Lottery, divorce and Mr Justice Mostyn’s lesson in the law

Divorce|October 19th 2011

Mr Justice Mostyn is not only a very good judge, but also a brilliant academic. Some of his written work is so complex that, years later, I’m not embarrassed to say I didn’t understand a word of what he had to say about the long-gone CSA maintenance formula.

Last week his latest judgment, S v AG [2011] EWHC 2637 (Fam), was published. It concerns the division of just £425,000 assets, the proceeds of a lottery win, between the wife who denied she had won it and the husband who said she had and was claiming an interest in it. How a case of this size brought by two litigants in person came to occupy the time of a high court judge in Central London is not clear. But it did, and he dealt with it as thoroughly as he would his usual caseload involving multi-million pound settlements.

(Although I wonder: might his fellow judges in the county courts, more accustomed to dealing pragmatically with a case of this level, have been more generous to the husband? I’ll come to that later.)

I once heard the Supreme Court judge Lord Wilson explain that when he is writing a judgment, he focuses very much on the “losing” party to explain why he has reached his decision. In this case, Mr Justice Mostyn had to explain to both parties, both of whom were litigants in person, how and why he had reached his decision.

S v AG has already been discussed in depth by John Bolch on Family Lore, so I’m not going to write too much about the specific facts of the case – except to point out that it was a long marriage, the parties having married in 1984 – and instead concentrate on the approach. It is important to note that the case apparently reached trial without any relevant papers! As a result, notwithstanding the appointment of two “McKenzie friends” to assist the parties, Mr Justice Mostyn had to adopt a far more “inquisitorial” role, which is routine for solicitors seeing a client for the first time but, in our aggressive “accusatorial” system, is an unusual approach for a judge.

He did not have the advantage (and luxury) of hearing erudite legal arguments from both sides, and making up his mind thereafter. He seems to have been obliged to consider all the potential legal arguments, for and against, all by himself and then make his own decision.

This is pretty much what we solicitors have to do when we meet a client for the first time.

When I first meet a new client, from the outset I am expected to give him or her an overview of what will happen, and what the likely result will be.  This can be a challenging task: inevitably, it will involve sorting out all the relevant information from all the information that is not. Clients don’t know what it is you need from them; as a result, much of what they volunteer and think is important, may not be. It’s up to me to decide what is important and what is not. I can only rely on what I’m told and sift it as best I can.

As Mr Justice Mostyn discovered in S v AG, both parties concentrated on the other’s conduct. For conduct to cross the (deliberately) high threshold and become relevant, it has to be very bad indeed. The judge didn’t think that it was a relevant issue in this case – and for 99.99% of my clients, it isn’t relevant either. Clients frequently think that it is, which makes it even more important that they are advised accordingly. As a solicitor I must advise clients to stay focused, unemotional and commercial – which isn’t always easy, but is always necessary.

And like Mr Justice Mostyn in this case, when I first see a client I have nothing by way of paperwork to help me. Since the Imerman judgment, even if paperwork is handed over, it will have to be handed back unread if it belongs to the other spouse.

So with no paperwork for guidance, what does happen when I first see a client who wants to know what his or her likely financial settlement will be?

The process that I follow is similar to that invoked by Mr Justice Mostyn who had no choice in S v AG. It is a basic, six-stage process in which I:

  1. Elicit the relevant facts from the client. This may involve calling in our forensic accountancy team to analyse further publicly obtainable information while the client is at the office.
  2. Broadly calculate the “reasonable needs” of the parties from the information provided.
  3. Consider and explain the relevant law.
  4. Apply the relevant law to the facts.
  5. Give a ballpark view as to the outcome. (Obviously I can’t give the exact figure, because I’m not a mind reader of judges!)
  6. Explain the procedure and potential timescale involved, and estimate the likely costs.

On paper, it looks to be a relatively straightforward process, designed to give the client an area to aim for and an understanding of what is going to happen, why and how.

In practice, it’s more complex. Sometimes there just isn’t enough information to go on from a first meeting.  In such circumstances, the client will be told what additional information is required, including valuations, financial data and so on. I will ask the client to come back with it so the outcome can then be considered in greater detail.

Furthermore, the law isn’t always easy to apply. For example, notwithstanding the relatively modest assets in this case, the law that Mr Justice Mostyn had to apply in S v AG involved:

  • Distinguishing the matrimonial and non-matrimonial assets.
  • Defining the applicable principles for sharing those classes of assets between the parties.
  • Applying the Duxbury Tables to ascertain lifetime income requirements, which would be met by a lump sum out of the assets.
  • Applying a cross-check of the fairness test.
  • Applying (or, as in this case, disapplying) the “compensation” test.

Ultimately, Mr Justice Mostyn reached a figure for the husband that he thought appropriate to the facts of the case, having applied the relevant law. He found that the wife had shared in a lottery win as part of a syndicate and on the facts of the case, he regarded her win as non-matrimonial property and therefore not to be shared equally. He gave the 55-year-old husband (a kitchen porter who earns £12,000 per annum and lives in rented property) a lump sum of £85,000, which amounts to 20% of the assets. He left the rest to the wife who has remarried and has a similar income to her former husband. She owns her own home from the proceeds of the lottery win, together with another property in Colombia.

With great respect to the judge, was he right when he held the win was a non-matrimonial asset? As he also pointed out, even if a lottery win is judged to be matrimonial property, in law it still does not necessarily mean that the win should be shared equally. He mentioned Australian cases that went both ways. Even though the marriage was in turmoil at the time of the win, the parties were still living together, the ticket was paid for out of the family income (which the judge dismissed as irrelevant) and the couple did not separate for some years thereafter.

So why should the windfall, (which could as easily befallen the husband as it did the wife) not be simply treated as “matrimonial property”? Or if not, given it had been effectively ring fenced and not “mingled” during the marriage, should there have been a more generous interpretation of the husband’s needs, applying all the factors of Section 25 Matrimonial Causes Act 1973? Why shouldn’t both parties live out their retirement years more equitably and in greater comfort?

Back on terra firma, we solicitors are often expected to give a ballpark view sufficient for a client to rely upon, after only an hour with a new client. Not every solicitor undertakes this six-step process at the first meeting – but the truth is, I enjoy brain teasers! However this case does demonstrate the wide parameters that exist in many cases, even those which at first sight seem straightforward. I would have given the husband a more generous award out of what was ultimately a lucky win 11 years ago.

The founder of Stowe Family Law, Marilyn Stowe is one of Britain’s best known divorce lawyers. She retired from Stowe Family Law in 2017.

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  1. Lottery, divorce and Mr Justice Mostyn’s lesson in the law « Untouched Smile | Care Your Child says:

    […] Lottery, divorce and Mr Justice Mostyn’s lesson in the law is a post from: Marilyn Stowe Family Law and Divorce Blog […]

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