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11 APR 2007

ANCILLARY RELIEF: H v H [2007] EWHC 459 (Fam)

(Family Division; Charles J; 4 April 2007)

Awarding the wife about £13.7 million of the trial assets of about £29.4 million (made up of half the assets at the date of separation, plus declining percentages of the husband's three subsequent bonuses), the judge made a number of observations concerning big money cases.

It was unhelpful to treat the guidance given by the House of Lords as if it were a series of statutory tests, the passing or failing of which would lead to particular and set results. That approach ignored the flexibility of the statutory provisions and the objective of achieving a fair result in the given case, and sought to impose a certainty or rigidity of division on a foundation of the matrimonial property, a concept which was not in the Matrimonial Causes Act 1973 and could not always easily or precisely be identified and valued.

The phrases and concepts 'matrimonial acquest' and 'family assets' were alluring judicial phrases much as 'reasonable requirements' had been, and might equally obscure the true position under the statute. The more sensible approach was (i) to have regard to the particular circumstances of a given case when considering concepts such as the matrimonial property and the application of the yardstick of equality; and thus to the range of reasonable possibilities in their application; (ii) to stand back and take an overview of the circumstances of a given case by reference to those possibilities; and (iii) not to take a formulaic or progressive approach that introduced a set and unalterable ingredient of the award, particularly when an aspect of its evaluation was not clear or common ground.

While the court would have regard to current values at the time it made its award, that did not mean that the value at date of trial would be the value of matrimonial property to which the yardstick of equality applied with force, further it might not be fair to apply the yardstick no matter what date was taken for the identification and valuation of the matrimonial property.

The rationale for an award in respect of a husband's future earnings, once needs, compensation for loss of earning capacity and sharing of capital assets had been taken into account, lay in the loss of a share in the enhanced income or earning capacity created by the contributions of the parties during the partnership, which could be classified as either compensation or sharing.

Where an award could be made on a clean break basis that provided the wife with capital to meet her needs and all other aspects of sharing and compensation for loss of earning capacity, the focus should be on the added effects of the provision to address the run off from the marital partnership, and thus the transition to independent living. Factors to be taken into account would include the length of time that the wife had enjoyed the fruits of the spadework and joint endeavours of the parties, the likely future product of that spadework and endeavour, an evaluation of the effects of the respective past and future contributions of the parties on the ability of the husband to earn his future income and thus on his future earning capacity (as opposed to an assessment of the effects of the couple's contributions during the continuation of the marital partnership) and the overall effects of an award with and without a provision in respect of future income.

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