YP v MP [2011] EWHC 2956 (Fam)

Case No FD08D01163

[2011] EWHC 2956 (Fam)

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION

Venue Royal Courts of Justice

Date Tuesday, 4 th October 2011

Strand

London

WC2A 2LL

Before

MR JUSTICE MOYLAN

______________________

Between

YPApplicant

-v-

Between

MPRespondent

PETRODEL RESOURCES LIMITED & ORS

Second to Eighth Respondents

______________________

Transcribed from the Official Tape Recording by

Apple Transcription Limited

Suite 104, Kingfisher Business Centre, Burnley Road, Rawtenstall, Lancashire BB4 8ES

Telephone: 0845 604 5642 – Fax: 01706 870838

______________________

Counsel for Applicant: MR TODD QC and MR TROWELL

Counsel for First Respondent: MR POINTER QC and MISS DSON QC

Counsel for Second, Fourth and Fifth Respondents: MR WAGSTAFFE QC

______________________

JUDGMENT

[1]THE JUDGE: This judgment follows the hearing of the wife’s ancillary relief application. The wife is represented by Mr Todd QC and Mr Trowell. The husband is represented by Mr Pointer QC and Miss Dson QC.

[2]A number of companies have been joined as respondents to the wife’s application. They are: Petrodel ResourcesLimited, an Isle of Man company, as second respondent; Petrodel Resources Nigeria Limited as third respondent; Petrodel Upstream Limited, an Isle of Man company, as fourth respondent; Vermont Petroleum Limited, an Isle of Man company, as fifth respondent; Elysium Diem Limited, an English company, as sixth respondent; Petrodel Resources Nevis Limited as seventh respondent and; Elysium Diem Limited Nevis as eighth respondent. None of these respondents took any part in the proceedings until the final hearing when the second, fourth and fifth respondents instructed Mr Wagstaffe QC to appear on their behalf. At the commencement of the hearing Mr Wagstaffe made an informal application for these respondents to be discharged from the proceedings. It was informal in that there was no written application and it was unsupported by any evidence. I rejected the application.

[3]The principal issues in the case are:(a) the extent of the husband’s wealth including the nature and extent of his interest in the respondent companies and;

(b) whether I can make orders directly against properties and shares held in the names of some of the respondent companies.

[4]As to issue (a), to give a brief summary of the parties’ positions in respect of the husband’s wealth, in his Form E sworn on 1st July 2008 the husband asserts that his liabilities exceed his resources in the sum of 48 million. He discloses assets with a combined value of approximately £1.5 million consisting principally of a property called 16 Elnathan Mews, London and shares in Elysium Diem Nevis Limited of which the husband is the sole owner. Set against these assets are liabilities totalling just under £50 million, consisting mainly of an alleged liability under a personal guarantee to the Guaranty Trust Bank Limited of US $100 million. The husband’s section 25 statement dated 20th May 2011 contains no account of his capital resources. He also states that since September 2010 he has had no regular income. In his closing submissions Mr Pointer produced an asset schedule totalling $4 million. This does not purport to be a schedule of the husband’s resources but was clearly intended to give some indication of the wealth that may be available to him.

[5]The wife contends that the husband is worth many tens if not hundreds of millions of pounds. She relies on documents and other evidence adduced on her behalf. It is also submitted that I should draw adverse inferences against the husband as to the likely level of his wealth. The wife relies in particular on an Information Memorandum which she found at the matrimonial home in London in February 2008 and on the evidence of a Mr Le Breton who first gave oral evidence under a witness summons in December 2010. In the Information Memorandum the Petrodel group of companies, which it is admitted the husband controls, was broadly stated to have a value of approximately $250 million. In his oral evidence in 2010 Mr Le Breton said that the husband had told him on occasions between 2001 and 2004 that he was worth in the region of $40 to $50 million.

[6]As to issue (b), again to provide a brief summary of the parties’ respective positions, the wife contends, as set out in her Points of Claim, that orders can be made direct against certain properties and shares held in the names of the respondent companies. Mr Todd relies on the following points in support of his submission that such assets are within the court’s powers under section 24(1)(a) of the Matrimonial Causes Act 1973:(1) that the corporate respondents hold the properties and shares as nominees for or on trust for the husband;

(2) that the companies are the alter ego of the husband who is, effectively, the sole owner and controller of the corporate respondents. Mr Todd relies on authorities including Nicholas v Nicholas

[1984] FLR 285

as establishing that in such circumstances orders can be made directly against property held in the name of a company. He invites me not to follow the then Munby J’s decision of Ben Hashem v Al Shayif

[2009] 1 FLR 115

which decided that a corporate veil can only be lifted if impropriety is established. The husband does not dispute that he controls the corporate structure. He does not accept that he is the owner and has not put forward any clear positive case as to the extent of his interest in the Petrodel group;

(3) alternatively if impropriety is required, Mr Todd submits that it is established in this case in respect of all the relevant companies.

[7]The husband and the represented respondent companies contend that the properties and shares are not held on trust for the husband or held by the companies as his nominee. They also submit that I should apply and follow Ben Hashem and decide that impropriety is not established in this case thereby preventing me from making orders direct against the properties and shares.

[8]The wife seeks the following award:(a) a lump sum of £30.4 million;

(b) an order transferring to her certain properties and shares held in the names of some of the corporate respondents with a declaration that those properties and shares are held by the companies on trust for the husband or that he is otherwise beneficially entitled to them;

(c) these orders are sought on the basis that the wife will sell or realise the properties and shares, with the net proceeds being applied in part satisfaction of the lump sum save for W Avenue which the wife will retain as her home (also in part satisfaction of the lump sum in the amount of its value, namely £4 million);

(d) child maintenance of £24,000 per annum for each child plus educational and medical/dental expenses.

[9]The husband proposes that the wife should receive:(a) a housing fund of £1.6 million;

(b) a lump sum of $150,000 payable by December 2010;

(d) a pension fund of £200,000;

(e) periodical payments for the wife of £27,000 per annum until payment of the lump sum of $1.6 million plus the cost of a driver and housekeeper until July 2013;

(f) all costs relating to the children, including the cost of education, to be paid direct by the husband.

[10]Mr Todd submits that the husband has attempted to frustrate the proper determination of the wife’s financial claims, “through a combination of obfuscation and outright lying”. Mr Pointer acknowledges that there is, “huge controversy as to the assets in the case”. He also acknowledges that Peter Jackson J has found the husband to be in contempt by failing to provide relevant and discoverable documents as ordered by the court. In making this determination Jackson J did not accept the husband’s reliance on an order made by the Nigerian High Court, which I deal with later in this judgment. However, in any event, Mr Pointer submits that this determination was concerned with the production of documents and that this, “does not and cannot mean that the husband’s account of the available resources is automatically or necessarily wrong”.

[11]When assessing the evidence in this case, I fully take into account that a party might lie or exaggerate in support of a true case and/or that they can be mistaken or confused about what happened or have simply forgotten what happened. If I decide that it is a lie and is material, I must also consider the possible reasons for the lie. People can lie for a number of different reasons including, as I have said, to bolster a true case. Further, the mere fact that a person lies about one or more points does not necessarily demonstrate that their whole case is or, indeed, other parts of their case are false.

[12]This judgment has taken me far longer than it should have done largely because I have sought to make sense of the husband’s factual case. Ultimately I have decided that this has been a vain task because the husband has failed so comprehensively to comply with his obligation to provide full and frank disclosure and to give clear evidence that his case does not permit of such an exercise. It became apparent to me that the evidence in this case is not such as would enable me to produce a comprehensive account into which all the various pieces of evidence could be fitted. Notwithstanding the quantity of documents which have been produced, there are far too many gaps for this to be an attainable objective. As I commented during the hearing, the result of the way in which the case has developed is that a great deal of energy has been expended by the husband on seeking to establish what he is not worth rather than the more conventional focus being on seeking to demonstrate what he is worth.

[13]The first task which normally faces a court hearing a financial application under the Matrimonial Causes Act is to determine the factual background including crucially the financial position of the parties; the ‘computation’ stage as referred to in Charman v Charman

[2007] 1 FLR 1246

67. As a result of the husband’s abject failure to comply with his disclosure obligations and to comply with orders made by the court during the course of these proceedings, I do not have the evidence which would enable me to assemble a conventional schedule of assets. One of the matters I must determine is whether the husband’s default is deliberate or whether he has been unable to comply with his obligations in these proceedings. The husband relies very largely on the order made by the Nigerian High Court to seek to explain his default. In addition, however, the husband succeeded in his oral evidence in failing to provide a clear exposition of many of the factual issues raised by these proceedings. With all due respect to the husband, his evidence consisted significantly of obfuscation and dissembling.

[14]The husband’s costs are just under £1 million of which he has paid just over £760,000, purportedly by way of a loan from one of the respondent companies. The wife’s total costs are approximately £1.3 million of which she has paid just under £900,000, very largely by way of a litigation loan. The other respondents have incurred costs of just over £200,000. These are truly staggering sums given the lack of clarity with which I am confronted. History

[15]Turning now to the factual background, the husband is aged approximately 50. He was born in Nigeria and has dual Nigerian and British citizenship. His family moved to England in 1966 and the husband was educated in this country until the end of 6th form. He obtained a law degree in Nigeria and was called to the Nigerian Bar in 1985.

[16]The wife is aged 49. She was born in England but lived in Nigeria until she was aged about 11 when she went to school in the Isle of Man where her maternal grandparents lived. Thereafter, the wife was educated and lived in the UK. She has four siblings. The wife also has dual Nigerian and British citizenship. The wife graduated from Thames Polytechnic in business studies and Spanish in 1984. The wife worked largely in IT until 1994. In 1994/95 the wife obtained an MBA from Cranfield. The wife’s mother and step-father, Mr and Mrs W, live in the Isle of Man.

[17]The parties met in the latter part of 1992 and married in October 1993. They have four children aged 14, 13, 11 and 10, who are all being educated at private schools in England. During the course of the marriage the main family home has been in London, although the parties have also had properties in Nigeria and the Caribbean island of Nevis. Since 2001/2002 their matrimonial home in England has been at 16 W Avenue, London. The marriage came to an end in 2008 and the wife’s petition for divorce is dated 7th March 2008. Decree Nisi was pronounced on 12th December 2008.

[18]The husband’s family is an eminent Itsekiri family and originates from Warri in Nigeria. The husband has four siblings: H aged approximately 52; M aged approximately 44; D aged approximately 34 and; V aged approximately 32. When the husband’s father died in October 1992 the husband became the head of the family.

[19]Following the completion of his education and being called to the Bar the husband moved to work in London in 1986/87. Since then he has worked principally in the oil trade and he began working as an oil trader in the early 1990s. He worked as a senior oil trader for a subsidiary of Salomon Brothers. He was made redundant in 1992 and received a substantial sum of approximately £150,000 net according to his section 25 statement. He then worked for an oil trading company called Vitol until 1996 when he began working for Marc Rich Investments Limited in London. He was employed as global head of oil trading until 2001.

[20]The husband left Marc Rich in 2001 and set up a joint venture called Aurora Energy Trading based in Monaco although registered in the British Virgin Islands. The husband became resident in Monaco and ceased to be resident in the UK. An important witness in these proceedings, Mr Tim Le Breton, began working with the husband in or about 2001. In 2005 Aurora ceased operations and the husband began working full-time in the business of the Petrodel group with the title of chief executive officer of Petrodel Resources Limited. Tim Le Breton also worked with the husband in Petrodel until 2008.

[21]The Petrodel group forms a major feature of this case. There are significant issues as to its ownership including what, if any, interest the husband has in the group, its value and whether any of its assets are directly amenable to orders under the Matrimonial Causes Act. I will deal with these issues in greater detail later in this judgment.

[22]Petrodel Resources Limited was incorporated in 1993 in the Isle of Man and Petrodel Resources Nigeria Limited was incorporated in Nigeria also in 1993. The development of this business is not clear save that the main trading company has, at least until recently, always been PRL Isle of Man. The public documents filed in the Isle of Man state that the company was dormant until 1996/97 and then became a property investment company. The accounts state that it did not commence operations until 2002. The husband asserts that the Isle of Man company acted as agent for Vitol and for Marc Rich from about 1993. Whatever the precise history, for a number of years PRL has been involved in the oil business in what are called downstream activities, namely trade and transportation, and more recently has been involved in upstream activities, namely oil exploration and production. Accounts for the years 2005, 2007 and 2008 are included within the bundles and they show turnover of between $572 million and $1,400 million and profits of between just under $3 million and approximately $6 million.

[23]In his section 25 statement the husband says that the concept of Petrodel was devised by his late father in early 1992. Its predecessor is said to be a company called JH Agrodata Services also devised by his late father. The start up capital for this earlier company is said to have been provided by the husband’s father and the company was run by the husband’s sister, H, and her husband. Agrodata was a company engaged in the collection of data relating to agricultural products. Apart from the husband’s assertion in his statement, I have seen no evidence which supports the assertion that Agrodata was Petrodel’s predecessor.

[24]The husband says that his father was concerned that his assets were not in a sufficiently liquid form to enable them to be accessed in case of emergency. His father, therefore, “instigated the creation of Petrodel” as a business platform in which the whole family could participate. He refurbished an office, put in place transport and clerical staff and, to quote the husband’s section 25 statement, “Provided me with sufficient funds, I recollect the sum of $10,000” to hold “for incorporation in London”. This sum of $10,000 has assumed great significance in the husband’s case because it is said to be the seed capital which entitles the husband’s siblings to an interest in the Petrodel group.

[25]The family has lived in a number of properties in central London. In or about 1995 they sold their then home and with part of the proceeds of sale purchased a property in Nevis, a house called Red Roof. It was purchased through a Nevis company called Elysium Diem Limited. In 1998 16 Elnathan Mews, London was purchased in the husband’s sole name.

[26]In 2001 the final matrimonial home, at 16 W Avenue W2, was purchased in the name of PRL. It was at or about this time that the husband became resident in Monaco and non-resident in the UK. The property was purchased for £1.4 million and approximately £1 million was spent on refurbishments. In his section 25 statement the husband says that it was purchased as a P family investment. The wife says that the husband told her this property was purchased from his bonus income. In his oral evidence the husband said that the funds used in this purchase came from PRL which was then acting as an agent for Marc Rich. He gave this answer to explain, when asked, the source of the funds used to purchase and refurbish the W Avenue property. This evidence does not tie in with the documents obtained from the Isle of Man, as referred to above, which state that PRL was dormant until 1996/97 and then became a property investment company. It also does not tie in with the statement, for example, in the 2008 accounts which say that the company started operations on 25th April 2002. The lack of clarity is also exemplified by the fact that the husband said in his oral evidence he was not sure whether he had put any money into any of the companies. No rent or other payment has ever been made in respect of the family’s use and occupation of this property. The Proceedings

[27]Turning now to the proceedings, the wife’s initial ancillary relief application is dated 11th March 2008. In this application the wife seeks a property adjustment order in respect only of 16 W Avenue. The wife amended her application on 17th June 2010. In the amended application the wife seeks property adjustment orders in respect of 11 listed properties in London and shares in 20 listed companies including the 2nd to 8th respondents. Her application was again amended on 30th March 2011 to include three properties in Nevis and properties in Nigeria.

[28]On 1st April 2008 the wife applied without notice for a freezing order. This was granted by McFarlane J and continued by me at a contested hearing on 25th April 2008. The order applied to a number of properties in London and to shares in a number of companies. The order contained terms as to the provision of information requiring the husband to serve his Form E by 14th May 2008, an extension from 30th April 2008.

[29]The wife’s Form E was sworn on 16th June 2008. She deposes to having no significant resources apart from a potential interest in a property in Nigeria which she estimates is worth in the region of £40,000. The wife states that her annual income needs for herself are £310,000 and for the children £420,000.

[30]By an order made on 19th June 2008 the time for the husband to serve his Form E was further extended to 3rd July. By this order the wife was given permission to adduce a report from an accountant as to the extent of the parties’ resources. The husband was also given permission to adduce a report in response. The parties were ordered to answer prospective questionnaires within eight weeks.

[31]On 14th July 2008 Herbert Smith wrote a letter on behalf of PRL Isle of Man to the wife’s solicitors in response to the freezing order which had been obtained. In this letter it was asserted that the sale of properties owned by PRL or its subsidiaries could only take place with the approval of the directors of which the husband was not one. A draft application was prepared and a draft statement from the husband was also prepared.

[32]An order for maintenance pending suit was made with effect from 24th July 2008. I say ‘with effect from’ because although the terms of the order were agreed at the hearing on that date, the husband’s counsel was then not instructed to agree the order as drafted by the wife’s counsel. As a result, the order was not perfected until 22nd September 2008 by Parker J (who also ordered the husband to pay the wife’s costs summarily assessed). By this order the husband is under an obligation to pay certain specified expenses which total approximately £200,000 pa including holidays, £18,000 pa in respect of general maintenance and £10,000 per month from 1st August 2008 in respect of costs. The freezing order was varied to permit the husband to secure borrowing of £15,000 against the property at 16 Elnathan Mews to enable him to pay £2,500 per month of the sum of £10,000 in respect of costs.

[33]The order for maintenance pending suit, including the provision in respect of costs, was subsequently extended to the final hearing by the order of Bennett J of 27th February 2009. The costs provision had initially been limited to the date of the financial dispute resolution hearing.

[34]The husband has not voluntarily paid any part of the maintenance pending suit order in respect of costs. This is not a minor breach of an order; it is a significant failure. It is made the more significant when contrasted with the fact the husband has paid in excess of £760,000 towards his own costs. The husband has also failed to comply fully with the order for general maintenance of £18,000 pa. The shortfall has not been calculated but he has consistently paid less than the required sum of £1,500 per month. The wife recovered £60,000 in June 2008 from the proceeds of sale of a property in London as a condition of her agreeing to that property being released from the freezing order. She also recovered the sum of approximately £29,000 from the sale of a car pursuant to a writ of Fi Fa issued in respect of arrears of maintenance pending suit in December 2008. Save for the recent order made by Jackson J, the husband has also failed to pay any of the costs orders made against him in the course of the proceedings totalling approximately £80,000.

[35]On 10th December 2008 the husband was ordered to answer the wife’s questionnaire dated 20th October 2008 by 19th December 2008. A number of other orders were made and the husband was ordered to pay the wife’s costs summarily assessed in the sum of £8,273.

[36]On 26th December 2008 the husband, then acting in person, served his replies to the questionnaire. It is immediately apparent that these replies gave very little of the requested information and documents which the husband had been ordered to provide.

[37]On 21st January 2009 the husband was ordered to answer a prospective schedule of deficiencies by 18th March 2009. The wife served the schedule on 4th February 2009. The husband answered this in a haphazard fashion with a series of e-mails which again failed to provide most of the information and documents sought by the wife.

[38]On 27th February 2009 Bennett J ordered PRL Isle of Man, PRL Nigeria, Petrodel Upstream Limited, Vermont Petroleum Limited and Elysium Diem Limited to be joined as respondents to the wife’s ancillary relief application. They were each given permission to apply to be disjoined. None of them sought to take advantage of that permission until the oral application made by Mr Wagstaffe at the commencement of this hearing.

[39]Bennett J also gave directions in respect of the husband’s application dated 21st January 2009 for a downward variation of the order for maintenance pending suit. He directed the husband to file a statement setting out his assets, income and liabilities with documentary evidence in support by 14th April 2009. This application has not been actively pursued since then by the husband.

[40]On 14th January 2009 the husband’s brother, M, commenced proceedings in Nigeria against the husband and PRL Nigeria. In the writ he seeks:

“(1) A declaration that the first defendant,” [being the husband] “is a trustee for life of the trust property and has an obligation to provide for all the family of their late father and their offspring from the estate in accordance with Itsekiri native law and custom; (2) A declaration that the seed money given to the husband by their late father towards the formation and business development of the second defendant, PRL Nigeria, is a conditional gift inter vivos charging the husband with trust obligations under Itsekiri native law and custom to provide for the plaintiff, his siblings and their offspring; (3) A declaration that the issued capital of Petrodel Resources Nigeria Limited is trust property and/or forms part of the estate of their late father; (4) A declaration that the husband and the company cannot in any way deal with the said shares either by way of sale or transfer contrary to the obligations of the husband under Itsekiri native law and custom; (5) A declaration that the plaintiff and his siblings not already shareholders in the company are entitled to shares in the company; In the alternative, a declaration that the husband cannot make any dispositions or dealings in the 3.9 million shares held in the second defendant in any way inconsistent with the beneficial interest of the plaintiff, his siblings and their offspring.”

[41]On 23rd June 2009 the High Court in Nigeria made the following order on the application of M. The application was not opposed by the defendants:

“The first defendant, his privies, assigns, personal representatives or agents are hereby restrained from divulging, communicating, publishing or disclosing to any person any information concerning the business accounts, finance or contractual arrangements or other dealings, transactions or any affairs of the second defendant and the interest of the plaintiff/applicant and his siblings in the second defendant pending the determination of this case; (2) The first defendant, his privies, assigns, personal representatives or agents are hereby restrained from making representation to third parties or otherwise asserting that he is the sole owner of the second defendant pending the determination of this case; (3) The first defendant, his privies … (etc) are hereby restrained from further disclosing information to third parties that the first defendant is the sole owner of the second defendant pending the determination of this case.”

[42]On 12th February 2010 Charles J ordered the husband to reply to the wife’s further schedule of deficiencies dated 13th August 2009 and her further questionnaire dated 9th February 2009 by 12th March 2010, later extended to 14th May 2010. The husband was given permission to apply to vary or discharge the penal notice attached to the order if he provided properly particularised evidence to show the steps he had taken to seek consent from the Nigerian court to allow him to comply with the orders of the English court and his duty of full and frank disclosure and what steps he had taken to obtain the consent of the plaintiff in those proceedings if such consent would be sufficient to obtain a variation of the order in Nigeria. The husband has made no application to vary or discharge the penal notice as permitted by Charles J.

[43]On 17th March 2010 the husband served his replies to the further schedule of deficiencies. These, again, can be easily seen to be deficient. The husband provided additional replies on 1st June 2010 which gave some limited additional information.

[44]On 15th June 2010 Mr Justice Bodey joined PRL Nevis as seventh respondents and ordered PRL Isle of Man to answer the wife’s questionnaire dated 10th June 2010 by 30th June 2010. No attempt was made by PRL Isle of Man, prior to the commencement of this hearing, to answer this questionnaire in accordance with this order.

[45]On 21st June 2010 Baron J vacated the trial fixed to commence on 26th July 2010 and re-fixed it for 13th June 2011. She ordered the wife to serve points of claim in respect of the relief she sought against the second to seventh respondents and ordered the respondents to serve defences. The wife did not, in fact, serve her points of claim until 23rd March 2011. None of the respondents have filed defences.

[46]On 17th December 2010 His Honour Judge Horowitz QC heard evidence from Mr Le Breton pursuant to a subpoena issued against him by order of Eleanor King J. His Honour Judge Horowitz also ordered the husband and PRL Isle of Man to disclose documents relating to a BNP Paribas loan secured against the London properties by 8th January 2011. Neither the husband nor the second respondent complied with the provisions of this order.

[47]On 18th January 2011 the Senior Master ordered that a letter of request be issued to the judicial authorities of the Isle of Man and of Nevis. Neither of these requests has resulted in the provision of any information for documents. In an affidavit provided by a director of PRL Isle of Man, Mr Murphy, he asserts that he is concerned about claims that might be made against the board, for breach of confidence, by the shareholders or commercial partners. Given the husband’s control over the corporate structure, it is hard to understand how these concerns could be genuine. It is not difficult, in my judgment, to see the hand of the husband behind this obstructive line which is also reflected in letters written on behalf of PRL by Manx advocates.

[48]On 28th February 2011 I gave the wife permission to amend her application by including properties in Nevis and Nigeria. I also, again, ordered the second to seventh respondents to file their defences to the wife’s points of claim by 4th April 2011. No respondent has complied with this order. I also again ordered the husband and the second respondent to provide documents relating to the BNP mortgage by 7th March, later extended to 21st March 2011. I additionally ordered the husband to provide information and documents relating to accounts with Credit Suisse in Geneva in his name or in the name of any of the respondents by 18th March, later extended again to 21st March 2011. No such documents were produced by the stipulated dates.

[49]The wife served her points of claim on 23rd March 2011. In summary, they contend:(1) the first respondent is in substance the owner and the controller of all of the other respondents;

(2) the second to eighth respondents inclusive are improperly run and in reality hold property including shares for the first respondent behind a corporate mask;

(3) the court is either on the basis of ownership and control or ownership, control and impropriety able to pierce the corporate veil and transfer the assets of the second to eighth respondents to the petitioner;

(4) further and alternatively, the second to eighth respondents hold property on trust for the first respondent such that the court can transfer that property to the petitioner without the necessity of piercing the corporate veil.

[50]On 25th March 2011 the wife applied for the husband’s committal to prison for failing to comply with paragraphs 2 and 4 of my order of 4th March 2011, which required him to provide information and documents relating to the BNP loan and accounts with Credit Suisse of Geneva.

[51]On 14th April 2011 I joined Elysium Diem Limited Nevis as eighth respondent. I also gave directions requiring the husband, or his solicitors on his instructions, to sign letters of instruction to property valuation experts in London and Nigeria and to a Professor Sagay who was going to give expert evidence on issues of Nigerian law. The husband failed to sign these letters and also failed or refused to give his solicitors instructions to sign them on his behalf. There was no justification for the position adopted by the husband and this is yet another example of the manner in which he has sought to frustrate the proper progress of these proceedings. Despite the husband’s evidence to the contrary, I am satisfied that he then also sought to frustrate, successfully, KnightFrank’s attempts to value the properties in Nigeria. I am confident that no one other than the husband would have had the authority to procure the obstructive letter dated 8th April 2011 written by a law firm called Ethnan & Co which threatened legal action if Knight Frank sought to value a property in Abuja, Nigeria.

[52]On 20th April 2011 Jackson J found that the husband was in contempt of court for failing to comply with the provisions of my order of 4th March 2011. In his defence the husband relied on the order made by the Nigerian High Court on 23rd June 2009. Jackson J decided that this order represented no genuine obstacle to the husband complying with the terms of the order of 4th March. He decided that the husband had not made:

“… any serious effort to put himself in a position to comply with basic obligations within these proceedings. If a person in his position genuinely wanted to comply with orders such as those of 4th March 2011, he would have found the means to do so lawfully a very long time ago.”

Jackson J also commented on how a summary of the BNP account had suddenly been disclosed. He said:

“For reasons which have no rational explanation, the husband’s brother … was apparently persuaded to consent to the release of a summary … There is no indication in the Nigerian order that a person in the position of the husband’s brother is entitled to procure a breach of the order by drip feeding information in this manner. It does not speak of a genuine process as between the parties.”

Jackson J then continued:

“I can think of no good reason … why the Nigerian court should, if the matter had been put squarely before it, have any reason for wishing to frustrate the work of this court.”

I agree with the comments made by Jackson J, which mirror the conclusions I have reached after considering all the evidence in these proceedings. Jackson J accordingly found the husband to be in contempt of court and fined him £20,000.

[53]The hearing before me commenced on 13th June and concluded on 30th June 2011. I was not then able to give judgment. For the purposes of the hearing the parties had assembled a considerable number of documents in some 30 bundles. During the course of the hearing I was only referred to a relatively modest selection of these documents and I propose to adopt the same course in this judgment. I heard extensive oral evidence from the wife and, over a number of days, from the husband. I also heard oral evidence from Mr Le Breton and from two accountants instructed as experts on behalf of the parties, namely Mr Lazarevic of Moore Stephens LLP and Mr Matthew-Jones of PKF UK Limited. Given the limited amount of information, especially current or even recent information, available to the accountants the evidence they were able to provide was of limited assistance to me.

[54]During the course of the hearing the husband was again able to disclose additional documents. He indicated that he was doing so at my request and in an endeavour to assist me. None of this persuaded me that the husband was genuinely seeking to assist me to ascertain the truth about his financial resources. It was too little and far too late for the additional information to assist me to any significant extent. In addition, the fact that the husband was suddenly able to do this, and with surprising speed, further undermined his attempts to rely on the terms of the Nigerian order to explain his comprehensive default in these proceedings. The Companies

[55]Turning now to the companies, it is not possible from the evidence adduced in this case to set out a full account of the nature of the Petrodel corporate structure, nor of the development of its business. I propose, therefore, to set out a summary of some of the evidence:(a) The main operating company in the group, at least historically, has been Petrodel Resources Limited Isle of Man. There are currently 60,000 issued shares, 59,999 of which are registered in the name of PRL Nigeria and 1 in the name of the wife’s mother. The following properties in London are held in the name of the company: the former matrimonial home at 16 W Avenue; Flats 4 and 5, 27 AR NW; Flat 2, 143 AR W; Flat 6, 62-64 BS W;

(b) Petrodel Resources Nigeria Limited is registered in Nigeria. There are currently 4 million issued shares of which 3.9 million are said to be registered in the name of Petrodel Resources Nevis Limited, 50,000 in the name of the wife and 50,000 in the name of the husband’s sister, H. The wife states that she was unaware that any shares were registered in her name until these proceedings. It is effectively a holding company for the Isle of Man company;

(c) Petrodel Resources Nevis Limited is registered in Nevis. The husband has provided no effective disclosure in respect of this company. During his oral evidence the husband said the Nevis company shares are owned by the Nigerian company. This alleged circular ownership is but one of the puzzling features of this case. Until the very end of the hearing the evidence appeared to point towards the Nevis company being merely the ultimate holding company. However, at the very end of the hearing the husband produced bank accounts in the name of this company with Credit Suisse Geneva. These showed not only that the company had substantial funds of several million dollars from which over $2 million had been paid or transferred in the period January to June 2011 but also that these accounts were being used for trading purposes;

(d) Vermont Petroleum Limited. This company is registered in the Isle of Man and was incorporated in April 1996. 49 per cent of its shares are held by PRL Isle of Man and 51 per cent by PRL Nigeria. It is the registered owner of two properties in London, namely 310 Pavilion Apartments, 34 St Johns Wood Road NW8 and Flat 11 South Lodge Circus Road NW8. The wife was a director between 1996 and 2005. The other directors are the husband and his sister, H;

(e) Petrodel Upstream Limited. This company is registered in the Isle of Man. Its one issued share is held or registered in the name of PRL Nevis;

(f) Elysium Diem Limited. There are three companies which have this name. (i) One is registered in the UK. 49 per cent of the issued shares are registered in the husband’s name and 51 per cent in the name of PRL Isle of Man. The accounts state that the controlling party of the ultimate holding company, PRL Nigeria Limited, is not known. The wife has worked as company secretary. This company is the registered owner of three properties in London, namely 16 Clarendon Mews W2 and 18 and 18a Formosa Street W9. It has also managed the properties owned by the other companies in London. The directors are PRL Isle of Man and the husband. (ii) Another Elysium Diem Limited company is registered in Nevis. 100 per cent of its shares are registered in the husband’s name. This company is the registered owner of the property in Nevis called Red Roof and of another property on the Clifton Estate. (iii) The third Elysium Diem company is registered in Nigeria. 40 per cent of the shares are registered in the husband’s name. It is the registered owner of property in Nigeria, a property in Abuja called Plot 502;

(g) Elysium Fields Limited is a company registered in Nevis. 70 per cent of the shares are registered in the name of EDL Nevis and 30 per cent in the names of the couple who run an equestrian centre owned by the company.

[56]The Information Memorandum relied upon by the wife is dated February 2008. It states that it has been prepared by Petrodel Resources Limited and is designed to provide information in relation to the development of the mini-conglomerate group of companies operating under the umbrella of PRL. It states that it has been prepared to provide the information necessary to inform a judgment over PRL because the company is seeking short-term credit facilities to provide working capital for future development. Such credit facilities were not, in fact, ultimately sought.

[57]In the diagram contained in the Information Memorandum PRL Nevis is placed at the head of the corporate structure. As referred to above, during his oral evidence the husband made the surprising assertion that the Nevis company is itself a wholly owned subsidiary of PRL Nigeria of which the Nevis company owns 97.5 per cent of the shares. If this were true, it would appear to follow that, effectively, there would be no one who would be entitled to share in the assets of these companies on liquidation, nor any means of distributing the profits for the benefit of shareholders. In his oral evidence Mr Le Breton said that he was told by the husband that the shares of the Nevis company are held for the husband’s benefit through a trust. Clearly the shares must be held for someone’s benefit.

[58]In the Information Memorandum it is said:

“Petrodel Resources Limited is an Isle of Man registered principally African based petroleum upstream and downstream integrated group and investment company. It is privately owned through Petrodel Resources Nigeria Limited and ultimately the holding company of Petrodel Resources Nevis Limited.”

[59]A number of copies of this document were found by the wife in the matrimonial home and she photocopied a number of pages. In the copy as found by her there appears, at paragraph 4.2, the heading “Ownership” under which these words also appear:

“Petrodel is 100 per cent owned and controlled,” [then the word ‘by’ is missing] “MP. Michael has a track record of entrepreneurial ingenuity and reliability and for bringing value added to the opportunities which he sources.”

The husband later produced another copy of the Information Memorandum in which the word “owned” no longer appears, although the paragraph remains headed “Ownership”.

[60]PRL Nigeria appears below the Nevis company in the Information Memorandum diagram. As I have said, it was incorporated in Nigeria in 1993. From a search undertaken on behalf of the wife in 2009 the initial directors and shareholders are listed as the wife (50,000 shares), the husband (150,000 shares) and the husband’s sister, H (50,000 shares). The share structure changed in 1996 when the issued share capital increased to 4 million. The wife and H remained the owners of 50,000 shares each, whilst the husband became the owner of 3.9 million shares. In 2006 it appears the husband transferred, he says sold, his shares to PRL Nevis. The husband’s expert accountant said that this looked like a restructuring in which the husband received shares in the new holding company in substitution for his shares in PRL Nigeria.

[61]PRL Isle of Man was, as I have said, incorporated in 1993. Its first directors were the wife’s mother and step-father and its first shareholders were the husband and wife each with one share. The wife’s step-father remained as a director until 2008. He was also the company secretary until October 2005 when he was replaced by a corporate secretary called Leinster Secretaries Limited. The wife says that her father was dismissed without even a board meeting. The current directors are Monica Walters and Mr Murphy. There is some dispute between the parties as to Miss Walters’ qualifications. She is a Nevis national who was appointed as a director in 2003. The wife says that she is employed by the parties to assist them with household tasks. The husband accepts that she does this work but says she also holds a position with the Nevis Historical Society. I have not heard evidence from Miss Walters but, whatever her status, I am satisfied that she has taken no more than a nominal part in the management of PRL. Mr Murphy is a professional director and provides his services through Leinster Management Limited.

[62]In 1994 the husband transferred his share to the wife’s mother who still owns one share. The documents which have been obtained from the Isle of Man show the allotment of 1,998 shares to PRL Nigeria in 1995 and a further allotment of 58,000 shares to PRL Nigeria also in 1995. At some stage it appears that the wife’s share was also transferred to PRL Nigeria giving it 59,999 shares.

[63]On the last day of the hearing, the husband for the first time produced accounts for this company. They contain no reference to PRL Nigeria having any shares in PRL Isle of Man but they purport to show that the company has one share in PRL Nevis with a nominal value of approximately 50 pence. The absence of any reference to PRL Isle of Man shares is but one of the puzzling conundrums in this case.

[64]According to public documents obtained by the wife from the Isle of Man, the company was dormant until 1996. In the annual return to 21st April 1997 the company’s principal trade or business is said to be property investment. The first sign of activity is the registration on 16th April 1996 of a memorandum of cash deposit in favour of the Royal Bank of Scotland (IoM) Limited securing the company’s liabilities to the bank. There is also registered on 8th January 1997 a charge dated 16th December 1996 in favour of the United Bank of Kuwait to secure all monies owing to the bank pursuant to a guarantee given by the company “of the borrowings from the bank (to) Elysium Diem Limited”. The properties charged are Flats 4 and 5, 27 AR and Flat 3, 143 AS, London.

[65]PRL subsequently charged the properties in its name to Ahli United Bank (UK) Plc. The mortgage deed is dated 10th November 2004 and it covers 27 AR, 64 Beethoven Road and 143 AS. The existence of this liability does not appear to be reflected in PRL’s accounts. On 15th September 2006 PRL entered into a mortgage deed in favour of BNP Paribas to secure the sum of $14.625 million. I will return to this liability later in this judgment.

[66]As I have said, the accounts for PRL state that the company started operations on 25th April 2002. There is a reference to the company preparing accounts for the first time for the year ended 31st December 2004, the annual return for the previous year indicating that no accounts had been prepared. The total stated profit for the years 2005 to 2007 inclusive is just under $13 million. The 2008 profit is $450,000 but this is after deducting $5.8 million for diminution in the value of investments, largely investment properties. The 2008 accounts also show, under creditors, directors’ current accounts of just over $10 million.

[67]As I have explained, PRL Isle of Man took no part in these proceedings until Mr Wagstaffe appeared at this hearing. After some comments from me about the absence of any evidence from PRL, an affidavit from Mr Murphy was produced on 22nd June 2011, some 10 days after the commencement of the hearing. Mr Murphy has been a director of PRL since 2005. He is also director of Leinster Secretaries Limited who act as company secretary for PRL Upstream and Vermont.

[68]Mr Murphy’s affidavit contains very little information of assistance to the issues which I have to decide. Mr Murphy was unable to come to court to give oral evidence or be cross-examined. In his affidavit he said he was unable to attend due to his commitments with Leinster and due to his health. The commitments were explained to me by Mr Wagstaffe as involving travel to, if I recall correctly, Liechtenstein. It seemed to me unhelpful for Mr Murphy to have been chosen to give evidence on behalf of PRL if his commitments and health were such that he might not be able to attend court. Mr Todd had made it clear that any deponent would need to attend court to be cross-examined.

[69]After the conclusion of the hearing further evidence was produced consisting of very brief letters from Mr Murphy’s GP and a letter from 2006 from a consultant cardiologist. The latter refers to Mr Murphy having cardiac arrhythmias from about 2003 – in other words, since well before he took on the role of director of PRL. The evidence, including the terse comment by Mr Murphy’s GP that he is not medically fit to attend court on the basis of high blood pressure and cardiac arrhythmia which can be worsened by stress, does not satisfy me that Mr Murphy was, indeed, unfit to attend court. It seems to me more likely, and I so conclude, that Mr Murphy was unwilling rather than unable to attend court.

[70]In any event, I can give very little weight to the generalised assertions contained in Mr Murphy’s affidavit, for example that he rejects:

“… absolutely and entirely any suggestion that in relation to each and every company of which I am a director, including PRL, that I do not apply my own mind and exercise my own judgment in relation to each and every issue that I am, or more generally the board is, called on to decide.”

A very broad statement but supported with no detail at all. Further, this assertion runs contrary to the balance of the other evidence I have heard, including the significant evidence given by Mr Le Breton that the directors acted pursuant to the husband’s instructions. In this context I also remind myself of the terms of the husband’s contract as CEO which give him complete discretion in the management of the company’s affairs. I am satisfied that the directors of the group, including Mr Murphy, act in accordance with instructions given by or on behalf of the husband. The husband was unable in his oral evidence to provide details of any specific occasion when the directors had not acted in accordance with his instructions.

[71]As referred to above, the PRL (IoM) accounts contain, under creditors, a directors’ current account entry for just over $10 million in both 2007 and 2008. When the husband was first asked in cross-examination to whom any money in a directors account would be payable he replied, a director, being Miss Walters and Mr Murphy. He was then shown the entry in the 2008 accounts. This entry was then explained by the husband as being the result of a misstatement. He said that the properties had been valued by Knight Frank in 2006inpounds. This valuation was then included in the accounts in dollars. The difference between these figures, he said, “makes up the bulk” of the sum appearing as being owed to the directors. It was not possible to understand the evidence given by the husband on this subject. Given that the properties held in the name of PRL are currently valued at just over £5 million, it seems reasonable to conclude that the amount appearing in the accounts, if not converted to dollars, would have been an understatement. This could simply have been rectified. It does not explain why a substantial sum had to be credited in the way alleged, nor where the sum of $10 million comes from.

[72]The draft 2009 PRL accounts were produced during the course of this hearing by Mr Murphy. In these accounts the sum due to the directors is given as $3.6 million. The husband was unable to provide any explanation for this figure, giving the surprising answer that he had first seen this document the day before.

[73]The husband accepted that these sums would not be due to the listed directors. The husband also said on one occasion in his oral evidence that, as he is not a director of the Isle of Man company, he does not have a director’s current or loan account with PRL. Despite this latter evidence, it is clear that there is no person other than the husband to whom such sums could or would be due. Indeed, in his section 25 statement the husband gives examples of Petrodel incurring expenditure for the benefit of the wife’s relations which he says would have been charged to, “my director’s loan account” if they were not permissible business expenses.

[74]The loan account has not been produced. Indeed, there is no direct evidence at all as to how the husband’s income and bonuses are dealt with in PRL’s accounts save possibly for references to directors’ remuneration which, given the amounts, are very unlikely to relate to the actual directors. Further, the amounts given for directors’ emoluments are significantly less than the annual amounts spent by the husband on himself and his family and for which there appears to be no significant source other than PRL Isle of Man. The husband told me that he does not know how his income and bonus are dealt with in the accounts. When he was asked whether he receives any benefits from PRL other than his salary he replied that this is an accounting question. When asked in cross-examination to explain how some of the payments relating to the wife’s mother were for the company’s benefit, the husband replied that she was a shareholder. When Mr Todd asked whether a dividend had been declared, the husband said he was not sure how this benefit or these payments had been achieved.

[75]It was suggested to the husband in the course of his cross-examination that he just draws from PRL whatever he and his family need. He denied this but when then asked how he paid for school fees he said he would either pay it himself or he would take a director’s loan. The only company of which the husband is a named director is PRL Nigeria. There is no indication that this company has had sufficient resources to enable school fees to be paid. As the husband’s employment contract permits him to set his own bonus, the whole exercise is artificial in any event as, if required, he could simply ascribe all payments made for his or his family’s benefit as being part of his bonus. I have no doubt at all that the husband does, indeed, just draw from PRL whatever he and his family need, as and when they need it.

[76]The husband has paid approximately £760,000 towards his legal costs of these proceedings. In his oral evidence he said that this sum had come from Petrodel. He was not sure which of the Petrodel companies but it could have been the Isle of Man or the Nigerian or the Nevis company. This was, again, a puzzling answer as on the husband’s case it was difficult to understand how such a sum could have been paid to him or on his behalf by either the Nevis or the Nigerian companies. The husband, no doubt seeing the difficulty with his answer, later added that this sum had been lent to him pursuant to a written agreement signed probably in 2008. I am not aware of any previous reference to the existence of any such agreement, nor has it been produced.

[77]In his oral evidence the husband told me that PRL is still trading in gasoline but has not undertaken a trade since a trade effected in early 2010 and in respect of which, he says, payment remains due from the Pipelines and Products Marketing Company (PPMC). He also said that PRL is no longer trading in crude oil. During the course of his cross-examination he said, “We haven’t traded any crude oil since 31st December”. In his section 25 statement he said:

“In September 2010 Petrodel lost its NNPC crude oil lifting contract. As a result I have had no regular income from Petrodel Resources Limited since that time. This is causing me to suffer financial problems and so I have been interviewing for a full-time position with other trading companies. At present I have yet to secure such a position. I am still trying and hope I can secure a full-time position in London by September 2011. I am also waiting to see whether I am given a government position in Nigeria. I should find out fairly shortly. If I do not, I will revert to seeking a salaried post in the oil industry.”

[78]When the husband was asked during the course of his evidence whether there would have been any documentary credits since 1st January 2011 involving any of the companies referred to in this case, the husband replied not with BNP but he would have to check whether there had been any with any other banks. This is an example of a deliberately evasive answer, as I have no doubt that the husband is aware of all the trades being conducted by all the companies. It later emerged from documents produced during the course of the hearing that substantial trades have continued to be made by companies within the group being, probably, either Vermont Petroleum and/or Nevis. It follows that the suggestion in the husband’s statement that his source of income had dried up is clearly also false. The London Properties

[79]Turning now to the London properties, save for Elnathan Mews all the London properties are registered in the names of a company - PRL Isle of Man, EDL or Vermont. Most are subject to a charge in favour of BNP Paribas and all save 16 W Avenue are subject to a charge in favour of Ahli. The properties have a combined gross value of £11.3 million. The total due to Ahli is £1.9 million. The sum due to BNP Paribas is less clear. It is clearly of significance to this case for the true extent of the amounts charged against these properties to be disclosed by the husband. In respect of the BNP loan he has failed to do so.

[80]In his written submissions at the start of the hearing Mr Pointer put the sum due to BNP as being $14.625 million. The charge or charges relate to the sum of $12.5 million which was borrowed by PRL in 2006 to finance the deposit paid for the proposed acquisition of an oil block in Nigeria. PRL then withdrew from this proposed acquisition and there is an issue as to whether the sum has or has not been repaid or will or will not be repaid.

[81]During his evidence the husband asserted for the first time that the sum due to BNP had been reduced to $7.6 million. This piece of evidence was given by reference to a BNP statement dated 6th April 2011 which had been produced during the course of the committal proceedings. This statement contains a summary of the sums due from PRL to BNP. Under ‘letters of credit’ the total amount due is $89 million. Under ‘loans’ the total amount due is given as $33.7 million. Of this latter amount the husband said that $7.6 million is in respect of the loan the subject of the charges. The balance of approximately $26 million was said by the husband to be a new loan which had been obtained to fund a trade or trades effected by PRL in February/March 2010 in respect of which the company has still not been paid by the Nigerian government. The sum should have been paid by the end of May 2010. It is interesting to note that the BNP statement refers to letters of credit with a total amount due of $89 million suggesting continuing trades.

[82]During the course of his evidence the husband produced some additional documents, largely bank statements, relating to BNP. From these it appears that the BNP loan probably reduced to $7.6 million by June 2009. These documents also show that BNP has a cash collateral of just over $4 million and also a guarantee from Credit Suisse. The latter is said by the husband to be secured against an account with Credit Suisse. Statements from Credit Suisse were also disclosed by the husband later during the hearing. Prior to the disclosure of these latter statements the husband said that the Credit Suisse account(s) were in the name of the Isle of Man company with a balance of something over $2 million. In another unexpected development, the account holder of the statements which were disclosed is PRL Nevis and the statement address is “Personal, Mr MP c/o Petrodel Resources Limited”, Monaco.

[83]In his oral evidence the husband said that these monies were generated by Petrodel working with or for Marc Rich and Aurora. The Credit Suisse statements were also said to hold the sum of $2.8 million which had been paid by a company called Afren Plc in respect of costs incurred by Petrodel in the Tanga oil block when Afren acquired an interest in the block. The statements also show very substantial trades being conducted through letters of credit in 2010, apparently under the name of PRL Nevis. This latter development was unexpected because the husband’s case had been, as he told Mr Matthew Jones, that PRL Nevis is a holding company.

[84]If the sum of $4 million, said to be held by BNP as collateral, was set off against the sum due of $7.6 million, this would reduce the loan charged against the properties to approximately $3.6 million. Further, if BNP called on the guarantee from Credit Suisse, the amount might be reduced by $2 million or more. However, as a result of the husband’s failure to give clear disclosure, the evidence is not sufficient for me to reach any firm conclusions as to what the true net position is in respect of the loan due to BNP.

[85]

(i) Flat 6, 62-64 BS was purchased by the husband on 19th February 1988 for £70,500. He transferred the Avenue to PRL on 11th August 2000 for £85,000. It is now valued at £335,000.

(ii) Flat 4, 27 AR was purchased by the husband on 5th April 1991. On 27th December 1995 the husband transferred the property to PRL for £1. It is now valued at £250,000. The husband could not explain why this or any other property had been transferred to PRL saying that the conveyancing solicitor would have the answer as this transaction had been undertaken at the instigation of the solicitor and the accountants.

(iii) Flat 2, 143 AS was purchased on 26th November 1992 in the name of a person called Jimmy Lawrence. The husband asserts that the funds used for the purchase were provided by PRL. On 28th March 1996 the wife transferred the property to PRL for £1. It is not clear to me how the property came to be in the wife’s name by 1996. This property is now valued at £345,000.

(iv) The freehold of 143 AS is said to have been purchased by the wife and the leasehold owner of one of the flats in the building in 1996. The wife again transferred the property to PRL in 1998. The husband asserts that the funds used for this transaction were also provided by PRL.

(v) Flat 5, 27 AR was purchased for £48,650 in the name of the husband’s brother, M, on 3rd March 1995. M transferred the property to PRL for £1 on 27th December 1995.

(vi) 18 Formosa Street was purchased in the name of EDL on 16th December 1996 for £170,000. It is currently valued at £1.1 million.

(vii) 16 Elnathan Mews was purchased in the husband’s name on 31st December 1998 for £170,000. It is currently valued at £1.25 million.

(viii) 16 W Avenue was purchased in the name of PRL on 14th May 2001 for £1.4 million. It is currently valued at £4 million. The wife says the husband told her it was purchased from his bonus income. The husband says that it was purchased with Petrodel’s resources. Given that at the time PRL, according to its accounts, had not commenced operations, it is difficult to see where it would have got the resources from to effect this purchase and the cost of refurbishment. In his section 25 affidavit the husband says that this property was purchased as a “P family investment for a rainy day”. I am satisfied that the purchase and refurbishment of W Avenue was paid for from the husband’s (bonus) income.

(ix) 310 Pavilion Apartments was purchased in the name of Vermont on 23rd July 2001 for £635,000. The monies used in this purchase appear to have come from an account in the name of PRL. This can be seen from the bank transfer documents which have been disclosed. Indeed, in a letter dated 19th July 2001 from the conveyancing solicitors to Lloyds Bank TSB the client is said to be PRL. It is currently valued at £1.4 million.

(x) 11 South Lodge Circus Road was purchased on 16th January 2004 in the name of Vermont for £700,000. In one of the few documents showing the monies used in a purchase, a substantial part of the monies, over £500,000, was remitted by PRL. This property is currently valued at £1.45 million.

(xi) 16 Clarendon Mews was purchased in the name of EDL on 13th September 2004 for £482,000. The monies used in this purchase appear to have been transferred to the conveyancing solicitors by PRL Nevis on 30th September 2004. This property is currently valued at £900,000. Overseas Properties

[86]Turning now to the overseas properties, EDL Nevis is the registered owner of(a) the property called Red Roof on the Jones Estate, St Thomas, Nevis which the parties purchased in or about 1995 and which has been valued at approximately $1.8 million; and

(b) a property on the Clifton Estate, Nevis which has been valued at approximately $1.1 million. There is also an equestrian centre which, as I have said, is operated by Nevis residents and which appears to have no significant value.

[87]PRL Nevis owns a condominium at Nelson’s Spring, Nevis which is valued at $675,000.

[88]EDL Nigeria owns Plot 502, Wuse, Abuja. The husband owns a property at 22 Deeper Life Street, Asokoro, Abuja. These properties were inherited by the husband from his father. He has built a house on the Asokoro property which the wife has estimated as being worth in excess of £1.5 million. The husband also owns other properties in Nigeria inherited from his father. They include, according to the information supplied to Professor Sagay, various plots of land in Lagos (plus a half built block of flats) and various parcels of land and houses in other parts of Nigeria including what the husband described in his oral evidence as huge parcels of land in Warri. None of these properties were disclosed in the husband’s Form E. The husband could provide no explanation for their absence. His attempt to say that it was because he was not clear about the effect of customary law until Professor Sagay’s opinion was received, was not an explanation for the complete absence of any reference to these properties.

[89]In respect of the property on Deeper Life Street the husband said that something in excess of $1 million had been spent on building the house on the property. Of this he had provided approximately $200,000 and the balance had been provided by Petrodel. This led the husband to being asked what Petrodel had received in return for this payment. This wrong-footed the husband as he had clearly not been thinking where his answers were going. He replied that he thought there was a loan between himself and Petrodel. This last answer was clearly made up by the husband to seek to explain his previous answers. He could not explain why it did not feature in his form E. The Wife’s Evidence

[90]The wife has filed a large number of statements during the course of these proceedings but I propose to refer specifically only to her Form E and her section 25 affidavit.

[91]The wife’s Form E was sworn on 6th June 2008. She discloses few resources. She puts her income needs, as I have described, at £310,000 p.a. for herself and £420,000 p.a. for the children. Her capital needs comprise principally the former matrimonial home. The wife’s section 25 affidavit was sworn by her on 16th May 2011. In this she says that during the marriage the husband’s career blossomed and his personal wealth exploded. She asserts a “firm belief” that the husband is the beneficial owner of all the properties held in the names of the companies. She also believes that PRL is wholly owned and controlled by the husband.

[92]In her oral evidence the wife said that no one has ever told her that anyone other than the husband has an interest in the Petrodel group. Nor has anyone ever referred to the existence of any trust for his siblings or their children. It is her firm belief that H, who has a law degree from King’s College, would have taken active steps in these proceedings if she had any interest in any of the companies. The wife has never met anyone other than the husband who has claimed to be a shareholder in any of the companies, nor anyone other than the husband who has given instructions concerning the companies’ affairs. In their conversations the husband always talked about “I” or “we” or “for us”. The extent of the husband’s control, she says, is reflected in the tight financial control he exercises over the companies. She also refers to how she and the husband alone made decisions about mortgaging the properties in London and buying and selling other properties.

[93]The wife also points to the way in which the family’s expenditure appears to have been funded by PRL from its account with the Royal Bank of Scotland in the Isle of Man. The payments made from this account include school fees and other educational costs, holidays in Italy, and the cost of a chalet in Meribel which has more recently featured in the draft accounts as an expense.

[94]The husband told her in one year when he was working for Marc Rich that he earned between $2 and $3 million. He also, as I have said, told her that he bought the property at W Avenue from his bonuses.

[95]The wife’s oral evidence dealt with a broad range of subjects. She does not believe that the husband’s account as to how Petrodel started is true. It is her understanding that the husband was not on good terms with his father in the period before his death and had not spoken to him for some time until very shortly before his death. In respect of the claim by the husband that his family has an interest in the Petrodel group or that there is a trust for them, the wife says that neither the husband nor any of his siblings ever mentioned that they had any such interest or that there was any such trust. She would have expected somebody to have told her or that she would at least have heard of it, if it was true. She was aware of disputes concerning their late father’s property in Abuja and Warri, including that the husband had taken the land in Abuja for his own use. She was not aware of any other issue between the husband and his siblings.

[96]Throughout the time the wife dealt with EDL’s affairs no one ever said that any other member of the family had an interest in that company and no one other than the husband ever gave instructions as to what was to happen by way of refurbishments or otherwise. She says she was not aware of the alleged protracted discussions with H in respect of the purchase of W Avenue. She has no recall of the discussion alleged by the husband to have taken place in Italy. The only time there was any reference to the husband’s siblings having shares in Petrodel was when the husband was considering floating the company. He told the wife that he was proposing to give shares in the company, when it floated, to her and to his siblings.

[97]When the wife was asked about the husband’s evidence dealing with the transfer of his shares in PRL Nigeria to PRL Nevis, the wife said that they had had a discussion between about 2004 and 2006 about what the wife should do with the properties in the UK if anything were to happen to the husband. The husband told her that she should sell everything and move to Nevis. The wife was to use the proceeds of the sale of the properties in the UK to meet her living expenses. The husband also said that he was thinking of setting up a trust which the wife understood to be for their benefit and which she believes was to be in Nevis. The Husband’s Evidence

[98]The husband’s Form E was sworn on 1st July 2008. The total value of his capital is put at minus £48 million. As I have described at the start of this judgment, he discloses assets with a combined value of £1.5 million and liabilities totalling just under £50 million.

[99]The personal guarantee to Guaranty Trust Bank Limited Lagos for $100 million is said to be in respect of a facility provided to Petrodel Resources Limited for the importation of petroleum products. This guarantee is said not to be secured on the company’s assets because the bank insists on the husband’s personal guarantee. The husband later produced a copy of one of the letters from Guaranty Trust Bank offering banking facilities. It is dated 19th May 2008. It is the offer of a loan to finance the importation of refined petroleum products. The security which is required is a payment undertaking from the NNPC, the Nigerian National Petroleum Corporation, to remit the proceeds of the contracts to Petrodel’s account with GTB.

[100]The husband’s assertions in his Form E were misleading as he makes no reference to the main security provided which was the proceeds of the contracts. Further, the document shows that there were, in fact, two facilities and that the husband’s guarantee is limited to the second in the sum of $20 million. In the husband’s oral evidence he insisted that he is or was potentially liable for the full amount of $100 million although, as I have said, this conflicts with the letter. In either event, it is notable that the bank considered it appropriate to procure a guarantee from the husband for either $20 million or $100 million, providing some indication of the bank’s view of the husband’s wealth. Later in his oral evidence the husband said that the guarantee of $100 million was, in fact, to the United Bank of Africa. This was the first mention of the existence of any such guarantee.

[101]In the section of the Form E which deals with business interests, the husband states that he is a 40% shareholder in Elysium Diem Ltd in Nigeria (a company said to be engaged in property development of the husband’s late father’s estate), a 49% shareholder in Elysium Diem Ltd in England and a 100% shareholder in Elysium Diem Ltd in Nevis. The value of these interests are put respectively at $140,000, nil (because the company is in debt) and £600,000. In respect of directors’ accounts the husband states that he is owed hundreds of thousands of pounds by the English company, otherwise he refers to no director’s account at all. The husband does not refer to his having any interest in any of the Petrodel companies. He refers only to being a director of PRL Nigeria.

[102]Other assets consist of bank accounts and shares totalling £135,000, chattels (cars, watches and paintings valued at £165,000) and a pension fund worth just under £160,000.

[103]As to his income the husband states that his income as chief executive officer of PRL for the last financial year was $500,000. He estimates his total net income for the next twelve months at £330,000. His capital needs are said to be for a home in London costing, with furniture, £2.7 million and a car. His income needs are put at £610,000 p.a. for himself, an increase from his current expenditure of £324,000, and £190,000 for the children, making a grand total of £800,000. The total of £610,000 includes personal general expenditure of £240,000, an increase from £148,000, staff expenditure at £60,000 and housing costs of £208,000, part of which is a mortgage of £162,000.

[104]In an annex to his Form E the husband makes a number of assertions. He states that the parent company of the group is PRL Nevis. As to PRL Nigeria the husband says that until 2006 he was a shareholder in the company. He states:

“Petrodel Resources Nigeria Limited is in turn owned by my wife, my sister, H, and until 2006 I too was a shareholder of the majority of the shares. To understand the situation better it is necessary to go into some history. In 1992 my father died. Prior to that, he had given me his business contacts and also the seed money to start up the company in Nigeria. In keeping with Nigerian customary law it was to be for the benefit of his children. At inception my sister, my wife and I were the shareholders and to avoid conflict with my then employers, in 1996/97 I divested myself of my shares and handed them to a lawyer to be held effectively in ‘trust’ for my children. At this time I was an employee of the Marc Rich group. I handed the shares to this Nigerian lawyer with a free hand but also with the option to buy my shares from me and also any debt of the company. In 2003 I became involved in contentious litigation in London on behalf of my employer, Petrodel Resources Limited and the Nigerian company and sued for $3.7 million. There was then a counterclaim for $142 million. This litigation took three years and cost $3.6 million effectively to be fought to a standstill and the result being that both parties walked away. Both Petrodel Resources Limited and I effectively lost a substantial amount of money. During 2006 I decided I did not want to have assets in my name because of the litigation that was going on. Furthermore, I was shot at on one occasion and also pursued by armed robbers between 2004 and 2006. I also flew a great deal as I do now and was concerned if anything happened to me for the future of the family, ie my wife and four children. The lawyer therefore agreed and advised me to sell the shares to Petrodel Resources Nevis Limited which became the majority shareholder in Petrodel Resources Nigeria Limited. Between August and October 2006 I advised my wife and siblings of the intention of the Petrodel Resources Limited board at some future stage to float the Petrodel Resources group in whole or in part because the company had acquired exploration rights in Tanzania and had a contractual obligation to invest in excess of US $300 million. It had also acquired exploration rights in Nigeria for which it paid $14.5 million and for which it required up to $1 billion to develop. It was agreed that in the proposed float entity my wife would have shares in her own maiden name and my siblings would have shares which they would hold in trust for their children. In addition shares would also be issued to staff and third party investors. There would be a majority block of shares held in trust for my children and provision made for my wife. This never happened because the market collapsed in February 2007. Accordingly, all the shares remain with Petrodel Resources Nevis Limited. The Memorandum of Information which was referred to in the freezing order proceedings was prepared in support of this concept which I still hope may be implemented in the future.”

[105]The assertions made in this annex are not easy to understand. In 1996/97 the husband says that he “divested” himself of the shares. This is difficult to square with his assertion that there was also an option to buy these shares from him. It is also difficult to square with his assertion that he sold the shares in 2006 to PRL Nevis. In addition, the husband clearly asserts that he is able to ensure that on the proposed floatation of PRL shares would be allocated to the wife and in trust for his and his siblings’ children.

[106]With his Form E the husband also disclosed a copy of his contract with PRL. The contract contains a term which states that the husband:

“shall be assumed to report to the board for issues pertaining to the management of the company, yet you shall have and employ full discretion with the way you manage all the affairs of the company insofar as your actions are for the benefit of the company and its shareholders.”

The company also gives the husband the complete sole discretion to determine his own bonus. Mr Le Breton told me that he and the husband had together drafted this contract without the intervention of anyone else, with the husband alone determining the final draft.

[107]The wife served a questionnaire dated 20th October 2008 on the husband. The husband was required to answer it by 19th December and his replies were provided on 26th December. The husband was then acting in person but, as referred to earlier in this judgment, these replies gave very little of the requested information and documents. They do not provide the requested details in respect of the listed properties - including information and documents substantiating the source of the funds used to effect the purchase which, it is said in the replies, “is being requested”.

[108]There is no answer at all to the request to identify all directors’ loan accounts and any other sums invested in each company by or for the husband, nor to the request to provide full details of all remuneration and/or other benefits received by the husband since 1st March 2005. The husband does not answer questions relating to Petrodel. He states that he is not then able to answer the questions as he has a high fever and does not have the manpower available but that the questions will be answered in the New Year (ie 2010).

[109]In question 16 the husband is asked, in respect of a number of companies including PRL Nevis and PRL Nigeria, to provide information and documents including detailing the beneficial ownership of the companies, financial accounts or a schedule of assets, valuations and directors’ loan accounts. Nothing is provided in response to these questions beyond a reference to paragraph 2.12 of the husband’s Form E which lists the companies of which he is a director. In respect of the question about trusts the husband replies, “Where applicable this information is being requested”.

[110]The wife’s schedule of deficiencies of 4th February 2009 was answered by the husband via a number of e-mails. The answers have been assembled in bundle F. Although this is a large bundle, in my judgment it is again fair to describe the answers as giving little of the requested information and documents. To take examples, the husband was requested to provide a copy of the completion statement in connection with the purchase of each property listed in the questionnaire and, where not apparent from the completion statement, to state and produce documentation to substantiate the source of the funds used to effect the purchase. The answer given is that the source of the funds is apparent from the completion statements. This is not correct. The information and documents requested in question 16, as referred to above, are again not provided. In respect of the question about trust interests there is disclosed only a letter dated 6th June 2008 from lawyers acting on behalf of the husband’s sibling.

[111]The statements filed by the husband as directed by Bennett J in support of his application to vary the order for maintenance pending suit are dated 14th April 2009. The husband describes himself as having been an employee since 1986. He says that his gross salary as CEO of PRL is $300,000 per annum with an additional discretionary bonus. He says that no bonus was paid for 2008 because of the group’s poor performance. He attaches an updated Form E which states that he has net assets of minus £67 million. The husband says his business assets consist of interests in the Elysium Diem companies. There is no significant supporting documentary evidence in respect of these interests or his alleged liabilities.

[112]On 17th March 2010 the husband served his replies to the wife’s further schedule of deficiencies. In response to many of the questions the husband states that he is unable to answer because of the Nigerian court order of June 2009. This includes the questions concerning company and trust interests. As a result, the replies to the questionnaire are not informative. It is difficult to understand how the information and documents sought by these questions could all be covered by the Nigerian order which relates to the affairs of PRL Nigeria and the husband’s interest in it, especially when the husband does not admit to having any interest in PRL Nigeria. The husband does say that the beneficial owners of the property in Zone 5 Abuja are himself and his siblings, even though the legal title is in the name of Elysium Diem Nigeria Limited.

[113]In respect of all the specified London properties, the husband states that the beneficial owner of all of them is “Petrodel Resources”. This answer was relied on by Mr Todd as demonstrating that the beneficial ownership of the properties does not necessarily follow, and in this case is asserted not to follow, the legal ownership. In his oral evidence the husband was asked by Mr Pointer what he meant by this answer. He said that he was referring to who the shareholders were of the company which owns the property. This was a puzzling answer, not least because five of the London properties are not held in the name of Petrodel Resources. Mr Todd suggested to the husband that putting his answers together it would mean that the shareholders are the beneficial owners of the properties. The husband did not accept that, nor did he mean to say that the beneficial ownership was different from the legal ownership. “I must have made a mistake,” he said in giving the questionnaire answer.

[114]At the very end of these replies the husband states that:

“In line with the global economic downturn the respondent’s finances have reduced by approximately £20 million since he swore his Form E on 1st July 2008.”

This is a puzzling assertion given that the Form E only identifies assets worth in the region of £1.5 million.

[115]During the course of his cross-examination the husband was asked in general terms about the attempts he had made to comply with the various Orders for disclosure, in particular in respect of the Orders of December 2010 and March 2011 since the committal proceedings in April 2011. The husband said that he had not and, when asked why not, he said he had “no answer to that question”. Mr Le Breton’s Evidence

[116]Mr Le Breton, as I have described, first gave oral evidence pursuant to a witness summons on 17th December 2010. I have read a transcript of this evidence. He describes how he started working for the husband in 2001, when he helped him set up Aurora of which the husband owned just under 50%. Petrodel was, he says, one of the husband’s key development vehicles for his West African business. Mr Le Breton was a member of the board at Aurora. When Aurora was wound up in 2004, they then raised independent banking finance for Petrodel to operate as an independent entity. Mr Le Breton was employed as managing director between the end of 2004 and about July 2008. He was clearly a close and valued colleague of the husband.

[117]In the period 2001/2004 Petrodel was engaged in trading oil products and short term shipping contracts. According to Mr Le Breton, Petrodel built up a portfolio of oil export contracts which gave Petrodel the right to export one or two crude oil cargos a month from Nigeria. They also had fairly constant opportunities to sell other oil products to the Nigerian government. From 2006 Petrodel began to develop an oil exploration and production portfolio with two blocks in Tanzania called Tanga and Latham Kimbiji. These did not involve an upfront payment. The company agreed to undertake specified activities and committed to a minimum level of expenditure. This would be funded, for example, by farming out the contractual obligations to a larger operator who in return would acquire a percentage interest in the contract.

[118]At or about the same time Petrodel won a bid for a Nigerian licence which required a deposit of $12.5 million. This deposit was paid with the loan from BNP Paribas. Petrodel did not then proceed with the contract because the prospects looked very poor. The evidence appears to show that the Nigerian Government agreed to refund the deposit but the husband says that this has not yet occurred.

[119]When asked about the ultimate ownership of Petrodel, Mr Le Breton said that this lay with the husband. The husband had told him that there was a trust behind the Nevis company of which he was the ultimate beneficial owner. During his cross-examination Mr Le Breton said that the husband told him on a number of occasions that he had beneficial ownership of PRL Nevis through trust.

[120]It was also clear to Mr Le Breton from his discussions with the husband and from the way in which the group’s affairs were conducted that the husband was the effective owner of the Petrodel group. He controlled every business decision. The directors acted merely on his instructions. Throughout the seven or eight years that he worked with the husband and Petrodel, the directors, according to Mr Le Breton, acted only on the husband’s instructions. There was also significant expenditure through Petrodel for the benefit of the husband, the wife and the children but Mr Le Breton was not aware of any significant sums being spent for other family members. There were also investments made through the company which were not business opportunities but were, he said, “Private commitments that (the husband) chose to make”.

[121]The husband and Mr Le Breton also discussed the husband’s worth. This was in the context of the proposal to bring private investors into Petrodel. The conversations took place in the years 2001 to 2004. The husband told Mr Le Breton that he was worth in the order of $40 to $50 million. This was based in part on what value an investor in the oil trading business might have been prepared to ascribe to Petrodel. When Mr Todd asked the husband about it, the husband said that the figures were not a fair appraisal of his worth at that time and, later, that he had had no such discussions with Mr Le Breton. When asked for his best estimate, he said that he did not think in those terms and was “amazed” that Mr Le Breton would even suggest something like that.

[122]I propose at this stage in my judgment to deal with my conclusions as to the weight which I can place on the evidence given by each of the parties and by Mr Le Breton.

[123]I found the wife to be a careful and honest witness. She gave her evidence in a calm and dispassionate manner which was convincing.

[124]I also found Mr Le Breton to be an honest witness. He was very careful when answering questions. He often paused for a short while before giving his answer. In my judgment, he did this because he wanted to give the question proper consideration so that his answer was as full and accurate as possible. Mr Pointer was able to suggest in cross-examination that Mr Le Breton’s evidence is unreliable both because he has fallen out with the husband and has been engaged in litigation with Petrodel and also because his wife is a very good friend of the wife in this case. I reject these attempts to suggest that Mr Le Breton is a biased or unreliable witness. As I have said, I am satisfied that his evidence was reliable. For many years Mr Le Breton and the husband were very close work colleagues and were also friends. I am satisfied that Mr Le Breton is in a very good position to give me an accurate insight into the husband’s and Petrodel’s affairs.

[125]As I have already made clear, I regret to say that I have found the husband to be a wholly unreliable witness. The husband is clearly an extremely intelligent, articulate and astute individual. I formed the clear impression that he regards the proceedings as a game in which he has sought to manipulate the process to his advantage. Despite occasional suggestions, largely at my prompting, that he was seeking to help the court, the husband was an extremely evasive witness. He was adroit but was deliberately evasive. He would frequently fail to answer a question although he clearly understood its meaning and would often digress onto a different subject or ask questions about the question. I do not consider that I can rely on any of the husband’s evidence unless corroborated by other reliable evidence.

[126]The obligation on spouses to give full and frank disclosure is well established and well known. It is a positive obligation, as stated on the first page of the Form E, to provide full, frank and clear disclosure. It is manifest in this case that the husband has not complied with this obligation. Mr Pointer acknowledged in his closing submissions, and in something of an understatement, that there is an “incomplete analysis of the assets”. The defence or explanation put forward by the husband to seek to explain at least some of his default is that he was bound by the terms of the order made by the Nigerian High Court which, he contends, prohibited him from complying with his disclosure obligations in the English proceedings. I return to this later.

[127]I have sought during the course of this judgment to reflect the wholly unsatisfactory nature of the husband’s evidence. It would, as I have said, be a vain task to seek to make sense of his evidence because I am satisfied that much of it was opportunistic in that he would say whatever he felt at the moment best suited his case or at least provided him with an answer to the question. There was little attempt to provide a coherent explanation or account. The wife submits that I can properly draw adverse inferences against the husband having regard to his abject failure to make proper disclosure and his contumelious conduct. I will return to this issue later in this judgment. Seed Money

[128]I now turn to consider the issue of the seed money. A significant element of the husband’s case is based on the assertion that the seed corn for the Petrodel group was provided by his father. There is no documentary evidence which supports this assertion. There is also no evidence for such an assertion which pre-dates the end of the marriage.

[129]The husband relies on two letters said to have been written by his sister, H, on 9th August 1996 and 15th April 2002. These letters refer to their late father’s property and/or estate. The only specific asset mentioned is the Abuja plot. There is no reference to seed money or the companies but merely to the father’s estate and to the husband developing the estate for himself and his family. The husband has, indeed, developed at least part of the father’s estate in Abuja by building a house. Interestingly, also, H refers to her having given the husband a sum of money in 1984 which she says he used to buy a property in London which, “is still in your family’s property portfolio” (my emphasis). The first reference to Petrodel appears to be in the letter dated 6th June 2008 written on H’s behalf by lawyers in Nigeria. In this letter, for the first time, it is asserted that the “interests” the husband holds in the company are held on trust. Further, at this stage it is being said that the beneficiaries are his children and his siblings’ children.

[130]In his oral evidence the husband was extremely vague about the details concerning the seed money. He said that when he saw his father in July or August 1992 his father gave him some money, partly in naira and partly in foreign currency. His recollection, which he said could be wrong, is that the total was either £10,000 or $10,000. His father asked the husband to hold the money and spoke to him about his role in the company he was then working for and said everybody should try and assist him. The husband later spoke to his father when he was in hospital when his father told him to use the money to create “your company”.

[131]Expert evidence has been obtained from Professor Sagay SAN to deal with issues of Nigerian law including Itsekiri customary law. He is clearly well qualified to provide evidence on Nigerian law given his experience as a practising lawyer and as an academic. The letter of instruction to Professor Sagay contains a list of the assets said to form the father’s estate. It is an interesting list as it comprises a number of properties and $1.1 million in bank accounts. The sum of $10,000 or, indeed, £10,000 apparently given such great significance by the husband and his family is rather modest when contrasted with the size of the late father’s estate. The husband’s evidence on this subject did not make the matter any clearer. When he was asked in cross-examination what had happened to the sum of $1.1 million, he initially replied that he had “no idea”; he had been too busy dealing with other things. When I explained I was puzzled by this reply, the husband sought to provide a different explanation. He said that his father’s sisters had said that the money was theirs.

[132]Professor Sagay deals with the husband’s potential obligations under Itsekiri customary law. He states that the Itsekiris have a concept of donatio mortis causa:

“by which a dying father called his children together and disclosed his assets and liabilities including debts owed by him and those owed to him, with instructions about how he wanted his properties treated and distributed. Such last words were generally taken into consideration when the time came to distribute the estate of the deceased ... In this regard if (the husband’s father) had actually handed over the seed money with the instruction that the husband should invest it for the benefit of himself and the other children, a customary trust would have been created.”

[133]Later Professor Sagay further explained that the Itsekiri concept of customary trust applies exclusively to real property left by the deceased. The main house of the deceased passes to the eldest son. If, accordingly, the husband took over the main dwelling of his late father and also took control and possession of the bulk of his real property, then a trust would come into effect under Itsekiri customary law under which these properties would be held on trust for himself and his siblings. This concept, “does not apply to seed money given by the deceased in his lifetime to the senior son”. He also comments about the references to ‘seed money’ being expressed in extremely vague terms:

“I do not see how such a vague account, devoid of concrete facts, can result in a trust under Itsekiri customary law which is based on inheritance and succession to landed property.”

Professor Sagay also states:

“I do not consider Petrodel Resources as part of (the father’s) estate and it is in my view not part of any customary trust property.”

[134]In her oral and written evidence the wife has disputed the husband’s case about the donation of the seed money. As I have described, it is her understanding that the husband and his father were not speaking to each other until about one month before he died. She was also, as I have said, aware of arguments between the siblings but this related to their late father’s land in Abuja and Warri. She recalls a meeting which took place in the late 1990s at the parties’ home in London. The husband’s siblings complained that the husband had taken the plot in Abuja for his own use. She has no recollection of the discussions about how, “we could each liquidate some value from Petrodel,” which are alleged by the husband to have taken place in Italy in 2006.

[135]Mr Le Breton’s evidence was also clear that the owner of the Petrodel group is the husband. If there had been any trust as alleged by the husband based on the provision of seed money from his late father, I consider it inconceivable that neither the wife nor Mr Le Breton would be aware of this.

[136]I found the husband’s evidence on this issue particularly unconvincing and I am satisfied that it is a deliberate invention. The husband had no need of such a small amount of money in 1992. The suggestion that the whole family has a substantial interest in PRL as a result of the gift of $10,000 dollars or pounds is, frankly, fanciful. No attempt was made during the course of the proceedings to produce any documentary evidence to demonstrate how any such sum was used to establish any part of the Petrodel group and no other member of the family has provided evidence in these proceedings to support the husband’s case.

[137]The husband’s evidence of how he used this money is, in my view, another example of how the husband would make up elements of his case to seek to bolster his overall case. I am satisfied the husband’s evidence as to the existence of any seed monies is false. This has been invented for the purposes of seeking to defeat the wife’s claims. Accordingly, the husband can have no obligation towards his siblings in respect of the Petrodel group. Insofar as the husband has interests in the group or any of the companies within it or any of the assets held by the companies, such interests are held solely for the benefit of himself and his immediate family. However, I accept Professor Sagay’s evidence that the husband might be under some customary law obligations in respect of the real property and, in particular, the plot in Abuja left by the husband’s late father in Nigeria. My factual conclusions on the issue of the seed money undermine the basis of the Nigerian proceedings but I propose to consider them separately in any event. Nigerian Proceedings

[138]As I have described, on 14th January 2009 the husband’s brother, M, commenced proceedings in Nigeria against the husband and PRL Nigeria. In the statement of claim the company is alleged to have assets worth hundreds of millions of naira (of which there are approximately 250 to the pound). The defence accepts that PRL Nigeria was established from seed money given to the husband by his father and also admits that the husband is trustee of his late father’s estate.

[139]As I have described, the husband’s brother applied for, and effectively by consent, obtained an injunction from the Nigerian Court on 23rd June 2009. I am somewhat disadvantaged in understanding this order as I have not seen any evidence filed in support of the application. However, with respect to the Nigerian Court it is difficult to understand the purpose of this order or, indeed, its intended effect. If applied literally it prevents the husband from publishing to anyone any information about PRL Nigeria. This would make it impossible for the husband effectively to run the company. Professor Sagay describes the order as odd because, as a matter of Nigerian law, company documents are public documents. I do not consider that the order can mean what it says but no proper explanation has been provided to me either of its purpose or its intended effect.

[140]The letter, dated 6th June 2008, written by lawyers acting on behalf of H is entitled, “Enforcement of Trust held in Petrodel Resources Limited”. The letter contains a bald assertion, unsupported by facts, that the interests held by the husband in the company are held in trust for his children and his siblings’ children. The husband is requested to confirm that, “The shares originally registered in your name continue to be held by you as trustee,” for the children. This letter is interesting for two principal reasons. First, it contains an assertion that the husband holds interests in PRL. The husband has never admitted in these proceedings that he holds any interest in any part of PRL. Secondly, it refers to the shares originally registered in the husband’s name as continuing to be held by him as trustee. It is not clear what these shares are, although I assume they are the shares in PRL Nigeria which the husband said in his Form E he had sold to PRL Nevis. I have no doubt that this letter was procured by the husband to seek to assist him in defending the wife’s ancillary relief application and it clearly does not contain a credible claim.

[141]The husband was asked about the June order during the course of his cross-examination. His answers did not provide a clear picture. He said that he does not hold any shares in PRL Nigeria. Just before he gave this answer the husband was asked whether he holds his interest in PRL Nigeria on trust for his siblings, to which he answered, “Yes”. When asked what interest, he replied that this was to be defined by the Nigerian Court. The husband could not explain why, if indeed he has no interest in PRL Nigeria either as trustee or personally, he had not said this in the Nigerian proceedings.

[142]Notwithstanding the terms of the Nigerian order the husband has been able to produce documents which would appear to be covered by its terms. They have been produced at random and in a manner which has given me the clear impression that the husband does so when he considers it might help his case. So, for example, Mr Le Breton’s employment contract was provided by the husband to his legal representatives in these proceedings shortly before Mr Le Breton was due to give evidence. I am satisfied that this was done so that he could be cross-examined on its contents. Such attempts to manipulate the process have been a recurrent feature of the husband’s conduct during the proceedings. Section 25

[143]Financial Resources As a result of the husband’s failure to provide proper disclosure and honest evidence, I do not have the information needed to enable me to determine the extent and value of the husband’s resources. I am satisfied that the husband’s failure has been deliberate. I have rejected his attempt to rely on the Nigerian proceedings and order. I am satisfied that they are based on a false factual case and were contrived at the husband’s instigation in an attempt to provide him with an explanation for his failure to comply with his obligations in these proceedings.

[144]Petrodel: Specifically as a result of the husband’s failure to comply with his disclosure obligations, the evidence which would be required to enable the value of Petrodel to be determined is almost completely lacking. This would require reasonably current information about its operations, both in respect of trading and exploration, and its assets. Both experts agree that the necessary information is not available, being the information listed in paragraph 4 of Mr Lazarevic’s report dated 17th May 2011. Mr Lazarevic also comments, and I agree, that all the required information should be available to the owner of the Petrodel group. As a result of the absence of this information neither expert is able to provide a current market valuation of the group. Indeed, the husband’s expert went so far as to say that a current valuation should be obtained based on up-to-date financial information. As a result, as I have said earlier in this judgment, the expert evidence has provided me with no real assistance in seeking to ascribe a value to the Petrodel group.

[145]Petrodel was involved in the downstream oil business, the trading of oil products, until about 2006 when it also became involved in the upstream oil business. As to the latter, Petrodel has an interest in oil blocks in Tanzania. The company entered into two production sharing contracts (PSCs) with the Tanzanian government in September 2006, one contract being in respect of areas called Kimbiji and Latham and the other being in respect of the area called Tanga. PRL has in turn entered into agreements in 2008 and in 2011, called farm out agreements, with very substantial public companies by which those companies take responsibility for the costs of exploration and development in return for an interest in the PSC.

[146]Under the 2008 agreement Heritage Oil has agreed to undertake works costing close to $40 million in return for a 70% interest in the Kimbiji licence area and a 29.9% interest in the Latham area. Heritage then has the option to proceed with further works costing $30 million. Under the 2011 agreement a company called Afren has agreed to undertake works as required under the PSC to a maximum cost of $40 million in return for a 74% interest in the Tanga block. It can be seen from these amounts that the blocks represent very substantial investments. PRL also appears to have, or there has been reference to its having, a block licence in Zambia but very little information has been given about this.

[147]The Information Memorandum records that the business typically generates annual profits from its downstream oil business of $5 to $8 million. The husband questioned the use of the word “typically” but accepted that the business has generated profits at this level. The 2007 accounts show a net profit of $5.9 million and net assets of $98 million. The 2008 accounts show a net profit of just over $400,000 after provision for the diminution in the value of short term investments of $5.8 million. As Mr Lazarevic comments, this is a book entry and the profit generated from the company’s activities was above $6 million. In that year the company repaid loans of $3 million and increased its bank balances by $1.5 million. The net assets are stated to be $75 million. I do not consider any significant weight can be placed on the draft 2008 accounts produced with Mr Murphy’s affidavit. The husband said he had not seen them and both accountants questioned their reliability.

[148]A substantial part of the expert evidence was directed to the weight which can be placed on the Information Memorandum which the wife relies on as being a genuine attempt to put a “top end” valuation on the business. It is a 127 page document and was prepared in or about February 2008. Its content cannot be dismissed as easily as the husband seeks to dismiss it. It may have been a draft and it is clearly inaccurate in some respects but it is also clear that a considerable amount of effort went into producing it. However, neither does it bear the weight that the wife, at least at one stage, was seeking to place on it. The evidence I have heard from Mr Le Breton has been of considerable assistance in enabling me to put the Information Memorandum in context.

[149]In the copy of this document as produced by the wife, Petrodel is described as being “100% owned and controlled” by the husband. It is said to have an annual turnover in excess of $1.7 billion and to have an estimated value of $200 million. With other parts of the group the total valuation is given as $252 million. The husband says that it is an internal document which was a work in progress and never finalised. It was prepared by a Mr Corrigan who was involved in accountancy and in banking. He spent some time speaking to the husband for the purposes of preparing the document. It was intended to be used for the purpose of providing a comprehensive Memorandum to banks to assist with raising money, which the company did not then proceed with.

[150]The husband has disclosed what he says is a later draft in which the word “owned” no longer appears. No other significant changes appear to have been made to the document. Further, as Mr Todd pointed out during the course of cross-examination, if the draft was being amended it is difficult to understand why the word “owned” was removed but the incorrect word “valued” in the same paragraph was not changed. The husband could also provide no explanation for the fact that the heading remains “Ownership” when, following the deletion of the word “owned”, there is no longer any reference in the paragraph to ownership. In his oral evidence the husband said that the document should say that he controls Petrodel for and on behalf of the children of his late father and in line with his customary law obligations.

[151]I agree with the submission made by Mr Todd that it is reasonable to conclude that the word “owned” was deleted for the purposes of these proceedings and not as part of a genuine revision of the document. Further, although the document may well have been a draft or a work in progress, I do not consider it likely that an important detail, namely the ownership of the structure, would have been inaccurately stated. It would have been of considerable importance to any prospective lender or investor to know not only who controlled the corporate structure but also who owned it.

[152]In his evidence Mr Le Breton said that, in his opinion, the value given in the IM of $200 million was not realistic given the very early stage of the development of the oil blocks in 2008 and that a more reasonable figure would have been “south” of $100 million. I accept this evidence but none of this helps me to determine what value can currently be properly ascribed to the Petrodel group.

[153]Turning now to the expert accountancy evidence, Mr Matthew-Jones is a chartered accountant and a partner in the firm of PKF UK LLP. His first report is dated 31st March 2011. He produced a revised report dated 26th May 2011 which was further amended by him in June of 2011. Mr Matthew-Jones took his instructions direct from the husband. As referred to in his report, and as became clear during his oral evidence, he had a number of conversations with the husband and had received a large number of e-mails from him. It is clear to me that his instructions were provided in a very unstructured manner and that he has had to rely to a significant extent on partial information supplied by the husband.

[154]Mr Lazarevic, a chartered accountant and senior partner at Moore Stephens, has prepared a report dated 17th May 2011. He was instructed by the wife’s solicitors to review and respond to the report by Mr Matthew-Jones and to provide an opinion, if possible, of the value of the Petrodel group.

[155]As I have said, both experts agree that they do not have the information they would need to undertake a valuation of the group. Mr Lazarevic does not consider that he has had the information necessary even to undertake the tasks referred to in Mr Matthew-Jones’ report, principally a critique of the Information Memorandum and the valuation contained within it. Mr Lazarevic also made the point, a telling point in my view, that as two major oil companies have invested in the oil blocks in Tanzania held by PRL, there must be a great deal of information available and to which, as the husband controls the group, he would have access which would assist with arriving at a proper value for the PRL group. He would expect this to include what is called a “competent person’s” report giving an assessment and evaluation of the PSCs.

[156]The experts agree that neither the book value of the PSCs under International Financial Reporting Standards (IFRS), nor the directors’ valuation as appearing in the accounts (of December 2008), reflect their current market value. Mr Matthew-Jones also questioned the reliability of the accounts generally because of the number of errors in them. In the 2007 accounts the oil blocks were given a value of $76 million, in the 2008 accounts this is reduced to $39 million. Mr Matthew-Jones deletes the latter figure entirely from his revised schedule and replaces it with a figure supplied by the husband of £1.86 million arriving at revised net assets for PRL of $12 million. I see no reason to accept this reduction simply on the husband’s word. I am also not in a position to determine whether the figure of $39 million or any other figure is too high or too low. The unsatisfactory nature of the evidence and the way in which the case developed can be demonstrated, for example, by the fact that in his opening submissions Mr Pointer says the best evidence of the present value of Petrodel is in the range of $20 million to $58.6 million while in his closing submissions he gives the value of PRL Isle of Man as minus $10.8 million. This arose as a result of the failure previously to allow for the additional BNP loan of $33.7 million – shifting sands.

[157]As I have described, Mr Matthew-Jones’ report was produced on the husband’s direct instructions. It is a limited report. Given that he was provided with very little of the information he would require properly to undertake even the limited exercise of preparing a critique of the Information Memorandum, his evidence has been of little assistance. Further, as referred to earlier in this judgment, he does not purport to seek to determine the current value of PRL but rather he analyses the extent to which some of the figures which have been put forward comply with IFRS. These are accounting standards which Mr Lazarevic described as only going a very limited way towards a valuation. I agree with this observation. He also made the sound observation that what would be required would be a valuation of the company’s assets, not of the figures to be included in accounts in accordance with IFRS.

[158]As a result of the lack of information, the evidence given by these experts has been of little relevance to the issues which I have to determine. They sought to extrapolate the current position to some extent from the Information Memorandum and the 2008 accounts but without the information necessary to enable them to undertake this task with any appropriate degree of accuracy. London Properties

[159]The London properties have a combined gross value of £11.3 million, as set out in the schedule attached to Mr Pointer’s submissions. They are clearly subject to the Ahli mortgage which totals just under £1.9 million giving a total net value of approximately £9 million allowing also for costs of sale. I have no evidence of the tax which would or might be payable on a sale and realisation of these properties.

[160]I now turn to consider the BNP charge. By a legal mortgage dated 15th September 2006 PRL charged the properties in its name in favour of BNP for $14.625 million. The charge was, as I have said, to secure a loan of $12.5 million provided to PRL to finance what is called a signature bonus in respect of an oil block called OPL258. The loan initially matured on 15th May 2007. The husband says that the sum of $12.5 million has not been repaid by the Nigerian government or its agencies. In the course of his oral evidence the husband first said that when PRL pulled out of block 258 the Nigerian government refused to refund the money. He said that he has a letter to this effect, which has not been produced. He was then shown correspondence in the bundles in which it is clear that the government, or its agency, says that the sum will be refunded. The husband then gave a string of unconvincing answers in which he sought to give an explanation for his evidence. They were based on a suggestion that in order to get repaid PRL entered into negotiations in respect of and took an option on a different block. It may well be that the sum of $12.5 million has been repaid but, if it has, it is clear that it was not used to repay the loan obtained from BNP.

[161]Whether the BNP loan would, in fact, be enforced against the London properties is far from clear. BNP has other security available to it and there seems little reason why the bank should not choose to realise that security ahead of the properties. The security available to BNP includes the cash collateral and the guarantee provided by Credit Suisse. As referred to above, these would substantially reduce the sum said to be secured of $7.6 million by $6 million or more. Overseas Properties

[162]The two main properties in Nevis have a combined value of approximately £1.8 million. The third property, about which there appears to be some dispute over the title, is valued at just over £400,000. The properties in Nigeria have not been valued but given the amount the husband says he has spent on building the property at 22 Deeper Life Street and on building works to plot 502, they are clearly worth several million pounds.

[163]The properties which have been valued have a total potential net value of approximately £11 million. To this, depending on my conclusions as to the ownership of the Petrodel group, would have to be added the value of the husband’s interest in the company. He also, as I have described, has a number of smaller assets including a pension fund.

[164]The wife has no significant resources apart from her interest in a property in Nigeria and she has a litigation loan of nearly £1 million.

[165]Income: In his section 25 statement the husband states that as a result of Petrodel losing its crude oil lifting contract in September 2010 he has had no regular income since then. He went so far as to state that this was causing him to suffer financial problems and that he has been interviewing for full-time positions with other companies. The impression that the husband sought to create in this paragraph was clearly false. I do not know whether Petrodel has, indeed, ceased trading. However, the husband omitted to mention that another company or other companies within the group have continued actively trading as became clear when statements from Credit Suisse were produced on the last day of the hearing. The husband then said that Vermont had started lifting crude oil in 2010. I am satisfied that the husband has an income available to him which is commensurate with the income that he has had available to him in recent years.

[166]Standard of living: The wife contends that the family enjoyed an extremely high standard of living, although she also says that the husband provided her personally with very limited resources. The bulk of the family’s expenses in England were funded by the husband through a management company which the husband formed for this purpose.

[167]It is clear to me that the family have, indeed, enjoyed a very high standard of living. An indication can be obtained from the fact that they had a nanny, cleaner, driver and live-in housekeeper. They also enjoyed regular family holidays staying in five star accommodation, flying business class and renting villas in Italy for substantial periods of time. All the children attend private school. This description is taken from the wife’s affidavit of 11th April 2008 and agreed by the husband in his reply when he also states that the annual running costs of London are approximately $400,000.

[168]Given the volume of documents obtained pursuant to an inspection appointment from the management company which administered the family’s expenses in England, somewhat unusually, expert evidence has been obtained addressing the level of the family’s expenditure. This culminated in a joint statement dated 16th June 2011 in which the experts agree that the evidence available to them indicates that the annual expenditure incurred by the family was in the region of just under £400,000. Significant costs are not included in this figure including expenditure in Monaco, Nevis and Nigeria, cash expenditure and holiday costs other than flights. Also the calculation was based on the provision of only nine months of the husband’s credit card.

[169]As I have described, the husband put his annual income needs for himself and the children at £800,000. The wife put her annual needs for herself and the children at £730,000. These figures give further support for the conclusion that the family enjoyed a very high standard of living. They also reflect, in my judgment, the income or resources available to the husband from Petrodel to meet the family’s income needs.

[170]Contributions: Both parties have made full contributions during the marriage and are likely to continue to make substantial contributions in respect of the children for a further period of ten to twelve years. By the conclusion of that period they will have been making contributions to the welfare of the family for a period of approximately 30 years.

[171]Housing: In my judgment, the present property at W Avenue (or a comparable property) would meet the wife’s housing needs in the United Kingdom. Given the standard of living enjoyed by the parties during the marriage she can also, in my judgment, properly claim to need a holiday home. The husband did not put forward any specific case in respect of his future accommodation needs save as set out in his Form E. However, there is no reason why they should not be similar to the wife’s.

[172]Income needs: As for the parties’ future income needs I am satisfied that an average annual sum in the region of £300,000 is a fair sum to take for their long-term needs. This is significantly less than the amounts claimed in their Form Es but it allows for a higher level in the near future and a lower level in the longer term. The Parties’ Submissions

[173]Turning now to the parties’ submissions, which I propose to summarise briefly given the length of this judgment.

[174]The wife asserts:(1) that the companies in the Petrodel group (including all the Respondent companies) are the alter egos of the husband who is the effective owner. She relies in particular on the Information Memorandum, the evidence of Mr Le Breton and her own evidence. She also relies on the failure by the husband to give proper disclosure.

(2) that the husband has a sufficient interest in the properties and shares held by the companies to enable orders to be made directly in respect of them. She asserts that the husband is the effective owner of these assets which are held for him by the companies behind a porous corporate mask or alternatively on trust for him.

(3) that, if required, the corporate veil can be pierced on the basis of the husband’s ownership and control, to enable orders to be made directly against the company properties and shares without the need to establish impropriety. Alternatively the wife contends that, if required, impropriety can be established in this case.

[175]Mr Todd submits that I am entitled to make orders directly against the properties and shares held in the names of the Respondent companies; that the husband not only controls but is also the effective owner of the Respondent companies; and that, on the basis of this ownership and control, I am entitled to make property transfer orders in respect of these assets. He submits that it is not necessary for impropriety to be established to enable me to make such orders but that if impropriety is required it is established in this case. In support of his submission that impropriety is not required, he invites me not to follow the decision of Ben Hashem v Al Shayif but rather to follow the decisions of Nicholas and Mubarak v Mubarak

[2001] 1 FLR 673

[176]Further, or alternatively, Mr Todd submits that the Respondent companies hold the relevant properties and shares on trust for the husband. The wife expresses the firm belief that the husband is the beneficial owner of all the properties. In his closing submissions Mr Todd referred to a number of factors including that the husband has had every opportunity of articulating a case on beneficial ownership and has singly failed to put a reasoned and credible account. He also submits that I should accept the wife’s evidence and find that the properties are held on resulting trust as a result of the husband providing the money used for their purchase. He contends that the evidence establishes that the husband retains the beneficial interest in these properties and shares.

[177]In support of his submission that the husband is the effective owner of the Petrodel group, Mr Todd relies, in particular, on the evidence of Mr Le Breton including his observation that, “Petrodel is MP; MP is Petrodel”; on the Information Memorandum; and on the way in which the companies have been used by the husband to fund the family and his legal expenses in these proceedings. He points to Mr Pointer’s inability to set out with any clarity the husband’s case as to ownership. Mr Todd also submits that the husband’s conduct during the course of these proceedings entitles me to draw adverse inferences against him. He has produced a list of all the orders which the husband has breached and, more generally, Mr Todd relies on what he submits has been the husband’s comprehensive failure to comply with his obligation to give full and frank disclosure.

[178]Even though Mr Todd is not in a position to advance any specific award as representing a fair share of the family’s resources, he submits that the amount he seeks on behalf of the wife of £30.4million is, on the evidence available to me, a fair award which not only gives the wife a fair share of the likely wealth available to the husband but also meets her reasonable needs. If he were to argue the case on the wife’s needs, Mr Todd submits that the application of this principle would produce an award in the region of £17.4 million. This comprises a house in London for £4.4 million, a holiday home of £2 million, a Duxbury sum of £10 million based on a level income need of £400,000 and a legal expenses fund of £1 million. The last item is based on the submission that the husband’s approach to these proceedings is unlikely to change and that it is reasonable to conclude that the wife will have to litigate to enforce any order.

[179]Mr Pointer’s submissions have focused on:(a) alleged deficiencies in the Information Memorandum;

(b) the extent of the husband’s alleged obligations as a result of the application of Itsekiri customary law and;

[180]As to (a) Mr Pointer has to accept that the evidence disclosed by his client does not enable the current market value of Petrodel to be determined. Indeed, in the course of his written submissions Mr Pointer was driven to use the phrase, “whatever the value of Petrodel”. He relies on the critique prepared by PKF on the husband’s instructions. As set out earlier in this judgment, I do not consider that the experts had the information they would need even to prepare a proper analysis of the reliability of the details set out in the Information Memorandum. Further, I accept Mr Lazarevic’s evidence that the task on which Mr Matthew-Jones was essentially engaged, namely to prepare a balance sheet by reference to the IFRS, would be only of very limited assistance in determining the value of the Petrodel group because what is critically required is a current valuation of the assets.

[181]As to (b) Mr Pointer submits, to quote his written submissions, that the wife’s case appears to ignore that the husband is subject to litigation in Nigeria that concerns directly, “the value of his interests in Petrodel,” or as Mr Pointer alternatively puts it, “the terms on which the husband holds his shares in the Petrodel companies”. I emphasise the use by Mr Pointer of the word “his” because, as referred to earlier in this judgment, the husband advances no positive case as to what interest he holds in any part of the Petrodel group and the thrust of his oral evidence was to the effect that he holds no shares in any Petrodel company.

[182]However, putting that to one side, Mr Pointer continues that the husband is being sued in Nigeria by members of his family for having wrongly diverted funds provided to him by their late father in such a way as to deprive his siblings of their entitlement under their father’s estate. These submissions clearly depend on my conclusions in respect of the alleged gift of £10,000 or $10,000 as so called seed money on which the whole Petrodel group is said to have been built. As I have rejected the husband’s factual case, these submissions fall away save in respect of the properties in Nigeria.

[183]As to (c), Mr Pointer submits that in the circumstances of this case the court is not entitled to pierce the corporate veil. He relies on a number of decisions, including that of Ben Hashem, as delineating the circumstances in which the court is entitled to pierce the corporate veil. Mr Pointer submits that the wife has not demonstrated the existence of any impropriety which would entitle the corporate veil to be pierced, namely impropriety linked to the use of the company structure to avoid or conceal liability for that impropriety. Mr Pointer also submits that there is no evidence which establishes the wife’s claim that any of the respondent companies hold assets for the husband beneficially by way of trust or otherwise.

[184]Mr Wagstaffe was considerably hampered in making submissions by the very limited amount of evidence provided by the companies he represented. However, he felt able to submit that whilst the husband has control of the operations side of the business, he has left questions of management to the directors. As I have indicated earlier in this judgment, I reject that submission. He also submitted that the wife cannot have a stronger claim against the companies than the husband himself can assert.

[185]The thrust of Mr Wagstaffe’s case, as with the husband’s, is that complete control and impropriety must be established before a corporate veil can be lifted and orders made in respect of assets held in the name of a company. He relies, in particular, on A v A

[2007] 2 FLR 467

and Ben Hashem. He submits that the wife has not established the requisite degree of control or impropriety which, he submits, she would need to establish in respect of each of the corporate respondents and each of the companies higher up the corporate structure. If the veil cannot be lifted, he submits that the court can only make orders dealing with property which a party owns directly. He includes within this property which is held by a nominee on a bare trust or similar.

[186]Mr Wagstaffe submits that the wife has also not succeeded in establishing that the husband has a beneficial interest in any of the assets held in the names of any of the corporate respondents, whether by way of trust or otherwise. He submits that the companies, as third parties, are entitled to require the wife to prove her case as to beneficial ownership and to prove it by application of the general principles relating to the ownership of property. He submits that the wife has failed to show by reference to established principle that the husband is or can properly be treated as the (legal or) beneficial owner of any of the properties held by the corporate Respondents. He has referred to me passages in Salomon v A Salomon & Co Ltd

[1897] AC 22

, Adams v Cape Industries PLC

[1990] Ch 433

and Prudential Assurance Company Limited v Newman Industries Ltd (No 2)

[1982] Ch 204

. These demonstrate the well-known principle that a company is a separate legal entity with its own rights and liabilities and that a shareholder does not, merely by virtue of being a shareholder, acquire a legal or beneficial interest in a company’s property.

[187]Accordingly, Mr Wagstaffe submits I do not have the power to make orders direct against any of his clients’ assets. Authorities

[188]I have been referred to a large number of authorities. The issue they, largely, address is the court’s power to make orders in respect of assets held in the name of a company. I propose to refer to only some of these authorities.

[189]In Nicholas the court considered the scope of section 24(1) of the Matrimonial Causes Act 1973 which provides that the court can order one party to transfer to the other party, “property to which the first mentioned party is entitled either in possession or reversion”. In Nicholas the husband was a (majority) shareholder with business associates in a company which was the legal owner of the former matrimonial home. During the course of his judgment Cumming-Bruce LJ with whom Dillon LJ agreed said, at p. 3:

“It is quite clear and there is abundant authority that where the shareholding is such that the minority interests can for practical purposes be disregarded, the court can and will pierce the corporate veil and make an order that has the same effect as an order that would be made if the property was vested in the majority shareholder.”

In his judgment Dillon LJ said, at p. 7:

“If the company was a one-man company and the alter ego of the husband, I would have no difficulty in holding that there was power to order a transfer of the property.”

[190]Although these passages were obiter, this decision stood as authority for over 20 years for the proposition, often applied, that the court could make an order as described by Dillon LJ. It was not referred to in Crittenden v Crittenden

[1990] 2 FLR 361

in which the Court of Appeal, again Dillon LJ and Sir Roualeyn Cumming-Bruce, decided (at p. 364 letters F to G) that the additional provisions inserted by section 24(a) could not relate to assets held by a company of which the parties were the sole shareholders because that section relates to:

“property in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest in possession or reversion.”

[191]Passing over Green v Green

[1993] 1 FLR 326

which was disapproved in Wicks v Wicks

[1998] 1 FLR 470

, I next refer to Mubarak v Mubarak

[2001] 1 FLR 673

. In that case Bodey J had to address the issue of whether the wife could enforce a lump sum order against company assets. He was referred to a large number of authorities which he considered under the headings “The company law approach” and “The family law approach”. In the former category he considered, among other cases, Salomon v Salomon, Adams v Cape and Ord v Bellhaven Pubs Limited

[1998] BCLC 447

[192]Bodey J then considered how the two approaches could be rationalised, starting at p. 682 B:

“Ideally the Family Division and the Chancery Division should plainly apply a common approach. However, the fact remains that different considerations do frequently pertain: the company approach, on the one hand, being predominantly concerned with parties at arm’s length in a contractual or similar relationship; the family approach, on the other hand, being concerned with the distributive powers of the court as between husband and wife applying discretionary considerations to what would often be a mainly, if not entirely, family situation. I would echo the experience referred to by both Cumming-Bruce LJ and Connell J as regards lifting the veil in the Family Division when it is just and necessary. In practice, especially in big money cases, the husband (as I will assume) will often make a concession that company/trust assets can be treated as his, whereafter the case proceeds conventionally on that basis. It is pragmatic, saves expense and usually works. Problems such as have arisen in this case are rare and anyway can be avoided where there are other assets against which the lump sum order can be enforced. The difficulty remains in defining those situations when lifting the veil is appropriate by way of enforcement following such a concession in ancillary relief proceedings. I would suggest that the Family Division can make orders directly or indirectly regarding a company’s assets where: (a) the husband (as I am assuming) is the owner and controller of the company concerned and; (b) where there are no adverse third parties whose position or interests would be likely to be prejudiced by such an order being made. I include as third parties those with real minority interests in the company and where relevant on the facts creditors and directors. The reason for my including the latter two categories will become apparent later in this judgment. I adopt the rationalisation of this offered by Mr Hunter, that it would amount merely to a short-circuiting of the full company law route, namely the declaration of a dividend to the husband comprising the company asset concerned, eg the matrimonial home, enabling him and/or the court then to transfer it onwards to the wife. It would amount to his property for the purposes of section 24 in the same sense that the law may look on that as done as ought to be done while the mechanics of the order would be along the lines adopted by Connell J in Green v Green.”

Then a bit later:

“I would add that lifting the veil is most likely to be acceptable where the asset concerned, being the property of an effectively one-man company, is the parties’ former matrimonial home or other such asset owned by the company other than for day to day trading purposes.”

[193]In essence, Bodey J decided, notwithstanding the comments in Crittenden, that property is within the scope of section 24 if it is property to which a spouse is to be treated as being “entitled” which can include property held by a company of which a spouse effectively has complete, or perhaps more accurately a sufficient degree of, control and ownership. Although the effect is to pierce the corporate veil it is, in my view, a question of statutory interpretation. Does the power given to the court by the Matrimonial Causes Act extend to property held through a corporate or other structure to which one spouse is (in effect) entitled through the use of rights and powers available to him or her? Bodey J decided that if a party has effective control of the legal or corporate structure and, because third party interests would not be prejudiced, is also the only person effectively entitled to the benefit of the property, then that property is within the scope of section 24 as being “property to which … (that) party is entitled in possession”.

[194]This is an important issue because in wealthy families it is not uncommon, and among international families it is common, for assets including an English matrimonial home to be held through a company, for sound and legitimate tax and other reasons. Minwalla v Minwalla

[2005] 1 FLR 771

is an example of such a situation and one in which the court made an order in respect of the property. The existence of such a structure rarely provides any true restraint on the beneficial use of this property by one or other of the spouses. It is simply a choice of the form in which they hold their wealth so that, notwithstanding the corporate structure, the equity in such a home is an asset to which they have full access, or, to put it in the language of the statute, to which they are entitled. The company may be a separate legal entity as a matter of English law, and in some cases, although not in this, rent or licence payments may be made, but I am confident that the owner of the corporate structure would invariably view the wealth within the company structure as being theirs and available for their use as they wish. In practice this is also achieved because they have complete control over the corporate structure and, subject to legitimate third party interests, are alone entitled to the benefit of the wealth within it.

[195]In Re W (Ex parte Orders)

[2000] 2 FLR 927

Munby J said, in passing, at p. 938 D/E:

“Nothing that I say should be taken as intended to water down in any way the robustness with which the Family Division ought to deal in appropriate cases with husbands who seek to obfuscate or hide or mask the reality behind shams, artificial devices and similar contrivances. Nor do I doubt for a moment the propriety and utility of treating as one and the same a husband and some corporate or trust structure which it is apparent is simply the alter ego or creature of the husband. On the other hand, and as Nicholas v Nicholas … itself demonstrated the court does not - in my judgment cannot properly - adopt this robust approach where, for example, property is held by a company which, although the husband has a majority shareholding, the minority shareholdings are what Cumming-Bruce LJ … called ‘real interests’ held by individuals who, as Dillon LJ put it …, are not nominees but business associates of the husband.”

In this passage Munby J acknowledged the propriety of treating as one and the same a party and a corporate structure which is the “alter ego or creature” of that party.

[196]In A v A

[2007] 2 FLR 467

Munby J was faced with an allegation that certain trusts were shams. In the course of his judgment he said, at paragraph 17:

“I wish also to make the point that, even in the Family Division, a spouse who seeks to extend her claim for ancillary relief to assets which appear to be in the hands of someone other than her husband must identify, and by reference to established principle, some proper basis for doing so. The court cannot grant relief merely because the husband’s arrangements appear to be artificial or even ‘dodgy’.”

[197]In Ben Hashem v Al Shayif Munby J considered in detail the circumstances in which the court can pierce the corporate veil. I propose to quote substantial parts of this judgment starting with the headnote, paragraph 3:

“To enable a court to pierce the veil of a corporation it was necessary to show not only control of the company by the wrongdoers but also impropriety – that is misuse of the company by the wrongdoers as a device or façade to conceal some wrongdoing that existed entirely outside the company. Mubarak was not authority for the proposition that impropriety was not an essential requirement. A company could be a façade even though it had not originally been incorporated with any deceptive intent. The question was whether it was being used as a façade at the time of the relevant transactions. The court could not pierce the corporate veil merely because it was thought to be necessary in the interests of justice and the required impropriety must be linked to the use of the company structure to avoid or conceal liability. The court would pierce the veil only so far as was necessary to provide a remedy for the particular wrong done by those controlling the company. The wife had failed to establish sufficient control of the company by the husband and there was no relevant impropriety. The court was not entitled to pierce the veil of incorporation in this case.”

Continuing from paragraph 150:

“150. It is common ground that there are circumstances where, despite the principle in Salomon's case, the court can, as it is said, pierce or lift the veil of incorporation – in this context the expressions are synonymous. What those circumstances are, and whether they can be shown to exist in the present case, have been the subject of great controversy before me. 151. The starting point is the statement of principle by Lord Keith of Kinkel in Woolfson v Strathclyde Regional Council1978 SC(HL) 90 at page 96: ‘It is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere façade concealing the true facts.’ That statement was treated by the Court of Appeal in Adams v Cape Industries PLC[1990] Ch 433 at page 539as stating a ‘well-recognised exception’ to the rule prohibiting the piercing of the corporate veil. It is, in my judgment, binding upon me and definitive. 152. There is no particular magic in the word façade, which is here plainly being used in its secondary (and surprisingly recent) sense of 'an outward appearance or front, especially a deceptive one'. Down the years a variety of other epithets and metaphors have been used to express the same concept. 153. In Gilford Motor Company Limited v Horne [1933] 1 Ch 935 Lord Hanworth MR referred (at page 956) to the company as having been ‘formed as a device, a stratagem, in order to mask the effective carrying on of the business of Mr E B Horne.’ He went on to describe the company as ‘a mere cloak or a sham’, adopting (pages 956, 961), as did both Lawrence LJ (page 965) and Romer LJ (page 969), the phrase used by Lindley LJ in Smith v Hancock [1894] 2 Ch 377 at page 385. Lawrence LJ, picking up a phrase which had been used by Farwell J at first instance (see at page 955) also referred to the company (page 965) as ‘a mere channel used by the defendant Horne.’ 154. In In re Bugle Press Limited[1961] Ch 270 Harman LJ described the company (at page 288) as ‘nothing but a little hut built around’ the shareholders and their scheme a ‘hollow sham.’ 155. In Jones v Lipman[1962] 1 WLR 832, Russell J (who was later, as Lord Russell of Killowen, to agree with Lord Keith of Kinkel in Woolfson) referred (at page 836) to the company as ‘the creature of the first defendant, a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity.’ 156. And in Wallersteiner v Moir[1974] 1 WLR 991 Lord Denning MR described the companies (at page 1013) as being ‘just the puppets of Dr Wallersteiner’ which ‘danced to his bidding’ as ‘he pulled the strings’ and were according his ‘creatures’. (In this Lord Denning was on his own, for both Buckley and Scarman LJJ differed from him on the facts.) … 158. I have been taken to a number of cases on the topic. In addition to those I have just mentioned I must also refer to Nicholas v Nicholas[1984] FLR 285, Green v Green[1993] 1 FLR 326, Ord v Belhaven Pubs Ltd[1998] 2 BCLC 447, Wicks v Wicks[1999] Fam 65, Gencor ACP Ltd v Dalby[2000] 2 BCLC 734, Mubarak v Mubarak[2001] 1 FLR 673, Trustor AB v Smallbone (No 2)[2001] 1 WLR 1177 and Dadourian Groupinternational Inc v Simms [2006] EWHC 2973 (Ch). I do not need to go through them all in turn, but the following principles can, in my judgment, properly be drawn from them. 159. In the first place, ownership and control of a company are not of themselves sufficient to justify piercing the veil. This is, of course, the very essence of the principle in Salomon v A Salomon & Co Ltd[1897] AC 22, but clear statements to this effect are to be found in Mubarak at page 682 per Bodey J and Dadourian at para [679] per Warren J. Control may be a necessary but it is not a sufficient condition (see below). As Bodey J said in Mubarak at page 682 (and, dare I say it, this reference requires emphasis, particularly, perhaps, in this Division): ‘It is quite certain that company law does not recognise any exception to the separate entity principle based simply on a spouse's having sole ownership and control.’ 160. Secondly, the court cannot pierce the corporate veil, even where there is no unconnected third party involved, merely because it is thought to be necessary in the interests of justice. In common with both Toulson J in Yukong Line Ltd of Korea v Rendsberg Investments Corporation of Liberia (No 2)[1998] 1 WLR 294 at page 305 and Sir Andrew Morritt VC in Trustor at para [21], I take the view that the dicta to that effect of Cumming-Bruce LJ in In re a Company[1985] BCLC 333 at pages 337-338, have not survived what the Court of Appeal said in Cape at page 536: ‘[Counsel for Adams] described the theme of all these cases as being that where legal technicalities would produce injustice in cases involving members of a group of companies, such technicalities should not be allowed to prevail. We do not think that the cases relied on go nearly so far as this. As [counsel for Cape] submitted, save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon v Salomon & Co Ltd[1897] AC 22 merely because it considers that justice so requires. Our law, for better or worse, recognises the creation of subsidiary companies, which though in one sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as separate legal entities with all the rights and liabilities which would normally attach to separate legal entities.’ 161. Thirdly, the corporate veil can be pierced only if there is some ‘impropriety’: see Cape at page 544 and, more particularly, Ord at page 457 where Hobhouse LJ said: ‘It is clear … that there must be some impropriety before the corporate veil can be pierced.’ 162. Fourthly, the court cannot, on the other hand, pierce the corporate veil merely because the company is involved in some impropriety. The impropriety must be linked to the use of the company structure to avoid or conceal liability. As Sir Andrew Morritt VC said in Trustor at para [22]: ‘Companies are often involved in improprieties. Indeed there was some suggestion to that effect in Salomon v A Salomon & Co Ltd[1897] AC 22. But it would make undue inroads into the principle of Salomon's case if an impropriety not linked to the use of the company structure to avoid or conceal liability for that impropriety was enough.’ 163. Fifthly, it follows from all this that if the court is to pierce the veil it is necessary to show both control of the company by the wrongdoer(s) and impropriety, that is, (mis)use of the company by them as a device or façade to conceal their wrongdoing. As the Vice Chancellor said in Trustor at para [23]: ‘The court is entitled to ‘pierce the corporate veil’ and recognise the receipt of the company as that of the individual(s) in control of it if the company was used as a device or facade to conceal the true facts thereby avoiding or concealing any liability of those individual(s).’ And in this connection, as the Court of Appeal pointed out in Cape at page 542, the motive of the wrongdoer may be highly relevant. 164. Finally, and flowing from all this, a company can be a façade even though it was not originally incorporated with any deceptive intent. The question is whether it is being used as a façade at the time of the relevant transaction(s). And the court will pierce the veil only so far as is necessary to provide a remedy for the particular wrong which those controlling the company have done. In other words, the fact that the court pierces the veil for one purpose does not mean that it will necessarily be pierced for all purposes.”

This decision is clear authority for the proposition that the corporate veil can only be pierced when a party controls a company and when the company structure is being used by that party to avoid personal liability for his wrongdoing, to paraphrase paragraph 190 of the judgment. ‘It is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere façade concealing the true facts.’ ‘It is quite certain that company law does not recognise any exception to the separate entity principle based simply on a spouse's having sole ownership and control.’ ‘[Counsel for Adams] described the theme of all these cases as being that where legal technicalities would produce injustice in cases involving members of a group of companies, such technicalities should not be allowed to prevail. We do not think that the cases relied on go nearly so far as this. As [counsel for Cape] submitted, save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon v Salomon & Co Ltd

[1897] AC 22

merely because it considers that justice so requires. Our law, for better or worse, recognises the creation of subsidiary companies, which though in one sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as separate legal entities with all the rights and liabilities which would normally attach to separate legal entities.’ ‘It is clear … that there must be some impropriety before the corporate veil can be pierced.’ ‘Companies are often involved in improprieties. Indeed there was some suggestion to that effect in Salomon v A Salomon & Co Ltd

[1897] AC 22

(s) ’

[198]In Kremen v Agrest

[2010] EWHC 3091 (Fam)

Mostyn J also had to grapple with this issue. Having quoted from Ben Hashem he said at paragraph 44:

“It certainly came as some surprise to those who practised in ancillary relief cases to discover that a positive finding of impropriety or ‘mask’ or ‘façade’ or ‘sham’ or ‘creature’ or ‘puppet’ was needed before the corporate veil could be disregarded and a direct order made against the property held by the company. The understanding had been for years that where the company was wholly owned by one party, or where minority shareholdings could realistically be disregarded, then a direct order could be made against the underlying asset. After all a strong Court of Appeal in Nicholas v Nicholas had said precisely that.”

However, having also expressed the view that there are strong practical reasons for the court being able to pierce the corporate veil even absent a finding of wrongdoing, Mostyn J decided that there had been the requisite impropriety in that case. Ownership of Petrodel

[199]I now intend to set out my determination of the extent of the husband’s interest in the Petrodel group. It might be thought that it would be relatively straightforward for me to state what the husband’s case is in respect of his interest in the Petrodel group. It is not. The husband has never clearly described the extent of his interest in the group. In his Form E he makes no reference to his having any interest at all. Further, as referred to earlier in this judgment, the husband has not provided the evidence which would enable the value of any such interest to be ascertained. When I asked Mr Pointer during his final submissions to tell me what I would write down if I was to set out the husband’s case as to ownership of the group, he was unable to provide me with a clear answer. All he could do was to invite me to accept the husband’s evidence and that the shareholdings are as described, adding that the structure functions for the benefit of the husband and the wider P family. This takes the matter no further having regard to the nature of the husband’s evidence which itself does not provide an answer.

[200]When I had asked the husband whether he wanted to put forward any positive case as to who the ultimate beneficial owner of the corporate structure is, he replied that he would prefer to seek the advice of his Nigerian lawyer before doing so. Just before this evidence, the husband had been asked by Mr Todd whether it was right that he was the ultimate owner. The husband also replied to this question that he would have to take the advice of his Nigerian lawyer, Mr Elusogbon. Yet the husband has specifically sought to assert that, as a result of the gift to him from his late father of seed money, the Petrodel group is subject to a trust for the benefit of his late father’s children. The extent of this alleged trust is not clear. In the course of his cross-examination the husband agreed that his position in the Nigerian proceedings is that he holds his interest in PRL Nigeria on trust for his siblings. But, when he was then asked what interest he is holding on trust for himself and his siblings he replied that this was to be defined by the Nigerian court. This was an answer that he gave on a number of occasions during the course of his evidence: that it was for the Nigerian court to determine or, for example, he could do something such as give shares to his family if the Nigerian court determined that he was obliged to do so.

[201]From the husband’s answers the whole structure appears to be sufficiently flexible so that the Nigerian court has the ability to determine who owns what. Potentially, everything is held for the benefit of the family and it would be for the court to decide how it should be divided within the family. As Mr Pointer commented during the course of the hearing, this flexible power would, on the husband’s case, be pursuant to Itsekiri customary law and not English trust law. If, however, I were to reject, as I have, the husband’s case as to any alleged interest held for his siblings, it would seem to follow that the whole structure would be held for the husband’s benefit alone.

[202]This is demonstrated, for example, when the husband was asked what he is holding for the benefit of himself and his siblings. He said it is his late father’s estate which would include everything that derives from what his father left the husband and also everything that derives from the seed money. The husband specifically asserted that the trust includes everything (my emphasis) which Petrodel has and everything (my emphasis again) created by Petrodel. This was a very broad answer. When he was then asked whether this would include the properties held in the name of Petrodel the husband, clearly seeing the difficulties created by his broad answer, said that he is uncertain and would have to seek legal advice to be sure. When asked whether the company shares would be subject to the trust, the husband said that he did not know the answer to that question.

[203]A bit later the husband said, in contrast to his earlier answer, that he does not hold any shares in PRL Nigeria. He could not then explain why his brother would assert that he did hold shares, nor why he did not assert in his Nigerian defence that he holds no such shares. When I then asked the husband what interest he has in PRL Nigeria which he holds on trust for his siblings, the husband said, “I have an interest consistent with Itsekiri customary law”. When I asked what that interest is, the husband again said that this is what is being determined by the court in Nigeria. He said that he had inherited his father’s estate which may or may not include PRL Nigeria, “That is what we are trying to define in Nigeria”. If it is included, the husband would presume that his late father’s children would own the shares in PRL Nigeria. If PRL Nigeria was not part of the estate, the husband could not say what the consequence would be because, “I haven’t thought it through if it’s not,” and, “I haven’t given that matter any thought”. This was, yet again, an evasive answer, no doubt because the husband could not think what to say which would help his case.

[204]When the husband was then asked by Mr Todd whether his case is that the shares are or whether it is that they are not part of his late father’s estate, the husband said, after a very long pause, that he did not know how to answer this question as “the shares are held by the shareholders”. As described earlier in this judgment, the husband for the first time made the surprising assertion that PRL Nigeria owns the shares in PRL Nevis. This alleged circular arrangement was later said by the husband to have been set up on the advice of his Nigerian lawyer. He told the husband not to worry; that everything was under control; and that the husband would be able to do whatever his customary law obligations required and would be able to float the company and, “provide shares for my siblings”. It is clear to me, from this evidence alone, that the husband has control of the corporate structure effectively as beneficial owner as he is able to change the structure and distribute the wealth within it to himself and/or his family as may be required or, I would add, as he wishes.

[205]In a sworn statement filed in the Nigerian proceedings the husband said that in 2006/2007 he was planning to float Petrodel and allot shares in the floated company to the wife and his siblings. In his section 25 statement the husband said that discussions took place in 2006 about how, “we could each liquidate some value from Petrodel”. In his oral evidence he said that “everybody would have shares” in the “family business” and upon floatation they could sell some of their shares thereby producing a “revenue event” for them. When cross-examined about this, the husband gave what, in my judgment, were deliberately evasive answers. This was typical of the husband’s evidence when he found it difficult for the purposes of his case to provide a clear answer. He was unable to explain how the allotment of shares to his family was going to be achieved. When it was suggested that he would not have been in a position to “give away” shares as a chief executive, he said that his written statement contained an expression of the “game plan” and a “general expression of what the intention was”. When it was suggested that he could not have achieved this intention if he did not own any shares he said, “If you apply a literal translation, I understand what you are saying”.

[206]The husband asserts that he is not the beneficial owner of any of the properties held by any of the respondent companies and that no property is held on trust for him. When it was suggested to him by Mr Todd that he could cause the sale of any of these properties and the payment of the net proceeds of sale as he directed, the husband gave a similar answer to that which he gave on many occasions, namely that he operates and controls the group of companies and that the seed money for these companies was given to him by his late father to invest on behalf of himself and his siblings consistently with Itsekiri customary law. Accordingly, he went on to say that, if what Mr Todd was proposing was consistent with his obligations, then he, “would accept what you say”. In other words, the husband accepted that if his customary law obligations required him to procure the sale of the properties and the payment of the net proceeds of sale as he directed, he could do this. Further, when the husband was then asked whether there was any obstacle in his deciding to pay all the net proceeds of sale to himself as one of the beneficiaries of this alleged trust, he did not identify any obstacle beyond saying that this is a matter which has yet to be decided by the Nigerian court. In respect of the property at W Avenue the husband also said in cross-examination that the Nigerian court would also determine whether his siblings are entitled to a share of the net proceeds of sale of this property.

[207]During the course of his evidence the husband sought to assert both that he holds no interest in any part of the Petrodel group or any of its assets and yet on the other hand that he is trustee for himself and his siblings of everything which has been created and is owned by Petrodel. How do these cases stand together? It would seem to me that one way in which they would stand together would be if the assets held within the corporate structure are held for the benefit of someone who does not hold any shares. If the husband does not have an interest in the companies and/or any of the assets he would be a trustee of nothing. In this part of the husband’s evidence he could be taken as acknowledging the possibility of Petrodel’s assets being subject to a trust.

[208]I spent some time during the hearing, and longer since, trying to make sense of what appeared to be inconsistent themes in the husband’s evidence and seeking to identify how they might be reconciled. Ultimately I have decided that I have been seeking to impose an unduly legalistic framework onto a relatively simply factual situation, namely that the husband operates and controls the Petrodel group and its assets for the benefit of his immediate family. The wealth within the group is the family’s wealth to which the husband has unrestricted access. I am satisfied that the husband is both the effective owner and controller of the whole of the Petrodel corporate structure. In coming to this conclusion I accept the evidence of Mr Le Breton that the husband told him that he is the ultimate beneficial owner and I also accept his apposite phrase that Petrodel is the husband and the husband is Petrodel. In my judgment, the Information Memorandum as found by the wife accurately describes the husband as the owner.

[209]The extent to which the companies are the husband’s nominees is demonstrated by the term in his contract, which I repeat, that he:

“shall be assumed to report to the board for issues pertaining to the management of the company, yet you shall have and employ full discretion with the way you manage all the affairs of the company insofar as your actions are for the benefit of the company and its shareholders.”

As the husband is the only effective shareholder, the husband is managing the affairs of the company solely for his benefit, hence the complete lack of any need for real board control. The husband has clearly used the companies to meet his and his family’s personal expenditure, as well as his legal costs in these proceedings, without any inhibition. The lack of any proper accounting also demonstrates the lack of any board control or supervision.

[210]I am also satisfied that all the assets held within the companies are effectively the husband’s property. He is able to procure their disposal as he may direct based again on his being the controller of the companies and the only beneficial owner. There are no third party interests of any relevance because the other shareholders are merely nominal with no expectation of benefiting from their shareholdings. Award

[211]I now turn to consider the quantum of my award, dealing first with the issue of adverse inferences. It is, in my judgment, appropriate in this case for me to draw adverse inferences against the husband. In coming to this conclusion I have reminded myself of the well known decision of J v J

[1955] 2 All ER 85

in which Sachs J said, starting at p. 92F:

“Next, I observe that this man, of all men, could by means of schedules supported by original documents very easily have presented to the court a clear-cut picture of his present schemes, of the results he planned and the times at which those plans were expected to mature. If not by schedules he could have achieved the same result by other clear evidence. The same observations apply to a considerable degree to explanations of his current expenditure. Instead the Registrar and this court were faced with prolonged argument on a welter of potentially confusing facts, a mass of figures in confused order, a complete absence of books of account or even a wages book, no schedules or summaries prepared by or for the husband, and no proper affidavits or documents or list of documents.”

Then continuing a bit later:

“In the upshot, in the documents as now analysed in a way that was perhaps not practical on their first impact at the hearing before the Registrar I have no hesitation in concluding that in his attempts to minimise the wife’s claims the husband has been devoid of frankness and indeed generally unreliable … In cases of this kind, where the duty of disclosure comes to lie on a husband, where a husband has, and his wife has not, detailed knowledge of his complex affairs, where a husband is fully capable of and has had opportunity to explain those affairs and where he seeks to minimise the wife’s claim, the husband can hardly complain if when he leaves gaps in the court’s knowledge the court does not draw inferences in his favour. On the contrary, when he leaves a gap such that two alternative inferences may be drawn the court will normally draw the less favourable inference, especially where it seems likely that his able legal advisers would have hastened to put forward affirmatively any facts, had they existed, establishing the more favourable alternative.”

A bit later Mr. Justice Sachs, after referring to the husband’s obligation to make full, frank and clear disclosure, said:

“Any shortcomings of the husband from the requisite standard can and normally should be visited at least by the court drawing adverse inferences against the husband on matters the subject of the shortcomings, insofar as such inferences can properly be drawn.”

Then continuing a bit later:

[212]The husband in this case is clearly well aware of his substantive obligation to make full, frank and clear disclosure of all relevant matters including, in particular, of his financial resources. This requires the production of such information and documents as is needed to provide as much clarity as is reasonably possible. In this case the husband has wholly failed to comply with this obligation and he is, indeed, in the same position as the husband referred to in the judgment of Sachs J. He has failed to comply with court orders including for specific disclosure and he has given misleading information and evidence. In the course of preparing this judgment I have had the opportunity to consider the course of the financial proceedings and all the evidence in detail. The husband’s failure to comply with his obligations is so extensive that little attempt was made by him or on his behalf to seek to put forward a comprehensive case as to the extent of his wealth.

[213]To adopt Sach J’s words, I am satisfied that the husband could very easily have provided proper disclosure as to his financial resources. Rather, as I have said, the husband has persistently failed to comply with court orders directing the provision of information and documents and has given misleading evidence. He has failed to provide any convincing explanation for these failures. The documents and information he has supplied during the course of the hearing were too late for any proper analysis or investigation to take place. In any event, given the husband’s lack of credibility, I can place little, if any, weight on his oral evidence when unsupported by credible corroborative evidence. I did not find the documents produced by the husband during the hearing helpful in enabling me to obtain a proper understanding of his financial position.

[214]I have come to the conclusion that I am entitled in this case to draw adverse inferences against the husband. I am satisfied that he has the financial resources to meet the award I propose to make in the wife’s favour and that, in addition, he will retain sufficient resources to meet his own needs and to give him a fair share of the wealth. The only fair conclusion to draw is that the husband has other resources which he did not want to reveal to this court in the hope, or perhaps expectation, of minimising any award in the wife’s favour. He continued to be obstructive even after Mr Le Breton had given evidence of the husband telling him in the years up to 2004 that he was worth between $40 and $50 million. I have no doubt that since these conversations took place the husband’s fortunes have increased. Petrodel has moved significantly into oil exploration and it would have been easy for the husband to procure the disclosure of the information necessary to enable these particular interests to be valued. This suggests to me that the husband’s total wealth is likely to be substantially in excess of the figures he discussed with Mr Le Breton, although I take into account that a significant element, namely the value of his interests in Petrodel, may not be easily realisable and may be properly described as risk assets.

[215]I am satisfied also that the husband has continued through Petrodel to trade successfully since 2004. The accounts for PRL suggest that the company has made a total net profit for the four years 2005 to 2008 of $19 million (adding back the sum deducted in the 2008 accounts for the diminution in the value of investments). It is not possible to identify properly what profits might have been generated through any other companies. It is also not possible properly to value Petrodel’s interests in the PSCs. Given that the husband considered he was worth in the region of $40 to $50 million in the period up to 2004, it is obvious to me that his wealth will have increased since then by the accumulation of savings or other hidden investments and by the development of Petrodel in the years since. I consider that, conservatively, the husband must be worth at least $60 million, ie approximately £37.5 million.

[216]Doing the best I can in the circumstances of this case and taking all the relevant section 25 factors into account, I consider that a fair award which achieves justice in this case is to provide for the wife to receive resources totalling £17.5 million. This is more than sufficient to meet the wife’s needs and, in my judgment, is also a fair share of the likely overall worth.

[217]How should this award be structured? Mr Todd seeks a lump sum order with property transfer orders being made in respect of the specified properties and shares in part satisfaction. Mr Pointer and Mr Wagstaffe submit that I cannot make orders against the shares or properties unless I find the requisite impropriety as set out in Ben Hashem. There is also the separate issue of whether the companies hold the shares and properties on trust for the husband or as his nominee.

[218]Dealing first with the issue of impropriety, has the wife established that the company structure has been used to avoid or conceal liability? In my judgment the company structure in this case was set up and has been used for conventional reasons including wealth protection and the avoidance of tax. Mr Todd is right, for example, to point to the reference in the annex to the husband’s Form E to his transferring his shares in PRL Nigeria to the Nevis company because he was involved in litigation. However, this does not result in the company structure being used to conceal or avoid liability. It is seeking to provide a degree of protection for the wealth, which may or may not be effective depending on the nature of the rights retained by the husband. He is also right to point to the company structure effectively being the husband’s money box which he uses at will. This might be contrary to accounting or company law principles but any disregard of those principles does not, in my view, mean that the structure is being used to avoid or conceal liability. From the husband’s perspective the wealth and the corporate structure is and remains his but at the same time he is able to take advantage of the tax and other benefits of holding it within a corporate structure.

[219]I also do not accept Mr Todd’s submission that the undoubted use by the husband of the corporate structure to seek to deny that the companies or their assets are his resources or are assets available to him amounts to impropriety as that word is used in the authorities. It is simply a husband giving false evidence. Accordingly, I do not consider that the wife has established impropriety in this case. I must, therefore, address the issue of whether I can make orders direct against shares and properties held in the names of the Respondent companies absent any impropriety. Should I apply the obiter comments in Nicholas v Nicholas and the reasoning in Mubarak or should I apply the conclusions of Munby J in Ben Hashem?

[220]In my judgment, the question I must decide is whether the relevant shares and properties are “property” to which the husband is “entitled, either in possession or reversion”. It is plain that the word “property” is extremely broad and covers all forms of property. The crucial words are, therefore, “entitled either in possession or reversion,” words which have not been the subject of any particular analysis. I agree with Mr Wagstaffe that if a lay person was asked the question whether a husband who owns a company which owns a house is entitled to the house, they would reply in the affirmative but I also agree with him that I must decide from a legal perspective whether as a matter of statutory interpretation, as applied to the facts of this case, the answer is the same. In undertaking this task, I am persuaded that I should apply Nicholas and what appears to me to be Bodey J’s reasoning in Mubarak as set out in paragraph 193 above.

[221]As I have indicated, I am satisfied that the husband has complete control over the Respondent companies both in terms of their operations and in terms of their management. He is the controlling force and the directors clearly act on his instructions. They are, to use the words of Munby J from Ben Hashem, the husband’s “stooges” or “ciphers”. I could also adopt the following passage from Lord Denning MR’s judgment in Wallersteiner v Moir

[1974] 3 All ER 217

“He was in control of them as much as any one-man company is under the control of the one man who owns all the shares and is the chairman and managing director. He controlled their every movement. Each danced to his bidding. He pulled the strings.”

[222]There is no evidence that any of the directors of any of the companies acted other than in accordance with the husband’s instructions. There is good evidence provided by Mr Le Breton that the corporate structure, the whole of it, was managed as the husband directed and I remind myself, again, of the terms of the husband’s contract of employment. Payments were made for the benefit of the husband and his family without any apparent attempt to see whether the husband was entitled to such payments. I have seen no reference to any determination being made of the husband’s bonus. The husband does not know how his income and bonus were accounted for in the accounts. There is reference to director’s remuneration but the amounts are substantially less than the amounts paid to the husband or for the benefit of the family. The husband himself accepts that the structure is such that he is able to effect whatever might be required to meet his obligations under Itsekiri customary law, be it transferring shares to his siblings or otherwise. How, I ask, would the husband be able to achieve this if he is not the effective owner of the whole group and of the companies?

[223]The superficial nature of the company structure and the extent of the husband’s control can be seen from his contract of employment and the other matters to which I have referred. It is also clear to me that the husband looks at things from the perspective of obligations or need. The legal structure is of secondary importance save that clearly any such structure must be capable of being used to enable his obligations and/or needs to be met. So, for example, if the husband’s customary law obligations require him to give his siblings shares in the company, then the structure must be such as to enable him to do so. I am confident that Mr Elusogbon did tell the husband not to worry because, indeed, the structure which holds the wealth and assets can be adjusted as required, or to put it another way the wealth held within the structure is freely available to be distributed as the husband directs. It is difficult to see how this could be achieved by him unless he controls, in English law terms, both the legal and beneficial interests in the worth. Further, if the husband not only has complete control but also is the sole effective owner, which I have found that he is, in my judgment, again in English law terms, I would see this as equating to beneficial ownership.

[224]In summary, therefore, in my judgment the answer to the question of whether an asset held in the legal name of a company is property which falls within section 24(1)(a) depends on the facts of the case. It is right, of course, that as a matter of company law a shareholder only has a right of participation in accordance with the terms of the Articles of Association and has no right to any particular item of property. But, what if the shareholder is, in fact, able to procure the transfer to them of a particular item of company property, such as a matrimonial home, as a result of their control and ownership of the company and the absence of any third party interests. Am I to ignore the reality that the shareholder is able to procure the transfer to them of that property for the purposes of deciding whether it is property to which they are entitled?

[225]In my judgment, it would be contrary to the purpose and intention of the legislation if I was to do so. The legislation is intended to ensure that marital wealth can be distributed by the court between the parties in a fair and just manner. In this case the husband can without inhibition acquire the properties and shares which the wife seeks because, in effect, the companies are his nominees or agents. As a result, in my judgment, the husband is “entitled” to the shares and properties held in the names of the corporate respondents because there is no impediment, including third party interests, to his enjoying the full benefit of these assets. They are held by the companies for the husband because the corporate structure is being used as a repository for the family wealth. Effectively the husband, in respect of the companies and their assets, is in the same position he would be in if he was the beneficiary of a bare trust or the companies were his nominees. There exists no legal impediment to his procuring the transfer of the assets held by the companies into his name. In the language of the cases, they are his “alter ago”.

[226]I do not consider that the company law principles, relied upon in particular by Mr Wagstaffe, determine the scope of the powers given to the court under the Matrimonial Causes Act. In my view, if a party is both the effective controller and the effective owner of a company it does not strain the language of the Matrimonial Causes Act to decide that he is “entitled … in possession” to an asset held by that company such as a former matrimonial home. This interpretation accords with what was said in Nicholas. As identified in Mubarak, he is entitled to the asset in possession because he has the right and ability to procure its transfer to him for his own use. This is not to challenge the principles established by Salomon or Adams v Cape or the other authorities referred to in the decision of Ben Hashem. It is to recognise, as was said by Slade LJ in Cape at page 536G, with my emphasis:

“save in cases which turn on the wording of particular statutes, the court is not free to disregard the principles of Salomon merely because it considers that justice so requires.”

[227]As a matter of general law the companies in the Petrodel group may be separate legal entities but, in my judgment, under the Matrimonial Causes Act their assets fall within the scope of section 24 as a result of the complete nature of the husband’s control and ownership. As Mr Wagstaffe submitted, the wife can have no stronger claim than the husband’s. In this case, as a result of his control and ownership, the husband is able to procure the transfer of the properties and shares into his sole name or as he may direct. The case was argued on behalf of the husband and the companies on the basis of the husband’s rights as against the company. Apart from the alleged interests of the husband’s siblings, which I have rejected, it has not been asserted that any other rights or interests would or should inhibit me from making the orders sought by the wife.

[228]I also propose to deal specifically with the position of W Avenue. I am satisfied that the monies used in the purchase and refurbishment of that property came from the husband. There is no evidence that he lent this money to the company, nor that he gifted it to the company. Accordingly, if it were necessary for me to decide the issue, I would decide specifically that the company holds that property on resulting trust for the husband.

[229]I propose to order a lump sum as indicated. I also propose to structure the order in the manner advanced by Mr Todd but at this stage I propose to limit the properties which I order to be transferred to the wife to the properties in Nevis and the properties in England and in respect of the shares I propose to limit the order to the shares in EDL England and EDL Nevis. I adjourn the issue as to whether I should make any transfer in respect of the shares of any other company or any other property to a later date.

[230]Finally, I propose to order that the husband pays maintenance for each of the children at the rate sought by the wife of £24,000 per annum and, in addition, he will be ordered to pay all educational and medical expenses. I propose to direct that there be a later hearing to deal with any issues arising out the drafting of the order, at which stage I will also deal with the issue of costs. [Discussions re further hearing follow]

YP v MP [2011] EWHC 2956 (Fam)

(s) ’

Then continuing a bit later:

Cited in 3 later judgments