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The Millers' Tale

Philip Moor considers the position in high net worth, short marriage cases in the light of Miller v Miller.

Philip Moor QC, 1 Hare Court

The Family Law Bar Association has an annual Conference at Cumberland Lodge every May. Just before this year's Conference, Singer J handed down judgment in a case called Miller v Miller [2005] EWHC 528; [2005] 2 FLR 533. On the Saturday morning, James Turner QC outlined the facts of the case to those attending the Conference. Notwithstanding the fact that Singer J. was himself clearly sitting in the middle of the audience, audible gasps of surprise could be heard from every corner of the room when the outline of the facts ended with the news that the eventual award in favour of the wife was £5m.

Never mind, we all agreed. Singer J had himself granted unconditional permission to appeal and, surely, the Court of Appeal was bound to put things right.

The factual matrix
Why such audible gasps, you may well ask? The wife was 36 years of age. Prior to the marriage, she had been living in rented accommodation, whilst working for a pharmaceutical company in Cambridge on a salary of about £85,000 per annum. After meeting her husband to be, she gave up her employment and moved to London. Seemingly to avoid the disapproval of her parents, she did not cohabit prior to the marriage, although the parties were "fully committed to each other".

On 14 July 2000, the Millers married. The marriage lasted two years seven months, at which point the husband left the wife for another woman. There were no children. The wife did not work during the marriage although Singer J. found that there was no reason why she could not re-establish her earning capacity.

The husband had been a wealthy man prior to the marriage. During the marriage, he was granted a very substantial shareholding in the New Star business of Mr John Duffield but this shareholding had been promised to him prior to the marriage and was made available to him because he moved his existing client base to the new firm.

By the time the case was determined, the husband had assets of about £15 million plus his shares in New Star. There was substantial disagreement as to the worth of the latter, but a broad assessment of their value at £15 million gave him an overall worth of around £30 million.

The matrimonial home was worth £2.3 million but was held in the husband's sole name. There was a property in France in joint names worth around £1m. This had been paid for by the husband but the wife had been very involved in the project.

The husband's open offer was £1.3 million. He argued that this was a generous proposal after a marriage lasting two years seven months and to which the wife had bought no capital. The wife sought £7.2 million, being 37.5% of the amount she argued had been generated during the marriage ("the matrimonial acquest").

The award
Singer J. awarded her £5 million, although he rejected the wife's matrimonial acquest argument. He transferred the London property to her and ordered a further lump sum of £2.7 million. She had to return to the husband her one-half interest in the French property.

The appeal
The husband immediately appealed and the matter came before Thorpe and Wall LJJ, sitting with Black J on 19 July 2005 [2005] EWCA Civ 984.

To the surprise of many, the appeal was dismissed. Thorpe LJ did say that he did not think that he would have gone so high had he been trying the case at first instance. Nevertheless, he did not consider that the award was "plainly excessive", although it was "at the top end of the permissible bracket".

An issue of principle?
Rather disconcertingly, this part of his judgment seems to suggest that no issues of principle arose in the case and that the matter was merely an exercise of discretion with the only question for the Court of Appeal being whether they could intervene on G -v- G [1985] 1 WLR 647 principles.

In fact, even a cursory look at the judgment reveals three very important matters of legal principle. The decision in Miller -v- Miller can certainly not be side-stepped on the basis that it is merely an example of the Court of Appeal not interfering with an exercise of discretion.

The first principle – an end to "putting the unhappy applicant back on her feet"
So what are these three principles? The first sweeps away the previous jurisprudence as to short marriages, in which the court aimed to place the wife back in the position that she would have been had the marriage not taken place. Thorpe LJ considered such an approach of "putting the unhappy applicant back on her feet" to be "discriminatory".

He said:-

"There are a number of very good reasons why that should no longer be the modern approach. First, it originated and developed during long years in which the yardstick for measuring the extent of the applicant's claim was an assessment of her reasonable requirements. Second, a marriage is not to be equated to a purely financial venture where the court may redress a breach of contract or the disintegration of a partnership by an award of damages or other financial relief. Section 25 requires a more sophisticated evaluation of the extent of the wife's commitment to an investment in the marriage, emotionally and psychologically. In some cases it may be necessary to assess emotional and psychological damage and the extent to which the applicant's future capacity and opportunity to enter into a fulfilling family life has been blighted. What a party has given to a marriage and what a party has lost on its failure cannot be measured by simply counting the days of its duration."

Many will agree that the old approach could not survive White v White, particularly given that "putting an unhappy applicant back on her feet" does not feature in any way in Section 25 of the Matrimonial Causes Act. The difficulty, however, is that the Court of Appeal has not been able to put in place an alternative approach. A vacuum has undoubtedly been created in short marriage cases. This vacuum simply does not exist when the courts are dealing with longer marriages. The beauty of White v White was that the "reasonable requirements" approach was immediately replaced with the "yardstick of equality" test. There was no vacuum.

So how are the courts to implement Miller in short marriage cases? Apart from saying that the award will be considerably more generous than before Miller was decided, there is no guidance or help to be elucidated from the decision. If we are to control the incidence of costs in Ancillary Relief cases, the profession needs better guidance on how to deal with shorter marriages.

It is, of course, axiomatic that the vast majority of short marriage cases do not have assets anywhere near as great as in Miller. These cases will mostly continue to be dealt with on the basis of balancing needs and ability to pay, particularly where there are children. Nevertheless, there are other reasons why Miller cannot be easily dismissed.

The second principle – the role of conduct
I began by saying that there were three important matters of principle to emerge from Miller. So what are the other two? The first is the likely reintroduction of conduct arguments to ascertain the reason why a marriage was short. This development is to be roundly deplored. Throughout the last 30 odd years, the courts have endeavoured to keep marital misconduct out of ancillary relief disputes. That can no longer be said to be the case where there has been a short marriage.

The Court of Appeal validated the wife's argument that it was relevant that she did not wish to bring the marriage to an end. She argued that the husband could not be heard to say that it was a short marriage when it was only terminated as a result of his conduct, namely adultery with another woman.

Thorpe LJ said:-

"… it is pointless, and in terms of costs, risky, to assert misconduct that does not measure high on the scale of gravity. But conduct that would not merit advancing under Section 25 (2) (g) is not therefore irrelevant or inadmissible. Often the court's assessment of the worth of the comparable contributions will require consideration of motives, attitudes, commitments and responsibilities."

He goes on to site with approval, his earlier judgment in G v G, which was decided in the year 2000 but unreported at the time:-

"There must surely be room for exercise of a judicial discretion between the pole of a wife who is driven to petition by the husband's unfeeling misconduct and that of a wife who exits from a marriage capriciously and for her own advantage. It seems to me that the judge was doing no more than taking his bearings as to where he stood along the path".

The Court of Appeal seems to be of the view that conduct arguments will not raise their ugly head in more than a handful of such short marriage cases. This may well be far too optimistic. After a short marriage, it is rare for one party to believe that they were to blame for its breakdown. It seems highly likely that conduct issues will regularly feature in such cases. One party will argue that the marriage would have been long were it not for the behaviour of the other. The latter will retaliate by alleging that the marriage was always doomed by reason of the attitude of the former.

The third principle – legitimate expectations
The third point of principle is to be found in the finding of Singer J. that it was a decisive factor that the marriage gave the wife "a legitimate entitlement to a long term future on a higher plane of affluence than she had enjoyed prior to the marriage". The Court of Appeal accepted that it was legitimate for the judge to regard this as the key element, whilst saying:-

".. I emphasise that this is a fact-dependent conclusion and it is not to be elevated into a principle or yardstick filling a vacuum created by the rejection of the restitutionary objective sought in the old cases."

But surely each wife of a very wealthy man will say that she had a "legitimate entitlement to higher plane of affluence" just by the exchange of vows. It is difficult to conceive of a short marriage case involving the very wealthy where this argument cannot be run. After all, it is rare indeed for the spouses of the very wealthy to reject the material world, and there is usually some comment or other along the lines of "you need not worry about money ever again".

The ambit of discretion
Worse, both judgments end with a particularly unhelpful observation. Thorpe LJ says:-

"The ambit of the judge's discretion in cases involving very large assets and a short childless marriage is particularly wide."

Wall LJ, having referred to his view that the decision was "within the band", said that, speaking for himself, he would advise caution about the use of this, or any other decision, as a template for others. So how do practitioners advise their clients in such cases?

Tabloid interest
The case has, regrettably, attracted a good deal of Press coverage. Even the tabloids have had their say, commenting on the observations of Mr Miller's leading counsel that attempted to compare ancillary relief awards with those made for libel, professional negligence or personal injuries. These submissions did not find favour with Wall LJ in particular. He said:-

"Not only were such comparisons, in my judgment, irrelevant, but they seemed to me both to demean the status of marriage, and to take no account of the serious social, financial and psychological effects which irretrievable breakdown frequently have on those who suffer it."

The impact on the public
The difficulty is that the decision itself may have the opposite effect to that intended by their lordships. It is becoming increasingly common for wealthy individuals to seek the advice of lawyers before marrying. In the absence of binding pre-nuptial agreements, and given the totally inadequate provision for cohabitees, the only safe advice to give any wealthy individual is not to marry under any circumstances.

It follows that the publicity generated by the Miller case is certainly not improving marriage rates. The statistics are beginning to speak for themselves.

A further appeal?
Perhaps the House of Lords will come to the rescue? Mr Miller has lodged an application for permission to appeal. There is no doubt that such an appeal would give the Law Lords the opportunity to determine many of the points raised in this Article. It would not, however, be entirely unexpected if their Lordships decline the generous offer of hearing the case.

The urgent need for reform of Section 25
It follows that the need to reform Section 25 is becoming clearer and clearer. Until this occurs, advice in short marriage cases involving the wealthy is going to be far from scientific and hedged with far too many "ifs", "buts" and "maybes".