Source: https://www.familylawhub.co.uk/default.aspx?i=ce5226
Timestamp: 2019-11-19 14:59:22
Document Index: 5682213

Matched Legal Cases: ['UKSC ', 'UKHL ', 'UKSC ', 'EWCA ', 'UKSC ', 'EWCA ']

Application for financial relief under Part III of the Matrimonial and Family Proceedings Act 1984 where the judge had to consider needs in a context of an extremely opulent lifestyle.
Case No: FD14D00410
Neutral Citation Number: [2016] EWHC 1684 (Fam)
CHRISTINA ESTRADA JUFFALI (Applicant)
WALID JUFFALI (Respondent)
Mr Charles Howard QC and Mr Deepak Nagpal (instructed by Hughes Fowler Carruthers) for the Applicant
Mr Justin Warshaw QC, Mr Geoffrey Kingscote and Mr Nicholas Wilkinson (instructed by Mishcon de Reya LLP) for the Respondent
Hearing dates: 24th, 27th, 28th, 29th and 30th June 2016
1. This is an application by a former wife for financial relief under Part III of the Matrimonial and Family Proceedings Act 1984 ("the 1984 Act"). The applicant is Christina Estrada Juffali. The respondent is Dr Walid Juffali. I shall refer to the parties as "the applicant" and "the respondent" although I have not anonymised this judgment because there has already been significant media interest in, and reporting of, this case which has travelled as far as the Supreme Court on one particular aspect.
2. The applicant's claim is brought under the 1984 Act because the marriage was dissolved not as result of English divorce proceedings but following the pronouncement by the respondent of a talaq in Jeddah, Saudi Arabia. It was a divorce which was initiated without notice to the applicant and she is entitled to no financial compensation under its terms. The Saudi divorce became absolute in December 2014. It is a divorce which is entitled to recognition in this jurisdiction and the applicant now applies to this court for financial provision for herself and the parties' 13 year old daughter, S. The 1984 Act provides the statutory gateway through which, in appropriate circumstances, the court can make a wide range of orders where no, or no adequate, financial provision has been made in the foreign jurisdiction in which the divorce proceedings took place.
3. The respondent does not now contest the jurisdiction of this court to make orders providing for his former wife and child. However, his full engagement in these English proceedings was achieved only when his defence of diplomatic immunity to suit was rejected by the Court of Appeal in March this year1. The Supreme Court has since refused him permission to appeal that decision.
4. Over the course of four days, I have heard evidence from the applicant. There is a wealth of written evidence before me, including several statements from both parties. Whilst he has been represented throughout the hearing by his very experienced legal team, the respondent has played no active part in these proceedings. He is suffering from terminal cancer and is currently receiving palliative care at a clinic in Zurich. Whilst the position has been kept under review, I had evidence from his treating physician at the start of this hearing that he was too ill to participate in these proceedings even via a video link with the court. Because of the need to finalise these proceedings without further delay, it was agreed that we should proceed in his absence. I am satisfied that he has not been prejudiced as a result because the focus of this case is on the applicant's financial needs. Whilst there has been some debate about the full extent of the respondent's very significant wealth, this is not a case, as the applicant accepts, where she seeks a share in that fortune by way of a percentage division. Whilst the respondent's assets may have increased to some extent over the course of this 12 year marriage, he was an extremely wealthy individual when they married. The issue which lies at the heart of this case is the extent to which the exorbitant standard of living which they enjoyed throughout the course of the marriage should now be reflected in the assessment which I have to undertake in respect of the applicant's future needs as she moves into an independent life outside her marriage.
5. The applicant is represented in these proceedings by Mr Charles Howard QC and Mr Deepak Nagpal. They are instructed by Hughes Fowler Carruthers. Mr Justin Warshaw QC with Mr Geoffrey Kingscote and Mr Nicholas Wilkinson represent the respondent, instructed by Mishcon de Reya. I have already expressed my thanks to both legal teams for the manner in which they have dealt with this case. Because of the very sad circumstances in which I have had to expedite this hearing and my judgment at its conclusion, I have agreed to deliver a written, albeit partially ex tempore, judgment. I cannot hope to do full justice to the careful and extensive submissions and the detail of the evidence which I have heard over the course of the last few days but I remain grateful for the assistance I have been given.
6. The positions of the parties in this litigation are very significantly polarised. The applicant has some assets in her own name including a London flat and a property which she owns in Hills, California. (That property was bought for her by the respondent at a time when the marriage was in difficulties in the early part of 2012.) In total, she has assets worth some £15 million. Mr Warshaw contends that the figure is closer to £20 million when the value of her chattels and jewellery is taken into account. The respondent has disclosed personal assets worth £22.8 million net and an entitlement to, or interest in, trust assets worth a further £95.3 million. His wealth was significantly greater prior to 2013. During that year, in June, he entered into a contract by which he purported to sell the bulk of his Saudi assets to his three daughters from his first and second marriages (including S) for just over £512 million. Under the terms of that contract, he is entitled to continue to receive the income arising during his lifetime (and it is a very considerable income). The money remains outstanding and due to him as a debt although he accepts that he does not expect repayment from his daughters. On his case, this was part and parcel of a careful estate planning exercise undertaken at a time when there were no known concerns about his health. The contract, which is governed by Sharia law, is revocable at his election and Mr Howard invites me to treat these assets as still available to him and thus part of his resources for the purposes of the present claims. On this basis, the applicant's case is that he has resources of some £650 million although, anecdotally, she believes he is worth far more and the figure of £8 billion has been referred to during the course of the hearing. Mr Howard and Mr Nagpal invite me, in due course, to draw adverse inferences in relation to what they contend is a failure on the respondent's part to disclose in these proceedings the full extent of his assets. The significance for the parties' daughter is that, for so long as the contract remains unchallenged, she has assets in her own name of more than £150 million. This step, says the respondent, was part and parcel of his wish to ensure her future financial security.
7. As to outcome, the applicant seeks global provision in the sum of £196.5 million. The major component elements of that sum comprise a central London housing fund of £62.8 million together with a capitalised maintenance fund of just over £127 million. That figure has been calculated on the basis of an annual budget of c.£6 million net. In addition, she wishes to keep her home in California and acquire a second home in this jurisdiction which she will pay for by selling her London flat and using part of the capital award she seeks from the respondent. Until payment of that award, she seeks the continuation of the current interim arrangements whereby the respondent pays the outgoings on their former matrimonial home, a substantial property situated on the edge of Windsor Great Park which she currently occupies with S, together with the other costs of maintaining that household, and a sum of $1,631,280 per annum which is the interim level of maintenance which was put in place by this court in April 2016.
8. The respondent's case is that £20 million is sufficient to meet the needs of any 54-year old woman, particularly in circumstances where all of S's costs are being met by him in the order of some £150,000 per annum. Those costs will continue to be discharged in future and at that level. Whilst he claims that an objective analysis of her current position would meet her future needs without any additional financial assistance from him, he nevertheless offers to pay to the applicant a further £17 million over a five- year period. Once she leaves the family home, he has offered to provide her with the use of a home in central London worth up to £6.5 million on the basis that the property will be held in their daughter's name. The applicant will be entitled to share that home with S for the next five years until she completes her secondary education. On this basis, the applicant will leave the marriage with assets of some £37 million and will have the use of the London property during S's minority.
9. In making his proposal, the respondent contends that he has had in mind the financial provision which was made for his first wife, the mother of his two elder daughters and his (now deceased) son. She is said to have received a total award of c.$60 million (£40 million) at the conclusion of contested English divorce proceedings. The applicant suspects that her award was significantly higher. Because his first wife has not consented to the disclosure of the relevant court order in these proceedings, I have no way of knowing who is right but in any event it makes little difference to my approach to this case. It is the applicant's and S's needs which I am considering in the context of this application and those needs fall to be assessed in the context of a number of factors, including their marital standard of living and the resources which are now available to the respondent.
10. Thus were the battle lines drawn as this case started and thus they have remained at its conclusion.
11. The respondent is a Saudi national who was born in Lebanon in 1955. He is now 61 years old and, as I have said, his health is now in terminal decline. He grew up in the family home in Jeddah before studying for a first degree in the United States. Following his graduation, he returned to Jeddah where he was employed within the family business, EA Al-Juffali and Brothers. That business had been founded by his father and brothers in 1946. It was a successful family enterprise which was involved in the supply of electricity and telecommunications throughout the Kingdom of Saudi Arabia. When his father died in 1994, the respondent, with his brothers, inherited his father's interest in the family business. Until the recent decline in his health, he was actively involved in the business which is, by and large, the provenance of the wealth in this case. That wealth enabled the respondent to become involved in a number of charitable and philanthropic causes. Notably, he was the founder of the Brain Forum, a non-profit making organisation based in Switzerland which promotes brain research. He is Chair of a foundation for intellectually disadvantaged children and his work has been recognised by Saudi Arabia, Denmark, Lebanon and the Vatican. His first marriage, celebrated in 1980, endured for some 21 years. In 2012, his only son died at the age of 23 years. In 2014, he became the permanent representative of the International Maritime Organisation at the invitation of the Prime Minister of St Lucia. That appointment has a resonance in the litigation chronology since he subsequently used that position to advance a defence of diplomatic immunity to suit in these proceedings. That defence was rejected by Hayden J who was upheld, in part, by the Court of Appeal on the basis of a finding that the respondent was permanently resident in this jurisdiction at the time these proceedings were launched. His subsequent application for permission to appeal to the Supreme Court was unsuccessful. Despite that finding, it is common ground that he is non-domiciled in this jurisdiction. The majority of his current wealth is held offshore and in part through trust structures based in Bermuda and the Bahamas.
12. In February 2012, during the currency of his marriage to the applicant, the respondent married his third wife, L. She is significantly younger than the applicant and they now have two small children. The respondent maintains that he and the applicant were separated at the time. Following the death of his only son some three months after that marriage, there appears to have been a rapprochement between the applicant and the respondent and it was during this period that the Californian property was acquired for the applicant. She contends that, on the basis of several promises which he made to her about ensuring her financial security, she agreed to give their marriage another chance and they reconciled briefly. However, the reconciliation was short-lived and, in August 2013, she issued English divorce proceedings which were overtaken by the pronouncement by the respondent of the talaq divorce. She accepts that by October 2013, their marriage had come to an end. By that point it had endured for some 12 years.
13. The applicant was born in Santa Monica, California in February 1962. She is an American citizen and is now 54 years old. In 1981, when she was 19 years old, she moved to Paris to work as a model. Her career took off and she was soon modelling internationally in New York, Japan and Italy. In 1988 she moved to London which has been her permanent home ever since. The following year she began a relationship with a well-known hotel tycoon2. Whilst they became engaged, they never married and the relationship ended after some ten years.
14. She met the respondent in 2000. He was then still married to his first wife and she and the respondent were living in a home in Wilton Crescent, Belgravia. By March 2001 the applicant and the respondent had commenced a relationship. Having divorced his first wife that summer, they were married in Dubai on 18 September 2001. This was followed by a second marriage ceremony in Jeddah in November that year. The marriage marked the effective demise of what had been a very successful international modelling career. The applicant told me, and I accept, that the respondent wished to have her by his side and available to travel the world with him as and when it pleased them both. She has not worked since and their principal family base throughout the marriage has been in England. In addition to providing for the applicant, the respondent also assumed responsibility for the financial support of her close family members. For a number of years he had been supporting her (divorced) parents as well as her maternal grandmother3. This arrangement continued throughout their married lives until the effective demise of the marriage since when that responsibility has passed to the applicant.at least in relation to her mother and grandmother. The respondent continued to provide financial support to the applicant father
15. The parties' first matrimonial home was a substantial apartment at 50 Hyde Park Gate in central London. In October 2002, S was born in London. She is a child who has brought much joy to each of her parents and she is dearly loved by them both. That much was abundantly clear to me from the evidence. She is their only child and she attends school in the Windsor area. She will be 14 years old next academic year and the intention is that she will become a weekly boarder at a school which she and her parents have chosen outside the immediate environs of London.
16. In 2005, the family moved to Bishopsgate House ("BGH"). It remains home to the applicant and S to this day. The property has been described in these proceedings as "a vast and prestigious property surrounded by about 33 acres of its own land immediately adjacent to Windsor Great Park". The property is owned by a Jersey company which is, in turn, owned by one of the trusts of which the respondent is a beneficiary. It was formerly a home occupied by the respondent's mother. The applicant's evidence is that it had been acquired by his parents as their family residence in England. His mother had continued to use the property as her summer home after her husband's death. When she moved to alternative accommodation in Eaton Square (and a sum of £13 million was apparently made available from family resources to fund this move), the parties embarked upon a two-year renovation project which involved the gutting and complete rebuilding of the house. It appears to have been a monumental undertaking which involved as many as fifty contractors working on the property from New York, Boston, Paris, Jeddah and England. During this period the parties travelled extensively (and internationally) in their quest to find works of art and antiques which they used to furnish the property. With the assistance of architects, they built tennis courts and stabling for four horses. A helipad was constructed to enable the respondent to travel easily to London. A summer cottage and tree house were built in the grounds for S. The gardens were re-established and fountains were built. A gazebo was added to the maze garden. The applicant maintains that she was told by the respondent that the cost of the work was $50 million. Whether or not that was the actual cost, it was on any view a very substantial project and one in which the applicant was fully involved. They moved in during 2005 with a full retinue of staff, including groundsmen, gardeners and a 24-hour security team.
17. In 2007, some six years into the marriage, the respondent purchased a grand palazzo in Venice. It was purchased for €12.5 million through a Luxembourg corporate entity which was owned by one of the family trusts. A further €3 million was spent on renovations. Whilst it has since been sold, the applicant contends that the property was purchased for her as a gift from the respondent. It was later sold for c.€22 million.
18. The following year in 2008 the respondent acquired a plot of land in Gstaad, Switzerland. Work commenced on the construction of a substantial "iceberg" chalet on the plot. Several floors were constructed underground to house a swimming pool and parking for up to sixteen vehicles. It now occupies six to seven floors and the photographs which I have seen speak to the sumptuous opulence of its interior specification. Materials were imported from all over the world to fulfil the design brief which the parties had stipulated. The respondent says that she shopped in Paris for the fabrics and curtains. A quantity of quartz was imported from Afghanistan to create one particular wall in the chalet. Other walls in the underground spa were fashioned in amethyst, which is the applicant's birthstone. According to the applicant's evidence, nearly sixty truckloads of wood were delivered to the construction site whilst the building was being erected and all the leather and velvet wall coverings were made and imported from Paris.
19. The parties celebrated the applicant's 46th birthday at the chalet in 2010. On that occasion, she was presented with diamond jewellery worth c.$1 million.
20. The respondent's case is that one of his elder daughters is the legal owner of this property. He has produced a contract which shows that the plot in Gstaad was purchased for SWF 42 million in February 2008. His case is that he gifted the funds which were required to purchase the plot and build the chalet to his daughter, D, and that she now holds the property on some trust arrangement for all of the respondent's children. In contrast, the applicant contends that the property was a gift to her. She says that when the respondent first told her that he had purchased the plot, he said, "Say thank you to me; I have just bought you a chalet". One of her witnesses told me that the respondent had said in her presence, "Let me show you the house I have done for her".
21. That same year the family property portfolio was augmented by the acquisition of a property on a beautiful part of the Devon coast near Dartmouth. Matthews Point Manor was bought as a weekend getaway home. A helipad was constructed at the property and the applicant told me that the journey from BGH took less than an hour. Again, the applicant says that this was always intended as a gift to her. It was a home which was visited often by the respondent's two elder daughters and the applicant told me during the course of her oral evidence that it became a place where the family could all meet and enjoy time away from the city.
22. It is quite clear to me from the evidence that the respondent would frequently buy very expensive jewellery for the applicant. It appears, and I accept, that it gave him much pleasure to indulge her with the purchase of what she described as "beautiful things". Over the Christmas / New Year holiday of 2004/2005, the parties were holidaying with family and friends in St Barts in the Caribbean. Whilst they were there, the respondent arranged for a blue diamond ring to be flown to the island by a representative of the jewellers, Chopard. On the applicant's case, he gave it to her as a Christmas present amidst much fanfare and celebration. Her witnesses (from two of whom I heard by video link) confirm that the applicant had told them that the ring was a Christmas present from the respondent who presented it to her with bows and ribbons whilst accompanied by a troupe of guitar players.
23. In the early part of 2011, the respondent suggested to the applicant that it was not sensible to keep all her jewellery in one place in the safe at BGH. He had removed the blue diamond ring from the property. The applicant's case is that he did so because of these security concerns but promised that it would be returned to her whenever she wished to wear it. Since the breakdown of the marriage, she has repeatedly asked for the return of the ring but those requests have fallen on deaf ears. During the early stages of this litigation and at a time when the value of this ring was thought to be between US$15 million and US$18 million, I made directions requiring the respondent to disclose the current whereabouts of the ring. He is in breach of those disclosure orders. Initially he said that the ring had not been a gift but was part of his precious stones collection. By the conclusion of the case, he had given instructions that the ring was no longer in his possession and had been gifted to a third party. He continues to refuse to identify that third party although he has now offered to pay to the applicant an additional $2 million in lieu. That sum is based upon 50% of its value. In support of that figure he has produced the original bill of sale which shows that the cost to him in January 2005 was $4 million. The applicant believes it is now worth very considerably more and she seeks within these proceedings a declaration that she is the beneficial owner of the ring. She wants the ring to be returned to her.
The circumstances in which the marriage came to an end
24. I have already referred to the fact that the respondent married his third wife, L, in February 2012. He says that by this stage he and the applicant were spending much of their time apart. She and S were based at the family home in England whilst he was spending much of his time outside the United Kingdom. He had met L in 2011 and they married in Beirut the following year. He says that it is not unusual for men to have more than one wife in his culture.
25. I have little doubt that the applicant is telling the truth when she tells me that she knew nothing of this marriage. It is not without significance that, in the same month in which that marriage was celebrated, there was a significant birthday celebration planned for the applicant's 50th birthday. She describes it in her written evidence as "a stunning party" at a luxury resort in Abu Dhabi. Two hundred guests attended and the cost of the firework display alone is said to have been $1 million. At that party, the respondent presented her with her birthday gift: a pale pink diamond ring with matching earrings. This is despite the fact that he claims to have been separated from her at the time.
26. Two days after the applicant returned to England from the party, she received a call from a friend in Jeddah who told her that the respondent had married a 24-year old Lebanese girl in Beirut. When confronted, the respondent accepted during the course of a telephone call that he had indeed taken another wife and that his relationship with her had been ongoing for about a year. The applicant describes herself as being "broken", "shocked, shattered and devastated" by this news. She says she was encouraged by the respondent's family members to remain patient and "wait it out". They encouraged her not to seek a divorce.
27. According to her evidence, which was not the subject of challenge, the respondent's "right hand man" approached her the following month in March 2012. She was told that the respondent wished to know what she wanted in exchange for not pursuing divorce proceedings. After a lengthy conversation, she impressed upon this gentleman her need for some financial security. She said that if she was to leave BGH she wanted a home in London and a holiday home in the United States where she could spend time with her family. She says that, on an occasion when he returned to the family home in England later that month, the respondent said that he would buy her two homes; since she was going to remain at BGH for the time being, the American property would be purchased first followed by a London home.
28. In May 2012, the respondent arranged for a mortgage to be taken out against BGH in the sum of $50 million. The applicant was not aware that this had been done. Later that month, he finalised the purchase of the Californian property which the applicant continues to own. The Beverly Hills property cost $12.25 million and a further sum of just under $4 million was spent on renovation and decoration. It is a property which extends to over 24,000 square feet and is sufficiently large to accommodate staff in a separate annexe.
29. This was a turbulent time for this family on any view. In the second week of May 2012, the respondent telephoned the applicant to tell her that he had been involved in an accident. On her case, he attempted to pass it off as a car accident but she subsequently discovered that he had fallen whilst skiing with L at their property in Gstaad. At his request, the applicant flew out to Zurich with S on a private jet which had been arranged by the respondent. She remained with him at their Zurich apartment for six days. Whilst at the family office in Zurich, she claims that she saw an American Express annual statement which showed that the respondent's personal expenditure for the previous year amounted to $33 million. The respondent denies that she saw any such statement.
30. There were discussions about her future during that trip. She claims that the respondent told her that she would be looked after and that her financial future was secure. She had only just arrived back in England when the respondent telephoned her to inform her that his only son had died. She and S flew immediately to Jeddah with her son-in-law's young widow. It was shortly after these events that the respondent agreed to finance the purchase of the Californian property.
31. In November 2012, the respondent held a lavish wedding party for his third wife at the palazzo in Venice. Many of their mutual friends were invited to attend. The applicant describes in her written evidence the humiliation which she felt for herself and their daughter as these events unfolded. Five months later, in April 2013, the respondent told the applicant that he had divorced L. He professed love for the applicant who agreed to attempt a reconciliation. The following month they flew to Cannes where he presented her with an 18 carat diamond ring. She claims he said it was his "coming back present". I have seen a valuation which suggests that the ring is worth in the region of $632,000.
32. It appears that during this period, the respondent remained in contact with L although he told the applicant that this was only for the purposes of resolving their own issues.
33. Shortly after their return to BGH, the respondent told the applicant that he had arranged for an imam to come to the property. She says that he told her that it was his intention to make a "living will" which would provide for his children (i.e. his two adult children from his first marriage and S). On 28 June 2013, the family assembled at BGH in the presence of an imam. It was, by all accounts, a happy family celebration. I have within the bundles a copy of the document which the respondent signed on that occasion together with an English translation. It is entitled "Contract of Sale". The parties are identified as the respondent and his three daughters (D, H and S4). The preamble records the respondent's ownership of various properties, stocks and shares and his agreement to "sell" these assets to his daughters for a sum of 2,812,926,500 Saudi Riyals (about £565 million on current fx rates). I set out below the material parts of the document which followed:
"Four: The Parties agree that the amount shall be paid within a period of one month. If payment is not made within the aforementioned period, [the respondent] shall have the right to retract this Contract at any time he wants, and he shall have the full right unilaterally to cancel the Contract or to continue with it.
Five: [The children] agree to pay the sale price by handing over all profits to [the respondent] until the full sale price is settled. In the event of the inability to pay the amount within a month, and if [the respondent] wishes to continue with the Contract, he shall have the right to take receipt of all the profits of the Companies, or part of the same, until the full price has been settled. He shall have the right unilaterally to decide between full or partial receipt.
Six: In the event, God forbid, of the death of [the respondent], the claim for payment of the outstanding amount of the Contract Value will lapse and the sale shall be correct and complete and the possessions the Subject Matter of the Contract shall not form part of the estate." [My emphasis]
34. It is the applicant's case that she trusted the respondent when he told her that what he was doing was in her and S's best interests. Despite the fact that the contract was written in Arabic (which neither she nor S could read), S was required to sign the document. She says that she was assured by the respondent that, as a result of the provision he had made, she would receive between $200 million and $800 million in the event of his death. It was not until he disclosed an English translation in the context of the current proceedings that she understood the contents of the document which was signed on that day.
35. The early part of the Summer in 2013 appeared to pass without incident. The parties, with S, spent some time cruising the Mediterranean in a yacht before celebrating his mother's 80th birthday in Monaco. It was whilst they were in Monaco that the applicant realised that the respondent's relationship with his third wife had not come to an end and, when she returned to England, she instructed solicitors to issue an English divorce petition seeking dissolution of their marriage.
These proceedings and the litigation which followed
36. In the context of the defence which the respondent sought to raise to the applicant's Part III application, in February 2016 Hayden J delivered a detailed and masterful judgment dismissing his claim to diplomatic immunity. Whilst much of the legal argument recorded in that judgment is irrelevant to the exercise in hand, it contains a summary of the journey which the litigation had taken to that point in time. It is reported as Estrada v Al-Juffali [2016] EWHC 213 (Fam). In the course of his judgment, Hayden J found as a fact that the respondent "has sought and obtained a diplomatic appointment with the sole intention of defeating W's claims consequent on the breakdown of the marriage": see paragraph 36.
37. Thus, I can set out the litigation history relatively succinctly.
C. These proceedings
38. The applicant's English divorce proceedings were issued on 13 August 2013. They were not served at that stage.
39. In June 2014, the respondent sold the palazzo in Venice. On her case, she received no notice of the impending sale.
40. On 17 September 2014, the respondent pronounced his talaq in Jeddah. The applicant had no prior notice of those proceedings. On 17 December 2014, a matter of days after that divorce became absolute, she issued her application in the English court for permission to proceed with her Part III claim under the 1984 Act. Two days later, Newton J gave her permission to proceed. Her formal Part III application was issued on 22 December 2014.
41. The respondent's stance to that application was clear from the early solicitors' correspondence. He threatened to seek indemnity costs against the applicant unless she immediately withdrew her application. On 2 February 2015, he issued a formal application to strike out her claims. He claimed that the Californian house was a perfectly good home for the applicant and their daughter and made clear his intention to resist any attempt by her to seek further financial provision.
42. In support of his strike out application, the respondent relied upon the evidence of one of his employees. Mr A made a statement on his behalf. He runs the respondent's Family Corporate Office in Jeddah and is responsible for the management of his personal and business travel schedule. He also coordinates his business and family affairs in Saudi Arabia. In his statement, Mr A claimed that:
(i) The respondent was not resident in the United Kingdom for tax purposes;
(ii) He does not have any assets in the United Kingdom which give rise to a taxable income;
(iii) He does not pay the annual remittance charge;
(iv) He files no tax returns;
(v) He discharges his expenses and living costs when in the United Kingdom using credit cards or expense accounts.
43. Mr A also stated that the respondent's home was a substantial property in the Al Hamra District in Jeddah. That property was held in his sole name. It occupied a plot of some 13,000 spare metres and consisted of 8 bedrooms, 8 living rooms, 21 bathrooms, 2 kitchens, staff accommodation, a garage and leisure facilities, including a gym, tennis court, swimming pool and cinema.
44. In mid-May 2015, the respondent's solicitors wrote to the applicant's advisers to set out the interim financial support which he was providing on a voluntary basis. In addition to the substantial running costs of BGH, he was paying the running expenses of her Beverly Hills home (said to be US$440,000 in 2015) and paying her US$100,000 per month. In addition to meting all of S's costs, he was also supporting the applicant's extended family at a cost of a further US$535,000 in 2015.
45. It appears that the voluntary support which the respondent was making was unilaterally reduced with effect from June 2015. This can only have been done on the respondent's instructions. The running costs of the Californian property were reduced, as was the support extended to members of her family. The staff numbers at BGH were reduced; routine maintenance work at the property could not be undertaken.
46. Towards the end of November that year, the applicant was told that the respondent was very seriously ill. That news was broken by his daughter, D. She immediately agreed that their daughter should spend the Christmas holidays with her father notwithstanding the fact that it was her turn to celebrate Christmas with S.
47. The New Year saw the start of the respondent's strike out application. On 18 January 2016 Hayden J sat to hear legal argument about the diplomatic immunity point. He delivered judgment on 8 February 2016 thereby opening the way for this claim to proceed.
48. That same day, the applicant filed a statement in support of her pending applications for interim periodical payments and payment of her legal costs. In that statement, she claimed that the sums he was providing (US$181,250 per month or US$2.175 million per annum) did not meet her needs. She stated her personal belief that the respondent's personal wealth was "in the region of £8 billion". She estimated the value of BGH, the matrimonial home, to be "in excess of £100,000,000". Significantly, she produced a budget of her needs on an interim basis. Whilst the global figure she gave was £1,666,620 per annum, it has subsequently emerged during the course of this hearing that there was an arithmetical error in that calculation and the claim for her personal expenses (including the housekeeping elements at BGH but ignoring the running costs for the property) was actually £1,779,620 or just shy of £150,000 per month. (That figure included the running costs of the Californian property (c.£420,000 per annum in total) and just under £390,000 per annum (US$565,000) for the contribution towards the costs of her parents and grandmother.) In addition, she claimed just under £280,000 per annum in respect of S's expenses, excluding school fees.
49. On 19 February 2016, the matter came before me for directions. By this stage, there were three applications to be considered: the full Part III application; the application for interim periodical payments and a legal services costs order; and an application for delivery up of the blue diamond ring. I was made aware of the critical state of the respondent's health although there was no formal evidence from any of his doctors. It was agreed that an abbreviated and bespoke process would need to be adopted. I directed him to produce a statement setting out in summary form his means and the location of his assets. I required him to provide, through his Family Office, details of the level at which he had been providing financial support for running the two homes used by the applicant. I also directed him to provide information about the current whereabouts of the blue diamond ring and, in summary form, his case as to the ownership of the ring.
50. The following month, the Court of Appeal heard and dismissed the respondent's appeal against Hayden J's judgment in relation to diplomatic immunity. Whilst they allowed the appeal in part (in relation to costs), his Lordship's finding in relation to his permanent residence in the United Kingdom was upheld.
51. On 24 March 2015, the respondent's solicitor on his behalf provided a statement in compliance with my earlier directions. She said on his behalf that his share of the sale proceeds from the Venetian palazzo had been spent. She deposed to the nature and effect of the June 2013 contract of sale. It appeared to be the respondent's case that the applicant was fully aware of the terms of this document and its significance for their daughter, S. The Family Office had supplied information about the running costs of BGH which, during the two year period between 2013 and 2015, were said to be approximately £1.25 million per annum. In 2013, 15 staff had been employed to run the home. (By 2016, these had been reduced to one butler, two housekeepers, two gardeners and a chef.) On behalf of the respondent, Miss Davis, his solicitor, stressed that he had not withdrawn voluntarily support from the applicant. On the contrary, he was discharging all the overheads and expenses at BGH; paying her US$100,000 per month; meeting all S's costs (about US$250,000 per annum); and providing financial assistance to her father.
52. He denied he had gifted the blue diamond ring to the applicant and said that it was no longer in his possession or control. About a month later, in a further statement, he said that the ring had been stored in one of his personal safes but he had been unable to ascertain its whereabouts.
53. On 6 April 2016, I made orders in respect of interim provision. Without prejudice to either side's contentions as to the appropriate level of support in the main Part III application, I ordered the respondent to pay periodical payments of US$1,753,920 per annum to include US$122,640 for the applicant's father. These sums were accrued on the basis that the respondent would continue to discharge the outgoings on BGH and all expenses relating to S. I adjourned consideration of whether he should be required by order to support her mother and grandmother to the forthcoming final hearing. (The applicant has assumed responsibility for those payments in the meantime.) I made a legal services costs order in the sum of £735,000. The final hearing was listed on an expedited basis to commence on 24 June 2016. Directions were made for the filing of further written statements and Forms E and provision was made for the valuation of BGH.
54. My orders in respect of interim provision and costs funding have been complied with by, or on behalf of, the respondent.
55. The applicant produced her statement setting out her future needs on 27 April 2016. Her section 25 statement followed on 3 June 2016. It is the content of those statements which has been the focus of much of her cross-examination during this hearing.
56. Before turning to examine her case in relation to her future needs, I need to deal with the law. I do so to provide some context to that exercise.
57. Section 16 of the Matrimonial and Family Proceedings Act 1984 provides as follows:-
(1) Subject to subsection (3)5, before making an order for financial relief the court shall consider whether in all the circumstances of the case it would be appropriate for such an order to be made by a court in England and Wales, and if the court is not satisfied that it would be appropriate, the court shall dismiss the application.
(2) The court shall in particular have regard to the following matters –
(a) the connection which the parties to the marriage have with England and Wales;
(b) the connection which those parties have with the country in which the marriage was dissolved or annulled or in which they were legally separated;
(c) the connection which those parties have with any other country outside England and Wales;
(d) any financial benefit which the applicant or a child of the family has received, or is likely to receive, in consequence of the divorce, annulment or legal separation, by virtue of any agreement or the operation of the law of a country outside England and Wales;
(e) in a case where an order has been made by a court in a country outside England and Wales requiring the other party to the marriage to make any payment or transfer any property for the benefit of the applicant or a child of the family, the financial relief given by the order and the extent to which the order has been complied with or is likely to be complied with;
(f) any right which the applicant has, or has had, to apply for financial relief from the other party to the marriage under the law of any country outside England and Wales and if the applicant has omitted to exercise that right the reason for that omission;
(g) the in England and Wales of any property in respect of which an order under this Part of this Act in favour of the applicant could be made;
(h) the extent to which any order under this Part of this Act is likely to be enforceable;
(i) the length of time which has elapsed since the date of the divorce, annulment or legal separation.
58. Section 17 of the 1984 Act enables the court to make a range of orders for financial provision and property adjustment, including an order varying a post-nuptial settlement under s24(1)(c) of the Matrimonial Causes Act 1973: s17(1)(a)(ii). In this case, the applicant seeks no such order save that she reserves her position as to enforcement. She confines her claim to a lump sum order and secured provision for S.
59. Section 18 of the 1984 Act lists those matters to which the court is to have regard when it exercises the powers given to it under s 17.
60. Section 18 provides as follows:-
(1) In deciding whether to exercise its powers under section 17 above and, if so, in what manner the court shall act in accordance with this section.
(2) The court shall have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.
(3) As regards the exercise of those powers in relation to a party to the marriage, the court shall in particular have regard to the matters mentioned in section 25(2)(a) to (h) of the 1973 Act and shall be under duties corresponding with those imposed by section 25A(1) and (2) of the 1973 Act where it decides to exercise under section 17 above powers corresponding with the powers referred to in those subsections.
(3A) ……
(4) As regards the exercise of those powers in relation to a child of the family, the court shall in particular have regard to the matters mentioned in section 25(3)(a) to (e) of the 1973 Act.
(6) Where an order has been made by a court outside England and Wales for the making of payments or the transfer of property by a party to the marriage, the court in considering in accordance with this section the financial resources of the other party to the marriage or a child of the family shall have regard to the extent to which that order has been complied with or is likely to be complied with.
61. Clearly, s. 18(2) and (3) are relevant here, as is s. 18(4). Section 18(6) is not, since it is accepted that the Saudi divorce gave rise to no rights or entitlement under Sharia law; it was a divorce without compensation.
62. The seminal authority on the application and interpretation of these sections is the decision of the Supreme Court in Agbaje v Agbaje [2010] UKSC 13, [2010] 1 AC 628 at 659. Lord Collins of Mapesbury JSC delivered the judgment of the court which was handed down on 10 March 2010.
63. In relation to the relevance of the section 16(2) factors (the first stage of the enquiry), Lord Collins confirmed that it had always been the Law Commission's intention to preserve the possibility of hiving off as a separate issue the 'appropriateness' of the English court which could be considered separately from, or together with, the matters relevant to the exercise of the court's discretion in deciding whether to exercise its powers and, if so, in what way6. That said, as is now clear following Agbaje, some of the matters which fall to be considered under s16 may also be relevant under s18, and vice versa. In considering the proper approach, Lord Collins said this at [2010] 1 AC 675 to 676:-
"71 To take up some of the points made in the preceding paragraphs, the proper approach to Part III simply depends on a careful application of sections 16, 17 and 18 in the light of the legislative purpose, which was the alleviation of the adverse consequences of no, or no adequate, financial provision being made by a foreign court in a situation where there were substantial connections with England. There are two, interrelated, duties of the court before making an order under Part III. The first is to consider whether England and Wales is the appropriate venue for the application: section 16(1). The second is to consider whether an order should be made under section 17 having regard to the matters in section 18. There are two reasons why the duties are interrelated. First, neither section 16(2) nor section 18(2)(3) refers to an exhaustive list of matters to be taken into account. Section 16(1) directs the court to have regard to "all the circumstances of the case" and section 16(2) refers the court to certain matters "in particular". Second, some of the matters to be considered under section 16 may be relevant under section 18, and vice versa. An obvious example would be that section 16(2)(e) refers the court to the financial provision which has been made by the foreign court. Plainly that would be relevant under section 18. So also the direction in section 18(6) to the court, in considering the financial resources of a party, to have regard to whether an order of the foreign court has been complied with would plainly be relevant in considering whether England is the appropriate venue. [my emphasis]
72 It is not the purpose of Part III to allow a spouse (usually, in current conditions, the wife) with some English connections to make an application in England to take advantage of what may well be the more generous approach in England to financial provision, particularly in so-called big-money cases. There is no condition of exceptionality for the purposes of section 16, but it will not usually be a case for an order under Part III where the wife had a right to apply for financial relief under the foreign law, and an award was made in the foreign country. In such cases, mere disparity between that award and what would be awarded on an English divorce will certainly be insufficient to trigger the application of Part III. Nor is hardship or injustice (much less serious injustice) a condition of the exercise of the jurisdiction, but if either factor is present, it may make it appropriate, in the light of all the circumstances, for an order to be made, and may affect the nature of the provision ordered. Of course, the court will not lightly characterise foreign law, or the order of a foreign court, as unjust.
73 The amount of financial provision will depend on all the circumstances of the case and there is no rule that it should be the minimum amount required to overcome injustice. The following general principles should be applied. First, primary consideration must be given to the welfare of any children of the marriage. This can cut both ways as the children may be being supported by the foreign spouse. Second, it will never be appropriate to make an order which gives the claimant more than she or he would have been awarded had all proceedings taken place within this jurisdiction. Third, where possible the order should have the result that provision is made for the reasonable needs of each spouse. Subject to these principles, the court has a broad discretion. The reasons why it was appropriate for an order to be made in England are among the circumstances to be taken into account in deciding what order should be made. Where the English connections of the case are very strong there may be no reason why the application should not be treated as if it were made in purely English proceedings. The full procedure for granting ancillary relief after an English divorce does not apply in Part III cases. The conditions which can be attached to leave, together with the court's case management powers, can be used to define the issues and to limit the evidence to be filed, as was done by Munby J in this case. This enables the jurisdiction to be tailored to the needs of the individual case, so that the grant of leave does not inevitably trigger a full blown claim for all forms of ancillary relief."
64. Lord Collins confirmed (para 61) that, whilst not pre-conditions to an order under Part III, both 'hardship' and 'injustice' will be relevant factors in the exercise of the court's discretion. 'Hardship' does not come into this case. It would be an insult to language to suggest that there is any prospect of this applicant suffering 'hardship' even if she is confined to an award at the level proposed by the respondent.
65. In this case, the provisions of aspects of Part II of the Matrimonial Causes Act 1973 ("the 1973 Act") are fully engaged. By virtue of s. 18(3) of the 1984 Act, I have to consider those matters referred to in s.25(2)(a) to (h) of the 1973 Act. Section 25A(1) and (2) of the 1973 Act sets out the so-called "clean break" provisions (which can easily be achieved in this case, given the extent of the resources) and s.25(3)(a) to (e) list a number of factors relevant to the assessment of financial support for S as a child of this family.
66. When deciding what financial orders to make in a matrimonial claim, the court is required under s. 25 of the 1973 Act to have regard to "all the circumstances of the case". First consideration is given to the welfare whilst a minor of any child of the family who has not attained the age of 18 years. When assessing "needs", the court has to take into account the matters set out in s.25(2):
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would be reasonable in the opinion of the court to expect a party to the marriage to acquire;
(e) any physical or mental disability of either of the parties;
(f) the contribution which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contributions by looking after the home or caring for the family;
(h) … the value to each of the parties to the marriage of any benefit which, by reason of the dissolution … of the marriage, that party will lose the chance of acquiring.
67. Any of these factors might, in an appropriate case, have a bearing on "needs". Clearly, the most relevant factors for the purposes of my assessment of this applicant's needs are sub-sections (a) (extent of available resources); (c) (marital standard of living); (d) (age, and thus potential length of any capitalised income provision); and (f) (ongoing contributions to the welfare of a child of the family).
68. The overlap between these factors and their interplay was recognised by Lord Nicholls in his leading judgment in the seminal decision of White v White [2001] 1 AC 596 at 608 to 609. His Lordship said this:
"Clearly, and this is well recognised, there is some overlap between the factors listed in section 25(2). In a particular case there may be other matters to be taken into account as well. But the end product of this assessment of financial needs should be seen, and treated by the court, for what it is: only one of the several factors to which the court is to have particular regard. This is so whether the end product is labelled financial needs or reasonable requirements. In deciding what would be a fair outcome the court must also have regard to other factors such as the available resources and the parties' contributions. In following this approach the court will be doing no more than giving effect to the statutory scheme."
69. In this context, it is important to note that the applicant does not come to this court seeking orders for financial provision as a supplicant. That much is plain and should be understood as a "given" in this case. As Lord Nicholls stated in Miller v Miller; McFarlane v McFarlane (paragraph 9) [2006] UKHL 24, [2006] 2 AC 618:
"In the search for a fair outcome it is pertinent to have in mind that fairness generates obligations as well as rights. The financial provision made on divorce by one party for the other, still typically the wife, is not in the nature of largesse. It is not a case of "taking away" from one party and "giving" to the other property which "belongs" to the former. The claimant is not a supplicant. Each party to a marriage is entitled to a fair share of the available property. The search is always for what are the requirements of fairness in the particular case."
70. Fairness to both parties remains the overarching objective even in a case based upon future needs. Thus, whatever view I take in relation to the scale of her future needs, the applicant has an entitlement to financial provision once she crosses the section 16 threshold imposed by the 1984 Act. Whilst Mr Warshaw at an early stage of his submissions advertised his case that the scale of the applicant's own resources would, on any objective view, be sufficient for her future needs, he does not seek to argue that it would be inappropriate for an English court to make an order in this case. The issue here is all about the scale of the provision to be made. Baroness Hale explained the rationale for meeting needs in these terms in her judgment in Miller v Miller; McFarlane v McFarlane:
"[137] …[T]here has to be some sort of rationale for the redistribution of resources from one party to another. In my view there are at least three. Any or all of them might supply such a reason, although one must be careful to avoid double-counting. The cardinal feature is that each is looking at factors which are linked to the parties' relationship, either causally or temporally, and not to extrinsic, unrelated factors, such as a disability arising after the marriage has ended.
[138] The most common rationale is that the relationship has generated needs which it is right that the other party should meet … This is a perfectly sound rationale where the needs are the consequence of the parties' relationship, as they usually are. The most common source of need is the presence of children, whose welfare is always the first consideration, or of other dependent relatives, such as elderly parents. But another source of need is having had to look after children or other family members in the past. Many parents have seriously compromised their ability to attain self-sufficiency as a result of past family responsibilities. …. A further source of need may be the way in which the parties chose to run their life together. …. All couples throughout their lives together have to make choices about who will do what … sometimes freely made in the interests of them both. The needs generated by such choices are a perfectly sound rationale for adjusting the parties' respective resources in compensation."
71. There is no statutory definition of "needs" under English law7. The issue has been addressed in a number of reported cases. The old language of "reasonable requirements" was largely swept away by White v White because of the judicial tendency to limit awards by reference to that concept. More recent decisions have adopted an approach of "generously interpreted needs" although this has come under attack as an impermissible judicial gloss on the words of the statute. In another context (nuptial agreements), the Supreme Court has spoken about "real need": see Granatino v Radmacher (formerly Granatino) [2010] UKSC 42, [2011] 1 AC 534.
72. What is abundantly clear is that needs in any given case have to be assessed by reference, amongst other things, to the marital standard of living prior to the breakdown of the marriage. Section 25(2)(a) makes it plain that any assessment of 'financial needs' will, in particular, be informed by the extent of the available resources; section 25(2)(c) brings into play within that consideration the "standard of living", at least, as here, where the marriage was of more than short duration (section 25(2)(d)). As Lord Nicholls confirmed in White v White at 608H of his speech, "Financial needs are relative. Standards of living vary.". So, too, in Miller v Miller;McFarlane v McFarlane, Baroness Hale observed (paragraph 138):
"In the great majority of cases, the court is trying to ensure that each party and their children have enough to supply their needs, set at a level as close as possible to the standard of living which they enjoyed during the marriage."
73. In G v G [[2012] EWHC 167 (Fam), [2012] 2 FLR 48 at [136(iii)(a)], Charles J observed that:
"… the lifestyle enjoyed during the marriage sets a level or benchmark that is relevant to the assessment of the level of the independent lifestyles to be enjoyed by the parties."
74. In the vast majority of high net worth cases, where the assets exceed the parties' combined needs, "need" as a concept will usually be subsumed within the application of the equal sharing principle. In this case it is accepted by the applicant that her claims should be adjudicated on the basis of "need" rather than "sharing". This stance appears to have as much to do with objective pragmatism (given the serious decline in the respondent's health) as the non-marital provenance of the vast bulk of the assets in the case.
75. The need to focus on the marital standard of living was confirmed by Moylan J in his recent decision reported as BD v FD [2016] EWHC (Fam) 594. In that case his Lordship was dealing with a "needs" based claim where the husband had personal assets of £58 million and interests in trusts worth a further £105 million. The wife in that case had accepted that, because of the non-marital provenance of the available wealth, her claims for a capitalised Duxbury fund should be assessed on the basis of her future needs as opposed to a share of the husband's existing wealth. Dealing with her income needs, Moylan J said this:
"91. …. In her oral evidence the wife was clear that she seeks a very different lifestyle and one which, in her view, is justified because the husband can afford it…."
"112. … ..the determinative principle in this case is that of need. When an application is being determined by reference to the principle of need the court will, obviously, have to assess the applicant's capital needs (housing and other capital items) and income needs (their annual living expenses). Further, if the latter are being met by the payment of a capital sum, the court will have to consider the period for which income needs, in fairness, should be met and the rate at which they should be made for the duration of or during that period.
113. Subject to first consideration being given to the welfare of minor children, the principal factors which impact on the court's assessment of needs are: (i) the length of the marriage; (ii) the length of the period, additional to (i), during which the applicant spouse will be making contributions to the welfare of the family; (iii) the standard of living during the marriage; (iv) the age of the applicant; and (v) the available resources as defined by section 25(2)(a).
114. In my view, the starting point for the assessment of needs is the standard of living during the course of the marriage. This was the view expressed by the Law Commission in its 2014 report, Matrimonial Property, Needs and Agreements (Law Com. No 343)(para 2.34/2.35) in respect of "very wealthy cases": "needs are still assessed primarily by reference to the marital standard of living". This does not mean that it is either a ceiling or a floor but, as Mr Howard agreed during the course of his submissions, it provides a benchmark or starting point against which to assess needs."
76. However, as Moylan J went on to state (correctly, in my judgment), a needs generated award calculated on the basis of a Duxbury multiplicand which reflects the former marital standard of living is not necessarily a complete answer in every case where the extent of the available resources makes such an award feasible. At paragraph 118 of his judgment in BD v FD, Moylan J said this:
"The use of the standard of living as the benchmark emphatically does not mean that, as referred to above, in every case needs are to be met at that level either at all or for more than a defined period (of less than life). Often, as Baroness Hale said in Miller v Miller; McFarlane v McFarlane [para 158]: "The provision should enable a gentle transition from that standard [the marital standard of living] to the standard that she could expect as a self-sufficient woman."
In G v G, Charles J said:
"[136] What I take from this guidance on the approach to the statutory task is that the objective of achieving a fair result (assessed by reference to the words of the statute and the rationales for their application identified by the House of Lords):
(i) is not met by an approach that seeks to achieve a dependence for life (or until remarriage) for the payee spouse to fund a lifestyle equivalent to that enjoyed during the marriage (or parity if that level is not affordable for two households), but:
(ii) is met by an approach that recognises that the aim is independence and self-sufficiency based on all the financial resources that are available to the parties."
77. It is equally clear that the marital standard of living cannot be assumed to be a "lodestar", as Mostyn J described it in his recent judgment in SS v NS (Spousal Maintenance) [2014] EWHC 4183 (Fam), [2015] 2 FLR 1124. At paragraph 35, his Lordship said this:
"It is a mistake to regard the marital standard of living as the lodestar. As time passes how the parties lived in the marriage becomes increasingly irrelevant. And too much emphasis on it imperils the prospects of eventual independence."
Whilst that observation was made in the context of a case where there were limited resources and where ongoing provision for monthly spousal maintenance was required to meet needs, it is a general principle with which I wholeheartedly agree, as did Moylan J in BD v FD. In that case, his Lordship took the view that in the case of a very long 30-year marriage, where there were ample resources to meet the claim, the longer the length of the marriage and/or the periods over which the applicant spouse would be making ongoing contributions to the welfare of a child or children of the family, the more likely the court will decide that the applicant spouse's needs should be provided for at a level which is similar to the standard of living during the marriage.
78. The implications of a significant future period of ongoing contribution towards the welfare or care of a child of the family was neatly summed up by Holman J in Murphy v Murphy [2014] EWHC 2263 (Fam) when he said "the having of children changes everything" (paragraph 35).
79. Thus, what I collect from these decisions are the following principles:-
(i) The first consideration in any assessment of needs must be the welfare of any minor child or children of the family.
(ii) After that, the principal factors which are likely to impact on the court's assessment of needs are: (i) the length of the marriage; (ii) the length of the period, following the end of the marriage, during which the applicant spouse will be making contributions to the welfare of the family; (iii) the standard of living during the marriage; (iv) the age of the applicant; and (v) the available resources as defined by section 25(2)(a).
(iv) In this context, it is entirely principled in terms of approach for the court to assess its award on the basis that needs, both in relation to housing and income, will reduce in future in an appropriate case.
E. The arguments advanced by the parties
80. On behalf of the applicant, Mr Howard and Mr Nagpal recognise (as they must) that, on any view, the claim which their client is making involves a very substantial sum of money. However, they seek to justify those claims by reference to the marital standard of living which they describe as "stratospheric" and "unimaginably high". Whilst labels do not necessarily help, having heard and read the evidence in this case, on any objective view they are not descriptions with which I would disagree. It is difficult to think of anything to which these parties might have aspired in terms of housing, lifestyle, or material possessions which they were not able to indulge to an apparently unlimited degree. The applicant describes their standard of living in these terms in her written evidence:
"It is difficult to convey the extraordinary level of luxury and opulence we were fortunate enough to enjoy. It was one that, because of the sheer expense required to maintain it, is only open to a very small number of families, even within the global ultra-wealthy."
81. It is for this reason that the applicant now aspires to purchase a property costing £55 million in Eaton Place, Belgravia which will require a further £1.2 million in respect of decorating costs. With stamp duty and other associated expenses, she says she needs a housing fund of £62.8 million. In April 2014, the respondent bought as his London family home a property called St Saviour's House. The purchase price was £39 million according to the respondent, although Land Registry records and a contemporaneous completion statement show that it was acquired for the greater sum of £41 million. It is owned by a corporate SPV which, in turn, is owned in equal shares by one of the respondent's family trusts and by his mother's trusts. Although there is a mortgage on the property of £19.25 million8, the respondent accepts that the responsibility for that debt is his and his alone (through his trust).
82. This is a seven-bedroom property which is in a prime location in London, SW3. The valuation report describes the property as a 7 bedroom house with a lower ground floor containing a hall, media room, pool room, juice bar, gym, plant room, treatment room, spa area and sauna, shower room, steam shower and changing room. S visits her father at this property when he is in London and it is here that she spends time with her two very young half-sisters. I was told that she has her own suite at the property.
83. The applicant contends that it is not, and will not be, in S's best interests to move between her parents' two homes in circumstances where there is a marked and significant disparity between the two properties. Of course, we do not know what the future may hold in terms of the respondent's health but, in any event, the point is made that, come what may, S will continue to see much of her extended paternal family, including all four of her half-sisters. Their standard of living as members of the Juffali family is said to be equally opulent. The applicant does not wish to be put in a position where her financial situation is such that S's primary home and the life she is able to lead within that home is materially inferior to that which she enjoys with her extended paternal family.
84. In addition to retaining her Californian home (which has an equity of just under £11 million), she wishes to purchase a country house outside London. She accepts that she should sell her flat in Roland Mansions and apply the sale proceeds towards the acquisition of a second English home. She has produced particulars of a property in Henley-on-Thames which would require an additional housing fund of £4,375,750. She asks the respondent to make up the shortfall of c.£1.4 million.
85. In terms of other capital claims, she seeks the following:-
(i) a sum of just under £½ million for the purchase of cars which she proposes to keep at her various properties;
(ii) a sum of £1,050,000 for artwork;
(iii) a sum of just under £2.1 million to discharge the US$3 million mortgage which is currently secured on her Californian property9;
(iv) a sum of just under £7,000 to discharge an outstanding liability for some legal costs in unrelated litigation;
(v) a sum of just over £50,000 in respect of the costs of some judicial review proceedings which she launched in St Lucia at the time of the respondent's strike out application. She may be found liable for the costs incurred by the St Lucia government and seeks a contingency fund in case that bill lands at her feet.
86. In terms of her income needs, she has produced a number of detailed and lengthy schedules which have been prepared at a cost of some £50,000 by PriceWaterhouseCooper (PWC). Because the applicant has throughout her marriage been insulated from financial issues, she has no independent means of ascertaining what it will cost to maintain her lifestyle going forward at an equivalent level. I do not say this to criticise the respondent; it is simply a fact that all of their living expenses were channelled through a Family Office which administered the smooth running of their domestic economy. What appears to have happened is that PWC has been provided with a narrative account of how life was lived in the various Juffali households. They have then attempted to cost on an item by item basis the likely component elements, or heads, of expenditure which a lifestyle in those rarefied échelons would involve. In some cases, their sources are uncontroversial (such as the cost of basic utility services). In others, they are questionable as reliable evidence of actual costs. For example, they appear to have consulted a website called "luxury Christmas tree stylist" in order to come up with an annual figure of £12,000 for the cost of 'seasonal decorations'. In terms of the cost of employing a second and third cleaner or housekeeper (in addition to her principal live-in housekeeper) and a gardener, they have gone not to employment agency websites but to an article in the Evening Standard newspaper about the cost of running a millionaire's home in central London. In relation to the cost of security for her new home (said to be £50,000 per annum), they have identified their source of information as an article which appeared in the Daily Mail entitled "Inside Multi-Million pound Luxury Homes".
87. The summary of the applicant's income needs which is set out as a front piece to the schedules is reproduced below.
London property outgoings 1,213,626
Henley property outgoings 329,191
London and Henley house housekeeping 125,960
London and Henley car expenses 167,084
Beverly Hills property outgoings 428,418
Beverly Hills housekeeping 21,770
Beverly Hills car expenses 50,289
Holiday and travels 2,106,274
Animal and pet expenses 8,808
Personal – health 76,654
Personal – clothes and accessories 1,021,047
Personal – beauty 138,033
Social and entertainment 484,122
Fees 175,500
(Extended) Family costs 160,016
Mobile phone costs 26,367
Annual cost 6,533,159
Average monthly cost 544,430
88. If the cost of financial support for the applicant's extended family is excluded, the applicant's personal budget reduces to £6,373,143. It seems to me that the figure of £160,016 cannot be included in any calculation relating to the provision of a Duxbury fund for the applicant because those expenses will end at some (as yet) unpredictable point in future. That much is agreed. I have been provided with a separate calculation which shows that, depending on prevailing exchange rates and based upon actuarial life expectancies, the capitalised cost of providing support for her 73 year old mother based on the applicant's figures would be between c.£1.188 million and c.£1.289 million. A similar exercise for her 82 year old father's lifetime expenses produces a figure of between c. £570,000 and c. £618,000. Because of her grandmother's age (92), it has not been possible to undertake a similar exercise in respect of her expenses.
89. The applicant accepts that she cannot aspire to live at this rate on a straight line basis for the rest of her life. In Duxbury terms, she is still a relatively young woman. She therefore proposes that these figures are reduced to take account of (i) a 20% reduction in her annual budget which will begin with effect from her 65th birthday (coinciding with S's 22nd birthday and the completion of her tertiary education); and (ii) a further 25% reduction of that amount commencing on her 75th birthday. This would mean that, for a period of 10 years between her 65th and 75th birthdays, she would have an assumed annual budget of just over £5 million and thereafter an ongoing annual budget for the rest of her life of just over £3.8 million.
90. The capitalised sum which is required to produce that outcome is just over £127 million.
91. In relation to the legal basis for seeking provision for the ongoing costs of her parents and grandmother, the applicant relies upon the historical assumption of that financial obligation by the respondent without prior consultation with her. Since his actions have established a continuing moral obligation to discharge these costs, on her case she will have to take them over. Mr Howard and Mr Nagpal submit that such "obligations and responsibilities" fall within section 25(2)(b) of the 1973 Act and are imported into Part III by virtue of section 18 of the 1984 Act. They remind me that, although the existence of any moral obligation to the husband's brother was rejected on the facts in Cowan v Cowan [2001] EWCA Civ 679, [2002] Fam 97, Mance LJ (as he then was) approved the principle in these terms (paragraph 94):
"I do not doubt that a moral obligation could in the right circumstances be of relevance, when considering the appropriate distribution between spouses of accumulated wealth. One may, for example, think of a spouse who was, with his or her partner's knowledge and consent, accustomed to support a parent or siblings or other relatives or a small charity, in circumstances where the relative or charity would depend on further support for the future. Surely, the wish to continue such support would be entitled to some weight, although how much would depend on the other circumstances."
92. In terms of the support which the respondent has provided for members of her extended family, the applicant has set out in her written evidence the circumstances in which her parents currently find themselves. Her mother has no assets of her own whether in terms of property, pension or employment. She is 73 years old and would otherwise be reliant on social benefits and Medicare. She recovered from an episode of breast cancer and was in recovery when she first met the respondent. The applicant says that the respondent promised to maintain her mother for the rest of her life. He was, until the onset of this litigation, meeting the cost of her rent in Washington State and paying her US$5,000 per month towards her living expenses. Her 82-year old father has no money of his own. He is disabled as a result of a heart attack. He has other health problems. The respondent has been paying his rent in Carmel, California and providing an allowance of US$6,000 per month. Her 92-year old grandmother had a stroke in her late seventies. She has been a widow since about 2004. She is presently living in an assisted care facility in Washington State. The applicant has been meeting her costs since the summer of 2015. In total, it appears that she has spent a total of just over US$368,700 from the sums which she has been receiving for her own maintenance.
93. On behalf of the respondent, Mr Warshaw and his team stand by their client's offer which they contend is a generous one in the circumstances of this case. On the basis of their calculation of the applicant's existing wealth of some £20.2 million, his offer of a cash payment of a further £17 million would see her leaving this marriage with an overall award of nearly £37 million, together with the use of a luxurious London property during S's minority.
94. By way of further justification for the fairness of this approach, the respondent seeks to rely on a comparison with the provision which was made for his first wife, B, at the end of a 21-year marriage during the course of which three children were born. She, it is said, received a total of award of US$60 million (c.£40 million) in the context of an English divorce. It seems to me that this is of little assistance here. First, there is no evidence before the court in relation to that award. I have not seen a copy of the court order. All I have is the evidence of the respondent which is disputed by the applicant in any event on the basis of what she knows (or believes she knows) about that lady's current financial circumstances. Secondly, this is not a "one size fits all" jurisdiction. An award made by a court in financial proceedings must be fair and principled. It must be one which has been made after a rigorous application of all the relevant section 25 factors. The guidance to be collected from the significant body of case law which has developed in the last few years provides valuable assistance and clear guidelines. However, the broad discretion which is invested in the court allows for a carefully crafted and bespoke solution to each and every case which passes in front of a judge. I know nothing about the circumstances of the respondent's first marriage save that it was underpinned by much of the wealth which is currently available to him. I am concerned here with this applicant, this child, and their particular needs going forward.
95. Next, Mr Warshaw invites me to look at the figures which the applicant is claiming against the background of the respondent's ability to fund such an award. He submits that his client has had substantial liquidity problems. He points to the fact that his offer is framed on an instalment basis. His client has said he will provide a further £17 million in a series of lump sums over a five year period. He reminds me that he had to borrow the full purchase cost of her Californian property. At the present time, says Mr Warshaw, the respondent's personal wealth is in a number of valuable chattels, together with the notional liability which his three daughters have to pay him over £500 million as a result of the sale of the Saudi assets in 2013.
96. As to his trust interests, the respondent has provided no trust documentation despite being asked to do so. All I have are summaries of the position in relation to three separate trusts.
The respondent's trust interests
97. The respondent has an interest in three separate trusts.
98. The WAJ Trust was settled by the respondent in 1996 some four years before he and the applicant met. It is a Bahamian discretionary trust of which he is the life tenant. The trustees can advance both capital and income to him during his lifetime, although the underlying trust funds appear to be in negative equity at the present time. L, the respondent's third wife, and all five of his daughters from his three marriages are beneficiaries. This trust is the property holding entity. The trust assets consist of six corporate entities which, in turn, own a portfolio with JP Morgan and UBS worth £795,000; St Saviour's House (now worth minus £1.25 million because of the borrowing secured against it); the former matrimonial home at BGH (also in negative equity as a result of the Strutt & Parker valuation of £22.5 million); the Devon property (£2.5 million); and a yacht worth c. £360,000.
99. The CABEC Trust is also resident in the Bahamas but, like the WAJ Trust, is subject to Sharia law. In 2010 it was divided into five equal sub-trusts. The respondent is the beneficiary of one of those sub-trusts but he will not benefit from the capital held within it until the end of December 2018. He has received no benefit to date and the medical prognosis in relation to his health must call into question whether he will benefit in future. The trust assets in his sub-trust consist of property holding companies which own two properties in central London together with some investments.
100. The third trust in which he has disclosed an interest is the CABEC II Trust. This trust is also divided into five separate sub-trusts, one of which has been earmarked for the respondent's exclusive benefit. The beneficiaries of his sub-trust include the respondent, his third wife and all his children. This trust comes to an end on 31 December 2018 on which date it will be collapsed and trust assets distributed. The sole asset of CABEC II is a 50% shareholding in a Cayman Islands company which owns an interest in a Turkish car factory, US real estate including an American hotel, and a portfolio of cash and investments.
101. The respondent maintains the value in these three trusts is as follows:-
(a) The WAJ Trust: minus (£2.6 million);
(b) The CABEC Trust: c.£68 million;
(c) The CABEC II Trust: c.£30 million.
102. As to the respondent's income, Mr Warshaw has distilled into a table what his client has received over the course of the last three years. I reproduce an abbreviated presentation of that table below.
Total 2013 to 2015 US$74,248,894
Average taken over 3 years US$24.75 million per annum
Sterling equivalent £17.325 million per annum
103. To these sums must be added the distributions which he has received from the trusts. Whilst there were no distributions in 2014, he received US$7 million (£4.9 million) in 2013 and a further US$33.5 million (£23.45 million) in 2015. Thus, it is not difficult to see how these parties were able to indulge in the levels of spending about which I have heard. Whilst the respondent maintains that his income is likely to reduce dramatically in the future because of the current economic climate in Saudi Arabia, I have to balance that evidence against what I know about his current medical condition and the prognosis for the future.
104. It is right to record that the applicant remains highly sceptical about this financial disclosure and, because of the exceptional circumstances in which I have been hearing this case, I accept that her legal team has had no opportunity to test this evidence in cross-examination.
105. As to the extent of the claims which she is now making, Mr Warshaw invites me to stand back and look at the enormous scale of the transfer of wealth which she seeks: some £230 million in total when all the component elements of her open offer are included. He, with his team, submit that the claims are "striking and, we say, excessive and exaggerated". He claims that her budget is a document which has been produced by accountants and carries little solid evidential value in relation to the true standard of living which the parties enjoyed during this marriage.
106. By way of an attack on some of the component elements of her budget, Mr Warshaw points, in particular, to the following:-
(i) her claim for a housing fund of up to £68 million for a London property is nearly three times the value of her current home at BGH (valued at £22.5 million). Her original claim that is was worth £100 million has been shown to be a gross exaggeration of its value;
(ii) her annual travel budget is in excess of £2.1 million per annum including nearly £600,000 per annum for private jet charters. She is claiming nearly £½ million per annum to rent a yacht for two weeks, just under £145,000 to provision it during the charter and a little short of £5,000 to tip the crew. She plans to spend the October half term this year in Paris staying in the Presidential Suite at The Ritz at a cost of just under £250,000 plus a further £74,000 odd for the nanny's room. She is claiming a further £103,000 for two weeks in the South of France at the Hotel du Cap-Eden-Roc and a further £30,000 odd for the nanny's room on that holiday.
(iii) her budget for clothing and jewellery is in excess of £1.02 million per annum including £40,000 for a new fur coat every year; £83,000 for fifteen new cocktail dresses every year; £80,000 for a special gown annually; £109,000 for seven haute couture dresses annually; £197,000 for two white tie jewellery sets every year; and £79,000 on cocktail dress jewellery sets every year. In addition, she seeks a further £58,000 for two luxury handbags every year; £23,000 for six casual handbags every year; and £35,000 on ten clutch handbags every year. Sunglasses will cost a further £4,000 per annum (15 new pairs every year). She has budgeted for two new sets of ski wear every season (including new helmets every year). She envisages buying 54 pairs of shoes a year, seven of which (for white tie events) will cost an annual sum of just under £21,000;
(v) a further £39,000 is needed for two new watches every year (to add to her existing collection of 43 valuable watches);
(vi) she claims to need three new suitcases every year at a total cost of just under £15,000 and five new silk dressing gowns each year;
(vii) her beauty costs include a sum of just under £94,000 per annum for treatments and £22,812 on products including £9,400 per annum on four bottles of face cream;
(viii) her staff costs are exceptionally high at £335,558 per annum. She claims to need in her London home a live-in butler, housekeeper, nanny and chauffeur. This impacts on the manner in which she advances her housing needs because it follows that her London property will need a separate annexe or wing to accommodate these staff. In addition, she has costed the employment of her live-out staff on the basis of a need for two cleaners, a chef, a reserve nanny and an office manager. She has budgeted for two live-in cleaners at the home in Henley which she wishes to purchase despite planning to spend on 43 days a year in the property. There is further provision in her budget for staff at her Beverly Hills home where she claims to need three housekeepers and extra staff when the family visits;
(ix) her mobile telephone is estimated to cost £26,000 per annum;
(x) in terms of leisure and entertaining, her budget includes £50,000 for Christmas lunch and a further £50,000 for each of her and S's birthday parties every year; £21,000 for theatres and shows; £28,000 for Wimbledon tickets each year and just under £18,000 per annum for a box at Ascot annually; and £10,000 per annum to attend Elton John's White Tie Ball;
(xi) the cost of running cars at the various homes she anticipates owning at the conclusion of these proceedings comes to just under £220,000 per annum. The capital sum she is seeking for cars as part of her overall award is £495,000 for five new cars – three in London and two in the United States. In addition, she seeks within her annual budget the cost of hiring a Bentley with chauffeur for the eight days she intends to travel around the West Coast.
107. I have set out the headline points of Mr Warshaw's assault on the applicant's budget because it informs, in part, the scale of the sum which she is claiming in terms of her annual needs budget going forward.
108. Aside from attacking the sheer scale of her stated needs, Mr Warshaw submits that I have to approach this Part III case with section 16 of the 1984 Act well in mind. I have already set out that section and the relevant passages from Lord Collins judgment in Agbaje in paragraphs 57 and 63 above. Amongst other considerations, the section deals with the strength of the connections which the parties have to this country, Saudi Arabia and elsewhere.
109. I was taken to a recent decision of Moor J. In MA v SK [2015] EWHC 887 (Fam), his Lordship addressed the principles to be distilled from Agbaje in this way:
"55. I need only refer to one authority, namely the Supreme Court decision in the case of Agbaje v Agbaje [2010] UKSC 13; [2010] 1 FLR 1813. The proper approach to be taken in a case such as this is set out by Lord Collins of Mapesbury at paragraphs [71] to [73] of his speech. I do not propose to repeat these important paragraphs word for word. I distil the following principles:-
(a) The intention of the [1984] Act was the alleviation of the adverse consequences of no, or no adequate, financial provision being made by a foreign court in a situation where there were substantial connections with England and Wales.
(b) The situation is different from an application that is made pursuant to the Matrimonial Causes Act 1973 as Lord Collins makes plain that some of the matters to be considered under section 16 may be relevant to section 18, and vice versa.
(c) It is not the purpose of Part III to allow a spouse with some English connections to make an application in England and to take advantage of what may well be the more generous approach in England to financial provision, particularly in so-called big-money cases, although there is no condition of exceptionality.
(d) Hardship or injustice is not a condition to the exercise of the jurisdiction but, if either factor is present, it may make it appropriate in the light of all the circumstances, for an order to be made and may affect the nature of the provision ordered.
(e) The amount of the financial provision will depend on all the circumstances of the case and there is no rule that it should be the minimum amount required to overcome injustice. It will never be appropriate to give the claimant more than she or he would have been awarded had all the proceedings taken place within this jurisdiction. Where possible, the order should have the result that provision is made for the reasonable needs of each spouse. Subject to these principles the court has a broad discretion.
(f) The grant of leave does not inevitably trigger a full blown claim for all forms of ancillary relief.
56. It is, therefore, clear that, as I am applying a different statute, different considerations apply compared to a pure MCA 1973 application. In this regard, I agree with the observations of Coleridge J in Z v A [2012] EWHC 467; [2012] 2 FLR 667. It follows that I disagree with the observations of Mostyn J made at [2014] EWHC 341110. The award may be the same as it would have been under the 1973 Act, if the English connections are very strong but, equally, it may not be. It all depends on the circumstances of the particular case being tried."
110. Thus, submits Mr Warshaw, in addition to an application of the section 25 factors imported into this case by section 18 of the 1984 Act, I also have to fold into my consideration of this case the engagement, where appropriate, of the factors listed in section 16 of the 1984 Act. These, he contends, are potentially a further brake or limiting factor on the scale of the applicant's claims. I shall return to consider this aspect of his case in due course.
111. In relation to the assessment of the applicant's future income needs, Mr Warshaw relies on the decision of Mostyn J in SS v NS [2015] 2 FLR 1124. In that case, his Lordship offered the following guidance in terms of an assessment of needs:-
"[46] Pulling the threads together it seems to me that the relevant principles in play on an application for spousal maintenance are as follows:
(i) A spousal maintenance award is properly made where the evidence shows that choices made during the marriage have generated hard future needs on the part of the claimant. Here the duration of the marriage and the presence of children are pivotal factors.
(ii) An award should only be made by reference to needs, save in a most exceptional case where it can be said that the sharing or compensation principle applies.
(iii) Where the needs in question are not causally connected to the marriage the award should generally be aimed at alleviating significant hardship.
(iv) In every case the court must consider a termination of spousal maintenance with a transition to independence as soon as it is just and reasonable. A term should be considered unless the payee would be unable to adjust without undue hardship to the ending of payments. A degree of (not undue) hardship in making the transition to independence is acceptable.
(v) If the choice between an extendable term and a joint lives order is finely balanced the statutory steer should militate in favour of the former.
(vi) The marital standard of living is relevant to the quantum of spousal maintenance but is not decisive. That standard should be carefully weighed against the desired objective of eventual independence.
(vii) The essential task of the judge is not merely to examine the individual items in the claimant's income budget but also to stand back and to look at the global total and to ask if it represents a fair proportion of the respondent's available income that should go to the support of the claimant.
(viii) Where the respondent's income comprises a base salary and a discretionary bonus the claimant's award may be equivalently partitioned, with needs of strict necessity being met from the base salary and additional, discretionary items being met from the bonus on a capped percentage basis.
(ix) There is no criterion of exceptionality on an application to extend a term order. On such an application an examination should be made of whether the implicit premise of the original order of the ability of the payee to achieve independence had been impossible to achieve and, if so, why.
(x) On an application to discharge a joint lives order an examination should be made of the original assumption that it was just too difficult to predict eventual independence.
(xi) If the choice between an extendable and a non-extendable term is finely balanced the decision should normally be in favour of the economically weaker party."
112. It is quite clear from the first sentence of paragraph 46 of Mostyn J's judgment that he was dealing specifically on that occasion with the principles to be applied when the court is asked to make provision for an award of ongoing spousal maintenance. In other words, a case where the resources of the parties will not stretch to a clean break and ongoing financial support is required to meet the future income needs of an applicant spouse. That much is reinforced by what his Lordship says in sub-paragraphs (v), (vii), (viii), (x) and (xi). To the extent that he highlights the need for an approach which focuses upon the impact on an assessment of future needs by reference to choices made during the marriage (including the standard of living), the length of the marriage, the presence of a child or children, and an eye to an eventual transition to financial independence, I wholeheartedly agree with him. Those principles, in my judgment, apply equally to a so-called "big money" case where a clean break on the basis of capitalised maintenance is the likely outcome.
113. However, Mr Warshaw seeks to extract from that case a principle that, in this case, and regardless of what I determine to have been the marital standard of living, I must reject as misconceived any attempt on the applicant's part to frame her future needs by reference to that standard of living. He says to me in terms, "We reject the proposition that, after a 10 year marriage, the standard of living enjoyed by the parties can create hard future need". In this context, on his case, the standard of living during the marriage is relevant but of limited importance. He submits that the element of her claims which relate to financial provision for her parents cannot be said to be causally connected to the marriage. He argues that I must factor into my approach consideration of the point at which it would be appropriate to terminate any ongoing provision in terms of maintenance. Why, he submits, should the award of capitalised maintenance not be made on the basis of a much lower multiplier as happened in Fournier v Fournier [1988] 2 FLR 990? In that case the Court of Appeal endorsed provision of maintenance only for a further eight or nine years during the minority of the child of the family. He invites me to frame my award for the applicant with a view to setting her on the road to independent living at the earliest opportunity. In this context, he submits that I must include within my assessment any prospects of remarriage or cohabitation which she may have in future.
114. As to the net effect of his proposal, Mr Warshaw says this in paragraphs 105 and 107 of his opening submissions:
"It is a matter for W as to whether or not she wants to retain a second home in the US. She has no need for it. She should sell Beverly Hills. This would give her c£11m. She can use this as an income fund immediately. If she wants to purchase a luxurious property in Beverly Hills, she can do so for $6m. She does not need to do so, particularly given that she intends to spend only 43 nights a year at the property."
"At the end of her licence to occupy [S's] property she will be able to live at Roland Mansions and will have an additional £17m in total from H. It is a matter for her as to whether or not she chooses to deploy some of this fund to buy a more spectacular home. She does not need to do so. She will have a home in London, £17m from H and her own residual assets of £17m; totalling £37 million."
115. On his case on behalf of the respondent, the release of equity from the Californian property, together with the £17 million which he offers to provide, would give her an income of just over £1 million net per annum. All her English property expenses would be met for the next 5 years. How, he asks, could this not meet her needs?
116. Of course, the answer to that question depends on how those needs are assessed and the impact on this case of the quite exceptional standard of living in which the parties were able to indulge throughout the course of their married life together. On any objective view, the package which the respondent has proposed would meet the needs of most people. Indeed, many would consider it lavish provision. However, that is not, without more, the answer to this case which has to be considered by reference to their standard of living amongst a number of other factors. I am enjoined to look at all the circumstances of the case, including the specific statutory factors referred to sections 16 and 18 of the 1984 Act and section 25 of the 1973 Act.
117. It is to those factors that I now turn.
E. Discussion and analysis
118. This is a Part III claim and I am exercising the jurisdiction conferred on me by the 1984 Act. In these circumstances, I am bound to consider the relevance (if any) of the various matters listed in section 16 of that Act. In this context, Mr Howard and Mr Nagpal, on behalf of the applicant, rely on what was said by Lord Collins in Agbaje in paragraphs 63 to 64 of his judgment where he said this:
"63 In decisions at first instance, however, it has been held that it is "only 'appropriate' for the English court to intervene with financial relief to the minimum extent necessary so as to remedy the injustice perceived to exist without intervention": A v S (Financial Relief After Overseas US Divorce and Financial Proceedings) [2003] 1 FLR 431, para 98, a decision of Bodey J, applied by Coleridge J in the present case [2008] EWHC 3618.
64 There is no statutory basis for this limitation, and it is contrary to principle. For example a talaq entitled to recognition may be granted abroad in a "big money" case when almost all relevant connecting factors are with England. In those circumstances there would be no reason not to apply English law so as to give the same provision for the wife as she would have obtained had there been divorce proceedings in England. There would be no need for any enquiry as to the minimum required to remedy the injustice. Nor, if the wife had independent means, would an enquiry into hardship be necessary or relevant."
119. As his Lordship went on to say in paragraph 70, what was required was a flexible approach.
"… There will be some cases, with a strong English connection, where it will be appropriate to ask what provision would have been made had the divorce been granted in England. There will be other cases where the connection is not strong and a spouse has received adequate provision from the foreign court."
120. Mr Warshaw takes up the "connection with England" issue in his skeleton. He reminds me that neither of these parties is British. Whilst Hayden J found his client to be permanently resident in this jurisdiction, the reality is that he spends the majority of his time outside the jurisdiction and has substantial assets in and connections with his country of birth, Saudi Arabia. He points to the fact that the marriage was celebrated in Saudi Arabia and their only child holds dual Saudi and American citizenship. Until 2013, the vast majority of his asset base, including his business interests, was in Saudi Arabia. The applicant is an American citizen who has never applied for a British passport. She owns property in California which is where her immediate and extend family lives. He points to the fact that the assets in England which might be available to meet her claims are limited.
121. As against those factors, I have to bear in mind that the home at BGH next to Windsor Great Park was the matrimonial family home for the majority of what was a reasonably long marriage. Prior to moving in, the parties virtually gutted the property and developed it to their particular taste as a family home. That is precisely what it became. It was, and remains, S's primary home, and she shares that home with her mother. The applicant has not lived in the United States since her late teens; she has made England her principal home for the best part of 20 years. She has indefinite leave to remain in this country. S was born here and the parties' joint intentions are that she should be educated here throughout her minority. For whatever time he has spent in this jurisdiction, the court has already determined him to be permanently resident here. He has recently established a very substantial home for himself and his third wife and their two children in central London. It is the applicant's intention to remain here for the foreseeable future, a plan which the respondent has tacitly endorsed by his offer to make a good London home available for her and Serena for the next five years.
122. Further, in terms of the Saudi divorce proceedings, I cannot ignore the fact that at a very turbulent time of the marriage, the respondent assured the applicant (as I find he did) that he would not divorce her despite his wish to take a third wife. I accept that she was telling me the truth about this. I further accept that he promised her financial security in the event that she would agree to remain married to him. I am further prepared to accept that her evidence in relation to her discussions with Mr J about the purchase of the Californian property was true. I find as a fact that the applicant believed the assurances she was given that she would be provided with a home in California and a home in central London once the time came for her to move out of BGH. She went ahead with the purchase of the Beverly Hills property relying on those assurances. She carried out the extensive programme of work which she undertook at the property believing this to be her second, holiday home. She had, as I find, every expectation that negotiations would continue in relation to what should happen about the purchase of a home in London where she and S would make their main base. I believe her account of these events. I reject any suggestion that, when the Californian property was purchased, either party intended it to be her main home or that she would relocate to live there permanently with S. That simply does not make any sense in the context of the evidence and the respondent's current proposals. When she discovered that the respondent's relationship with L, his third wife, was ongoing despite their attempted reconciliation, she immediately issued English divorce proceedings. They were not served and within a month the respondent had pronounced a bare talaq without giving the applicant any advance warning of his intentions. She is now in a position where she has had no choice but to recognise that talaq as having effectively dissolved their marriage in circumstances where there is not even a possibility of her seeking a financial award in the Saudi courts. This is not a situation where the provision made for a wife after foreign divorce proceedings has been inadequate; it is a situation where there has been no court-approved provision at all.
123. On behalf of the respondent, Mr Warshaw invites me to consider in the context of section 16(2)(g) the availability of assets within this jurisdiction. He submits that the uncharged English assets in his client's name are limited. First, there is his interest in W Ltd, the company which owns many of the valuable chattels at BGH and others located all over the world. The value of these is put at £14.6 million. In addition to limited funds in UK bank account, the only other asset in England are the two mews properties in Point Street which were acquired recently as additional staff accommodation for St Saviour's House. These have a combined equity of £1.5 million. The only uncharged trust asset in the jurisdiction is the property in Devon which is owned by the WAJ Trust. That has a value of £2.5 million.
124. Looking at the reality of the current situation, it is said on behalf of the respondent that any enforcement of my award will be against his estate rather than against him personally. I fear that may be the sad reality of the situation. In MA v SK, Moor J asked himself whether it was appropriate to take difficulties of future enforcement into account. Enforceability is a relevant factor under section 16(2) of the 1984 Act and that factor does not simply disappear because of the fact that I have decided that it is appropriate for this court to make an order under Part III.
125. Pursuant to the 2013 arrangement (the contract of sale relating to the vast bulk of the respondent's Saudi business assets), some £512 million has been effectively stripped out of the "resources" equation for the purposes of any computation exercise in these Part III proceedings. Those steps may well have been undertaken with a view to efficient tax planning or to provide his children with financial security in circumstances where the respondent took the view his remaining assets were more than sufficient, with the significant annual income that he would continue to receive, to sustain the family's lifestyle. Mr Howard and Mr Nagpal invite me to treat those assets as being immediately available to the respondent because of the clause in the contract which entitles him to rescind the contract at will. If he triggers such a rescission, the other parties to the contract will be bound by it. That much is clear from the face of the document I have seen.
126. On the first day of this hearing, I was made aware that the applicant's solicitors had formally issued two further applications on her behalf. The first was an application under section 23 of the 1984 Act to set aside the 2013 contract of sale as between the respondent and his daughters. Section 23 of the 1984 Act mirrors the terms of similar anti-avoidance provisions contained in section 37 of the 1973 Act. It is not without significance in this context that the application was issued on 23 June 2016, five days before the benefit of the three year presumption in the applicant's favour expires. The second application, issued on the same date, seeks relief under sections 423 to 425 of the Insolvency Act 1986 and a restoration of the status quo ante in relation to the Saudi business and other assets which were the subject of the 2013 contract. Neither application had been served on the other parties to the contract and I directed that they be served by email that day. Their whereabouts were known since all three of his daughters were then with their father in Zurich at the clinic which is caring for him. I gave them liberty to apply on short notice. None has done so although I am satisfied that they have been put on notice that these applications are extant. (S is now back with her mother in BGH.)
127. Mr Howard has made it plain that he does not seek any relief in relation to these applications in the context of the present hearing. He has issued simply to preserve his client's position in relation to enforcement. I may need to consider further directions in terms of the case management of those applications in due course. Mr Warshaw submits that they cannot simply sit "in aspic" until such time as the applicant decides she wishes to activate them and take further steps towards enforcement.
128. Nevertheless, he invites me to look at the position as it presently stands in relation to enforcement. In the event of his client's early death, the assets which are the subject of the 2013 contract will fall to be distributed in accordance with Sharia law. Any attempt by the applicant to enforce her English order would have to be undertaken in Saudi, against Saudi nationals, and in relation to Saudi assets. As Mr Warshaw puts it, "Realistically, with the best will in the world, the most positive outlook for enforcement would be £19.1 million" (i.e. the aggregate value of the chattels, the two mews houses in Pont Street, the cash held in English bank accounts, and the Devon property).
129. These potential difficulties do not dissuade me from my conclusion that this is an appropriate case for the intervention of the English court. Without such intervention, there is no jurisdiction anywhere in the world where the applicant can pursue her legitimate financial claims against the respondent. S's interests are at the forefront of my consideration throughout. Whilst she may in due course be a wealthy young woman in her own right (and subject to rescission of the contract of sale, she is already in that position), that fact does not in any sense diminish the claims which her mother has as a result of the contributions which she has made to this marriage. The fact that she prosecutes her current claims on the basis of her future needs does not detract from the value of those contributions, past, present or future.
130. I am also conscious of the fact that, notwithstanding his apparent willingness to pursue his defence of diplomatic immunity to the bitter end, the respondent has, since the rejection of that defence, engaged fully in these proceedings to the extent that he could. He has employed a first class legal team to appear on his behalf to make submissions as to the extent to which I should exercise my jurisdiction. I shall come to the case which Mr Howard seeks to run in relation to adverse inferences shortly, but I am proceeding on the basis that the respondent is not intending to disobey any order which I make at the conclusion of these proceedings. I accept that I have not yet been provided with the name of the person to whom he gave the blue diamond ring but that is a separate issue. If my confidence in his willingness to obey my order is misplaced, so be it and the applicant will have to proceed as she is advised may be appropriate. I suspect that a more significant obstacle to enforcement may be the death of the respondent before payment is due and/or made. I sincerely hope that this will not be the case and I intend to do what I can to ensure that a tight timetable is put in place for compliance with the terms of my order. This case has already been case managed with these difficulties in mind. However, on balance, I do not regard the issues which might potentially flow from non-performance for whatever reason to be an obstacle to making financial provision in this case. Nonetheless, I bear in mind that the path to enforcement during the life of the respondent is likely to be easier if he understands the basis and rationale of my assessment of need in this case.
131. Thus, my overall conclusions in relation to section 16 of the 1984 Act are these. First, I consider it entirely appropriate in all the circumstances for this court to make an order for financial relief in favour of the applicant. Secondly, in terms of those facts and matters which I have set out above, I regard the connections of this case with England to be strong. This was, and is, an international family. They have had the ability throughout the marriage to criss-cross the globe almost at will. They have maintained a number of homes throughout their marriage but their home in this jurisdiction was, I am satisfied, their main base and the centre of family operations whilst S attended her English school during term times. Weekends were sometimes spent at the Devon property. Holiday periods may well have been spent elsewhere in the world whether cruising in the Mediterranean, skiing in Gstaad, or spending time in Venice and Jeddah. The impression I had from the totality of the evidence was that the Al-Juffali extended family members were close. The applicant appears to have had a good relationship with her two step-daughters. The family appears to have taken every opportunity to get together in one location or another. These were clearly very happy occasions and I have no doubt that the respondent derived considerable pleasure from having all his daughters together under one roof whenever the opportunity presented itself. To this extent, regardless of legal ownership, it appears that they looked upon several of the properties as 'family homes' where they had the opportunity to spend time with each other and where, on occasions, they visited alone.
132. More importantly, whilst there is an element of international expense in the applicant's future budget, this is where she and S will live following the conclusion of these proceedings. She tells me, and I accept, that she intends to make her main base here in London for the foreseeable future. It is on that basis that I am asked to consider the reasonableness of the costs which she advances in respect of maintaining that home. The extent to which the costs she claims for supporting her lifestyle outside England and generally in terms of her holiday expenditure is something to which I shall need to come in due course.
133. After careful analysis, I do not regard the considerations flowing from section 16 of the 1984 Act as operating as any significant brake or restriction on my assessment of 'needs' in this case. The adverse consequences of the failure of the Saudi courts to provide the applicant with a remedy are obvious. That said, I am conscious that the jurisdiction which is engaged under the 1984 Act enables me, according to the words of the statute, to "alleviate the adverse consequences of no, or no adequate, financial provision being made by the foreign court in a situation where there are substantial connections with England11" (my emphasis). 'Adequate' is not the same as 'full'. Particularly where, as here, I am dealing not with the equivalent of a full English sharing claim under Part II but with a needs-driven claim under Part III, there is, in my judgment, a need to scrutinise budgets carefully. To the extent that the applicant has unreasonably exaggerated or inflated her needs, and notwithstanding the level at which this couple spent during the marriage, the law requires me in the exercise of the broad discretion which I have to disallow that element of expenditure provided that I am satisfied that her reasonable needs are adequately met without it.
Needs in the context of the section 25 factors
134. Both sides agree that, in the time available to me to deliver this judgment, it is simply not possible for me to undertake a detailed 'blue pencil' exercise in respect of the individual items of expenditure which go to make up the applicant's £6 million annual budget. The document which sets out her case in this regard was prepared by accountants over what was no doubt days of work at a cost of £50,000 or thereabouts. It is agreed that this case requires a more holistic approach in terms of that assessment. There are categories of expenditure which fall to be considered individually. For example, is it appropriate in the context of a needs case for the cost of chartering private jets to continue just because this was a feature of their married life together? Is it appropriate for her to include in her future budget the cost of running her Californian home (some £420,000 per annum) when she could down-size to a cheaper property, if not sell up completely so as to add a further £11 million to her capitalised maintenance fund ? In either event, does she need a third country home in this jurisdiction with all the attendant expense? There are other categories of expenditure where it is said that, whilst legitimate needs, the scale of the applicant's budget in respect of these items falls for significant judicial censure and pruning. Where, Mr Warshaw asks rhetorically, is she keeping all the skiing outfits and helmets which are to be replaced regularly each year? Why does she need to spend such significant sums on jewellery and watches when she already has a collection which is worth getting on for £5 million? These and others are all issues which I shall need to consider and I do so in the context of the relevant section 25 factors which are engaged in this case.
135. It is trite law that there is no general hierarchy of importance in the section 25 factors. Each must be considered to the extent that it is relevant to the parties and the claims which they are advancing. However, all the jurisprudence which I have set out above points clearly to the magnetic factor of the importance of standard of living in a case such as this. I agree, and take that as my starting point.
Section 25(2)(c): Standard of living enjoyed by the family before the breakdown of the marriage; Section 25(2)(a): the income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future
136. I have said much already in this judgment about the standard of living which these parties enjoyed during their marriage. I am satisfied that it was a standard which was maintained throughout the course of the 11 or 12 years which they enjoyed together as a couple. It was a standard which came to reflect the reality of daily life for their only child, S. Since her birth, she has known no other existence than the privileged and ultra-wealthy lifestyle which her father's wealth has funded. The applicant described their lifestyle as "magical". That may well be an apt description. The issue is the extent to which she should be entitled to continue within the bubble of a "magical existence" for the foreseeable future. I am concerned with ensuring that adequate provision is made to meet her reasonable needs.
137. Mr Howard and Mr Nagpal remind me about the backdrop to family life over the years. It is one of opulent houses and yachts. Despite the fact that the respondent (through one of his trusts) owns his own yacht and has the use of his mother's far more luxurious vessel, he has nevertheless elected to spend very significant sums on commercial charters from time to time over the course of the marriage at weekly charter rates of between €425,000 per week and €500,000 per week. This was presumably no problem for him with a disclosed income (verified by his solicitors) of US$115 million over the years 2013 to 2015, the period which includes the final two years of the marriage. That equates to an average annual net income of US$38 million.
138. His property portfolio (through the trusts or Juffali family ownership) extends to the following:-
(a) the former matrimonial home, BGH;
(b) the Devon property;
(c) St Saviour's House;
(d) the mews accommodation for his staff in Pont Street;
(e) the Gstaad chalet;
(f) a substantial apartment in Beirut;
(g) villas in Saudi Arabia (which the respondent claims were transferred to his elder daughter in 2013);
(h) properties owned by the Cabec Trust of which he is the principal beneficiary and which include two properties in Belgravia earmarked for the use of his two elder daughters from his first marriage when they visit London. The combined value if these properties is just under £20 million.
These are all properties which, on his case, he will retain at the conclusion of these proceedings.
139. He was spending about £1.3 million on the outgoings of BGH alone in addition to the running costs of the other properties which, during the marriage, included the Venice palazzo. He has continued to retain a substantial number of staff in his homes. They are on hand 24 hours a day to cater for his new family's needs as they travel between the properties. This was exactly what happened during his marriage to the applicant. Mr A's travel logs show that the respondent has continued his preferred habit of using private jet charters at a cost which Mr Howard contends is likely to be very considerably more than the €756,683 which the applicant is claiming in this respect. He claims his own vehicle fleet is worth nearly £1.5 million. His disclosed spending in 2015 on his American Express card was US$408,163 of which over US$300,000 was spent on "retail".
140. In response, Mr Warshaw submits that none of these figures are inconsistent with the presentation which his client has made in these proceedings in terms of the income and capital resources available to him. He accepts that the income generated by the £512 million of assets which passed to his daughters under the 2013 contract has been very substantial. The figures have been disclosed and there is no issue about them.
141. I have already set out the capital resources which are available to the applicant. If she sells the Californian property, her income needs will reduce accordingly in terms of the costs of running that home. She is now 54 years old and her earning capacity is limited. This is a direct result of the decisions which this couple took at the beginning of the marriage. I accept that the respondent did not wish his wife to continue her job in the world of international modelling. The demands on her time would have been considerable and he wanted her to be available to travel with him. Once S arrived, the applicant's role as a mother would have made it very difficult to re-establish her career, even with the number of staff available to her. I accept that neither she nor the respondent would have wished her to be absent from the family home for the lengthy periods of time which the schedule of a busy model would have demanded. It is too late now for her to resurrect that career at any level which would make a significant contribution to her financial needs going forward. She continues to be responsible for providing S with her primary home, a home which – I suspect – will become even more important as a solid and stable base as S comes to terms with a significant loss in her life.
Section 25(2)(f): contributions to the welfare of the family
142. It is one of the tragic circumstances of this case that S is likely to lose one of her two parents in the not too distant future. Thereafter, the entire parental burden of raising their daughter will fall to the applicant. Of course, S will continue to see much of her paternal family. That fact underpins much of the argument which the applicant makes in support of her need for an extremely affluent lifestyle. But the fact of the matter is that S's father will not be there to make a matched contribution in the years ahead. He has made that contribution, insofar as he can, by ensuring her financial security in the years to come and beyond. The corollary of that point is that S will, on any view, have significant wealth in her own name in due course.
143. Thus, I have dealt with section 25(2)(a) (resources); (b) (to the extent of ongoing obligations and responsibilities); (c) (standard of living); (d) (age); (e) (to the extent that the respondent's health is a significant cause of concern in this case and, on the medical evidence, his life expectancy is severely limited); and (f) (contributions). Section 25(2)(g) (conduct) is not relevant in this case; neither side has pleaded conduct. So, too, is section 25(2)(h) (benefits lost as a result of divorce). Pensions do not feature in this case and the applicant, in her capacity as a spouse or former spouse, is not a beneficiary under any of the three trusts which the respondent has disclosed in these proceedings.
144. And thus I return once more to the question of her needs and the provision which should be made to ensure that she is provided for adequately at the conclusion of these proceedings.
145. The inclusion in the section 25 factors of the marital standard of living is a statutory recognition of the relative elasticity of the concept of needs. Mr Warshaw has produced a schedule which sets out in columns his suggested figures in respect of what this applicant actually needs as she moves forward into an independent life. I reproduce it below.
Interim budget (April 2016) Budget until S is 18 Budget after S is 18
1. London property 0 0 100,000 H will pay outgoings during S's minority
2. London housekeeping 113,000 25,000 113,000
3. Roland Mansion outgoings 23,689 0 0 Let or sell
4. Roland Mansion housekeeping 13,245 0 0 Let or sell
5. London car expenses 34,000 34,000 34,000
6. Beverly Hills property outgoings 319,165 0 0 Sell
7. Beverly Hills housekeeping 97,440 0 0 Sell
8. Beverly Hills car expenses 3,451 0 0 Sell
9. Holidays and travel 285,000 285,000 285,000
10. Animal and pet expenses 51,600 8,808 8,808 G227
11. Personal 429,000 429,000 429,000
12. Fees 20,000 20,000 20,000
13. Family costs 389,850 0 0
Total 1,779,620 801,808 989,808 only 1 home
146. Much of Mr Warshaw's cross-examination of the applicant was directed towards the very significant uplift which appeared in the final version of her budget once it had input from PWC. Whilst there were no outgoings listed in respect of BGH, her interim budget (produced in April 2016) demonstrated a requirement for just under £1.78 million net spendable in each year. The figures were given on the basis of an annual requirement and were not restricted to, or intended to be representative of expenditure to be incurred during, the months leading up to this final hearing. How is it possible, asks Mr Warshaw, that this budget has now increased to c.£6 million per annum. He submits that the likelihood is that the accountants' brief was to maximise every possible aspect of the budget so as to produce the highest figure they could reach. I do not know what instructions were given to PWC. I do know that the applicant produced the figures in her interim budget without assistance from the accountants although, no doubt, with some assistance from her solicitors. To a certain extent, I accept the difficulties which confronted her in this task. She was under significant pressure of time given the need to accelerate this hearing for obvious reasons. She did not have access to the computerised records at the Family Office which might have enabled her to track expenditure over the last couple of years of the marriage. However, she must have had a reasonable idea as to her spending on her own personal expenses, and particularly on clothes, shoes, handbags and the like. I am assuming that, apart from gifts made to her by the respondent, she has been responsible for choosing and assembling her own wardrobe, even if she has had assistance from personal shoppers. My clear impression is that the sums which she now seeks to claim in respect of these expenses are inflated and unnecessary in the context of adequate provision for her reasonable needs. I can well understand how she would wish to have the sort of budget for which she now contends but, even against the background of the standard of living during this marriage, I regard her figures for several heads of expenditure (and particularly her personal expenses) as unreasonable in terms of her future needs.
147. Before addressing these figures in any further details, I turn now to consider her future housing needs because these, to a significant extent, inform her future budget.
148. I do not regard the sort of Schedule 1 arrangement which the respondent advances in his open proposal as either reasonable or appropriate in this case. There is no reason why, after an 11 or 12 year marriage with the resources available in this case, the applicant should be beholden to her daughter for her main family home. She has earned an entitlement to a secure home which she will own independently of any parallel wealth into which S will come in future.
149. I regard the respondent's offer of the provision of a home worth c.£6.5 million to be too low and unreasonable in the circumstances of this case. I accept that the current family home is not worth anything approaching the figure of £100 million for which the applicant was originally contending. Nevertheless, whilst a home worth £6.5 million might to many seem over-indulgent, I am not dealing with the "many"; I am dealing with this particular applicant in the circumstances of her marriage to this particular respondent. Having carefully considered all the evidence which I heard in relation to housing and the nature of the accommodation available in the various property particulars about which the applicant was asked, I have come to the clear conclusion that a property such as that which we looked at in Belgrave Mews South in SW1 or Cheyne Walk in SW3 would be perfectly adequate as a home for this mother and daughter. Some might consider them magnificent properties (to coin Mr Warshaw's description). The former is being offered for sale at just under £16 million; the latter for £15 million. I do not regard either as an inappropriate London home for S and I can see no reason why she should feel disadvantaged in any way as she moves between that sort of home and one of her elder sister's London homes. These are worth less than the home she will be living in. As to her contact with her younger half-siblings, time will tell what arrangements are made in that respect. L may not keep the property at St Saviour's House as her permanent London home in the months or years ahead. Even if she does, I have seen internal photographs of the property as it was before the respondent acquired it. I know its dimensions and its facilities. I simply do not believe that S will feel herself disadvantaged in any way if she is living with her mother in a home similar to the property on Cheyne Walk.
150. I accept that it will be very important to the applicant to ensure that she is in a position to decorate and refurbish her new home to her taste. She has always invested a great deal in her homes and it will be important to ensure that she feels she has made her new home her own. For these purposes I am proposing to allow a sum of up to £1 million to enable her to carry out that work on top of the costs of acquisition. She will have a substantial bill in respect of stamp duty as well as other moving costs. Rounding up rather than down, I have reached the conclusion that a sum of £18 million is an appropriate housing fund for the applicant and their daughter. I am aware that this is not a significant departure from the value of the family home which they currently occupy. However, we are not comparing like with like here. The cost of an appropriate home in a prime residential area in central London is going to be greater than the cost of an equivalent property outside the immediate environs of the city. In the light of the number of properties which were available to this family over the course of the marriage, and given the portfolio which the respondent, or his estate, will retain at its conclusion, I do not regard a housing fund for her principal residence of £18 million as an unreasonable figure.
151. I regret that I cannot accept that she needs a central London housing fund of £60 million or anything approaching that sum. In the context of a Part III claim, I do not regard it as reasonable to apply a 'like for like' need using as a yardstick the value of the respondent's home in London. I am entirely satisfied that she can acquire a very comfortable home with a sum of £18 million and that such a home will enable her to entertain and have her charity meetings as she does now. It will not be on the same scale as the entertaining she has done before but a claim anchored to needs cannot, in my judgment, ever justify unbridled spending, whatever the marital standard of living.
152. I take a similar view in relation to the sums she seeks to spend on maintaining her lifestyle in this and her Californian property. There is no need for her to maintain three cars at a home she uses for only part of the year, nor for such high levels of staffing costs. The same observations apply to the budgeted costs of staffing her principal home in London. In this context, I have well in mind the observations of Baroness Hale about the need to structure a financial award so as to reflect a "gentle transition from the marital standard of living to that which [she] could expect as a self-sufficient woman". Whilst I am prepared to structure my award on the basis of a full life Duxbury calculation, there is no question of the applicant having any realistic entitlement to an annual income which replicates that which she claims to have been her standard of living during the marriage over that period. To be fair to her, that is not what she seeks. She accepts that there should be step-downs at appropriate points over the life of the fund. However, in my judgment, her base line is pitched at far too high a level. For example, she accepted when pressed by Mr Warshaw in cross-examination that she probably could run her London property for about £100,000 per annum. Similarly, in the context of a gentle transition towards independence (which, in this case, means a transition to a standard of living which is disengaged over time from the marital standard of living), I do not consider it reasonable for her to expect the respondent to fund spending well over £1 million per annum on clothes and beauty treatments. As the coming years unfold she will be creating a life of her own. She will not be able to replicate her life with respondent. She is no longer his wife. In my judgment, and echoing the words of Mostyn J, there has to come a point at which the connection between her former marital standard of living and her future needs becomes sufficiently tenuous to contemplate breaking that link. My function in the context of this application is to determine a fair outcome as between these spouses and to carve out of the available resources a bespoke financial award which properly meets her future needs as the former wife of a wealthy man.
153. I decline to accept Mr Warshaw's invitation to apply my mind to the prospects or likelihood of her future remarriage or cohabitation. It seems to me that such an assessment has no place or relevance in my approach to this case. The applicant is an independent woman. She will make her own choices in future as to whether or not she chooses to remarry. It would be impertinent of me to suggest that this court had any function in pre-determining such a choice on the basis of the likelihood of such an event materialising. In any event, on what basis am I supposed to carry out that assessment? It is a non-issue as far as I am concerned. I might have taken a different view on the facts if she was already in an established and committed relationship. But she is not, and there the matter must lie.
154. What of her claim for a second English property or weekend retreat? The applicant told me much about S's love of country life and her wish to have somewhere to which they could go, close to her new boarding school, where they could enjoy time away from the city. It is highly likely that the next few years will see significant changes in terms of S's own views about how she spends her leisure time. Any award which I make will include generous provision for holidays and weekends away. The applicant advances the Henley property as one which meets her needs but she has not yet seen the property and the estate agents' particulars are in the bundle, so it seems to me, as no more than evidence of what that sum of money will secure in terms of properties in that area. I am not persuaded that she has made out a case for the acquisition of a second English property with all the attendant running costs and I propose to make no allowance in my award for a Henley property or its equivalent. The applicant will have adequate means at her disposal to spend as many weekends out of London as she chooses. I do not accept that it is realistic in the confines of a Part III application to include either capital or income provision for a second home in this country.
155. I am grateful to all three junior counsel in this case. At my request they have produced a number of Capitalise calculations on an agreed basis reflecting various scenarios as they have been canvassed during the course of this hearing. The numbers are all agreed in terms of the underlying calculations.
156. I am persuaded that there needs to be provision in my award for a step down in the level of income provision for the applicant at two separate stages. The first is when S completes her first degree in tertiary education after allowing for a gap year between school and university. That will occur in January 2026 when she is 23 years old and the applicant will shortly be turning 64. There will be a further step down just before the applicant's 75th birthday. I have considered carefully whether the first step down should occur at a point sooner than 2026 in order to accelerate the curve of the "gentle transition" to independent living. On balance, I am persuaded that such an adjustment should be deferred until the natural breakpoint of the completion of S's tertiary education. Whilst I accept that the applicant will still wish to provide her daughter with a home at that stage, the reality is that, as a young woman of independent means, it is highly likely that S will wish to move into a flat or apartment of her own. I am equally persuaded that a further step down is justified when the applicant reaches the age of 75. I hope and expect that she will still enjoy robust good health at that point in her life but inevitably she is likely to be leading a somewhat quieter social life to that which she presently enjoys. That, in turn, will have a significant impact on her expenditure needs although I readily accept that these expenses may to a lesser extent be replaced by other expenses, such as the cost of additional help in her home.
157. In my judgment, this is not a case where the applicant can expect to continue to spend vast sums on travel by private jet in circumstances where an appropriate allowance has been made for the cost of air travel with commercial carriers. Nor do I accept that she can expect the respondent to continue funding teams of staff at her various homes. Of course it is reasonable that she should expect to employ for the foreseeable future a nanny (or some form of assistance with child care as the years roll by), a housekeeper and a live-out cleaner. She probably also needs help with organising her social diary and co-ordinating the running of her home. That does not require more than assistance from a live-out (and possibly part-time) personal assistant. Budgets are highly subjective presentations when they are not anchored to evidence of actual expenditure. I accept that the applicant has not had access to the records maintained by those administering the respondent's Family Office nor have I had the opportunity to listen to his evidence in court. He states in his written evidence that it did not cost as much as the applicant claims to support their marital standard of living. I have some fixed anchor points from which to work in terms of the figures but nothing more.
158. To a certain extent, it will be a matter for the applicant as to how she restructures her financial affairs once she and S leave BGH. For the time being I intend to leave her with the Californian property. What she does about keeping this property will ultimately be a matter for her. I do not accept that it is reasonable to sanction ongoing maintenance costs of some £420,000 per annum as part of her Duxbury budget with the implication that, on an ongoing basis, the respondent or his estate should be expected to pick up those costs. It will be entirely a matter for her. She may choose to keep the property, sell it or purchase something smaller and more economical to run for the one and a half months of the year which she expects to spend at the property. I consider that a sum of £½ million a year is more than sufficient to replenish her wardrobe and meet her personal costs given the very extensive wardrobe and collection of jewellery which she has amassed over the years of the marriage. I am conscious that she considers it necessary to maintain a public profile and dress accordingly. I have sympathy for her aspirations to continue to develop her social connections with a view to furthering her philanthropic work. However, this is a needs case and I am considering the extent of the award which is necessary to provide her with adequate financial provision.
159. I have already said that it is not possible in the time available to me to address each and every item of expenditure which she has included in her budget. Nor do I consider it appropriate to roll up my sleeves and produce some sort of judicial counter-schedule to that which has been provided by PWC. To her credit, the applicant accepted that some of the reductions suggested to her by Mr Warshaw in cross-examination were realistic. She agreed that a figure of £100,000 per annum was a sum which might enable her to maintain a London home, albeit that she would have to make significant economies. She thought she could "survive" on a housekeeping budget of £113,000 per annum. She accepted that a figure of £285,000 per annum was an acceptable amount for holidays although she maintained that this allowance would have a significant impact on the extent to which she would be able to enjoy herself. When Mr Warshaw asked her if a figure of c. £1 million per annum was a reasonable budget to sustain her in an independent existence in the new circumstances of life post-divorce, she accepted that she could "survive" on that sum.
160. The exercise of discretion entrusted to me is a broad one. I have thought very carefully about this case in the weekend I have had since it concluded and I have taken into account all of the facts and matters which I have addressed in my judgment. I have reached the conclusion that Mr Warshaw's submission that £1 million per annum is an appropriate baseline figure for the next phase of her life fails to reflect sufficiently the marital standard of living in this case. During this next phase, and whilst she is maintaining S's primary home, she should be entitled to a standard of living which allows her a greater degree of flexibility in terms of her discretionary spending. It will be a matter for her at the end of the day how much she spends and on what: I have no intention of being prescriptive in terms of those decisions.
161. At the end of the day I am satisfied that, with a net annual budget of £2.5 million, the applicant can meet her reasonable needs. I have assessed those needs insofar as I can against what I know about their marital standard of living. She cannot expect to replicate that standard of living going forward but I am satisfied that the basis of my award in terms of her income needs bears a sufficient correlation to that standard of living. In my judgment an award at that level is both principled and fair. There will be a step down reduction of 33% to £1,675,000 in 2026. By that stage, the likelihood is that she will no longer be providing S's primary home base. She may at that stage make any number of decisions about where she wishes to live and whether such a substantial property in central London is necessary. There will be a further step down on her 75th birthday of a further 25% to £1,256,250. I am entirely satisfied that, by that stage, this will be a reasonable and entirely appropriate retirement income for her. It is one which reflects in full the valuable contributions which she made as a wife and mother and, in my judgment, it patently meets her needs at that stage of her life.
162. The sum required to support this Duxbury calculation is £44,313,355 which I propose to round down to £44.3 million for her income needs.
163. How far is the applicant in a position to make a contribution towards those needs from her own resources ? It seems to me that it is reasonable in this case to embrace within her housing needs the provision for a second home in the United States. That was a clear term, as I find, of the informal agreement which she reached with the respondent as a condition of not proceeding with her own English divorce petition when she agreed to a reconciliation. However, I do not accept that the costs of the Beverly Hills property on an ongoing basis many years into the future can properly be factored into a Duxbury calculation of her future income needs. I am persuaded by Mr Warshaw's suggestion and by the evidence which has been produced that she can purchase a smaller property in Beverly Hills at a saving of at least US$8 million. That is approximately £6 million on the basis of current fx rates which I accept may fluctuate significantly over the coming months. Together with the value of the Roland Gardens apartment which she accepts can be sold that produces an overall contribution from her own resources of £8.97 million.
164. Her needs can therefore be summarised as follows.
Housing fund (London) £18,000,000
Duxbury fund 44,300,000
£62,300,000
Less contribution by W ( 8,970,000)
Shortfall to be funded by H £53,330,000
165. For these purposes, I do not propose to attribute any realisable value to the jewellery which the applicant will retain. It has a value of some £4.83 million but I am satisfied in the particular circumstances of this case that it would be wholly inappropriate to require her to sell her jewellery (which came to her largely by way of gift from the respondent) to meet her future housing or income needs. I am satisfied that the retention by her of her jewellery collection at the end of this marriage is an entirely appropriate reflection not only of the respondent's generosity during their marriage but also of the common expectation which each had that her collection was intended for the purposes of personal adornment (to adopt a phrase once used by Thorpe LJ) and not for its intrinsic investment value.
166. In terms of the chattels which she is to be entitled to remove from BGH, I propose to say no more at this stage. There is apparently a list in circulation of those items which she wishes to retain. I would hope and expect that this aspect of her claims might be agreed. As canvassed with leading counsel during the concluding minutes of the hearing, I will adjourn further consideration of what, if any, further provision needs to be made in this respect until there has been further consideration of the chattels issue between the two legal teams. It would seem sensible to allow the applicant to retain a fair share of those contents. Not only do they provide part of the fabric of S's home; it seems unlikely that the respondent will be in a position to enjoy his chattels even if they are transported to one of his many residences around the world.
Provision for the applicant's extended family
167. It follows from what I have said thus far that I do not propose to make separate provision in my award for the applicant's extended family. I take on board Mr Howard's arguments that this was a moral obligation which the respondent was willing to take on. Nevertheless, I cannot ignore the fact that the applicant will be an extremely wealthy woman in her own right once this award is satisfied. Her grandmother is now 92 years old. It would be entirely inappropriate to seek to capitalise those costs even if it were possible. To the extent that the applicant feels it incumbent on her to contribute to, or even subsidise entirely, the ongoing costs of her parents, I am satisfied that she will have sufficient resources to make that choice.
168. I should only say that, in reaching my conclusions about the provision to be made for the applicant in terms of her future needs in relation to housing and income, I have not made my decision on the basis of any subjective value judgments. Rather, the figures have emerged clearly from a carefully considered and objective view of what this particular applicant in the circumstances of this particular case needs in terms of adequate financial provision for her future.
169. In terms of the ability of the respondent to meet an award at this level, I am entirely satisfied that he has access to resources which are more than sufficient to enable him to pay. If and insofar as there has to be some restructuring to extract funds from assets which passed under the 2013 contract of sale, then so be it. That contract is entirely revocable at his election. In these circumstances, there is no need for me to embark upon a process of drawing adverse inferences against the respondent in respect of the likely extent of his wealth, including any wealth which has not been disclosed in these proceedings. The extent of the "visible" resources is more than adequate to dispose fairly of this application. Given that I have not heard any evidence from the respondent, I am not prepared to make any further findings in relation to non-disclosure. In my judgment, it would not be fair to conclude that he was in breach of his obligations to this court without having heard oral evidence and cross-examination. Whilst I bear in mind the document which Mr Howard and Mr Nagpal produced for me as a summary, or vignette, of his trappings of wealth, I do not necessarily find that summary to be inconsistent with the capital and (very substantial eight figure) income which he has disclosed in these proceedings.
170. Further, I cannot ignore the fact that the respondent's own needs will be limited to the remainder of his life expectancy. As I have said, the medical evidence suggests that he is currently in the final stages of a terminal illness. Thus, the need to ensure fairness in respect of both parties' future needs carries less weight as a factor to be weighed in the balance.
171. In terms of provision for S, I regard it as entirely unsatisfactory that her needs should in future be determined on an ad hoc basis by her elder half-sisters. The applicant, as her mother, is her primary carer. She will make decisions about what S needs and what she spends. On the basis of the provision which has been made for their child, I am satisfied that her needs are in the region of £225,000 per annum, including the future cost of boarding school fees at her new school from September this year. That figure is based on the figure of US$287,578 which the respondent says he has been contributing to her expenses and substituting the current day school fees for the more expensive boarding school fees at the beginning of the next academic year. Depending on the exchange rate which is applied, this sum capitalised is between £1,711,436 and £1,835,995. The mid-point between those two figures is £1,773,715. Given the current volatility in exchange rates in the wake of the European referendum, I am no better placed than any of the financial pundits to anticipate where fx exchange rates may be by September this year or a year hence. It seems to me that the best I can do is to take the mid-point between those two figures.
172. I am persuaded that there is a need for security in this case for all the obvious reasons. I do not intend to leave the applicant in a position where she has to negotiate with her step-daughters in relation to S's ongoing needs and expenses. The respondent identifies no assets in respect of which an ongoing child support obligation could be secured. Unless its terms were very specific, it is doubtful whether such an order for secured provision would survive his death. Accordingly, what I propose to do is to order a lump sum in respect of S's future maintenance. It will be paid by the respondent into an agreed designated account which is earmarked for these purposes. The applicant has indicated through Mr Howard that she will give an undertaking to draw down against that account in the annual amount specified. It is not entirely clear to me whether the capitalised sums on the agreed schedule include provision for indexation. If they do not, I would ask junior counsel to provide me with figures which do include an uplift for inflation over the life of the child support order and I will deal with the figures once I have a draft order. Any further issues can be dealt with at next Friday's hearing but in principle I accept that S's future needs will be dealt with by means of a capitalised lump sum notwithstanding the very generous provision which the respondent has already made for her under the provisions of Saudi law.
173. I am entirely satisfied from the evidence I heard from the applicant and her witnesses that the blue diamond ring was given to her by the respondent as a gift. It is of significance, in my judgment, that, having allowed her to keep the ring in her personal safe at BGH for a number of years, he removed it at a time when there were pressures on the marriage and during a period when it is highly likely that his relationship with his (soon to be) third wife, L, had begun. Her repeated requests for its return were ignored. I am satisfied that he knows exactly where the ring is and the identity of the donee (if he has indeed gifted it to a third party). It will be a matter for the applicant whether or not she chooses to accept his offer of a further US$2 million in satisfaction of any claims she may have in respect of the ring. If that offer (or an improved offer) is rejected, I shall make a declaration pursuant to section 17 of the Married Women's Property Act 1882 that she is the legal and beneficial owner of this particular chattel.
174. Given the constraints of time and the fact that the respondent is presently out of the jurisdiction receiving care in Zurich, I am content for the parties' legal advisers to communicate to their respective clients the substance of my decision. I would be grateful to receive any editorial comments in advance of Friday's hearing so that appropriate amendments (if any) can be made to my draft judgment. I am proposing formally to hand it down on that occasion. Both legal teams should endeavour to address drafting issues as soon as possible. My expectation is that we will be in a position to resolve any drafting points at Friday's hearing with a view to a sealed order being produced shortly thereafter. In the event that any further issues arise which I have not covered in this judgment, I am happy to receive short email submissions so that these, too, can be dealt with at next Friday's hearing.
1 Judgment was handed down on 22 March 2016: Al-Juffali v Estrada, Secretary of State for Foreign and Commonwealth Affairs Intervening [2016] EWCA Civ 176
2 Despite spending periods of time in South Africa during her relationship with this gentleman, I am satisfied that London continued to be her main base.
3 The applicant's father was unable to work following a heart attack and her grandmother was widowed.
4 D, the respondent's eldest daughter, is 33 years old and engaged to be married. She holds Saudi and British passports and lives in Switzerland and the United States. She appear to divide her time between Saudi Arabia, the United States, Europe and Asia (Shanghai in particular). According to the evidence in the bundle, her fiancé is a United States national who lives and works in California. H, her younger sister, is 31 years old. She lives in Jeddah where she is the managing director of a Saudi Arabian company. Both women were educated in the United Kingdom. [1/D:26]
5 Section 16(3) concerns the jurisdiction which may arise under Council Regulation (EC) No 4/2009 and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011. It has not been necessary to consider Section 16(3) in these proceedings as the respondent has not suggested that the applicant's application should be dismissed.
6 The Law Commission for England and Wales produced a Working Paper on Financial Relief after Foreign Divorce (Working Paper No 77) (1980) as a result of which Part III of the 1984 was enacted. That this was the Law Commission's intention is clear from the Explanatory Notes which accompanied the draft Bill in relation to what was to become s 16 of the 1984 Act.
7 When the Law Commission reported on "needs" in the context of its report entitled "Matrimonial Property, Needs and Agreements" (Law Com No 343), its glossary referred to "needs" as "a very broad concept with no single definition in family law".
8 This mortgage debt and the £27.3 million secured against BGH were advanced by J P Morgan on the basis of a split security in order to fund the purchase of the applicant's Californian property.
9 This mortgage was taken out by the applicant to meet the escalating costs of this litigation.
10 This was the contested leave application in the same case.
11 per para 71 of Lord Collins' judgment in Agbaje
Wife's application for financial relief pursuant to Part III of the Matrimonial and the Family Proceedings Act 1984. Husband's counter application to strike out her claim predicated on his assertion of protection from civil action arising from diplomatic immunity. Judgment, 09/02/2016, free
Estrada v Walid Bin Ahmed Abdallah Al-Juffali [2016] EWHC 213 (Fam)
Wife's application for financial relief pursuant to Part III of the Matrimonial and the Family Proceedings Act 1984. Case note, 17/03/2016, members only
In a tweet: High Court makes £53.3 million award in proceedings under Part III MFPA 1984 Case note, 21/09/2016, members only