In big money divorce cases, much is made of the distinction between the so-called sharing principle and needs-based assessments of financial entitlements. However, as a High Court ruling in one such case clearly showed, family judges are in fact focused on just one thing – overall fairness.
The wife, a former model, and the husband, a successful entrepreneur and software engineer, were married for about four years and enjoyed an exceptionally lavish lifestyle. Upon their divorce, the assets that fell to be divided between them were agreed to be worth over £38 million.
The wife sought a lump sum of £16 million – about 40 per cent of the total pot. Her lawyers put her reasonable housing needs at up to £7 million and sought capitalised maintenance of £8.5 million. The husband, however, offered her a lump sum of £5.1 million on the basis that £3.5 million would be sufficient to meet her housing needs and that her income requirements could be capitalised at £1.6 million.
In assessing the contribution that each of them had made to the marital wealth, the Court took account of a period of about four years before their marriage during which their relationship was solid and quasi-matrimonial. The husband, however, had achieved much of his business success before they became committed to each other, having sold a business for over £15 million several years previously.
The Court therefore adjusted the wife’s share of the available assets to reflect the wealth that the husband had brought into the relationship. Her housing needs were assessed at £4.5 million and her capitalised income needs at £4.44 million. Applying the sharing principle, the Court awarded her a total lump sum of £9.31 million, about 24.3 per cent of the pot. The husband was also ordered to contribute over £700,000 towards her legal costs.
The Court noted that, in taking a broad brush approach to the matter, it had sought to apply a combination of the principles of sharing, needs and compensation in a non-discriminatory manner. In respect of the departure from equality in dividing the marital assets, it was both essential and fair to make an adjustment to reflect the husband’s pre-existing wealth. The Court was satisfied that the overall outcome was fair to both husband and wife,
For help and advice please contact Karen Moores on 0808 166 5638 or email k.moores@sydneymitchell.co.uk
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