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Divorce & Financial Remedy Update, July 2018

Sue Brookes, Principal Associate and Rose-Marie Drury, Senior Associate, both with Mills & Reeve LLP, analyse the news and case law relating to financial remedies and divorce during June 2018.

Sue Brookes, Principal Associate, and Rose-Marie Drury, Senior Associate, Mills & Reeve LLP


As usual, this update is provided in two parts:

A. News in brief

Divorce petitions take almost a year from start to finish
The latest release of family court statistics show that whilst the number of cases starting in the Family Court has dropped, the time taking to deal with them has increase.  The stats show that there has been a drop in financial remedy, private law children and divorce cases since last year although domestic abuse remedy orders and personal injunctions increased.  A divorce from petition to decree absolute is now taking 51 weeks.

New standard orders and revised forms
Sir James Munby, has issued Guidance promulgating standard children and other orders for general use. At the same time, revised versions of Forms A, A1 and D50C have come into operation. 

Legal aid applications up 21%

The MoJ's legal aid statistics for January to March 2018 also show that the number of applications granted has risen by 14% compared to last year.  Applications are at their highest since 2013 and reflect the changes to domestic abuse evidence requirements that were brought in in January this year. 

At the same time, the MoJ has published research looking at the barriers domestic abuse victims face when obtaining evidence for legal aid applications. Conducted in 2016 and 2017, the research highlights a number of factors that prevent individuals from evidencing abuse including accessing evidence (e.g. health professionals being unwilling to write letters, data protection issues when trying to access information from the police and language barriers), problems with the time limit and the rigidity of the process. 

New appointments

Lady Justice Arden DBE, Lord Justice Kitchin and Lord Justice Sales are to be elevated to the Supreme Court. Lady Justice Arden DBE and Lord Justice Kitchin will join the Supreme Court as Justices on 1 October 2018, followed by Lord Justice Sales on 11 January 2019. They will replace Lord Mance, Lord Hughes and Lord Sumption.

And there are also seven new Court of Appeal judges, including Mr Justice Baker. 

First forced marriage protection order for boy

The order was obtained by South Yorkshire Police to safeguard a 19 year old who had received threats for not complying with a pre-arranged marriage which his family had promised he would consent to when he was five years old.  For further details click here.


B.  Case Law Update

Kelly v Pyres [2018] EWCA Civ 1368
H and W met in Brussels in the late 1990s and were married in 2005 in Italy. They had two children, the first born in 2006 in London and the second born in Italy on 2008. In 2015 the marriage broke down. W commenced divorce proceedings in England based on her habitual residence (although she did not pursue this) and her English domicile.

It was common ground that H's domicile of origin was India and W's was Ireland.

H was born in India to Indian parents and moved to England in 1957 aged 13. He completed his education in England and married an English woman. He purchased 2 properties in England and also bought a retained a farmhouse in Italy. Between 1972 and 1995 he was seconded to the European Parliament in Luxembourg.

W was born in England in 1972 to Irish parents. The family returned to Ireland when W was a baby and she remained there up to and included her university education. In 1995, aged 23, W moved to Manchester for her Master's degree and obtained a British passport. She lived in England for some 18 months before moving to Brussels in March 1997 for an internship and thereafter to work as an employee of the European Commission. W worked in Brussels until 2001 when she moved to work for a company in London on a time limited contract. W and H cohabited in a property H owned in London which was in multiple occupation.

By June 2002 W had applied for a post in Albania and she left London in November 2002. W and H went to Ireland to collect W's belongings from her parents' home which she then left in storage at the London property. H followed W to Albania in 2005. Shortly before their wedding in 2005, at H's instigation, the parties signed a prenuptial agreement describing them as 'British subjects' and 'farmers' and declaring that they were 'habitually resident and domiciled in Italy'.

W returned briefly to London in the summer of 2006 to have her first child although she left shortly after the birth to spend her maternity leave in Italy before returning again to Albania.

In October 2006 H moved to Sarajevo where he remained until his retirement in 2009. W remained in Albania and the parties had a long distance relationship.

In 2009 W was posted to Sarajevo and in the same year the parties attended marriage counselling in London.

At first instance Mr Justice Cobb found:

1. From 1998 W had used a London address for all formal and business correspondence and from 2000 to date W had used the London property as her address for most purposes.

2. W kept personal possessions she had retrieved from Ireland at the London property.

3. There was not any agreed firm, long term plan about the use of the London property as a home. It was one of a number of options. The floor plan of the property did not support her case that when renovated the basement was designed to be self-contained although he accepted W was concerned about the ceiling heights which was indicative of an interest in living there herself.

4. W paid income tax in England from 1997 to 2000.

5. W paid NI from 2002 reflecting she saw herself returning to England to retire.

6. W's pension for the EU delegation was paid according to weighting referable to a base in England, not Ireland.

7. W returned to London for antenatal and postnatal checks with her first child and postnatal treatment with her second. Both children received vaccinations in London and both parties were registered with GPs in London. It was W's instinct and habit to return to London for any significant medical treatment.

8. W's relationship with her Irish family was strained. She had no state pension or equivalent rights in Ireland and only a dormant bank account. W regarded Ireland as not offering a multicultural life and described Ireland as too monocultural, too small land too remote.

9. W had chosen not to spend time in England when she could, preferring to be in Europe or further afield. She had never taken holidays in England and when living in England in 2001 she was applying for jobs abroad not further afield.

Mr Justice Cobb was satisfied W had lived in England sufficiently to qualify for establishing a domicile in the jurisdiction. She had viewed London as her base and adopted home in place of Ireland and developed a singular and distinctive relationship with London. Although she spoke with little worth or attachment towards England as a country London had become the centre of gravity and place of her permanent home. She had acquired a domicile of choice from 2000 at the latest in England which had not been lost. H appealed.

H argued that a domicile of choice can only be acquired if the intention to remain permanently or indefinitely is established whilst a person is resident in the relevant country. The judge had erred in treating the period from 1995 to 2000 as a continuum to find a domicile of choice was established during that period. A domicile of choice could not have been acquired between March 1997 and 2000 when W did not live in England.

W submitted that she had the necessary intention to acquire a domicile of choice when she was living in Manchester between 1995 and 1997 and the judge's findings in relating to the period 1997 to 2000 were capable of supporting such a finding.  She further submitted that it remained open to the judge to have found that she acquired a domicile of choice in England between October 2001 and November 2002.

Giving the lead judgment for the Court of Appeal Lady Justice King found that the judgment could not be interpreted in the way W sought. There was no suggestion she intended to remain permanently or indefinitely in England in 1997 and no evidence she had any plan to return to live in England. There was no evidence she formed the requisite intention to obtain a domicile of choice during that period of residence. The developing intention to replace her relationship Ireland with London did not show the necessary co-existence of residence and intention nor was it possible to conclude the requisite intention was present between 2001 and 2002.

Whilst in some cases the requisite intention to establish a domicile of choice could be established din a day W's temporary residence of 11 months with an expressed intention to retire in England in several decades' time was not enough without more cogent evidence to create a domicile or origin. Far from establishing herself and her family in England following her period of residence between 2001 and 2002 W chose not to marry, holiday, spend her maternity leave or give birth to her second child in England. The judge was rightly concerned by W's emotional detachment to England. It was her fiscal base and she utilised the country's medical expertise but she demonstrated no personal nexus never choosing to spend time or just enjoy being in her 'adopted home'. Her intention to retire in several decades in England was not sufficient to demonstrate her intention.

Whilst it is possible for a person working abroad to acquire a domicile of choice in England one would expect England would be truly 'home' and all the evidence would point to that person regarding himself as living in England but working abroad.


A v B (No.2) [2018] EWFC 45
A (the Husband) and B (the Wife) met in 1980 and married in 1983. In 1986 B gave birth to the parties' first child, E and a further child, F, was born in 1989. In 1991 the parties' relationship broke down and they divorced in 1992.

A remained in the family home with E and F. B lived with her new partner, C and over time the children had overnight weekend contact on alternate weekends with W.

In 1992 B was made redundant and she received a lump sum of £30,000. B said she paid £10,000 to A and produced a bank statement showing a debit of £10,000 although A did not recall receiving such a sum.

B then suggested that A move with E and F to live with his girlfriend and B and C would move into the family home to sell it, which they did so albeit A claimed he was under pressure to do so.

In 1994 the family home was sold. B's case was that there was negative equity of around £6,000 which was paid by C. There were also four endowment policies in joint names which B said were shared between the parties. A did not recollect any negative equity or recall retaining any of the policies, although in cross-examination he accepted there had been four policies and the parties had shared them.

Thereafter the children continued to live mainly with A and B paid maintenance for them. B had a series of jobs arranged around being the children's primary carer although for a period of time he worked full time. In 2001 A began a long-term relationship with D. 

B's career continued successfully and in 1999 B married C. In 2003 B was made redundant again and in view of C's significantly improved financial position she decided to retire from paid employment and she invested sums from the redundancy payments in property in her and C's names.

In 2006 A was admitted to hospital suffering chest pains. In a series of conversations B agreed to increase the maintenance paid for the children, to clear A's credit card debts and that C would purchase a property for A to live in with the children. At the same time E was involved in a serious road accident and underwent a long convalescence. A gave up work to care for him and in Autumn 2006 C paid for A, D, B, C, E, F and C's children to go on holiday together to the Maldives. In the meantime, A found a property to purchase and moved in November 2006.

B and C subsequently funded a significant extension to the property. A argued this was to make the property sufficient for D and her children to live in it whilst B maintained it was to increase the investment value. B and C permitted A to have lodgers and to retain the rent.

In 2009 D moved into the property and A and D. In 2012 they spent sums on a workshop at the property for D's business and they were married in 2013.

In 2013 A emailed C requesting that C and B provide A with a right to occupy the property. C subsequently replies explaining that as a result of C and b's financial position they needed to sell the property as by 2014/2015 they would no longer be able to afford to keep it.

In 2014 D sold her property and purchased another. In 2015 C then emailed A asking what his and D's plans were. A replied that they had seen a property to purchase but it needed work carrying out for it to be their home and to run their business from there and he guessed they would vacate in late 2016/2017. C agreed to a backstop date of February 2017.

A subsequently took legal advice and, understanding he could pursue financial claims pursuant to the MCA 1973 if the claim had been made in his original divorce petition, he proposed to B that they attend mediation. B issued a section 21 notice for A to vacate the property and A issued a Form A. B filed to strike out A's claim on the grounds of lack or jurisdiction in accordance with s28(3) MCA 1973 and FPR rule 4.4(1)(a) and 4.4(1)(b). B subsequently abandoned her claim under rule 4.4(1)(a) on the basis of evidence from A's solicitor it was standard practice to tick all of the boxes in the petition including the prayer for ancillary relief.

In January 2018 B's claim for strike-out was refused.

A had no assets in his own name save for a pension with preserved benefits of just under £60,000 and liabilities including legal costs of £40,000.  His wife, D, had assets including another property but A had no interest in it.

B had assets of approximately £4.7m plus a pension of £780,000. B's assets included a number of properties in her own name and others which she owned jointly with C.

A sought to occupy X house for life. B offered a lump sum of £40,000 to be reduced pound for pound by the extent of B's legal fees from the date of the offer which by final hearing would extinguish the entirety of the lump sum.

Mr Justice Baker found that B was an impressive and measured witness whereas A was hesitant and at times inconsistent. Whilst he was not deliberately evasive overall his evidence was not reliable on a number of key issues.

He accepted that B had paid £10,000 to A in 1992, that the former family home was sold with negative equity and the net liabilities paid by C. He further accepted A's evidence as to the division of the endowment policies.

Despite the absence of a formal agreement he was satisfied th4e parties reached an informal agreement between 1992 to 1994 which was fair in all the circumstances and which amounted to a comprehensive resolution of the financial arrangements arising from the marriage and divorce.

He accepted that the house purchased in 2006 was to help A get back on his feet so that he could continue to care for and support the children and neither B or C made any promises he would be able to live there indefinitely. When A had written to C in 2013 he was requesting C to grant a right which would be binding not to put in writing a right he already enjoyed and his conduct in the email exchanges in 2013 and 2015 was inconsistent with his case he genuinely believed he had a right to occupy the property for life.

Although it was not correct, as asserted by C in emails, that the parties could not afford to keep the property that did not affect the overall circumstances surrounding the acquisition and occupation of the property.

The case was distinguishable from Pearce, M v L and Wyatt v Vince on the basis that:

1. Unlike the parties in those cases A and B had reached a comprehensive agreement concerning the division of the limited resources in 1992 to 1994. They reached a fair and amicable resolution of all financial issues that existed at that stage in their lives.

2. A received considerable assistance by way of financial provision and other support from B throughout the children's minority. In particular, he was provided with a rent-free property of substantial size, it was renovated and extended at no cost to himself, his debts were paid off and the level of periodical payments were increased. Thereafter he was allowed to have lodgers and to keep the rent.

The responsibility for caring and supporting the children had been shared between the parties.

3. A's financial needs were not needs which B could be fairly asked to meet. A's wife, D, had a property in which they could live. In so far as A and D needed assistance to support their business it was not fair to expect B to provide it. It would not be unreasonable to expect B to seek alternative paid work if his business did not make higher profits in the future.

4. A had not suffered a disadvantage so as to found a claim based in compensation. A was able to work full-time for periods during the children's minority. His current employment in D's soft furnishing business was a career choice he had been able to make because of the financial support he had received from B.

5. B had assumed financial obligations towards A and arranged her financial affairs on the assumption that A could not and would not make any claim against her. She would not have agreed to the provision she made in 2006 had she thought he would do so.

6. The reason for delay in bringing the claim was that both parties considered that they had resolved the financial issues arising on their divorce in the informal agreement they had reached in 1992 to 1994.


Bruzas v Saxton [2018] EWHC 1619 (Fam)
The parties divorced in 2013 and a consent order in relation to the finances was made on 27 March 2014. W subsequently applied to set aside the consent order and on 11 December 2017 (the December 2017 hearing) her application was dismissed by Parker J.

In January 2018 Parker J received a quantity of documents and material from a person employed during 2017 as a paralegal by the firm acting for H (who had acted both in 2013/2014 and in 2017). The documents including an account of things allegedly said between H and his solicitor and junior counsel. Parker J supplied copies of the documents and material to both parties and listed a hearing on 22 February 2018 (the February 2018 hearing) to consider what should happen to the documents.

In advance of the February 2018 hearing W sent an unissued application notice to overturn the judgment made at the December 2017 hearing on the grounds H had committed perjury and perverted the course of justice. It appeared the application was triggered by the contents of the documents and material sent to the parties.

At the February 2018 hearing H applied for Parker J to recuse herself on the ground she had seen material which was protected by legal professional privilege. Parker J allocated the matter to another judge to consider the future conduct of the matter including how the court shall determine the admissibility or inadmissibility of the documents and material on the basis W would issue her application to set aside (which she did not).

The matter came before Holman J. He was unable to deal with the substantive issues on the basis that:

1. The transcripts of the judgments given by Parker J in December 2017 and February 2018 were unavailable and so it was unknown what all her reasons were for dismissing the application to set aside and it was unknown what reasons/observations were made at the February hearing.

2. Intense consideration was required to be given to the law in relation to legal professional privilege – the case raised a novel issue of deliberate disclosure (rather than accidental) to the court of prima facie privileged material.

3. Sooner or later a judge was likely to have to read the documents and material before ruling on their admissibility unless the court was persuaded that the material simply cannot be seen by the court on the basis of legal professional privilege.

4. W had not issued her application to set aside (which she undertook to do before Holman J).

Holman J directed the matter to be listed before the President of the Family Division for hearing later this year.


MT v OT [2018] EWHC 868 (Fam)
The parties had twin daughters together aged 17 (one of whom suffered from various difficulties including chronic asthma, mobility issues, was very forgetful and struggled with school work). The parties had never married and had separated in 2003. Litigation had ensured in both England and Nigeria for most of the children's lives and F had not seen the children since 2005.

In 2007 Mr Justice Charles gave judgment in the first application for financial provision pursuant to Schedule 1 Children Act 1989 which is reported at [2008] 2 FLR 1311.

Throughout the litigation F took the "millionaire's defence" and accepted that he was worth at least some £40m. In reply to an order to provide an outline of his means he stated that included some £15m of property in the UK held in trust with the balance of his significant assets being in Nigeria and his income was £790,000 per annum.

M was a qualified lawyer in Nigeria and F's case was she should now be in paid employment. Save for small periods of unpaid work in 2004-5 and 2010-2011 she had been unemployed for some 18-20 years and there was no evidence before the court as to what employment she might reasonably be able to obtain.

M and the children lived in London pursuant to the provision in Mr Justice Charles' order for F to provide a property up to £975,000 with a provision around replacement of the property in the event of a significant issue arising which reasonably required the relocation of the twins. M sought an order that she be permitted to move house on the basis the property was no longer suitable for the family. F's position was that the court had no power to make such an order and that would be tantamount to a second settlement of property. Mr Justice Cohen rejected that submission. On the basis the property M lived in was now worth £1.35m he ordered F to provide a housing fund of £1.35m or the greater of the actual sum obtained on sale of the current property. H was further ordered to pay up to a maximum of £50,000 (of which no more than £25,000 was to be spent on equipping the property and removals with the balance to be spent on works to the property).

Pursuant to Mr Justice Charles' Order and taking into account RPI increases F paid £6,500 pcm maintenance. M sought an increase to £10,000 pcm whilst F argued £7,000 pcm until the children finished secondary education and thereafter £6,000 pcm during a gap year and afterwards their living costs to be dealt with within a sum set aside for tertiary education. Mr Justice Cohen found an appropriate budget was £7,500 pcm for the remainder of the children's secondary education and £6,000 pcm to include either 4 years' tertiary education or 3 years with a gap year) with the maintenance from September 2019 to be index-linked. It was agreed that F would lodge such funds with M's solicitor's to administer the monthly payments.

F was further ordered to pay:

1. £121,900 for the completion of the children's secondary schooling.

2. £8,617 to clear some of M's debts (her other indebtedness relating to sums which were excluded from Mr Justice Charles' order in 2007).

3. £5,495 being the shortfall in M's costs allowance.

4. £22,000 for M's car (being index-linking from Mr Justice Charles 2007 Order less the sum M had received on sale of her previous car). 

5. £7,500 into M's solicitor's account to restore a contingency fund for the purpose of advising her on making application pursuant to the Children Act.

6. £5,000 per annum towards insurance and maintenance costs of the property for 5 ½ years (comprising 1 ½ year secondary education and tertiary education.)

7. A tertiary education fund of £158,750 (being a total of 7 years' tuition fees on the basis one child might do a 4 year course and the other a 3 year course, accommodation costs of £12,000 per child per annum and a kitting out fund of £5,000 per child).

8. £32,880 for individual tuition for the children.

9. £27,500 for medical and dental expenditure and a skills tutor and other help the children may require.

10. £7,920 for M's solicitor to administer the fund.

11. £100,000 as a further reserve fund not be utilised without agreement or further order of the court.


JS v SSWP and ZS (CSM) CCS/605/2017
M and F separated in 2010. M applied for child maintenance in August 2015. Save for a four month period in which there was equal care it appeared that they had agreed F would have care of the child every Thursday and Friday night and each alternate Saturday night. M's position was that the 4 month period was an isolated case as her work pattern was non consistent.

F argued that in determining child maintenance the Secretary of State should have applied regulation 46(3) Child Support Maintenance Calculations Regulations 2012 (CSMC Regulations 2012) so as to split the shared care arrangements into one period of four months and one period of eight months on the basis that the pattern of care had been very different. M argued taking a 12 month period was the appropriate period to assess maintenance.

Before the First-Tier Tribunal the Tribunal concluded a 12 month period was appropriate. On appeal to the Upper Tribunal Judge Wright concluded a 12 month period was appropriate as:

1. The starting point was regulation 46(2) CSMC Regulations 2012 that the determination would be based on a 12 month period. Regulation 46(3) CSMC Regulations 2012 permitted the Secretary of State to allow a shorter period but that was an exception to the rule. No period of more than 12 months could be used.

2. The use of the word "appropriate" vested a broad discretion in the Secretary of State or First-Tier Tribunal in deciding whether a period of less than 12 months should be applied. The jurisdiction of the Upper Tribunal would require a finding that First-Tier Tribunal failed to take into account all the relevant circumstances or the interests of all the parties or that the decision was legally perverse. These tests were not satisfied by arguing that on the evidence a four month and then eight month period should have been used to assess child maintenance. To do so would be to improperly interfere in the fact-finding and evaluative functions of the First-Tier Tribunal.

3. The First-Tier Tribunal had not made any material error of law by not referring in its reasoning to the focus of the legal test it had to apply being on the 'expected' incidents of shared care in the 12 months from 23 August 2015.

4. Although the First-Tier Tribunal did not refer to regulation 46(4) of the CSMC Regulations 2012 or whether there was an agreement between the parties for a shorter period its doing so would not have assisted F and so could not amount to a material error of law because on the face of the evidence a pattern of shared care had been established over the past 12 months from which the 4 month period was an exception and there was no agreement between the parents as to the shorter period than 12 months.


R (of the application of Steinfeld and Keidan) (Appellants) v Secretary of State for International Developments (in substitution for the Home Secretary and the Education Secretary) (Respondent) [2018] UKSC 32
This was an appeal brought by Rebecca Steinfeld and Charles Keidan who were seeking a declaration that sections 1 and 3 of the Civil Partnership Act 2004 (CPA) infringed their rights under Article 14 and Article 8 of the European Convention on Human Rights (ECHR) with a declaration of incompatibility under section 4 of the Human Rights Act 1998 (HRA).

Under the CPA, only two people of the same sex may enter in a civil partnership. The Marriage (Same Sex) Couples Act 2013 (the 2013 Act) introduced marriage for same sex couples, meaning that, because the CPA was not repealed when the 2013 Act was introduced, same-sex couples now have the choice between marriage or a civil partnership if they want to formalise their relationship. Different-sex couples can only choose either marriage or cohabitation, which leaves those who choose not to marry because of genuine ideological objections to marriage financially vulnerable.

When the 2013 Act came into force, the government decided to leave the CPA as it was and await clarification of social attitudes towards civil partnerships, rather than either extending civil partnerships to different-sex couples or abolishing them for same-sex couples as an interim measure. The outcome of their initial investigations was inconclusive and the government chose to carry out further investigations before making any change in the law. The government had recognised that there was an inequality between the treatment of same-sex and different-sex couples. However, the government decided that it was proportionate to obtain more data before acting to remedy the inequality. It considered that sufficient information would be available by September 2019 and that there would then be a further consultation "at the earliest" in 2020, although there was no indication about how long the consultation period would be nor the likely date that any further legislation might be enacted.

In 2016, the High Court dismissed the application for judicial review on the basis that the difference in treatment did not infringe a right to family life and, even if article 8 were engaged, there was sufficient objective justification for maintaining the disparity whilst the government took stock.

In 2017, the Court of Appeal found that the case did in fact come within article 8. However, the majority (Briggs LJ and Beatson LJ) found that interference was, at least for the time being, justified and the "wait and evaluate" approach was not disproportionate. Arden LJ considered that it was disproportionate, but that it pursued a legitimate aim.

The Supreme Court allowed the appeal. It rejected the government's argument that ECHR case law required a wide margin of appreciation, as this had no place in domestic law. The English court has to confront any interference with an ECHR right and decide whether or not it is justified.

Whilst it was reasonable for the government to have time to reflect when dealing with an inequality that it has come to recognise due to evolving societal attitudes, the same does not apply when the government has deliberately created the inequality in the way that it had here. It was unreasonable to create the issue and then to ask for several years to decide how to rectify it.

To be "legitimate", the aim had to be "intrinsically" connected to the unequal treatment and in this case it was not. Tolerance of discrimination whilst determining how to remedy it cannot be characterised as a legitimate aim. The government had to eliminate the inequality immediately upon the 2013 Act coming into force.

The interests of the community in denying civil partnerships to different-sex couples who do not want to marry were unclear, whereas the consequences of denial for such couples may be far-reaching because of the financial predicament they may be left in.

The Supreme Court therefore declared that sections 1 and 3 of the CPA were incompatible with article 14 and article 8 of the ECHR to the extent that they precluded a different-sex couple entering into a civil partnership. Although this does not oblige the government to do anything, the court should not be reticent about making such a declaration.


XW v XH [2017] EWFC 76
The husband (H) and the wife (W) had been married in Italy in 2008. They did not have a pre-nuptial agreement, but at the wedding they signed a "marriage deed" which included a "separazione dei beni" confirming that they had chosen the separation of goods regime under Italian law. They separated in 2015. They had one child, who sadly had significant disabilities, to whom they were both very committed.

H was Italian. W was from an Asian family. H and W had lived in England before and throughout the marriage, whilst also owning properties around the world.

W's family were very wealthy and her mother specifically had provided her with substantial financial support before and during the marriage. H was a very successful business man. He had considerable wealth prior to the marriage, but between 2011 and 2015 the company of which H was the CEO increased spectacularly in value because of one product which is used by millions of people around the world. When the company was sold in 2016, H realised about $540million.

W sought half of the increase in value of H's business throughout the marriage i.e. £235million. H offered her £20m and his share of a jointly owned property because of the separazione dei beni. He also argued that the increase in value was a non-matrimonial asset; his company should be attributed as having a latent value at the date of marriage which was higher than the formal valuation received in the proceedings; and because the increase in his wealth was a result of his special contribution.

H also referred to W's own wealth, which he argued included the benefit of a trust set up by her mother worth £23m, and so he said W's needs were met and this was a needs case. In response, W argued that the trust (which was clearly non-nuptial as it pre-dated the marriage) was discretionary, so she was not entitled to any of the funds, and that it was intended to benefit her mother so any future benefit to W was pure speculation.

W argued that she had not understood the separazione dei beni because it was in Italian and she had not been given any proper explanation about the legal implications of signing such a document or agreeing to the regime, either from H or the priest who had conducted the wedding ceremony. Nor had she been given the opportunity to take legal advice or to have a translator present at the wedding. She asserted that the increase in H's wealth was a matrimonial asset in relation to which she was entitled to half; the court should adopt the conventional approach to valuing the business at the date of the marriage and ring-fence only the expert's valuation plus any passive increase calculated by reference to the appropriate index; this was not a short marriage of the type said to justify a distinction between "unilateral assets" and matrimonial property which should be shared; and H had not made a special contribution or, if he had, she had matched it in her role looking after the parties' son.

Having heard detailed evidence from the parties, as well as from W's mother, the priest who married them and three experts in Italian matrimonial law (two party appointed and one SJE), Mr Justice Baker gave a very detailed judgment in which he worked through the various issues and explored the relevant case law. He found as follows.

1. It was plain and obvious that the discretionary trust was set up for W's benefit. Although her mother was named as the primary beneficiary, she was only to benefit as much as she needed, and the evidence was that she would not need much from the trust because of her own very substantial wealth. The long term aim of the trust was to benefit W and her children so there was a strong possibility that W would benefit from the trust in its entirety. It was therefore a resource that she was likely to have in the foreseeable future under s25(2)(a).

2. An agreement incorporating the election of a European separation of goods regime can be a nuptial agreement falling within the Radmacher (No.2) Financial Remedy: Marriage Contract) [2011] EWHC 2878 (Fam). However, the parties must also have intended the agreement to apply in the event of a divorce, wherever they might be divorced and, in particular, if they were to be divorced in a regime that operated a discretionary equitable distribution. Whilst it may be appropriate for the court to uphold an agreement as to the matrimonial property regime in some cases, it would not be fair to do so where the election was made in an unfamiliar language and the implications were not made fully clear. W had understood in basic terms the nature and effect of the separazione dei beni, but she did not understand the circumstances in which its implementation in a jurisdiction other than Italy may affect the scope of any remedy which would otherwise be available. The judge was also satisfied that the wording of the signed agreement did not indicate that the parties had chosen Italian law to govern their property relations. The personal and property relations were therefore governed by English law in this case. However, even if the judge were wrong and the parties had agreed Italian law would govern them, that would only be evidence of their intentions at the time and it would not be enough to oblige the English court to uphold the agreement. It would therefore be manifestly unfair to hold W to this agreement, particularly given the wholly exceptional increase in the value of the assets over the 7 years of marriage, and so no weight was attached to the agreement in this case.

3. Having considered the various cases dealing with matrimonial and non-matrimonial assets, including the recent case of Sharp, the judge was not persuaded to extend the concept of "unilateral assets" to the facts of this case. There will only be a small minority of cases in which there should be a departure from equality simply because the assets were generated by one party. There is no authority for the proposition that the concept of "unilateral assets" should be extended to cases in which there are children of the marriage. On the contrary, the rationale for allowing a departure from equality in short marriages where there is less of a contribution does not apply where there are children and the domestic contribution will continue a long time after the marriage has come to an end. Particularly where the child has special needs, excluding H's wealth would fundamentally undermine the principles of financial remedy claims in our jurisdiction by undervaluing W's domestic contribution, which would be discriminatory. The increase in H's wealth was therefore an asset which should be considered as part of the property adjustment exercise.

4. However, the fact that the shareholding was worth around half a billion pounds because of H's activity cannot be ignored entirely. Fairness has a broad horizon and whilst it would be wrong to exclude H's assets from the sharing principle, the nature and source of the assets may be taken into account when deciding how to share.

5. The exceptional nature of "special contribution" is reflected in the infrequency in which it has been successfully argued (only 4 reported cases). However, whilst it may be right to describe the concept as "rare as a white leopard", the decision in Work v Gray confirms that it is "neither a unicorn nor, for that matter, a dodo".

6. Taking as his lodestar the dictum of Moylan J (as he then was) in C v C that the court's focus remains on achieving a fair result, the judge concluded that it was fair to depart from equality in this case and leave H with a significantly greater proportion of the assets because of the following.

6.1 The parties had chosen to keep their finances separate and the way the couple have run their lives may be taken into account as per Miller.

6.2 The assets which grew so substantially in value were H's business interests. Ultimately it does not matter whether these are called matrimonial because the growth occurred during the marriage or non-matrimonial because H ring-fenced them in his sole name. The nature and source of the property is still relevant in deciding how the assets should be shared.

6.3 There was, as H had argued, a latent value in the business as at the date of marriage, which was not reflected in the SJE value. The ultimate phenomenal success was due in part to developments and decisions taken pre-marriage. Neither the approach in Robertson (treating 50% of the value of the business at the date of sale as having been created pre-marriage) nor the linear apportionment approach in WM v HM was appropriate in this case. The court must look at the reality as much as it can. Adopting Moylan LJ's approach in Hart v Hart the evidence did not establish a clear dividing line between matrimonial and non-matrimonial property and it was neither proportionate nor feasible to seek to determine a clear line.

6.4 The increase in value of H's assets was on a scale sufficient by itself to bring the case within the concept of special contribution. However, in any event, H's contribution was also of a quality which could justify departing from the sharing principle.

The judge therefore awarded W the jointly held property which H had offered and a lump sum of £115million which was equivalent to 25% of the increase in the value of H's shares from the SJE valuation as at the date of the marriage (increased to take account of passive growth applying the MSCI World Technology share index) to the value achieved when the shares were sold in 2016. W was therefore left with £152.45m or 28.75% of the total assets.

W has subsequently appealed this order.


XW v XH [2018] EWFC 44
This judgment arose from the applications submitted by both parties in the above case for reporting restrictions because of the risk to the family, particularly the parties' son. W was also concerned about her mother and her wider family, if the family could be identified. Although H was not personally famous, his products are used by millions around the world, and it would not hard to identify the family on the facts set out in the judgment.

H argued that the case should not be published because the details were incapable of camouflage and, if it were published, it should be anonymised and significantly redacted. W was neutral on the question of publication but strongly supported the need for anonymization.

Mr Justice Baker summarised the law on reporting restrictions and the publications of judgments in matrimonial cases. He concluded that there is a public interest in the publication of his judgment which deals with a number of issued in financial remedy cases, which are of interest not just to the "small clique of specialist practitioners" as H argued, but to the individuals who find themselves in similar proceedings in the future. That interest does not however require the judgment to be published in a version which identifies the family.

Article 8 rights include the need for confidentiality attaching to the disclosure which parties are obliged to make in financial remedy proceedings, as well as to the right against unwanted intrusion into one's personal space. It is significantly likely that the intrusion here would be on a scale to cause harm to the vulnerable son, so the court should take all reasonable steps to protect the family.

There was no reason to delay the reporting until after W's appeal had been heard.

Although the restrictions would only apply to this jurisdiction it was still appropriate to restrain the publication of information notwithstanding that it was already in the public domain.