F v F (Ancillary Relief: Substantial Assets)
| Jurisdiction | England & Wales |
| Judgment Date | 11 February 1994 |
| Court | Family Division |
17 MAY 1994
15 JULY 1994
24 OCTOBER 1994
THORPE, J
Financial provision – husband very rich – maintenance pending suit – approach to fixing appropriate figure – disclosure – extent to which husband need provide information as to his financial position – whether court had jurisdiction to make interim lump sum order or appropriation order – disclosure where conduct in issue – relevant factors on wife's substantive application.
The parties were married in 1985. The husband was then aged 40 and the wife was aged 25. Both were of German origin. There were three children of the marriage: a boy born in 1986, a girl born in 1988, and a boy born in 1989. The husband's family owned an industrial group and in the 1960s the husband held a substantial shareholding in the group. During the 1970s the husband disposed of his shareholding to an uncle for a very substantial cash sum. He subsequently devoted himself to the management of his personal fortune. The husband had homes in Switzerland, Germany, the United States of America and England. After the parties' marriage they settled in England.
The marriage broke down in 1993. The husband petitioned for divorce. A decree nisi was pronounced in June 1993 and this was made absolute in August 1993. The wife sought ancillary relief.
After the separation in March 1993 the husband at first provided only ad hoc support for the wife and children. From May 1993 he provided £36,000 a year and certain expenses and in June 1993 this was increased to £75,000 a year plus expenses. The wife issued a summons for maintenance pending suit.
In February 1994 directions were given as a result of which a questionnaire under r 2.63 of the Family Proceedings Rules 1991 was served on the husband in March 1994 seeking information as to his financial position. The husband responded that it was not necessary for him to respond to the questionnaire in full as he was to be taken as having available to satisfy judgment a share in a family fortune with a value between £150m and £200m.
Correspondence between the parties' solicitors failed to produce agreement on the issue of conduct. As a result, in May 1994 the husband issued a summons seeking directions
as to the relevance or otherwise of conduct in the ancillary relief proceedings.
After the separation it had been the intention of the wife to remain in the former matrimonial home. During 1994, however, she decided to find an alternative future home. She found a house which could be purchased for £2m and which required refurbishment costing about £500,000. The husband was not prepared to make £2.5m available but offered £1.5m. In July 1994 the wife issued a summons seeking an interim lump sum payment or alternatively an appropriation order.
At the substantive hearing of the wife's application for financial relief it was submitted on behalf of the husband that the parties were bound by ante-nuptial contracts drawn up in Germany. If strictly applied those contracts would have the result of confining the wife to the equivalent of the pension of a German Judge.
Held –
Maintenance pending suit(1) In her application for maintenance pending suit the wife sought over £500,000 a year. The husband offered £220,000 a year plus expenses. In determining the wife's reasonable needs on an interim basis it was important as a matter of principle that the court should endeavour to determine reasonableness according to the standards of the ultra rich. It would therefore be wrong in principle to determine the application of some broad conclusion that if the wife could not manage on £250,000 a year she ought to be able to do so. It was necessary to establish a yardstick that reflected the standard of living which had been the norm for the wife since marriage. Even in the case of a family of unusual riches it would be wrong of the court not to look carefully and critically at the wife's suggested budget. In this case there were certain elements in the wife's budget which were unjustifiable. An appropriate interim order would be for £360,000 a year on the husband undertaking to pay rent, school fees, and medical expenses and the cost of providing a nanny for the girl, those payments to be without order and paid direct.
(2) In a case such as the present which involved very large sums of money, the wife's reasonable needs for herself and the children depended upon a variety of issues which could not be resolved without full discovery. In such a case it was generally superfluous for there to be a full scale investigation of interim provision. The discipline imposed on the parties in the preparation of the case should ensure that the interim period was a matter of months rather than years and any under provision or over provision could always be corrected when the account came to be taken at the substantive hearing.
Disclosure(3) The husband had accepted that his wealth was sufficient to meet any order the court might make. Consequently, a restrictive approach to a wide ranging questionnaire under r 2.63 of the Family Proceedings Rules 1991 was justified and the husband was entitled to resist searching inquiry into his present and anticipated future wealth. However, this did not entitle him to refuse reasonably framed questions that were designed to establish the broad outlines of the case and illuminate issues as to past dealings. In the present case the wife had asked far too much and the husband had proffered too little. The questionnaire would, therefore, be amended accordingly.
(4) The husband's summons for directions as to the relevance of conduct was issued after correspondence between the solicitors. Although at first the husband seemed to be suggesting that conduct was irrelevant it eventually became clear that he alleged that the wife's acquisitiveness remained a relevant issue. Where one party was acting unreasonably in the exploratory exchanges towards issue limitation, then the court had the power and the responsibility to intervene and impose a limitation of issues even if those issues were not agreed. In the present case the husband sought to say that the lavish past standard of living was not to set a precedent for the indefinite future since it was reflective at least
in part of the wife's extravagance. That was a relevant case to develop. It was not a conduct case but in order to develop it he did not need to retain and develop the allegation of acquisitiveness. Acquisitiveness, which related to what was selfishly acquired and preserved, was manifestly distinct from extravagant expenditure. The husband would not be allowed to say in one and the same breath that conduct was irrelevant but that he was going to maintain the allegation that an important contributing factor to the irretrievable breakdown of the marriage was the wife's acquisitiveness.
Interim lump sum order or appropriation order(5) The wife's application for a lump sum provision or alternatively an appropriate order was opposed by the husband on the ground that the court had no jurisdiction to make such an order. Following divorce and within ancillary proceedings, the cost of rehousing the wife and children might be a crucial issue. In most cases it would be undesirable to pre-empt that issue or confine the judicial discretion to be exercised at the final hearing. But where the available assets were very substantial the cost of rehousing the wife and children was only one of a number of determinations, the summation of which would be a lump sum that accompanied the mutual dismissal of all claims. In such circumstances, the court could exercise an inherent jurisdiction to regulate the lives or affairs of the parties to ensure fair play pending the final hearing.
The application for ancillary relief(6) The approach to a decision as to ancillary relief was the application to the established facts of the criteria contained in s 25 of the Matrimonial Causes Act 1973. First consideration must be given to the welfare of the children. Then the court must have regard to the financial resources of each spouse. It was unnecessary to investigate the husband's financial circumstances after his concession of a personal fortune of or approaching £200m. Against that the wife had nothing except her jewellery and some very modest investments in Switzerland. The crux of the case lay in the needs, obligations, and responsibilities which each had or were likely to have in the foreseeable future. The needs of the wife must be measured against the standard of living enjoyed by the family before breakdown. This was undoubtedly opulent. As to the wife's needs for a home for herself and the children it would be ordered that the husband pay £1.9m to purchase the lease of the former matrimonial home or such alternative as might be agreed. It would further be ordered that £300,000 be provided for a London flat and that a flat of the wife's choosing in Switzerland be purchased by the husband's family for a sum not exceeding £750,000, that flat to be available to the wife on terms equivalent to a trust under English law. A further sum of £650,000 would be ordered to furnish those properties. As to the age of the parties and duration of the marriage, it was very significant that this was a marriage of only seven years' duration and that the wife was now only aged 36. As to the question of any disability of either of the parties, that had no application. As to the issue of contribution, the wife had a mother's contribution but no financial contribution. It was agreed that conduct was irrelevant. Pensions were of no application. A special condition in this case was the existence of ante-nuptial contracts but they were of very limited significance in this jurisdiction. The rights and responsibilities of those whose financial affairs were regulated by statute could not be much influenced by contractual terms which were devised for the control and limitation of standards that were intended to be of universal application. Consequently...
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