The recent ruling in the Akhmedov case highlights the Family Court’s powers to make court orders against third parties in financial remedy proceedings on divorce. In this particular case, the court ordered the parties’ son to pay his mother £75 M.
The Wife had been awarded £453M in a court order made in 2016, but when she received only a fraction of what was owed, she was left with no option but to issue enforcement proceedings against her ex-husband.
The Wife applied to join several third parties as respondents, comprising several companies together with the parties’ son. The Wife’s position was that her ex-husband had intentionally used these vehicles to keep his wealth out of his wife’s reach.
The judge considered that Mr Akhmedov had worked with his son to hide millions of pounds worth of assets in the form of property, a superyacht, a helicopter and an extensive art collection to avoid paying his wife the amount awarded to her by the court. Mrs Justice Knowles determined that the wife had indeed been the victim of schemes to keep her then husband’s wealth out of her reach, by any means possible.
The Judge found that the Wife had successfully proven that her son had been dishonest and was wholly complicit in doing all he could to assist his father in the dissipation of assets to prevent her from receiving that which had been awarded to her.
Generally, the Family Court has no power to make orders against third parties in financial remedy proceedings. Third parties are not parties to the proceedings between the husband and wife and they cannot, therefore, be bound by any Family Court decision. However, there are exceptions to these rules where third parties are joined as parties to the litigation, or where third parties are provided court permission to intervene within litigation between the husband and wife. Issues of joinder of intervention can arise when:-
Either party to the marriage or any third party can make an application to the court to be joined as a party to the divorcing couple’s financial remedy proceedings. The court itself of its own motion can make an order joining a third party to litigation between the spouses.
A decision to join a third party to matrimonial financial remedy proceedings may arise when either a party to the marriage alleges that the other party is beneficially entitled to property held in the name of a third party or, alternatively, a third party alleges that they have a beneficial interest in the property held in the name of one or both parties to the marriage.
It may be necessary to have a preliminary hearing to determine whether a third party should be joined as a party to the proceedings or granted court permission to intervene within proceedings. The disadvantage of joining third parties to financial remedy proceedings is that if the third-party claim is successful, the parties to the marriage may be liable to pay the third party’s costs
The Family Court may allow a third party a timeframe in which to intervene within financial remedy proceedings and file a narrative statement setting out his position. The third-party can then elect to intervene or not.
If the third party does not intervene, he risks losing a claim to property in which he claims a beneficial interest, but which is not in his name. If the third party is claiming a beneficial interest in property owned legally by one or both spouses, the third party has the option to either intervene within matrimonial proceedings, or be joined, or can issue civil proceedings pursuant to section 14 of the Trust of Land & Appointment of Trustees Act 1996. Potentially, the matrimonial proceedings could then be stayed pending the outcome of the civil proceedings, or the two sets of proceedings could be tried together.
If your third-party property interests have been affected adversely by divorce proceedings taking place between a couple, it is important that you seek urgent legal advice to protect your interests. At Myerson, we often advise third parties on how best to protect their property rights.