Francis J. A final hearing in H’s financial remedy application.

W sought a lump sum of £9.145m on the basis of sharing and compensation. H asserted this was a needs case due to the non-matrimonial nature of the assets and offered W £3.545m.

Background

W was aged 53, and H 61, both nationals of another country. On H’s case they cohabited from late 2005/early 2006, and on W’s case they cohabited from 2003.

The parties married on 8 December 2007. They signed a PNA the day before which set out that there would be no community property. H had three adult children from his previous marriage and the parties had two children aged 15 and 13. They both lived with their father in the FMH. In children proceedings it was ordered that the eldest child was only to have indirect contact with W and the youngest would have supervised contact.

W was an accountant in a top private equity firm in 1997, when she was only 27. The parties met at that firm but H left and moved to a rival private equity business. W was required to give up her position because of the conflict of interest arising from their engagement. W then had the parties’ first child in 2008 and had to relocate to England because of H’s work. She argued that this all impacted her career.

PNA

Mr Justice Francis found that there was undue pressure sufficiently reducing the weight of the PNA. W had signed the day before the wedding, she was four months pregnant, and she had left her private equity role meaning she was reliant on H. However, he did still take into consideration the fact that it existed as one of the circumstances of the case and emphasised that the undue pressure was not the fault of H.

Valuation of the FMH

It was agreed that the FMH should be transferred to H in order to provide the children with a stable home. The value was disputed. The judge preferred W’s expert valuation which was thorough and well-reasoned over the SJE valuation.

Cohabitation and matrimonial assets

Discussion of indicators of cohabitation, relevant to identifying matrimonial and non-matrimonial assets. Judge held that the parties cohabitated from 2005/early 2006 because H’s prior marriage did not appear to have come to an end until late 2004 with divorce in 2006. Further the H and W did not actually mingle their finances until 2006.

H argued that N Trust, worth c.£7m, was non-matrimonial. He contended he settled this trust in 2011 for the benefit of the family and its descendants and it was not used to benefit the parties during the marriage. The judge rejected the suggestion that it was a dynastic settlement as it was only settled in 2011. The trust was not varied. Instead the judge made an award and left the parties to find the most efficient way to effect it.

Compensation

Mr Justice Francis agreed that this was a case where there was a proven track record of excellence and achievement which came to an end because of the relationship. He had no doubt that W would have had substantial wealth in her own name.

Distribution

W should not be restricted to an apartment when H in larger house given risk of children’s perceptions about that. It is rarely right to approach compensation as though it was a tortious claim for loss of earnings or similar. It is the exercise of a wide discretion by the judge.

Francis J performed a balancing exercise by including the totality of the assets in, including preacquired wealth and trusts, as a way of dealing with the compensation claim, but deducted a full potential 45% tax liability (even though it was very unlikely H would pay that level of tax, if any).

He then gave W a 50% split of the potential net assets – c.£6.9m. He concluded that this would meet W’s needs as it equated to £2.5m for a house and a Duxbury annual income of £175,000 pa for life. H would receive £6.9 million but any monies set aside for tax which were not needed for tax would be retained by him.