to pursue his strike out application." The next day (4 April 2006) the husband filed notice of acting in person, since when he has played no active part in the proceedings. He did not appear at the hearing on 11 April 2006 and his 'strike out' application was dismissed with costs.
iv) The wife was then driven to apply on 26 April 2006 for a garnishee order in an ultimately futile attempt to recover the arrears of maintenance. When the order came to be enforced, it became apparent that all the husband's bank accounts in this country had either been emptied or closed.
i) 64 St John's Wood Court, 215 The Quadrangle and 32 Forest House were each sold (respectively in January 2001, March 2000 and December 2000) at around a time when, according to the wife, the husband was complaining of difficulties in the marriage. In each case the entire proceeds of sale were remitted to the husband
ii) The mortgage on 17 Kensington Heights was increased to £300,000 in April 2002, £50,000 being remitted, as we have seen, to the husband.
iii) An attempted realisation of 57 Forest House in January 2005, less than a month after the wife had issued her divorce petition, failed only because of the wife's registration of the unilateral notice at the Land Registry. It will be recalled that the wife's petition was issued on 20 December 2004. On 19 January 2005 the husband gave telephone instructions to the Company's solicitors that the property should be sold, followed up by written instructions the same day indicating that "the purchaser is pressing for quick exchange and I would like you to expedite". Only on 24 January 2005 was it discovered that the wife had registered her unilateral notice on 10 January 2005.
In relation to (i) and (ii) Miss Parker says that the justification for the remitter to the husband of no less than £820,000 (whether or not it was the sole justification) was to limit the husband's exposure to an ancillary relief claim from the wife in the event that the marriage failed. In relation to (iii), the Company's case is that these instructions from the husband were given by him qua director of the Company; Miss Parker says that it was on any view an attempt by the husband to place one of the two remaining Properties beyond the reach of the court.
i) In the first place she submits that the husband has completely failed to engage properly in the ancillary relief proceedings, in particular by failing to make anything remotely approaching full and frank disclosure. In this connection she points out that, having indicated that his overall net worth is only £5 million, the husband, if that were truly the case, would surely have been prepared to file a Form E to substantiate it.
ii) Secondly, she says, this has been exacerbated by his disregard for and disobedience of court orders even when endorsed with penal notices.
iii) Thirdly, she points to his complete failure to make any let alone proper provision for the wife, despite his promises to do so and even when specifically ordered to do so.
iv) Fourthly, she points to what she says are his attempts to place assets beyond the jurisdiction of the court.
v) Finally, she says, all this is to be contrasted with his involvement in, and what she asserts is his instigation of, the Chancery proceedings. It is, she submits, part of his campaign.
In short, she says, the husband has evinced his utter determination to defeat the wife's claim.
The extent of the husband's wealth
"Let it be assumed for the sake of argument, he says, that there is no evidence before me which would justify a specific finding that the husband's wealth is the $200 million mentioned by the wife or indeed which would justify a finding that the husband's wealth is £X, whatever specific figure one chooses to substitute for X. What he says I can safely infer is that the husband's wealth, whatever it may be, is such that, were he to make the full and frank disclosure which he ought to but has not made, the court would award the wife even more than she is asking for The only sensible inference, says Mr Mostyn, is that a frank revelation of the truth would be even more damaging to the husband than the adverse inferences to be drawn from his non-disclosure, that the truth would be more painful to him than the consequences of non-disclosure."
In that case I accepted the submission, saying at para :
"I do not accept Mr Mostyn's submission that the materials I have seen justify the inference that the husband's wealth amounts to the $200 million which the wife believes it to be. I am not saying that it does not. All I am saying is that the materials I have seen do not properly justify an inferential finding that it does. But Mr Mostyn does not have to go that far. The inference which in my judgment I can properly draw, and which I do draw, is that the full extent of the husband's present wealth is such as will very comfortably justify the kind of award which the wife is seeking."
The issues as between the wife, the Company and the children
i) First, she asserts that the Company is simply the husband's alter ego, the other shareholders being simply his nominees. Accordingly, she says, it is appropriate to pierce or lift the corporate veil.
ii) Second, and given, she says, that the children did not themselves fund the purchase of their shares in the Company, she asserts that their shareholdings are subject to resulting trusts in favour of the husband. (In response the children rely, inter alia, on the presumption of advancement.)
iii) Third, and even if the children's shareholdings in the Company are real and genuine, as opposed to merely nominal, she asserts that the Company holds 17 Kensington Heights and 57 Forest House upon constructive trusts for the benefit of the husband alone.
iv) Finally, and in the alternative to all the above, she asserts that 17 Kensington Heights and 57 Forest House can and should be regarded as having been settled on the husband (or on the husband and the wife) in such a way as to engage section 24(1)(c) of the 1973 Act, and that the court should accordingly exercise its power to vary those settlements by resettling the properties on her free from any trusts.
The issues as between the wife and the husband
i) First, the wife has to make good the various claims which she seeks to pursue against the Company and the children, for otherwise her only claim by way of ancillary relief so far as concerns either the Company or the Properties will be a claim to the husband's 30% shareholding in the Company.
ii) Secondly, she has to meet the potential argument, which I have to address even though the husband is not before me, that the fact that the marriage was bigamous affects the way in which the court's discretion would otherwise be exercised in accordance with the provisions of the 1973 Act.
The structure of the judgment
Preliminary matters: the wife's case against the children and the Company in outline
i) First, and as the wife has asserted from the very outset, there is her evidence which I accept that the husband on a number of occasions during the course of the marriage pointed out or referred to the Properties as being 'his' 'mine' and similarly told her that the Company was his.
ii) Second, the Company was established in 1988, the husband providing the entire share capital, at a time when Isam was just 18, when the other children were all minors and when Firas was a very young baby. Of course, as Miss Parker accepts, even minors can legitimately own shares, and many fathers legitimately wish to make provision for their children by conferring shareholdings on them, but it is important, she says, to note that the Company was in no way and never has been a joint venture between investors or a partnership of equals on the part of the husband and the children. The issue for the court, she says, is whether, at that stage, the husband genuinely intended to part, in favour of his children, with 70% of the value of the assets transferred into the Company's name or, indeed, of those assets acquired subsequently. She submits that he did not.
iii) Third, and as the contemporaneous documents to which I have referred make clear, the purpose for which the Company was established was not to make immediate provision for the children but to protect the husband from United Kingdom capital gains tax and inheritance tax. In particular, says Miss Parker, the references to inheritance tax indicate that the benefit of the Company's assets was not to be enjoyed by the children until after the husband's death.
iv) Fourth, the only person to contribute funds to or to draw funds out of the Company has been the husband. When funds have been required by the Company he has provided them. (It is asserted that since about March 2006 some funds have been provided by Isam to meet various costs incurred by the Company. Miss Parker says that, given the date and circumstances in which the Chancery proceedings were launched, it is not difficult to be cynical about that exercise; there is, moreover, she says, not a shred of evidence as to where Isam got the money from to make these contributions.) When the Company has purchased properties, restrictions have been registered with the Land Registry so that the properties could not be sold without the husband's consent. Perhaps most important of all, and of particular significance given the amounts involved, she suggests, when the Company's properties have been realised, the husband alone has received the proceeds of sale. She asserts (though this is hotly disputed) that not a penny of this has been paid to any of the children.
v) Fifth, whilst the various 'hired' directors or managers have dealt to a certain extent with various day to day matters, all the important decisions relating to the Company, she says, have plainly been taken by the husband and all the professionals involved with the Company plainly take their instructions from him. The documents disclosed by the Company are simply littered, she says, with examples of the husband and the Company being treated as interchangeable entities, and there is no example prior to 2006 of any of the other shareholders having anything other than a nominal relationship with the Company.
vi) Sixth, the husband appears to have regarded himself as the ultimate beneficial owner. He refers to the Company's property as 'my' property and to the Company as a 'vehicle'; indeed the directors of the Company refer to him as "the company's beneficial owner" even though his shareholding, on the face of it, is only 30%. Such references to the interests of the other shareholders as there are (and they are, says Miss Parker, few and far between) present as formalities, rather than real issues or impediments.
vii) Seventh, the timing of the attempt to sell 57 Forest House, the evident haste in the husband's instructions, and the suggestion that the sale proceeds will be remitted outside the jurisdiction, are wholly consistent with a sense on the part of the husband of his personal property being threatened by the wife's application.
Preliminary matters: specific findings of fact sought by the wife against the children and the Company
i) The husband was the source of all the funds injected into the Company. What Miss Parker says was his inability to explain whether this was by way of gift or by loan is inconsistent with the case that the Company was an arms length entity and supports the inference that it was not.
ii) The husband placed a restriction against the titles to prevent sale or realisation of the properties without his consent, so as to ensure that his beneficial ownership was safeguarded as against the other shareholders.
iii) On the sales of 215 The Quadrangle, 64 St John's Wood Court and 32 Forest House, the husband received all of the proceeds of sale as also £50,000 from the re-mortgage of 17 Kensington Heights.
iv) The husband treated the moneys as his as did the children. On the only occasion when consents from the children were required by the administrators of the Company the decision that the proceeds of sale be applied to the husband and the husband alone had already been taken. On other occasions consents were neither required nor obtained.
v) All the properties in Saudi Arabia and their contents conveyed to the children were conveyed by way of gift without consideration. The purported shares of the children in the proceeds of sale of 215 The Quadrangle, 64 St John's Wood Court and 32 Forest House were not set off against the value of the gifts nor taken account of in any way.
vi) The husband intended to retain ultimate ownership of the Company and/or the Properties and in fact did so. Whatever the formal position, the children regarded the husband as the ultimate owner of the Company and/or the Properties. The husband and the children all knew, and the children regarded themselves, as holding the shares in name only. The inference to be drawn from their actions and inaction in relation to the proceeds of sale is that they regarded the husband as the ultimate owner.
vii) No distinction has ever been drawn by any of the directors or shareholders as between funds to which the Company is entitled and funds to which the husband is entitled.
viii) The directors of the Company were nominees acting on the husband's instructions so that the Company can be regarded as the husband's company and his intentions can be regarded as the Company's intentions.
ix) The husband has evinced his utter determination to defeat the wife's claim.
x) If it were necessary so to find, the removal of the proceeds of sale of 215 The Quadrangle, 64 St John's Wood Court and 32 Forest House, and £50,000 of the moneys obtained by the re-mortgage of 17 Kensington Heights, were at least in part motivated by the husband's desire to reduce his exposure to the wife's potential claims.
xi) The attempts to sell 57 Forest House and 17 Kensington Heights were motivated by the desire to defeat the wife's claim.
xii) The husband has instigated the Company's claim and it is part of his campaign.
Preliminary matters: specific findings of fact sought by the wife against the husband
i) The husband has evinced his utter determination to defeat the wife's claim. The husband has instigated the Company's claim and it is part of his campaign.
ii) The husband is worth in excess of £250 million. Even if the court is not able to find that as a fact it is able to and should find that he is able to satisfy the wife's claim in its entirety.
iii) The husband promised the wife that he would support her and that she would never have to work again and assured Mrs Penny that he would take care of the wife and she did not need to worry about her future.
iv) No distinction has ever been drawn as between funds to which the Company is entitled and funds to which the husband is entitled. The assets held in the name of the Company and the shares in the Company should be regarded as the husband's for the purpose of identifying his assets.
v) The wife is not a bigamist. On Bennett J's findings she may have committed secondary offences, but any offence which either party committed was immaterial within the context of the marriage validly celebrated according to Quranic law and custom. What was important to the husband was that he was validly married according to Quranic law. The wife relies on Bennett J's findings in respect of the husband's actions.
Preliminary observations: the approach of the court
"these sophisticated offshore structures are very familiar nowadays to the judiciary who have to try them. They neither impress, intimidate, nor fool any one. The courts have lived with them for years."
" I agree entirely with Coleridge J that the court should adopt a robust, questioning and, where appropriate, sceptical approach. As I said myself in Re W (Ex Parte Orders)  2 FLR 927, at 938:
'the court will not allow itself to be bamboozled by husbands who put their property in the names of close relations in circumstances where, taking a realistic and fair view, it is apparent that the recipient is a bare trustee and where the answer to the real question Whose property is it? is that it remains the husband's property.'
And I went on to refer to:
'the robustness with which the Family Division ought to deal in appropriate cases with husbands who seek to obfuscate or to hide or mask the reality behind shams, artificial devices and similar contrivances. Nor do I doubt for a moment the propriety and utility of treating as one and the same a husband and some corporate or trust structure which it is apparent is simply the alter ego or creature of the husband.'
 But this does not mean, and I am sure that Coleridge J did not intend to suggest, that the court can simply ride roughshod over established principle, least of all where there are, or appear to be, third party interests involved. As I went on to comment in Re W, at 938:
'On the other hand, and as Nicholas v Nicholas  FLR 285 demonstrates, the court does not in my judgment cannot properly adopt this robust approach where, for example, property is held by a company in which, although the husband has a majority shareholding, the minority shareholdings are what Cumming-Bruce LJ at 287G called "real interests" held by individuals who, as Dillon LJ put it at 292G, are not nominees but business associates of the husband.'"
"In deciding whether or not, and, if so, in what manner, these principles operate in any particular case, the court will of course have regard to the particular context and to the particular factual matrix. Thus it may be easier, for example, to 'pierce the corporate veil' in the context of a small family company than in some larger-scale or more purely commercial context. Similarly, the inferences that can properly be drawn in the case of an asserted resulting trust may differ, even in a family context, depending upon the nature of the relationship between the parties; an inference appropriate in the case of a married couple may not be appropriate in the case of an unmarried couple, whilst an inference appropriate in the case of a couple (whether married or unmarried) may be wholly inappropriate as between siblings."
Miss Parker submits, and I entirely agree, that in just the same way the particular cultural context may be very important.
"In this sense, and to this limited extent, the typical case in the Family Division may differ from the typical case in (say) the Chancery Division. But what it is important to appreciate (and too often, I fear, is not appreciated at least in this division) is that the relevant legal principles which have to be applied are precisely the same in this division as in the other two divisions. There is not one law of 'sham' in the Chancery Division and another law of 'sham' in the Family Division. There is only one law of 'sham', to be applied equally in all three Divisions of the High Court, just as there is but one set of principles, again equally applicable in all three divisions, determining whether or not it is appropriate to 'pierce the corporate veil'."
"even in the Family Division, a spouse who seeks to extend her claim for ancillary relief to assets which appear to be in the hands of someone other than her husband must identify, and by reference to established principle, some proper basis for doing so. The court cannot grant relief merely because the husband's arrangements appear to be artificial or even 'dodgy'."
"The Family Division applies precisely the same principles, and in precisely the same way, as the Chancery Division, or for that matter the Queen's Bench Division. A creditor is not to be prejudiced because a wife's application to annul the bankruptcy order on which he depends is heard by a Family Division judge (more properly, as Vaisey J explained, a judge of the High Court who is assigned for the time being to the Family Division) any more than a wife is to be prejudiced because her application is heard by a Chancery judge."
Preliminary observations: the rule in Salomon's case
"it seems to me impossible to dispute that once the company is legally incorporated it must be treated like any other independent person with its rights and liabilities appropriate to itself, and that the motives of those who took part in the promotion of the company are absolutely irrelevant in discussing what those rights and liabilities are."
"It was said that in the present case the six shareholders other than the appellant were mere dummies, his nominees, and held their shares in trust for him. I will assume that this was so. In my opinion, it makes no difference. The statute forbids the entry in the register of any trust; and it certainly contains no enactment that each of the seven persons subscribing the memorandum must be beneficially entitled to the share or shares for which he subscribes. The persons who subscribe the memorandum, or who have agreed to become members of the company and whose names are on the register, are alone regarded as, and in fact are, the shareholders Whether they are beneficial owners or bare trustees is a matter with which neither the company nor creditors have anything to do: it concerns only them and their cestuis que trust if they have any."
"It has become the fashion to call companies of this class "one man companies." That is a taking nickname, but it does not help one much in the way of argument. If it is intended to convey the meaning that a company which is under the absolute control of one person is not a company legally incorporated, although the requirements of the Act of 1862 may have been complied with, it is inaccurate and misleading: if it merely means that there is a predominant partner possessing an overwhelming influence and entitled practically to the whole of the profits, there is nothing in that that I can see contrary to the true intention of the Act of 1862, or against public policy, or detrimental to the interests of creditors."
"I do not see my way to holding that if there are seven registered members the association is not a company formed in compliance with the provisions of the Act and capable of carrying on business with limited liability, either because the bulk of the shares are held by some only, or even one of the members, and the others are what is called "dummies," holding, it may be, only one share of 1l. each, or because there are less than seven persons who are beneficially entitled to the shares."
The result followed even though, as Lord Davey put it (at page 55) "any jury, if asked the question, would say the business was Aron Salomon's and no one else's."
"no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up."
As Lord Wrenbury put it at page 633:
"the corporator even if he holds all the shares is not the corporation, and neither he nor any creditor of the company has any property legal or equitable in the assets of the corporation."
Constructive or resulting trusts of 17 Kensington Heights and 57 Forest House
Resulting trust of the children's shares in the Company
Piercing the veil of incorporation
"it is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere faηade concealing the true facts."
That statement was treated by the Court of Appeal in Adams v Cape Industries PLC  Ch 433 at page 539 as stating a "well-recognised exception" to the rule prohibiting the piercing of the corporate veil. It is, in my judgment, binding upon me and definitive.
"[Counsel for Adams] described the theme of all these cases as being that where legal technicalities would produce injustice in cases involving members of a group of companies, such technicalities should not be allowed to prevail. We do not think that the cases relied on go nearly so far as this. As [counsel for Cape] submitted, save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon v Salomon & Co Ltd  AC 22 merely because it considers that justice so requires. Our law, for better or worse, recognises the creation of subsidiary companies, which though in one sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as separate legal entities with all the rights and liabilities which would normally attach to separate legal entities."
"it is clear that there must be some impropriety before the corporate veil can be pierced."
"Companies are often involved in improprieties. Indeed there was some suggestion to that effect in Salomon v A Salomon & Co Ltd  AC 22. But it would make undue inroads into the principle of Salomon's case if an impropriety not linked to the use of the company structure to avoid or conceal liability for that impropriety was enough."
"the court is entitled to "pierce the corporate veil" and recognise the receipt of the company as that of the individual(s) in control of it if the company was used as a device or facade to conceal the true facts thereby avoiding or concealing any liability of those individual(s)."
And in this connection, as the Court of Appeal pointed out in Cape at page 542, the motive of the wrongdoer may be highly relevant.
" In all of the cases where the court has been willing to pierce the corporate veil, it has been necessary or convenient to do so to provide the claimant with an effective remedy to deal with the wrong which has been done to him and where the interposition of a company would, if effective, deprive him of that remedy against him. It seems to me that the veil, if it is to be lifted at all, is to be lifted for the purposes of the relevant transaction. It must surely be doubtful at least that the ex-employee in Gilford Motor Co v Horne would have been liable for the company's electricity bill simply because he was using the company as device and sham to avoid a covenant binding on him personally; and the same goes for the vendor of the property in Jones v Lipman.
 It is not permissible to lift the veil simply because a company has been involved in wrong-doing, in particular simply because it is in breach of contract. And whilst it is clear that the veil can be lifted where the company is a sham or faηade or, to use different language, where it is a mask to conceal the true facts, it is, in my judgement, correct to do so only in order to provide a remedy for the wrong which those controlling the company have done."
"Burnstead was an offshore company which was wholly owned and controlled by Mr Dalby and in which nobody else had any beneficial interest. Everything it did was done on his directions and on his directions alone. It had no sales force, technical team or other employees capable of carrying on any business. Its only function was to make and receive payments. It was in substance little other than Mr Dalby's offshore bank account held in a nominee name. In my view this is the type of case in which the court ought to have no hesitation in regarding Burnstead simply as the alter ego through which Mr Dalby enjoyed the profit which he earned in breach of his fiduciary duty to ACP. If the arrival at this result requires a lifting of Burnstead's corporate veil, then I regard this as an appropriate case in which to do so. Burnstead is simply a creature company used for receiving profits for which equity holds Mr Dalby to be accountable to ACP. Its knowledge was in all respects the same as his knowledge. The introduction into the story of such a creature company is, in my view, insufficient to prevent equity's eye from identifying it with Mr Dalby"
"these conclusions are such as to entitle the court to recognise the receipt of the money of Trustor by Introcom as the receipt by Mr Smallbone too. Introcom was a device or facade in that it was used as the vehicle for the receipt of the money of Trustor. Its use was improper as it was the means by which Mr Smallbone committed unauthorised and inexcusable breaches of his duty as a director of Trustor."
"In this case the whole litigation has been conducted on the basis that the respondent has control over G Ltd and over the land which is owned by that company. As I have already indicated, he is the 100% shareholder in that company The whole background to the litigation, as I say, has been that the respondent has the effective control over that land via the company in which he owns all of the shares, and it would, it seems to me on the face of it, be an irony if the court was precluded from ordering a sale of the land which was very much central to the litigation, simply because a party has only a 100% interest in the shares in the company which owns the land, rather than the actual title to the land himself."
"I find it difficult to see how the application for ancillary relief in Green v Green  1 FLR 326 could have been said to relate to land when the husband merely owned shares in two companies which owned land. I can well understand Connell J's desire to find a solution so that the petitioner and her child could be provided with a home, but I do not think that the court had power in that case to order a sale of the land."
Moreover, Connell J seems to have treated the fact of ownership and control alone as sufficient to justify piercing the veil, but as we have already seen subsequent authority makes it clear that that is not so. To refer again to what Bodey J said in Mubarak at page 682, "it is quite certain that company law does not recognise any exception to the separate entity principle based simply on a spouse's having sole ownership and control." There has also to be impropriety and the use of the company as a device or faηade to facilitate the wrongdoing.
"Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. Woolfson cannot be treated as beneficially entitled to the whole share-holding in Campbell, since it is not found that the one share in Campbell held by his wife is held as his nominee. In my opinion there is no basis consonant with principle upon which on the facts of this case the corporate veil can be pierced to the effect of holding Woolfson to be the true owner of Campbell's business or of the assets of Solfred."
"it is not possible to take the view that the minority interests in either company can be thus disregarded. The shareholdings are set out in the evidence and it is quite clear that they are of such a character that the minority interests are real interests and it would not be an appropriate case in which the court should exercise its power to pierce the corporate veil."
As Dillon LJ said (page 292):
"If the company was one-man company and the alter ego of the husband, I would have no difficulty in holding that there was power to order a transfer of the property, but that is not this case. The evidence shows that the husband only has a 71% interest in this company. The remaining 29% is held by individuals who, on the evidence available to this court, are not nominees but business associates of the husband."
"we do not accept as a matter of law that the court is entitled to lift the corporate veil as against a defendant company which is the member of a corporate group merely because the corporate structure has been used so as to ensure that the legal liability (if any) in respect of particular future activities of the group (and correspondingly the risk of enforcement of that liability) will fall on another member of the group rather than the defendant company. Whether or not this is desirable, the right to use a corporate structure in this manner is inherent in our corporate law. [Counsel] urged on us that the purpose of the operation was in substance that Cape would have the practical benefit of the group's asbestos trade in the United States of America without the risks of tortious liability. This may be so. However, in our judgment, Cape was in law entitled to organise the group's affairs in that manner and to expect that the court would apply the principle of Salomon v A Salomon & Co Ltd  AC 22 in the ordinary way."
"Nothing improper was done by the group or the companies in the group or their directors
Indeed, before us Mr Ashe has frankly accepted that he does not put his case in that way. He says no impropriety is alleged. He does not allege that there was any breach of the provisions of the 1986 Act, nor that there was any conduct on the part of the directors (or any other person) in 1992 or 1995 which would give rise to remedies under the Companies Act 1985 or under the 1986 Act. Therefore, he is not able to rely upon any concept of fault or indeed of fraud in support of his contention that the corporate veil should be pierced. It will be appreciated that this immediately puts the facts of this case into a completely different category from cases such as Wallersteiner v Moir  1 WLR 991. Furthermore, he is not able to make out any case that at any stage the company was a mere faηade, or that it concealed the true facts, nor that there was any sham. All the transactions that took place were overt transactions. They were conducted in accordance with the liberties that are conferred upon corporate entities by the Companies Act 1985 and they do not conceal anything from anybody. The companies were operating at material times as trading companies and they were not being interposed as shams or for some ulterior motive."
"The approach of the judge in the present case was simply to look to the economic unit, to disregard the distinction between the legal entities that were involved and then to say: since the company cannot pay, the shareholders who are the people financially interested should be made to pay instead. That of course is radically at odds with the whole concept of corporate personality and limited liability and the decision of the House of Lord in Salomon v A Salomon & Co Ltd  AC 22.
On the question of lifting the corporate veil, the Court of Appeal in Adams v Cape Industries plc  Ch 433 at 544 expressed themselves similarly, but it is clear that they were of the view that there must be some impropriety before the corporate veil can be pierced. It is not necessary to examine the extent or the limitations of that principle because, in the present case no impropriety is alleged. For example, they quoted what was said by Lord Keith in Woolfson concerning the DHN decision [DHN Ltd v Tower Hamlets LBC  1 WLR 852]. I have some doubts whether in this respect the Court of Appeal properly applied the principle that it is appropriate to pierce the corporate veil only where special circumstances exist, indicating that it is a mere faηade concealing the true facts.
The plaintiffs in the present case cannot bring themselves within any such principle. There is no faηade that was adopted at any stage; there was no concealment of the true facts.
We pressed Mr Ashe during the course of his submissions as to whether he was making any such suggestion. He was unable to give a satisfactory reply. This was obviously inevitable because there was no basis for suggesting that there was any such faηade. It was just the ordinary trading of a group of companies under circumstances where, as was said in Adams v Cape Industries plc  Ch 433 at 544, the company is in law entitled to organise the group's affairs in the manner that it does, and to expect that the court should apply the principles of Salomon v A Salomon & Co Ltd in the ordinary way."
In that case, it may be noted, the corporate reorganisation took place during the period between 1992 and 1995, after the plaintiffs had issued their writ in 1991.
"Looking at the totality of the husband's presentation, it was, in my view, sufficient to amount to a concession that he was to be treated for the purpose of the proceedings as the ultimate owner, not only of the company shares but also of the assets belonging to the companies. However, that concession cannot, in my view, be binding on the companies: he was not a director of DIL at the material time and did not, on the evidence, have the authority to bind either Board of Directors in saying that company assets could be seised and used for the satisfaction of his personal liabilities towards the wife."
He continued at page 684:
"The fact that the husband purported and appeared to be able during the various 'stay' hearings to use and control company assets as if his own and the fact that the directors may in practice not have objected to that course whilst a stay was in place or in the offing, does not prove that in the last analysis he was able to establish and enforce against the companies the right in law to do so.
So although the earlier findings based on the husband's concession that he was the owner of the companies are res judicata against him, they are not binding on the companies."
"Mr Aiyer has been described on behalf of the wife as a mere cipher of the husband, the implication being that he is masterminding the companies' intervention and opposition to the seizure of its jewellery simply to assist the husband in avoiding his proper obligations to the wife. However, having seen Mr Aiyer, albeit briefly (and whilst I do not doubt he has discussed with the husband the tactical advantages of the companies fighting to retain the stock and that he is acting in line with the husband's wishes) I conclude that, nonetheless, he is also genuinely concerned with his duty as a director to safeguard company assets.
I did not get the impression from him that the board's resistance to the order is driven purely by instructions from the husband, nor purely by the board's wish to help the husband in resisting payment of the lump sum order."
"At the end of the day, both companies are bona fide trading companies incorporated well before the matrimonial difficulties of the husband and wife. DIL is indeed incorporated outside this jurisdiction and the husband is not a director. It is not suggested that they are as such being used as a sham or device, albeit that their existence is very convenient to the husband. In my judgment, there do exist genuine third party rights and interests which ought to be respected, namely the interests of bona fide commercial creditors (one of them secured on the jewellery) and the position of directors who have fiduciary duties and who oppose the seizure of stock in trade. The facts of this case are far away from those of Green v Green  1 FLR 326 which Mr Pointer asks me to follow.
Applying the above proposed approach as regards lifting the corporate veil to the evidence now before me and having heard full legal argument, I come to the conclusion that this case does not fall within the necessarily circumscribed circumstances in which lifting the veil would be acceptable. However much the court may wish to assist a wife and children where a lump sum has not been paid, I am satisfied that doing so here, whensoever it may be permissible, would be a step too far in all the circumstances."
" However, having seen Mr Simms give oral testimony, and having read and re-read his statements, I do not see him as a man who would be dictated to by Jack and Helga. He would, in the end, no doubt comply with their instructions since they could ultimately "call the shots": the money was their money (or on their case, money of the Helga family trust) and not Mr Simms' money. He, however, was the chairman of Charlton carrying out negotiations as he saw fit on behalf of Charlton: he was not simply the agent of Jack and Helga in doing so, still less their lackey to do their bidding.
 It is also clear that Mr Rahman, when in Bangladesh and in dealing with the Bangladeshis, was acting as he saw fit and not in any way, on a day to day basis, at the direction of Jack and Helga. It was he alone who knew, and had contact with, the potential financiers and backers and he who dealt with the Bangladeshi banks. As managing director of Charlton, he took the day to day decisions about how to get the Bangladesh deal off the ground. Again, I have no doubt that Jack and Helga were kept fully informed and had input into decisions and could, ultimately, as I say, "call the shots": nonetheless, so far as concerns the Bangladesh end of the transaction, Charlton was, so it seems to me, a genuine company which was not being used, vis a vis the Bangladeshis, as a sham or faηade at all."
"whether the wife can seize and sell company assets by way of enforcement of her lump sum award. This raises the question whether on the facts of this case the court can ignore the company/trust structure through which the jewellery stock is owned, ie 'lift the corporate veil'."
After a detailed examination of the authorities and the evidence he concluded, as we have seen, that the court could not.
"The test propounded by Mr Pointer QC for the wife is that the court can lift the corporate veil and make an order directly against a company's assets binding on the company when it can be shown that the husband (as I shall assume) controls the company and when any minority interests can properly be disregarded, for example as being mere nominees of the husband.
Mr Hunter QC, for DIL, supported by Miss Prevezer QC, for DJL, and by Mr Howard QC, for the husband, all challenge this proposition head-on and take issue with the basis of the Family Division's assuming this power directly or indirectly against company assets. They assert that the 'veil of incorporation' can only be lifted in circumstances where a company has been formed or used as a device or sham: in other words where corporate status has been or is being abused, and not merely where the spouse in question has full ownership and control."
I pause here to observe that the authorities which I have already analysed, including of course, authorities decided after Mubarak, demonstrate that the law is indeed as was submitted by Mr Hunter, Miss Prevezer and Mr Howard and not as Mr Pointer contended.
"Mr Hunter and Miss Prevezer rely here on the fact that there is no suggestion of a sham and that DIL and DJL have as such been run perfectly properly for their own legitimate trading purposes. They submit strongly, relying on Adams and Others v Cape Industries plc and Another  Ch 433, that no principle exists whereby, if reliance on the strict technicalities would produce injustice, then the veil of incorporation can, without more, be lifted."
In my judgment, that submission was quite plainly correct as a matter of law. Bodey J continued:
"One can well see that, at least conceptually, the willingness of those who deal commercially with companies large or small, could well be compromised if the general principle were that the former wife of the owner and alter ego of the company might be able, with an ancillary relief order in her favour, to make off with company assets."
Save that I myself would omit the words "at least conceptually" for in my judgment the risk is real not notional I would respectfully agree with this.
"the precise extent of the Family Division's power to go directly against the property of a company owned or controlled by one of the spouses appears less than clear."
"Ideally the Family Division and the Chancery Division should plainly apply a common approach. However, the fact remains that different considerations do frequently pertain: the company approach, on the one hand, being predominantly concerned with parties at arm's length in a contractual or similar relationship; the family approach, on the other hand, being concerned with the distributive powers of the court as between husband and wife applying discretionary considerations to what will often be a mainly, if not entirely, family situation."
"In practice, especially in 'big money' cases, the husband (as I will assume) will often make a concession that company/trust assets can be treated as his, whereafter the case proceeds conveniently on that basis. It is pragmatic, saves expense and usually works. Problems such as have arisen in this case are rare and anyway can be avoided where there are other assets against which the lump sum order can be enforced."
I entirely agree.
"The difficulty remains in defining those situations when lifting the veil is appropriate by way of enforcement following such a concession in ancillary relief proceedings. I would suggest that the Family Division can make orders directly or indirectly regarding a company's assets where (a) the husband (as I am assuming) is the owner and controller of the company concerned and (b) where there are no adverse third parties whose position or interests would be likely to be prejudiced by such an order being made. I include as third parties those with real minority interests in the company and (where relevant on the facts) creditors and directors."
He adopted the following rationalisation offered by Mr Hunter:
"that it would amount merely to a short-circuiting of the full company law route, namely the declaration of a dividend to the husband comprising the company asset concerned (eg the matrimonial home) enabling him and/or the court then to transfer it onwards to the wife. It would amount to his property for the purposes of s 24 in the same sense that the law may look on that as done as ought to be done".
"I would add that lifting the veil is most likely to be acceptable where the asset concerned (being the property of an effectively one-man company) is the parties' former matrimonial home, or other such asset owned by the company other than for day-to-day trading purposes."
"In practice, especially in 'big money' cases, the husband (as I will assume) will often make a concession that company/trust assets can be treated as his, whereafter the case proceeds conveniently on that basis. It is pragmatic, saves expense and usually works. Problems such as have arisen in this case are rare and anyway can be avoided where there are other assets against which the lump sum order can be enforced."
I entirely agree. Third, there is the fact that claims which might otherwise have to be made good, if at all, by application of the doctrine of piercing the veil can in appropriate circumstances be made good in the Family Division (though in the nature of things not elsewhere) by successful reliance upon either section 37 of the 1973 Act or the principle in Thomas v Thomas  2 FLR 668. Finally, and fundamentally, there is the point made by Hobhouse LJ in Ord at page 457, that the concept of stripping or piercing the veil is "extremely limited indeed." Reported cases in any context where the claim has succeeded are few in number and striking on their facts.
"(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may make any one or more of the following orders, that is to say
(c) an order varying for the benefit of the parties to the marriage and of the children of the family or either or any of them any ante-nuptial or post-nuptial settlement (including such a settlement made by will or codicil) made on the parties to the marriage
(2) The court may make an order under subsection (1)(c) above notwithstanding that there are no children of the family."
"The court after a final decree of nullity of marriage or dissolution of marriage may inquire into the existence of ante-nuptial or post-nuptial settlements made on the parties whose marriage is the subject of the decree, and may make such orders with reference to the application of the whole or a portion of the property settled either for the benefit of the children of the marriage or of their respective parents as to the court shall seem fit."
I need not trace this provision through its subsequent incarnations in section 192 of the Supreme Court of Judicature (Consolidation) Act 1925, section 25 of the Matrimonial Causes Act 1950, section 17 of the Matrimonial Causes Act 1965 and section 24(1)(c) of the 1973 Act as originally enacted, save to note that the words "the property settled" which had first appeared in the 1859 Act were omitted for the first time when the provision was recast in 1973. However, and that said, as Thorpe LJ noted in C v C (Ancillary Relief: Nuptial Settlement)  EWCA Civ 1030,  Fam 250, at para , "it is common ground that there is no material distinction throughout these transitions."
"The section is concerned with a settlement "made on the parties to the marriage." So, broadly stated, the disposition must be one which makes some form of continuing provision for both or either of the parties to a marriage, with or without provision for their children. Conversely, a disposition which confers an immediate, absolute interest in an item of property does not constitute a settlement of that property. The statutory provision is concerned with an order varying the terms of a settlement. This would not be an altogether apt exercise in relation to property given out-and-out and belonging to one of the parties to the marriage as his or her own absolute property. The context does not require that outright gifts of this nature should fall within the scope of the variation provision. In such a case the appropriate order on the dissolution of the marriage, if an order is needed in respect of the property, is a property transfer or property settlement order."
"Beyond this the authorities have consistently given a wide meaning to settlement in this context, and they have spelled out no precise limitations. This seems right, because this approach accords with the purpose of the statutory provision. Financial provision that is appropriate so long as the parties are married will often cease to be appropriate when the marriage ends. In order to promote the best interests of the parties and their children in the fundamentally changed situation, it is desirable that the court should have power to alter the terms of the settlement. The purpose of the section is to give the court this power. This object does not dictate that settlement should be given a narrow meaning. On the contrary, the purpose of the section would be impeded, rather than advanced, by confining its scope. The continuing use of the archaic expressions "ante-nuptial" and "post-nuptial" does not point in the opposite direction. These expressions are apt to embrace all settlements in respect of the particular marriage, whether made before or after the marriage. In this connection, it should be noted in passing that a settlement may be made in respect of a particular marriage even though in certain circumstances the wife or husband by a subsequent marriage might be the person to take. Lort-Williams v Lort-Williams  P 395 affords an illustration of this."
Conversely, it may also be noted, a settlement which was nuptial when made may lose that character, depending on the facts and circumstances of the particular case: C v C (Ancillary Relief: Nuptial Settlement)  EWCA Civ 1030,  Fam 250, at para  (Thorpe LJ) and para  (Arden LJ).
"Those words are extremely wide, and I am anxious that they should not, by any construction the Court may put upon them, be narrowed in any way. To narrow them would be undesirable for this reason: the various circumstances which come before the Court, and for which this section is brought into operation, are so diverse that it is to my mind extremely important that, so far as possible, the Court should have power to deal with all the cases that come before it, and, in dealing with them, to meet the justice of the case. I, therefore, do not desire to see any narrow interpretation placed upon the words of the section."
That policy seems to me to be as important and the approach, in my judgment, is as valid today as a century ago.
"Is it upon the husband in the character of husband or in the wife in the character of wife, or upon both in the character of husband and wife? If it is, it is a settlement on the parties within the meaning of the section. The particular form of it does not matter. It may be a settlement in the strictest sense of the term, it may be a covenant to pay by one spouse to the other, or by a third person to a spouse. What does matter is that it should provide for the financial benefit of one or other or both of the spouses as spouses and with reference to their married state."
He added at page 235:
"But whether a settlement is within s. 192 does not depend on who is the settlor. In many ante-nuptial settlements, neither the husband nor the wife are themselves the settlors But whether a settlement is within s. 192 must depend on what it effects. If, in fact, it is a settlement on either husband or wife, or both in the character of husband or wife, it is wholly immaterial that it is prompted and stated to be prompted by affection only for one of them.
On the question whether a settlement is a settlement within s. 192, the motive of the settlor seems to me immaterial, except so far as it is given effect to by the terms of the deed."
"My task is to consider what the real substance of the arrangement was which governed this property. The authorities make it clear that I should consider the question broadly and ask myself whether or not it was an arrangement which made ongoing provision for the husband, wife and/or child in those capacities. Motive is irrelevant."
He continued, at para :
"This property was bought by the trust during the parties' engagement and prior to their marriage. I think there can be no doubt it was nuptial. In terms of the question of ongoing provision for them during their marriage, it is hard to think of any arrangement that is more ongoing than the provision of a matrimonial home."
A little further on, at para , he indicated that the task of the court was to "examine the true character of the arrangement."
"One feature of the power of the court under the section is to be noted. The section gives the court power to vary a settlement. Inherent in this provision is the notion that the court's jurisdiction extends to all the property comprised in the settlement. Thus it includes any interest the settlor himself thenceforth may have in the settled property by virtue of his own settlement. Further, the court's power is not confined to varying the interests of the parties to the marriage under the settlement. The power includes, for instance, the interests in the settled property of the children or, more widely, of others under an old-fashioned protective trust. Blood v Blood  P 78 is an example of the former, and Marsh v Marsh (1878) 39 LT 107, 545, of the latter. Conversely, it is also implicit in the section that the court's power does not extend to property which is not part of the settled property. In some cases, of which Dormer v Ward  P 20 is an example, nice questions may arise over whether property is or is not property brought into the settlement."
"I agree with what I understand to be the opinion of Gorell Barnes J, that what has been brought into settlement, in this Settlement, so far as the charges are concerned, is not the property upon which the charges are made, but the charges themselves; but there is one argument which was brought before us by Mr Danckwerts, and was also urged by him before Gorell Barnes J, with which I have yet to deal. It is this that the whole of the hereditaments and premises comprised in the schedules to the marriage settlement were property settled by that settlement, and that the Court could therefore under the terms of s 5, which gives the Court power to make orders with reference to the application of the whole or a portion of the property settled for the benefit of children or their respective parents, order that the whole or a portion of the hereditaments and premises be applied for the benefit of the petitioner. The learned judge answers this by saying, "It seems a very extraordinary proposition that, because a charge it may be a very small one is created on a large real estate by a marriage settlement, the whole estate can be dealt with by the Court under the powers created by the sections aforesaid." I agree with him as to this".
"to my mind, the property settled is not the whole fund out of which the 500l. was carved, but it is the 500l. and nothing else."
"An estate or interest not disposed of by a settlement and remaining in or reverting to the settlor, or any person deriving title under him, is for the purposes of this Act an estate or interest comprised in the subject of the settlement and coming to the settlor or such person under or by virtue of the settlement."
"Although the reversion is separated off from the particular estate by the settlement itself and remains vested in the grantor, and is not in fact comprised in the settlement, the effect of the Act is to treat it for the purposes of the Act as if it were comprised in the subject of the settlement. Therefore the settlement is for the purposes of the Settled Land Act a settlement of the moiety of the fee, that moiety is settled land for the purposes of the Act; and each daughter, having the powers of a tenant for life, can sell and convey a half part of the moiety, the purchase-money being paid to the trustees of the settlement."
"Now the guiding principle which will be found running through the cases is, in my opinion, this: Where the breaking up of the family life has been caused by the fault of the respondent, the Court, exercising its powers under the above section, ought to place the petitioner and the children in a position as nearly as circumstances will permit the same as if the family life had not been broken up."
"It follows that where the trust funds are settled, as is usual, upon the parents successively, or upon one of them for life, with remainder to the children, the Court, while it might extinguish the whole or a part of the guilty parent's life interest and his or her power of appointment, if any, amongst the children, would not interfere to deprive the children of those interests to which they are entitled under the settlement."
"No one could quarrel with this statement as a guiding principle, but at the same time I think it would be wrong to interpret it as meaning that it is a principle which must be applied in every case, regardless of its facts. That would, in my opinion, be placing fetters on the discretion of the court which the legislature never intended."
In the final analysis the statutory discretion is both unlimited and unfettered.
"The main object of variation is to make proper provision for the injured spouse and the children of the marriage. And prima facie, settlements ought not to be interfered with further than is necessary for that purpose. But the Court which has annulled the marriage must not only protect the injured party, but also be fair to the wrongdoing party."
That approach was frequently approved and applied: see, for example, Colclough v Colclough and Fisher  P 143 at page 147 (Langton J), Egerton v Egerton  2 All ER 238 at page 242 (Bucknill LJ) and Garforth-Bles v Garforth-Bles  P 218 at page 221 (Pearce J).
"But one has in these cases to consider what is really for the benefit of the children, because I think the authorities shew that nothing must be done that on the whole would be for the disadvantage of the children. This does not so much turn on the words of the Act of Parliament, but generally on the principle that the children, being innocent parties, ought not to have their interests injuriously affected by the conduct of either of their parents."
"It would be hard that a wife who is freed by the misconduct of her husband should not be able to appoint anything at all in favour of a second husband, or in favour of the children of a second marriage; and if, without substantial injury to the interests of the children of the first marriage, such an arrangement can be made, I think it is desirable and is in accordance with the spirit of the Act of Parliament."
His approach was followed by Sir Gorell Barnes P in Hodgson Roberts v Hodgson Roberts and Whitaker  P 142 at page 144, by Hill J in Scollick v Scollick  P 205, by Langton J in Colclough v Colclough and Fisher  P 143 at page 146 and by Cairns J in Purnell v Purnell  P 141 at page 148.
"It is, in my view, to the child's interest in another respect to allow the husband to remove a part of his fund from the settlement. He brought into the settlement reversions that were substantially all that he possessed; he now has, apart from these funds, no expectations and very little property; if, as seems likely in view of his age, he remarries, he has extremely little to settle on any future wife or children. If I refuse his request and devote exclusively to this child all the money that came from him, allowing none of it to go to any future wife or child of his, it may quite reasonably give him a feeling of injustice and impair the satisfactory relationship between father and child, a relationship of whose existence his generous dealing with the question of her maintenance gives some indication. Moreover, in the eyes of fair-minded members of the family, or friends, and of the child herself when she grows up, such an order will probably seem unjust and an excessive preference of the child's interests to those of her father. To produce this result would cause a loss to the child which the retention of the money would not compensate. To produce a happier result by the surrender of some part of the husband's fund would, in my view, be a benefit to the child. There may be cases where financial stringency might compel one to disregard such a benefit, owing to the necessity of keeping every available penny for the child, but this is not such a case."
"Now it is well established by authority that the variation may be such as to confer a benefit on a stranger to the settlement provided it also confers a benefit on children interested in the settlement, and I think the authorities establish that it is sufficient if the variation contains some benefit to those children which can be regarded as being approximately equivalent to what is taken from them for the benefit of the stranger.
the court has jurisdiction to admit an adopted child to benefit under the settlement, provided that anything which the natural children of the marriage are called upon to give up is compensated for in some sufficient way. In considering this compensation the court cannot do any exact sum, because such intangible factors as the benefit of equality, or something approaching equality, within the family can be taken into account, though there must be some pecuniary benefit as well."
"under section 17(1) the court will not use its power to vary so as to punish either of the parties. It will try to do what is fair. If a wife, after her divorce, marries a rich man, the court might give her less and the husband more. Whereas if she is without means, she might be given more, and regard must be had to the children. The situations that may arise are so infinitely various that the only thing for the court is to do what is fair in the circumstances."
(It may be noted that in the same case both Diplock LJ (at page 190) and Edmund Davies LJ (at page 191) referred to the principle that, although the statutory power is not intended to be used as a punishment of the guilty spouse, the object is to make good the pecuniary damage caused to the innocent party by the matrimonial offence of the guilty party and the break up of the marriage: see Moy v Moy and White  1 WLR 552 at page 555, a case decided under the predecessor of what is now section 24(1)(b) of the 1973 Act. At that time the statute referred to "the innocent party" where section 24(1)(b) now refers to "the other party to the marriage".)
"The court can vary the established rights in those assets in whatever way it thinks fit. Its discretion is unlimited; see Egerton v Egerton  2 All ER 238. It can consider the conduct of the parties; the incomes of each; their earning capacity; their financial needs; their ages; their standards of living; the contributions made by each, and not merely their financial contributions, direct or indirect, but also any contributions made (particularly by the wife) by looking after the home and caring for the children. In short, the discretion is just as wide as that which is contained in the Matrimonial Proceedings and Property Bill now before Parliament. That will not become law until 1 January 1971. But meanwhile the courts have, by judicial decision, reached the same result."
"It is clear also from those cases that in deciding whether anything that the children may be called upon to give up under the terms of a proposed variation is compensated for in some other way, the court is not limited to monetary considerations but is entitled to take into account such intangible factors as the benefits likely to accrue to the children from (as in Purnell) the maintenance of equality in the family between themselves and an adopted child, or (as in Garforth-Bles v Garforth-Bles  P 218) the preservation of a satisfactory relationship with their father. In my judgment, moreover, it is upon that basis that in this case any proposed variation of the marriage settlement should be weighed: namely, that if and in so far as it would affect the interests of the child, it should be permitted only if, after taking into account all the terms of the intended order, all monetary considerations and any other relevant factors, however intangible, it can be said, on the while, to be for their benefit or, at least, not to their disadvantage."
"[T]taking everything into account, the proposed or necessary variations of the marriage settlement, taken as a whole, would be for the children's benefit; a fortiori, they would not be to their disadvantage. Any loss to them is to be found in the reduction of the capital of the trust-fund by £20,000. Against that, however, they would have gained financially by the discharge of the respondent's contingent life interest in the trust-fund after their mother's death a gain which it is impossible now to quantify in monetary terms but which could be considerable if by some mischance she were to die while relatively young. In addition, when considering the financial background of the parties, the standard of life that they and the children have been accustomed to, and that the children will undoubtedly continue to enjoy while living with the petitioner, I am of the opinion that it is of importance to the children, to their enjoyment of their father's company and of their visits to him, as well as to the maintenance of good relations between them, that he too should have a settled and secure home to which they can come. In my view, moreover, that is unlikely to be achieved unless he receives such a capital sum as that now proposed."
i) The court's discretion under section 24(1)(c) is both unfettered and, in theory, unlimited. As Miss Parker put it, no limit on the extent of the power to vary or on the form any variation can take is specified, so it is within the court's powers to vary (at one end of the scale) by wholly excluding a beneficiary from a settlement, to (at the other end) transferring some asset or other to a non-beneficiary free from all trusts. She points to E v E (Financial Provision)  2 FLR 233 and C v C (Variation of Post-Nuptial Settlement: Company Shares)  EWHC 1222 (Fam),  2 FLR 493, as illustrations of property held on trust being transferred free from any trusts to the applicant, in E v E a sum of £50,000 and in C v C shares in a Cayman company.
ii) That said, the starting point is section 25 of the 1973 Act, so the court must, in the usual way, have regard to all the circumstances of the case and, in particular, to the matters listed in section 25(2)(a)-(h).
iii) The objective to be achieved is a result which, as far as it is possible to make it, is one fair to both sides, looking to the effect of the order considered as a whole.
iv) The settlement ought not to be interfered with further than is necessary to achieve that purpose, in other words to do justice between the parties.
v) Specifically, the court ought to be very slow to deprive innocent third parties of their rights under the settlement. If their interests are to be adversely affected then the court, looking at the wider picture, will normally seek to ensure that they receive some benefit which, even if not pecuniary, is approximately equivalent, so that they do not suffer substantial injury. As Sheldon J put it in the passage in Cartwright which I have already quoted: "if and in so far as [the variation] would affect the interests of the child, it should be permitted only if, after taking into account all the terms of the intended order, all monetary considerations and any other relevant factors, however intangible, it can be said, on the while, to be for their benefit or, at least, not to their disadvantage."
Conclusions as between the wife, the Company and the children
The 'bigamy' point
"Whosoever, being married, shall marry any other person during the life of the former husband or wife, whether the second marriage shall have taken place in England or Ireland or elsewhere, shall be guilty of felony, and being convicted thereof shall be liable to be kept in penal servitude for any term not exceeding seven years".
"That brief survey of recent authority relating to operation of public policy on statutory claims in other fields leads me to the conclusion that the general rule is that the ex turpi causa maxim is not applied absolutely but in the exercise of a proportionate judgment after careful scrutiny of the nature of the crime and the relevant surrounding circumstances."
"I would be loathe to reach any other conclusion since absolute rules in the field of family law are inevitably, and usually swiftly, challenged by the exceptional case. Even the present case, not so exceptional on its facts, challenges the application of the rule in Whiston to all culpable bigamists. Here the wife engineered the ceremony and embraced the desired respectability for some 22 years. She herself petitioned for divorce and obtained her decree absolute. She too prayed for all forms of ancillary relief. Only when confronted with her husband's money claim did she play the bigamy card, falsely asserting that she, like Mr Whiston, was the innocent victim of deception. She went to trial on that issue plainly conceding that her attack on the husband's entitlement to claim ancillary relief depended upon the court accepting her version of the facts."
"I do not regard the rule in Whiston v Whiston as extending to exclude every culpable bigamist whatever the circumstances of the case. The court cannot be deprived of the freedom established through a line of cases in other fields to evaluate the nature of the crime itself the rule does not preclude this court from having regard to the nature of the crime and all the surrounding circumstances."
"I would seek to explain my approach as follows. (1) In all the relevant sections of the Act of 1973 dealing with ancillary relief all decrees of nullity appear to be treated in the same way. (2) Section 25 of the Act of 1973 requires the court when exercising its powers under section 23 or 24 to take account of all the circumstances of the case. This requirement suggests that the scope for the trial of a preliminary issue is very limited. (3) The principle of public policy which can be invoked to bar a claim depends on the establishment of a "serious" crime by the claimant. In many cases, as it seems to me, a decision as to whether or not a particular crime has crossed the threshold of seriousness may involve an investigation of all the circumstances, including the effect on the other party and any mitigating factors which may reduce the degree of blame. In a case concerning a transsexual in particular such an investigation may require detailed consideration of the medical treatment and advice which the applicant received over a period. (4) I have not been persuaded that in a case which involves the exercise of the court's discretion it is necessary or desirable to carry out a preliminary inquiry to determine one aspect of an applicant's conduct before the general merits of the claim are investigated. As I have already indicated, crimes may vary to an almost infinite degree in their seriousness. This is particularly true of offences under the Perjury Act 1911. (5) Though it is clear from the decision of the House of Lords in Tinsley v Milligan  1 AC 340 that where considerations of public policy intervene to prevent the enforcement of rights claimed under an illegal contract the court is precluded from carrying out a balancing operation, the situation appears to me to be different where parliament itself has conferred a discretion on the court and has included a requirement that the court in exercising that discretion should consider all the circumstances of the case.
For these reasons I would not decide the preliminary issue on the basis that the applicant is barred in limine from pursuing the claim because by signing the false declarations he had committed a serious crime. Nor would I bar him by the invocation of the wider doctrine of ex turpi causa without investigating all the circumstances of the case."
The ancillary relief claim
i) Subject to only one point, the wife has failed in her claims against the Company and the children, whether in respect of the Properties or the children's shareholdings in the Company. The one point on which she has succeeded is in establishing that the Company cannot remove her from 17 Kensington Heights without giving her notice. But subject only to that qualification, the Company and the children are entitled to the relief sought by them in the Chancery proceedings.
ii) The wife has succeeded in her claim for ancillary relief against the husband in the amount she has claimed. She is entitled to an order along the lines set out in paragraph  above but including an order for the transfer to her of the husband's loan account with the Company (the amount of which, when received by her, is to be set off against her overall award). The various set offs should be against the husband's total liabilities to the wife, including the arrears of maintenance and any costs that he may have been or may be ordered to pay; there is no reason why the wife should be prejudiced by directing the set offs to be against the award of £7,061,570.
"The purpose of this letter is to explain my withdrawal from the above proceedings and my non-attendance at the hearing on 29 March 2007. In doing so, I am writing in my personal capacity in an attempt by what seems to be the only way open to me to explain my position. I greatly regret that I do not think that I can do more. I hope that you will accept that I mean no disrespect to the Court by saying that, and I will explain why I have come to this extremely unfortunate conclusion.
As anyone will attest, I have been a law-abiding and hard-working person throughout my life. However, in this case I felt and continue to feel that the odds are unfairly stacked against me. While I was bewildered by what was said about me in your judgment, I do not for one moment suggest that you were unreasonable. However, the same cannot be said for the Petitioner. Despite my best efforts to reconcile with her, through discussions with her family and other intermediaries, she continues to act totally unreasonably by insisting that I am worth over £500 million, based on no evidence, which is simply another attempt on her part to deceive the Court and to pressurise me. Presumably, she is trying to insinuate that I have at least substantially more than I actually do in an attempt to force me to make payments that could ruin me.
I stated in an Affidavit, in which I provided a breakdown, that I in fact had little more than £5 million, and of course I have four children and a wife (not to mention numerous other family members) to support. On top of this, I had also agreed with her, as witnessed by her family, that in case of divorce, I would pay her a lump sum of £200,000 as stipulated in the written Islamic marriage certificate, which was provided to the Court. Yet I was still required to prepare a statement requiring extensive details of every single asset I have, despite the fact that most of these assets are in Saudi Arabia. I feel that this enquiry is unjust and excessive, particularly in light of the Petitioner's own conduct and the nature of our relationship.
In the judgment of 8 February 2006, you said not only that the Petitioner had obtained a marriage certificate on 30 October 1998 in the full knowledge that I had previously been married (as I believe was always an undeniable fact, and one which the Petitioner always knew), but that she had tried to deceive the Court in applying for a decree of divorce in December 2004 against this background. In my case, I immediately admitted to the Court that I was still married at the time, although I had not thought that it was a criminal offence:
You went on of course to consider who had "instigated" the deception of the Registrar. In fact I had no reason to obtain an English certificate bearing in mind that I lived in Saudi Arabia the suggestion came solely from the Petitioner. For that matter, living in England or obtaining British residence or nationality was the furthest thing from my mind. However, despite this, you found that I had "instigated" a deception of the Registrar.
I continue to categorically and absolutely deny this or indeed any improper conduct. My insistence that it was not my idea to obtain the English certificate was only necessitated by the Petitioner's deception in seeking that the court grant her a divorce. In other words, the only reason it was an issue at all was her own deception and I also considered it to be irrelevant since both of us acted in the full knowledge that I was already married in Saudi Arabia, as you held was in fact the case.
Despite her deception of the Registrar and the Court, I feel that I was unfairly portrayed as the villain. I was then ordered to pay £45,000 per annum in maintenance fees together with legal fees, all of which already adds up to a considerable amount of money (well over £100,000 as of this date). All this has happened against a background where it is not in dispute that the relationship between the Petitioner and me was strained from the very beginning. All in all, we lived together only for very brief periods since I continued to be based in Saudi Arabia. It seems now that she is seeking to send me to prison.
I regret to say that I sincerely believe that in light of what has happened it is very difficult for me to continue my involvement. Despite this, I mean no disrespect to you or the Court and I apologise sincerely, for my absence, which is the last thing I would normally have wished to happen."