YP v MP

For the purposes of matrimonial financial relief, assets held through companies may fall within Matrimonial Causes Act 1973, section 24(1)(a), where one spouse is the effective owner and controller, can procure their transfer, and no relevant third-party interests would be prejudiced. A finding of impropriety is not always required: the issue is one of statutory interpretation and entitlement.

The court may draw adverse inferences where a spouse deliberately fails to provide full and frank disclosure, breaches disclosure orders and gives misleading evidence. A company may also hold property on resulting trust where the spouse provided the purchase money without evidence of a loan or gift.

The wife sought ancillary financial relief following the breakdown of the marriage. She claimed a substantial lump sum, property and share transfers, and child maintenance. Several companies were joined as respondents because properties and shares were held in their names.

The principal issues were the extent of the husband’s wealth and interest in the Petrodel group, whether company-held assets were within the court’s statutory powers, whether any assets were held on trust for the husband, and the effect of his extensive failures to provide disclosure. The wife relied on effective ownership and control, nominee or trust principles, and the corporate veil authorities.

1. Disclosure and adverse inferences. The husband had deliberately failed to comply with his positive obligation to give full, frank and clear disclosure. He had breached court orders and given evasive and misleading evidence. Applying the reasoning in J v J [1955] 2 All ER 85, the court was entitled to draw adverse inferences and concluded that the husband possessed resources substantially greater than those disclosed.
2. Ownership and control. The husband was the effective owner and controller of the Petrodel corporate structure. The companies were managed according to his instructions, their directors had no effective independent role, and company resources were used for his and his family’s expenditure. The alleged seed-money trust for his siblings was rejected as false and unsupported.
3. Section 24(1)(a). The relevant question was whether the properties and shares were property to which the husband was entitled in possession or reversion. That depended on the facts. Although company law ordinarily treats a company as a separate legal person, the husband could procure the transfer of the assets for his own use, and no relevant third-party interests existed. The assets were therefore within section 24(1)(a).
4. Corporate veil. The court found no impropriety of the kind required by Ben Hashem v Al Shayif [2009] 1 FLR 115. The company structure had been used for wealth protection and tax purposes, and false evidence about ownership did not itself amount to using the structure to avoid or conceal liability. That did not prevent orders under the statutory interpretation adopted from Nicholas v Nicholas [1984] FLR 285 and Mubarak v Mubarak [2001] 1 FLR 673.
5. Resulting trust. In relation to W Avenue, the purchase and refurbishment monies came from the husband. There was no evidence of a loan or gift to the company. If necessary, the company therefore held that property on resulting trust for him.
6. Orders. The court assessed the husband’s wealth conservatively at not less than approximately £37.5 million and awarded the wife resources totalling £17.5 million. Transfer orders were made, or proposed, in respect of specified English and Nevis properties and shares in Elysium Diem companies. Child maintenance was ordered at £24,000 per child per year, together with educational and medical expenses. Further issues concerning additional transfers and costs were adjourned.

First-instance ancillary relief judgment. No appellate history is stated in the judgment.