This case has received a lot of
in the past week and has been heralded as changing the face of financial remedy orders, although this isn’t accepted by many esteemed family silks.
At the date of the judgment the husband was aged 80 and the wife was 59 years old. The parties have two adult children after a long marriage of 19 years supplemented by five years of cohabitation prior to marriage.
When the parties met, the husband was 48 years old and was already wealthy. It is important to note that this was accepted by the wife. By contrast, when they met she was a 27-year-old air hostess with no assets save for a Porsche.
The husband had a number of business interests and assets in a trust valued at £5.5 million. The parties' combined capital resources totalled £9.4million, including the trust assets.
The trial judge assessed the wife’s needs at £3.47 million and made an order for her to receive assets totalling £3.56 million. The judge arrived at this figure by assessing her needs and adding maintenance arrears of £92,000. The judge considered this the most principled way to distribute the assets. Any calculation based on the non-matrimonial assets was unreliable.
The judge had found that an equal division of assets would be unfair as this would ignore the wealth that the husband had entered the marriage with. It was evidentially impossible to ascertain the exact wealth of the husband at the date of the relationship as he had failed to submit clear evidence. The judge’s best guess was that he had business interests of £1.5 million when the parties met. The judge estimated that his personal assets were worth £1.18 million at the start of the relationship. It was noted that some of those assets had been intermingled during the relationship.
The wife appealed against the order as she wanted an equal share of the assets (£5.1 million). She submitted that her husband had failed to produce evidence to support his contention that there should be a departure from equality based on premarital wealth. She should not suffer as a result of his failure to do so which had tied the judge’s hands and prevented him from using a formulaic approach.
Her position was that even if a departure from equality was justified the decision to base her award on her needs alone was arbitrary. She should have been awarded one of the higher figures the judge had contemplated but rejected.
The Court of Appeal recognised that the first step was to determine marital wealth. The court can do so as appropriate to the case - a formulaic approach isn’t required to achieve fairness. The trial judge had done this in the best way possible with the available evidence. The judge took the view that it would be unfair for there to be an equal division of assets, particularly as this point wasn’t in contention, the wife agreed that husband was wealthy when they met. A precise calculation of that wealth wasn’t needed in this case to produce a fair approach.
It is an established approach that the court should apply the higher of the needs principle or the sharing principle. The judge didn’t state this explicitly in his judgment but it was referred to by the wife’s counsel. The Court of Appeal found that the lower court didn’t fall into error by awarding her a needs-based sum. The trial judge was right to ignore the other calculations as they were based on unsound calculations. The award made produced fairness as it met the wife’s needs and gave fair account to the husband’s premarital wealth.
The wife’s appeal was rejected.
About the author - Mena Ruparel
Mena Ruparel is solicitor, family law arbitrator and managing director of Law CPD Solutions Ltd. She is also a member of the Family Section Advisory Group.