Cambridge Family Law Practice

A lease preventing the sale of a high value property was entered into solely to prevent payment of a large financial settlement, a High Court judge has declared.

The case concerned a wealthy couple whose divorce reached the High Court in 2023. At the conclusion of their financial remedy (settlement) proceedings, Mr Justice Mostyn ordered the husband to pay his estranged wife a large lump sum totalling £18.964 million.

However, the husband did not pay, and in April the following year, the wife returned to court to enforce the order. Mr Justice Knowles ordered the husband to sell a number of assets and four separate properties to settle his debt. This included a high-end home on a Gloucestershire estate.

The latter attracted an interested buyer but it then emerged that the sale could not proceed because the husband had previously leased it to a business associate who sub-let luxury properties. Under its terms, the lease would need to be brought to an end before a sale could take place.

Events took a predictable turn. At a further hearing in early 2025, the wife duly asked the court to set aside the obstructive lease. Her former husband was the first respondent to her action, and his business associate the second. High Court Judge Mr Justice Poole explained:

“The First Respondent had not disclosed the existence of the [lease] to the Court or the Applicant at any stage before 2 August 2024 and only disclosed it on 3 September 2024, notwithstanding that he was subject to disclosure obligations [at earlier court hearings] and that the existence of a lease on the property that was ordered to be sold by way of enforcement of the financial remedy final order was clearly a highly relevant matter.”

The Judge accepted that the wife’s argument that the lease was a “sham”. Noting, amongst other evidence, the absence of paperwork related to lease negotiations, the fact that no utility payments for the property, such as electricity, had been made, and that no marketing to holidaymakers had taken place, he declared:

“I have little hesitation in concluding that the lease agreement purportedly entered …between the Respondents is a sham. This is an agreement which was designed to defeat the financial remedy order. The Respondents have long known each other well and worked together on various business projects.”

He continued:

“The lease agreement has all the appearance of being hastily put together. I have heard no evidence from any other person involved or knowing about it and received no documentary evidence of the involvement or knowledge of the lease by any other person….The First Respondent has chosen not to give an account of the creation of the lease. [The second respondent]’s evidence about it has been inconsistent and incredible. There is no evidence of any money exchanging hands as a result of the lease being agreed.”

Mr Justice Poole set aside the lease so the property sales to proceed after and the wife receive her due financial settlement.

Read the judgement here.