Neutral Citation Number: [2017] EWHC B109 (Fam)

Case No: ZC15D04042

IN THE FAMILY COURT
SITTING IN THE CENTRAL FAMILY COURT
Central Family Court
First Avenue House, 42-49 High Holborn
London WC1 6NP

Date: 4/12/2017
Before:
MR RECORDER CUSWORTH QC 
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Between:

	BELA BLOOM	Applicant	
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	BARON ALEX BLOOM	Respondent	
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	IRINA KONTIPAYLOVA	       Intervenor	

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HARRY OLIVER (instructed by FARRER & Co) for the Applicant
The Respondent appeared in person
ROBERT AVIS (instructed by CHARLES RUSSELL SPEECHLYS) for the Intervenor

Hearing dates: 2nd - 6th October 2017
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Judgment Approved
Mr CUSWORTH QC:
1.	I give this judgment at the conclusion of a final hearing in financial remedy proceedings, which I have heard over 5 days from 2nd October 2017, but must record at the outset that I previously heard from the same witnesses as well as the Applicant wife’s parents at an earlier hearing which began in March 2017 and lasted for a further 4 days. That hearing concerned a preliminary issue between the parties and the Applicant’s parents, who asserted, and I found, had provided the funds for the purchase of a property in Southern France during the marriage, not as a gift to the parties, but rather on trust for the parties’ daughter "A." At the end of that hearing I gave a full judgment on that issue, and made clear findings of fact in relation to a number of issues then in dispute, which findings inevitably bear upon the further evidence which I have now heard from the parties alone. 

2.	I will not repeat all of the facts and matters which formed the subject of that judgment, but I have inevitably had the background as I there found it to be in mind during the process of this hearing. All of those matters are in my mind as I have written this judgment.
3.	That background, insofar as it is agreed, may be briefly stated as follows:
a.	The Applicant is Russian, and was born on 10th February 1989. She is now therefore 28. At the time of the parties’ marriage on 14th March 2011, she was just 22. She is the only child of the Intervenor and her husband Valentin.
b.	The Respondent is English, and was born on 19th February 1974, and is therefore 43. At the time of the marriage, he was 37.
c.	The parties’ relationship began in January 2010, and they commenced cohabitation in October 2010. They separated in August 2015, and the Applicant’s divorce petition was issued on 10th September 2015. Decree Absolute of divorce was obtained on 26th September 2016. 
d.	Shortly after the marriage, on 12 May 2011, the couple’s matrimonial home at Flat 10, 54-56 Stanhope Gardens, London SW7 (‘Stanhope Gardens’) was acquired, for £1,325,000. The purchase was funded entirely by the Applicant’s parents. The Intervenor sent just over $2m to the Respondent between January and May 2011, to fund the purchase. Mortgages have subsequently been taken out in respect of this property, of just over £500,000. The property is now held in the names of both parties.
e.	The Applicant and the Respondent’s only child is A, who was born on 18th February 2013, and is therefore now 4 years of age. She lives with the Applicant.
f.	The ‘French Property’ is a villa situated at 80 Chemin de l’Ermitage, 06160 Antibes, Juan Les Pins, France. It was purchased on 14th June 2013, for €2.5m, in the Respondent’s sole name; but the purchase was funded entirely by the Intervenor, Irina Kontipaylova, the Applicant’s mother. The purchase was secured by a 100% mortgage from Societe General (Soc. Gen.), backed by a deposit of €1.15m from the Intervenor. Thereafter, the Intervenor made payments to the respondent at the rate of €30,000 per quarter which she intended would be put to the mortgage liability, until June 2015. The total amount paid by the Intervenor towards that property and its mortgage was €1,963,742.
g.	The Applicant is the child of comfortably off (but as I found in April not vastly wealthy) parents. She does not and has never worked. She gave up her degree, unfinished, upon the relationship with the Respondent starting. He told her she need not worry about such matters, as he could support her. She is currently receiving nothing from the Respondent for herself or A, as has been the case since separation. She is now on benefits, and has income support. Her parents are meeting A’s school fees. Housing benefit is meeting a proportion of the interest on the FMH mortgage. I am told that arrears are accruing.
4.	The proceedings which have followed the separation of the parties have been multi-faceted and hard fought. However, it is fair to say that the court’s findings have fallen during their course more usually on the side of the Applicant, for reasons which I will examine later. The different aspects of the dispute have proceeded as follows:
a.	The Applicant’s Form A was dated 18th September 2015. Her Form E was sworn on 14th December 2015. The Respondent’s Form E was dated 13th December 2015. 
b.	The Respondent issued a non-molestation application, ex parte, on 13th October 2015. DJ Simmonds refused to hear it without notice and relisted it for 16th October 2015, when DJ Hammond refused the Respondent an interim order and listed a final hearing on 25th & 26th January 2016. 
c.	The Applicant was granted an ex parte non-molestation order on 9th December 2015 (following an incident on 7th December) by DDJ Wilbourne. The full hearing was listed to also occur on 25th & 26th January 2016.
d.	The Respondent issued two Child Arrangements Order applications, seeking equal/shared residence. The Applicant cross-applied for sole residence. DJ Parker conducted a FHDRA on 10th December 2015, and ordered that the FLA and CA proceedings be consolidated, and that the already listed hearing in January 2016 be used for fact finding in both.
e.	At the hearing in January 2016, it was the case that the Respondent failed to prove any of his serious allegations against the Applicant. DJ Mauger also found, in accordance with the Applicant’s evidence and allegations, that the Respondent had inflicted significant violence against her, including rape. 
f.	On 16th May 2016, DJ Alderson joined the Intervenor into the Financial Remedy proceedings, and made an asset preservation order against the French Property. He also made orders for 2 accountants to attend an inspection appointment at the next hearing.
g.	On 5th September 2016, DJ Duddridge dismissed the Respondent’s application to strike out the Intervenor’s case as to the beneficial ownership of the French Property, provided for the filing of points of claim and defence, and directed that each party should file and serve any witness statements on which they proposed to rely in relation to the preliminary issue; the hearing of that issue was also listed, on 22nd March 2017, it being defined by the order of 5th September as follows: ‘all issues relating to the beneficial ownership of the French Property or bank deposits held in French bank accounts by the respondent and other claims relating to monies paid to the respondent for the purchase of the French Property or for mortgage’. The judge also dealt with the first of the 2 accountants, who had attended as ordered.
h.	By the final FLA and CA orders of DJ Mauger of 10th October 2016, the Respondent is only permitted to have indirect contact with A, by way of a weekly Skype call of 20 minutes maximum duration. The judge also made a s.91(14) order prohibiting the Respondent from making further applications within one year without leave of the court. Recitals record that the court would expect to see the results of drug and alcohol testing from the Respondent should he seek leave.
i.	On 25th November 2016, the second inspection appointment against one of the Respondent’s accountants took place, again before District Judge Duddridge.
j.	In December 2016, the non-molestation order against Respondent was renewed, and he is precluded from attending within a specified distance of the FMH (as well as prohibitions against threatening/harassing conduct towards the Applicant and A).
5.	I heard the preliminary issue between 22nd and 24th March 2017, and again on 20th April 2017. In the course of the 4 days of evidence that I received, in addition to the Respondent, I heard from the Intervenor, her husband Valentin, and from the Applicant. I delivered a full judgment at their conclusion, dated 23rd April, which as I have said should be read as the companion piece to this one, and in which in summary I found:
a.	Firstly, that on a holiday in the South of France in May 2012 attended by the Applicant, the Respondent, the Intervenor and her husband Valentin, the Respondent held himself out as a successful property dealer, and talked about properties in that region and their values. 
b.	In November 2012, the same group of people holidayed together in Mexico. By that time, the Applicant was around 6 months pregnant. The Intervenor indicated that she wished to make a gift of a property for her grandchild, at a cost of around €1m. She made it clear that the property was to be for her grandchild, and that the Respondent accepted this.
c.	On the basis of that acceptance, the Intervenor agreed that the Respondent would be in charge of finding the appropriate property and arranging for its purchase – given his expressed expertise in the area. He identified the French Property in January 2013, at the higher price of €2.45m, and the intervenor was persuaded to pay €270,000 as a deposit for the property, on the basis of her understanding that the property was for her grandchild.
d.	The exact sequence of information passed to the Intervenor during the following period at the Respondent’s behest was the subject of detailed findings by me in my earlier judgement. 
i.	In the 5 months leading up to the completion of the purchase of the French Property in June 2013, during which period A was born, the Respondent led the Intervenor to believe she needed to pay over €35,000 per quarter, when in fact the cost of the mortgage which he had arranged was just €14,375 per quarter. 
ii.	The Respondent intended to make use of the balance. Between March and June 2013, the Intervenor made payments totalling €1,610,365, initially into the joint account of the Applicant and the Respondent and after 8th April at the Respondent’s request, into an account in his sole name. The property purchase completed on 14th June 2013.
iii.	Further, thereafter, the Intervenor paid €30,000 per quarter to the Respondent, who himself had ‘agreed’ with her that he would pay the balance of funds due. 
iv.	Later, in July 2015, the Respondent asked his French banker to send through his mortgage interest rate details in a word document, in response to the Intervenor’s renewed questions. He also asked for the document to be sent with the bank’s letterhead. He then sent a doctored version of the signed original to the Intervenor, showing both an increased rate of interest and an increased total amount paid. I was quite satisfied that these changes had been deliberately perpetrated by the Respondent, to attempt to hide the true deficit between what the Intervenor had been paying him and what the bank had actually required to receive.
e.	I rejected the Respondent’ account of the funds being provided by the Intervenor as an unconditional gift to the parties. I accepted the Intervenor’s case as to the events which led up to the purchase of the French Property in July 2013. Where there were any issues of fact between the Respondent’s evidence and that for the Intervenor, I preferred that given for the Intervenor. I also rejected the Respondent’s central tenet that, as he is essentially untrustworthy, it is unlikely that the Intervenor would have trusted him to hold property for his daughter. 
f.	I found that it was far more likely that any further funds advanced by the Intervenor (who had already provided the funds for the parties’ matrimonial home) would have been provided on condition that they would be held ultimately for her grandchild, than that they would be provided as an outright gift to a man who freely acknowledges that he was behaving appallingly both to the Applicant and to her family. I accepted that the Respondent had been bragging about his history as an entrepreneur in the property market – it is clear that he also held himself out to banks in this way, which would have justified the Intervenor leaving the details of the property purchase in his hands.
g.	I concluded the judgement as follows:
43.	I am therefore able to find… that there is a constructive trust by which the Respondent holds the French Property for his daughter A, that having been the clear basis upon which the funds for its acquisition were advanced to him by the Intervenor; the Respondent knew and understood that at all times, and allowed the Intervenor to believe that he accepted it. 
44.	Further, it is also clear (and I think not disputed) that significant further funds that were advanced to him for the purpose of making mortgage payments on the property were not in fact so used, but rather appear to have been spent during the marriage. There has not been any investigation yet before me as to how those funds have been used, nor whether there are any funds available to either party to the marriage from which they can be repaid without impinging upon their respective needs. Prima facie, there is a further liability to the Intervenor in respect of those funds, which will be a debt to be dealt with during the substance of the financial remedy application.

6.	It is that financial remedy application which now comes before me for final determination. I have again heard oral evidence from both parties, and received written and oral submissions from the Respondent who has acted in person with his father for some parts of the hearing as his McKenzie Friend. At the outset, his father had produced a statement and wanted to give evidence on his son’s behalf as a witness. This is something which he had previously assured me that he would not seek to do. I pointed out to him that he could not act as both a witness and a McKenzie Friend at the same time; he opted to withdraw his statement and remain to assist his son instead. The Applicant has been represented at this hearing by Mr Oliver of counsel, and the Intervenor by Mr Avis, not during evidence but only for the conclusion of the hearing on the last day when submissions were made to me.

7.	Costs orders made against the Respondent total £46,628 in already quantified orders in the Applicant’s favour (and £120,000 in respect of her mother). The Applicant’s advisors estimate that about the same amount again will be due in as yet unassessed orders. The Respondent has not paid any of those that have fallen due already, and has sought time to pay all but the costs of the preliminary issue. I am told that the Applicant’s parents have had to lend her the money to pursue these proceedings and those under the FLA and CA 1989, and that currently she owes them c£604,000. There will of course be further bills to be added to this. I am told that there is a formal loan agreement between the Applicant and her parents. Mr Oliver says that this is not therefore a soft loan. It is another significant debt to the Applicant’s parents, to be placed alongside that which I found due at the conclusion of the preliminary issue hearing.

8.	It is against that background and context that I now have to weigh the parties’ respective claims. At the outset of the hearing, the Applicant’s open position was to seek the following:
a. A transfer to her of the Respondent’s remaining interest in the family home
b. Payment to her of the following lump sums:
i.   £78,500 (to meet SDLT still due from a failed avoidance scheme)
ii.  £20,000 (to meet arrears of mortgage since separation)
iii. £250,000 (to be applied to reducing the mortgage)
iv. £96,000 being arrears of backdated periodical payments at £4,000pm for two years, and a nominal order thereafter
v.  £250,000 payable in 5 separate lump sums annually over 5 years.
c. Child maintenance be governed by CMS
d. Her costs.

9.	Remarkably, however, the greater claim was actually being made against the Applicant by the Respondent. Of course, I take into account the fact that, since the third day of the preliminary issue hearing, he has not been legally represented; but I was nevertheless struck by the ambition of his open position. By that he sought:
a.	Lump sum orders for the Applicant to pay:
i. c.£500,000 to discharge the mortgage on the family home if she wishes to retain the property, which he modified in closing to a simple requirement that his name should be removed from the mortgage;
ii. £1,000,000 lump sum payable to him to buy himself a new home (although in closing he modified this to £400,000 on the basis that he would be able to obtain a non-status mortgage for the same amount);
iii. An unspecified “compensation payment” to him from the Applicant in respect of an alleged “lost” opportunity to be in business with W’s parents - left to the court to quantify although his says his loss “would eventually be multi-millions”, which claim he did not in fact pursue at the conclusion of the case;
iv. A lump sum equal to 50% of the value of her jewellery, which he dropped in closing.
b. 	The transfer to him of one of the Applicant’s two Russian properties (both of which are occupied by elderly relatives) within 28 days, which he also dropped in closing.
c. 	Dismissal of the Applicant’s income claims.
d. 	Periodical payments for the time being from her to him of £7,000pm (to cover the costs of his accommodation), which was also dropped by the end of the hearing. 
e. 	The Applicant’s parents pay the Respondent €300,000, being the amount which he claims he expended on the French property, prior to my finding that the property is held in trust for the parties’ daughter A.
f. The Applicant to pay her own costs.

10.	Such claim as originally put must always be hard to sustain absent clear evidence of need in any case where the marriage has been relatively short; where all of the parties’ capital resources have derived from the extra-matrimonial contributions of the Applicant’s parents, and the evidence about the Respondent’s own income resources has been unclear, as I shall consider in due course. It is especially so when the Applicant has effective sole care of the parties’ daughter A, the Respondent is making no financial contribution towards her care, and the parties’ liquid assets (before considering the value of the Respondent’s businesses) come to about the same amount as that which the Respondent is requiring the Applicant and/or her parents to pay him, before she begins to reduce the mortgage on the family home as required, and before any of their significant debts are considered.

11.	Even as amended, the Respondent is asking the court to make a significant award to him and completely ignore the very significant costs that have been run up by the Applicant in these proceedings. He is also in effect seeking a reversal of the costs order that I made against him at the conclusion of the preliminary issue proceedings against both the Applicant and the Intervenor.

12.	The Assets. The schedule which Mr Oliver produced did not attempt to place a value on the Respondent’s business ventures, with which I shall deal below. Aside from them, the schedule shows just £1,421,095 before the impact of debt, of which £68,609 is represented by the Respondent’s pension. This means that their liquid non-business resources come to just £1,352,486. Of this amount the vast bulk, £1,242,681, is represented by the equity in Stanhope Gardens. Otherwise, the Applicant holds 2 houses in Russia with a combined value of £80,000.

13.	Stanhope Gardens was acquired, as indicated, for £1,325,000 after funds of around $2,000,000 were provided by the Applicant’s parents, so it is clear that the fact that the current mortgage on the property stands at some £500,000 is all down to additional spending by the parties, or one of them. The initial mortgage taken out was for £245,000, and it was twice extended in 2011/2012. Although it has never been let out, the current terms negotiated by the Respondent are on a buy to let basis. 

14.	Mr Oliver makes the point that the Respondent has never provided evidence of the use of the original £245,000, nor of the use of the mortgage extension in October 2011 of c.£100,000, nor of the use of the further equity released by the re-mortgage in May 2012, despite being ordered to do so. The Applicant’s evidence, which I accept, is that the parties did not have a joint account until the day of the marriage in March 2011, by which time the Respondent had received all of the funds from the Applicant’s mother. The purchase completed in May 2011. All of the mortgage files, the conveyancing files and the SDLT avoidance scheme files, which the Applicant has had to obtain herself during these proceedings, do show that the Respondent was the sole conduit of information and communications at the time.

15.	At the time of the purchase the Respondent entered into an SDLT avoidance scheme, which HMRC have not accepted as legitimate. As a result, the Applicant still owes c£78,515 of stamp duty including interest. The Respondent said in his evidence that this has been paid (he has said by her), but it is clear that it has not and that it is a debt which has been created by the Respondent’s unsuccessful attempt to minimise the tax that the couple would have to pay to complete the purchase.

16.	At the outset, I should make clear that throughout these proceedings, the Respondent has made a series of allegations of non-disclosure against the Applicant. During the course of the trial he was constrained to acknowledge that the vast majority of these were not being pursued, and for the avoidance of doubt it is clear to me that all of the allegations which he had made have been false. I will deal with the specific instance of the Soc. Gen mortgage application in more detail below, but it is clear that the respondent’s case in this regard has been no more than an intended distraction from his evidential lacunae, and ultimately a waste of time and costs.

17.	The mortgages. The Respondent’s case here is that the Applicant has been effectively complicit in the use of all of the money that has been received from her parents, but diverted to meet other costs during the course of their marriage. He has claimed that the original mortgage was necessary as the sums provided by the Applicant’s mother were insufficient to complete the original purchase. Later he maintained that he and she had spent some of the funds from her mother, before the purchase, hence the need for a mortgage. It is the Applicant’s position that if this was the case, she was not made aware of it, and certainly, no documentary evidence has been produced by the Respondent. These events were not very long ago, and if his account were true it should have been relatively easy for him to have provided bank statements to substantiate what he is saying. Mr Oliver suggests that a pattern can be seen here between what happened with the acquisition of the French property and with Stanhope Gardens. Essentially, he says, the Respondent is receiving money from the Applicant’s parents for one purpose and diverting it to himself. 

18.	Having heard both parties give evidence on this area, I am convinced that the Applicant is telling me the truth about these things, and insofar as the Respondent has not made complete admissions in relation to the case that she has put, he should I done. I am quite satisfied from the evidence that I have heard that the Respondent was the conduit through which all family financial affairs were conducted. Equally I am satisfied that, at the outset of the marriage and for some years thereafter, the Applicant trusted him, and his professed financial and property expertise (as did her parents). 

19.	Mr Oliver set out in his closing a specific schedule of facts in relation to this aspect of the case in relation to which he seeks a finding, and in relation to each of which I am quite satisfied that he is entitled to, on the basis of the documents produced and the oral evidence which she gave, which I was able to accept in its entirety, as follows:

a. The Applicant neither met with nor spoke to nor wrote to the mortgage broker in relation to mortgage secured over Stanhope Gardens.
b. She neither met with, nor spoke to, nor wrote to Premier Strategies (the SDLT
scheme introducer).
c. She did meet for a very brief time with Mr Cope, the conveyancing solicitor on the purchase of the property, solely for the purpose of signing the completing documents. The Respondent accompanied her to the office in which the meeting took place. He himself says he was not present for the meeting, and his assertions about what was said there are therefore rejected.
d. The nature of the transactions that the Applicant was involved in, specifically the SDLT scheme, was not explained adequately or at all to her by Mr Cope, nor Premier Strategies, who may have been satisfied by the Respondent that she understood the transaction, although in fact he failed to explain it to her.
e. The main family finances were conducted through the Respondent’s account in his sole name. Before the marriage the parties did not have a joint account.

20.	Further I am satisfied that the Applicant had no knowledge of, nor was complicit in in any way the fraudulent obtaining from her mother of funds, under the pretext they were the sums required to pay the French property mortgage, or for any other reason. It is equally clear that neither of them received funds from her parents save as the parents have said in these proceedings, for the acquisition of Stanhope Gardens, and of the French property on Trust, and for the outright acquisition of a car for the Respondent’s 40th birthday. There is no reliable evidence to support the Respondent’s assertion that funds were received which were intended for general living expenses, and indeed, insofar as funds were available to the family during the marriage from otherwise unexplained sources, I will deal with the Respondent’s access to funds generally later in this judgment. It may be that funds provided for other purposes were diverted to that end, but I do find that that was something about which the Applicant at the time did not know. 

21.	It is also clear in relation to the mortgage documents that I have seen that has been a significant amount of falsification of the Applicant’s signatures and/or the contents of documents pertaining to her:

a. The French ‘mortgage application document’ which has been produced by the Respondent is not a reliable document, and very much draft in form. It is by no means clear who it’s author is, and it may well be the Respondent himself. Although the Applicant’s signature appears on it, if it is genuine it may well have been inserted either before the text or without the text having been explained to her.
b. The signatures on the genuine mortgage application document are not the Applicant’s, and in any event the Respondent admits producing them himself
c.  I am unable to find that the Harrods mortgage document was signed by W knowingly, nor can I find that she understood the content of the document if she did sign it. It is equally likely, in my judgment that the respondent did in fact sign it on her behalf.

22.	In conclusion in relation to the mortgages, and again largely accepting Mr Oliver’s formulation, I can say that on the balance of probabilities that:

a. The Respondent has forged documents to extract greater sums from the Applicant’s mother each month for alleged mortgage payments for the French property, than were in fact required
b. Further, he fraudulently misrepresented his and the wife’s financial position to obtain the first mortgage on Stanhope Gardens in May 2011 for £245,000
c. He fraudulently misrepresented his and the wife’s financial position to obtain
the second advance on that mortgage on property in October 2011 for £100,000. Including:
i. falsely representing that he had an interest in 3 Belgrave Place through an   offshore trust, and
ii. falsely misrepresenting an inflated income for the Applicant and for himself
d. He fraudulently misrepresented his and wife’s financial position to obtain the
NCBS mortgage in June 2012 for £500,000, releasing equity of c.£117,000, by
fraudulently misrepresenting that the property was to be let out
e. The Respondent’s answers given during the preliminary issue hearing and
initially in this hearing in respect of 3 Belgrave Place, when he sought to blame the broker, Mr Duncan, for the false representation of the ownership of the property, saying it was his idea, were deliberately dishonest. 

23.	The Businesses. In order to determine what the purpose of the Respondent’s diversion of money to himself might have been, I have now to turn to the Respondent’s various business ventures, and the way that he run and funded them throughout the marriage. In his section 25 statement, the respondent said only this: ‘I am employed as a director of Etaireia Investments PLC. This is my full time job. I have a gross annual income from this employment of approximately £60,000 but the company is not in a financial position to pay me my full salary. To the extent that it is not paid, it will accrue. There is no current indication of when the company will be in a position to pay any accruals.’

24.	Beyond that, he made reference only to owning ‘one small property in partnership with Oliver Fattal which was acquired some time ago for approximately £20,000’ of which his share was said to be half of that. Having asserted that he was maximising his earning capacity, he continued: ‘I am optimistic that I will be able to generate a reasonable income from Etairea over the coming years but there will not be any prospect to enjoy the highest standard of living as provided throughout the marriage by my in laws without a substantial financial award.’

25.	The Respondent was cross examined by Mr Oliver for the best part of 2 days. During that time, a fairly clear picture began to emerge of the way that he has conducted his various business ventures throughout the marriage. In order to do justice to the evidence which came out and the unfortunate picture with which I am left, it will be necessary to examine in some detail a number of the property transactions with which the Respondent has been involved. First, though, it is important to set out the painstaking process by which the information which informed the questions asked and so the conclusions to be drawn had to be obtained.

26.	The Respondent’s Form E mentioned the names of a number of companies but gave no sufficient details about any of them. The Applicant sought non-party disclosure orders against 2 accountants, and on 16th May 2016, District Judge Alderson made orders for both gentlemen to attend an Inspection Appointment on 5th September, and one of them, a Mr Robinson, did attend. He accepted that he acted for 4 separate companies connected to the Respondent, and produced 2015 accounts for them – these were Pacha Properties Ltd, Pacha Leisure Ltd, Maddox Properties Ltd, and Palais Properties Ltd. He also accepted that he had acted for 3 others, but said that the files had now been passed to the second accountant – Mr Whincup. These were Berkonty Ltd, Firishna Ltd and Citigroup Estates Ltd. He denied acting for a further 6 companies, 3 of which had been listed in H’s Form E. On 25th November 2016, Mr Whincup attended court, but produced very little helpful documentation, and much that was not helpful.

27.	Most of the documentation which has therefore been before me, and has formed the bulk of the documentation upon which the Respondent has been cross-examined, has therefore not come from his own disclosure, but come from assiduous but therefore inevitably expensive detective work undertaken by the Applicant’s solicitors. Whilst the reason for the Respondent’s reticence has eventually become clear, it cannot relieve him of his primary responsibility to produce documentation which he has had as I find at his disposal, or under his control, but which he has chosen not to make available whilst nevertheless claiming substantial sums against the Applicant.

28.	I shall deal with the companies one at a time. First, Pacha Properties Ltd., a company incorporated in July 2010, with the Respondent and Oliver Fattal as directors. Until 2016, each of these two had an equal shareholding in the business. Pacha Properties is a property-owning company. In his Form E signed on 13th December 2015, the Respondent ascribed a negative value to his interest of just (£2,077) – 50% of the shareholders funds per the 2015 accounts. From April 2016, all of the shares in the company were transferred to Mr Fattal, for no apparent consideration. In November 2016, the Respondent had asserted in some responses that the company had ‘not traded for several years’. There was no mention of the share transfer.

29.	The statement about the lack of trade was not true. In fact, Pacha Properties had acquired a property at 76 King Street, Whitehaven, Cumbria, in April 2013, for £36,000. The property was placed in an auction in January 2016, and sold with the apparent benefit of a lease to a company called Udachi Ltd., who were said to be trading as Pacha Coffee, and paying a rising rent of £21,000pa. King Street was sold on 8th January 2016, for £200,000, to the trustees of a pension fund. This was not the first time that this company has had dealings with an entity involved with the Respondent.

30.	In 2014, the same company had also acquired a pub called the Black Bull Inn in Bolsover. On 25th February 2015, the company had entered into a lease with Udachi Ltd, for 25,000pa for 10 years. Then on 17th March 2015 Pacha Properties sold this property, also with the benefit of the lease, for £150,000. At the same time, the Respondent’s loan account was debited by the sum of £57,300 – showing his receipt back of that amount previously owed to him.

31.	The fundamental problem with both of these transactions is that Udachi is not, and never was an independent company which operated these premises paying rent to Pacha Properties. During cross-examination, the Respondent was constrained to admit, hesitantly at first but ultimately without condition, that the sole shareholder of the company – ‘Daniel Alves’ - does not exist. He is in effect a fiction created by the Respondent, as I find for the sole purpose of generating fictitious leases to falsely inflate the potential sale value of these commercial premises immediately before their sale, so as to inflate the amount of money that the innocent purchaser might pay for them. Once possession is taken, the company (Udachi) melts away, no rent is ever paid under the lease and the Respondent has pocketed a tidy uplift on the sale value of the property. It is a simple but undeniable fraud.

32.	At every previous court hearing when the issue had been raised, the Respondent had continued to assert that Mr Alves was a real person. His address had been given as the same as that of the accountant Mr Robinson, who of course is the accountant for Pacha Properties who were the vendor company in both transactions. It later changed to that of Stanhope Gardens and then to that of Mr Whincup. The Respondent had been ordered to produce independent evidence of Mr Alves’ independent existence, but of course could not do so. In September 2016, Udachi was the subject of a compulsory strike off, but by then the damage had been done. Pacha Properties received £158,597 on completion of the sale of King St, and both the Respondent and Mr Fattal then received £48,000 personally over the next few months.

33.	Pacha Properties has owned other properties within the course of these proceedings. In February 2013 it acquired the Castle Leisure Club in Porth for £25,200, a lease was signed in November 2016 for £12,000pa, and the property was sold in February 2017 for £60,000. In March of this year, at the preliminary issue hearing before me, H appeared to assert that he still owned this property. Given both the earlier sale (to a company called SK Alpha Properties Ltd) and the transfer of his shares in the company to Mr Fattal in April 2016, that assertion is surprising.

34.	The Commercial Hotel, Cleator Moor, Cumbria, was acquired by Pacha Properties in September 2013, for £53,100. In August 2016, it was transferred to a company called Pacha Cleator Ltd for £45,000 (the same price less VAT). This company was solely owned by Mr Fattal, who was its sole director until replaced by the Respondent in September 2016. By then, on 17th August 2016, the new company had itself been acquired by Etaireia Ltd (as to which see below), for £182,000. That price was satisfied by the payment of £50,000 to Mr Fattal, deferred for 12 months, and the issue of 203,076,923 shares to him by the company. The announcement by Etaireia about the purchase stated in terms that the Respondent ‘is not a beneficiary’ of the sale proceeds.

35.	This pattern has also been repeated elsewhere. At some time in May 2015, Pacha Properties had also acquired a property known as the Ivy Leaf Club, in Suffolk Street, Sunderland. The purchase price was £70,000, and the Respondent paid his share - £32,380, to the conveyancing solicitors on 15th May, ostensibly as a loan to the company. This became clear during the hearing because bills in relation to that property were being discharged from then.  What had been known beforehand from the Applicant’s solicitors’ searches was that the property had been acquired by a company called Pacha Sunderland Ltd on 11th November 2015. That company itself had been established in October 2015, with the Respondent and Mr Fattal each holding 1 share, but by a return filed on 7th December 2015, both shares were held by Mr Fattal. 

36.	This was 6 days before the date of the Respondent’s Form E, which made no mention of the company or the property. When asked about this during his evidence, the Respondent said merely that it was ‘an oversight’, and that he had ‘forgotten’. The same, he said, applied to the ‘loan’ of £32,380 that he had made to the company for the purchase of the property in the previous May. All of that was untrue.

37.	On 16th November 2015, 5 days after acquiring the property, Pacha Sunderland had granted a licence in respect of the property to Udachi Ltd, expressed to last for just 1 year. On 10th February 2016, another company return showed the shares in the company were again held equally between the Respondent and Mr Fattal. On 15th February, Etaireia Ltd announced the acquisition of Pacha Sunderland in exchange for equity, the notional price paid - £210,000 – based upon the existence of the Udachi license. The Respondent was further constrained to acknowledge in his evidence that, given he was plainly aware of these transactions in February 2016, he should have mentioned them in the proceedings. He had not done so, I find for the simple reason that the wished to hide his repeatedly unethical and dishonest practices away from the court. 

38.	Etaireia Ltd. also merits scrutiny. The Respondent became the chairman of the company in September 2015. It is listed on the ISDX exchange, with a number of unconnected shareholders, some of whom have actually been persuaded to acquire shares in the company in exchange for genuinely valuable property interests. In addition to the Commercial Hotel and the Ivy Leaf Club, Etaireia owns a number of other properties, including 2 quite large sites in Scotland which it has owned for some time and is seeking to develop. It also acquired, from a company incorporated in November 2016, whose shares are held by Mr Fattal (Girvan Dev Ltd), an old cinema building in Dalrymple Street, Girvan, subject to a ’10 year repairing lease’, for £60,000, of which £35,000 was to be cash consideration deferred for 12 months, and the rest by way of 25,000,000 new shares to Mr Fattal, in March 2017.

39.	Thus, this company appears to hold some genuine commercial investments – and it is currently in the process of completing an apparently major acquisition in Peterlee, alongside properties acquired from companies in which the Respondent has, or until very recently had, and would acquire again, an interest, at prices inflated by the existence of fictitious leases or licences created specifically for that purpose. In his evidence the Respondent described how he hoped that by building up a patchwork portfolio in this way, he would eventually create a company that was big enough and solid enough to pay him a regular salary. 

40.	It is clear that Mr Fattal is intimately involved in the Respondent’s schemes, and the latter accepted that when cash is forthcoming after an intercompany transfer which has ostensibly been only for Mr Fattal’s benefit, then the Respondent’s share may well be paid to him later. I do find that this arrangement, and the transferring of his shares to Mr Fattal and then back again is at least in part designed to enable him to place properties into Etaireia without apparent benefit for himself. It is clear that both gentlemen use property ownership within these companies as means to an end, and that unless valuable cash consideration is seen to flow to the Respondent whenever he divests himself of an otherwise valuable interest, I must assume that he will receive that consideration, in cash or in kind, in a form which the Respondent has chosen not to make clear.

41.	Whether a fraud is being perpetrated upon innocent third party purchasers of the property (as with Whitehaven), or upon the third party shareholders in Etaireia, whose shares will only lose value as they are diluted by the issue of more shares for the receipt into the company of greatly over-valued property (as with Sunderland), the Respondent is clearly seeking to repeatedly gain financial advantage by his systematic deceptions. In relation to these practices, he appears to be quite without remorse.

42.	I will touch briefly upon the other companies with which the Respondent has been involved, but there is inevitably much about each that the Respondent has chosen not to reveal. Pacha Leisure Ltd was incorporated in June 2014. It was initially held equally between Mr Fattal and the Respondent. The company purchased a pub in Hull known as the Savoy Hotel in September 2015. The money for that purchase - £40,657 – in shown in the company’s March 2016 accounts as a debt owing, but the value of that debt was again absent from the Respondent’s Form E. In April 2016, in a familiar manoeuvre, the Respondent’s share was passed to Mr Fattal. The company may for a time have been used to pay the outgoings on the Whitehaven coffee shop, which the Respondent was operating directly, rather through any lessees before its eventual sale. The Savoy Hotel was sold in February 2017.

43.	Of the older companies, Palais Ltd. predates the parties’ marriage. It was set up jointly by the Respondent and Mr Fattal in December 2009. The company owned a property at 26 Durrels House, London W14, purchased in 2010 for £492,500. This was sold during the marriage, in December 2012, for £795,000. It is likely that the Respondent will have received back about £200,000 from this sale at that time, although he has not revealed how he utilised the proceeds. There appears to have been some relatively recent unexplained activity in the company in the year to March 2016. Maddox Ltd. was incorporated in February 2010, and also jointly owned by the Respondent and Mr Fattal. In that year it bought a property at 34 Union Street, Inverness, for £220,000 but sold it in April 2014 for £172,159.

44.	Firishna Ltd. was incorporated in 2012, and registered to the address of one of the Respondent’s accountants, Mr Pearl. Both the Applicant and the Respondent had 1 share each, but the address given for each of them in the company return is that of the accountant. The Respondent accepts that all communication was through that gentleman, and that he and the wife have not met. In his Form E the Respondent had stated that the company could not afford to prepare and submit accounts. However, this company, unlike most of the Respondent’s vehicles, does have a bank account, and as a director, the Applicant was able to obtain statements. These show credits into the account between August 2013 and January 2016, the month after the filing of his Form E, of £283,097. The decision not to prepare accounts is therefore quite deliberate on the Respondent’s behalf. This company acquired another property known as the ‘Black Bull’ in 2012, which was renamed ‘Grace Court’. It was sold in March 2014 for £130,000.

45.	There are other companies and other properties bought and sold. For example, Citigroup Estates was originally used by the Respondent as a sort of estate agency advertising acquisitions and sales of his own (or his other companies’) properties and now seems to be used by the Respondent as a conduit, through which fees for operating fruit machines in properties owned by other companies are paid. It is clear that this company continues to operate from its bank accounts, notwithstanding the Respondent’s assertion that it has not ‘transacted any business for several years’, although it does not appear to own property. The Respondent was eventually constrained to accept that Citigroup has been collecting rents for Etaireia. It is also clear that on occasions payments due to Etaireia have been diverted to the Respondent directly, on the simple basis that he felt that he ‘needed the money’. Between March 2016 and July 2017, Citigroup has paid a total of £81,000 into the Respondent’s personal accounts.

46.	Lepotaa Ltd. was incorporated in May 2014 (like Firishna and Udachi, its name is derived from a Russian word), and it acquired the Criterion Hotel in Hull in November 2014. This was one of the properties, originally bought in 2012/3 for £40,000, which operated machines owned by ‘Gamestech’, an independent company which paid fees to Citigroup Estates. These machines had generated a large electricity bill which the Respondent wished to avoid paying, and so the transfer to Lepotaa (which did not operate a bank account) was designed to achieve that purpose. The sale of the property was agreed in December 2015, and the proceeds received on 11th January 2016, of £105,000.

47.	Trying to draw the threads together of all of this disparate evidence, it is clear that the Respondent has been strikingly active in his property dealing businesses throughout the period of the marriage, and subsequently, of these proceedings. Yet it is also striking that he has never volunteered any helpful information about the progress dealings. He has operated on the principle that, however much the Applicant is able to discover, if he reveals nothing, she might not find everything, and so, he might get away with something, and so obtain a better outcome to these proceedings. That is, with or without advice, a deplorable approach to matrimonial litigation. Whenever he was forced during his oral evidence into an admission, or the revelation of a new piece of information not previously disclosed, he did so with no sense of contrition. Rather a shrug of the shoulders, and no doubt the hope that the next undisclosed secret would not be found. This makes it quite impossible for me to accept that even the picture that I now have represents a true and fair account of the extent of his dealings in the 6 years since the parties’ marriage.

48.	It is quite obvious that the Respondent has not revealed anything that he does not feel that he needs to. It is also obvious that he is a man who takes to fraud and the telling of casual untruths in an attempt to gain financial advantage easily and without compunction. During these proceedings he has been letting out the French property which was the subject of the preliminary issue hearing to generate additional income for himself, but has chosen not to reveal that until it was discovered. Even Mr Fattal, who has played a part in most of his more dubious schemes, seems not to be aware of the diversion of funds away from Etaireia, although his shareholding in that company is in fact 3 times the size of the Respondent’s. There are in truth other threads and trails that I could follow in this case, but I am quite satisfied that they will all lead to the same conclusion, which is that the Respondent can be trusted only to do at any given moment only what he sees as being in his own short term financial interest, without regard to the consequences, and then lie about it afterwards.

49.	The Respondent has until recently lived in the c. €2.5m French property, without charge to himself, notwithstanding that it has now been established that the property is and always was held on trust for his daughter. He continues to make no financial contribution at all to the Applicant or to A. His lifestyle of the last two years reveals that this non-support of wife and child was very probably a deliberate choice of his, rather than a necessary reality. Since vacating the French property, following my determination of the preliminary issue, he now lives at a Monte Carlo 4-star hotel (he originally described it as 3-star). He asserts that the cost is c.€4,000 per month, which he says represents a discount from what should be its proper rate of €17,000pm. Such is the standard of living he feels is appropriate for himself, and the costs that he feels able to afford. He also acknowledges that he subsidizes his 19-year old Austrian model girlfriend, Eva, and it is the case that already one of his tame accountants has set up a company with her as a director, no doubt for a similar purpose to all of the other companies discussed above. 

50.	I have no doubt that in conducting himself in this way, he has been living beyond his means. But that is always how he has chosen to spend his life. In December 2016, 3 days after his statement seeking to justify a stay in relation to an order for him to make a costs payment, he took his girlfriend on holiday to Phuket, in Thailand. This was funded by the proceeds of sale of a property in Kirkcaldy - the Respondent had received funds marked “Kirkcaldy”, totalling £16,502 in early December 2016, of which he made no mention in that statement or elsewhere in these proceedings until constrained to do so. He is paying £16,000pa towards the rent on the property in which his mother is currently living, which is a kindness, but from the rest of his expenditure, his approach seems to be to carry on selling assets to fund the lifestyle until something else comes along to ease the financial situation, as so far in his life it has always seemed to. If he has been treating the outcome of these proceedings as the next prospective funding event for him, as I suspect that he has, then he may be disappointed by their outcome.

51.	An analysis of his spending has been performed by Mr Oliver, which I accept shows that in the 18 months to July 2017 the Respondent spent £33,414 at hotels, restaurants, clubs and bars; £16,410 on airlines; £5,400 on taxis; and £42,937 in straight cash withdrawals. These figures combined come to some £98,161, or £65,441 if averaged over a single year. There is no provision for ordinary day to day living costs, or the €48,000pa which it is costing him to stay in his Monaco hotel. His overall rate of living may therefore be somewhere between £125,000pa and £150,000pa, at a conservative estimate. Whilst there is no tangible evidence before me that the Respondent can in fact afford to live at this rate, his determination to continue to do so, his ongoing unwillingness to be truthful about his financial affairs and his willingness to do whatever he perceives that it takes to generate funds to support his lifestyle satisfies me that he is not someone who needs obvious sources of income to lead an ostensibly lavish lifestyle.

52.	It is the case that the Respondent has shown a willingness to seize every opportunity which he believes presents itself to enable him make money from others. He clearly hoped to insert himself into his parents-in-law’s shoe business, Berkonty, by setting up a UK company and using the Applicant as a conduit, but this never materialised. He has then effectively robbed out the capital value of the gifts made by them to the Applicant and to him, in order to produce some capital in order to both launch his various property companies, but also to live well at the same time. To borrow the money he has told lies to the mortgage companies. He has then told lies to prospective purchasers of his properties and investor in his companies. And these have not just been small lies but elaborate and carefully conceived lies backed up by professional valuation obtained under false pretences. Even now, he continues to spend on his young girlfriend as if he were a man of relative affluence.

53.	I have to decide whether this is because in truth he such a man, or whether he is actually no more than a charlatan, who by the shear boldness of the lies he is willing to tell is able to persuade other, for a time, that he can be trusted. Ans when those lies are uncovered, he moves on. I am satisfied that I cannot rely on anything he says to me to determine this question, and so I must look carefully at the ‘footprints’ that Mr Oliver asks me to examine to determine what lies behind the charade.

54.	At the outset of the relationship, Mr Oliver says that the respondent was not ‘penniless’ and points to the fact that he was able to fund an expensive holiday in Bermuda, and other holidays, acquire an old Bentley and live a seemingly fashionable London lifestyle. He was also able to procure a £490,000 mortgage to acquire Durrels House in 2010, at a time when bank lending was not freely given. Prior to that his own case was that he was able to generate around £150,000pa as an estate agent.

55.	Next, Mr Oliver says that the Respondent may have owned or been interested in a property in Notting Hill at the outset of the parties’ relationship, which the Applicant recalls visiting with him. No trace of that property, not the receipt of any proceeds, have ever been found. However, other proceeds can be seen to have been received. He is likely to have received over £100,000 as his share of the proceeds of sale of Durrels House. He certainly received the £160,000 intended for him as a present in 2014 to enable the purchase of a car, and a total of £217 from the 2011 and 2012 re-mortgages of Stanhope Gardens. He may have had as much as £200,000 from the Applicant’s mother in respect of overpayments towards the true cost of the original mortgage on the property. He appears to have received unaccounted for amounts from the fraudulent Whitehaven transaction which may be up to a further £80,000. There remain various sums ostensibly owed to him in various company accounts, which may represent some of these funds. And finally, there remain further questions about transactions that may or may not have happened (Great Yarmouth), and about the Respondent’s ability to receive funds from people, who may be lenders, but may equally simply be holding funds for him from earlier transactions. Certainly, it appears clear that Mr Fattal does this – as when properties which are about to be sold into Etaireia are transferred into his sole name just before sale. There may well be a similar arrangement, about which very little is known, with Mr Karlov, of Fashion Galaxy, from whom the Respondent received £27,725 between January and May of this year.

56.	That it has been exceedingly hard to discern the truth in all of this is entirely down to the Respondent’s determination to be untruthful throughout the proceedings, but I must find that is as likely to have been driven by an entirely justifiable fear that to tell the truth would reveal him for the fraudster that he undoubtedly is, as because he was actually sitting on a large amount of undisclosed assets. The difficulty for Mr Oliver is that he can point to a degree of excessive spending over recent months, which suggests that the Respondent must have some cash or other source of income available; and he can point to the fact that he has received significant amounts of cash during the course of the proceedings. What he has struggled to demonstrate in addition is that the one does not necessarily account for the other. 

57.	Is the truth that having received the cash as has been identified, the Respondent has simply then been engaged in the act of spending it, without thought of laying anything by for the future? Is it more likely, given his character as I have identified it, that alongside these relatively low level (but not insignificant and certainly serious) frauds, he has also been assiduously been building a genuinely grounded property empire, and it is from that invisible economy that he has actually been funding his lifestyle? I have come to the clear view that whilst there may well have been undisclosed property transactions – indeed it is unlikely that every single one in which the Respondent has been involved have been uncovered by the Applicant’s team, who have nevertheless shown remarkable perseverance to reveal what they have, what has remained hidden is likely to be of similar scale to those that have been uncovered, and not to add any more significantly to the picture that I already have before me. Taking into account all of the matters raised by Mr Oliver, and setting them against the rate at which the Respondent has been spending leads me to the conclusion that whilst it is likely that there are assets available to him which I don’t know about, they are unlikely, together with those that I do, to have a value of more than £400,000.

58.	That of itself though is not insignificant, in that I can be satisfied that the Respondent has, or should have, a sufficient capital base to provide him with somewhere to live when choses to end his tenure in the Monaco hotel. He can certainly find from those resources a sufficient deposit, allied to his undoubted earning capacity – I remind myself of his own evidence that he would ‘be able to generate a reasonable income from Etairea over the coming years’. From that base, though, what provision should the Respondent be making, both prospectively and to cover the period of these proceedings, for the Applicant and A?

59.	As indicated, Mr Oliver is seeking:

a.	A transfer to her of the Respondent’s remaining interest in the family home – and given both her and A’s need for a home, and the undoubtedly non-matrimonial derivation of the equity in the property – from her parents – I have no hesitation in saying that that would be appropriate, notwithstanding that the property was the matrimonial home, and therefore can prima facie be considered matrimonial. I also do not forget that A also has the benefit through her maternal grandparents of ownership of the French property. That is for her future; she and her mother have need of a home in London now. However, there remains the question of the Respondent’s ongoing liability under his mortgage covenants, which I will deal with below.

b.	Payment to her of the following lump sums:
i.	£78,500 (to meet SDLT still due from a failed avoidance scheme) – I have no doubt here that the scheme was the Respondent’s sole responsibility, and also that he had been provided with sufficient funds by the Applicant’s mother that he could have paid the tax and acquired the property mortgage free. That he did not is entirely his responsibility. That is not quite the same as determining that he should now be responsible for paying the tax, in circumstances where his entire share in the property is being transferred to the Applicant. I must be satisfied that he can pay without impacting upon his own needs.

ii.	£20,000 (to meet arrears of mortgage since separation) – I will deal with this as part of the claim for backdated periodical payments.

iii.	£250,000 (to be applied to reducing the mortgage) – I have already indicated that I hold the Respondent solely responsible for the taking out of the successive mortgages on Stanhope Gardens, and I find on the balance of probabilities that he used the funds so received on a combination of living expenses and for investment into further property transactions through his companies. It is also clear that the Respondent only told the Applicant what he felt he had to during the course of marriage, to procure her signature on documents to enable the release of funds, or otherwise to generate cash for himself. However, an order for this sort of sum to be now provided to ‘turn back the clock’ on the Respondent’s actions should not trespass on his needs unless necessary to meet those of the Applicant and A. I also bear in mind that to some extent the parties are likely to have lived off these funds during the marriage.

iv.	£96,000 being arrears of backdated periodical payments at £4,000pm for two years, and a nominal order thereafter. It is very clear that, had the court been in the position to make findings at an interim stage about the Respondent’s access to funds as I have, then would fairly have been in place orders for financial provision for the Applicant and A, throughout these proceedings. Not to make an order now which reflects that fact, if such an order were affordable, would in my judgment be profoundly unfair to the Applicant, who should not have had to bear sole financial responsibility for the parties’ daughter as she has. Plainly too, that order should have included sufficient provision, again if affordable, to enable her to discharge the mortgage payments on the family home. Mr Oliver points out that the combination of these 2 elements comes to some £116,000, or less than one third of the Respondent’s identifiable receipts of £370,483 during the period.

v.	£250,000 payable in 5 separate lump sums annually over 5 years. These are in effect future maintenance payments made capital to avoid the hazards of variation should the Respondent seek to do so. Mr Oliver also urges that they will enable the Applicant to pay down further some of the outstanding mortgage, and also to assist her in paying back her mother if possible. Given the Respondent’s earning capacity, and history during the course of these proceedings, I accept that just as historic provision should have been made it is appropriate too for future provision to be ordered for a limited term to enable the Applicant to move into employment and self-sufficiency whilst at the same time caring for A. Given too, the horrendous costs consequences of these proceedings, brought about as I have already said solely by the Respondent’s reactive and fundamentally dishonest approach to the disclosure process, and his ostensibly over-ambitious target for settlement, an order that is certain and not capable of future variation is certainly attractive. An order at the level sought is also entirely proportional to the assessable level of receipt for the Respondent over past years. If paid, it should be taken into account as against any nominal order for maintenance, which should be extinguished upon compliance in full with this element.

c.	Child maintenance be governed by CMS. This is entirely appropriate.

d.	Her costs. I will deal with this having heard submissions from the parties, but given the terms of my judgment above, I am sure that the Respondent will understand that he has a significant burden to discharge if he is to avoid further liability.

60.	The Respondent seeks an order that he be released from his covenants under the mortgage in relation to Stanhope Gardens. Mr Oliver says frankly that this may not be possible for some time. It is never desirable to a have a situation where some years after a marriage’s end a couple are still tied together financially in this way, and this is especially so when the relationship between them is so poor because of the Respondent’s bad conduct. I must consider whether, given the equity in Stanhope Gardens is currently some £1,242,681, and given also that the current mortgagees NCBS were misled about the basis for that mortgage and may well demand its replacement once they are appraised of the true situation whether on needs basis that property must be preserved. Undoubtedly, the Applicant and A could rehouse comfortably with the equity, and thereafter their income, whether earned or by way of maintenance would go further.

61.	However, it is also the case that the very existence of that mortgage, and its size, are down to the Respondent’s deceitful behaviour in the marriage. I conclude that, if he wants to be released from his obligations, he must demonstrate that he is going to comply with the order that I make, by making all of the initial payments that I am going to order, and at least the first of those that will be delayed. This will also give the Applicant, as I think is reasonable, the opportunity to renegotiate with the current or other prospective lenders to retain the property – and if she can do so, on the basis that the respondent is no longer guaranteeing the mortgage.

62.	Consequently, I propose to make the following orders. Firstly, I will order that the Respondent pays a lump sum of £116,000 on account of arrears of interim maintenance and the current mortgage arrears, payable within a relatively short space of time – provisionally no longer than 28 days. 

63.	Next, in relation to the sum due for SDLT after the scheme which failed, these are funds which I find the Respondent had already received from the Applicant’s parents and chose to deploy primarily into his businesses in the hope that the tax could be avoided. The scheme failed and it should therefore prima facie be he who now provides the sum required to meet the tax. If I do not so order, then much of the arrears of maintenance which I have ordered to be paid above will be taken up in meeting the burden of this bill, which not be fair on the Applicant or A. He should make that payment, of £78,500, within the same period as the above lump sum. This means that the total amount that the Respondent will have to find in the first instance will be £194,500.

64.	In addition, he must pay a further series of 5 lump sums over the next 5 years on account of future support; I will order the first of those to be payable in 12 months, rather than immediately, so that these payments are in effect made in arrears. Provided that the Respondent has made that first payment, together with any accrued interest if it is paid late, and has met the first payment of £50,000 that will be due in December 2018, then he is to be released from his covenants under the mortgage by that date, or the later satisfaction of the second lump sum order. That gives the Applicant around 12 months to refinance if she can, having hopefully received a significant payment from the Respondent in the meanwhile from which she may be able to reduce the outstanding loan. If she cannot, then the property will have to be sold. The last lump sum payment will be due in December 2022.

65.	I am not satisfied that the Respondent has presently got the funds available, nor the means generally to pay the additional lump sum sought of £250,000, nor am I satisfied that the Applicant’s needs require it, so I will not make that order. However, I am satisfied that the Respondent can meet the order orders that I have indicated from the resources that he has, both revealed and unrevealed, and still be left with sufficient funds to house himself and meet his own income requirements going forward. Insofar as this will be something of a stretch for him, he should remind himself how much money he has taken from the Applicant’s family during the course of this short marriage, and of that not accounted for what a relatively modest proportion he is returning.

66.	Ultimately, in looking to the s.25 (2) factors, this has been a short marriage, and the overwhelming financial contribution has come through the Applicant from her family. Going forward, she will have principal if not sole financial and physical responsibility for the parties’ daughter A, and I am quite satisfied that the Respondent can meet his own needs going forward through a combination of his own resources and earning capacity. I have not based any element of this award upon my findings as to the Respondent’s conduct, but rather upon meeting the Applicant and A’s need for housing and maintenance, since separation, and ensuring that they receive that benefit net of any assessment to tax which should already have been met by the Respondent. However, his conduct has certainly been sufficiently grave for it to have weighed in the scales against him had the parties’ respective needs not been fully engaged.

67.	As I have indicated, child maintenance should be dealt with by the CMS, although given the respondent’s unorthodox modes of generating funds, I do not expect that he will be assessed an amount that is truly fair to A. 

68.	I will hear submissions on costs.

Dated 4th December 2017