“(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire; (b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; (c) the standard of living enjoyed by the family before the breakdown of the marriage; (d) the age of each party to the marriage and the duration of the marriage; (e) any physical or mental disability of either of the parties to the marriage; (f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family; (g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it; (h) … the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.”
“there is one principle of universal application which can be stated with confidence. In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles. …. [W]hatever the division of labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party when considering paragraph (f), relating to the parties’ contributions. This is implicit in the very language of paragraph (f): ‘the contributions which each … has made or is likely … to make to the welfare of the family, including any contribution by looking after the home or caring for the family’. If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets. There should be no bias in favour of the money-earner and against the home-maker and the child-carer.”
“9. The starting point is surely not controversial. In the search for a fair outcome it is pertinent to have in mind that fairness generates obligations as well as rights. The financial provision made on divorce by one party for the other, still typically the wife, is not in the nature of largesse. It is not a case of ‘taking away’ from one party and ‘giving’ to the other property which ‘belongs’ to the former. The claimant is not a supplicant. Each party to a marriage is entitled to a fair share of the available property. The search is always for what are the requirements of fairness in the particular case. 10. What, then, in principle, are these requirements? The statute provides that first consideration shall be given to the welfare of the children of the marriage …. Beyond this several elements, or strands are readily discernible. The first is financial needs …. 11. This element of fairness reflects the fact that to a greater or lesser extent every relationship of marriage gives rise to a relationship of interdependence. The parties share the roles of money-earner, home-maker and child-carer. Mutual dependence begets mutual obligations of support …. 12. In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes. The court seeks to stretch modest finite resources so far as possible to meet the parties’ needs …. 13. Another strand, recognised more explicitly now than formerly, is compensation. This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage…. …. 16. A third strand is sharing. This ‘equal sharing’ principle derives from the basic concept of equality permeating a marriage as understood today. Marriage, it is often said, is a partnership of equals. …. The parties commit themselves to sharing their lives. They live and work together. When their partnership ends, each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less. But I emphasise the qualifying phrase: ‘unless there is good reason to the contrary’. The yardstick of equality is to be applied as an aid, not a rule.”
“he is a wonderful child … I want everybody to hear how proud we are of him and that we couldn’t be more blessed. I think we are the luckiest parents in the world. He is a superstar.”
“it is my prerogative to decide how I manage and ultimately distribute my resources now and following my death. I have been in the very fortunate position of not having to worry about money, raising and educating XW and her two sisters as well as gifting funds and assets to them from time to time at my discretion …. My daughters have no share in the wider family’s wealth and, save for their own properties (which they received from me) they are not independently wealthy. I have always avoided involving them in financial affairs.”
“[White] and [Miller] establish that the overriding criterion to be applied in ancillary relief proceedings is that of fairness and identify the three strands of need, compensation and sharing that are relevant to the question of what is fair. If an ante-nuptial agreement deals with those matters in a way that the court might adopt absent such an agreement, there is no problem about giving effect to the agreement. The problem arises where the agreement makes provisions that conflict with what the court would otherwise consider to be the requirements of fairness. The fact of the agreement is capable of altering what is fair. It is an important factor to be weighed in the balance. We would advance the following proposition, to be applied in the case of both ante- and post-nuptial agreements …. ‘The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.’” ‘The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.’”
“The reason why the court should give weight to a nuptial agreement is that there should be respect for individual autonomy. The court should accord respect to the decision of a married couple as to the manner in which their financial affairs should be regulated. It would be paternalistic and patronising to override their agreement simply on the basis of the court knows best. This is particularly true when the parties’ agreement addresses existing circumstances and not merely the contingencies of an uncertain future.”
“In England, when the court exercises its jurisdiction to make an order for financial relief under theMatrimonial Causes Act 1973 , it will normally apply English law, irrespective of the domicile the parties, or any foreign connection ….”
“Anyone who chooses to divorce here must be advised that the court will apply English law and not the law of the country which the parties have chosen or with which the marriage has the closest connection.”
“It may be a crystal clear indication that the parties intended their agreement to be legally binding, not only upon themselves, but also the court. On the other hand, a further couple may have been warned …. that their agreement might not have the same effect in other countries as it did in the country where it was made. But it means that their expectations may have been very different. The agreement may also have affected their later behaviour to a greater extent than it would have done had they not regarded it as legally binding …. None of this is to suggest that evidence of foreign law will be necessary in a foreign case. The relevance is not as to the effect of a foreign agreement in English law because, by the time the case gets to the divorce court, it has none. The relevance is as to the parties’ intentions and expectations at the time when they entered into it.”
“Sound legal advice is obviously desirable, for this will ensure that a party understands the implications of the agreement, and full disclosure of any assets owned by the other party may be necessary to ensure this. But if it is clear that a party is fully aware of the implications of an ante-nuptial agreement and indifferent to detailed particulars of the other party’s assets, there is no need to accord the agreement reduced weight because he or she is unaware of those particulars. What is important is that each party should have all the information that is material to his or her decision, and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end.”
“Where the ante-nuptial agreement attempts to address the contingencies, unknown and often unforeseen, of the couple’s future relationship there is more scope for what happens to them over the years to make it unfair to hold them to their agreement. The circumstances of the parties often change over time in ways or to an extent which either cannot be or simply was not envisaged. The longer the marriage has lasted, the more likely it is that this will be the case.”
“81. Of the three strands identified in White and Miller, it is the first two, needs and compensation, which can most readily render it unfair to hold the parties to an ante-nuptial agreement. The parties are unlikely to have intended that their ante-nuptial agreement should result, in the event of the marriage breaking up, in one partner being left in a predicament of real need, while the other enjoys a sufficiency or more, as such a result is likely to render it unfair to hold the parties to their agreement. Equally, if the devotion of one partner to looking after the family and the home has left the other free to accumulate wealth, it is likely to be unfair to hold the parties to an agreement that entitles the latter to retain all that he or she has earned. 82. Where, however, these considerations do not apply and each party is in a position to meet his or her needs, fairness may well not require a departure from their agreement as to the regulation of their financial affairs in the circumstances that have come to pass. Thus it is in relation to the third strand, sharing, that the court will be most likely to make an order in the terms of the nuptial agreement in place of the order that it would otherwise have made.”
“On the one hand, the sharing principle reflects the egalitarian and non-discriminatory view of marriage … adopted in English law at least since White. On the other hand, respecting the individual autonomy reflects a different kind of equality. In the present state of the law, there can be no hard and fast rules, save to say that it may be fairer to accept the modification of the sharing principle than of the needs and compensation principles.”
“In my judgment there is a marked difference between a negotiated prenuptial agreement which specifically contemplates divorce and which seeks to restrict or influence the exercise of discretion to which the law gives access, and an agreement made in a civil jurisdiction which adopts a particular marital property regime.”
“… the vast majority of European countries operate marital property regimes. These share three features. One is that they are systems of rules for the division of property on death, divorce or bankruptcy. That division is equal unless a couple have made it otherwise by contract. Another is that they are not concerned with what is usually referred to in the European context as maintenance, or income provision for spouses and children after divorce. The third is that they all involve the facility for couples to opt for a change of regime, before or after marriage, by contract.”
“The European analogy is flawed … because agreements in those jurisdictions are made against the background of a default matrimonial property regime and operate as a choice to adopt another regime …. In none of these cases is anyone opting out of a discretionary regime and into certainty; instead, they are opting for different sets of rules.”
“It can, therefore, be seen that a civil law matrimonial property agreement is different in character and objective to a ‘common law’ prenuptial agreement which seeks to abrogate or influence the right to invoke the statutory discretion to redistribute fairly (or equitably) all the resources of the spouses following their divorce.”
“In my judgment, the requirement of ‘a full appreciation of its implications’ does not carry with it a requirement to have received specific advice as to the operation of English law on the agreement in question. Otherwise every agreement made at a time when England and Wales was not on the horizon would be discarded. But in order to have influence here it must mean more than having a mere understanding that the agreement would just govern in the country in which it was made the distribution of property in the event of death, bankruptcy or divorce. It must surely mean that the parties intended the agreement to have effect wherever they might be divorced and most particularly were they to be divorced in a jurisdiction that operated a system of discretionary equitable distribution. I have respectfully suggested in Kremen v Agrest (No 11) (Financial Remedy: Non-Disclosure: Post-Nuptial Agreement)[2012] EWHC 45 (Fam) that usually the parties will need to have received legal advice to this effect, and will usually need to have made mutual disclosure.”
“… even where it is not fair to hold a party to an agreement, it may be that it is right to pay some regard to the agreement. I say this as I am not dealing here with strict contract law. I am applying s.25 of the MCA 1973 which requires me to consider ‘all the circumstances of the case’. The existence of the marriage settlement is undoubtedly one of the circumstances of this case.”
“I have interrogated both parties according to canonic rules in the presence of said witnesses and having ascertained their consent I joined them as spouses according to the Church procedure. After that in the presence of said witnesses, I read articles 143, 144 and 147 of the civil code regarding rights and obligations of spouses. I then filed the Deed of Marriage in two original copies one of which is filed in this church and the other is sent to the Italian city Municipality to be registered. The spouse [sic] in the presence of said witnesses have declared SEPARATION OF ASSETS: yes ‘we choose the regime of separation of assets pursuant to art 162, paragraph 2 of the civil code’.”
“it was the briefest of conversations. It did not seem important at the time either to me or, I thought, to XH.”
“I did not think, and certainly did not know, that it would apply to assets acquired during the marriage or that it would have any relevance if there was a divorce. The prospect of divorce, in the happy days of planning our marriage, did not ever enter my mind. This topic was never discussed between us again until XH raised it after these proceedings had begun.”
“there didn’t seem to be any need for it. The way he told me about it, it all seemed so very simple and straightforward, not a big deal.”
“as far as I am aware, at no time before the wedding when we were with Father G did the topic of electing a marital regime come up”
“of course I knew I was agreeing to marry XH , but I did not understand anything else that was said at all during the ceremony”
“The first time we discussed the separation of goods was three or four months before the wedding in the early summer of 2008 in XW’s flat …. I remember it was in fact in the drawing room and it was not a short conversation. I remember the moment well since I was very anxious. It was an important matter for me that I could show XW and her mother that I was not marrying for the purpose of entering into a wealthy family. I wanted the separation of goods regime, where XW’s assets were to be kept separate from mine, to ensure that XW and her family always kept their own wealth and I would not be part of it. Equally I wanted to keep separate from her assets any future wealth which I created from my own shareholding in the company (which I had worked so hard to build up), albeit I never anticipated that it would be anything compared to the wealth of XW and her family. I had been preparing this conversation for some time beforehand. I had discussed the question of separation of goods with my father who had introduced me to a lawyer, Mrs C, with whom I had had two phone calls, one shortly before my meeting with XW . I repeated to XW what she had advised, namely that there were two regimes under Italian law, community and separation of goods. The community of goods was the default regime whereby each party owned what they had before the marriage but after the marriage or assets thereafter acquired would be owned jointly. In the separation of goods regime, the assets of each party would always be kept separate, and each party kept their own assets not just before the marriage but thereafter and they would always be kept separate. In the early summer of 2008 in XW’s flat in London, I explained to XW the difference between the two regimes as I had written down from my previous discussion with Mrs C, and that I wanted, for both our sakes, the separation of goods regime. At the end of my explanation I told XW the way it works is very simple: both before and after the wedding, what is hers always stays hers and what is mine always stays mine. I also told her that despite the community of goods being the default regime many couples would choose separation of goods. She said she fully understood and was in agreement with this and it was the right choice. Therefore there was no need to have any further discussion with XW directly on this topic, nor did XW raise any question nor ask to have further information on this matter. XW was always very focused on detail and she always researched every aspect of the ceremony. Thus I was sure she had understood and was in full agreement with the choice. There was no need for doubt about this.”
“XH translated what I said to XW. I was fully satisfied she understood. Both parties said the word “si” meaning “yes”
“it was not a long speech, but it was explained to her concisely”
“Miss Stone: Father G, you would not be in a position, would you, to tell somebody who is not Italian whether the patrimonial regime would be binding in a foreign country? Witness (through an interpreter): No, I’m not a legal expert. I do not know the laws of the other countries. Miss Stone: And when you talk to the parties about the patrimonial regime, do you discuss divorce with them? Witness: Not so much. I’m not in a position to enter into the details and I think that if they decide to marry in Italy they should accept the laws and the rules that are binding here anyway. So I believe that when they marry in Italy they have to accept the rules and the legislation of Italy. Judge: Can I ask you this: do you – what do you understand the difference to be between separation and community of goods? Witness: In the case of the community of assets, those assets that come after the marriage become a sort of common patrimony, let’s say of the two spouses and the separation of assets obviously governs – after the marriage these assets remain separated ‘what is mine is mine and what is yours is yours’, just to summarise it in very simple terms. Judge: And … how long does this continue, separation or community? Witness: For the whole life. For the whole life Judge: What’s your understanding of this: if the marriage comes to an end, does it continue? Witness: Obviously if there is a divorce, if the marriage ends that’s okay, it doesn’t continue. Judge: Say that again please. Interpreter: I beg your pardon? Judge: Could you repeat what you just said? Interpreter: Obviously he agrees with you, if the marriage is put to an end, if there is a divorce obviously this is no longer valid. Judge: I wasn’t asserting something. I was asking a question. Does Father G understand it to continue after divorce or not? Witness: No, not after the divorce.”
“Mr Pointer: Father G, you explained in answer either to Miss Stone or to the judge that the separation of goods agreement is something that continues with the whole of the lives of the two spouses, is that correct? Witness: Yes, when they lived together, when they are not separated, yes. Judge: My question was his understanding. Mr Pointer: Is that something you explained to the spouses at the meeting you had with [them]? Witness: Yes, I explained this. I think it is quite logical that this lasts until the end – until the death, yes. This applies to the regime as it applies to the marriage. Mr Pointer: If the spouses were to separate, what would happen to the regime of separation of goods or the regime of community of goods? Witness: They address to lawyers, they resort to lawyers in order to settle these issues. This is something that no longer pertains to the church. This is something that is regulated before divorce by lawyers. They have this deed of marriage and they use it in order to settle the matter with the help of lawyers. Mr Pointer: Is this something that you explained to XH and XW in 2008? Witness: Yes, I explained - yes it was a brief explanation but I explained this to XW and XH and, as I said, XH also translated what I said to XW . Mr Pointer: My question was about divorce. Is there any real difference – sorry my question was about separation. Is there any real difference between separation and divorce from your perspective? Witness: No, I just explain the difference between separation of assets and community of assets. I do not enter into the technical [inaudible] I do not enter into the divorce, what happens if they divorce. It’s not my competence to do so.”
“said it as a matter of fact, that it was not of any significance, it was just one of the things XH had said, and I did not think of what the separation of goods was referring to, nor did I think of asking her … I thought nothing more of it and did not for a moment think that it might have legal consequences in the event of a divorce. Indeed I had not contemplated the possibility of a divorce at all. Had I known that XH had been taking legal advice, I would have insisted that XW took independent legal advice in a language she understood.”
“however during the discussion, I recalled that I had what I thought was the Italian marriage certificate. Nick Jacob suggested that I look into it further to make sure that my understanding was correct. I therefore arranged for a translation. A quick glance at just the heading of the translation confirmed my understanding that it was a marriage certificate, and I therefore filed the document away without considering the rest of the translation further.”
“Civil effects shall be recognised for marriages contracted according to the norms of canon law, provided that the act of marriage is transcribed in the Stato Civile registry, and the notices of marriage have been previously published at the communal offices. Immediately after the ceremony, the priest or his delegate shall explain the civil effects of the marriage to the parties, by reading the articles of the Civil Code concerning the rights and duties of married people and he shall thereafter draw up, in original duplicate, the certificate of marriage, in which the spouses’ declarations permitted by civil law may be inserted.”
“Legal patrimonial system between the spouses. In the absence of a different agreement made pursuant to Article 162, the legal patrimonial system of the family is common ownership of property ….”
“Form of marriage agreements. Marriage agreements shall be stipulated by public act, under penalty of nullity. The choice of a system of separation of property can be declared also in the record of celebration of the marriage. The agreements can be stipulated at any time, subject to the provisions of Article 194. Marriage agreements cannot be set up against third parties when the date of the contract, the name of the notary by whom it was drawn up and the particulars of the contracting parties, or the choice referred to in the second paragraph, are not annotated in the margin of the marriage record.”
“Article 29 (Personal relations between spouses) 1. Personal relations between spouses are governed by national ordinary law. 2. Personal relations between spouses of different nationalities or multiple nationalities are governed by the law of the State in which the married life is predominantly located. Article 30 (Property relations between spouses) 1. The property relations between spouses are governed by the law applied to their personal relations. The spouses may nevertheless agree in writing that the property relations are governed by the law of the State of which at least one of the parties is a citizen or in which at least one of the parties resides. 2. The agreement of the spouses regarding applicable law is valid if it is considered as such by the chosen law or by that of the place in which the agreement was entered into. 3. The property relations regime between spouses governed by a foreign law is binding on third parties only if the latter are familiar therewith or are unaware thereof owing to their own negligence. With regard to property rights on real estate, the enforceability is limited to the cases in which the forms of advertising prescribed by the law of the State in which the property is found have been adhered to.”
“Arrangements shall also be made in the event of choosing the separation of estate system or choice of the law applicable to their property relations pursuant to Article 30 (1) of Law 218/95”
“In the event whereby the spouse does not speak Italian, and also in those circumstances whereby the spouse is deaf, mute or, in any event, unable to communicate, the registrar shall celebrate the marriage either with the help of an interpreter or by availing of the appropriate means ….”
“The undersigned Central Directorate receive notifications regarding the difficulties encountered by some registrars, as well as by private citizens, in relation to the indication of the property regime applicable to spouses in the presence of at least one foreign party intending to marry pursuant to the provision referred to in Article 30 of the Law 218/95, in the case of religious marriages with civil effects (marriage governed by Concordat). In this regard it is noted that this Ministry, through the Ministry of Foreign Affairs, has involved the Apostolic Nunciature in Italy for a change to the current templates for requesting the registration of marriages regulated by the Concordat, with the aim of adopting new forms which show the choice made by the spouses also with reference to the law which said parties intended to apply to their property relations. As a result of this request, it is acknowledged that the Holy See shall make the desired changes to the template for requesting the registration of marriages with the civil effects regulated by the Concordat, so as to allow those intending to marry the possibility of indicating, at the time of marriage, the foreign law applicable to their property relations, as set out by the referenced Article 30 of Law 218/95. This choice shall be duly noted pursuant to Article 69 letter (b) of Presidential Decree No 396/2000, as already occurs for civil marriages, and this will also allow parties, including those who marry in a ceremony regulated by the Concordat, to avoid further tasks, including onerous ones, in order to exercise their own right as regards the possible property choice.”
“The choice of a system of separation of property can be declared also in the regular celebration of the marriage”
“(1) The validity, interpretation and effect of a marriage contract or settlement are governed in general by the proper law of the contract. (2) In the absence of reason to the contrary the proper law of a marriage contract or settlement is the law of domicile. (3) The parties to a marriage contract or settlement may expressly or impliedly agree that it shall be governed by some other law than the law of the matrimonial domicile.”
“… property owned by one spouse before the marriage, and inherited property whenever acquired, stand on a different footing from what may be loosely called matrimonial property. According to this view, on a breakdown of the marriage these two classes of property should not necessarily be treated in the same way. Property acquired before marriage and inherited property acquired during marriage come from a source wholly external to the marriage. In fairness, where this property still exists, the spouse to whom it was given should be allowed to keep it. Conversely, the other spouse has a weaker claim to such property than he or she may have regarding matrimonial property.”
“This difference in treatment of matrimonial property and non-matrimonial property might suggest that in every case a clear and precise boundary should be drawn between these two categories of property. This is not so. Fairness has a broad horizon. Sometimes, in the case of a business, it can be artificial to attempt to draw a sharp dividing line as at the parties’ wedding day. Similarly the ‘equal sharing’ principle might suggest that each of the party’s assets should be separately and exactly valued. But valuations are often a matter of opinion on which experts differ.”
“ … the courts should be exceedingly slow to introduce, or reintroduce, a distinction between ‘family’ assets and ‘business or investment’ assets. In all cases the nature and source of the parties’ property are a matter to be taken into account when determining the requirements of fairness …. But ‘business and investment’ assets can be the financial fruits of a marriage partnership as much as ‘family’ assets. The equal sharing principle applies to the former as well as the latter. The rationale underlying the sharing principle is as much applicable to ‘business and investment’ assets as to ‘family’ assets.”
“More difficult are business or investment assets which have been generated solely or mainly by the efforts of one party. The other party has often made some contribution to the business, at least in its early days, and has continued with her agreed contribution to the welfare of the family …. But in these non-business-partnerships, non-family assets cases, the bulk of the property has been generated by one party. Does this provide a reason for departing from the yardstick of equality?”
“On the one hand is the view… that commercial and domestic contributions are intrinsically incommensurable. It is easy to count the money or property which one has acquired. It is impossible to count the value which the other has added to their lives together. One is counted in money or money’s worth. The other is counted in domestic comfort and happiness. If the law is to avoid discrimination between the gender roles, it should regard all the assets generated in either way during the marriage as family assets to be divided equally between them unless some other good reason is shown to do otherwise …. On the other hand is the view that this is unrealistic …. Some [assets] are not family assets in the way that the home, its contents and the family savings are family assets …. It simply cannot be demonstrated that the domestic contribution, important though it has been to the welfare and happiness of the family as a whole, has contributed to the acquisition. If the money-maker had not had a wife to look after him, no doubt he would have found others to do it for him. Further, great wealth can be generated in a very short time, as the Miller case shows; but domestic contributions by the very nature take time to mature into contributions to the welfare of the family.”
“152. My Lords, while I do not think that these arguments can be ignored, I think they are irrelevant in the great majority of cases. In the very small number of cases where they might make a difference, of which Miller may be one, the answer is the same as given in White in connection with premarital property, inheritance and gifts. The source of the assets may be taken into account but its importance will diminish over time. Put the other way round, the court is expressly required to take into account the duration of the marriage: section 25(2)(d). If the assets are not ‘family assets’, or not generated by the joint efforts of the parties, then the duration of the marriage may well justify a departure from the yardstick of equality of division. As we are talking here of a departure from that yardstick, I would prefer to put this in terms of a reduction to reflect the period of time over which the domestic contribution has or will continue …. 153. This is simply to recognise that in a matrimonial property regime which still starts with the premise of separate property, there is still some scope for one party to acquire and retain separate property which is not automatically to be shared equally between them. The nature and the source of the property and the way the couple have run their lives may be taken into account in deciding how it should be shared. There may be other examples. Take, for example, a genuine dual career family where each party has worked throughout the marriage and certain assets have been pooled for the benefit of the family but others have not. There may be no relationship-generated needs or other disadvantages for which compensation is warranted. We can assume that the family assets, in the sense discussed earlier, should be divided equally. But it might well be fair to leave undisturbed whatever additional surplus each has accumulated during his or her working life. However, one should be careful not take this approach too far. What seems fair and sensible at the outset of a relationship may seem much less fair and sensible when it ends. And there could well be a sense of injustice if a dual career spouse who has worked outside as well as inside the home throughout the marriage ended up less well off the one who had only or mainly worked inside the home.”
“… there was a reason to depart from the yardstick of equality because those were business assets generated solely by the husband during a short marriage. Whether one puts this as a result of the contacts and capacities he brought to the marriage or as the result of the nature and source of the assets generated … it comes to much the same thing.”
“We hasten to correct a serious misapprehension at the heart of the submission …. Baroness Hale of Richmond put forward the distinction between unilateral assets and other matrimonial property for use in cases in which the marriage was short. And, although obiter she suggested an extension of it to another situation, namely that of the dual career … she definitely did not commend the distinction for use in other cases. Its application in a case such as the present would be deeply discriminatory and would gravely undermine the sharing principle articulated, albeit embryonically, in White and emphatically developed in other parts of the speeches in Miller itself.”
“The extension of the concept of unilateral assets, suggested by Baroness Hale of Richmond in Miller at para 153, was expressly endorsed by Lord Mance at para 170. Although obiter, it clearly commands great respect. It relates to the ‘dual career’. The suggestion was that, where both parties had worked throughout the marriage, had pooled some of the assets built up by their efforts but had chosen to keep other such assets under their separate control, the latter, although unequal in amount, were unilateral assets which might not be subject to the sharing principle. Because of the convincing logical objections of Lord Nicholls of Birkenhead to the different treatment of unilateral assets, we would prefer, so far as it is proper for us to do so, to keep the room for application of the concept closely confined.”
“Where… the lone opinion of Lord Nicholls [in Miller] on a matter is in conflict with that of the three members of the House you were in agreement on that matter, the opinion of the majority must be the authoritative view. In so far as the judgment of this court in Charman at paragraph 86 has been interpreted as expressing a preference for the opinion of Lord Nicholls on such matters, such an interpretation is, in my view, erroneous.”
“97. The inescapable conclusion from this analysis of the speeches in Miller, in terms of the possibility of some alteration from, rather than a strict application of, the equal sharing principle in relation to short, childless marriages, where both spouses have largely been in full-time employment and where only some of their finances have been pooled, is that fairness may require a reduction from a full 50% share or the exclusion of some property from the 50% calculation. Of the five members of the Judicial Committee, only Lord Nicholls suggested a contrary view and even on his analysis the potential for some form of relaxation can be seen. 98. In contrast to the position in Charman, this court now has to confront the short marriage ‘dual career’ issue directly on the facts of the present case. In my view, whilst affording due respect to the observations made by the experienced court in Charman, we are obliged to go back to the speeches in Miller and do so on the basis that I have described …. For the reasons that I have given, the authoritative guidance in relation to short marriage, dual-career cases is to be found in the speeches of the majority and not, where it differs, in that of Lord Nicholls. 99. Whilst much of what is said in this regard in Miller (for example relating to dual careers) is probably obiter, the conclusive point to be taken from Miller, however, arises from the actual determination of the House of Lords on the Miller appeal itself, where all five of their Lordships agreed that Mrs Miller should receive substantially less than 50% of the value of the New Star shares. The existence of a basis for departing from a strict application of equal sharing, albeit in a small number of cases and on the unusual facts of that case, is thereby established as a matter of law.”
“106. Miller is a short marriage, but not a dual career case. This distinction is directly acknowledged by Baroness Hale at paragraph 152: “the duration of the marriage may justify a departure from the yardstick of equality of division”
“33. My view is that, in applying the sharing principle to this case, we should in the first instance adopt the approach commended to the judge by Miss Stone. We should therefore effect a division of the total assets of£25m into the part reflective of non-matrimonial assets and that reflective of matrimonial assets. But in doing so, we should remember that, as Lord Nicholls stressed in Miller at paragraph 26, we are unlikely to need, still less to achieve, a precise division… 34. My view, however, is that we should test the results suggested by the adoption of Miss Stone’s approach against application of Mr Pointer’s approach, namely by identifying, for allocation to the wife, such lesser percentage than 50% of the total assets as seems to make fair overall allowance for the husband’s introduction of his company into the marriage. 35. Criticism can easily be levelled at both approaches. In different ways they are both highly arbitrary. Application of the sharing principle is inherently arbitrary; such is, I suggest, a fact which we should accept and by which we should cease to be disconcerted. Mr Pointer’s approach seems particularly by-and-large. But is the greater apparent specificity of Miss Stone’s approach an illusion? … [I]n this case, particularly in circumstances in which a central valuation mandated by has been crystallised by sale, I prefer in the first instance to adopt Miss Stone’s approach.”
“37. Our second step should be to ascribe to the company a value, as at the date of the marriage, which is both realistic and apt to the context in which it is required. In that regard our starting-point should be the valuation of the company as at the date upon which the respective accountants were ultimately agreed, namely£2m net…. 38. In my view, however, there are two reasons why the sum of£2m requires substantial adjustment. 39. The first reason for adjustment arises out of further consideration of the concept of latent potential or, in the judge’s word, the springboard. I am concerned lest our decision in this case were to be misunderstood as generally encouraging an enquiry into whether the professional valuation of the company at a specified date should be subject to increase by reference to the presence within it at that date of springboard. Mr Pointer correctly submits that a professional valuation calculated by reference to future maintainable earnings will generally reflect the value of any such springboard. But there will be rare cases in which a judge may be persuaded that it has failed to do so ….”
“we are concerned only with the value to be attributed to the springboard in place at that date [i.e. the date of the marriage], not with a value to be attributed to the subsequent activity of the diver or gymnast upon it”
“By reference to its latent potential at the date of the marriage, I propose to take the value of the company at that date as being£4m rather than£2m . The figure is again, highly arbitrary; I make no apology for this but it reinforces the need to test against some other approach the conclusion ultimately reached by reference to it …. [N]ot even a judge at first instance, with access to all the evidence referable to the reason for the company’s later success, could secure acquittal of a charge of having been arbitrary at this stage of conversion of such a feature into terms of money.”
“ … Take a work of art or land with potential for development which a spouse has owned since prior to the marriage and which, without activity on his or her part, has substantially increased in value during it. The court would accept that the increase in its value during the marriage was as much non-matrimonial as its value at the date of the marriage: it would thereby allow for its passive growth. Passive growth is to be contrasted with growth as a result of contributions of one sort or another made during the marriage, i.e. of activity, irrespective of whether such is achieved with the assistance of a springboard already in position.”
“ … If at the date of the marriage the husband’s£4m had represented the value of a minority holding in the company in which he was no more than an investor but which operated in a field identical to that in which his company actually operated, he would again be the beneficiary of adjustment for any passive economic growth. I do not see how the law can logically decline to attempt to enquire into the existence and, if so, the amount of such growth by reference only to the nature of the husband’s investment.”
“59. As to ‘passive growth’, I agree that in principle and, in the circumstances of this case, an allowance should be made even though the asset is a private company the business of which is developed and expanded (in this case exponentially) during the marriage … 60. However, I would query whether what Wilson LJ proposes in his judgment is really passive growth and reject the notion that the only growth that can be taken into account is passive growth. First, as a matter of principle, when valuing the non-matrimonial assets at the end of a marriage, the court should so far as it can look at what has actually happened and not at what might have happened. In parenthesis, I would add that, because of this principle of ‘reality’, I would reject the graphs provided by Miss Stone seeking to establish the values of the company at certain dates based on an artificial assumption of a straightline growth up to eventual sale. Secondly, if only passive growth is taken into account, the law rewards the spouse who buries her non-matrimonial assets in the ground rather than the spouse who actively manages them. The correct analysis in my judgment, in circumstances of the present, is that, where a spouse has a non-matrimonial asset of the present kind, he is entitled to that element of the company at the end of the day which can fairly be taken to represent the fruits of the non-matrimonial assets that accrue during the marriage, even if the fruits are the product of activity by him or on his own behalf.”
“A telescoped approach runs the risk of insufficient logical rigour being applied to the identification and treatment of the two very different categories [i.e. matrimonial and non-matrimonial assets]. It runs the risk of palm-tree justice being applied.”
“I am firmly of the view that the correct approach to give effect to the sharing principle is to try to calculate the scale of the matrimonial property and then normally to share that equally leaving the non-matrimonial property untouched. This is logically pure, morally sound, easy to understand and limits individual judicial caprice.”
“… a flexible approach is required to ensure that the court's focus remains on achieving a result which is fair. Of course, as the Court of Appeal said in Charman, judges must be loyal to the guidance given on a topic by the House of Lords. However, it is the application of guidance, not the rigid application of any specific formula coupled with a requirement to find clear and precise boundaries.”
“ … it is important to note that Jones used both a mathematical and a broad approach to determine the fairness of the proposed award. It is also important to note that both approaches arrived, effectively, at the same outcome. In my view, this demonstrates, through the use of both approaches and by reference to the respective outcomes, that both methods provide a permissible route to arriving at a fair determination.”
“84. In my view, the court is not required to adopt a formulaic approach either when determining whether the parties’ wealth comprises both matrimonial and non-matrimonial property or when the court is deciding what award to make. This is not necessary in order to achieve “an acceptable degree of consistency”, (Lord Nicholls in Miller, paragraph 6), or to achieve a fair outcome …. 85. It is, perhaps, worth reflecting that the concept of property being either matrimonial or non-matrimonial property is a legal construct. Moreover, it is a construct which is not always capable of clear identification. An asset can, of course, be entirely the former, as in many cases, or entirely the latter, …. However, it is also worth repeating that an asset can be comprise both, in the sense that it can be partly the product, or reflective, of marital endeavour and partly the product, or reflective, of a source external to the marriage. …. When property is a combination, it can be artificial even to seek to identify a sharp division because the weight to be given to each type of contribution will not be susceptible of clear reflection in the asset’s value. The exercise is more of an art than a science. 86. In my view, the guidance given by Lord Nicholls in Miller remains valid today and, indeed, bears increased weight in the light of the courts’ experience since that case was decided. It can, as he said, be artificial to attempt to draw a “sharp dividing line”
“Even if the court has made a factual determination as to the extent of the parties’ wealth which is matrimonial property and that which is not, the court still has to fit this determination into the exercise of the discretion having regard to all the relevant factors in this case. This is not to suggest that, by application of the sharing principle, the court will share non-matrimonial property but the court has an obligation to determine that its proposed award is a fair outcome having regard to all the relevant s.25 factors.”
“I recognise, of course, the need for clear guidance and principles when the court is given a discretion as wide as that contained in section 25 of the 1973 Act. Such clarity not only assists judges when determining financial claims but also enables those seeking to resolve the consequences of their separation and divorce, as it has been described, “to bargain in the shadow of the law”: Matrimonial Property, Needs and Agreements 2014 (Law Com No 343) paragraph 3.6. However, this should not lead to the imposition of constraints which are not needed to achieve, and which deprive the court of the flexibility required to achieve, a fair outcome.”
“It needs to be stressed, however, that the methodology is a tool and not a rule. The overarching duty upon the court is to exercise its statutory duty under s.25 … and to exercise the wide discretionary powers conferred upon, and entrusted to, it by Parliament in a way which is principled and above all fair to both parties on the facts and in the circumstances of the particular case.”
“much greater allowance must, in fairness to the husband, be made for the history in order, to borrow words from Lord Nicholls in Miller … to ‘reflect the amount of work done by the husband on this business project before the marriage’. He added, however: “But, in my view, the pre-existing shares cannot, in fairness to the wife, be carved out and left out of account altogether …. They were part of the backdrop of the whole matrimonial economy; and to borrow words from Baroness Hale of Richmond in Miller … they were part of ‘the way the couple have run their lives’ (ibid). This led him to the following conclusion (at paragraph 63): “In my view, not as an accountancy exercise, but in the exercise of broad discretion, the only fair way to treat the remaining pre-existing shares (and the three … investment properties) is to treat them as to half as the personal non-matrimonial property of the husband, and as to half as the matrimonial property of the parties to be evenly shared.”
“I am surprised that it was so lightly dismissed or disregarded as it seems to me to provide a useful heuristic basis for analysing the issue, which if commonly adopted would have the beneficial side-effect of eliminating arid, absolute and expensive black-letter accountancy valuations of a company many years earlier at the start of the marriage”
“It was his genius to perceive the potential of binliners which revolutionise the collection and disposal of household waste.”
“The underlying idea is that a spouse exercising special skill and care has gone beyond what would ordinarily be expected and beyond what the other spouse could ordinarily have hoped to do for himself or herself, had the parties arranged their family lives and activities differently. The first spouse’s special skill and effort is special to him or her, and the individual’s right to the fruits of an inherent quality of this nature survives as a material consideration despite the partnership or pooling aspect of marriage. For my part, I think that this consideration is a material one to which weight can and should be given in appropriate cases.”
“45. Having now heard submissions, both full and reasoned, against the concept of special contribution, save in the most exceptional and limited circumstances, the danger of gender discrimination resulting from a finding of special financial contribution is plain. If all that is regarded is the scale of the breadwinner’s success, the discrimination is almost bound to follow since there is no equal opportunity for the homemaker to demonstrate the scale of her comparable success. Examples cited of the mother who cares for a handicapped child seem to me both theoretical and distasteful. Such sacrifices and achievements are the product of love and commitment and are not to be counted in cash. The more driven the breadwinner the less available will he be physically and emotionally both as a husband and a father. There is also some justification in Mr Mostyn’s emphasis on the extent to which the homemaker frequently sacrifices her potential to generate assets by undertaking the domestic commitment to husband and children. At the same time she risks the outcome of failure and so earns her entitlement to share in the successful outcome. 46. In sum I am much more wary of the issue of special contribution than I was in writing my judgment in Cowan ….”
“there may be cases where the product alone justifies a conclusion of a special contribution but, absent some exceptional and individual quality in the generator of the fortune, a case for special contribution must be hard to establish.”
“In my judgment, the evidence establishes that the true explanation for his extraordinary success story is that the husband does possess the ‘spark’ or ‘force’ or ‘seed’ of genius, call it what one will. It was by his talents, as I have set out above, that he generated the fortune for the family …. His genius was the generator of that fortune.”
“It simply would be unfair not to recognise it. If it were ignored it would, in my judgment, create an unfair outcome.”
“67. ... A party should not seek to promote a case of ‘special contribution’ unless the contribution is so marked that to disregard it would be inequitable. A good reason for departing from equality is not to be found in the minutiae of married life. 68. This approach provides the principled answer in those cases where the earnings of one party, usually the husband, have been altogether exceptional. The question is whether earnings of this character can be regarded as a ‘special contribution’, and thus as a good reason for departing from equality of division. The answer is that exceptional earnings are to be regarded as a factor pointing away from equality of division when, but only when, it would be inequitable to proceed otherwise.”
“It had already been made clear in White that domestic and financial contributions should be treated equally. S.25(2)(f) of the 1973 Act does not refer to the contributions which each has made to the parties’ accumulated wealth, but to the contributions they have made (and will continue to make) to the welfare of the family. Each should be seen as doing their best in their own sphere. Only if there is such a disparity in their respective contributions to the welfare of the family that it would be inequitable to disregard it should this be taken into account in determining their shares.”
“The notion of a special contribution to the welfare of the family will not successfully have been purged of inherent gender discrimination unless it is accepted that such a contribution can, in principle, take a number of forms; that it can be non-financial as well as financial; and that it can thus be made by a party whose role has been exclusively that of a homemaker. Nevertheless in practice, and for a self-evident reason, the claim to have made a special contribution seems so far to have arisen only in cases of substantial wealth generated by a party’s success in business during the marriage. The self-evident reason is that in such cases there is substantial property over the distribution of which it is worthwhile to argue. In such cases can the amount of the wealth alone make the contribution special? Or must the focus always be upon the manner of its generation?”
“In such cases, therefore, the court will no doubt have regard to the amount of the wealth; and in some cases, perhaps including the present, its amount will be so extraordinary as to make it easy for the party who generated it to claim an exceptional and individual quality which deserves special treatment. Often, however, he or she will need independently to establish such a quality, whether by genius in business or some other field. Sometimes, by contrast, it will immediately be obvious that substantial wealth generated during the marriage is a windfall – the proceeds, for example, of an unanticipated sale of land for development or of an embattled take-over of a party’s ailing company – which is not the product of a special contribution.”
“Like this court in Lambert, we find ourselves unable to identify any figure as a guideline threshold for a special contribution of this character. It would, we consider, be dangerous for us to do so. However laden with qualification, the guideline might discourage a court from discerning special contribution in the generation of wealth below the threshold in circumstances, however rare, in which it should properly do so. The greater concern, however, is the obverse risk that it might encourage a court to discern special contribution in the generation of wealth above the threshold in circumstances in which it should not properly do so. While the law recognises the concept of a special contribution in the generation of wealth, there is no doubt that, following the decision of this court in Lambert, approved and developed in Miller, it keeps the concept in very narrow bounds. We would not wish a party’s claim to have made a special contribution to succeed by reference to something interpreted as effectively a presumption deriving from our identification of a threshold figure.”
“Although we declined to identify a threshold for the application of the principle of special contribution, we are nonetheless prepared to respond to the judge’s postscript to the extent of offering guidance on the appropriate range of percentage adjustment to be made in cases in which the court is satisfied that the principle requires departure from equality; it is necessary however to bear in mind that fair dispatch of some cases may require departure even from the range which we propose …. We find it hard to conceive that, where such a special contribution is established, the percentages of division of matrimonial property should be nearer to equality than 55% - 45% … Arbitrary though it is, our instinct is … that, even in an extreme case and in the absence of some further dramatic feature unrelated to it, fair allowance for special contribution within the sharing principle would be most unlikely to give rise to percentages of division of matrimonial property further from equality than 66.6% - 33.3%.”
“there has not been demonstrated such a change in perceptions of fairness since Miller and Charman to warrant a different approach to special contribution. As the House of Lords made clear in both White and Miller, the touchstone for financial provision under s.25 of the MCA 1973 is the achievement of a fair outcome. Different people, judges included, no doubt may have different views about the fairness of the principle of special contribution but Miller and Charman provide the authoritative jurisprudence on that issue…. There is no doubt that concepts of discrimination, equality and fairness change with time, and this is reflected in the changing jurisprudence on the application of s.25 over time. In the absence, however, of any significant change in perceptions of fairness since Miller and Charman, it is not open to us to substitute any personal concepts of fairness for those reflected in the principles on special contribution laid down by the House of Lords in Miller and Charman.”
“would serve, at best, to complicate the analysis required when the court is considering whether a party has made a special contribution and, at worst, would unfairly elevate a financial contribution above other forms of contribution … The word ‘contribution’ clearly incorporates all aspects including the nature of the contribution, its consequences and the party’s role in making the contribution. The contribution has to derive from something the contributor has done. Accordingly, if the contribution does not derive from the ‘exceptional and individual quality of the contributor’, it could not be a special contribution.”
“ … the court is still mandated to consider the parties’ respective contributions. In order to ensure fairness, for the reasons articulated, in particular in White and Miller, the courts have confined the concept of special contribution so that it reflects a significant, substantive difference, which does not require extensive evidential investigation. Moreover, such significant, substantive difference gives rise to a special contribution irrespective of whether the contribution has been made by the husband or the wife.”
“the application of the concept of special contribution is confined to very narrow bounds and is not applied, in practice, in a manner which is discriminatory.”
“I am not a person who boasts, far from it, but I believe it is incontrovertible that I made an immense, pivotal and in fact the most substantial contribution not only to the development of our teams at every stage but also to the development of the business itself so as to produce the products which were developed by the company early in its existence and which were adapted and improved so successfully … To put it colloquially, coming up with flashes of inspiration and turning them into money-making business deals is not the instantaneous cartoon image of a lightbulb switching on above one’s head. It takes an enormous amount of time, effort and research, and obtaining the right personnel and direction, the results of which I would then produce to the board when the time was right for their approval …. Assembling and managing the right people and giving them the right direction are vital ingredients to a business’s success, as is tenacity. These are the key contributions I have made to the company.”
“I am the first to accept that it is not just by my efforts alone that the company achieved such success. There were many people involved, in particular LL and his team who invented the very successful products. Without the product the company would never have been successful but a potentially successful product could not be successful without proper marketing, vision and determination in an increasingly competitive market … My commitment to the company has been overwhelming. I hope it can be said objectively that, whilst many people were responsible for its success, I was above all the person who made the company so financially successful because of (1) my innovative role of the concept of the business, setting up the business and building a team; (2) the work in developing the business, in terms of financing, personnel and commercial relationships; (3) actual development of the business; (4) my overall management of an ever-expanding company working very hard with all its different components to make it so successful; (5) taking the company public; (6) thereafter negotiating the sale of the business.”
“it was XH who made the [products] big with his marketing strategy and capabilities. He created the opportunities for the company right from the earliest stages of the company’s life and I would say that but for his approach in selecting the finest experts in their field, his entrepreneurial skills and vision in choosing the direction for the company, his management and his marketing skills, we would not have got on board our key partnerships …,”
“Without hesitation, the one person who was the absolute key factor to the financial success of the business was XH . He drove the company in various directions which ultimately achieved this enormous sale. Of course without the product the company would not have been so successful. XH made a vital decision initially to heavily invest early into a broad set of technical, marketing and analytical capabilities that allowed us to scale our business successfully. He was the individual whose leadership in hiring skills, inspirational approach and innovation determined the business’s progression. The company’s triumph was a result of years of internal business development and XH’s recognition for the need to continually adapt and foresee where the market was leading and take risks where it was not at all certain. Quite simply, without XH’s enormous influence at The company, it would not have become what is recognised as one of the leading [redacted] companies in history ….”
“XH was the single person I would state as the stand-out figure who made the success possible. This was due to his remarkable abilities in the many facets of the business which I would state as follows: (i) his outstanding leadership qualities, confidence, control and concern, which combined to effect a highly efficient organisation; (ii) his ability to generate the proper funding for the business, including the IPO; (iii) his direction of the future development of the business, which was key to the success of the business; (iv) the organisation of the personnel and obtaining the right teams in various sectors of the business to drive it forward and the ability to keep the various components of the business all working together harmoniously.”