Kingsley Napley achieves landmark divorce ruling

Kingsley Napley’s Family & Divorce team has achieved a significant legal victory for their client, Stalo Michael, in her divorce and financial proceedings against her husband, Mario Michael. This landmark ruling, delivered by His Honour Judge Hess as a Deputy High Court Judge, addressed the existence of a sham trust, which the court found Mr Michael had set up to conceal substantial assets. The judgement concluded that Mr Michael controlled the trust assets solely, bringing them into consideration as part of the overall matrimonial assets.

The divorce proceedings began in 2022 following a marriage of 22 years during which Mr Michael, a notable property investor and developer, amassed interests in over 200 properties. The complexity of the case required the involvement of seven other parties, including Mr Michael’s company, and testimony from over 30 witnesses, making the litigation particularly intricate.

In his ruling, Judge Hess depicted Mr Michael as a “fundamentally dishonest man, quite prepared to be wholly and deliberately dishonest when it suits him.” He found that Mr Michael had a “deliberate intention” to deprive Mrs Michael of her rightful share, leaving her “homeless and in a financially parlous situation.” The judge stated that Mr Michael had “unfortunately done everything in his power” to obstruct Mrs Michael’s claim.

After a final hearing in May, which revolved around the true value of Mr Michael’s business interests, he was ordered to pay Mrs Michael a total of £15 million in lump sums. Speaking on behalf of Mrs Michael’s legal team, Family Law Partner Jane Keir remarked, “Proving that a trust is a sham trust is a complex matter, particularly in circumstances where the party seeking to challenge the arrangement often does not have access to the key evidence." She expressed satisfaction with the court’s decision, emphasising the importance of ensuring that “no one should be aided in the concealment of funds that should properly be considered shared matrimonial assets.”

Keir also highlighted the long and frustrating process for her client, stating, “This has been a long and, at times, highly frustrating process for our client as she courageously fights to uphold her rights before the court.” She noted that Mr Michael’s strategy of obfuscation had backfired, worsening his legal standing and driving up costs.

In a rare additional ruling, the Family Court approved the appointment of receivers to enforce payments owed to Mrs Michael, including outstanding maintenance and legal fees, reflecting the court's determination to uphold compliance with its orders. Judge Hess recognised Mr Michael's “very obvious refusal to cooperate,” declaring it necessary to impose such measures in the case.

With multiple cost orders in place, Mr Michael's financial obligations continue to mount, including the order to cover 85% of Mrs Michael’s legal costs up to early August 2024. Currently, Mr Michael is pursuing several applications for permission to appeal to the Court of Appeal, with one already denied and others pending a decision. As the case unfolds, the implications of this ruling may serve as a cautionary tale for others who might consider misleading practices in divorce proceedings.