Ancillary relief - conduct - equality - exceptional contribution - spouses - departure from 'yardstick of equality' between parties
Beverley Anne Charman v John Robert Charman: (Fam); Fam Div (Mr Justice Coleridge): 27 July 2006



The petitioner (W) sought capital provision from her former husband, the respondent (H).



During their 30 years of marriage, H had generated wealth of between £150 and £160 million through his exceptional entrepreneurial activities in the field of insurance. Approximately £6 million was in W's name, £25-30 million was held in trust for the parties' children, and the remaining £125 million was either in H's ownership (£56 million) or in a further trust (£68 million).



H had become resident in Bermuda for tax purposes, but W had been reluctant to move with him and the extent of H's time spent there had put a strain on the marriage. H had made a settlement offer to bring W's assets to £20 million, but W sought to raise her provision up to at least 45% of the total value of assets.



H asserted that: an equal division of assets was not appropriate given his stellar contribution to the generation of the wealth, so the court should award H a special premium in the marriage division; W had failed to support H's business endeavours during the marriage, in particular by refusing to move with him to a tax haven, so she should not benefit from any corresponding tax savings; and the trust was said to be a 'dynastic trust' that had been formulated for the benefit of H's unborn family members and should be left out of account.



Held, the court was required, pursuant to section 25(2)(d) of the Matrimonial Causes Act 1973, to take account of the duration of the marriage in the divisionary process. Where assets were not family assets, or had not been generated by the joint efforts of the parties, then the duration of the marriage could have justified a departure from an equality of division, although the importance of the source of the assets would diminish over time.



However, the concept of exceptional wealth creation was a further relevant factor in the discretionary exercise. It did not matter whether, in this case, H's remarkable wealth-creation abilities were categorised as 'conduct' or as 'a contribution to the welfare of the family'; in the broadest sense, their product was 'wholly exceptional, gross and obvious', so that in this case a departure from equality was fair (Miller v Miller (2006) UKHL 24, (2006) 2 WLR 1283 considered).



Where adjustment from the yardstick of equality was appropriate, it was important in big money cases that it was meaningful and significant and not a token, although not so great as to impact on the wife's standard of living. In all the circumstances, it was appropriate to order H to pay a lump sum of £40 million so that W's assets amounted to 37% of the total. The difference also reflected the fact that W could receive cash, whereas H would continue to operate high-risk assets.



Although W was entitled to refer to the phenomenal earning capacity of her husband under section 25(2)(a), caution was needed, as H had indicated, not unreasonably, that his working days were coming to an end.



In big money cases such as this, the respective financial needs of the parties and their standard of living under section 25(b) and (c) was far outweighed by other factors.



W had not failed to provide H with support in his business endeavours. W had not refused to move to Bermuda and had, in the end, been resigned to such a move. However, even if W had refused, it was unlikely that such conduct was of sufficient quality and gravity to impact on the balancing exercise. A wife such as W, who fulfilled the customary role of mother and home-maker, was entitled to make a life of her own while her husband was at work. There had been no domestic misconduct that fell within section 25(g) fulfilling the criteria as being of a seriousness where 'it would in the opinion of the court be inequitable to disregard it' (Miller considered).



No such dynastic plan had been indicated on the face of any of the letters of wishes drafted at any time since the creation of the trust. It would have been remarkable if H's settled and real intention to benefit future unborn members of his family through the trust was not documented anywhere, when only a simple drafting was required, and the trust had at all times been in the hands of professional trustees. In any event, the court could not have simply ignored the trust assets, even if H had established his motive of settlement for future generations. A spouse could not remove from consideration under section 25, at the stroke of such an informal arrangement as a letter of wishes, half the assets accumulated during a marriage, without the consent of the other spouse.



Judgment accordingly. (For related proceedings, see Charman v Charman (2005) EWCA Civ 1606, (2006) 1 WLR 1053.)



M Pointer QC, J Ewins, R Bailey Harris (instructed by Manches) for the petitioner; B Singleton QC, D Eaton, D Nagpal (instructed by Withers) for the respondent.