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England and Wales Family Court Decisions (other Judges) |
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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (other Judges) >> Bloom v Bloom [2017] EWFC B109 (04 December 2017) URL: http://www.bailii.org/ew/cases/EWFC/OJ/2017/B109.html Cite as: [2017] EWFC B109 |
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SITTING IN THE CENTRAL FAMILY COURT
First Avenue House, 42-49 High Holborn London WC1 6NP |
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B e f o r e :
____________________
BELA BLOOM |
Applicant |
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- and - |
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BARON ALEX BLOOM |
Respondent |
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- and - |
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IRINA KONTIPAYLOVA |
Intervenor |
____________________
The Respondent appeared in person
ROBERT AVIS (instructed by CHARLES RUSSELL SPEECHLYS) for the Intervenor
Hearing dates: 2nd - 6th October 2017
____________________
Crown Copyright ©
Mr CUSWORTH QC:
a. The Applicant is Russian, and was born on 10th February 1989. She is now therefore 28. At the time of the parties' marriage on 14th March 2011, she was just 22. She is the only child of the Intervenor and her husband Valentin.
b. The Respondent is English, and was born on 19th February 1974, and is therefore 43. At the time of the marriage, he was 37.
c. The parties' relationship began in January 2010, and they commenced cohabitation in October 2010. They separated in August 2015, and the Applicant's divorce petition was issued on 10th September 2015. Decree Absolute of divorce was obtained on 26th September 2016.
d. Shortly after the marriage, on 12 May 2011, the couple's matrimonial home at Flat 10, 54-56 Stanhope Gardens, London SW7 ('Stanhope Gardens') was acquired, for £1,325,000. The purchase was funded entirely by the Applicant's parents. The Intervenor sent just over $2m to the Respondent between January and May 2011, to fund the purchase. Mortgages have subsequently been taken out in respect of this property, of just over £500,000. The property is now held in the names of both parties.
e. The Applicant and the Respondent's only child is A, who was born on 18th February 2013, and is therefore now 4 years of age. She lives with the Applicant.
f. The 'French Property' is a villa situated at 80 Chemin de l'Ermitage, 06160 Antibes, Juan Les Pins, France. It was purchased on 14th June 2013, for 2.5m, in the Respondent's sole name; but the purchase was funded entirely by the Intervenor, Irina Kontipaylova, the Applicant's mother. The purchase was secured by a 100% mortgage from Societe General (Soc. Gen.), backed by a deposit of 1.15m from the Intervenor. Thereafter, the Intervenor made payments to the respondent at the rate of 30,000 per quarter which she intended would be put to the mortgage liability, until June 2015. The total amount paid by the Intervenor towards that property and its mortgage was 1,963,742.
g. The Applicant is the child of comfortably off (but as I found in April not vastly wealthy) parents. She does not and has never worked. She gave up her degree, unfinished, upon the relationship with the Respondent starting. He told her she need not worry about such matters, as he could support her. She is currently receiving nothing from the Respondent for herself or A, as has been the case since separation. She is now on benefits, and has income support. Her parents are meeting A's school fees. Housing benefit is meeting a proportion of the interest on the FMH mortgage. I am told that arrears are accruing.
a. The Applicant's Form A was dated 18th September 2015. Her Form E was sworn on 14th December 2015. The Respondent's Form E was dated 13th December 2015.
b. The Respondent issued a non-molestation application, ex parte, on 13th October 2015. DJ Simmonds refused to hear it without notice and relisted it for 16th October 2015, when DJ Hammond refused the Respondent an interim order and listed a final hearing on 25th & 26th January 2016.
c. The Applicant was granted an ex parte non-molestation order on 9th December 2015 (following an incident on 7th December) by DDJ Wilbourne. The full hearing was listed to also occur on 25th & 26th January 2016.
d. The Respondent issued two Child Arrangements Order applications, seeking equal/shared residence. The Applicant cross-applied for sole residence. DJ Parker conducted a FHDRA on 10th December 2015, and ordered that the FLA and CA proceedings be consolidated, and that the already listed hearing in January 2016 be used for fact finding in both.
e. At the hearing in January 2016, it was the case that the Respondent failed to prove any of his serious allegations against the Applicant. DJ Mauger also found, in accordance with the Applicant's evidence and allegations, that the Respondent had inflicted significant violence against her, including rape.
f. On 16th May 2016, DJ Alderson joined the Intervenor into the Financial Remedy proceedings, and made an asset preservation order against the French Property. He also made orders for 2 accountants to attend an inspection appointment at the next hearing.
g. On 5th September 2016, DJ Duddridge dismissed the Respondent's application to strike out the Intervenor's case as to the beneficial ownership of the French Property, provided for the filing of points of claim and defence, and directed that each party should file and serve any witness statements on which they proposed to rely in relation to the preliminary issue; the hearing of that issue was also listed, on 22nd March 2017, it being defined by the order of 5th September as follows: 'all issues relating to the beneficial ownership of the French Property or bank deposits held in French bank accounts by the respondent and other claims relating to monies paid to the respondent for the purchase of the French Property or for mortgage'. The judge also dealt with the first of the 2 accountants, who had attended as ordered.
h. By the final FLA and CA orders of DJ Mauger of 10th October 2016, the Respondent is only permitted to have indirect contact with A, by way of a weekly Skype call of 20 minutes maximum duration. The judge also made a s.91(14) order prohibiting the Respondent from making further applications within one year without leave of the court. Recitals record that the court would expect to see the results of drug and alcohol testing from the Respondent should he seek leave.
i. On 25th November 2016, the second inspection appointment against one of the Respondent's accountants took place, again before District Judge Duddridge.
j. In December 2016, the non-molestation order against Respondent was renewed, and he is precluded from attending within a specified distance of the FMH (as well as prohibitions against threatening/harassing conduct towards the Applicant and A).
a. Firstly, that on a holiday in the South of France in May 2012 attended by the Applicant, the Respondent, the Intervenor and her husband Valentin, the Respondent held himself out as a successful property dealer, and talked about properties in that region and their values.
b. In November 2012, the same group of people holidayed together in Mexico. By that time, the Applicant was around 6 months pregnant. The Intervenor indicated that she wished to make a gift of a property for her grandchild, at a cost of around 1m. She made it clear that the property was to be for her grandchild, and that the Respondent accepted this.
c. On the basis of that acceptance, the Intervenor agreed that the Respondent would be in charge of finding the appropriate property and arranging for its purchase given his expressed expertise in the area. He identified the French Property in January 2013, at the higher price of 2.45m, and the intervenor was persuaded to pay 270,000 as a deposit for the property, on the basis of her understanding that the property was for her grandchild.
d. The exact sequence of information passed to the Intervenor during the following period at the Respondent's behest was the subject of detailed findings by me in my earlier judgement.
i. In the 5 months leading up to the completion of the purchase of the French Property in June 2013, during which period A was born, the Respondent led the Intervenor to believe she needed to pay over 35,000 per quarter, when in fact the cost of the mortgage which he had arranged was just 14,375 per quarter.
ii. The Respondent intended to make use of the balance. Between March and June 2013, the Intervenor made payments totalling 1,610,365, initially into the joint account of the Applicant and the Respondent and after 8th April at the Respondent's request, into an account in his sole name. The property purchase completed on 14th June 2013.
iii. Further, thereafter, the Intervenor paid 30,000 per quarter to the Respondent, who himself had 'agreed' with her that he would pay the balance of funds due.
iv. Later, in July 2015, the Respondent asked his French banker to send through his mortgage interest rate details in a word document, in response to the Intervenor's renewed questions. He also asked for the document to be sent with the bank's letterhead. He then sent a doctored version of the signed original to the Intervenor, showing both an increased rate of interest and an increased total amount paid. I was quite satisfied that these changes had been deliberately perpetrated by the Respondent, to attempt to hide the true deficit between what the Intervenor had been paying him and what the bank had actually required to receive.
e. I rejected the Respondent' account of the funds being provided by the Intervenor as an unconditional gift to the parties. I accepted the Intervenor's case as to the events which led up to the purchase of the French Property in July 2013. Where there were any issues of fact between the Respondent's evidence and that for the Intervenor, I preferred that given for the Intervenor. I also rejected the Respondent's central tenet that, as he is essentially untrustworthy, it is unlikely that the Intervenor would have trusted him to hold property for his daughter.
f. I found that it was far more likely that any further funds advanced by the Intervenor (who had already provided the funds for the parties' matrimonial home) would have been provided on condition that they would be held ultimately for her grandchild, than that they would be provided as an outright gift to a man who freely acknowledges that he was behaving appallingly both to the Applicant and to her family. I accepted that the Respondent had been bragging about his history as an entrepreneur in the property market it is clear that he also held himself out to banks in this way, which would have justified the Intervenor leaving the details of the property purchase in his hands.
g. I concluded the judgement as follows:
43. I am therefore able to find that there is a constructive trust by which the Respondent holds the French Property for his daughter A, that having been the clear basis upon which the funds for its acquisition were advanced to him by the Intervenor; the Respondent knew and understood that at all times, and allowed the Intervenor to believe that he accepted it.
44. Further, it is also clear (and I think not disputed) that significant further funds that were advanced to him for the purpose of making mortgage payments on the property were not in fact so used, but rather appear to have been spent during the marriage. There has not been any investigation yet before me as to how those funds have been used, nor whether there are any funds available to either party to the marriage from which they can be repaid without impinging upon their respective needs. Prima facie, there is a further liability to the Intervenor in respect of those funds, which will be a debt to be dealt with during the substance of the financial remedy application.
a. A transfer to her of the Respondent's remaining interest in the family home
b. Payment to her of the following lump sums:
i. £78,500 (to meet SDLT still due from a failed avoidance scheme)
ii. £20,000 (to meet arrears of mortgage since separation)
iii. £250,000 (to be applied to reducing the mortgage)
iv. £96,000 being arrears of backdated periodical payments at £4,000pm for two years, and a nominal order thereafter
v. £250,000 payable in 5 separate lump sums annually over 5 years.
c. Child maintenance be governed by CMS
d. Her costs.
a. Lump sum orders for the Applicant to pay:
i. c.£500,000 to discharge the mortgage on the family home if she wishes to retain the property, which he modified in closing to a simple requirement that his name should be removed from the mortgage;
ii. £1,000,000 lump sum payable to him to buy himself a new home (although in closing he modified this to £400,000 on the basis that he would be able to obtain a non-status mortgage for the same amount);
iii. An unspecified "compensation payment" to him from the Applicant in respect of an alleged "lost" opportunity to be in business with W's parents - left to the court to quantify although his says his loss "would eventually be multi-millions", which claim he did not in fact pursue at the conclusion of the case;
iv. A lump sum equal to 50% of the value of her jewellery, which he dropped in closing.
b. The transfer to him of one of the Applicant's two Russian properties (both of which are occupied by elderly relatives) within 28 days, which he also dropped in closing.
c. Dismissal of the Applicant's income claims.
d. Periodical payments for the time being from her to him of £7,000pm (to cover the costs of his accommodation), which was also dropped by the end of the hearing.
e. The Applicant's parents pay the Respondent 300,000, being the amount which he claims he expended on the French property, prior to my finding that the property is held in trust for the parties' daughter A.
f. The Applicant to pay her own costs.
a. The Applicant neither met with nor spoke to nor wrote to the mortgage broker in relation to mortgage secured over Stanhope Gardens.
b. She neither met with, nor spoke to, nor wrote to Premier Strategies (the SDLT
scheme introducer).
c. She did meet for a very brief time with Mr Cope, the conveyancing solicitor on the purchase of the property, solely for the purpose of signing the completing documents. The Respondent accompanied her to the office in which the meeting took place. He himself says he was not present for the meeting, and his assertions about what was said there are therefore rejected.
d. The nature of the transactions that the Applicant was involved in, specifically the SDLT scheme, was not explained adequately or at all to her by Mr Cope, nor Premier Strategies, who may have been satisfied by the Respondent that she understood the transaction, although in fact he failed to explain it to her.
e. The main family finances were conducted through the Respondent's account in his sole name. Before the marriage the parties did not have a joint account.
a. The French 'mortgage application document' which has been produced by the Respondent is not a reliable document, and very much draft in form. It is by no means clear who it's author is, and it may well be the Respondent himself. Although the Applicant's signature appears on it, if it is genuine it may well have been inserted either before the text or without the text having been explained to her.
b. The signatures on the genuine mortgage application document are not the Applicant's, and in any event the Respondent admits producing them himself
c. I am unable to find that the Harrods mortgage document was signed by W knowingly, nor can I find that she understood the content of the document if she did sign it. It is equally likely, in my judgment that the respondent did in fact sign it on her behalf.
a. The Respondent has forged documents to extract greater sums from the Applicant's mother each month for alleged mortgage payments for the French property, than were in fact required
b. Further, he fraudulently misrepresented his and the wife's financial position to obtain the first mortgage on Stanhope Gardens in May 2011 for £245,000
c. He fraudulently misrepresented his and the wife's financial position to obtain
the second advance on that mortgage on property in October 2011 for £100,000. Including:
i. falsely representing that he had an interest in 3 Belgrave Place through an offshore trust, and
ii. falsely misrepresenting an inflated income for the Applicant and for himself
d. He fraudulently misrepresented his and wife's financial position to obtain the
NCBS mortgage in June 2012 for £500,000, releasing equity of c.£117,000, by
fraudulently misrepresenting that the property was to be let out
e. The Respondent's answers given during the preliminary issue hearing and
initially in this hearing in respect of 3 Belgrave Place, when he sought to blame the broker, Mr Duncan, for the false representation of the ownership of the property, saying it was his idea, were deliberately dishonest.
a. A transfer to her of the Respondent's remaining interest in the family home and given both her and A's need for a home, and the undoubtedly non-matrimonial derivation of the equity in the property from her parents I have no hesitation in saying that that would be appropriate, notwithstanding that the property was the matrimonial home, and therefore can prima facie be considered matrimonial. I also do not forget that A also has the benefit through her maternal grandparents of ownership of the French property. That is for her future; she and her mother have need of a home in London now. However, there remains the question of the Respondent's ongoing liability under his mortgage covenants, which I will deal with below.
b. Payment to her of the following lump sums:
i. £78,500 (to meet SDLT still due from a failed avoidance scheme) I have no doubt here that the scheme was the Respondent's sole responsibility, and also that he had been provided with sufficient funds by the Applicant's mother that he could have paid the tax and acquired the property mortgage free. That he did not is entirely his responsibility. That is not quite the same as determining that he should now be responsible for paying the tax, in circumstances where his entire share in the property is being transferred to the Applicant. I must be satisfied that he can pay without impacting upon his own needs.
ii. £20,000 (to meet arrears of mortgage since separation) I will deal with this as part of the claim for backdated periodical payments.
iii. £250,000 (to be applied to reducing the mortgage) I have already indicated that I hold the Respondent solely responsible for the taking out of the successive mortgages on Stanhope Gardens, and I find on the balance of probabilities that he used the funds so received on a combination of living expenses and for investment into further property transactions through his companies. It is also clear that the Respondent only told the Applicant what he felt he had to during the course of marriage, to procure her signature on documents to enable the release of funds, or otherwise to generate cash for himself. However, an order for this sort of sum to be now provided to 'turn back the clock' on the Respondent's actions should not trespass on his needs unless necessary to meet those of the Applicant and A. I also bear in mind that to some extent the parties are likely to have lived off these funds during the marriage.
iv. £96,000 being arrears of backdated periodical payments at £4,000pm for two years, and a nominal order thereafter. It is very clear that, had the court been in the position to make findings at an interim stage about the Respondent's access to funds as I have, then would fairly have been in place orders for financial provision for the Applicant and A, throughout these proceedings. Not to make an order now which reflects that fact, if such an order were affordable, would in my judgment be profoundly unfair to the Applicant, who should not have had to bear sole financial responsibility for the parties' daughter as she has. Plainly too, that order should have included sufficient provision, again if affordable, to enable her to discharge the mortgage payments on the family home. Mr Oliver points out that the combination of these 2 elements comes to some £116,000, or less than one third of the Respondent's identifiable receipts of £370,483 during the period.
v. £250,000 payable in 5 separate lump sums annually over 5 years. These are in effect future maintenance payments made capital to avoid the hazards of variation should the Respondent seek to do so. Mr Oliver also urges that they will enable the Applicant to pay down further some of the outstanding mortgage, and also to assist her in paying back her mother if possible. Given the Respondent's earning capacity, and history during the course of these proceedings, I accept that just as historic provision should have been made it is appropriate too for future provision to be ordered for a limited term to enable the Applicant to move into employment and self-sufficiency whilst at the same time caring for A. Given too, the horrendous costs consequences of these proceedings, brought about as I have already said solely by the Respondent's reactive and fundamentally dishonest approach to the disclosure process, and his ostensibly over-ambitious target for settlement, an order that is certain and not capable of future variation is certainly attractive. An order at the level sought is also entirely proportional to the assessable level of receipt for the Respondent over past years. If paid, it should be taken into account as against any nominal order for maintenance, which should be extinguished upon compliance in full with this element.
c. Child maintenance be governed by CMS. This is entirely appropriate.
d. Her costs. I will deal with this having heard submissions from the parties, but given the terms of my judgment above, I am sure that the Respondent will understand that he has a significant burden to discharge if he is to avoid further liability.
Dated 4th December 2017