Administration of justice - Anonymity - Lump sum orders - Matrimonial property

K v L: CA (Civ Div) (Lord Justices Laws, Jacob, Wilson): 13 May 2011

The appellant husband (H) appealed against a decision in ancillary relief ­proceedings ([2010] EWHC 1234 (Fam), [2010] 2 FLR 1467) ordering the respondent wife (W) to pay him a lump sum of £5m on a clean-break basis.

H and W were together for 21 years and had three children.

W’s assets were entirely non-matrimonial, consisting of shares inherited before she and H married.

By the time of the judge’s decision they were worth £57m, while H’s assets, also derived from W’s shares, were worth just £300,000.

During the marriage neither party generated any earned income and, despite W’s wealth, the family lived very modestly in a semi-detached suburban house.

When W left the matrimonial home with the children she bought another similar home nearby.

In H’s claim for ancillary relief he stated his wish to buy more expensive property and his need for a larger annual income.

The judge’s award of £5m reflected W’s open offer; the judge noted that, in view of the modesty of the family’s lifestyle during the marriage, it would comfortably enable H to buy the house he wanted and cover all his future needs.

He observed in passing that an element of the award could therefore be regarded as a top-up referable to the sharing principle.

H accepted that the award generously met his needs, but contended that the judge had failed to make an assessment by reference to the sharing principle, which would have yielded £18m.

H submitted that: (1) the judge’s reasoning discriminated against him by attaching great importance to W’s provision of the family’s income; (2) the judge had failed to recognise that the importance of the source of assets would diminish over time;

(3) having in effect found that W had made a special contribution to the family’s welfare, the judge should have followed the guidance in Charman v Charman [2007] EWCA Civ 503, [2007] 1 FLR 1246 that fair allowance for special contribution within the sharing principle would be most unlikely to cause a departure from equality further than two-thirds/one-third, so his claim for £18m out of £57m was well-pitched; (4) in light of the awards in several other reported decisions involving non-matrimonial property, the award to him of only 9.3% of the parties’ assets was ­disproportionate.

Held: (1) H’s complaint of discrimination was founded upon a misunderstanding.

What was unacceptable was discrimination in the division of labour within the family, in particular between the party who earned the income and the party whose work was in the home and unpaid, White (Pamela) v White (Martin) [2001] 1 AC 596 HL followed.

The judge in the instant case had been careful to stress that, as neither H nor W went out to work, their work in the home, although different, should be taken to be a contribution of equal value for the purposes of the award.

The finding that W made a very important financial contribution did not discriminate between the parties in any unacceptable way but correctly recognised a substantive difference (see paragraph 15 of judgment).

(2) The true proposition was that the importance of the source of assets might, not would, diminish over time, Miller v Miller followed.

In contrast to the situation in White v White, there were no facts in the instant case that logically justified a conclusion that, as long as the marriage proceeded, there was a diminution in the importance of the source of the parties’ entire wealth, which was at all times ring-fenced by share certificates in W’s sole name, which were to a large extent just kept safely and left to grow in value, White v White considered (paragraphs 16-18).

(3) The phrase ‘a special contribution’ had become a term of art in the law of ancillary relief which was used to describe a contribution entirely different from that of non-matrimonial property.

A special contribution arose in circumstances in which a spouse’s contribution, direct or indirect, to the creation of matrimonial property had been so extraordinary as to dictate a departure within the sharing principle from the ordinary consequence of its equal division.

By contrast, although non-matrimonial property also fell within the sharing principle, equal division was not the ordinary consequence of its application; rather, extensive departure from equal division was the ordinary consequence.

W’s contribution of non-matrimonial property was quite different from the special contribution addressed in Charman, Charman distinguished (paragraphs 20, 21).

(4) None of the decisions cited by H involved assets that were entirely non-matrimonial and an award by reference to the sharing principle in excess of the applicant’s needs (paragraph 22).

(5) It was very rare for the Court of Appeal to anonymise its judgment in an appeal regarding ancillary relief.

However, that course was taken in the instant case because the rights of the parties’ children under article 8 of the European Convention on Human Rights 1950 outweighed the general interest publishing proceedings that identified them, given that their mother was abnormally wealthy but had over many years, with H, carefully made for them a normal life in which even their friends were unaware of their wealth, JIH v News Group Newspapers Ltd [2011] EWCA Civ 42, (2011) 2 All ER 324 applied.

Appeal dismissed.

Martin Pointer QC, Geoffrey Kingscote (instructed by Family Law in Partnership) for the appellant; Lucy Stone QC, Duncan Brooks (instructed by Kingsley Napley) for the respondent.