AE v BE

In a very long marriage, the sharing principle ordinarily requires the fruits of the marriage to be divided equally where both spouses have made equal contributions, including homemaking and childcare. Needs and compensation are distinct principles and may require separate consideration, but they do not justify adjustment where needs are met and neither spouse lost significant earning capacity. Risk should generally be reflected in the valuation of the relevant asset or liability, rather than by reducing one spouse’s share. A fair award may transfer illiquid or risk-laden assets in specie where a cash award would be impracticable or unfair. The court must assess the parties’ real financial position, including liabilities that are personally guaranteed and realistically enforceable.

The wife sought financial provision following an exceptionally long marriage. The parties, both aged 75, had accumulated substantial wealth through property businesses in England and Cyprus. The principal disputes concerned the value of the assets and liabilities, including substantial Cypriot debts and contingent tax liabilities, whether the award should be based on equal or unequal sharing, and whether the wife should receive company interests or cash.

The court also considered the effect of the wife’s existing shareholding, the husband’s control and management of the businesses, the liquidity and risk of the assets, and the need for a clean break. The proceedings were at first instance in the Family Division.

1. Application of statutory principles. The court applied the Matrimonial Causes Act 1973, including sections 23, 24 and 25. The parties’ adult children were no longer the first consideration. The section 25 factors required consideration of resources, needs, standard of living, age, marriage duration, contributions and conduct.
2. Sharing and contributions. Following White v White [2001] 1 AC 596, the wife’s homemaking and childcare contribution was equal in value to the husband’s breadwinning contribution. The marriage was almost exceptionally long and there was no good reason to depart from equality. Special contribution was abandoned and could not in any event justify departure.
3. Needs and compensation. The principles identified in Miller/McFarlane [2006] UKHL 24 and [2006] 1 FLR 1186 were considered. The assets were sufficient to meet both parties’ needs, and neither party had sacrificed a significant earning capacity. Needs and compensation therefore did not alter the result.
4. Valuation and liabilities. The court valued assets at the date of trial, considered the reality of the parties’ financial affairs, and reflected risk in valuation rather than by an additional reduction in the wife’s share. It included the husband’s personally guaranteed Cypriot liabilities in full, but excluded future interest. It rejected the proposed deduction for latent capital gains tax on companies the husband was likely to retain because the liability was unlikely to crystallise in reality.
5. Structure and outcome. The wife was entitled to £8,365,254. A cash-only award was impracticable because of the husband’s liabilities and liquidity requirements. Company interests were therefore transferred to the wife, including Y Limited and several connected companies, with the wife’s interest in X Limited transferred to the husband. A lump sum of £1,605,465 was payable by 7 February 2016, with specified interest. There was to be a clean break, and no order as to costs.