Family Finances 2
Family finances - some old concepts for new?
The post White "big money short childless marriage" case of Miller [2005] EWCA Civ 984 recently heard by the Court of Appeal appears to have the potential to upset some long established ideas of Family Practitioners and has also generated a good deal of tabloid and other media interest.
The Background
H and W met in mid 1995 and became engaged 4 years later. They married in July 2000. They did not live together before the wedding. There were no children. In April 2003 they separated when H revealed that he had formed an attachment elsewhere. H was a very successful fund manager. In addition to the matrimonial home worth gross £2.3m and a holiday villa worth £1m, H had assets of £17.5m plus shares worth about the same again (the actual value was in dispute). He had been earning over £1m p.a.. W had earned £85k gross p.a. but had given up employment and concentrated on home making.
Ancillary Relief Proceedings
After the usual preliminaries the case was heard at first instance by Singer J. H contended that a lump sum of £1.3m was more than generous - it would enable W to buy a home for herself and have enough to live on in reasonable comfort whilst she re-established herself. She would transfer her half share of the villa to H. W contended for an award of £7.2m being 37.5 % of assets acquired during the marriage.
The Judge rejected H's argument and while not accepting W's contention ordered H to transfer the former matrimonial home mortgage free to W and to pay her a lump sum of £2.7m on the basis that she transfer the holiday villa to H. As her share in the holiday villa was worth £500,000 the net value of the award was £4.5m. The apparent basis of the Judge's reasoning was that W had a legitimate expectation that her standard of living would increase as a result of the marriage though he rejected W's argument that H's conduct should be taken into account.
The Appeal
Not surprisingly H appealed, permission to appeal having been given by the Judge himself. W did not cross appeal. The Court of Appeal upheld the award albeit with some admitted difficulty so W received her £4.5m.
The following were the main issues addressed by the Court of Appeal:-
1. Length of the marriage
H relied on the fact of a short childless marriage. The pre White cases on such marriages suggested that those wives should receive enough to "get back on their feet". The post White case of Foster emphasised restitution to the parties' pre-marital positions. The CA held that the old cases were no longer to be relied upon. They were discriminatory against W and the reasoning in Foster was not inconsistent with Singer J's award. One may wonder whether the CA may not themselves have positively discriminated in favour of W since it is hard to believe that had the genders been reversed the court would have made the same award in favour of H.
2. Pre-marital cohabitation
The established pre-Miller view was that a seamless period of pre-marital cohabitation should add years and so value to an applicant's claim. Here there was no such period but W had sufficiently demonstrated her commitment to the marriage so that notionally the years of relationship were taken into account in her favour. One may foresee that future narrative affidavits may include arguments on whose commitment was the stronger.
3. Conduct
All family practitioners know that conduct of the parties is only relevant if it would be inequitable not to take it into account. Most would say that conduct within the marriage is irrelevant to finances unless exceptional ("gross and obvious") or financial, where there is dissipation of assets or, in relation to the litigation itself, where there is non disclosure of assets or unnecessary or oppressive investigation driving up the costs. Surprisingly the CA accepted W's position as a blameless wife and agreed that H had caused the breakdown of the marriage by his adultery. Consequently his case that W should receive less because it was a short marriage was weakened since he had himself by his conduct brought about its end. In fact H had in the course of the proceedings levelled accusations against W which Singer J had said were not marriage breaking. The CA said that he was entitled so to find. This is ground breaking news. Undefended petitions based on behaviour go through daily on matters which often seem quite trivial since the test of unreasonable behaviour is subjective. Wall LJ tried to prevent possible repercussions by saying that blame would still be a rare factor perhaps confined to short marriages because in longer marriages the other s. 25 factors such as needs would carry greater weight. Nevertheless it would be surprising indeed if practitioners were not now encouraged to try to explore the causes of the breakdown in greater depth than hitherto with added costs and aggravation.
4. Discrimination
White has now established that in a long (20 years or more) marriage there is no qualitative distinction between the contributions of the breadwinner (male) and the homemaker (female). One can see why the CA thought that the old cases on short marriages (see above) could be taken to be discriminatory but it was not here assessing the worth of contributions and it does seem odd that in endorsing W's "legitimate expectation" of an enhanced standard of living to be provided by H it may have fallen into precisely the old fashioned mindset which it aimed to avoid. It was over 20 years ago that the aim to put the parties in the same position as if the marriage had not broken down was seen to be unattainable and abolished. Is "legitimate expectation" an illegitimate posthumous offspring?
5. Compensation
The CA stressed very properly that matrimonial finance is not compensatory and criticised H's counsel for echoing the old tort maxim by suggesting that it would be cheaper for H to maim than to stray. Nevertheless when H is in effect told by the court that his conduct has dashed his wife's hopes of a well-to-do lifestyle he may feel aggrieved that he has been made to pay for his infidelity.
It is expected that the judgments of Thorpe LJ and Wall LJ will be carefully studied by practitioners. They stress once again the role of the appellate court in ancillary relief cases: it is not for members of that court to substitute their own judgment for that of the court below but to review its decision ensuring that due weight had been given to the relevant statutory factors and that the end result was not manifestly unjust and/or plainly excessive.
In the end one will probably return to the fundamental and overriding conclusion that the Judge did what he thought was fair overall given the disproportionate financial positions of H and W and the CA was not prepared to interfere with his discretion albeit that it would have preferred a more detailed account of his reasoning. W has cause to thank her counsel for the astute way in which he teased out that reasoning for the benefit of the CA.
This case may go further but at all events can be expected to provoke a lively debate and produce some fascinating questions for practitioners to resolve.
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