Basic principles and financial remedies in divorce by John Bolch

Divorce|Family Law|November 21st 2013

Yesterday I mentioned the way some well-known cases come to  seem like old friends to us lawyers. Another example of the genre cropped up in a law report that appeared on Bailii yesterday. It is one of the best known “old friends”: White v White.

But I am getting ahead of myself. The report in question concerned the financial remedies (family) case G v B. It is quite a complex case and I don’t propose to go into all of the details here. Rather, I will pick out a few nuggets of interest.

Firstly, the wife claimed that the husband had failed to fully disclose his assets during their divorce. This was not on the scale of the infamous Young case that has been making the headlines for the last two weeks (and which is due to conclude tomorrow), but it is significant nevertheless.

The parties had agreed a schedule (list) of the available assets. However, this was obviously affected by the wife’s claim that the husband had not disclosed assets and this was an issue upon which the court (Mr Justice Blair) had to rule before the case could proceed.

I won’t go into the details of the wife’s claim – as I say, the case involved somewhat complex financial arrangements. Suffice it to say that, after investigating the matter, Mr Justice Blair accepted the husband’s evidence and rejected the wife’s case. Accordingly, the assets were declared to be as set out in the agreed schedule.

Interestingly, the husband had already admitted to certain amount of non-disclosure, including failing to mention assets in his Form E. However, this did not lead Mr Justice Blair to the conclusion that there were further assets that the husband had failed to disclose – a good example of why it is best to “come clean” with the court, even if you do so later than would have been ideal.

Having dealt with that issue, Mr Justice Blair turned to the factors he had to consider, as set out in section 25 of the Matrimonial Causes Act.

As is usually the case, the issue of the needs of the parties was the ‘magnetic’ factor, despite the fact that the available assets exceeded £6 million. This may seem somewhat odd to us ordinary mortals – surely, £6 million is more than enough to satisfy the needs of a husband and a wife? However, as the wife’s counsel pointed out, “what a party can be said to “need” must be measured against (i) the standard of living during the marriage and (ii) affordability, meaning not only that the claimed needs can be met but that they can be met whilst being fair to the other party.” Mr Justice Blair found that: “by ordinary standards, the parties had a high standard of living prior to the breakdown of the marriage.”

Moving on to the issue of each party’s financial contributions to the marriage, the unusual feature of the case was that, save for the wife’s limited assets, the entirety of the resources in the marriage emanated from the husband’s late father. The husband had never worked, having been provided for by his father during his lifetime and having then inherited his father’s substantial estate.

The husband accepted that inherited assets are available to meet a needs claim. However, he argued that their source should be taken into account “in determining both needs and overall fairness”. This is the White v White point. As Mr Justice Blair paraphrased Lord Nicholls in White: “… the fact that inherited property comes from a source wholly external to the marriage is one of the circumstances of the case, which the judge should take into account, deciding how important it is in the particular case”.

Here, Mr Justice Blair found that the husband’s father clearly intended to benefit not only his son but also his grandchildren – the husband’s three children by his previous marriage, and his son by this marriage. This, therefore, limited the amount available to the wife.

In the circumstances, Mr Justice Blair made an order that the former matrimonial home be sold and that the wife receive £1.6 million from the net proceeds of the sale, sufficient for her to re-house herself and the child. He also ordered the husband to pay maintenance for the child and £55,000 per annum maintenance for the wife.

There were two final points.

Firstly, the wife asked for ‘security’, i.e. for the husband to deposit £1 million into an account as security in case he failed to pay the maintenance. In a case with an international element (the husband lives abroad and the wife is Russian), one might think that this kind of security was not unreasonable. However, Mr Justice Blair did not think it necessary – if the husband breached the order, he would face enforcement proceedings.

Secondly, the husband felt that the wife’s maintenance should be time limited, ending when the child reached 18, as she had a modest earning capacity. Whilst Mr Justice Blair accepted this, he did not consider that limiting the duration of the maintenance was appropriate “given current uncertainties, including in the jobs market”.

So there we have it. Nothing particularly new here, but an interesting application of basic legal principles nevertheless.

John Bolch often wonders how he ever became a family lawyer. He no longer practises, but has instead earned a reputation as one of the UK's best-known family law bloggers.

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