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Finance and Divorce Update August 2016

Edward Heaton, Principal Associate and Jane Booth, Associate, both of Mills & Reeve LLP, analyse the news and case law relating to financial remedies and divorce during July 2016

Edward Heaton, Principal Associate and Jane Booth, Associate, both of Mills & Reeve LLP

As usual, this month's update is divided into two parts: the first part is a News Update and the second comprises a Case law update.

This month's update is divided into two parts:

A. News in brief

Marriage continues to decline as cohabitation increases
Latest figures from the Office of National Statistics reveal that 50.6% of the population in England and Wales aged 16 and over were married in 2015 (it was 54.8% back in 2002.

23.8 million people were married in 2015, whilst a total of 28.4 million were living as a couple, amounting to 60.5% of the population aged 16 and over.  This meant an increase in people cohabiting from 6.8% in 2002 to 9.5% in 2015.

Resolution's spokesman on cohabitation law, Graeme Fraser, referred to the statistics as a "wake-up call" for policymakers.  He indicated that Resolution is calling for "the urgent introduction of safety net legislation providing legal protection and fair outcomes at the time of a couple's separation, particularly for children and mothers left vulnerable under the existing law".

The full statistics can be found here

Divorce battle compared to Jarndyce v Jarndyce
The Telegraph has reported on the ongoing divorce battle between a four times married airline pilot and his third wife, from whom he separated in the late 1990's.  The case, referred to by the Telegraph as "one of Britain's longest ever divorce rows" revolves around the issue as whether the wife's teenage daughter, in respect of whom the husband is obliged to pay maintenance under the terms of the 2001 divorce settlement, is in fact his daughter.  

Whilst he has apparently paid out almost £400,000 in maintenance to his former family, having been officially declared the daughter's father in 2000, the husband continues to deny that the daughter is his.  

According to the article, despite indicating that a declaration of parentage has been made and that that is the end of the matter, Lady Justice King has reluctantly concluded that there is a "compelling reason" why an appeal should be heard.  Accordingly, the husband has been granted permission to appeal.

The full article is available here

Ruling against excessive tuition

An article on AOL has reported a case in which Mrs Justice Roberts considered the extent to which the husband should be obliged to pay nearly £150,000 a year to cover "child expenses" including £60,000 for extra tuition. 

Roberts J found that the "appropriate level" of financial support was £70,000 per annum and that the husband should only have to pay for extra tuition that was recommended by the children's teachers.  It was a matter for the mother to elect to pay for any further additional tuition.

The full article can be found here

Divorced helicopter pilot refusing to leave the marital home

The Telegraph has reported on a case involving a helicopter pilot who has refused to leave the marital home which he "lost" in his divorce.  Instead, according to the article, he barricaded himself into the home, put barbed wire around it and even allegedly threw rocks at bailiffs, threatening self-harm and even suicide if forcibly removed.

The report indicates that a six month suspended sentence had been imposed by Mr Justice Moylan against which an appeal had been filed. The Court of Appeal, however, rejected the appeal, referring to Moylan J as having considered all of the "available options" and having concluded that he had had "no choice" but to impose the sentence. 

The full article can be found here

Child Maintenance Service Statistics
A statistical report providing figures on scheme intake, caseloads, accuracy, telephony and complaints (covering the period from August 2013 to May 2016) has been published.  The report relates to cases being processed on the Child Maintenance Service 2012 Scheme, delivered by the Child Maintenance Service (the CMS).
The headline statistics include:

• 7 out of 8 are contributing towards their current liability; and
• The number of children benefiting has increased to 250,800.

For the full report can be found here

B. Case Law Update

MCJ v MAJ [2016] EWHC 1672 (Fam)
This was a financial remedy application by a husband before Mrs Justice Roberts. The husband was 83, having been born in Grenada before moving to England some 60 years ago.  The wife, over 15 years younger, was an American citizen born in Mississippi.

There was considerable dispute between the parties over their respective financial positions at the outset of the marriage.  The husband maintained that the wife had been on the verge of being evicted from her home.  He had been lured into the marriage and the wife had then persistently pressured him to transfer property to her so that everything was held jointly.  The wife maintained, however, that she had been financially secure prior to moving in with the husband and that she had only moved in with him on the basis of assurances from him that she would acquire a joint interest in their home (and, in due course, those assurances were extended to apply all of his assets). 

The husband's case was that the wife's award should be based on needs.  The wife's case was, however, that she had a full, sharing entitlement, relying not only on the assurances but also on the fact that she had, for many years, helped the husband run two care home businesses which, she contended, had been teetering on financial insolvency when she and the husband had met.

The husband's wealth derived, essentially, from two businesses.  The first was a portfolio of central London investment properties.  The wife sought an order transferring one of them into her name as it would produce a gross rental income of some £140,000 per annum and would, therefore, cover her income needs.  She set her sights on another, currently divided into three units, as her home. 

The husband's other business was the running of two care homes. One care home had, despite having been run successfully had been shut down by the authorities in 2010 following a report from the Care and Quality Commission, its only remaining value, therefore, being in the form of the property, which was falling into dereliction.  The other care home had been sold as a going concern, with the husband, the wife (to whom the husband had transferred 25% as, he maintained, a "gratuity") and the husband's daughter (to whom the husband had transferred shares) benefitting.  Of her share of the proceeds of sale, the wife retained approximately £500,000.  

One issue in the case was the extent to which the husband was holding assets on behalf of his daughter (whose sale proceeds he had largely retained to invest and look after on her behalf) and the extent to which the husband had transferred the beneficial interest in one of his properties to his four grandchildren.  Roberts J excluded the assets and property in question on the basis that she was satisfied that the husband's position that he was not beneficially entitled to either, was consistent with his previous, historic practice of transferring assets to members of his family.

Roberts J found that she preferred the husband's account of the position at the outset of the relationship.  Whilst both parties had entered into a "committed relationship in the hope and expectation that it would bring much happiness, companionship and (in W's case) future financial security", she was nevertheless persuaded that, "whilst he was willing to share with W the benefits which flowed from his wealth as a consequence of marriage, there was never – on his part at least – an expectation, far less legal commitment or agreement, to endow her independently with a 50% share of that wealth".

In relation to the property portfolio, Roberts J referred to the leading authorities in respect of the assessment of pre-marital wealth and to Holman J's judgment in Robertson v Robertson [2016] EWHC 613 (Fam) in which Holman J had stressed that the methodology of Wilson LJ in Jones v Jones [2011] 1FLR 1723 was "a tool and not a rule.  The overarching duty upon the court is to exercise its statutory duty under section 25 of the Matrimonial Causes Act 1973 (as amended) and to exercise the wide discretionary powers conferred upon, and entrusted to, it by Parliament in a way which is principled and above all fair to both parties on the facts and in the circumstances of the particular case". 

Roberts J indicated that it seemed to her that the substantial wealth tied up in the husband's property portfolio was an asset that was external to the marriage and wealth to which the wife had made no contribution.  The fact that properties within the portfolio had been sold and replaced during the course of the marriage mattered not, nor did the fact that income generated by the portfolio had been applied, in part, to sustain the domestic economy of the marriage.  This did not "change the fundamental nature of [the] capital asset [which] was non matrimonial from the outset".

Turning to the issue of the nursing homes, Roberts J found in favour of the wife, that she had been more than a mere employee and had contributed very significantly towards the transformation of the both businesses.  Her contributions had staunched "the haemorrhage of losses" which had occurred prior to her involvement.

Roberts J indicated that, if the value of the two businesses were to be shared equally, each party would have an interest of just under £1.3m.  This was, in Roberts J's view, the maximum value of any sharing claim that the wife could advance in relation to the marital request.  

Roberts J held, however, that the wife was being realistic in her housing aspirations in focusing on the property that was currently subdivided into three units.  The property itself was worth approximately £800,000, and the wife sought and was granted a lump sum of £200,000 on top, as a conversion fund. 

On the income front, the wife placed her needs at £140,000 per annum, but Roberts J restricted them to £90,000, which was to be provided by way of a Duxbury fund.  It was not appropriate to transfer to the wife the property that would generate rental income of £140,000, not least because the property itself was worth £4m.  

On the basis that the wife had already retained £500,000 from the proceeds of sale of one of the nursing homes, the husband was required to transfer a further sum of just over £1m to her, together with the property that was to become her home.  The wife emerged with assets worth £2.3m with the husband retaining over 75% of the wealth. 

Roberts J acknowledged that £2.3m exceeded, by a significant margin, the value of 50% of the marital acquest, but she was nevertheless satisfied that the wife's needs could not properly be met for less.  It was clear, however, that she had borne in mind the balance that needed to be struck between meeting the wife's needs on the one hand and taking into account the fact that any balance over the value of 50% of the marital acquest would need to be paid from non-marital assets.

Ali v Ansar-Ali [2016] EWCA Civ 781
This was an appeal by a husband, instructing Leading Counsel by direct access, against a financial remedy order dated 17 July 2015. 

By way of background, the parties had married in 1994 and separated in 2011.  They were both in the mid to late forties and had two children, who remained with the wife, aged 15 and 11 respectively.  The husband had been a successful banker in London before being made redundant and relocating, with the family, to a bank in Dubai which had then, in 2008, collapsed.  The husband had, with a partner, managed to purchase some of the bank's assets and sell if on for considerable profit, but he had not worked since and had suffered from ill-health.  By the time of the hearing, however, he indicated that he expected to secure employment in the near future.  The wife had not worked throughout the course of the marriage.  In 2011, she had returned, with the children, to London.

At the time of the final hearing, the husband's assets could be summarised (all figures to the nearest £k) as follows:

Former matrimonial home:

­Former matrimonial home: 


London flat:


London property in SW19:


Land in Pakistan:


HSBC shares:


Bond held by solicitors:


A loan to the husband's sister:


The Falcon Trust:


EFG portfolio:


ICDC portfolio: 


There were also pensions totalling £449,000. 

The wife's assets amounted to around £15,000, but she was in debt, partly due to legal fees, to the tune of £625,000.

The Recorder worked on the basis that, in round terms, there were net assets of £3,750,000, excluding the pensions.  Despite the sizeable asset base, however, he indicated that this was a case in which the parties' needs could "just barely be met by what is available with little if any remaining to be shared over and above needs". 

There was a slight issue over the extent to which the EFG portfolio took into account certain debts.  The Recorder built, into his order, provision for the husband to make a top-up payment of £90,000 in the event that the £280,000 figure did not take them into account, which turned out to be the case, reducing the value of the portfolio from £280,000 to £163,000.

The Recorder ordered that the wife receive the former matrimonial home, the Falcon Trust, the EFG and the ICDC portfolios.  These came, once the mortgage over the former matrimonial home of £274,000 and the wife's debts of £625,000 had been taken into account, to £2,045,000, which amounted to 55% of the total assets.  The wife was left, therefore, with a Duxbury fund of just over £900,000. 

The husband, in contrast, was left with the two other London properties, the land in Pakistan, his shares, the bond monies and the loan to his sister, less the £90,000 top up payment relating to the EFG portfolio.  In short, therefore, he retained £1,663,000, which amounted to 45% of the total assets.  

The husband's capital liabilities under the order were secured against the English properties retained by him on the basis, that once those liabilities had been discharged, only one of the properties would continue to be charged, to the value of £500,000, as security for the payment of maintenance for the children, fixed at £5,000 per annum per child, plus school fees and extras.  Payment of the maintenance were to start immediately.

The husband's appeal was based on a number of grounds, summarised below:

1. The part of the order that related to the top up provision contradicted itself and was inconsistent with the judgment.  The Recorder should have provided for the transfer of the assets at whatever value they had at the time of transfer.  The Recorder had been wrong to order the husband to make the top up payment;

2. The order should not have included any provision for the husband to pay the costs relating to the unscrambling of the Falcon Trust;

3. In relation to income issues, the Recorder had treated the husband's earning capacity wrongly.  His assessment of the wife's earning capacity had also been unsound.  

4. The husband should not have been ordered to commence child periodical payments until such time as he had been able to secure employment, and the order should not have provided for him to pay extras.

5. Proper account had not been taken of the husband's needs.  Once the periodical payments and schooling costs had been covered, the husband would have too little to cover his own expenses, including his medical expenses, even if he were to find employment.

Lady Justice Black's key findings can be summarised as follows:

The Recorder had used notional figures for the value of assets as was "often necessary" in financial remedy proceedings and had not intended the wife to receive a guaranteed lump sum.  Black LJ said that, even if she was wrong about this, she considered it necessary to adjust the order accordingly, referring to the adjustment subsequently, in her judgment, as the "no guaranteed lump adjustment".  Her Ladyship was not inclined, however, to make any other adjustment to the capital side of the order, the 55% / 45% split in favour of the wife reflecting the Recorder's prioritisation of the welfare of the children (who were based with the wife) and taking into account the wife's lesser earning capacity.

Black LJ did not consider that the Recorder had erred in making an order that required the husband to pay the costs of dismantling the Falcon Trust, commenting that it was "an entirely unsurprising order given the finding that the husband's 'true motivation was to keep [his wealth] from his soon-to-be ex-wife'  … and to frustrate her claim".  The order required amendment, however, to ensure that there was "a mechanism to protect the husband against excess in the costs incurred in dismantling the trust".  Accordingly, the husband was to meet such costs "as are reasonably incurred". 

On the issue of the husband's earning capacity, Black LJ found the evidence "not entirely easy to pin down" and so she approached the issue from another angle, considering "the feasibility of [the husband] discharging what the Recorder expected him to discharge on the sort of earnings to which he alluded in his statement".  However, she also took into account the husband's annual income from rent and shares, which came to just under £29,000.

The judgment contained no detailed examination of the parties' respective budgets and the appeal process had not enabled the Court to reach detailed conclusions about the parties' income needs.   Black LJ referred, however, to the fact that it was clear from the judgment that the Recorder had expected both parties "to retrench substantially from the budgets they had laid out on paper in preparation for the trial".  This was, as the Recorder had forecast, a case in which the parties' needs could "barely be met from their assets".  Black LJ was, ultimately, not persuaded that the Recorder had approached issues of income in a way that had been unfair to the husband.  

In relation to the requirement that the husband commence child periodical payments before securing a job, Black LJ found that the Recorder had been looking at a relatively short period on the basis of the husband's own evidence that he would get employment in the near future. The Recorder could not, therefore, be said to have been wrong in principle.

Other than in relation to the guaranteed lump sum and the costs involved in unscrambling the Falcon Trust, Black LJ declined to interfere with the Recorder's order which, she said, had not been established as having "strayed outside the bounds of the orders which were available to him on the material before him".

Grant & Anor v Baker [2016] EWHC 1782 (Ch)
Whilst not directly relevant to most financial remedy cases, this judgment is worthy of consideration if dealing with a case involving a bankrupt with a child or vulnerable adult residing in a property. 

This was an appeal by Trustees in Bankruptcy against an order that a property, which was the only asset of value in the bankruptcy, should not be sold until the 30 year old vulnerable child of the bankrupt, who resided at the property, no longer lived there.  Unless the property was sold, the Trustees would have no funds with which to discharge their own costs or make a distribution to the only known creditor, HMRC.

The appeal was granted and a time limit of 12 months was placed on the postponement of sale.

Z v Z and Others [2016] EWHC 1720 (Fam)
This was a successful application by the wife, under Part III of the Matrimonial and Family Proceedings Act 1984, for financial relief after an overseas divorce and an order that had been made in full and final settlement in Russia.

This was part 2 of the matter that featured in the May Finance & Divorce Update, Z v Z and Others [2016] EWHC 911 (Fam).

In part 1, Mrs Justice Roberts had concluded that it would be appropriate to make an order under Part III MPFA 1984.  Accordingly, the focus in this judgment was on what that order should be, with reference to s.17 Matrimonial and Family Proceedings Act 1984.

Roberts J noted, in her judgment, two key developments since part 1.  First, Lady Justice King had refused the husband's application for permission to appeal her decision in part 1.  Second, there had been an open offer from the trustees to buy out the wife's annuity entitlement under the trust for a single accelerated payment of £1 million.

By way of a reminder of the background, the couple were Russian nationals who had married in Moscow in 1997 and separated in 2008.  They had three teenage children.

The husband was extremely wealthy, with his money deriving from his philanthropic father, and the couple had moved to London in 2004.   A substantial property in Kensington, in which the wife and the children continued to live, had been purchased in 2007.  It had been purchased by a company which was in turn owned by a Bermudan trust which had been settled by the husband's father in 2005.

The husband had never lived in the property, but had paid the annual rent of £156,000 to the company to ensure that the wife and the children could continue to live there. 

The parties had divorced in Russia and, in 2009, an order was made embodying an agreement between the parties concerning matrimonial assets which provided for the wife to received approximately $10 million in full and final settlement in "all countries of the world".  The wife also retained an apartment in Moscow.  However, the Russian court made no express provision for the wife's housing and did not enquire as to whether the settlement sum would be sufficient to meet her future needs. 

Between 2012 and 2013, the husband received appointments of around $36m from his father's trust, which increased the husband's wealth to just under £33m by the time of this hearing.

The wife made her application under Part III in July 2014, the delay being due, she maintained, in part to her own and in part to the children's health issues.

Both parties agreed that it was a "needs case".  However, the husband argued that the wife's needs had to be assessed in light of the delay that there had been, the non-matrimonial source of the husband's wealth and the agreement that had been reached in Russia, compromising all the wife's worldwide claims, including those against the trust property.

It was contended by the husband's legal representatives that the wife had been previously advised that her prospects of success in any English litigation would be significantly enhanced if she had first severed all financial connections with Russia and that she had, therefore, waited until the apartment in Moscow had sold before issuing her application. 

In her judgment, Roberts J noted that wife to be an anxious individual who had not had the emotional resilience to initiate English proceedings in the immediate aftermath of the Russian order. However, Roberts J accepted that there had been at least an element of tactical delay (although there was no suggestion that she had delayed in any expectation of an improvement in the husband's financial position).  A more conservative assessment of the wife's future needs was, therefore, appropriate.

In advance of part 2, the husband had agreed to pay the rent on the wife's property in Kensington to allow the wife to remain living there until the completion of the tertiary education of the youngest child in 2022.  The husband asserted that the wife could step down her housing needs thereafter and that she should be able to meet them from her own resources.

Roberts J noted that the Russian court had not been able to consider any remedies in respect of the Kensington property due to the fact that it was held in trust and that it had not looked into the circumstances of the wife's occupation.  There was a concern, therefore, that it had failed to meet the wife's needs for housing and income once the Kensington property was no longer available for her occupation.  The English Court was, therefore, able to make an order under s.17 of the 1984 Act.  Whilst not appropriate for the wife to remain in the Kensington property indefinitely, any transfer of the property to her risked providing her with an award in excess of what she would have received in purely English proceedings.

Against the backdrop of the husband's assets of £33m, Roberts J ordered the husband to pay £2.5m to the wife as a housing fund for her relocation in 2022. 
On the basis of an assessment of the wife's needs at around £139,000, and taking into account an assumed rental income of £78,000 for the next six years and the capital that the wife already had, Roberts J calculated that the wife had a shortfall of £1.1m on the Duxbury fund required to cover her future needs.  Roberts J held that it was fair and reasonable for the husband to meet this shortfall given the scale of his wealth.

Roberts J also ordered the husband to make periodical payments of £35,000 p.a. for each of the two children who continued to live with the wife until they began to live independently.  The husband would pay such tuition as was agreed as necessary in addition to any private medical bills not covered by the insurance that he provided. 

Roberts J concluded that, although any costs application would be considered, it might be inappropriate in light of the needs-based nature of her assessment.

Estrada Juffali v Jaffali [2016] EWHC 1684 (Fam)
Readers will recall this case from the numerous reported judgments in relation to the husband's application for diplomatic immunity. 

This was an application by a former wife for financial relief under Part III of the Matrimonial and Family Proceedings Act 1984 which provides the statutory gateway through which, in appropriate circumstances, the Court can make a wide range of orders where no, or no adequate, financial provision has been made in the foreign jurisdiction in which divorce proceedings have taken place.
The wife's claim was brought under Part III because the marriage was dissolved not as result of English divorce proceedings but following the pronouncement by the husband of a talaq in Jeddah, Saudi Arabia.  It was a divorce which was initiated without notice to the wife and she was entitled to no financial compensation under its terms.  The Saudi divorce became absolute in December 2014 and is a divorce that is entitled to recognition in England.  The wife's application for financial provision was for both herself and the parties' 13 year old daughter. 

The husband was suffering from terminal cancer and receiving care in Zurich at the time of the hearing.  He was, however, represented throughout.  

The husband was a Saudi national, aged 61. He was involved in the family business that had been set up by his father and brothers in 1946 which supplied electricity and telecommunications throughout Saudi Arabia.  Until his recent decline in health, the husband had been actively involved in the business which was, by and large, the provenance of the wealth in this case.  The majority of the husband's current wealth was held offshore and, in part, through trust structures based in Bermuda and the Bahamas.

The husband took another wife (his third in total, having been divorced prior to marrying the wife in this case) in 2012.  The wife claimed that she had been unaware that the husband had taken another wife.  The parties had separated for a period in 2012 and had then reconciled, the husband purchasing a property in California for the wife.  However, the reconciliation had been short-lived and, in August 2013, the wife had issued English divorce proceedings which was then overtaken by the pronouncement by the husband of the talaq divorce.  The wife accepted that, by October 2013, the parties' marriage had come to an end, after 12 years.

The wife was an American citizen who had been born in California.  At the time of the hearing, she was aged 54.  She had been living in the UK since 1988.  Whilst she had enjoyed a successful international modelling career, the commencement of her relationship with the husband had marked the demise of this career, as he had wanted her to travel the world with him, by his side.
The husband had provided financial support to the wife's close family members, namely her divorced parents and her maternal grandmother.

The husband disclosed personal net assets of £22.8m and an entitlement to, or interest in, trust assets worth a further £95.3m.  The husband's wealth had been significantly greater prior to 2013 but, during that year, he had entered into a contract by which he had purported to sell the bulk of his Saudi assets to his three daughters from his first and second marriages (including the parties' daughter) for just over £512m.  Under the terms of the contract, he had been entitled to continue to receive the income arising from the assets during his lifetime.  The contract, however, which was governed by Sharia law, was revocable at his election and, on that basis, the wife's case was that the husband had resources of some £650m (although she actually believed that he was worth far more than that, having referred to a figure of £8b).

The former matrimonial home, purchased in 2005, was Bishopsgate House ("BGH"), a "vast and prestigious property … immediately adjacent to Windsor Great Park" with "a full retinue of staff, including groundsmen, gardeners and … security".  It was owned through a family trust structure.

The husband had purchased a grand palazzo in Venice in 2007, which the wife claimed had in fact been a gift to her (although it had subsequently been sold).  In 2008, the husband had also purchased a plot of land in Gstaad, Switzerland, upon which a substantial "iceberg" chalet had been built, with an interior specification of "sumptuous opulence".  The wife asserted that this property, together with a "weekend getaway home" in Devon, also purchased in 2008, had been gifted to her. 

The husband had frequently purchased expensive jewellery for the wife, including a blue diamond ring which the wife had believed to be worth between $15 and $18m.  The husband had removed it from BGH and claimed to have given it to a third party, refusing to divulge its location or the identity of the third party.  The husband had offered the wife $2m in lieu.

The wife sought global provision in the sum of £196.5m. This primarily comprised of:

• A central London housing fund of £62.8 million; and
• Capitalised maintenance of just over £127million.

In addition, the wife wanted to retain her home in California and acquire a second home in England, which she would pay for by selling her London flat and using part of the capital award she sought from the husband.

Until payment of the above, the wife sought the continuation of the current interim arrangements, whereby the husband paid the outgoings on the former matrimonial home, together with the other costs of maintaining that household, and a sum of $1,631,280 per annum by way of interim maintenance.

The maintenance payment the wife sought was £6,533,159 per annum or £544,430 per month.  In addition, she claimed just under £280,000 per annum for the parties' daughter's expenses, excluding school fees.

The wife accepted that she could not aspire to live at this rate on a straight line basis for the rest of her life.  She proposed that the figures be reduced and take account of (i) a 20% reduction in her annual budget, which would begin with effect from her 65th birthday (coinciding with the parties' daughter's 22nd birthday and the completion of her tertiary education) and (ii) a further 25% reduction of that amount commencing on her 75th birthday.

The husband's case was that £20m was sufficient to meet the needs of any 54-year old woman, particularly in the circumstances where all of the parties' daughter's costs were being met by him in the order of £150,000 per annum.  He also offered to pay a further £17m over a five year period. 

Upon leaving the former matrimonial home, the husband offered to allow the wife the use of a home in central London worth up to £6.5m, on the basis that the property would be held in their daughter's name.  The wife would be entitled to share that home with the parties' daughter for the next 5 years, until the daughter completed her secondary education.  On that basis, the wife would leave the marriage with assets of £37m and would have the use of a London property during the parties' daughter's minority together with any payment, if accepted, in respect of the blue diamond ring.

The issue that lay at the heart of this case was the extent to which the standard of living which the parties had enjoyed throughout the course of the marriage should be reflected in the assessment of the wife's needs as she moved into an independent life outside of the marriage.

There were question marks over the enforceability of an order, particularly because of the husband's health and the structures holding the assets.  However, Roberts J observed that "these potential difficulties do not dissuade [her] from [her] conclusion that this is an appropriate case for the intervention of the English court. Without such intervention, there is no jurisdiction anywhere in the world where the applicant can pursue her legitimate financial claims against the [husband]".

Roberts J observed that, where she was "dealing not with the equivalent of a full English sharing claim under Part II but with a needs-driven claim under Part III, there [was], in [her] judgment, a need to scrutinise budgets carefully.  To the extent that the [wife] has unreasonably exaggerated or inflated her needs, and notwithstanding the level at which this couple spent during the marriage, the law requires [her] in the exercise of the broad discretion which [she has] to disallow that element of expenditure provided that [she is] satisfied that [the wife's] reasonable needs are adequately met without it".

Roberts J said, "it is one of the tragic circumstances of this case that [the parties' daughter] is likely to lose one of her two parents in the not too distant future.  Thereafter, the entire parental burden of raising their daughter will fall to the [wife].  Of course, [the parties' daughter] will continue to see much of her paternal family.  That fact underpins much of the argument which the [the wife] makes in support of her need for an extremely affluent lifestyle.  But the fact of the matter is that [the parties' daughter's] father will not be there to make a matched contribution in the years ahead.  He has made that contribution, insofar as he can, by ensuring her financial security in the years to come and beyond. The corollary of that point is that [the parties' daughter] will, on any view, have significant wealth in her own name in due course".

Roberts J reached the conclusion that a sum of £18m was an appropriate housing fund for the wife and the parties' daughter for a property in central London.  Roberts J did not regard it, in the context of a Part III claim, as reasonable to apply a 'like for like' need using as a yardstick the value of the husband's home in London.

Going through the wife's budget, Roberts J did not consider there to be a need, for example, to maintain three cars at a home used only for part of the year, nor for the staffing costs the wife submitted, nor for the wife to spend well over £1m per annum on clothes and beauty treatments.

Roberts J determined that an assessment of future remarriage or cohabitation had "no place or relevance in [her] approach to this case", in the absence of an established and committed relationship.  Roberts J was not persuaded to make provision in the award for the wife's extended family, observing that the wife would be able to choose to fund them if she wished.

Roberts J concluded that the wife had not "made out a case for the acquisition of a second English property with all the attendant running costs".  Roberts J did not "accept that it is realistic in the confines of a Part III application to include either capital or income provision for a second home in this country".
Roberts J was "satisfied that, with a net annual budget of £2.5 million, the applicant can meet her reasonable needs". 

Roberts J was persuaded by the need for a step down in the maintenance payable to the wife. She indicated "the first is when [the parties' daughter] completes her first degree in tertiary education after allowing for a gap year between school and university.  That will occur in January 2026 when she is 23 years old and the [wife] will shortly be turning 64.  There will be a further step down just before the [wife's] 75th birthday".  The first step down would be 33% and the second being 25%.  Following the Duxbury principles, Roberts J suggested that this maintenance figure should be capitalised at £44.3m.

Roberts J indicated that the wife could downsize her Californian property, thus saving about £6m. The husband would, therefore, need to pay to the wife a total of £53m (to include the London housing fund and the Duxbury award, less the wife's contribution of £8.97m from her own resources).

The wife's jewellery, whilst worth £4.83m would be retained by her "for the purposes of personal adornment".

The court adjourned the matter of chattels and the blue diamond ring, inviting the parties to agree the same and indicating that it would seem sensible for the wife to retain a fair share of the contents of BGH.

Roberts J ordered a lump sum in respect of the costs in relation to the parties' daughter and her education of £1,773,715.

This case confirms that the appropriate approach, on a Part III application, is one of needs.  In this case, Roberts J found that the wife could meet her reasonable needs on the basis of the figures above and that, whilst her needs had been assessed so far as possible against the marital standard of living, the wife could not expect to replicate that standard of living going forward.  However, Roberts J was satisfied that the basis of her award, in terms of the wife's income needs, bore a sufficient correlation to that standard of living.