London’s status as the divorce capital of the world was enhanced by the news in July this year that Alexei Golubovich and Olga Mirimskaya have apparently issued proceedings in London’s High Court to deal with their English property, following their divorce in Russia last year.
They are reported to be the first foreign dynasty in which two consecutive generations have sought the aid of the English courts. Their son, in fact, tried to avoid the English courts and initially succeeded by winning the "race’" to issue divorce proceedings outside England and Wales. The Court of Appeal subsequently held that his wife was entitled to commence financial proceedings here because there was a connection to England (she was living here).
She succeeded in winning an award of just over £2.8m following a marriage of just 18 months. Commentators were critical that the decision would encourage people to move here to take advantage of the more generous divorce legislation.
At the centre of this latest row is a mansion on Upper Mall in Chiswick alleged to be worth £6.4m. Both claim it is theirs, although it is currently registered in Mr Golubovich’s name.
In English divorce cases, it does not normally matter in whose name a property is registered. The court has the power to transfer assets from one to the other and the recent Prest case confirmed that if a third party owns property on trust for one spouse, a transfer to the other can be ordered.
In smaller money cases a court will not normally order a transfer to a spouse if it would financially prejudice the other (e.g. an order that means one party remains liable under the other’s mortgage indefinitely, since this affects their mortgage capacity and prejudices their own ability to rehouse!).
In cases where the matrimonial home is the largest asset and it is required to meet the needs of the spouse caring for the children, it is common to have a "Mesher" Order so that the property is sold upon specified triggering events, such as when the children attain the age of 18 years or cease full-time education. Where both parties want to retain the matrimonial home and there is sufficient money for one of them to do so, emotions inevitably run high.
In a divorce case, the judge has the option to order a sale of property and other assets. When a couple are arguing about contents, being told that they face receiving just half the proceeds of sale of their second-hand goods and then having to replace them often leads to a pragmatic approach being adopted by both.
With property, if a sale is ordered potentially either or both of the couple can make an offer. In some cases, the issue can go to sealed bids with both (and any interested third parties) having to make offers by a certain time deadline. This can, in practice, mean one pays significantly over the odds for a property he or she particularly wants. Arguably, if the other wanted it as well, it may make losing out less of a bitter pill to swallow.
According to press reports, the arguments being run by Mr Golubovich and Mrs Mirimskaya are that each says that it was the intention that the property would be beneficially theirs.
Documentation will apparently show that initially the house was bought by an offshore company in 2004 and then transferred to Mrs Mirimskaya’s name in 2005. In 2008 the house was transferred into her husband’s name, but she says it remained the common intention of both of them that she would continue to be the 100 per cent beneficial owner of the property.
The court will no doubt want to hear the circumstances in which this 2008 transfer took place. It may become relevant that in the latter years, according to media reports, the property was occupied by Mr Golubovich, the couple’s two younger children, niece and mother-in-law, while Mrs Mirimskaya spent most of her time outside the United Kingdom.
He will apparently insist the 2008 transfer was part of the agreed division of their assets and if the documentation confirms this, it is hard to see on what basis the court would order a transfer back, particularly given the developments with prenuptial and postnuptial agreements.
Until more information is available about both their cases, it is impossible to predict how this one will develop. In choosing to resolve matters through court as opposed to trying mediation or collaboration, what is certain is that both will spend significant sums on legal costs. Unlike most people, they can afford to do so.
This piece first appeared on Spear's magazine.
Kirstie Law is a partner at Thomson Snell & Passmore