McCartney v McCartney

In a short marriage where most wealth was acquired before the relationship, the needs principle may be the dominant consideration and may subsume any arguable sharing claim. Compensation requires a factual basis showing a lost earning opportunity attributable to the relationship. Detailed claims of special contribution should be advanced only where the contribution is so marked that disregarding it would be inequitable. Conduct is relevant only where it would be inequitable to disregard it; allegations forming part of the unhappy history of the marriage, or likely to generate disproportionate satellite litigation, may properly be excluded. Capitalisation models are guides to fairness rather than rigid formulae. An applicant who advances an exorbitant and unsupported budget may receive a robustly assessed award.

The wife sought financial provision following a marriage lasting from June 2002 until separation in April 2006. She claimed a substantial share of the husband’s approximately £400 million wealth, compensation for alleged career loss, recognition of exceptional contributions, and adjustment for conduct. The husband contended that the case was principally one of need because his wealth was largely premarital and the marriage was short. The court determined the length of the parties’ settled relationship, the wife’s earning capacity, capital and income needs, alleged contributions, expenditure, and the relevance of conduct under section 25 of the Matrimonial Causes Act 1973.

1. Needs, sharing and compensation. The court found that the settled relationship began on marriage, not in March 2000. The marriage was short, the great bulk of the husband’s wealth predated it, and any marital acquest was small by comparison with his total assets. The compensation principle was not engaged. The wife’s needs, generously interpreted, were of magnetic importance and subsumed any arguable sharing claim.
2. Contribution. The wife was a good mother and had made a significant contribution to the matrimonial home and the husband’s emotional welfare. Her claim to have been an exceptional business partner or to have restored the husband’s professional confidence was rejected. Applying the guidance in Miller v Miller [2006] UKHL 24, detailed evaluations of married life did not justify a special-contribution award.
3. Earning capacity and needs. The wife retained earning capacity, assessed at £75,000 gross annually after a two-year recovery period. Her reasonable income needs were assessed at £600,000 annually. She was allowed £2.5 million for a London property, while claims for additional overseas properties, excessive security, and an extravagant charitable and lifestyle budget were rejected or substantially reduced.
4. Expenditure and conduct. A cautious addition of £500,000 was made for completely unreasonable expenditure. The court excluded allegations of marital and post-separation conduct under section 25(2)(g), because they were not conduct which it would be inequitable to disregard and would lead to disproportionate satellite litigation. The alleged telephone bugging and confidentiality breaches did not, without more, justify a reduction.
5. Capitalisation and order. The approaches in Flick v Flick [1995] 2 FLR 45 and Duxbury were treated as guides. A broad assessment produced a capitalisation of £14 million for income needs. The husband was ordered to pay the wife a lump sum of £16.5 million on or after decree nisi, giving her total property and funds of approximately £24.3 million. Provision was also made for the child, and a clean-break and confidentiality order was made.

This was a first-instance financial remedy decision. The judgment records earlier directions and interim hearings, including the February 2007 hearing, the June 2007 child-arrangements proceedings, and the December 2007 directions hearing. No appeal from those earlier orders was pursued.