Jersey Unreported Judgments

Matrimonial - re setting aside final order.

[2022]JRC287

Royal Court

(Family)

16 December 2022

Before     :

J. A. Clyde-Smith OBE., Commissioner and Jurats Ramsden and Cornish

 

The Petitioner appeared personally

Advocate P. C. Sinel for the Respondent.

judgment

The commissioner:

1.        The Respondent applies by summons to set aside the judgment of the Court dated 15^th January 2019, reported in anonymous form as S v T [2019] JRC003, which determined the Respondent's claim for ancillary relief against the Petitioner by way of a clean break.  We will refer to this as "the Final Judgment" and the final hearing which commenced on the 19^th November 2018 as "the Final Hearing".  The Respondent seeks to set the Final Judgment aside on the grounds of the absence of full and frank disclosure, undervaluation of assets and hidden dissipation on the part of the Petitioner.

2.        In advance of the issuing of the summons, the Respondent brought proceedings against the Petitioner by way of Order of Justice, obtaining, inter alia, orders freezing her assets up to £5M and orders requiring her to disclose her current assets.  Separate proceedings were also issued by the Respondent against the Petitioner freezing her assets in Guernsey and France, where she now lives. 

3.        For the purposes of this judgment, it is necessary to have regard to the full terms of the Final Judgment, but we give this summary:

(i)        The Petitioner had substantial assets and the Court was concerned, therefore, with the sharing principle.  Particular features of the case were noted to be the very significant investments the Petitioner had made in businesses that were loss making, which restricted the liquidity available to meet any order the Court may wish to make, and whether equality of division should be departed from because of the Petitioner's special contribution to the family wealth. 

(ii)       The parties were married in 1995 and have one adult son ("U"), who was born in October 1996. 

(iii)      In December 2014, the Petitioner sold her shares in the company she had formed to develop a new payroll platform to Company C, receiving a total consideration of £22,885,915.26 of which approximately £14M was paid in cash and the rest in 157,591 Company C shares, the sale of which was restricted as to one half after December 2015 and the remainder after December 2016, as shown by the completion statement accepted by the parties as being accurate.  This was, in effect, the sole source of the family wealth. 

(iv)      The Petitioner utilised the cash proceeds of the sale as to £2.24M to pay off the mortgages on the matrimonial home in Jersey, Property C, and the former matrimonial home in the UK, Property B, some £900,000 in refurbishing Property C and £250,000 and a Patek watch by way of gift to the Respondent.  The Petitioner then started investing in a number of businesses held in a corporate structure which she established for that purpose. 

(v)       The parties separated finally in May 2016, with the Petitioner filing her petition on 19^th June 2016.  In her affidavit of 21^st September 2016, in response to the Respondent's application for interim spousal maintenance, the Petitioner exhibited a report from Smith & Williamson, Accountants, to the effect that with her monthly outgoings and capital expenditure, her then current average spend was between £100,000 and £150,000 a month, or between £1.2M and £1.8M per annum. 

(vi)      At a directions hearing on 30^th September 2017, the Petitioner disclosed that she had settled the corporate structure into a Guernsey proper law discretionary trust known as the A Trust.  She had also procured the establishment by U, who at that stage was living with the Petitioner and estranged from the Respondent, of a second trust known as the B Trust, to which the Petitioner had made loans.  At the hearing, Advocate Davies for the Petitioner made it clear that the trusts had not been established to defeat the Respondent's financial claims and could be looked through for the purpose of those claims, a position accepted by Advocate Corbett for the Respondent.  At the same time, there was a lack of clarity as to the assets within the A Trust structure, and the Petitioner proposed that she instruct BDO, Accountants, to prepare an interim and final report on the value of the assets within that trust, a proposition accepted by Advocate Corbett.  The Court vacated the final hearing dates of February 2018 for that purpose.  The Respondent did not instruct his own forensic accountant.  The interim report by BDO was filed on 9^th March 2018 ("the First Report") and took as the valuation date the 31^st August 2017.

(vii)     New final hearing dates were fixed for 23^rd April to 2^nd May 2018, but on 15^th March 2018, the Petitioner applied for an adjournment, which was granted, on the grounds that she wished to raise allegations of physical assaults by the Respondent.  A fact-finding hearing was ordered and took place on the three days commencing 10^th October 2018, with the final hearing being postponed to the eight days commencing 19^th November 2018.  At the close of the fact-finding hearing, the Court found, for the reasons set out in an unpublished judgment of 12^th October 2018, that the Petitioner's allegations were not proved. 

(viii)    The filing of the final report (referred to as "the Supplementary Report") was delayed to 5^th October 2018 so that BDO could consider the accounts of those companies involved to 30^th June 2018 and to enable BDO to fill in a number of what they described as "holes" in the First Report. The Supplementary Report was not filed on the 5th October 2018 for these reasons explained by the Petitioner:

(a)       she was in dispute with the trustee of the A Trust (Albany Trustees), which had retained the books and records without undertaking any of the accounting work,

(b)       her Chief Financial Officer was dismissed over the summer, taking with him relevant information and data, and

(c)       she was continuing to experience difficulties in resolving taxation issues, partly due to litigation with Smith & Williamson over their fees, which was ongoing. 

The Supplementary Report was eventually filed on 2nd November 2018, with a valuation date of 30th June 2018.

(ix)      A directions hearing took place on 9^th November 2018, barely a week before the start of the Final Hearing, in which Advocate Corbett sought orders for the production by the Petitioner of most of the documents which BDO stated in the Supplementary Report it had not received, in particular, updated valuations.  The Petitioner was then away in Dubai, and the Court accepted that it was not practicable for her to comply with such an order in good time for the Final Hearing, and declined, therefore, to make the orders requested.  There was no application by the Respondent for an adjournment, leaving the Court and the parties with no option other than to proceed with the Final Hearing, working from the BDO reports inter alia.

(x)       The relationship between the Petitioner and U broke down in the summer of 2018, at which time he became completely estranged from her and reconciled with the Respondent. 

(xi)      Beneath the A trust established in July 2017 was a holding company Company E, also established in July 2017, and it owned Company I, established in February 2015 and it is to this latter company that the Petitioner had lent funds, and it was through this company and the subsidiaries below it that assets were held.

(xii)     Looking through the structure of the A Trust, the principal assets held within it as at 30^th June 2018 according to the Supplemental Report comprised:

(a)       An execution account with Investec in Guernsey worth US$1.13M, down from £2.7M as at 31^st August 2017.  By the time of the final hearing in November 2018, that had all but gone.

(b)       A defined mandate account with Investec in Guernsey valued at £9.1M, pledged as security for a loan by Investec of £2M.

(c)       Two properties in the UK known as Property F and the Property B.

(d)       Two residential properties in Guernsey known as Property G and Property H (the latter being purchased after the First Report).

(e)       A commercial property in Guernsey known as Property D (which was in part occupied by a car storage business owned by the B Trust).

(f)        A property and stud farm in France known as Property I and a manor house known as Property J.

(g)       Horses.

(xiii)    Property J, Property I and Property G were all being refurbished.

(xiv)    The principal assets held outside the A Trust were the jointly owned shares in Company L, which owned Property C and to which the Petitioner had made a large loan, the T RBS pension, a jointly owned half share in a small ski apartment and the Petitioner's large collection of high-end value cars. 

(xv)     The A Trust was in deficit in that the Petitioner had lent a total of £19,521,873 to Company I to finance its various activities, which based on market values was only recoverable as to the extent of £16,878,021 giving the A Trust a nil value.  Based on a forced or immediate sale valuation, only £14,390,483 was recoverable.

(xvi)    Working from the schedules of assets produced by the parties (which were not agreed) and the BDO market valuations and looking through the A structure, the Court determined that the assets of the parties were as follows:

Petitioner

Loan due by Company 1	£16,878,021
Loan due by Company L	£2,267,766
Loan due by Company Q	£49,878
Bank accounts	£191,921
T RBS pension	£425,000
Vantage pension	£58,233
Ski apartment quarter share	£18,380
Fine art, antiques and clocks situated at Property C	£98,000
Jewellery situated at Property C and Property J	£65,000
Two Rolex watches	£35,000
A Patek watch	£14,000
A diamond necklace	£19,000
Cars	£1,206,000
Total	£21,326,994
Respondent
Bank accounts	£62,287
T RBS pension	£274,130
Army pension	£239,658
Vantage pension	£15,036
Investments	£10,894
Quarter share of the ski apartment	£18,380
Patek watch	£21,000
Pocket watches	£100
Silver	£7,500
Painting	£7,000
Furniture	£2,000
Carriage clock	£2,000
Barometer	£1,000
Aston Martin DB7 2003	£59,990
Motor bikes	£48,800
Total	£769,775

After a number of adjustments, the Court found the total net assets of the parties to amount to £22M.

(xvii)   At the rate the Petitioner was depleting capital the defined mandate account with Investec would have been exhausted in two or three years.  BDO estimated that between 11^th July 2017 when the two trusts were established and 30^th June 2018, the date of the valuation of the Supplementary Report, some £2.6M had been expended by the Petitioner, which from an accounting point of view, could be characterised as losses, although the Petitioner did not accept them as such; she was adamant that all of the businesses would ultimately be profitable. 

(xviii)  In her affidavit of 8^th November 2018, sworn in support of the Final Hearing, the Petitioner estimated the current cost of her supporting the businesses within the A and B trust structures at £123,000 and €100,000 per month, which at the then exchange rates amounted to a combined expenditure of some £2.53M per annum.  She said it was impossible to say when the burden would reduce.  She estimated that she was supporting the salaries of some thirty staff overall employed within these structures, including twelve employed by the stud farm in France and seven at Company P in Jersey, which was developing a game, an educational portal and a car app to be used in connection with the far storage business operated by Company Q at the Property D premises.  That company offered car storage for the luxury car market.

(xix)   The Court made this assessment of the evidence of the Petitioner and Respondent:

"87.    As with the fact finding hearing, the Court did not find the petitioner to be a reliable witness.  In evidence, she seldom gave a direct answer to the questions put to her, had a tendency to lecture the Court as to the issues she said were important, and to decide what was or was not relevant.  She was gratuitously offensive to the respondent, describing him as financially illiterate, barely able to use a laptop and of low calibre.  When not in the witness box, she would react audibly to anything that was said with which she disagreed, so much so that she left the Court on two occasions at the point at which she was about to be removed.

88.      On the other hand, the Court found the respondent to be a reliable witness, who gave his evidence in a polite and straightforward manner. Although describing how difficult the petitioner could be to work with he volunteered that she was talented, creative and at times inspirational."

(xx)    The Petitioner said it was insulting to be accused of pouring money down the drain in the investments she had made, explaining how the stud farm would be profitable and her plans to roll out the car storage business in a number of other jurisdictions.  She said she was in the process of launching an investment fund for those wishing to invest in high end value cars which would be stored at the Property D facility.  She said the businesses within the two structures required a further £1M before becoming profitable, in addition to the cost of works needed to be carried out to the properties, so that she needed a further £1.78M of liquidity over the next year or so.  The Court accepted her evidence as to the financial needs and prospects of the businesses within these two trust structures all of which she clearly controlled, as she was as she said a proven entrepreneur.

(xxi)   The Court found that despite its reservations as to the quality of the Petitioner's evidence, she had made a special contribution to the wealth of the family through the development of the payroll platform that was sold to Company C that it would be inequitable to disregard and determined, after a cross check for fairness, that the Respondent should receive properties worth £3.78M, £3M in cash and cars worth £565,000 (or cash in lieu) which totalled £7.35M, and which when added to his own assets of £0.75M gave a final figure for the Respondent of £8.10M or 37% of the total family assets. 

(xxii)  Finally, the Court dismissed a number of claims made by the Petitioner as to alleged financial misconduct on the part of the Respondent.

4.        Neither party appealed the Final Judgment.

5.        Initially, the Petitioner did not comply with the orders made by the Court under the Final Judgment, forcing the Respondent to issue enforcement proceedings.  Ultimately indemnity costs were awarded against the Petitioner in respect of the proceedings as a whole, for the reasons set out in the unpublished judgment of Sir William Bailhache, Commissioner, of 13^th October 2021, including:

(i)        The continued and regular failure of the Petitioner to comply appropriately with disclosure orders, in particular the deficiencies in the information provided to BDO.

(ii)       The creation of the A Trust, which caused delay and difficulty in obtaining all the information which the Court and the parties needed. 

(iii)      There was no real effort by the Petitioner to engage in mediation.

(iv)      The Petitioner raised at a later date two issues which she ought not to have raised, namely allegations of physical and financial misconduct, causing delay; the Commissioner being satisfied that this was part of the Petitioner's litigation strategy, hoping to wear the Respondent down so that he would settle for a lesser sum than he might expect to get if the matter were to go to Court. 

6.        Claims by the Respondent against the Petitioner arising out of her failure to comply with the Court's orders on a timely basis were finally determined by the Court for the reasons set out in the judgment of Sir William Bailhache, Commissioner, of 4^th November 2021, reported as S v T [2021] JRC275.

7.        The Respondent's Order of Justice seeking freezing and disclosure orders against the Petitioner's current assets in contemplation of his application to set aside the Final Judgment was first signed by the Bailiff on 17^th August 2021, but it was not served on the Petitioner in France until 21^st October 2021.  The summons making the application itself was not issued until 3^rd November 2021. 

8.        A feature of this case is the Petitioner's ill health.  As the Court noted in paragraph 93 of the Final Judgment she had suffered serious injuries in the past, in particular a car accident in 1987, when she broke her neck, back and left ankle, a riding accident in 1992, when she broke her collar bone and a very serious horse riding accident in 1993, in which her liver, lungs and spleen were crushed and indeed, in which she almost died.  That, and the subsequent treatment, have had a deleterious effect on her health.  She deposed in her affidavit of 10^th December 2021 that she had been advised by her doctor that her liver was barely working and she was kept going by medication which would only work in the short term.  She was placed on the waiting list for a liver transplant which was undertaken in July of this year.  She was currently receiving strong immunosuppressant drugs which she said made it difficult to concentrate and at times she was confused as to what was happening.  She said it was a hugely stressful time for her. 

9.        The Court resisted applications this year by Advocate Sinel on behalf of the Respondent for extensive discovery for the four year period leading up to the Final Judgment in advance of the Court deciding whether or not to reopen the case, save in one respect, namely an account the Petitioner held with Investec with the last four digits [Redacted], which came to light in March, 2019, and which the Petitioner accepted had not been disclosed during the ancillary relief proceedings.  The Petitioner was ordered on 1^st July 2022 to produce complete unredacted copies of the statements for this account for the period starting 1^st January 2016 or if later from the date of inception until 31^st November 2018.  In view of her transplant operation, no specific date was set for production of these statements.  Leave is being sought by the Petitioner to appeal against that order although she has in part complied with it. 

10.      On 3^rd October 2022, Advocate Mistry gave notice that he was no longer acting for the Petitioner who thereafter represented herself.  Prior to the hearing, she lodged a large number of documents with the Court, including the bank statements for the account numbered [Redacted] and for three other accounts with Investec numbered [Redacted] for the period from 1^stJanuary 2018 until closure; we refer to this below.

11.      In the two days allocated for this hearing, the Court proceeded on the basis of the affidavits filed without cross examination of the deponents, namely affidavits filed by the Respondent, the Petitioner, U on behalf of the Respondent, F on behalf of the Petitioner (a lawyer who had provided legal advice to the Petitioner from time to time) and Andrew Shaw of Smith & Williamson on behalf of the Respondent.

12.      The central issue for the Court is whether the Respondent has established on the balance of probabilities that there has been material non-disclosure on the part of the Petitioner in the ancillary relief proceedings, and if so, whether the Final Judgment should be set aside.  If the Final Judgment is set aside, then further directions would need to be given for the purposes of a rehearing of the Respondent's claim for ancillary relief.  

Non-disclosure

13.      The Respondent's pleaded case was that the parties' assets of £22M had been understated by the Court in the Final Judgment by at least some £9.2M because of non-disclosure by the Petitioner, of which on the face of the Final Judgment the Respondent would have been entitled to 37%, namely a further sum of some £3.4M over and above that which he had received.  We take his case under the headings that follow and we set out the essential evidence upon which he relies.

Company C shares

14.      In the course of the ancillary relief proceedings, the Petitioner asserted repeatedly that she was unable to provide accurate information as to when and for how much she sold her shares in Company C before their transfer to Investec in 2017, because the relevant contracts and records were being withheld by Smith & Williamson, with whom she was in dispute.  At the time of completion of the sale to Company C her shares were valued at some US$88 per share, but they increased in value over time to some US$201 per share as at 26^th November 2018.  The Respondent said that if all of the shares had been retained and sold in November 2018, they would have realised some £24M. 

15.      On 18^th April 2018, the Petitioner swore an affidavit at the direction of the Court in order to explain when she had sold the shares in Company C, how much for and, by way of overview, how the proceeds were dealt with.  She deposed that she had sold the first tranche of her shares in relatively small amounts in 2015 and 2016 before the filing of her affidavit of means of 16^th December 2016.  The share proceeds had been paid into her accounts with National Westminster, which she said had been disclosed.  She sold all but 40,000 of the second tranche in January 2017, with the proceeds being placed into a portfolio under the management of Investec.  The 40,000 were also transferred to the Investec portfolio, the statements for which had been disclosed, with the final sale of shares taking place in March 2018.  The Petitioner deposed that she was unable to provide contract notes or sale documentation (with one exception prior to the transfer to Investec) because the documentation was in the possession of Smith & Williamson, who refused to return it to her. 

16.      The Respondent has procured an affidavit from Andrew Shaw, then chairman of Smith & Williamson, dated 26^th April 2021 in which:

(i)        He gave the history of his firm's dealing with the Petitioner up until it ceased working for her in December 2016.  There then followed extensive litigation over the payment of their fees.

(ii)       All of the documents relating to the Petitioner were placed into six boxes and collected by one of her employees, a V, on 10^th January 2017.  He exhibited the receipt signed by V.

(iii)      He explained that the only documents retained by Smith & Williamson were the draft accounts which constituted its property under the ICAEW's guidelines.  The documents delivered to her would have included all of the records needed by any newly appointed accountant. 

17.      Advocate Sinel submitted that the evidence of Andrew Shaw shows that the Petitioner lied over her assertions (in her affidavit of 18^th April 2018 and in her affidavit for the final hearing dated 18^th November 2018) that she was unable to provide contract notes or sale documentation (with one exception prior to the transfer to Investec) because the documentation was in the possession of Smith & Williamson, who refused to return it to her. 

Gold

18.      U deposed in his affidavit of 15^th June 2022 that he was present at Property C with the Petitioner when he saw "a number of gold bars stacked in a box on the floor" of the kitchen.  He did not count them, but he said he could indicate the approximate size and shape of the bars.  The Petitioner, who he said had a chromic alcohol problem, warned him not to tell anyone. 

19.      He told the Respondent that this would have been in January 2017 but he said it could have been in either 2017 or 2018.  The gold was not there when he returned to Property C in January 2019.

20.      U exhibited to his affidavit a file note of a meeting held on 5^th May 2020 prepared by Fides Trustees, which was then trustee of the A and B Trusts in place of Albany Trustees, headed "Project Intervention" which appears to be concerned with intervening with the Petitioner's control of the assets of the trusts.  The meeting was attended by two members of Fides, F and U.  It contains this entry:

"There was gold. However [F] does not know where this is although he vaguely remembers some gold bars. [U] said in the interest of fleecing the divorce she had got some gold bullion bars." 

There was also reference in the note to the Petitioner allegedly drinking again.

21.      The Respondent postulates from what U said he saw that there were approximately 16 gold bars, each weighing 400 Troy Ounces which would have been worth some £6.2M.

22.      Advocate Sinel also referred to this exchange of email correspondence between the Petitioner and W an employee of hers at Property D in November 2019, as constituting an admission on the Petitioner's part that she had gold bars.  The Petitioner was closing her account with Investec and said this:

"Gold bars [Y] [an employee at Investec] knew about and as I keep saying, I think with Rothschilds."

Rothschilds were the investment managers who held the portfolio prior to the appointment of Investec.  Claire Smith (legal counsel at Investec) explained by email that the Petitioner had never had any physical gold bars lodged with Investec.  The gold mentioned in the portfolio was simply an investment in gold and not actual gold bars held.

Jewellery

23.      At the final hearing, the Petitioner disclosed ownership of jewellery worth £65,000, two Rolex watches worth £30,000, a Patek watch worth £14,000 and a diamond necklace worth £19,000; a total of £133,000. 

24.      In his affidavit, U deposes that the Petitioner had greatly undervalued the jewellery in her possession as at November 2018.  He recounted an incident in the summer of 2018 driving back from Cannes when he was telephoned by F who explained that the Petitioner was in a rage and accusing him of stealing her jewellery which she believed was worth around £2M.  On his return to the Property J, her jewellery was found to be in her safe. 

25.      U referred to the Petitioner having £2M worth of jewellery at the meeting with Fides in May 2020.  He recalled conversations he had had with the Petitioner over her collection of jewellery and its value and he had personally witnessed many purchases.  He referred in particular to a ring which she had purchased for £40,000 in the summer of 2017, which he now estimates to be worth between US$750,000 and US$1M.  He said she had at least six Rolexes. 

26.      U said he had seen the photographs of the jewellery seized from the Property J by the huissier pursuant to French proceedings brought by the Respondent against the Petitioner, which he said in no way represented the Petitioner's complete jewellery collection.  There were many more items of her jewellery.

Horses

27.      U deposed that when the Respondent informed him that the Petitioner had valued her horses at around £300,000 for the purposes of the Supplementary Report, he knew that this was untrue.  In the middle of 2020, he was sent by email a spreadsheet dated 10^th April 2019 by someone who used to work for the Petitioner, which listed 39 horses with a total insurance value of £1,424,600.  He understood that the spreadsheet had been prepared by two employees of the Petitioner.  To him, this spreadsheet demonstrated the amount of money that the Petitioner had wasted on horses.  He referred to one horse, [Redacted], which according to the spreadsheet was valued at £534,000, but which he said was subsequently sold for £10,000.  He maintained the spreadsheet showed that she had undervalued the horses for the purpose of the Supplemental Report. 

Further evidence of non-disclosure

28.      Amongst the documents filed by the Petitioner for this hearing was a document which she had prepared headed "Company C Share Sales" covering the period 2015 to March 2018 which she informed the Court she had prepared from the contract notes which she said she had found in 300 storage boxes at Property J.  That showed the total number of shares sold at 186,590 as against the previously known figure of 157,591, a difference of some 29,000 shares which, according to Advocate Sinel, would be worth between £2.7M and £5.4M depending on the share price when sold.  He submitted that this was evidence of a material number of Company C shares that the Petitioner had not disclosed in the ancillary relief proceedings.

29.      In fact, the figure of 186,590 shares is an error on the face of the document provided by the Petitioner, in that if you add up the sales she has listed, the number of shares in fact comes to 156,590.  There are other obvious errors in the document, pointed out by Advocate Sinel, rendering the whole document unreliable.  The Court dismisses this as evidence of undisclosed shares.  

30.      The Petitioner also produced a letter from Investec dated 14^th October 2022, enclosing statements for four accounts in her name with Investec for the period from January 2018 to November 2019, when they were closed. 

31.      By way of background, at a directions hearing on 10^th July 2018, there was an application by the Respondent for the disclosure of a number of missing bank statements set out in a schedule referred to as the traffic light document.  Advocate Corbett, for the Respondent, was concerned that the assets of the A Trust were diminishing, and it was necessary to ascertain whether this was being effected through the Petitioner's personal accounts. 

32.      The Court was informed by Advocate Davies that the Petitioner only had one active personal account with Barclays Bank in Jersey, which was routinely disclosed to the Respondent and the other accounts were either closed or dormant.  The Court ordered the Petitioner to file an affidavit confirming that she had only one active personal bank account and by reference to the missing statements in the schedule stating which accounts were closed or inactive.  That affidavit was filed by the Petitioner on 24^th July 2018 and in it, she confirmed that her only active personal account was with Barclays Bank (save for the occasional use of a NatWest account) and she set out a schedule of accounts, which she said were inactive or may be closed.  With reference to her American Express card, she said the payments were processed through the A Trust and all payments were accounted for.  She did, however, refer to the use of bank accounts with Investec, which she said were accounted for in the business and trust accounts and would be contained in the BDO report.  No statements for these Investec accounts were produced by the Petitioner.

33.      Of the four Investec accounts now disclosed by the Petitioner, all of which were in her personal name:

(i)        Account [Redacted] a sterling account, had no transactions.

(ii)       Account [Redacted], a US dollar account, had an opening balance of $390,790.18 and showed payments inter alia to American Express and to a Y (who we understand to be an employee).  As at 19^th November 2018, it had some US$11,000 in credit.

(iii)      Account [Redacted], a Euro account, had an opening balance of €4.34, and a receipt of €222,930.59 on 17^th January 2018 from Investec.  Payments out appear to be connected with the equine business.  As at 19^th November 2018, it had some €13,000 in credit.

(iv)      Account [Redacted], a sterling account, which was very active over the period covered by the statement.  The Court is not in a position to do an analysis, but it shows payments in from Investec between 1^st January 2018 and 19^th November 2018 of some £2.9M, regular payments to the Petitioner, to what appear to be businesses within the two trusts and what appears to be personal expenditure of the Petitioner, including £180,572 to American Express.  As at 19^th November 2018, it had some £8,248 in credit.

34.      When questioned by the Court as to why the Petitioner had only requested statements from Investec for 2018 to the closure of the accounts, she seemed unaware that the Court had ordered disclosure of the statements for account [Redacted] from 1^st January 2016 or, if later, from the inception of the account, which had appeared to be some time in 2017.  She apologised for not doing so. 

The law

35.      The law in this area is well established, and has been drawn extensively from English authority, no doubt because of the similarity in the legislation in both jurisdictions. In both P-S v C [2006] JRC 139A and Manley v Bell [2006] JRC 195, the Court quoted from the well-known House of Lords decision in Livesey (formerly Jenkins) v Jenkins [1985] FLR 813 where Lord Brandon said this at page 823:

"...unless a court is provided with correct, complete and up-to-date information on the matters to which, under s.25(1), it is required to have regard, it cannot lawfully or properly exercise its discretion in the manner ordained by that subsection.  It follows necessarily from this that each party concerned in claims for financial provision and property adjustment (or other forms of ancillary relief not material in the present case) owes a duty to the court to make full and frank disclosure of all material fact to the other party and the court.  This principle of full and frank disclosure in proceedings of this kind has long been recognized and enforced as a matter of practice."

36.      He went on to say at page 830:

"I would end with an emphatic word of warning.  It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal.  On the contrary, it will only be in cases where the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good.  Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed."

37.      Lord Keith and Lord Bridge simply agreed with Lord Brandon. Lord Scarman expressed his "firm support" for the "emphatic word of warning".  Orders were not to be set aside on the ground of non-disclosure if a disclosure would not have made any substantial difference to the order which the court would have made.  Lord Hailsham too underscored the warning.

38.      In Livesey, the wife had failed to disclose to the husband and to his solicitors that she was engaged to be married and she did marry shortly after the consent order was made.  There was no suggestion of any misrepresentation on her part.  In Manley v Bell, the husband had disclosed owning 20% of the financial services business in which he worked when in fact, he owned 27%, the difference being valued at several hundreds of thousands of pounds.  In P-S v C the impact of a transfer of shares to Switzerland had been misrepresented by the husband with the result that the value of his shareholding had been materially understated by the experts and by the Court.

39.      As the Court said in P-S v C at paragraph 18 material non-disclosure by a party to a matrimonial suit may be active or passive but the effect upon the Court's ability to do justice in the case is the same.  The Court went on to say at paragraph 19 that it is no defence to an allegation of material non-disclosure that the true facts might have been elicited by the other party if greater diligence had been exercised.  It is not the duty of the opposing party to act as a ferret.  The Court then said at paragraph 20:

"... The duty to disclose all material facts in ancillary relief proceedings is a high one.  The breakdown of a marriage of some years' duration engenders disappointment, hurt and a sense of failure, as well as other emotions.  The policy of the Court is to try to secure wherever possible a "clean break" so that the parties may put the failure of their relationship behind them and get on with their lives. It is inherent in the nature of a "clean break" that the husband and wife are honest to each other, especially with regard to financial matters.  No break can be clean if suspicion lurks that assets have been hidden or that their value has been understated.  The wife in this case received what most people would regard as a substantial reward in the 2003 judgment, but that it not the point.  The wife told us that she felt cheated and, if there was material non-disclosure, that is a perfectly understandable reaction.  If parties are transparent and truthful in their dealings on divorce there is a much greater likelihood not only that they will be satisfied with whatever award is made, but also that they will be able to draw a line under the failure of their marriage.  The duty of full and frank disclosure is one of the highest importance.  If a party to a matrimonial suit fails in that duty to a material extent, so that the Court concludes that the impugned order would or might not have been made, it is liable to be set aside."

40.      As the Court also said in P-S v C at paragraph 21, it has often been stated that it is of public interest that there should be an end to litigation. 

41.      The most recent seminal cases on setting aside for non-disclosure are the decisions of the Supreme Court given on the same day in Sharland v Sharland [2015] UKSC 60 and Gohil v Gohil [2015] UKSC 61.  In Gohil, Lord Wilson confirmed at paragraph 25 that it is for the party seeking to set aside an order of the court to satisfy the court on the balance of probabilities that the other party has been guilty of material non-disclosure.

42.      In Sharland, the husband had knowingly misled both of the expert valuers and his evidence at the hearing was found to be both false and dishonest.  Lady Hale said at paragraph 32:

"...It is clear from Dietz and Livesey that misrepresentation or non-disclosure must be material to the decision that the court made at the time.  This is a case of fraud.  It would be extraordinary if the victim of a fraudulent misrepresentation, which had led her to compromise her claim to financial remedies in a matrimonial case, were in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case, including a contract to settle a civil claim.  As was held in Smith v Kay [1859] V11 HLC 749, a party who has practised deception with a view to a particular ......, which has been obtained by it, cannot be allowed to deny its materiality. Furthermore, the court is in no position to protect the victim from the deception, or to conduct its statutory duties properly, because the court too has been deceived. .....

33.      The only exception is where the court is satisfied that, at the time when it made the consent order, the fraud would not have influenced a reasonable person to agree to it, nor, had it known then what it knows now, would the court have made a significantly different order, whether or not the parties had agreed to it. But in my view, the burden of satisfying the court of that must lie with the perpetrator of the fraud.  It was wrong in this case to place upon the victim of showing that it would have made a difference."

43.      The burden is therefore upon the Respondent to satisfy the Court on the balance of probabilities that the Petitioner has been guilty of material non-disclosure, save that if the Court were to make a finding of fraudulent misrepresentation on the part of the Petitioner, the burden will fall upon her to satisfy the Court that it would have made no difference to the order made. 

The Petitioner's response

44.      It is not practical to summarise all of the documentation lodged with the Court by the Petitioner, but suffice it to say that she denies that she has been guilty of material non-disclosure.  She clearly has the contract notes for the sale of the Company C shares and she produced the Company C Share Sales document referred to above.  She denies ever having purchased physical gold bars and having them at her home.  She points out that when the huissiers raided the Property J in late October 2021, no gold bars were found there.  She says that the Respondent was aware of her jewellery collection up to the point of their separation in May 2016 and the Respondent now has a list of the jewellery seized and held by the huissiers.  That shows the jewellery that she owned as at October 2021 (which has not been valued), which Robert asserts without any evidence does not account for all the jewellery she owns.  None of this is evidence of the jewellery she owned in November 2018. 

45.      As to the horses, she points out that there is a difference between the actual market value of a horse and its insurance value.  The Petitioner had gone through the Investec bank statements annotating some of the entries in pen.  Advocate Sinel pointed to one entry on 19^th October 2018 in the Euro account [Redacted] for a payment of €188,543 to Arquana which she annotated was for the purchase of a horse, [Redacted], which is shown in the Supplementary Report as being valued at £12,000 and in the April 2019 spreadsheet as having an insurance value of £50,000.  She informed us that the purchase of [Redacted] was a mistake on her part and explained how horses can become valueless overnight. 

46.      Advocate Sinel questioned whether two relatively small payments to a Company F in June 2018 shown in the statements for account [Redacted] was evidence of a US company owned by her.  The Petitioner explained that this had been formed as part of the Company R, which in 2018 employed four staff, including someone from the USA.  This company was formed to employ him. 

47.      As to the evidence of Andrew Shaw of Smith & Williamson, in her affidavits the Petitioner challenges its admissibility on the grounds that Mr Shaw was allegedly in breach of his duties of confidentiality to her as her accountant (he states that both the Petitioner and the Respondent were his clients), but she did not challenge his evidence that her records had been delivered to an employee of hers on 10^th January 2017.  She informed us at the hearing that she was not aware of the receipt of these documents, which she said must have been delivered to her office when she was not there.  She clearly has the documents now.

48.      Whilst the Petitioner acknowledged that the four Investec accounts she had disclosed prior to the hearing were in her personal name, she described them as "client accounts", used for the purposes of the businesses owned by the A and B Trusts, repeating her assertion that as such, they were covered by the BDO reports.

49.      In terms of her current financial position, all of the monies held by Investec have now been exhausted, and she has sold all of the properties which she retained following the Final Judgment, other than the [Property J] in France and [Property D] in Guernsey, which are now ultimately jointly owned between her and her husband ("B").  The stud farm has ceased to trade, but she still owns some thirteen or so horses and employs five staff in France, one in Guernsey (we assume associated with Property D) and one in Jersey (we understand for software development).  According to her affidavit of 10^th December 2021, she has jewellery insured for £462,000 and the contents of the Property J including fine art insured for £916,500.  She values the horses at £500,000 which are ultimately jointly owned with her husband.  She also still owns a number of high-end value cars, which we understand are housed at Property D.  She claims monthly expenditure of some £58,450 with an income described as variable.  All in all her financial situation appears to have deteriorated markedly since the Final Judgment. 

Decision

50.      Advocate Sinel submitted that there had been massive non-disclosure by design on the part of the Petitioner.  He said her strategy before, during and after the Final Hearing had been to:

(i)        Obfuscate;

(ii)       refuse to comply with disclosure orders;

(iii)      mislead the Court in relation to the availability of documents;

(iv)      to form a trust he said was in effect non-existent and to refuse to provide the accountants BDO, with the necessary documentation, thus preventing them from being able to provide an accurate report;

(v)       claimed enormous undocumented expenditure clearly as a cloak for the acquisition of hidden assets and/or dissipation;

(vi)      under declare and/or undervalue assets;

(vii)     fail to declare assets;

(viii)    make very serious false allegations against the Respondent which were dismissed but nevertheless caused delays;

(ix)      generally, was as offensive and disruptive as she could be;

(x)       post the final hearing, delayed and obstructed payment to the Respondent and in the case of the former matrimonial home, Property C, vandalising it before it was transferred, and

(xi)      generally, put forward inconsistent, uncorroborated stories accompanied by partial disclosure.

51.      It is the case that in the Final Judgement the Court found the Petitioner to be an unreliable witness and the Supplemental Report set out a list of documents which it said the Petitioner had not provided to which we will refer below. 

52.      The Court accepts the evidence of Andrew Shaw that the Petitioner's documents were handed over to an employee of hers on 10^th January 2017 and that her assertions on oath that she could not give details of the sale of the Company C shares because his firm had retained all of her documentation was untrue.  In any event, the contract notes could have been procured directly from the brokers who conducted the sales.  Curiously, the Respondent called Andrew Shaw to give evidence on his behalf at the Final Hearing in relation to the allegations of financial misconduct made against the Respondent by the Petitioner, but he was not asked about the return of the Petitioner's documents to her.

53.      Whilst the Petitioner had made reference to the existence of accounts at Investec in her affidavit of the 24^th July 2018, she failed to disclose the statements to the Respondent and thus deprived him and his advisers of the ability to analyse and investigate the same.  

54.      However, even accepting the Respondent's case there has been non-disclosure on her part, the Court is not in a position to say whether it was material in that disclosure would have made a substantial difference to the order the Court made, without very extensive further disclosure and investigation.  In this respect, we note the judgment of the English Court of Appeal in NG v SG [2011] EWHC 3270 (Fam) in which the husband had been found by the district judge to be a serial non discloser.  Mostyn J said this at paragraph 16:

"16     Pulling the threads together it seems to me that where the court is satisfied that the disclosure given by one party has been materially deficient then:

(i)        The Court is duty bound to consider by the process of drawing adverse inferences whether funds have been hidden.

(ii)       But such inferences must be properly drawn and reasonable.  It would be wrong to draw inferences that a party has assets which, on an assessment of the evidence, the Court is satisfied he has not got.

(iii)      If the Court concludes that funds have been hidden then it should attempt a realistic and reasonable quantification of those funds, even in the broadest terms.

(iv)      In making its judgment as to quantification the Court will first look to direct evidence such as documentation and observations made by the other party.

(v)       The Court will then look to the scale of business activities and at lifestyle.

(vi)      Vague evidence of reputation or the opinions or beliefs of third parties is inadmissible in the exercise."

55.      It is necessary to analyse the actual evidence placed before the Court by the Respondent in support of his application to set aside the Final Judgment.

Gold

56.      This is an allegation of outright fraud, namely the acquisition by the Petitioner of large quantities of physical gold kept in her home Property C and concealed from her lawyer, the Respondent and the Court.  The evidence is based substantially on that of U, that at some point before the Final Hearing, probably in January 2017, he saw a number of gold bars in the kitchen and was warned by the Petitioner not to tell anyone. 

57.      Accepting that evidence as true, it is too uncertain to attempt a realistic and reasonable quantification of the value of that gold or to properly justify the making of a substantially different order against the Petitioner.  The Respondent postulates that there may have been 16 gold bars which would have been worth £6M but that is pure speculation.  Evidence would be needed of an actual purchase of physical gold bars by the Petitioner in the years leading up to the Final Hearing.  Bearing in mind the Petitioner's categorical denial of any such purchase, it can reasonably be assumed that this denial will be maintained and so the only way such evidence might be obtained, if it exists, is through a forensic investigation and analysis of the Petitioner's finances from 2016 up to the Final Hearing. 

58.      As against that evidence it is the case that no gold was found by the huissier at Property J in October 2021.  The email between the Petitioner and W refers to gold bars possibly being with Rothschilds and certainly does not amount to an admission that the Petitioner had gold bars in her home.  The gold bars she referred to are entirely unquantified.  We note that the Investec portfolio exhibited to the BDO's reports does show an investment in gold bullion through securities at a cost of £290,154 as part of that portfolio and the transcript produced by U of the meeting held with Fides shows him saying this:

"So, that's it with the cars but also she got a lot of jewellery and Rolexes that she has bought with the Investec portfolio money that should be within her [Property J] and I know she actually got some gold as well, which was all part of that portfolio ..." (our emphasis)

Jewellery

59.      Again, the evidence here is that of U and is based on his assessment of the jewellery the Petitioner purchased when he was present and a statement attributed to her second hand that at some time in the summer of 2018 her jewellery, which she had accused him of stealing, was worth around £2M.  U is not, of course, an expert in jewellery and this evidence does nothing more than raise a suspicion that she may have under declared her jewellery for the purposes of the hearing in November 2018, so that once again, accepting this evidence as true, it is too uncertain to attempt a realistic and reasonable quantification of the undervalue of that jewellery or to properly justify the making of a substantially different order against the Petitioner.  The jewellery seized by the huissier in October 2021 is not evidence of what the Petitioner may have owned in November 2018.  Evidence of her owning more than was declared would again require a forensic investigation and analysis of the Petitioner's finances from 2016 up to the Final Hearing

Horses

60.      Again, the evidence here is that of U and comprises the one spreadsheet dated 10^th April 2019 which gives an insurance value of £1,424,600 as opposed to market valuations of the horses on that list.  His evidence about the horse [Redacted], insured for £534,000 and actually sold for £10,000, perhaps illustrates the Petitioner's point about the difference between insurance and market valuations.

61.      For the purposes of the First Report independent market valuations dated 8^th and 10^th January 2018 respectively of the horses then owned was provided by the Petitioner to BDO, totalling £337,000.  It is true that further independent market valuations were not provided to BDO for the purposes of the Supplemental Report later that year, with the Petitioner providing her own valuation of £290,000. 

62.      The spreadsheet raises a suspicion that the horses may have been undervalued as at November 2018 but once again it is too uncertain to attempt a realistic and reasonable quantification of that undervalue or to properly justify the making of a substantially different order against the Petitioner.  The Court suspects that it may be difficult to obtain a reliable market valuation today of horses owned in November 2018. 

The Company C shares

63.      In his skeleton argument in support of the Order of Justice, Advocate Sinel argued that it was clearly anticipated that the BDO reports would address the entirety of the Petitioner's wealth, including her shareholdings in Company C.  This is to misunderstand the purpose of the BDO reports, which was to explain the structure of the A Trust, the nature of the assets ultimately held within its structures, the current market and forced sale value of the assets ultimately held and the current market value of the assets or investments held by the Petitioner either directly or through companies outside the trust structure, excluding Property C, the ski chalet and her personal chattels.  As previously stated, the current market value for purposes of the First Report was the 31^st August 2017 and the current market value for purposes of the Supplemental Report was 30^th June 2018.  BDO were not required to investigate into the history of the Petitioner's shares in Company C and how much she derived from the sale of those shares from the time of their vesting in her in 2014.

64.      It needs to be remembered that the precise number of shares held by the Petitioner were disclosed together with when they could be sold and secondly, they were publicly quoted on Nasdaq.  It would seem clear that at the time the Petitioner moved from Rothschilds to Investec in 2017, only 40,000 shares in Company C were owned by her and these were transferred into the Investec portfolio.  Sales of those shares by Investec were disclosed.  Indeed, there is a letter from Investec to the Petitioner dated 11^th January 2018 explaining why a large proportion of the 40,000 shares held within the Investec portfolio had been sold.  The letter refers to her gradual exit from the Company C shares being prudent.  She had taken advantage of a rising share price enabling her to build a more diversified asset base.

65.      The Petitioner's shares in Company C would have benefited from the increase in the share price and the Respondent made his own calculations, which the Court noted without comment at paragraph 16 of the Final Judgment:

"16.    The net consideration received by the petitioner on completion was £22,885,915, of which £14 million was paid to her in cash, and the rest in [Company C shares], the sale of which was restricted - one half until December 2015 and the remainder until January 2016.  Because the petitioner is in dispute with Smith & Williamson her accountants at the time, she says she is unable to disclose precisely how much the shares she received in [Company C] were ultimately sold for.  According to the respondent, they were trading at $93 at the time of completion and she received her shares at $86.04.  He says they were sold above $100, and accordingly some $4 million in uplift was received by her bringing the total consideration she received from the sale to some £27 million."

66.      The function of the Court at the final hearing was to ascertain the value of the family assets as at November 2018, and how those assets should be shared between the parties.  The Court did not, and was not asked to, determine the precise sale proceeds received by the Petitioner in the four-year period leading up to the Final Hearing.  The Court noted at paragraph 17 what the Petitioner had done with the initial cash proceeds, and it also noted at paragraphs 22 and 42 her rate of expenditure:

"22.    In her affidavit of 21st September 2016, in response to the respondent's application for interim spousal maintenance, the petitioner exhibited a report from Smith & Williamson to the effect that with her monthly outgoings and capital expenditure, her then current average spend was between £100,000 and £150,000 a month, or between £1.2 million and £1.8 million per annum."

"42.    We have already mentioned the rate of expenditure of the petitioner as disclosed in her affidavit of 21st September 2016.  In her affidavit of 8th November , sworn in support of the final hearing, she estimated the current cost of her supporting the businesses within  the [A] and [B] structures at £123,000 and £100,000 per month, which, at current exchange rates, amounts to combined expenditure of some £2.53 million per annum.  She said it was impossible to say when that burden would reduce.  She estimated that she was supporting the salaries of some 30 staff overall employed within these structures, including 12 employed at the stud farm in France and seven at [Company P].  There were now some 39 horses at the stud farm and in other locations."

67.      As the Court said at paragraph 39 of the Final Judgment, all of the investments made by the Petitioner had been financed by loans to the two structures she had created, the value of which exceeded the value of the assets held within the structures, as ascertained by BDO, so that the Petitioner's interest lay in the extent to which those loans were recoverable (paragraph 39).  As BDO advised in the Supplemental Report, and as summarised in paragraph 49 of the Final Judgment, the loan to Company I amounted to £19,521,873 but based on current market values only £16,878,021 of that loan was recoverable. 

68.      The Court also made this observation at paragraph 53 of the Final Judgment:

"53.    The BDO report noted that as at the valuation date of 30th June 2018, the Investec execution only account was worth $1.13 million, down from £2.7 million as at the 31st August 2017, but by the time of the final hearing, virtually all of that had gone.  The defined mandate account was still worth £9.1 million at the date of the final hearing, but the whole account had been pledged as security for a loan of £2 million by Investec to [Company I].  At the rate that the petitioner was depleting capital, that account would be exhausted within two or three years.  Mr Foottit [of BDO] estimated that between 11th July 2017 when the two trusts were established and 30th June 2018, the date of the valuation for the supplemental report, some £2.6 million had been expended which, from an accounting point of view, could be characterised as losses, although the petitioner would not accept them as such."

69.      The failure of the Petitioner to provide details of the sales of the Company C shares leaves the precise amount received by her uncertain, and her providing an explanation for not providing those details that was untrue understandably raises a suspicion in the mind of the Respondent as to the true extent of those proceeds.  It is notable, however, that at no stage did the Petitioner make any representation, either to the Respondent or to the Court as to the amount of the sale proceeds of the Company C shares she received.  The Court is certainly not in a position to find that she fraudulently misrepresented the amount of those proceeds. 

70.      The only new evidence to emerge in relation to the [Company C] shares following the Final Hearing is the evidence of Andrew Shaw about the return of the Petitioner's documents.  Subject to that, the Respondent is in the same position as he was at the Final Hearing, and he did not appeal the findings of the Court as set out in the Final Judgment. 

71.      The Court has found the Petitioner's explanation for not providing details of the sales of the Company C shares to be untrue, but the provision of such details would not of itself lead to a different order being made.  It would be necessary to trace the proceeds through the multitude of bank accounts which she used through to the assets that were disclosed in the Final Hearing in order to discover whether any assets had been hidden away, such as gold, and to support the Respondent's argument that the Petitioner had hidden or dissipated those sale proceeds to his detriment.  The question arises as to whether it is practicable now, given the lapse of time and the Petitioner's ill health, to expect her to be able to explain items of expenditure over this lengthy period. 

Investec accounts

72.      The production of the statements of the four Investec accounts shortly before this hearing constitutes new evidence that was not before the Court in November 2018.  The Petitioner had disclosed the existence of such accounts but failed to provide any statements which she was clearly under a duty to do, as these were accounts in her personal name.  These accounts would not appear to have been dealt with in the BDO reports contrary to her assertion that they would be.

73.      The most egregious aspect of this failure is that it deprived the Respondent and Advocate Corbett of the ability to analyse those statements and cross examine the Petitioner upon them, in particular in relation to the Respondent's argument that money should be added back to the Petitioner's side of the asset schedule so that the Respondent did not have to pay for or otherwise suffer from the Petitioner's unilateral reduction of the marital acquest through extravagant expenditure on her lifestyle and investments in loss making businesses.  The matter is addressed at paragraphs 84 - 86 of the Final Judgment, where the Court held that it had insufficient evidence to add back to the Petitioner's side of the asset schedule.

Non-disclosure to BDO

74.      Much emphasis was placed by Advocate Sinel on the documents requested by BDO in the Supplemental Report but not produced by the Petitioner.  Quoting from appendix 2 of the Supplemental Report:

"DOCUMENTS REQUESTED BUT NOT RECEIVED

1.     Management accounts for the [A] Trust and [Company E], the [B] Trust and [Company L] for the period to 30th June 2018.

2.     General ledgers for the [A] Trust and [Company E] and the [B] Trust for the period to 30 June 2018.

3.     Formal valuation of bloodstock held by [Company K] and [Company O] at 30 June 2018 and open market and forced sale basis.

4.     Formal valuation of [Property F], [Property G], [Property D], the Guernsey Property and [Property I] at 30 June 2018 on an open market basis.

5.     Formal valuation of [Property F], [Property B], [Property G], [Property D], the Guernsey Property, [Property I] and [Property J] at 30 June 2018 on a forced sale basis. Valuation of the fixtures, fittings and antiques held by [Property J] at 30 June 2018 on an open market and forced sale basis.

6.     Estimates to complete any development works at [Property G] and, [Property D] and the market values when completed.

7.     Estimates of the current and ongoing tax position and liabilities of the [A] Trust.

8.     Details of the current value at which [Property C] is on the market.

9.     Detailed fixed asset register of [Company Q] at 30 June 2018;

10.  Formal valuation of the intellectual property held by [Company P] ."

75.      Advocate Sinel suggested that in addition to this missing information the entire report was based upon the information provided by the Petitioner and was, therefore, of little or no value.

76.      The work carried out by BDO was in fact substantial and of value, and we would highlight the following:

(i)        At paragraph 5.2 of the First Report, it states that BDO had been provided with summaries of the profit and loss accounts and balance sheets of the A Trust and each of its subsidiaries as at 31^st August 2017 by Albany Trustees (not the Petitioner).  Albany Trustees is a completely independent Guernsey based trust company.  It states at paragraph 5.5 that Albany Trustee also provided a consolidated profit and loss account and balance sheet for the A Trust and because that did not include the three French companies, BDO prepared a consolidation of the balance sheet, including those three companies, using the same exchange rate that Albany Trustees had used when preparing the accounts.  It states at paragraph 5.15 that the A Trust had a net liability position as at 31^st August 2017 attributable to a loss incurred at that date.

(ii)       As made clear in the First Report most of the properties had been recently acquired on the open market, which is a good indicator of market value, but for the purposes of the First Report a valuation estimate for [Property F] was produced from a firm of estate agents called Goadsby.  BDO was provided with a formal valuation of the [Property B] carried out in August 2015 with a valuation estimate carried out again by Goadsby on 29^th September 2017.  No valuation had been produced for [Property D], but that had been acquired on the open market on 11^th August 2016 for £2,242,500. [Property G] had also been acquired on the open market on 31^st May 2016.  A valuation of [Property I] as at 16^th August 2017 by Socogefin had been provided, together with a valuation of the [Property J] by Abaximmo on 2^nd August 2017.

(iii)      As previously mentioned, independent valuations of the livestock had been provided to BDO for the First Report.

(iv)      An appendix to the First Report confirmed that BDO had examined the management accounts for the A Trust and the companies beneath it and the general ledgers for these companies.

(v)       It was the Petitioner who provided BDO with the accounts of Company L, the sole asset of which was Property C, which was on the market for sale for £2.4 million as neither party had the necessary housing qualifications to live there.  The accounts recorded a loan to the company by the Petitioner of some £3.3 million, but BDO logically valued that loan at the price for which the property was being marketed.  It transpired at the hearing that the Petitioner had turned down an offer of £2.6 million, because she felt that a higher figure could be achieved.  In her view, it was worth £2.75 million at best, and we note that the property was ultimately sold by the Respondent for £2.8 million.

77.      The list of information listed as not received by BDO in the Supplemental Report has to be seen therefore in the context of the work done in the First Report, so that:

(i)        There were no assets in the A Trust (other than the shares in Company E), Company E (other than the shares in Company I) and the B Trust (other than the shares in the companies beneath it) and therefore management accounts for those entities were of no import.  The same applies to Company L, whose only asset remained Property C.

(ii)       For the same reason, access to the general ledgers of the A Trust, Company E and the B Trust was of no import.  BDO did have access to the general ledgers of the other entities. 

(iii)      There had been formal independent valuations of the horses in the First Report.

(iv)      In terms of the properties, some had been very recently acquired including Property H, but valuations had been obtained for the remainder for the purposes of the First Report as set out above.  It was, of course, always open to the Respondent to procure his own valuations of the properties concerned.

78.      At the directions hearing on 9^th November 2018, Advocate Corbett sought updated valuations of the bloodstock and of Property G, Property H, Property I, the Property J and Property D and the provision of the other information which BDO had requested.   This was too late for the final hearing due to start on 19^th November 2018.  There was no application for an adjournment or suggestion that the Court was not in a position, fairly, to proceed on the basis of the BDO reports as they were.  Clearly the Court felt it was able to do so, but if the Respondent took the contrary view, then it was open to him to appeal the Final Judgment, which he did not do.  Accordingly, the Court will not set aside the Final Judgment on the strength of the asserted deficiencies in the Supplemental Report. 

79.      The position we have reached is that the Respondent has failed to persuade the Court that there has been material non-disclosure by the Petitioner on the basis of the information not provided to BDO for the Supplemental Report and the evidence in relation to the alleged gold bars, the jewellery and the horses. 

80.      What we are left with is the failure of the Petitioner to disclose details of the sales of the Company C shares, the untruthful justification put forward by her for not being able to do so and the failure to disclose the statements in relation to the Investec accounts. 

81.      It is not possible to say now whether rectifying these failures would lead to a substantially different order being made by the Court.  That would depend upon a forensic investigation and analysis of the Petitioners' finances from 2016 up to the Final Hearing for which extensive disclosure orders against her would first be required.  To give some indication of the depth of the disclosure exercise that would follow the setting aside of the Final Judgment, we set out the disclosure that the Respondent sought in May 2022 in advance of this hearing and which was the subject of the Court's unpublished judgment of 19^th May 2022:

"5.0    ...all bank statements for all accounts from the date that the accounts were opened until 31/7/19 starting on 1/6/16.

6.0      The definition of bank accounts above, including any bank accounts upon which [S] is or was a signatory or over which she exercised control, including those held in the name of companies of which she has been a director or shareholder.  Reflecting profit and losses for the year and to include a balance sheet.

7.0      Accounts in the conventional sense, i.e. prepared on an annual basis, be provided for all companies of which [S] is or has been a shareholder or director from 1/6/16 to 30/7/19, where accounts have been filed with the relevant Registry they must be disclosed.

8.0      That [S] shall provide the missing bank statements referred to in the traffic light document within 14 days hereof, again up until 31/7/19.

9.0      That [S] shall disclose within 14 days hereof, all of the trade notes and related for the [Company C]De shares complete with documents and bank statements from Morgan Stanley and Chase Group showing how many shares were sold, how much for and where sale proceeds went to.  Bank statements for the recipient accounts shall be provided as per 5.0 and 6.0 above.  For the avoidance of doubt there will be a complete paper trail including all relevant transfers.

10       That [S] shall disclose, within the 14 days hereof, all her financial records relating to or derived from Wealth & Investment (Channel Islands) Limited, which obviously includes all bank statements and portfolio statements and/or related including correspondence with Wealth & Investment (Channel Islands) Limited, and Investec Bank (Channel Islands) Limited from inception to 31/7/19 including for the benefit of doubt, all statements for all dates for the extra account ending [Redacted], sort code 40-48-15.

11.0    That [S] shall disclose all of her financial dealings complete with Bank Statements, Portfolio Statements and related and all correspondence with any Rothschild entity including but not limited to Rothschilds Bank ICI) Limited, Rothschild & Co London and/or Rothschilds (UK) Limited.

12.0    That [S] does provide within 14 days copies of all insurance policies including, for the benefit of doubt, of those from buildings, livestock and chattels from years 31/1/16 to date, held by her personally or by any company of which she is or has been a director or shareholder during the relevant period i.e. 31/1/16 to 31/7/19.

Other matters

13.0    In relation to the items seized by the Huissier, pictures of which are attached, [S] shall within 14 days hereof state when and where these items were purchased, complete with receipts for each item and a paper trail showing when those items were paid for from exhibiting an unredacted copy of the relevant bank statement."

82.      Following the production of all of this documentation, upon which further questions will undoubtedly arise, Advocate Sinel says the Respondent will appoint a forensic accountant to investigate and analyse the same.  The Petitioner will no doubt do the same.  In addition, Advocate Sinel gave notice at the hearing that if the Final Judgment is set aside, the Respondent will argue that the Petitioner should not receive a greater share of the family wealth on the grounds of her special contribution to the wealth created by the sale to Company C in 2014.  He indicated that this argument would be based on her record since the sale to Company C in investing in a series of loss-making enterprises.  As set out in paragraphs 99-101 of the Final Judgment the issue of the special contribution was concerned with her creation of the wealth that culminated in the sale to Company C, not her handling of the proceeds of that sale.  Quoting from paragraph 99 of the Final Judgment:

"99.    Turning to the petitioner, and despite our reservations as to the quality of her evidence and the submissions of Advocate Corbett to the contrary, we do accept that the petitioner has made a special contribution to the wealth of the family, which it would be inequitable to disregard.  [C], [B] and [D] all gave evidence as to her unique talents, as did the respondent, and it didn't require extensive evidential investigation.  She turned the business of the company, helped by additional finance of £5 million provided by [C], into something worth £44 million in two to three years, an outstanding feat, based entirely upon her own entrepreneurial skill, a skill described by [C] in evidence as very rare."

83.      In our view it would be quite wrong for the Respondent, who did not appeal the Final Judgment in this respect, to be able to argue this issue for a second time.

Conclusion

84.      Despite the serious nature of the Petitioner's failings, there are a number of reasons why the Court will not set aside the Final Judgment:

(i)        We take into account the public interest that there should be an end to litigation.  The parties have already been involved in expensive litigation from 2016 until 2020.  Since the start of these proceedings in 2021 to set aside the Final Judgment, substantial fees will by now have been incurred in Jersey, Guernsey and France.  If the Final Judgment is set aside, it can be anticipated that the parties will be involved in a further two years or so of expensive litigation.

(ii)       The disclosure and investigatory process that will inevitably follow a setting aside of the Final Judgment will be extensive and will rely to a large extent upon the Petitioner, who the Court has already found to be an unreliable witness and who is representing herself.  Furthermore, she is not in good health having recently had a liver transplant for which she is receiving immunosuppressant drugs which she says can make her confused.  That confusion is illustrated by some of the documentation she has presented.  Any assertion she makes about her financial circumstances at the material time in any rehearing would be unlikely to be accepted without protracted and costly examination.  She has also recently broken her leg.

(iii)      In essence what we have is a suspicion that there has been material non-disclosure and/or undervaluing of assets and/or dissipation of assets on the part of the Respondent but no sufficient evidence upon which to attempt a realistic and reasonable quantification of the amounts involved or to properly justify the making of a substantially different order against the Petitioner.  Advocate Sinel accepted that the Respondent was not in a position now to say what order the Court should make instead; hence the need for an extensive and costly discovery and investigatory exercise which may or may not produce the necessary evidence.  It is not possible to say now that any such exercise would lead to a substantially different order being made and so it would inevitably be a speculative exercise.

(iv)      The Final Judgment has now, albeit with difficulty, been fully implemented with properties transferred and/or sold and the issue arises as to whether it is proportionate to set aside the Final Judgment so that an essentially speculative discovery and investigatory exercise can be undertaken.  The question also arises as to whether it is practicable now, given the lapse of time and the Petitioner's ill health, to embark upon such an exercise.

(v)       Despite the failure of the Petitioner to disclose the Investec account statements, those accounts were used to process payments in and out and not to hold undisclosed capital.  The monies paid in and out of account [Redacted] were broadly consistent with what the Court understood was being expended by the Petitioner, namely some £2.53 million per annum (paragraph 42 of the Final Judgment).  The overall picture was therefore clear to the Court.

(vi)      Whilst the Respondent was denied the opportunity of examining the Investec account statements and cross examining the Petitioner on them, we are conscious of the high hurdle that any spouse must surmount in order for the Court to "add back" assets.  The English law on this subject, which would be persuasive in this jurisdiction, was considered in Map v MFP [2015] EWHC 627 (Fam).  In short, the Respondent would need to show "wanton dissipation of assets" on the part of the Petitioner.  Reference was made to what Cairns J said in Martin v Martin [1976] Fam 335:

"A spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to if he had behaved reasonably."

(vii)     In Map, Moor J said this at paragraph 68:

"68.    Mr Molyneux, in closing submissions, argued that there needs to be deliberate, unprovoked and morally culpable conduct.  The most obvious example would be where a spouse deliberately dissipates a fund simply to prevent his or her former partner receiving a fair share of that fund.  The court cannot permit such conduct.  I further accept that there will be other situations where conduct justifies a financial penalty although such cases will undoubtedly be rare."

(viii)    In the Map case, the Court declined to add back expenditure on inter alia cocaine and prostitutes.  In this case, the Petitioner commenced her investments and the creation of the structures through Company I in 2015 before the parties separated and was adamant that all of her investments, although loss making and requiring further investment, would eventually come good.

(ix)      The Petitioner has already been penalised for non-disclosure through the order for indemnity costs the amount of which, in the light of the number and length of hearings, will no doubt be substantial.

85.      For all these reasons, we are not persuaded by the Respondent on the balance of probabilities and on the evidence before us that there has been non-disclosure on the part of the Petitioner which is material, namely which would make a substantial difference to the orders the Court made and in the exercise of our discretion we decline to set aside the Final Judgment so that an extensive disclosure and investigatory exercise can be embarked upon in the search for evidence that might make a difference to the orders the Court made.

86.      It follows that when this judgment is handed down, the Court will dismiss the Respondent's summons of the 3^rd November 2021 and, subject to any application that may be made, the Court will lift in their entirety the interim injunctions imposed upon the Petitioner under the Order of Justice, but we will not dismiss the Order of Justice as it must remain in place in order to deal with any issues as to costs and damages.  We will hear submissions as to costs but any issues as to damages will have to be left over. 

Authorities

S v T [2019] JRC 003

Judgment of 12^th October 2018 [unpublished].

Judgment 13th October 2021 [unpublished].

S v T [2021] JRC275.

P-S v C [2006] JRC 139A.

Manley v Bell [2006] JRC 195.

Livesey (formerly Jenkins) v Jenkins [1985] FLR 813.

Sharland v Sharland [2015] UKSC 60.

Gohil v Gohil [2015] UKSC 61.

NG v SG [2011] EWHC 3270 (Fam).

Judgment of 19^th May 2022 [unpublished].

Map v MFP [2015] EWHC 627 (Fam).

Martin v Martin [1976] Fam 335.