Quan v Bray & Ors

In financial remedy proceedings, a trust’s assets may be relevant to a spouse’s resources even where neither spouse is a beneficiary, if the trust can remunerate the spouse on a genuine commercial, arm’s-length basis. The court assesses likely future resources, rather than requiring certainty or relying on the concept of “judicious encouragement”.

Periodical payments should ordinarily be term-limited, with a non-extendable term where appropriate, to promote eventual economic separation. Exceptionally, a joint-lives award may be justified where termination would cause undue hardship. Capital claims may also be adjourned where a foreseeable future event may provide the resources for a fair clean-break settlement.

The applicant wife sought financial remedies against the first respondent husband after long-running proceedings concerning the Chinese Tigers South African Trust (CTSAT). Earlier judgments had concluded that CTSAT was not a post-nuptial settlement and that its assets were not a Thomas v Thomas resource directly available to the husband.

Following an agreement concerning the former matrimonial home, the wife pursued periodical payments and sought an adjournment of her capital claims. The central issues were whether the husband had the capacity to earn substantial commercial remuneration from CTSAT or elsewhere, whether periodical payments should be joint lives or term-limited, and whether the capital claims should be adjourned.

1. Commercial remuneration and resources. The earlier conclusion that CTSAT could not provide gratuitous benefits to either spouse did not prevent it from employing the husband and paying him a genuine commercial reward. The court could take that potential remuneration into account when assessing his earning capacity and likely resources. The evidence of historical fees, non-disclosure and the husband’s expertise established that he had capacity to receive substantial remuneration. The court rejected his evidence where it was unsupported by clear contemporaneous documents.
2. Likely future trust support. The court endorsed the approach in Whaley v Whaley [2011] EWCA Civ 617: the assessment is not whether trustees will certainly provide funds, but whether they are likely to do so in the foreseeable future, on the balance of probabilities. The expression “judicious encouragement” was liable to create confusion and should no longer be used. That principle did not provide a route to direct provision from CTSAT because neither spouse was a beneficiary.
3. Duration of maintenance. Under sections 25A and 28(1A) of the Matrimonial Causes Act 1973, the court should consider a term order in every case. A term should generally be imposed unless the claimant could not adjust to termination without undue hardship. A non-extendable term will ordinarily require good reason not to be made. The objective is, where possible, eventual economic separation. Because the wife had no capital base and would face homelessness and substantial indebtedness, a joint-lives award was exceptionally justified, following Joy v Joy-Morancho and Others (No 3) [2015] EWHC 2507 (Fam).
4. Capital claims. The court adopted the exceptional approach in Joy v Joy-Morancho and Others (No 3) and adjourned the wife’s capital claims. It was foreseeable that the husband would later accumulate sufficient resources for a proper clean-break settlement. Fairness and justice therefore outweighed the usual desirability of finality.
5. The husband was ordered, from 1 March 2019, to pay the wife £5,333 monthly in advance during joint lives, until her remarriage or further order, with CPI indexation. The existing maintenance pending suit order continued until that date and arrears were immediately payable. The wife’s capital claims were adjourned. Permission to appeal was refused.

• Court of Appeal: The wife’s earlier appeal was dismissed in Quan v Bray & Ors [2017] EWCA Civ 405.
• High Court (Family Division): The present court determined the wife’s final financial remedy claim, ordered joint-lives periodical payments, adjourned the capital claims and refused permission to appeal.