The judgment in the divorce case of M v M [2013] EWHC 2534 (Fam) has now been published amongst great speculation and interest. It is thought to be a combination of various aspects that has resulted in family lawyers being so intrigued:
- The sizeable sums involved;
- The uncertainty as to how the assets (held by companies of which the husband was a shareholder) would be dealt with in light of the case of Prest v Petrodel; and
- The fact that the husband was not even present at the final hearing.
M v M divorce
Case details
The case involved a husband and wife who were Russian nationals, married for 17 years and who had been living in the UK since 2005. They had 2 children together. In 2009, the wife petitioned for divorce in Russia as she was unaware that the Courts of England and Wales had jurisdiction. In 2010, after the divorce was finalised in Russia, the wife issued proceedings to deal with the finances in the High Court of England and Wales.
The matrimonial assets were held in a network of complex off-shore corporate structures that had been created by the husband, which led to an additional five Respondents to the application. The assets that the wife had traced at the time of the hearing included, in broad terms, £14m of properties in England, £1.4m of residential property in Russia and £92m of commercial property in Russia. On the wife’s case therefore, there were assets worth over £107m to be dealt with.
Excluding the former matrimonial home, which had been acquired in the husband and wife’s joint names, the English properties were all held by the husband’s companies. A common feature of the English properties was that each was bought for the domestic use of the family.
In her forthright judgment, the husband was condemned by Mrs Justice King for his “appalling litigation misconduct”, having ignored several Court orders and failed to provide anything close to full financial disclosure. The Judge also went on to reject the suggestion that some of the properties had been registered in the names of offshore structures as part of a scheme to mitigate tax and instead determined that the properties were held beneficially by the husband, who was effectively the “puppet master”.
The Judge stated that despite the assertions made by the husband to the contrary, the family wealth had been accumulated during the parties’ lengthy marriage and that the wife had fully contributed during that time.
Just as the Supreme Court decided in Prest, the Judge in this case found that the English properties were held on the resulting trust by the companies for the husband. It was therefore ordered that the properties be transferred to the wife. In addition to the value of the English and Russian residential properties, the Judge made a lump sum order that the husband pay the wife £38m, the combined value of which provided the wife with £54m or 50% of the assets which had been identified by her.
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