Richardson-Ruhan v Ruhan (2017) EWHC 2739 (Fam)

Facts

H and W were married for 16 years. They had a son aged 19 and a daughter aged 16. The family enjoyed a very high standard of living achieved through H’s successful career.
H contended that his entire fortune, some £200m, had been stolen from him in March 2014 by a fraudster, Dr. Smith, and two business partners.
W argued that this was a false representation and that H remained vastly rich in that very large sums or the right to receive very large sums were held on his behalf by a nominee, Mr. Stevens.
Proceedings were commenced in the Commercial court in 2012 in relation to Dr. Smith’s fraud (the ‘Orb litigation’). They had given rise to a counter-claim from H. They were compromised by a consent order made in 2016 and providing for a mutual dismissal of the claims.
The settlement agreement included (a) a loan note of £73.75mio dated 29 April 2016 between Dr. Smith’s ex-wife and company called Phoenix, owned by Mr. Stevens, and (b) a further agreement by Dr. Smith’s ex-wife to transfer 50% of the shares of a company (‘Sentrum Rugby’) to Phoenix.
The main question to be determined by the court was how much of H’s fortune was available for distribution between the parties. In order to answer this question, the court had to determine, amongst other things, whether Mr. Stevens had been acting as a nominee for H as part of (a) a £92mio transfer to him in 2012 under a settlement agreement relating to failed business ventures in Qatar (‘the £92mio transfer’) and (b) the settlement agreement dated 29 April 2016.

Held

The Court rejected H’s contention that he was impecunious. Of the assets in dispute, H should be treated to have £12mio of liquid assets available him, 50% of shares in Sentrum Rugby and a claim to repayment of £73.75mio under the loan note dated 29 April 2016. No one had any valid claim against H, apart from W, to those assets.
H’s claim in the Orb litigation was for over £200 mio in respect of assets which he stated had been stolen from him by Dr. Smith. These assets were unquestionably matrimonial property. While W did not have any direct proprietary interest in those assets, she had an inchoate discretionary claim to them. It would have been expressed to have been 50% of the net recovery from those proceedings.
Stevens had been acting as a nominee for H when he received the £92mio transfer. H habitually used nominees for his business dealings and to hold title to his personal assets. The transaction took place only a week after H was served with the Orb proceedings. Mr. Stevens had not intervened in these proceedings or at least appeared as a witness to defend his ownership of the relevant assets. W gave credible evidence that H had told her that Mr. Stevens held the bulk of the parties’ money. Moreover, the use subsequently made of the £92m plainly showed that it was H’s money. All but £12m of the £92m had been spent. H was therefore treated as having £12m available to him for the purposes of the distributive award.
Stevens had also been acting as H’s nominee in relation to the 29 April 2016 loan note. It followed that insofar as the documents proclaimed that Mr. Stevens or one of his companies were genuine parties to the agreements to compromise the Orb litigation, they were shams (applying Bhura v Bhura [2014] EWHC 727 (Fam)). The true agreement was made between Dr. Smith and H.
The effect of the 29 April 2016 agreement was that H relinquished his claim against Dr. Smith in exchange for a payment, via Dr. Smith’s ex-wife for £73.75mio, plus 50% of Sentrum Rugby. Those assets represent the consensual recovery achieved by H of his own money following the appropriation by Dr. Smith.