Chapter 5 Interactive key cases

Financial provision on divorce or dissolution

The wife killed herself and the couple’s two children shortly after a final order was made. The husband applied for leave to appeal out of time.

The House of Lords held that leave to appeal out of time would only be granted if:

1. new events since the order have invalidated the basis of the order or fundamental assumptions underlying it to the extent that, if leave was given, the appeal would be certain or very likely to succeed;

2. the new events occurred very shortly after the order was made. It was suggested this would be no more than a few months;

3. the application for leave to appeal out of time was made reasonably promptly; and

4. the grant of leave to appeal out of time should not prejudice third parties who acquired relevant property in good faith and for paying full value.

The parties had been married for 28 years and had combined assets of £131m. The husband appealed against an order giving the wife £48m (36.5% of the assets) on the basis that:

1. more weight should have been given to his special contribution; and

2. assets totalling £68m in an offshore trust should not have been taken into account in calculating his wealth.

The Court of Appeal held that the trust assets belonged to the husband. Cases in which special contribution applied would be rare. It was relevant in this case and the award made by the judge reflected this. Sir Mark Potter P commented ‘even in an extreme case and in the absence of some further dramatic feature unrelated to it, fair allowance for special contribution within the sharing principle would be most unlikely to give rise to percentages of division of matrimonial property further from equality than 66.6%–33.3%.’

In financial remedy proceedings the parties have a duty to disclose their assets. In this case, the wife’s brothers downloaded huge numbers of documents belonging to the husband as they feared the husband would not be truthful in his disclosure.

The Court of Appeal held that these documents could not be used by the wife as to allow her to do so would breach the husband’s right of confidentiality.

The Millers were married for just under three years and had no children. The husband ran a very profitable company and was estimated to be worth £32m, of which £15m consisted of shares in his company. The wife received one-sixth of the assets which reflected the effort the husband had put into the business before the marriage.

The McFarlanes were married for 16 years. At marriage, both were professionals earning similar amounts. After their second child was born the wife gave up work to look after the children. There was insufficient capital to achieve a clean break but the husband had substantial income.

The court noted that the husband’s earnings after marriage resulted from the parties’ earlier joint efforts. The wife had given up a successful career. In looking after the children she would be economically disadvantaged and would be supporting the husband, at least indirectly. The court awarded her periodical payments of £250,000 a year, well in excess of her needs, to reflect an element of compensation.

There are three elements to fairness: needs, compensation, and sharing.

A wealthy German woman married a French banker who later gave up work to return to university. Their ante-nuptial agreement was drawn up in German. The husband signed it without allowing time for it to be translated, and without having independent legal advice. The key provisions were explained to the husband before he signed it.

An agreement between the parties was one factor in the process of quantifying a claim ‘and, perhaps, in the right case . . . the most compelling factor’.

A farming couple were married for 33 years. They contributed similar amounts to purchase their first farm and took out a mortgage and received a loan which later became a gift, from Mr White’s father. Mr White inherited the second farm which was not put into joint names nor treated as part of the partnership, though they farmed it as part of their business. Both were involved in the business, but Mrs White was the children’s primary carer when they were young.

Fairness is the guiding principle. There should be no bias in favour of the money-earner as against a home-maker. The judge should check the award against ‘the yardstick of equal division’. There should only be a departure from equality where there are good reasons to do so.

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