V v V

On an appeal from an exercise of the statutory discretion under the Matrimonial Causes Act 1973, an appellate court may intervene where the lower court has erred in law, including by failing to consider relevant factors or give adequate reasons. A nuptial agreement is not determinative, but following Granatino v Radmacher [2011] 1 AC 534, proper respect must be given to the parties’ autonomy. The agreement may materially affect the fair allocation of capital, subject to the needs of children and spouses. Future earning capacity must be assessed by reference to both the possibility of improvement and the risk that improvement will not occur. Where housing needs justify an award exceeding the sharing outcome, a percentage charge back may fairly preserve the other spouse’s deferred interest.

The wife obtained financial relief following the breakdown of the parties’ marriage. District Judge Cushing awarded her a lump sum sufficient to purchase a home in a small and expensive area of West London, together with periodical payments, but made no charge back in favour of the husband. The husband appealed, contending that the judge had given insufficient weight to the parties’ Swedish marriage settlement, which protected his pre-acquired property, and had assessed his future earning prospects without properly addressing the risk that his income would not improve. The central issues were whether the judge had erred in the statutory exercise and, if so, whether the High Court should remit the case or re-exercise the discretion.

1. Appeal allowed. The judge’s decision was vitiated by errors of law, namely a failure properly to apply Granatino v Radmacher [2011] 1 AC 534, a failure to give proper weight to the marriage settlement and pre-acquired assets, and a failure adequately to account for the risk that the husband’s earning capacity might not improve.
2. Under Part 30 of the FPR 2010, an appeal is by way of review. Intervention is justified where the lower court erred in law, reached a decision outside the range of reasonable disagreement, or committed a serious procedural or other irregularity causing injustice. An error includes failure to apply the statutory test, failure to take account of relevant factors, reliance on irrelevant factors, or failure to give proper reasons.
3. The appellate court may exercise the statutory discretion itself. It should use the lower court’s findings and evaluations so far as they are not tainted by the identified error, while recognising that it is exercising its own discretion rather than merely reviewing the permissible range of disagreement.
4. A nuptial agreement is one factor in the statutory balancing exercise. It cannot prejudice the reasonable requirements of children or leave a spouse in real need. Nevertheless, the agreement may found a different award by giving substantial weight to the parties’ autonomy, particularly where it was entered into freely, honestly and knowingly and without vitiating factors.
5. The marriage settlement was intended to ring-fence the husband’s pre-acquired property. Its terms, the parties’ intentions and the absence of duress, fraud, misrepresentation or material non-disclosure meant that it deserved more than little weight. Together with the short marriage and the husband’s unmatched contribution, it supplied good reasons to depart from equality.
6. The judge had treated the possibility of the husband obtaining better-paid employment as relevant without accounting for the contrary possibility. That approach placed disproportionate risk on him and was legally and manifestly unfair. The wife’s housing needs remained important, but they could be met by a charge back, periodical payments and later variation or capitalisation if the husband’s position improved.
7. The court imposed a percentage charge back over the property purchased with the lump sum. After adjustment for the husband’s appeal costs, the charge was increased to 35.83%. The husband was also ordered to pay the wife £5,600 within seven days of receiving the relevant bonus tranche. The wife was to bear the husband’s appeal costs, satisfied through the increased charge.

• High Court (Family Division): Appeal from District Judge Cushing’s decision of 23 February 2011 allowed. The court re-exercised the statutory discretion and varied the financial award.