G v B (Rev 1)

In a needs-based financial remedy case, inherited or externally derived wealth remains a financial resource capable of meeting a party’s needs, but its derivation may affect fairness and the assessment of need. The court must also consider the legitimate claims of other beneficiaries of the resource.

Where a party alleges material non-disclosure, adverse inferences require evidence sufficient to establish that disclosure is materially deficient. Suspicion, extensive cross-examination and unexplained discrepancies do not justify findings of undisclosed assets without a proper evidential foundation.

Needs, including housing and income needs, must be assessed against the marital standard of living, affordability and the resources available. A clean break should not be imposed where future earning capacity is uncertain and termination of maintenance would cause undue hardship.

The wife applied for financial remedies following the breakdown of the marriage. The principal resources were the former matrimonial home and funds held by a Liechtenstein foundation established from the husband’s late father’s assets.

The parties treated the claim as needs-based. The central disputes concerned the extent of the husband’s resources, alleged non-disclosure, the appropriate housing fund, periodical payments for the wife and child, the duration of spousal maintenance, security for maintenance and the relevance of the husband’s inherited wealth and the other beneficiaries of the foundation.

The court also considered whether a deferred clean break should be imposed and what orders were required to achieve a fair outcome.

1. Non-disclosure. The court applied the approach in NG v SG (Appeal: Non-Disclosure) [2012] 1 FLR 1211. The husband’s late disclosure was unsatisfactory in several respects, but the evidence did not establish further undisclosed assets. The court declined to draw adverse inferences merely from suspicion or extensive cross-examination. It applied the principle in E v E (Financial Provision) [1990] 2 FLR 233 that inferences should not be drawn where the evidence did not support them.
2. Financial resources and inherited wealth. Funds legally owned by the foundation were not the husband’s property for the purposes of MCA s.25(2)(a), but were financial resources on which he could reasonably be expected to call. The court applied Charman v Charman [2006] 2 FLR 422, Whaley v Whaley [2012] 1 FLR 735 and RK v RK [2013] 1 FLR 329.
3. The derivation of the funds from the husband’s father was relevant but carried no great weight where the wife’s needs had to be met. Fairness also required recognition of the claims of the husband’s other children, who were beneficiaries of the foundation. The court applied the approach in White v White [2000] 2 FLR 981 and considered the inherited-wealth authorities discussed in Y v Y (Financial orders: Inherited Wealth) [2013] 2 FLR 924.
4. Needs and outcome. Needs were the magnetic factor. Housing and income needs had to be assessed by reference to the marital standard of living and affordability, while preserving resources for both parties’ housing and the other beneficiaries. The former matrimonial home was to be sold. The wife was awarded a housing fund of £1.6m, periodical payments of £55,000 per annum for herself and £10,000 per annum for the child, and specified education-related payments.
5. Security and clean break. Security was refused because tying up nearly one sixth of the available assets would make the overall provision unaffordable. Applying MCA ss.25A and 28(1A), the court declined to impose a deferred, non-extendable clean break because the wife’s realistic earning capacity was limited and future employment conditions were uncertain.