P A F v S C F

The parties were married out of community of property subject to the accrual system. Divorce proceedings commenced in 2013. Shortly before trial in 2015, the applicant established an offshore trust in the British Virgin Islands, with the parties’ minor child as sole beneficiary, and donated £115 000 to it. Around the same time, he transferred £125 000 to his father, allegedly in repayment of a historical loan. The respondent amended her counterclaim to allege that these transactions were designed to defeat her accrual claim. The High Court found that the transactions were fraudulently intended to reduce the respondent’s accrual entitlement and ordered that their value be deemed part of the applicant’s estate for accrual purposes. The applicant’s appeal to the full court lapsed due to late prosecution. The full court refused condonation and an application to adduce further evidence. The applicant sought special leave to appeal to the Supreme Court of Appeal.

The application for special leave to appeal was refused with costs, including the costs of two counsel.

The case clarifies that in accrual disputes, courts may pierce the trust veneer where a trust is used to defeat a spouse’s accrual claim. It affirms the protection of contingent accrual rights during marriage and reconciles conflicting High Court authority on the treatment of trust assets in accrual calculations. It also restates strict principles governing condonation and the admission of further evidence on appeal.