Summary
In financial remedy proceedings, the court may draw adverse inferences from a party’s failure to call evidence within that party’s knowledge, particularly where the economically dominant spouse controls the relevant financial information. The family court’s inquisitorial function means that ordinary civil burdens and evidential rules cannot be applied mechanically. Judgments and witness statements from related proceedings may be admitted and given the weight they deserve. A nominee arrangement may be found on the balance of probabilities, and documents presenting the nominee as the true contracting party may be shams where they disguise the real agreement. A party’s deliberate concealment of assets or settlement arrangements may materially affect the computation of the resources available for distribution.
Factual background
The wife sought financial remedies following a long marriage. The husband asserted that he was insolvent after approximately £200 million had been appropriated by Dr Gerald Smith, whereas the wife alleged that substantial assets or rights to assets remained held through Anthony Stevens and related structures.
The court considered evidence and judgments arising from the connected Orb and Phoenix commercial proceedings. The wife’s financial remedy claim had previously been stayed, but the stay was lifted after the husband settled the commercial litigation in April 2016 without fully disclosing the settlement documents. The central issues were whether Mr Stevens was the husband’s nominee, whether the settlement documents represented genuine liabilities, and what assets should be treated as available for the eventual distributive award.
Held
- Adverse inferences. The court applied the principle stated in Prest v Petrodel Resources Ltd [2013] UKSC 34, drawing on the approach in R v Inland Revenue Commissioners, Ex p TC Coombs & Co [1991] 2 AC 283. In family financial proceedings, the court may draw on experience and inherent probabilities where a party fails to provide evidence about matters within that party’s knowledge. This is not a licence for speculation. The husband’s failure to call Mr Stevens was highly significant, and supported the conclusion that Mr Stevens was his nominee.
- Evidence from related proceedings. Judgments in related litigation were admissible as hearsay material and had to be given the weight they deserved, while the ultimate decision remained that of the family court. The court did not need finally to determine the continuing scope of the rule in Hollington v Hewthorn [1943] KB 857. Witness statements were admissible under section 2(4) of the Civil Evidence Act 1995, despite non-compliance with the notice requirements in FPR 23.2.
- Nominee and sham findings. On the balance of probabilities, Mr Stevens acted as the husband’s nominee in relation to the £92 million transfer in 2012 and the April 2016 settlement. The documents portraying Mr Stevens or his corporate vehicles as genuine parties therefore concealed the true agreement between Dr Smith and the husband. Applying the test summarised in Bhura v Bhura [2014] EWHC 727 (Fam), the arrangements were shams.
- Settlement and available resources. The husband had deliberately given a false account of the negotiations and concealed material settlement documents. The court treated the £73.75 million loan note and the transfer of 50% of Sentrum Rugby as consensual recovery of the husband’s own property, not as genuine debts owed to Mr Stevens. The husband was accordingly treated as having £12 million available for the distributive award, while the final distribution was deferred for further submissions.
The court’s approach to earlier authorities
Available to signed-in members.
Key cases cited
13 authorities cited.
- Virgin Atlantic Airways Limited v Zodiac Seats UK Limited (formerly known as Contour Aerospace Limited) [2013] UKSC 46
- Prest v Petrodel Resources Limited and others [2013] UKSC 34
- Johnson v Gore Wood & Co [2002] 2 AC 1
- Henderson v Henderson (1843) 3 Hare 100
- Takhar v Gracefield Developments Ltd & Ors [2017] EWCA Civ 147
- Norman v Norman [2017] EWCA Civ 120
- F (Children), Re [2016] EWCA Civ 546
- Hoyle v Rogers & Anor [2014] EWCA Civ 257
- Fage UK Ltd & Anor v Chobani UK Ltd & Anor [2014] EWCA Civ 5
- Carmarthenshire County Council v Y [2017] EWFC 36
- Bhura v Bhura [2014] EWHC 727 (Fam)
- R v Inland Revenue Comrs, Ex p TC Coombs & Co (Coombs (TC) & Co, Ex parte) [1991] 2 AC 283
- In re H (A Minor) (Adoption: Non-patrial) [1982] Fam 121
Sign in to see how the court treated each authority. A free account is enough.
Cases citing this case
5 later cases · 1 positive · 4 neutral
Most senior citing decisions:
- Re W-A (Children: Foreign Conviction) [2022] EWCA Civ 1118 mentioned
- Hotel Portfolio II UK Limited (in Liquidation) & Anor v Andrew Joseph Ruhan & Anor [2022] EWHC 1695 (Comm) considered
- HOTEL PORTFOLIO II UK LIMITED v ANDREW JOSEPH RUHAN [2022] EWHC 383 (Comm) considered
- Towuaghantse v General Medical Council (Rev 2) [2021] EWHC 681 (Admin)
- The Serious Fraud Office & Anor v Litigation Capital Ltd [2020] EWHC 3548 (Comm)
Sign in for the full treatment table. A free account is enough.