Today the Government have announced there will be new legislation in divorce law. This new law will update the Matrimonial Causes Act 1973 in due course. It will mean that, in the future when the legislation comes into force, divorcing couples will no longer have to ‘blame’ each other for the breakdown of their marriage. It is hoped the new law will help reduce family conflict.
Hughes Paddison represents the Wife in High Court Case
Hughes Paddison’s matrimonial partner, David Sterrett, recently represented the wife in the four day ancillary relief final hearing of N-v-N (http://www.familylawweek.co.uk/site.aspx?i=ed58019) at the High Court before Mr Justice Charles.
What departure should there be from equality on the principle of sharing when a large proportion of the matrimonial assets are inherited or gifted assets?
This was the question posed to Mr Justice Charles in this case and argued between Nicholas Mostyn QC (leading counsel, shortly before his elevation to the High court bench) and David Burles (junior counsel) on behalf of the wife, and James Turner QC on behalf of the husband.
This was a marriage of some 29 years and the parties have four children, all of whom are now over the age of 21 years. It was a big money divorce case with a difference. The parties’ total assets added to approximately £16m. Of that £16m, the Judge found that £12m (75%) were the products of wealth created by the husband’s family in the 18th century and handed down through generations. They were therefore “inherited” of ‘gifted’ assets. These are therefore treated differently by the Court in comparison to assets the parties had accrued during the marriage. The main asset in the case consisted of a company which was set up by the Husband’s father in 1947 and is principally an investment company with a portfolio of land and buildings. This included a large manor house, S Hall, which was valued at approximately £5.2m. It was the parties’ family home since 1987 and they lived there with their four children. The husband still resides there. This property was owned by the company and additionally there were very valuable chattels in S hall which the husband had inherited including photograph albums valued at £1.6m.
Other assets included apartments situated in Manhattan, New York and Buenos Aries together with £1.782m in the bank and husband’s declared bonuses from his employment (£796,296).
The husband argued throughout the proceedings that the inherited assets in the case justified a very marked departure from equality of the sharing principle. Throughout the proceedings the wife had always accepted that there should be a departure from equality but not on the same scale as contended by the husband.
The husband argued that the inherited wealth had not inextricably mingled with the parties’ other wealth during the marriage and that it is not the earned fruits of joint efforts from the marriage. The wife, however, argued the exact opposite, that during the marriage the parties had jointly transformed and substantially enhanced the husband’s interest in the company. Additionally, they had lived for some twenty years in the inherited S Hall where they raised their four children. These two arguments were at the very heart of the case in deciding on the division of the assets and what the scale of the departure from equality should be.
The Judgement (link above) consists of 37 pages and explores in detail the background to the case and the assets, all the evidence presented, the arguments advanced by the parties’ respective counsel and the approach that Mr Justice Charles used in reaching his conclusions. Mr Justice Charles had to consider the nature of the assets in this case, how any award to the wife would be funded by the husband, the consideration of the wife’s needs and the expectations both parties had as to their lifestyle following the husband’s retirement from the banking sector had they remained together.
Mr Justice Charles concluded that the wife required a lump sum of £2.9m to cover her housing needs (£2.5m) and to cover her costs and liabilities. He also concluded that the wife needed a fund of £2.4m to invest which, on a Duxbury basis, would provide the wife with an income in the region of £110,000 - £125,000 per annum for the rest of her life. This therefore produced a total of £5.3m. With the deduction of assets already in her sole name, the husband was ordered to pay the wife a lump sum of £3.62m. An outcome confirming the departure from equality but providing an award to the wife in excess of the sums the husband contended she should receive.