K v L
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE BODEY |
| Judgment Date | 13 May 2010 |
| Neutral Citation | [2010] EWHC 1234 (Fam) |
| Docket Number | No.FD07D01254 |
| Court | Family Division |
| Date | 13 May 2010 |
[2010] EWHC 1234 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Before: Mr. Justice Bodey
No.FD07D01254
MR. M. POINTER QC and MR. G. KINGSCOTE (instructed by Family Law in Partnership LLP) appeared on behalf of the Applicant.
MISS L. STONE QC and MR. D. BROOKS (instructed by Kingsley Napley LLP) appeared on behalf of the Respondent.
(As approved)
A: INTRODUCTORY
This is an application for ancillary relief made by a husband (whom I will call ‘the husband’) against a wife (whom I will call ‘the wife’). It raises issues about the appropriate treatment of inherited wealth, the wife being very wealthy by virtue of pre-marriage inheritances. This Judgment is anonomysed so as to minimize identification of the family.
The wife is aged 51, having been born in 1958 to Israeli parents. She was born in England, but her parents took her to Israel in 1959 when she was aged one and she was brought up there. In 1967, on the death her mother, the wife (then aged 11) went to live on a kibbutz until she was adult. She is now a housewife and mother and is non-domiciled for UK tax purposes. She has never had to work in the commercial sense by reason of her wealth, but has devoted herself to the home and family. This has involved a relatively modest standard of living, but with an emphasis on bringing up the children (as per her Form E) ‘…with decent values, unrelated to material wealth, as we ourselves were [brought up]…’.
The wife lives with the three children at a property purchased by her at the time of the breakdown of the marriage in 2007. As I am anonomysing this Judgment, I shall simply say that it is in a quite modest area of a county adjoining London. The property itself (which I will call “the wife's home”) is a pleasant but relatively modest four-bedroom, semi-detached house. The children's ages range from 15 to down to 8. All have attended local State schools until recently when the middle child moved to a local private school, for which the fees are £4,000 a term, paid for by the wife. As I say, they live with the wife but see the husband effectively as and when they wish to do so, since the parties live around the corner from each other.
The husband is aged just 48, having been born in 1962. He continues to live at the former matrimonial home, just round the corner from the wife's home. He now lives on his own there. He is a practising Muslim. He has Degrees in Business Administration and Sociology. He does not work and has never done so because the wife's wealth made it unnecessary for him to do so. He asserts that he was able to contribute significantly to the welfare of the family by being an available father in the way that working fathers often are not.
At this hearing, the husband has been represented by Mr. Pointer QC and Mr. Kingscote; the wife by Miss Stone QC and Mr. Brooks. I am grateful to counsel for their characteristically helpful written presentations, Schedules and oral submissions.
B: BACKGROUND
Each side has placed before me a Chronology, namely at pp.18 to 23 of the husband's opening presentation and at pp.34 to 42 of the wife's. There are no differences of significance and I therefore adopt them. Reference may be made to them if more detail is required than the much-pruned version which I propose to set out here.
The parties met in Israel in early 1986 when the wife was 28 and the husband 24. By that stage the wife was already possessed of substantial means. Her grandfather had been a scientist who owned founder shares in a company, R. In 1973, following the death of his widow, the wife's grandmother, the wife (then aged 15) and her brother inherited those shares. Later, in 1976, R merged with S to become S Ltd.. It is described in the papers as one of Israel's largest companies, being quoted on the Israeli Stock Exchange and the NASDAQ. Those S Ltd shares, which are dollar shares, were in the wife's and her brother's ownership when the parties met in 1986, and were then worth in total about £580,000, the wife's half of them being worth about £290,000. In addition, she had a joint interest with her brother in two properties which they had inherited from family members long before the parties met in 1986, namely a house in France, and a house in Israel. These two properties still remain in the joint names of the wife and her brother, although neither is of significant value in the context of this case.
There has been some dissent about when the parties started to cohabit. I am satisfied on the evidence which I have seen that this was in June 1986. From then on, the parties lived together (initially in Israel, in a flat bought by the wife using her inherited wealth) until they separated in April 2007. In November 1987 the parties went through an Islamic ceremony of marriage in Israel. However, the law there did not then recognise marriage between couples of mixed religion, the wife being Jewish and the husband Muslim; and so they decided to move to England to marry legally. They came here in October 1991, and on 21 st November 1991 were married at a Register Office in south London. At that time the wife's half of the S Ltd shares was worth about £680,000. Thereafter there occurred various relatively modest dealings in her shares and there were various rights or bonus issues, as a consequence of which the value of her holding has massively increased over the years.
Upon arrival in this country in 1991 and for the first three years of their married life here, the parties lived in rented accommodation. The wife worked for a few months at the outset, as a nursery assistant. The husband tried to get work too, but without success. He started a course as a student nurse, for which he was paid, but that only continued for four months, whereupon he started an English course. He says that he had a place available at the LSE but let it go when the wife became pregnant with their first child.
In August 1994 the parties purchased their matrimonial home just outside London for £91,000 (per the wife's Form E) which was raised initially through a loan from a family friend. That friend was later paid back by monies representing the proceeds of some of the wife's S Ltd shares. The matrimonial home is a three-bedroomed, semi-detached property now valued at about £225,000. The parties lived there with the three children throughout the remainder of their married life together until their separation in April 2007.
In 1996 the wife and her brother separated out their shareholdings in S Ltd, with the exception of a small number of shares later separated out in 1999. By virtue of these transactions, the wife became the sole owner of the S Ltd shares which now stand to her name. In October 2000 the wife sold a number of them for the sterling equivalent of something over £1 million. Those proceeds were used for the purchase of two properties (see below); for investment in a policy here (since cashed); and for living expenses. In 2000, 2002 and 2004 respectively, the wife was the recipient of 100% bonus issues in respect of her S Ltd shares, thereby hugely augmenting their quantity. Mr. Pointer makes the point that neither party contributed to these increases, they just happened. It was from about 2002 or 2003 that the income produced by the shares began to pick up. The average income received by the wife from 1993 to 2001 (allowing an estimated £50,000 for the year 1994/1995, for which we have no figure) was at the rate of about £38,000 per annum, and from 2002 to 2008 the average was about £180,000 per annum, if my maths is correct.
In April 2005 the wife bought in her sole name a property near to the matrimonial home for £157,000. I will call it “Station Close”. It is currently occupied by the parties' former housekeeper who, having started her own family, now no longer works for the wife but does pay her a rent.
On 16 th October 2006 the wife purchased her present home (that is, “the wife's home”, as defined above) for £320,000. She spent some £75,000 refurbishing it, and it is now valued at £345,000. On 27 th April 2007 she moved out of the matrimonial home with the children and into the wife's home. At that time the value of her S Ltd shareholding was about £28.3 million gross.
In April 2007 the wife started divorce proceedings. This led to a decree nisi on 23 rd July 2008, which has not yet been made absolute. On 18 th July 2007 the husband's solicitors wrote to the wife's solicitors enclosing a budget for the husband at £3,505 per month, or £42,000 per annum, which contained a sum of £1,035 per month for the three children. Stripping that out, the proposal from the husband for his personal support was of £2,470 per month, or £29,640 per annum. In the event, the amount which came to be agreed between the parties was one of £1,000 per month on the basis that the husband would take over responsibility for payment of the household utilities, agreed to have been in the sum of about £300 per month. That represented £700 per month, about £10,800 per annum, for the actual support of the husband himself. He told me in evidence that this was not a representative figure since he was at that time depressed, hoping for a reconciliation and was only looking at things on a very temporary basis.
On 9 th October 2007 the parties started counselling, and the solicitors agreed that the divorce would therefore be put on hold. In December 2007 that counselling broke down. This was followed in February 2008 by a letter from the husband's solicitors expressing the hope that interim maintenance could be agreed....
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