Thursday, August 15, 2013

M v M: "A fantastic charade with the husband a shady puppet master in the background"

Mrs Justice King
The eagerly-anticipated report in the record-breaking financial remedies case M v M has now been published on the Judiciary of England and Wales website.

I don't propose to go through the report in great detail, as I'm sure it will be scrutinised by many far more learned family lawyers in the coming days and weeks, but the following will hopefully be a useful summary of the 266 paragraph judgment.

Briefly, the case involved a Russian husband and wife who were married in 1991 and have lived in England since 2005. The husband is 49 and the wife is 48. There two children of the marriage, a nineteen year old at university and a fifteen year old at boarding school, and both parties have another child by a previous marriage. They separated in 2008 and a divorce was granted upon the wife’s petition in February 2009.

During the course of the marriage the husband's business interests in Russia 'took off' and, from humble beginnings, the family began to enjoy a lavish lifestyle. Three companies were set up to look after the husband's businesses. Prior to moving to London in 2005, the husband transferred the ownership of his commercial properties to jurisdictions outside Russia, and after the move properties were purchased in England, all for the exclusive use of the family.

After the marriage broke down the wife, erroneously believing that she had to divorce in Russia, issued proceedings there and obtained her divorce. She did not receive any financial provision from the Russian court. However, in 2010 she issued Part III proceedings and the matter has since been dealt with by the English courts, culminating in this final hearing, heard by Mrs Justice Eleanor King DBE.

The first issue dealt with by Mrs Justice King in her judgment was what she called "the husband's engagement with the proceedings", which for the most part was minimal: "He has neither attended hearings nor complied with orders of the Court; he is in contempt many times over". He did, however, send his companies "in to bat" for him at the trial:
"In that way he was able to fight the case in relation to the only assets about which I am satisfied he cared and which were within the jurisdiction without having to expose himself either to cross-examination or punishment for contempt of court."
This section of the judgment includes the following amusing paragraph:
"Mr Wagstaffe QC appeared to represent the three companies, supported by the usual cast of characters appearing in such cases, including junior counsel, a senior partner from Withers, at least one associate solicitor and various others whose precise role is unclear. The only person Mr Wagstaffe had missing from his entourage was a human client; the directors of the companies he represented were as elusive as the husband, they neither filed a statement nor attended court to give evidence and be cross-examined."
Mrs Justice King concluded with the memorable line: "The case has been a fantastic charade with the husband a shady puppet master in the background."

Moving swiftly on, the rest of the judgment comprises primarily evidence concerning the husband's assets and Mrs Justice King's summary of the applicable law, including substantial argument regarding the ownership and assets of the companies.

Eventually, at paragraph 256, Mrs Justice King states that the 'identified assets' (i.e. those traced by the wife) amounted to £107 million. The wife sought half, and the husband had "failed, whether in writing or by attending court to make any submissions to the contrary". Mrs Justice King stated at paragraph 260:
"In my judgment this is a case where, notwithstanding the formidable challenges for the wife in enforcing a lump sum order, it would be iniquitous if the husband was permitted, by virtue of his appalling litigation misconduct, to drive the court into an order which is substantially less than that which by virtue of the sharing principle, she would otherwise receive."
Accordingly, the wife was awarded £53.5 million (including a lump sum of £38 million), believed to be the highest payout in a contested claim to date, together with child maintenance at the rate of £20,000 per child per annum, plus university/school fees.


  1. Now let her enforce it other than against the real property in England . . .


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