Michael v Michael (No 3) [2025] EWFC 245

[2025] EWFC 245

IN THE FAMILY COURT Case No 1653-3397-6938-2607

Venue SITTING AT THE ROYAL COURTS OF JUSTICE

STALO MICHAEL Applicant

MARIO MICHAEL Respondent

Between

STALO MICHAELApplicant

MARIO MICHAELRespondent

Mr Christopher Pocock KC and Mr Thomas Haggie (Counsel instructed by Kingsley Napley, Solicitors) appeared for Applicant wife.

Mr Christopher Wagstaffe KC and Mr Max Lewis (Counsel instructed by Hill Dickinson, Solicitors) appeared for Respondent husband.

Written Judgment of His Honour Judge Edward Hess

(sitting as a Deputy High Court Judge) initially dated 23 rd May 2025 and amended (after receiving further submissions from Counsel) on 11 th June 2025

Date 2025-06-11

INTRODUCTION

[1]This judgment should be read alongside my judgments dated 6th December 2023 (dealing with a number of interim applications), 12th August 2024 This judgment was slightly amended on 11th September 2024 as a result of some submissions made by Counsel, but I shall refer to it here as the judgment of 12th August 2024 (dealing with a number of substantial preliminary issues) and 13th January 2025 (dealing with enforcement and Receivership issues). For avoidance of doubt, nothing has happened in the later parts of the proceedings to cause me to change or revise any of the findings and conclusions I reached in my earlier judgments.

[2]This case concerns the financial remedies proceedings arising out of the divorce between Ms Stalo Michael (to whom I shall refer as “the wife”) and Mr Mario Michael (to whom I shall refer as “the husband”).

[3]The case proceeded to a final hearing in two parts. The first involved 12 days in July and August 2024, after which I handed down the judgment dated 12th August 2024, and it has resumed over 5 days on 13th, 14th, 16th, 19th and 21st May 2025 and this judgment mostly relates to the disputes articulated in this part of the final hearing.

[4]The representation before me in this part of the final hearing has been as follows:-(i) Mr Christopher Pocock KC and Mr Thomas Haggie (Counsel instructed by Kingsley Napley, Solicitors) appeared on behalf of the wife.

(ii) Mr Christopher Wagstaffe KC and Mr Max Lewis (Counsel instructed by Hill Dickinson, Solicitors) appeared on behalf of the husband.

[5]This case has unfortunately turned into a horrendously expensive legal battle for this family, with nearly £5,000,000 in family money spent on lawyers by the husband and wife combined. As in the 2024 part of the final hearing, both parties in the 2025 part of the final hearing have had the benefit of top level legal representation; but the cost of this has been very substantial. The total costs incurred by the wife and the husband in these proceedings (to which have to be added, on an overall assessment, other very significant third party costs) are as follows:- PARTY COSTS INCURRED COSTS PAID COSTS OUTSTANDING The wife £2,608,626 This figure includes a figure for implementation, which have not yet been incurred £1,547,492 £1,061,134 The husband £2,339,981

£1,878,527

£461,454 TOTAL £4,948,607 The husband’s legal costs would have been yet higher if he had not been a litigant-in-person for much of 2025, but he was fully represented in the current hearing and employed direct access barristers at some of the interim/directions hearings.

[6]I still have access to the voluminous bundles used in the 2024 part of the final hearing; but a fresh selection of bundles has been prepared for the 2025 part of the final hearing and I have mainly focused on these for the purposes of this judgment. For the 2025 part of the final hearing, the court was presented with three electronic bundles with a total of about 4,500 pages. The bundles are a Core bundle (with page references to Cp.X), an Experts’ bundle (with page references Ep.X) and a Miscellaneous bundle (with page references Mp.X). Some other documents were presented during the hearing, in particular a late statement from the husband (not in the other bundles) running to 773 pages (with page references Sp.X).

[7]The bundles include:-(i) A collection of applications, court orders, pleadings and transcripts of interim judgments and hearings.

(ii) Material from the wife including her Form E dated 28th September 2022 and a number of witness statements including her updated section 25 statement dated 16th April 2025.

(iii) Material from the husband including his Form E dated 23rd September 2022 and a number of witness statements including his updated section 25 statement dated 6th May 2025 and his late statement dated 16th May 2025.

(iv) Witness statements put forward by the husband from two of his brothers, namely Mr Michael Michael (AKA Agy) and Mr Stavros Michael, both dated 6th May 2025.

(v) Material from various SJEs as follows:- (a) Material from Mr Daniel Sladen (the SJE tax expert from K3 Advisory), in particular his main report dated 24th March 2025 and his written answers to follow up questions from both parties. (b) Material from Mr Gavin Pearson (the SJE company valuer from Quantuma), in particular his main report dated 10th February 2025 and his written answers to follow up questions from both parties. (c) Material from Mr Hari Hirani (the SJE real property valuer from Anderson, Wilde & Harris), in particular his main report dated 15th May 2024 and his written answers to follow up questions from both parties.

(vi) A completed ES2 document and an agreed chronology.

(vii) Selected correspondence and disclosure material.

[8]The following people gave live oral evidence in the May 2025 part of the final hearing (in order of appearance):-(i) The wife.

(ii) The husband.

(iii) Mr Michael Michael (AKA Agy).

(iv) Mr Stavros Michael.

(v) Mr Daniel Sladen.

(vi) Mr Hari Hirani.

(vii) Mr Gavin Pearson.

[9]At the outset of the 2025 part of the final hearing, the husband made an adjournment application on the basis that certain comments included in Mr Pocock’s case summary had taken the husband by surprise. I refused the application (and delivered an ex tempore judgment to that effect on 13th May 2025 explaining why in my view the factors contained in the overriding objective in FPR 2010 Rule 1 clearly pointed towards the case proceeding). I indicated that I would nonetheless permit the husband to file a further statement to make the extra points he wanted to make, which he did (dated 16th May 2025). I offered Mr Pocock the opportunity to cross-examine the husband on this statement (which arrived after the completion of the husband’s oral evidence), but he indicated he was content to deal with the matter in submissions.

[10]I have also had the benefit of full and excellent submissions from both teams of Counsel in their respective opening notes and their closing, partly oral and partly written, submissions. I have received written submissions from both sides after my sending out an initial version of my judgment on 23rd May 2025. This version incorporates all my responses to these submissions.

CHRONOLOGY OF THE MARRIAGE, THE DIVORCE AND THE FINANCIAL REMEDIES PROCEEDINGS

[11]The history of the marriage is as follows:-(i) The wife is aged 59 (d.o.b. 12th April 1966).

(ii) The husband is aged 57 (d.o.b. 1st November 1967).

(iii) Both parties have Greek Cypriot heritage, but have lived in England for most of, if not all, their lives.

(iv) They met in January 1999, started a relationship of cohabitation in 2000 and married on 29th April 2006 (the marriage moved seamlessly from cohabitation into marriage).

(v) The relationship produced two children:- (a) A is aged 23 (d.o.b. 6th November 2001). (b) B is aged 22 (d.o.b. 12th February 2003).

(vi) From about 2010 the family all lived together at the property in North London that I have referred to in previous judgments (‘the family home’). The family home was purchased in joint names in 2005, was rented out for a period and then substantially rebuilt, hence the delay in occupation by the family.

(vii) I have talked in some detail in my earlier judgment about the timescale for the breakdown of the marriage so shall not repeat that here, save to note that, on 21st April 2022, the wife formally informed the husband of her decision to divorce and on 9th May 2022 her divorce application was issued. The duration of the marriage is accordingly about 22 years from cohabitation to separation, on any view a long marriage.

(viii) I described in my judgment of 12th August 2024 how the husband reacted to being told the wife intended to divorce and I noted that “to my mind, he was as determined at that moment as he is now that the wife should not receive her fair share of the fruits of a long marriage and it appears to me that he has unfortunately done everything in his power to achieve that aim”. Unfortunately, to my mind, that has continued to be the case from 12th August 2024 to the present.

(ix) Decree Nisi (Conditional Order) was ordered on 28th March 2024. Decree Absolute (Final Order) awaits the outcome of the financial remedies proceedings and is not, in itself, controversial.

(x) After the commencement of the divorce proceedings, and right the way up until January 2025, both parties, and indeed both of their adult children, continued to live under the same roof in the family home. I commented in my earlier judgment that this must have been very difficult for everybody in view of the hugely acrimonious financial remedies proceedings going on around them. In January 2025 the husband left the family home in controversial circumstances about which some very strong views have been expressed in both directions. It is common ground that I should not make any findings about the circumstances of his departure and I do not propose to do so, nor shall I attach any significance to these circumstances in determining what orders to make in the financial remedies proceedings. It is common ground and obviously sensible that, in order that both parties may live more peacably, the husband will not now return to live at the family home and my order should continue the interim arrangements that have been in place in recent weeks (although he will be permitted to return at an agreed time and with suitable precautions taken in order to identify the chattels he would like to receive from the family home and, once they are agreed, to collect them).

[12]The financial remedies proceedings chronology is as follows:-(i) The wife issued Form A on 24th June 2022.

(ii) The wife sought a High Court Judge level allocation for the case and this was approved by Peel J and the case allocated to me by Peel J to be dealt with administratively by the RCJ High Court team.

(iii) A two-day private FDR took place on 11th and 12th April 2024 before Nigel Dyer KC; but sadly no settlement was reached.

(iv) The pFDR apart, I have dealt with all of the many hearings in the case, including numerous directions/interim/enforcement hearings and the substantive hearings in July/August 2024 and May 2025.

(v) I have made a number of joinder orders on third party issues, the details of which I dealt with in my judgment of 12th August 2024.

(vi) I have made numerous disclosure and SJE directions.

(vii) I have made an MPS and LSPO order (on 6th December 2023), in relation to which the husband was unsuccessful in seeking permission to appeal (Moylan LJ refused permission to appeal on 28th March 2024), but with which the husband has largely not complied and in relation to this there is an extant enforcement application.

(viii) I have made a number of inter partes costs orders, most significantly an order dated 25th October 2024 in which I ordered the husband to pay 85% of the wife’s costs incurred up to 11th September 2024 (less the LSPO figure), subject to a detailed assessment on the indemnity basis. I ordered the husband to pay £850,000 on account of this liability by 22nd November 2024, with which the husband has largely not complied and in relation to this there is an extant enforcement application.

(ix) The 2024 part of the final hearing took place before me over 12 days in July and August 2024. For reasons explained in that judgment, it was not possible to deal with all aspects of the case at that hearing (the valuation exercise was not sufficiently complete) and I refer the reader of this judgment to the full analysis contained in my judgment of 12th August 2024 as to what I was able to decide; but the most significant findings and conclusions made at that hearing can perhaps be summarised by the following comments and extracts:- (a) I made a full assessment of the character and reliability of the husband, including the following comments:

“I am entirely satisfied that the substantial wealth that exists in this family has all been created by the efforts of the husband and that he is a skilled, successful and hardworking operator in the property development business. That is of course to his credit, but in this instance it comes with several darker sides. The first darker side is that the husband is a dominating and menacing presence and likes people to know that he is in charge and that doing what he says will generate a reward and crossing him will generate a punitive reaction… The second darker side is that the husband is, in my view, a fundamentally dishonest man, quite prepared to be wholly and deliberately dishonest when it suits him to be…The third darker side, and this may be a combination of the first two, is the husband’s willingness, indeed tendency, dishonestly to create documents, and/or dishonestly forge signatures on documents, which suit his purpose. Of course, I must give myself the Lucas direction here, and remind myself that just because a person lies about one thing, it does not follow that he must therefore be lying about something else; but I am entirely satisfied that, this behaviour has been demonstrated many times in this case”

. Plainly, the publication of these conclusions could be reputationally damaging to the husband’s business career. (b) I made a full assessment of the character and reliability of the wife, including the following comments:

“I found the wife to be a much more straightforward and honest witness before the court. She is not an unintelligent person, but in my view she always played a submissive role to the husband in financial matters and is not sophisticated in business affairs…My impression also is that it did not matter greatly to her whether what her husband was suggesting was above board and honest. If he provided a good life for her in financial terms, which he generally did until recent times, then she was prepared to give him the benefit of the doubt and not question the wisdom or honesty of what he did.” (c) On the Astute issue, where the husband sought to persuade me to use Matrimonial Causes Act 1973, section 37, to set aside a transfer by the wife, in January 2022, of the one issued share in Astute Capital Investments Limited to her brother-in-law Kyriacos Kyriacou, which might have increased her wealth by about £1,000,000, I concluded: “I am entirely satisfied on a balance of probabilities that the account of these events given by the wife, Kyriacos and Youlla is true and accurate and the husband’s account is not true. He has deliberately misled the court about it…I am satisfied that the wife’s transfer of shares was executed for valuable consideration (i.e. the amount agreed under the secret unwritten agreement) and in good faith (compliance with the obligations under the secret unwritten agreement)… it would not be an appropriate exercise of my discretion to set aside the share transfer on the facts of this case.”

This conclusion, in the light of the later bankruptcy of Kyriacos, inconveniently laid bare a dishonest scheme in which the wife, the husband, Kyriacos and Youlla were all dishonestly involved, to the detriment of the later Trustee-in-Bankruptcy of Kyriacos and the creditors he represented and potentially opened up further litigation or even a criminal prosecution. (d) On the MBL issue, where the husband sought to persuade me that he held his 34.375% shareholding in Michael Bros Limited (MBL), and to which I attributed an ‘indicative’ value of £7,500,000, on trust for his two sisters, I concluded:

“I am satisfied that the husband has conducted the MBL issue in an egregiously dishonest way and I find that he retains his …interest in MBL”. (e) On the AB Trust issue, the husband’s case was that a large portion of the assets in the case (to which I attributed an ‘indicative value’ of £38,000,000) were held beneficially for others, i.e. not him, under the AB Trust; but the wife’s case was that this arrangement was a sham and that these assets were really owned by the husband. I concluded: “In my view the whole situation was false, designed to mislead and the ‘trust’ and its documents were a sham and that this was known by Proglobal Trustees / Eurofast. There was no settlor. There was no trust. What happened was that the husband was investing his own assets into a structure for which the trust document was a cover story. In reality he was the true beneficial owner of the assets at all times”

. It was known by the participants in the 2024 hearing that a finding to this effect might have significant, possibly very significant, tax consequences for the husband (to which I attributed an ‘indicative value’ of £15,000,000), for reasons I shall explore further below.

[13]The open positions of the parties at the time of the 2024 hearing were far apart. The wife (in her offer letter of 19th July 2024, justified on the basis of a substantial sharing claim) essentially sought the transfer of the family home plus a lump sum of £12,500,000 on a clean break basis. The husband (in his offer letter of 20th May 2024, justified on the basis that he had no beneficial interest in either MBL or the ‘trust’ assets) essentially sought the sale of the family home with an equal division of the net proceeds and a clean break, with the wife to pay him 50% of the proceeds from the properties held in Astute and no lump sum at all payable by him.

[14]I want to mention in passing at this stage that, cognisant of the possible consequences for the family of my reaching the findings and conclusions which I eventually did, at the close of the evidence in the Summer 2024 hearing, I said this to all the parties and their legal representatives:- “Before we move to submissions, and in the presence of all the advocates for all the parties, I want to say something. I do not invite or expect any response, but I express the hope that some reflection will follow over the next few days. Now that I have heard all the evidence, and although I have not heard all the submissions I have a fair idea from the written presentations what is to be said, it does appear to me that (whilst I have not made up my mind about anything) there are findings which I could properly make which, while following legal principles and justice, could have unwelcome consequences for all concerned. On the usual application of legal principles to such findings, it seems probable that the findings would find their way into the public domain with the potential to engage outside bodies such as the HMRC, the Trustee-in-Bankruptcy and the Police in ways which could amount to the possibility of an unwelcome scene of self-destruction for this family. If I conclude and hand down a written judgment, which could be (though I make no promises) as early as next Tuesday, then it may be difficult for this family to be sure that these consequences will not flow. I have not been told, and cannot be told, where the negotiations reached at the pFDR or otherwise, but whilst time is running out, it is not too late for a compromise to be reached which releases a fair amount of resources from those with control over them to those without and so avoid the potential self-destruction for this family”.

[15]Plainly, I have not been and cannot be told whether or not this led to any further without prejudice negotiations, which I hoped it might, but it had no effect whatsoever on the open positions of any party and (the husband maintaining his position that he would not be paying any lump sum at all to the wife referable to the MBL or the ‘trust’ assets) I had to proceed to produce my written judgment. The decision on publication has yet to be made, a decision having been made to defer publication until the completion of the whole case, but I expressed a provisional view on this in my judgment of 12th August 2024 as follows:- “I am minded to publish this judgment on TNA / BAILII, but would like to hear the views of the parties on the principle of publication and on the principle of anonymisation. My present provisional thinking is that the principles which appear in cases such as Lykiardopulo v Lykiardopulo

[2010] EWCA Civ 1315

probably point to publication without anonymisation in view of the findings I have made about conduct, but I am prepared to hear further submissions on this by email if necessary”.

[16]Subsequent to the 2024 hearing, I made orders on 16th September 2024 and 25th October 2024, in which I made the declarations and costs orders referred to above as well as timetabling through to the May 2025 hearing, and I made certain orders which were intended to prevent any dissipation of assets in the meantime.

[17]In the meantime, the husband failed to comply with both my MPS/LSPO orders and my costs orders and acted in a way which caused me to believe that he had absolutely no intention of complying with them in any meaningful way. An application followed for the appointment of Receivers over some of the husband’s assets to secure the performance of the orders made thus far. I granted this application, initially on 13th January 2025 (with some later amendments), and so Ms Hannah Davie and Ms Ami Sweeney of Grant Thornton UK LLP are now acting as Receivers, attempting to extract value from the husband’s assets to enforce the existing orders. I shall discuss further below the progress of this exercise.

[18]I note also that the husband has in the meantime sought assistance from the Court of Appeal to stay and in due course overturn by way of appeal both the substance of my judgment of 12th August 2024 and the subsequent enforcement orders. At the time of writing this judgment, the Court of Appeal has made no decisions, either to stay the enforcement of my existing orders or on the permission to appeal applications. Anything that I do is obviously subject to a subsequent decision of the Court of Appeal; but it has been common ground in the current hearing that, unless and until the Court of Appeal intervenes, I should proceed with this judgment on the basis that they will not interfere with my earlier decisions.

[19]I completed the evidence and submissions at the end of the fourth day of the May 2025 hearing and have taken the fifth day (and a little further time) to write this judgment.

BASIC LAW

[20]In dealing with the claim I must, of course, consider the factors set out in Matrimonial Causes Act 1973, sections 25 and 25A, together with any relevant case law.

[21]Matrimonial Causes Act 1973, section 25, reads as follows:-(1) It shall be the duty of the court in deciding whether to exercise its powers under section 23, 24, 24A or 24B above and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.

(2) As regards the exercise of the powers of the court under section 23(1)(a), (b) or (c), 24, 24A or 24B above in relation to a party to the marriage, the court shall in particular have regard to the following matters:- (a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire; (b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; (c) the standard of living enjoyed by the family before the breakdown of the marriage; (d) the age of each party to the marriage and the duration of the marriage; (e) any physical or mental disability of either of the parties to the marriage; (f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family; (g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it; (h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

[22]Matrimonial Causes Act 1973, section 25A, reads as follows:-(1) Where on or after the grant of a decree of divorce or nullity of marriage the court decides to exercise its powers under section 23(1)(a), (b) or (c), 24 or 24A or 24Babove in favour of a party to the marriage, it shall be the duty of the court to consider whether it would be appropriate so to exercise those powers that the financial obligations of each party towards the other will be terminated as soon after the grant of the decree as the court considers just and reasonable.

(2) Where the court decides in such a case to make a periodical payments or secured periodical payments order in favour of a party to the marriage, the court shall in particular consider whether it would be appropriate to require those payments to be made or secured only for such term as would in the opinion of the court be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party.

SECTION 25 ANALYSIS – THE CHILDREN

[23]The parties have two children, A and B, but they are adults and, accordingly, they are not my first consideration. On this issue, I have nothing to add to paragraph 21 of my judgment of 12th August 2024.

SECTION 25 ANALYSIS – PROPERTY AND OTHER FINANCIAL RESOURCES, INCOME AND EARNING CAPACITY

[24]In the circumstances of this case, where income and capital are fairly entwined, with income largely being derived from capital rather than separate employment, I propose to consider together, in one computational exercise, the “property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future” and “the income, earning capacity…which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire”.

[25]Within this overall heading lie some agreed items but also the major computational issues in dispute in this part of the case. Where I make no particular comment below, and just include a figure in the asset schedule, it is because the item is not controversial.

[26]It is agreed that the family home (which is in the joint names of the partiers) is worth £6,000,000 and is subject to a Handelsbanken mortgage with an outstanding balance of £3,500,000 plus mortgage arrears of £142,954 (which have accrued because, notwithstanding my MPS order that the husband should pay the mortgage interest, he arranged with the bank to take a mortgage holiday). It is common ground that from this headline figure will need to be deducted sale costs at 3% (£180,000) and the costs of a significant repair to the swimming pool roof (£200,000, although it may be that the property will have to be sold before the repair work is completed). More controversial is the husband’s contention that a charge executed on 24th October 2024 in favour of his solicitors, Hill Dickinson, should be deducted to secure their outstanding costs bill (currently £461,454) against his share of the equity. Mr Pocock told me that the wife may yet bring an application to set aside this charge (which would then involve further proceedings in which Hill Dickinson were themselves a party); but this application has not yet been made and may not be and, in the meantime, my view is that I should observe and respect in my asset schedule the existence and effect of this charge in favour of Hill Dickinson. Accordingly, my asset schedule will record the net equity in the family home as being £6,000,000 less £3,500,000 less £142,954, less £180,000 less £200,000 less £461,454 = £1,515,592.

[27]The wife owns twoother real properties in her sole name (a third, 72 La Rose Lane, having been sold to pay legal costs):-(i) 16C, Eversley Park Road, London N21 is worth £400,000 and (after deduction of the mortgage of £174,291 plus an ERP and some CGT and sale costs) the net equity is £149,849. This property is occupied by the wife’s mother.

(ii) 97b, Falkland Road, London N8 is worth £412,000 and (after deduction of the mortgage of £128,506 plus an ERP and some CGT and sale costs) the net equity is £173,581. This property has been rented out until very recently.

[28]The wife owns 56% of the shares in a company called Kairos Property Solutions Limited (I shall refer to the company as ‘Kairos’). The other two shareholders (who are both family members) hold 22% each. Kairos owns two real properties (70, Lancaster Road, Northolt, Middlesex and Malvern House, Woodford Green, Essex), which are both let out and are subject to significant mortgages. The properties were valued by Mr Hari Hirani who provided two SJE reports dated 27th July 2023. An SJE report on Kairos has been produced by Mr Gavin Pearson dated 18th July 2024 and some further questions were answered by him on 2nd August 2024. The wife has been prepared to accept and adopt Mr Pearson’s conclusions, treating this as a quasi-partnership for valuation purposes, and assuming a sale to a third party. Accordingly, I shall include in my table the net value of the wife’s shares at £737,360 and will also include a debt owed by the wife to Kairos in the category of a shareholder loan account of £89,093.

[29]I note also that the wife has an income from Kairos of £21,552 per annum net, though plainly this would not survive a sale or winding up of Kairos. The wife also derives an income from letting 97b, Falkland Road; but there is no profit once the costs are taken into account.

[30]The husband held the legal title of two other real properties, 31, Townsend Avenue, London N14 and 33, The Avenue, London EN6 (the latter has been sold during proceedings); but in each case it is asserted by the husband that he holds or held the property on trust for somebody else and the wife has not in the end challenged this, so it is agreed that the correct figure in the schedule is zero. The husband does not receive any rental income from them.

[31]The parties have been able to agree figures for bank accounts held in their respective sole names, premium bonds and credit card debts, as recorded in the schedule below.

[32]Both parties have significant debts arising from their legal costs, which are recorded in the schedule below and the wife also has a substantial outstanding litigation loan.

[33]In relation to STMA Developments Limited it is common ground that the wife and the husband each own 50% of the shares in the company, but it is now common ground that there is no longer any value in this company, the husband having removed such money as there was in the company bank accounts. It is therefore recorded as having zero value and the wife is content to transfer her shares in it to the husband, subject to an indemnity in relation to tax or other costs arising (which are not anticipated to amount to anything of significance).

[34]The husband has an interest in MSI Investments LLP. The argument here is de minimis and it is common ground that I should simply split the small difference between the two figures in the ES2 and identify its value as £202,003.

[35]The controversial items, on which I need now to make findings, are the following:-(i) The value of the husband’s shareholding in Michael Bros Limited (MBL) and the income to be derived from it. Related to this is how I should treat certain dividend payments which have been made out of MBL and how these may (or may not) be related to certain monies said by the husband to be owed by him to his siblings.

(ii) The value of the husband’s shareholding in Hartsfield Investments UK Limited and the income to be derived from it. Related to this is how I should treat certain monies said by the husband to be owed by him to Mr Philip Philippou.

(iii) The potential liability to tax arising from the findings of ‘sham’ which I made in my judgment of 12th August 2024.

(iv) The wife’s add-back claims.

[36]In assessing the values of the shareholdings I remind myself of the fragility of share valuations of private companies, in particular the apposite words of Moylan J (as he then was) in H v H

[2008] EWHC 935

:- “The experts agree that the exercise they are engaged in is an art and not a science. As Lord Nicholls said in Miller v Miller; McFarlane v McFarlane

[2006] 2 AC 618

[26]:

‘valuations are often a matter of opinion on which experts differ. A thorough investigation into these differences can be extremely expensive and of doubtful utility’

. I understand, of course, that the application of the sharing principle can be said to raise powerful forces in support of detailed accounting. Why, a party might ask, should my ‘share’ be fixed by reference other than to the real values of the assets? However, this is to misinterpret the exercise in which the court is engaged. The court is engaged in a broad analysis in the application of its jurisdiction under the Matrimonial Causes Act, not a detailed accounting exercise. As Lord Nicholls said, detailed accounting is expensive, often of doubtful utility and, certainly in respect of business valuations, will often result in divergent opinions each of which may be based on sound reasoning. The purpose of valuations, when required, is to assist the court in testing the fairness of the proposed outcome. It is not to ensure mathematical/accounting accuracy, which is invariably no more than a chimera. Further, to seek to construct the whole edifice of an award on a business valuation which is no more than a broad, or even very broad, guide is to risk creating an edifice which is unsound and hence likely to be unfair. In my experience, valuations of shares in private companies are among the most fragile valuations which can be obtained”. investigation into these differences can be extremely expensive and of doubtful utility’. I understand, of course, that the application of the sharing principle can be said to raise powerful forces in support of detailed accounting. Why, a party might The court is engaged in a broad analysis in the application of its jurisdiction under the Matrimonial Causes Act, not a detailed accounting exercise. As Lord Nicholls said, detailed accounting is expensive, often of doubtful utility and, certainly in respect of business valuations, will often result in divergent opinions each of which may be based on sound reasoning. The purpose of valuations, when required, is to Further, to seek to construct the whole edifice of an award on a business valuation edifice which is unsound and hence likely to be unfair. In my experience, valuations of shares in private companies are among the most fragile valuations which can be

Michael Bros Limited (MBL)

[37]With one eye firmly set on these caveats expressed by Moylan J, I shall first turn to the issues relating to MBL.

[38]MBL is a property development and letting business in which the husband owns 34.375% of the shares. The other shares are held as to 34.375% by his brother Mr Michael (AKA ‘Agy’) Michael and as to 31.25% by his brother Mr Stavros Michael.

[39]I refer the reader of this judgment to paragraphs 45 and 87 to 99 of my judgment of 12th August 2024 for a full analysis of the history and operation of this company. My conclusions were that the husband continued to own his shares on behalf of himself, ran the company himself without much (if any) assistance or input or interference from his brothers, that he had a free hand to move money out of MBL if and when he wanted to do so, and that he paid his brothers (and other family members) money from MBL if it suited him to do so without reference to any contribution they had made to the business and often in cash. As I noted in my earlier judgment, the husband’s siblings have done very well out of the husband’s generosity in relation to MBL. Stavros Michael told me in July 2024 and again in May 2025 that, although he is a director of MBL, he lives in Cyprus and does little or nothing in the MBL business. In his words in July 2024:

“I don’t do anything in the business. Nor does Agy. Nor do my sisters. I left it to Mario unless I was asked”

. His evidence in May 2025 confirmed that he still does nothing in the business. Michael (AKA ‘Agy’) Michael told me in July 2024:

“For MBL. I don’t do nothing. Mario does the work for my benefit.”

He also confirmed that, at that stage, he had never been a director of MBL because of “an issue in the past”.

[40]I note that on 24th October 2024, the day before the hearing before me on 25th October 2024, the husband resigned as a director of MBL and was replaced by his brother Michael (AKA ‘Agy’) Michael. Although presented to me as a decision of Stavros and Michael, justified by reference to the fact that these divorce proceedings were causing the husband to become distracted from the affairs of MBL, I find it very difficult to see this move as other than a tactical manouevre to attempt to distance the husband from the affairs of MBL and thus perhaps impede enforcement efforts – though it perhaps makes not much difference in fact in view of the later appointment of the Receivers. In view of the conclusions I have reached about this family, and hearing the oral evidence in May 2025, I am unable to accept that this move was orchestrated by anybody other than the husband himself. I think it overwhelmingly likely that, even though he is no longer a director as such, the husband still makes all meaningful decisions over the running of MBL and this, of course, includes the decisions made on the quantum and methodology of dividend payments.

[41]The value of MBL has in its ownership a large number (I have added it up to 38) pieces of real property, much of it in London, most of which is residential let property. Whilst the company itself was incorporated in 2001, it acquired some properties which had been owned and run by a previously existing partnership (Michael Brothers Partnership) so that the business as a total entity seems to have begun its life in the late 1980s, but has continued to operate and expand ever since.

[42]The real properties were valued by Mr Hirani as at 31st March 2024 in his report of 15th May 2024. The challenges to Mr Hirani’s evidence did not significantly affect the values of MBL owned real properties and so it can be said uncontroversially that the total value of the real properties within MBL is, for my purposes, £24,411,001. In his analysis in his report of 10th February 2025, Mr Pearson has appropriately used this figure in place of the accounting book value of the same real property. Following from this adjustment Mr Pearson has analysed all of the other matters affecting the company value, obviously including borrowing and other indebtedness (which are set out in his Appendix 6 at Ep.1331) and concluded that MBL as a whole has a market value of £15,091,258. On this basis a 34.375% share (without any more adjustments) would be worth £5,187,620. He further suggests that if a ‘minority discount’ is to be applied to this figure then the correct percentage is 35%; but he raises the possibility (for the court to answer) that the business may represent a quasi-partnership, in which case there would not be any minority discount. Amongst the deductions reflected in his valuation figure is writing off of the sum of £3,982,000 owed to MBL by Paul Simon Developments Limited, but said (by the husband in information provided to Mr Pearson) to be unlikely to be recoverable (see Ep.1298). The appropriateness of this writing off has been challenged on behalf of the wife and oral questions put to Mr Pearson on this subject. I need, therefore, to address two issues – the minority discount issue and the write off issue.

[43]Dealing first with the write off issue, I record that some documents were put to Mr Pearson in cross-examination. First, two emails dated 28th April 2025 (Mp.204) and 1st May 2025 (Mp.233) recording some views from Mr Bharat Varsani, the Head of Finance at Paul Simon Developments Limited, which suggested that the projected balances “will be cleared on completion and re-finance of the particular project” which “we anticipate to be 10 to 12 weeks from now” (i.e. in July 2025). Secondly, a document created by Paul Simon Developments Limited (Cp.1269) calculating the amounts due (with interest) at £7,035,566. Mr Pearson said in response to these documents:

“I genuinely hadn’t seen these before. If cash is to be repaid then it should be added onto the valuation. Yes…If it is a recoverable debt then it should be added”

. In this instance Mr Pearson did not consider that this information should be excluded on the basis that it emerged after 31st March 2024 (the notional valuation date) and I agree with him. Mr Pocock’s case in closing is that this figure should be added to the overall value of MBL to turn it from £15,091,620 to £22,127,186 and that, commensurately, a 34.375% share would be turned from £5,187,620 to £7,606,220. Mr Wagstaffe has accepted in his closing submissions that something should be added to reflect the late emergence of the documents put to Mr Pearson, but not the whole figure of £7,035,566. On a balance of probabilities, I have favoured Mr Pocock’s argument here. The information coming from Paul Simon Developments Limited is that the amount owing will be paid and I regard this as a more reliable indicator of the reality than the information put forward by the husband. Accordingly, I accept Mr Pocock’s argument that, subject to the matters below, it is appropriate to value the husband’s MBL shareholding at £7,606,220.

[44]Should a minority discount be applied to this figure? In assessing this I have noted (and I accept) Mr Pearson’s view that, if it is to be applied at all, it should be applied at 35%. But Mr Pocock’s argument is that it should not apply at all because the arrangement of MBL is, in effect, a quasi-partnership. In this context I remind myself of the words of Mostyn J in Clarke v Clarke

[2022] EWHC 2698 (Fam)

, which was an appeal judgment from a Circuit Judge who had applied a minority discount somewhere between zero and the SJE’s suggested figure. Mostyn J said:- “I turn to the 20% discount that was applied in the valuation of the respondent’s interest in both companies…The judge explained that the accountant had applied this discount to take account of the unquoted status of the company, the lack of marketability of the shares and the lack of overall control due to his percentage of the total shareholding...The judge was clearly uncomfortable with the 20% discount, and rightly so. He said: ‘In his oral evidence Mr Clarke stated that he had been trading with his partner, Mr Shadforth, for many years and he would imagine that they would always take decisions jointly. There was an element as I discussed with Mr Lewis in what he described, he, Mr Clarke, described, as a quasi-partnership’ …Of course, it is perfectly true that were the respondent to seek to sell his 50% shareholdings in 2R Investments Limited and PCP Cladding Ltd he would struggle to do so, and if he were able to find a buyer would have to sell at considerably less than the par value of £939,033...So in that sense the 20% discount is logical. But it is also completely unreal because, in my judgment, on the evidence it was not possible for the judge to find that there were any likely circumstances in which the respondent would sell his shares other than in conjunction with his fellow 50% shareholder. It is my opinion that the judge should have looked into the future, and asked himself whether it was more likely than not that a discount would be suffered. The answer to that question would, on the balance of probability, be no. If the judge was satisfied that the business was run as if it were a partnership, and if the judge was satisfied on the balance of probability that no discount would be suffered on any disposal in the future, then the judge should not have made a middle choice. It seems to me that the question is a binary one. Either the discount applies or it doesn’t. There is no room for a third way.”

[45]In my view it is difficult to distinguish the facts of Clarke from the present case in this context and it is difficult to reach any different conclusion in the present case to the one reached by Mostyn J in Clarke. MBL was, as I have concluded, run by the husband as a quasi-partnership, in fact rather more than that in this case where the husband effectively ran it on his own without much reference to his ‘partners’. If the husband needs to raise money by realising the value of his MBL shares then it is highly unlikely that this would involve a sale other than in conjunction with his brothers. Anything different is, in my view, in the category of “completely unreal”. I am not persuaded by Mr Wagstaffe’s suggestion that the brothers would simply refuse to co-operate. In reality they would be likely to co-operate if the husband asked them to do so (whatever their strict legal rights may be) – that is the way the Michael family works as I have previously described. I do not therefore propose to make any minority discount in the figure in my schedule.

[46]Where I agree with Mr Wagstaffe is that the appropriate figure to place in my schedule must have potential Capitasl Gains Tax (CGT) deducted from it. Applying Mr Pearson’s methodology to the higher valuation figure, I have calculated that the potential CGT liability would be £7,606,220 less £4,796,498 (Ep.1303) = £2,809,722 x 24% = £674,333.

[47]The figure which I will place in my asset schedule for the value of the husband’s MBL shares is therefore £7,606,220 less £674,333 = £6,931,887.

[48]Mr Wagstaffe has gone on to make some points about the partially non-matrimonial nature of this asset, which may be relevant to the quantification of any sharing claim, and I shall return to this issue in the distributional part of this judgment below.

[49]A further aspect of the MBL part of the dispute relates to a dividend paid in July 2023 (in the course of the proceedings, when the dispute about MBL was already at large) in the sum of £3,531,088, of which only £36,823 was received by the husband (instead of his 34.375% share of £1,213,811). Apart from the £36,823 paid to the husband, the entirety of the sum was paid to Stavros Michael. Because he lived in Cyprus he did not have to pay any UK income tax on this figure. Although I have not seen any formal documentation to this effect, it is suggested that there was a formal waiver of dividend entitlements in favour of Stavros, who then formally ‘loaned’ rather than ‘gifted’ portions of this dividend money to his brother Michael and his sisters in proportion to what was being then contended as the true beneficial interests in the MBL shares, so that they also received a portion of the dividends without paying any UK income tax, although they are all based in the United Kingdom. Mr Wagstaffe told me that this is a lawful tax-saving device (he cited WT Ramsey Ltd v Inland Revenue Commissioners

[1982] AC 300

and Furniss v Dawson

[1984] AC 474

in support of his proposition) and nobody has argued otherwise before me. Whatever the lawfulness of this arrangement, in the context of my findings on 12th August 2024 about the real ownership of the MBL shares, there is a strongly persuasive argument for saying that the husband’s ‘waived’ amount should be added back to his assets on the basis that this is likely to be being held to his demand by one or other of his siblings. Why was he waiving substantial dividend entitlements and, not long afterwards, telling me that he could not afford to pay MPS and LSPO obligations? Related to this, in my view, is the late emergence of a sequence of ‘loans’ from his siblings at the eleventh hour (28th April 2025) in the total sum of £530,000 (see Cp.1156 & Cp.1278 et seq). In the context of the modus operandi of the Michael family, as previously described, I have been persuaded on a balance of probabilities by Mr Pocock to find that these ‘loans’ are really no more than the recycling of the dividend money held for the husband. I am therefore minded to include on my asset schedule a figure of £1,213,811 (the dividend he should have received) less £36,823 (the dividend he did receive) less £530,000 (what has already been recycled back to him) = £646,988. Mr Wagstaffe has argued that if I am minded to write back in the dividend figure of £1,213,811 (which I am) then I should deduct dividend tax from this figure. The response to this from the wife’s team is to say:

“The entire purpose of sending the dividends to Stavros and then ‘loaning’ them to H (as was his presentation) was to avoid tax. Where a party in fact has structured receipt so as to avoid tax it is inappropriate to include a notional figure for tax that will not in fact be paid: see e.g. BJ v MJ [2011] EWHC 2708 (Fam) at §69”

. I agree with this response.

[50]This business does generate a significant income and has had available monies for good dividends, but, of course, if it is to be sold to meet matrimonial or tax liabilities then it will not be available to provide income and I am not thinking there is any significant purpose in analysing its income-producing abilities. I do conclude, however, that the income available from this source was sufficient to enable to meet the MPS and LSPO obligations I placed on him and I reject his suggestion that I should unpick these interim orders in my final order. I am satisfied that my interim MPS and LSPO orders were fair and justified.

Hartsfield Investments UK Limited (Hartsfield UK)

[51]Again with one eye firmly set on the caveats expressed by Moylan J above, I now turn to the issues surrounding Hartsfield Investments UK Limited, to which I shall refer in this judgment as Hartsfield UK. This is a company of which (on my findings of 12th August 2024) the husband is the 100% beneficial owner. It has no operations itself but it has a large number of subsidiaries, some owned as to 100% and some owned as less than that, and some of which do have successful and valuable operations. Most of the activity in these subsidiaries is in the nature of real property developing and letting; but there are some exceptions to this. The table below is reproduced from Mr Pearson’s report of 10th February 2025 (Ep.1275).

[52]It took Mr Pearson a great deal of time to value these companies (and I make no criticism of him personally for that; I am absolutely satisfied that he is a highly professional, careful and hard-working valuer). Partly this was because he was awaiting clarification on the underlying real property values from Mr Hirani to feed into his calculations (depending on how the individual properties are counted there are more than 150 real properties to be valued within the overall company valuation, many of which gave rise to individual challenges and queries, and, again, I make no criticism of Mr Hirani for his highly professional and skilled valuation work) and partly because they are complicated companies, but also this was partly because the husband was slow in providing information when it was requested. One particular feature which Mr Pearson found unusually complex was the reconciliation of the intercompany debt balances. Money often moved around the group with apparently little planning or formality but, to a valuer, the nailing down of a reliable picture at a particular snapshot date was obviously important.

[53]The overall valuation of Hartsfield, broken down into its constituent parts, appears at Appendix 4 to Mr Pearson’s report of 10th February 2025 (Ep.1328). He has placed a market value of the Hartsfield UK shares at £24,870,951. Omitting the subsidiaries where there is no value, these figures are broken down in Appendix 4 (Ep.1328) as follows:- 100% x Hartsfield Investments Cyprus Limited (HIC) 8,563,253 50% x M&S Homes North London Limited (M&S) 160,077 50% x Magic Life Limited (MLf) 3,513,977 50% x Magic Living Limited (MLv2) 2,209,201 50% x Paul Simon Magic Group Homes Ltd(PSMGH) 3,987,789 100% x Property Empire Limited (PE) 7,709,403 TOTAL (HARTSFIELD UK SUBSIDIARIES) 26,143,700 Plus other net assets within Hartsfield UK itself 213,718 Less Book value of Hartsfield UK Subsidiaries -289 Less Reconciliation of Intercompany debts -1,157,187 Less irrecoverable amounts due to members -328,970 Less rounding error -21 TOTAL Although Mr Pearson does talk in his written report of CGT (see Ep.1302 & Ep.1303) it became common ground at the hearing that CGT would only arise if the value of Hartsfield was assessed above the figure of £30,212,015 (the valuation assumed as at November 2020) – see for example Mr Wagstaffe’s closing note at paragraph 67. 24,870,951

[54]This presentation has been challenged in a number of different ways in the course of the May 2025 hearing.

[55]I shall deal first with the wife’s challenges to Mr Pearson’s presentation. The essence of Mr Pocock’s position for the wife is summarised by the table below, which shows a near doubling of the original bottom line figure from £24,870,951 to £47,350,707, as follows:- 100% x Hartsfield Investments Cyprus Limited (HIC) 8,563,253 50% x M&S Homes North London Limited (M&S) 160,077 50% x Magic Life Limited (MLf) 3,513,977 50% x Magic Living Limited (MLv2) 2,209,201 50% x Paul Simon Magic Group Homes Ltd (PSMGH) 14,560,317 100% x Property Empire Limited (PE) 7,709,403 60% x Verve Clothing Company Limited (Verve) 38,991 50% x D&S Homes North London LLP (D&S LLP) 11,539,245 TOTAL (HARTSFIELD UK SUBSIDIARIES) 48,294,464 Plus other net assets within Hartsfield UK itself 213,718 Less Book value of Hartsfield UK Subsidiaries -289 Less Reconciliation of Intercompany debts -1,157,187 Less irrecoverable amounts due to members 0 Less rounding error -1 TOTAL 47,350,707

[56]It can be seen that the following figures have been amended from Mr Pearson’s presentation to Mr Pocock’s presentation:-(i) The figure for the value of Hartfield UK’s 50% interest in Paul Simon Magic Group Homes Ltd has been increased from £3,987,789 to £14,560,317. This change is attributable to Mr Pocock’s presentation in relation to the developments at West Green Road and Clarendon Road.

(ii) The figure for the value of Hartsfield UK’s 50% interest in D&S Homes North London LLP has been increased from nil to £11,539,245. This change is attributable to Mr Pocock’s presentation in relation to the development at Lawrence Road.

(iii) The amount entered under the heading of ‘irrecoverable amounts due to members’ has been amended from minus £328,970 to zero.

[57]I shall therefore start with Mr Pocock’s case in relation to the development at West Green Road, London N15 and I have the following comments on this:-(i) This is a substantial development of a large number of residential flats being carried out by Magic Living Limited, a wholly owned subsidiary of Paul Simon Magic Group Homes Ltd.

(ii) The challenge begins with an error in Mr Hirani’s property valuation report in that he had omitted to include a figure of £13,000,000 (in fact the accurate figure is £12,960,000) due to Magic Living Limited from the London Borough of Haringey. The existence of this obligation was confirmed in an email dated 14th April 2025 (Mp.81) and was accepted by the husband in his late statement (Sp.2). It was also accepted by Mr Pearson when the documentation was put to him. Because Hartsfield UK owns 50% of Paul Simon Magic Group Homes Ltd this would increase the value of Hartsfield by 50% x £12,960,000 = £6,480,000. Although initially resisting the challenge to Mr Pearson’s report, Mr Wagstaffe’s closing note conceded the point (subject to some further deductions) when he said:- “In relation to the West Green Road development, and in particular the point that LB Haringey is due to pay Magic Living Limited £13m on completion of the project for Block A which has not been factored into the valuation, it is particularly unfortunate that despite being knowing about this particular aspect of this particular development since March 2024 W did not raise any point about it either with Mr Hirani, or with Mr Pearson, or indeed with anyone until the last day before this hearing began. On reflection, however, it is a good point and Mr Pearson agreed that it should feature in the assessment of Hartsfield’s value. The resulting adjustment is not quite so straightforward as W would have the court accept, and this is returned to below, but it is fundamentally sound reasoning that this was a receivable at the date of valuation (i.e. 31 March 2024) and should therefore have featured in Mr Pearson’s calculations - which is no criticism of him”

(iii) Mr Wagstaffe went on in his note to suggest that this figure of £12,960,000 should be added but should be ameliorated by a number of deductions, which can conveniently be tabulated as follows:- Add the omitted sum 12,960,000 1. Deduct the ‘missing receivable’ referred to in Mr Pearson’s report (Ep.1291) but omitted because nil was the appropriate figure if it was in the negative -1,149,000 2. Deduct interest on the figure of £2,400,000 due to Derby Hall Christian Assembly -594,000 3. Deduct Corporation Tax which would become payable now the £12,960,000 is reinstated -1,402,125 4. Deduct a notional finance and uncertainty charge on the basis that the sums due from LB of Haringey will not be due for some time and the existence of the danger of a buy back clause -1,296,000 5. Deduct a litigation risk figure of £250,000 in addition to the figure already included by Mr Pearson (see Ep.1296) -250,000 TOTAL 8,268,875 x 50% representing H’s interest 4,134,438

(iv) Of Mr Wagstaffe’s five proposed deductions, I am persuaded that numbers 1, 3 and 5 should be allowed. Numbers 1 and 3 seem to me to be reasonable extensions of Mr Pearson’s approach. Having heard Mr Pearson answer questions from Mr Wagstaffe on number 5 I am persuaded that an insufficient sum was allowed by Mr Pearson for the litigation risks arising and I consider Mr Wagstaffe’s figure work reasonable. I have not been persuaded on numbers 2 and 4. As Mr Pearson said in relation to number 2, he was never shown any evidence of interest being payable by the Derby Hall Christian Assembly and nor was I and I was not persuaded that the various speculations on ‘indexation’ should properly be incorporated in my figure work. On number 4, I was not persuaded that this was more than speculation by Mr Wagstaffe. I am therefore minded to increase the value of Hartsfield UK by reference to the West Green development by adding the sum of £5,079,438, calculated as follows:- Add the omitted sum 12,960,000 1. Deduct the ‘missing receivable’ referred to in Mr Pearson’s report (Ep.1291) but omitted because nil was the appropriate figure if it was in the negative -1,149,000 3. Deduct Corporation Tax which would become payable now the £12,960,000 is reinstated -1,402,125 5. Deduct a litigation risk figure of £250,000 in addition to the figure already included by Mr Pearson (see Ep.1296) -250,000 TOTAL 10,158,875 x 50% representing H’s interest 5,079,438.

[58]I shall next deal with Mr Pocock’s case in relation to the development at 30-36Clarendon Road, London N8 and I have the following comments on this:-(i) This is a substantial development of residential properties being carried out by Magic Living Limited, a wholly owned subsidiary of Paul Simon Magic Group Homes Ltd.

(ii) At the time of Mr Hirani’s valuation in March 2024, as described in his report of 15th May 2024, there was in train a planning application and it was uncertain whether it would be granted. Mr Hirani assessed its value on that basis, taking into account ‘hope value’. He estimated a Gross Development Value (i.e. a value after completion of works) of £28,365,000 less a broad Red Book assessment of the cost of development and ended up with a Residual Value for the site (i.e. netting off the completed value against the construction costs) of £2,780,000.

(iii) The planning application was in fact formally granted on 14th June 2024 (although the work not been carried out, nor even commenced) and Mr Pocock has suggested that it would be fair to make an upwards adjustment to the value to reflect that fact. He makes the point that the accepted practice in financial remedies cases is to value assets at the date of the trial and so significant developments post the valuation exercise, but pre the trial, should be factored into a fair valuation exercise.

(iv) Against that, and this was Mr Wagstaffe’s response, rather backed up by the comments in the oral evidence of Mr Hirani, is that on the facts of the present case it was agreed that the valuations would be targeted at the date of 31st March 2024 and, particularly in a case where there are a large number of items, some of which may have gone up in value and some down, it would not be fair to allow one party to cherrypick some items (which might suit them) and ignore others (which might not). Further, it was not just a matter of increasing a valuation figure by a notional amount on the grounds that planning permission had now been granted, as a proper review would have to look again at building costs arising. Mr Wagstaffe made the point that in every case involving valuations a target date had to be set, which would always be some time before a trial date, and doing that was not in any way a breach of the principle that items should be valued at the trial date.

(v) In my view, the court has a discretion to look at post valuation events if it thinks it fair to do so, but also not to permit that if it would be unfair to do so. In my view the subsequent grant of planning permission on its own (and without any building work actually having been done) is not sufficient to justify a revaluation of the Clarendon Road project and on this item I agree with Mr Wagstaffe. I decline to re-open the valuation and Mr Pearson’s utilisation of the figures in the overall valuation is sound and reliable, so I make no change on this basis.

[59]I shall next deal with Mr Pocock’s case in relation to the development at 45-63 Lawrence Road, London N15 and I have the following comments on this:-(i) This is a substantial development of residential properties which, as at March 2024, was being carried out by D&S Homes North London LLP, in which Hartsfield UK has a 50% stake.

(ii) The expectation in March 2024 was that the project would be completed in the summer of 2024, and in due course it was completed, though a little later, probably April 2025. Mr Hirani gave his views on value. He assessed a Gross Development Value of £32,482,006 and a Residual Value of £15,360,000.

(iii) In relation to the assessment of the value of the Lawrence Road Development, a significant number of things have happened since March 2024. Mr Pocock’s opening note expressed his case in the following way:- “Mr Hirani valued this asset as having a gross development value of £32,482,000. He was instructed there were remaining costs to completion of £4,987,692, and opined there was a present residual market value of £15,360,000…This is the figure that finds its way into Mr Pearsons’ report. That figure (£15.36m) therefore leaves c.£17.1m “off” the valuation of a property with three months left to complete. This surprising write-off arises from the completely unreal assumption the property would be sold, incomplete, to an unrelated third party ahead of completion, for that purchaser to have to “pick up the pieces” and complete the development. It self-evidently represented a pessimistic and artificial view of value. That, nonetheless, is the valuation taken forward by Mr Pearson. It transpires (as we have learned only very recently) that, at approximately the same time as Mr Hirani was valuing the site, Knight Frank were instructed to value the site for the purpose of securing continued financing from Eurobank (Ep.82). Their opinion of value, at the same time, was that the site would have a value of £40,170,000 on completion (Ep.91), in the event that the units were sold off separately (the value-maximising way of selling the development on). Further, whilst Mr Hirani considered a total annual rent of £1.89m would be achievable (Ep.944) – almost identical to KF’s opinion of £1.9m – in reality, on 30 December 2024, the development was rented in toto to Stef & Philips at an annual rent of £2.75m (Mp.10). Mr Oliver informs us that this rent will start flowing into the hands of the business in the coming weeks…Given that the valuation was undertaken on the yield basis by both KF and Mr Hirani, the fact that the rent payable by Stef & Philips (on a 5 year agreement (Mp.10) is 44.7% higher than was thought by either valuer will obviously have a material impact on either valuation. Applying the same uplift to Mr Hirani’s valuation (which assumed sale as a block and accordingly is the more appropriate starting point against the KF break-up value) would give a value of just over £47m to that asset. The same figure is reached applying the implied yield from Mr Hirani’s own valuations – GDV £32.482m and rental value of £1.9m p.a. = an implied yield of ca 5.85%. Applying that to the actual rent of £2.75m gives a value of £47m again. The value is certainly nothing like £15.3m – for a property worth ca. £32.5m (Hirani) or £40.17m (KF) completed, when it is actually (or almost) completed. KF’s adopted gross yield is 6.8% (Mp.88. 6.8% implies a valuation on a yield basis of £40.4m – almost exactly their “aggregate market value for the individual units” of £40.17m (Mp.91). That is the very least this property is worth…What is more, Eurobank’s new loan secured against Lawrence Road is on the basis of a minimum of 55% LTV basis: implying a value of at least £43.2m. Third (commercial) parties have plainly been convinced that this property is worth that level. Again, as with West Green Road, W considers the court is in a better position to assess the true net value of this project today than Mr Pearson was, taking the date of 31 March 2024. The true property value (to feed into the consequent corporate valuation).”

(iv) Mr Wagstaffe’s opposition to these arguments has been very much on the lines of his contentions in relation to the Clarendon Road Development (see above); but in my view the two situations are distinguishable. In relation to the Lawrence Road Development it is possible, with fairness, to re-examine the value in the light of some very material changes since Mr Hirani was involved and (unlike in relation to Clarendon Road) it would not be fair to limit the position to what it was in March 2024. I accordingly propose to exercise my discretion to increase the value of the Lawrence Road Development by a headline figure of £10,000,000. I propose (along the same lines as I did in relation to the West Green Development – see above) to deduct £2,000,000 from this figure so that the increase will be £8,000,000, so that the increase to the value of Hartsfield will be 50% of this figure, that is £4,000,000.

[60]The amount entered under the heading of ‘irrecoverable amounts due to members’ has been amended from minus £328,970 to zero. I have not been persuaded that there is any basis for this adjustment.

[61]Nor have I been persuaded that there is any proper basis for adjusting Mr Pearson’s original findings on Verve Clothing Company Limited.

[62]Like MBL, Hartsfield does generate a significant income but, of course, it is interlinked with capital projects and anyway if it is to be sold to meet matrimonial or tax liabilities then it will not be available to provide income and I am not thinking there is any significant purpose in analysing its income-producing abilities.

[63]Accordingly, I propose to revise Mr Pearson’s valuation of Hartsfield UK by finding for the following table (subject to the further arguments below made by Mr Wagstaffe):- 100% x Hartsfield Investments Cyprus Limited (HIC) 8,563,253 50% x M&S Homes North London Limited (M&S) 160,077 50% x Magic Life Limited (MLf) 3,513,977 50% x Magic Living 2 Limited (MLv2) 2,209,201 50% x Paul Simon Magic Group Homes Ltd(PSMGH) 9,067,227 100% x Property Empire Limited (PE) 7,709,403 50% x D&S Homes North London LLP (D&S LLP) 4,000,000 TOTAL (HARTSFIELD UK SUBSIDIARIES) 35,223,138 Plus other net assets within Hartsfield UK itself 213,718 Less Book value of Hartsfield UK Subsidiaries -289 Less Reconciliation of Intercompany debts -1,157,187 Less irrecoverable amounts due to members 0 Less rounding error -1 TOTAL 34,279,379

[64]Mr Pocock has invited me to find that the £200,000 recently lent to the husband by Mr Philip Philippou should be disregarded as a loan on the basis that it is ‘skimming’, i.e. that there is a secret agreement between the husband and Mr Philippou to let the Waverley Road property to him at a knockdown price in return for him holding money for the husband. There are certainly a number of circumstances which cause a degree of suspicion, but I have not been persuaded that I could find on a balance of probabilities that the loan is not genuine and I propose to leave it in my schedule of assets.

[65]Mr Wagstaffe has urged me to make a number of further deductions from this figure.

Adjustments proposed by the husband

[66]First, Mr Wagstaffe takes issue with Mr Pearson’s decision not to make any ‘minority discount’ deductions for the constituent parts of Hartsfield UK of which he owns less than 100%. In essence, these are the following items which are, for all practical purposes, owned 50% by the husband and 50% by his long-term business partner Mr Simon Oliver. Mr Wagstaffe suggests (with a degree of support from Mr Pearson) that the court might decide to make a discount of 20% of these items. 50% x M&S Homes North London Limited (M&S) 160,077 50% x Magic Life Limited (MLf) 3,513,977 50% x Magic Living 2 Limited (MLv2) 2,209,201 50% x Paul Simon Magic Group Homes Ltd(PSMGH) 9,067,227 50% x D&S Homes North London LLP (D&S LLP) 4,000,000 TOTAL 18,950,482 Minority Discount of 20% -3,790,096

[67]I have described above the law on quasi-partnerships; but there seems to me to be a material difference between the relationship between the husband and his siblings in MBL and the relationship between the husband and Mr Simon Oliver in the other companies. I find myself persuaded by Mr Wagstaffe’s words, in his closing note, as follows:- “It is a particular feature of this case that H does not have overall control over the assets of the principal asset in the case, namely Hartsfield’s subsidiaries. The fact that H has only a 50% share in these (other than Property Empire) gives rise to the question of whether a minority discount should be applied. Whilst in common usage, the description “minority interest” is in fact something of a misnomer. The concept, as Mr Pearson explains, is that “where a party holds less than 100% of the issued share capital of a company it is necessary to consider whether a discount should be applied to the pro-rated value in order to reach the market value…Plainly, a clause in the Articles of Agreement cannot bind a third party, and there is no reason why it would even bind Mr Oliver unless a sale of Hartsfield’s shares in the subsidiary companies was mandatory under the Articles of Agreement – and there is no suggestion that one would be in present circumstances. Otherwise, if Mr Oliver was in principle willing to buy H’s shares, but H wanted a price Mr Oliver did not want to pay, he would just walk away…There are three reasons why a discount is appropriate:(a) Mr Pearson is, as noted above, simply wrong about the effect of the Articles of Association.

(b) H and Mr Oliver have worked in partnership with each other for over 40 years This was later corrected from ‘over 40 years’ to ‘nearly 40 years’, but this makes no difference to my conclusions . In the case of a third-party sale any purchaser of H’s (indirect) 50% interest would be taking a very substantial risk of deadlock. It is highly likely that a purchaser would not be willing to pay full value for a company they cannot control.

(c) In cases such as this where the principal participants have been in business together for over 40 years…it would not be unusual to regard it as a quasi-partnership, with the effect that a minority discount would be inappropriate, but in liquidity terms the court would not expect the company to be realisable in the foreseeable future absent specific evidence of an intention to sell. In this case, receivers have been appointed over H’s shares in Hartsfield already, and W’s case is that receivership should be extended. The concept of quasi-partnership by definition has not application where one of the shareholders (or their receiver) is by definition trying to liquidise their share. This is quite apart from the point that from somewhere H needs to find money to pay a tax bill that will increase sharply with late payment”

[68]I therefore propose to make a further deduction of 20% of the value of the 50% owned assets. This (as per the table above) produces a deduction of £3,790,096.

[69]Secondly, Mr Wagstaffe suggests that I should make a further deduction of 3% for costs of sale. Had I not been minded to make a minded to make a minority discount deduction I may have been more inclined to do this, but since the minority discount deduction involves contemplating a real possibility that Mr Oliver will purchase some of the husband’s assets at a discount, I take the view that the costs of sale are likely to be relatively small and there may be a degree of double counting. Therefore I shall exercise my discretion to make no further deduction representing costs of sale.

[70]Thirdly, Mr Wagstaffe has suggested that I should deduct the costs that the Receivers are charging for trying to enforce my earlier orders and/or make a deduction of the value of some of the assets on the basis that the Receivers may extract what they wish in a way which is less advantageous to the husband than if he were extracting money himself. I decline to do this, for the following reasons. The main reason that the court has had to accede to the expensive request for the appointment of Receivers is that the husband has made it entirely clear that he intends not to comply with and to resist all enforcement of my orders and to do his very best to minimise any receipt of monies by the wife. He has repeatedly said that it has always been his policy not to sell any real property and that he does not propose to change this now. I am afraid that this attitude does not sit well alongside his obligations to his wife after a long marriage – if he has to sell real property assets to pay her what she is due then that will have to be, whether or not it fits with his general policies. He has also shown himself very willing to manoeuvre his asset position to obstruct enforcement if that is an option. As such, the presence and cost of the Receivers is entirely of the husband’s own making and, if I was to allow a deduction for the consequences of this, this might, in effect, cause the wife to have to pay one half of them and that would not be fair. His best policy would have been, and would still be, to offer the Receivers full and willing co-operation and work with them to ensure the wife receives what is validly due to her. The Receivers’ recent report (Cp.1535) and recent application suggest that the husband has not yet taken this message on board.

[71]Fourthly, Mr Wagstaffe has raised the possibility of CGT on the shares in Hartsfield UK. Since I have now placed a value of the husband’s interests at £34,279,379 less £3,790,096 =£30,489,283, it can now be seen that there is unlikely to be any significant CGT on a disposal of the Hartsfield UK shares since they are worth almost exactly what they were assessed as being worth in November 2020 – see above.

Potential Tax Liability

[72]I now turn to the issue of the potential liability to tax arising from the findings of ‘sham’ which I made in my judgment of 12th August 2024.

[73]At some point prior to the Summer 2024 hearing, the husband was advised (in particular by a letter dated 7th May 2024 from his accountant, Mr Yogan Patel of MHA accountants) that if I found the trust arrangement to be a ‘sham’ (which I later did – see above) then there was likely to be a tax issue arising from a transaction which took place on 24th November 2020.

[74]The background was that, until 2020, the assets of the ‘trust’ were its 100% shareholding in AB Holdings Limited which in turn owned 100% of Hartsfield Investments Limited (Cyprus). Both these companies were Cypriot companies and Hartsfield Investments Limited then owned numerous subsidiary companies in the UK. On 23rd November 2020 a new company was incorporated in the UK, namely Hartsfield Investments UK Limited, which was also 100% owned by AB Holdings Limited. On 24th November 2020 the subsidiary companies owned by Hartsfield Investments Limited (Cyprus) were all transferred to Hartsfield Investments UK Limited. On the same day, 24th November 2020, the shares of Hartfield Investments UK Limited were transferred by AB Holdings Limited to the ‘trust’ for a nominal consideration of £1. The legal consequence of my declaring that the ‘trust’ was a sham was that the assets of the ‘trust’ were at all times beneficially owned by the husband. As such, the transfer of the shares of Hartsfield Investments UK Limited to the ‘trust’, i.e. to the husband, might be treated by the HMRC in the United Kingdom as an income distribution of the entire open market value of the assets of Hartsfield Investments UK Limited, then said to have been worth £30,212,015. Further, the income tax liability would have been due on 31st January 2022. Interest would be due on late payment. In addition, absent unprompted disclosure, penalties might be imposed of up to 100% of the liability at the discretion of HMRC. The liability might be a substantial amount.

[75]Because the wife’s team thought this unlikely, and did not accept the objectivity of Mr Yogan Patel, Mr Sladen of K3 Tax Advisory Limited was instructed, on a SJE basis, to give a view on the matters arising from the letter of Mr Yogan Patel.

[76]He produced an initial report on 12th July 2024, and some responses to questions dated 25th July 2024, and a final report dated 24th March 2025 (Ep.1424).

[77]Mr Sladen notes the opinion of MHA that, as at 24th November 2020 (at the moment of the share transfer) the assets of Hartsfield were worth £30,212,015.

[78]His evidence was to the effect that, given my sham finding, the share transfer of 24th November 2020 would be likely to give rise to a UK tax liability in the name of the husband. His report (and his subsequent oral evidence) suggests that this tax liability could end up somewhere within a very wide range of outcomes. He emphasised that the way HMRC deal with these things depends on the discretion of the appointed case-worker/investigator and it is impossible to predict who that might be or how sympathetic such a person might be to the dilemma which has arisen. The possibilities ranged from the share transfer being treated as a capital distribution or as employment income or as the purchase of shares with the consideration left unpaid. Mr Sladen could not be sure where the facts of this case would end up, but felt that all outcomes were possible and that the HMRC were used to a situation such as this where a court decision imposed a transaction that nobody was anticipating at the time it was made such that the documentation did not necessarily determine the real effect of the transaction. The width of outcomes was made yet larger by the discretion likely to be exercised by the HMRC case-worker/investigator in relation to interest and penalties. A decision would be made as to the degree of turpitude in the original non-disclosure or late disclosure, the extent to which the disclosure was considered prompted or unprompted and the degree of co-operation with the HMRC in the course of the investigation. The range of possible outcomes was very wide – very broadly, a best case scenario of a liability of about £6,000,000 and a worst case scenario of about £30,000,000.

[79]The husband’s evidence before me (which I regarded as perfectly sensible) was that he would seek advice after this hearing (the need for which he still hoped might be obviated by a successful appeal of my decisions) from his own accountants and follow any advice proffered by his own accountant as to how, when and in what manner to approach the HMRC so as to minimise the damage arising from this tax liability.

[80]The uncertainty of this situation creates a very real difficulty for the court. If I make a finding that this tax liability will, on a balance of probabilities, be at a particular level and fix my order accordingly then the order could come to look very unfair in one direction or another if the actual level proves to be significantly wide of the mark, whether higher or lower than the figure identified by me. I raised with both legal teams the possibility of a formulaic answer, for example a reverse contingent lump sum order dependent upon the actual tax arising. For different reasons, neither legal team were very keen on this; but, having reflected further on this myself, I have concluded that such a way forward provides the only fair way forward here. My asset schedule, and the terms of my final order, will reflect these thoughts.

The wife’s add-back claims

[81]Mr Pocock has put forward some add-back claims. I have carefully read paragraphs 47 to 56 of Mr Pocock’s closing note and have reached the conclusion that these are, in reality, costs arguments rather than add-back arguments. I will deal with costs in due course, but I do not propose to include any ‘add-backs’ in my asset schedule on the bases suggested.

Asset Schedule

[82]Thus, having reached the above conclusions, and utilising the figures referred to above, I find the the asset schedule in this case to be as follows:- REALISABLE ASSETS/DEBTS (£)83. Joint The family home This figure represents the agreed value of £6,000,000 less the Handelsbanken mortgage with an outstanding balance of £3,500,000 plus unpaid mortgage interest (from the ‘mortgage holiday’) of £142,954 less sale costs at 3% less repair costs at £200,000 less the charge in favour of Hill Dickinson at £461,454 = £1,515,592. 1,515,592 STMA Developments Limited 0 TOTAL 1,515,592

84. Wife 16C, Eversley Park Road, London N21 This figure represents the agreed value of £400,000 less the mortgage of £174,291, less an ERP of £90, less CGT of £63,770 less sale costs = £149,849. 149,849 97b, Falkland Road, London N8 This figure represents the agreed value of £412,000 less the mortgage of £128,506, less an ERP of £90, less CGT of £97,463 less sale costs = £173,581. 173,581 Bank accounts in sole name 8,060 Premium Bonds 60 Crypto trading account 868 Trading 212 Stocks & Shares ISA 17,981 Jewellery 42,480 Amex credit card debt -2,845 Next pay card debt -23 MBNA credit card debt -2 British Airways Amex credit card -186 Outstanding Legal Costs This figure is based on a total of incurred fees of £2,608,626 less a total of fees paid of £1,547,492 = £1,061,134 -1,061,134 56% shareholding in Kairos 737,360 Monies owed to Kairos -89,093 Monies owed by Kyriacos Kyriacou (re Astute) 26,000 Monies owed to Level (litigation loan) -588,197 TOTAL -585,241

85. Husband 31, Townsend Avenue, London N14 0 33, The Avenue, London EN6 0 Bank accounts in sole name -517 Watches 42,600 Interest in MSI Investments LLP 202,003 Shares in Michael Bros Limited (MBL) 6,931,887 Add-back of MBL dividends (net of sibling loans) 646,988 Shares in Hartsfield UK 30,489,283 Potential Tax Liability arising from court’s findings The figure in the table is zero; but this is because it is very difficult to predict where this will end up, most likely somewhere between £6,000,000 and £30,000,000 0 Monies owed to Philip Philippou -200,000 Money owed by Michael Nsier 1,008,000 Coutts credit card debt -1,958 Monies owed to Property Empire Limited -85,000 Monies owed to MHA (accountants) -36,417 Monies owed to HMRC (Advantis) -8,324 Monies owed to HMRC (2024-25 tax year) -11,037 Outstanding Legal Costs This figure is based on a total of incurred fees of £2,339,981 less a total of fees paid of £1,878,527 = £461,454; but this liability is secured against H’s share in the family home and recorded above and is accordingly recorded as zero here 0 Add-backs contended by W 0 TOTAL 38,977,508 OTHER SECTION 25 FACTORS

REALISABLE ASSETS/DEBTS (£)

[83]In my judgment of 12th August 2024 I said:- “I want to say at this stage, however, that it is unlikely that needs issues will be to the fore in any analysis. This seems to me to be very likely a case where the sharing principle will dominate”.

[84]On my findings there are assets here worth £1,515,592 less £585,241 plus £38,977,508 = £39,907,859. Even if the potential tax liability falls at the top end of the scale, i.e. £30,000,000, then there should still be enough to meet both parties’ needs, albeit at a much reduced level from the very high standard of living they enjoyed during the marriage. If the tax liability is at the bottom end of the scale then this is all the more the case.

[85]In my judgment of 12th August 2024 I said:- “All of the assets have built up over the course of a long marriage and it seems to me unlikely that any of them will be non-matrimonial property. The guiding principle at the distribution stage is likely to be the sentiment expressed by Mostyn J in JL v SL

[2015] EWHC 360

: ‘Matrimonial property is the property which the parties have built up by their joint (but inevitably different) efforts during the span of their partnership. It should be divided equally. This principle is reflected in statutory systems in other jurisdictions. It resonates with moral and philosophical values. It promotes equality and banishes discrimination.’”

[86]In the period since I said this, the husband has developed a case (with, I accept, a degree of force) to the effect that a significant portion of the assets in MBL (perhaps in the region of 40%) were acquired prior to the parties’ cohabiting in the year 2000, have never been mingled and should be treated as non-matrimonial property. I accept that this would justify a departure from equality in the husband’s favour to some extent and that this should be, and is, factored into my decisions below which will inform my order. The full extent of this feature is ameliorated by the fact that some of the wife’s assets were also held before the marriage.

[87]Mr Wagstaffe, again with a degree of force, has drawn my attention to the fact that if a lump sum order is to be calculated as a fixed sum then the court should factor in the fact that the wife’s assets will be copper-bottomed liquid assets (i.e. cash) whilst the husband’s assets will be illiquid risk-laden assets (i.e. shares not necessarily easily saleable) and that some adjustment from equality is appropriate in these circumstances. This factor may also affect the timing of payments – where they are dependent on the sale of real property they may take some time to achieve. As Peel J said in HO v TL

[2023] EWFC 215

it it is appropriate for the court “to step back when conducting the s25 exercise and, in the exercise of its discretion, to allocate the resources in such a way as to reflect illiquidity and risk. Conventionally, that would be to allocate to the party retaining the business a greater share of the overall assets to provide a fair balance. As Bodey J said in Chai v Peng and Others

[2017] EWHC 792 (Fam)

at para 140:

“It is a familiar approach to depart from equality of outcome where one party (usually the wife) is to receive cash, while the other party (usually the husband) is to retain the illiquid business assets with all the risks (and possible advantages) involved”

. In making the decision I set out below, I have factored these matters into my thinking.

[88]I have also heard different submissions from Counsel on who should be responsible for meeting the tax obligation arising from my sham trust finding (in matrimonial terms; it will be the husband’s obligation as far as HMRC are concerned). Mr Wagstaffe has wholly blamed the wife for this; but in my view this is unfair. The husband created the difficulty and, without doing what she has done, the wife would not have been able to claim a fair share of the family’s assets – certainly the husband would never have offered her one. Mr Pocock says that the blame wholly falls on the husband – he created the structure which has caused the problem and his conduct made it inevitable that the wife had to seek findings of ‘sham’. My view is somewhere between these two positions. The husband, in setting up the structure and by his conduct in defending it, must be regarded as the principal cause of the problem. On the other hand, in assessing the wife’s claims I cannot ignore the existence of the problem, further that she was happy to accept the benefits of the structure when she was still married, without much questioning of the husband’s methodologies. In reaching a solution here I bear all these thoughts in mind and, in making an order, create a fair balance between the competing positions.

CONCLUSIONS

[89]There was an 11th hour exchange of new open offers on 12th May 2025, the day before the second part of the final hearing commenced, which represent a further and extreme polarisation of the parties’ positions.

[90]The wife now sought an order which provided (broadly):-(i) A lump sum from the husband of £27,000,000 (up from her open position on 12th July 2024 at £12,500,000). The MPS order would continue until at least £5,000,000 has been paid towards this.

(ii) The sale of the family home (but only when she has received £5,000,000 towards her lump sum) with the wife receiving all the proceeds of sale as part of her £27,000,000 entitlement. The wife would have sole rights to occupy the family home pending sale and the husband should pay all the household outgoings.

(iii) The wife to transfer her shares in STMA to the husband.

(iv) An indemnity against any liability under the ‘trust’, including the potential tax liability arising out of the transaction of 24th November 2020.

(v) Otherwise a clean break.

(vi) The husband to pay 85% of the wife’s costs since 12th September 2024 (my previous order having done the same for costs up to that point).

[91]The husband now sought an order which provided (broadly):-(i) No lump sum from the husband to the wife.

(ii) The immediate sale of the family home with the wife receiving all the proceeds of sale, once the husband’s solicitors’ charge has been satisfied. The wife would have sole rights to occupy the family home pending sale and the husband should pay all the household outgoings.

(iii) For the wife to transfer her shares in STMA to the husband.

(iv) For all arrears under the existing LSPO and MPS order to be remitted and the orders discharged.

(v) Otherwise a clean break.

(vi) No further order as to costs save that the wife should pay the husband 50% of the solely funded SJEs.

[92]I am afraid that neither of these offers commend themselves to me. Both would represent wholly unfair outcomes in different directions. I must therefore determine what is, in my view, a fair outcome for both parties, piecing together all the findings and comments I have set out above.

[93]I propose to make an order as follows:-(i) The husband will pay a series of lump sums to the wife in the total sum of £15,000,000. This will be payable as follows. There will be a first payment of £4,000,000 due on or before 1st September 2025, from which the wife will be obliged to redeem the mortgage on the family home. There will be a second payment of £3,500,000 due on or before 1st December 2025. There will be a third payment of £7,500,000 due on or before 1st September 2026. Interest will run in default of payment at the High Court judgment debt rate of the individual lump sums.

(ii) The MPS order will continue (as spousal periodical payments after Decree Absolute) until the second lump sum payment has been paid in full. When the first lump sum payment is made in full, the obligation to pay the mortgage payments will cease as the mortgage will be redeemed, but the MPS order will otherwise continue until the second lump sum payment is made in full.

(iii) The family home will be placed on the market for sale forthwith and the wife will have sole conduct of the sale, but must keep the husband informed of all material developments and he will have liberty to apply to the court, for example if he thinks the wife is not appropriately progressing the sale or if the sale is proceeding at an undervalue. If, and only, it is agreed between the parties that the sale shall be delayed to enable the repairs to the swimming pool roof to be carried out, should this happen. Failing agreement on this, the marketing shall begin forthwith of the family home as it is.

(iv) The net proceeds of sale of the family home will be paid to the wife but credit will be given against the third lump sum payment for whatever she receives minus any payment made by her to redeem the mortgage (e.g. if the net proceeds received by the wife are £2.5m but she has paid £1m to redeem the mortgage then the credit will be £1,500,000 and the third lump sum payment will be reduced to £6,000,000).

(v) The wife will have sole rights to occupy the family home pending sale.

(vi) The wife shall transfer her shares in STMA to the husband, with appropriate indemnities against tax or other liabilities arising from her shareholding or its disposal.

(vii) The husband shall undertake to keep the wife informed of the progress in relation to the tax liability (if any) arising from the finding of sham. She will undertake to take all lawful steps she reasonably can to ensure that this liability is minimised and will keep the husband informed of any steps she has taken in this regard. In the event that a liability does arise from this source, and that the husband has actually paid that obligation to HMRC, then he will be able to reclaim from the wife 50% of what he has paid up to a cap of £7,500,000 (e.g. if he receives a liability of £15,000,000 and pays that liability then he will be able to reclaim 50% of that sum, i.e. £7,500,000, from the wife; but if the liability is higher than £15,000,000 then he will still only be able to reclaim £7,500,000 from the wife). The legal mechanism to be utilised to achieve this will be a reverse contingent lump sum. I have selected this cap, which I accept could disadvantage the husband in the event of an HMRC liability at the top end of the scale, largely in the context of my views as to the respective responsibilities for the accrual of this liability and in the context of the effect on the overall liability of the husband’s future behaviour, over which the wife will have no control. The wife’s legal team have suggested that the husband may not be averse to “consider cutting off his nose to spite his face, if he felt he had a realistic prospect of bringing W down with him” – although there is some force in this, I have not regarded it as a significant part of my thinking on the cap. I do not propose to distinguish in this context between a principal liability imposed by HMRC and any punitive element of the liability (e.g. late payment interest or penalties), the difference being factored into the selection of the cap. I have decided to include in my order a condition that the right to reimbursement will depend on the HMRC liability actually having been paid in an effort to introduce clarity into the mechanism; but if (for example) the HMRC obligation (as opposed to the actual payment) has been clearly established prior to the payment of the third lump sum it is clearly an option for the court to take that into account in relation to any enforcement application of the third lump sum. I do not propose to include in the mechanism any ‘long stop’ date for reimbursement by the wife to the husband – her potential obligation for reimbursement will last as long as his potential obligation to the HMRC.

(viii) The parties chattels will be divided by agreement, save that the wife will retain her jewellery and the husband his watches.

(ix) I do not propose to remit any of the arrears of obligations arising from my interim orders. The existing costs orders will remain in force.

(x) Otherwise there will be a clean break to take effect once the second lump sum has been paid in full.

[94]This is my decision. I regard my act of sending this (amended) judgment out by email as the handing down of the judgment and the 21-day appeal period will begin from this date, i.e. 11th June 2025.

[95]I invite Counsel to draft an order which follows from these conclusions.

[96]As discussed during the hearing we will need to convene again to deal with residual matters and I have fixed a one day hearing for this purpose in the Central Family Court before me for an attended hearing on 1st July 2025. I hope on that day to deal with the residual costs issues from the July/August 2024 hearing, the costs orders arising from this hearing and this judgment, judgment publication issues and any issues arising from this judgment for the continuance (or otherwise) of the Receivership order.

[97]In the hope that it may assist discussions and narrow the issues required for determination on 1st July 2025, I express the following provisional views (subject to further submissions):-(i) In view of my findings it seems to me that the wife is likely to have a strong costs argument to the effect that the husband should have accepted the wife’s offer of 19th July 2024 and that his open negotiating position thereafter has been unreasonable.

(ii) Nothing that I have heard in this case so far has caused me to believe that the husband will comply with my orders without the force of the involvement of a Receiver pushing towards extracting value from the corporate interests. I dare say that this could change; but I will need something very clear, specific and reliable if I am to contemplate discharging the involvement of the Receiver.

(iii) My present provisional thinking is that the principles which appear in cases such as Lykiardopulo v Lykiardopulo

[2010] EWCA Civ 1315

probably point to the publication without anonymisation of my judgments in view of the findings I have made about conduct, but I am prepared to hear further submissions on this, on the principle or on the detail.

[98]I believe that the other third parties who may have an interest in appearing on 1st July 2025 have been alerted to this date. I request the legal teams to make absolutely sure this has happened. HHJ Edward Hess Royal Courts of Justice 11th June 2025

Cited in 1 later judgment

Mario Michael v Stalo Michael 2025