Rapp v Sarre (Formerly Rapp)

In ancillary relief proceedings, need is flexible and may be assessed by reference to the parties’ marital standard of living. An equal division of capital is not automatic. The court may allocate illiquid or risky business assets to the spouse with the financial expertise to manage them, particularly where the evidence does not permit a practical alternative allocation. A Duxbury calculation is a tool for testing whether an award is sufficient; it does not necessarily require the recipient to exhaust capital. Agreed property valuations may be used without the judge obtaining updated valuations of the court’s own motion. An appellate court need not decide whether addictive behaviour should affect the award where the order is justified by needs alone and the issue was not fully explored below.

The parties married in 1994, separated in 2009 and had no children. The wife commenced ancillary relief proceedings in 2011. The husband provided inadequate disclosure, participated only minimally and was absent from most of the final hearing. The Family Court made a clean-break order giving the wife 54.5% and the husband 45.5% of the capital assets. The husband challenged the unequal division, the treatment of asset liquidity and valuation, the reliance on his addictive behaviour, and the refusal to adjourn the hearing. The central issues were whether the order properly met both parties’ needs and whether the procedural decision to refuse an adjournment was plainly wrong.

The Court of Appeal unanimously dismissed the appeals against both the ancillary relief order and the refusal to adjourn.

1. Needs and division of capital. Need is a flexible concept. In assessing it, the judge was entitled to consider the parties’ high standard of living during the marriage and to scrutinise the wife’s detailed budget. The husband had supplied no reliable budgetary information, so the judge was entitled to estimate his needs using the available evidence. The wife’s trimmed budget could be met while also making proper provision for the husband.
2. Capital and earning capacity. The Duxbury model was used as a tool to test the sufficiency of the award, not on the assumption that the husband would actually exhaust his capital. The judge was entitled to take account of the husband’s business acumen, investment experience and likely ability to make his capital work. It was also reasonable to assume that he would continue renting his accommodation.
3. Nature and valuation of assets. There was no unfairness in leaving the husband’s illiquid and risky business investments with him. He had invested in and understood those assets, whereas the wife was not financially astute and the evidence did not permit a practical alternative allocation. The reliance on agreed values for the French and London properties was permissible. The judge was not obliged to obtain updated valuations of his own motion, and the possible delay in selling the French properties did not create unfairness because the husband had sufficient other capital.
4. Conduct. Although the first-instance judge also relied on the husband’s dissipation and addictive behaviour, the order was independently justified by the wife’s needs. The Court therefore declined to determine the wider question whether such behaviour should affect an ancillary relief order, particularly without full evidence and submissions below.
5. Adjournment. Given the husband’s prolonged non-compliance, lack of supporting medical evidence, knowledge of the hearing date and previous failure to engage, the refusal to adjourn was open to the judge and was not plainly wrong.

1. Court of Appeal (Civil Division): On 18 February 2016, the appeals were dismissed and the Family Court’s order upheld.
2. Family Court sitting at the Central Family Court: His Honour Judge Everall QC made an ancillary relief order on 21 January 2015, providing for a clean break and an unequal division of the parties’ capital assets.