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Millionaire keeps charity windfall
13 February 2009
Multi-millionaire Sir Paul Judge, 59, has defeated his ex-wife’s claim for a share in a £14m sum which, it was believed at the time of their divorce settlement, he would have to repay to a family charity.
The divorce took place in 2001. At that time Sir Paul’s wealth was estimated at approximately £29m. The judge deciding on the financial claims of his wife, Anne Judge, took into account among other considerations the fact that their marriage had lasted 18 years and that they had two sons.
An important aspect of the case was that Sir Paul had borrowed £14m from a charity set up by the family, in order to invest in a company which had subsequently failed. Sir Paul’s case was that he had not only a legal obligation to repay the money, but that it was also a debt of honour.
Consequently, the judge left the £14m out of account when calculating what proportion of the remaining assets Lady Judge ought to receive. He decided her share should be 38% of the remainder.
Following the apportionment of the assets, however, lawyers acting for Sir Paul managed to persuade the charity commissioners that there was no legal obligation to refund the money to the charity. Rather than having to pay back £14m, Sir Paul merely had to pay a tax bill of less than £600,000. His ex-wife, now 61, came back to court to ask for a re-opening of her financial claims in the light of this unexpected turn of events.
It was argued on her behalf that she should be entitled to an additional 38% of the £14m, minus the sum paid to the Revenue.
She did not allege that Sir Paul had misrepresented the position as he then understood it, merely that the original court order had been made as the result of a mistake. Were she to be successful in obtaining a further sum, she intended to set up a trust for the two sons of the parties.
The Court of Appeal has refused to re-visit the case. One of the judges described that result as an ‘undeserved windfall’ for Sir Paul, a distinguished businessman and one-time director-general of the Conservative Party, currently chairman of the Royal Society of Arts and an Alderman and Freeman of the City of London.
This may not be the last we hear of this case. Lawyers are waiting to learn if permission will be given for Anne Judge’s case to go to the House of Lords, the court of final appeal in our legal system. Only cases raising important legal issues are heard by the Lords.
But many family lawyers consider that there is a significant question on a point of law as to whether a financial distribution clearly made on the basis of a mistake, as in this instance, ought to be open to re-examination after the passage of such a long period of time.
