AF v SF

In financial remedy proceedings, needs must be assessed by reference to all the Matrimonial Causes Act 1973 section 25 factors. They are not determined by the marital standard of living alone, which may become less significant over time and may require adjustment for excessive or reckless spending.

A beneficiary’s interest in a dynastic trust may be relevant to the resources available for needs, even though the trust is non-matrimonial and the beneficiary has no absolute entitlement to its capital. The court must not invade trustees’ discretion or impose undue pressure on them. Where a clean break is appropriate, a maintenance claim may be capitalised on a Duxbury basis, with the amount adjusted to reflect the circumstances of the marriage and the applicant’s needs.

The applicant wife sought financial remedies following the breakdown of her thirteen-year marriage to the respondent husband. The parties had two children, and the wife had also treated an adult child from a previous relationship as a child of the family.

The husband had failed almost completely to engage with the proceedings and was found to lack capacity to litigate. The Official Solicitor acted as his litigation friend. The husband was a beneficiary of a substantial family trust, but the trust was dynastic, the wife was not a beneficiary, and the trustees had made no significant capital distributions.

The principal issues were the wife’s reasonable housing and income needs, the treatment of the trust interest and income, the proposed capital distribution or enforcement mechanism, child-related claims, a contingent litigation fund, and the form and timing of any clean-break award.

1. Statutory framework. The court applied section 25 of the Matrimonial Causes Act 1973, giving first consideration to the welfare of the minor children and considering the parties’ resources, needs, standard of living, ages, duration of the marriage, contributions, earning capacities and conduct. The sharing and compensation principles were not materially engaged, but the needs principle was.
2. Needs and standard of living. Needs are elastic and must be assessed by reference to the individual facts. The marital standard of living is relevant but is not a lodestar. It may become less important with time, and excessive or reckless expenditure should not inflate the assessment. The wife’s reasonable income need was assessed at £175,000 per annum.
3. Trust resources. The court could take account of the husband’s substantial trust income and potential access to wealth, while respecting the trustees’ discretion. The dynastic nature of the trust, the absence of significant capital distributions, the wife’s non-beneficiary status and the fact that the trust was not a nuptial settlement made a capital distribution from the trust inappropriate. The husband’s notional 70% capital entitlement was therefore not treated as an available capital resource.
4. Capitalisation and enforcement. A clean break was essential. The wife’s maintenance claim was capitalised on a Duxbury basis for life, producing a Duxbury fund of £4.1 million. The husband’s poor cooperation and difficulty in enforcing payment justified allocating the entire £1.75 million frozen sum to the wife, with the balance of £2.5 million payable over five years and stepped maintenance payments to compensate for delayed receipt.
5. Other claims and orders. The wife received provision for home works, vehicles and £250,000 for the adult child’s fund. The court made provision for the children’s school fees but lacked jurisdiction to capitalise child maintenance because there was no consent and no maximum child-support assessment. A contingent litigation fund was refused, as there was no immediate or established need for such litigation. The claim for a reversionary costs fund was an illegitimate extension of the existing law.
6. The matrimonial home was transferred to the wife, school-fees orders were made, and a clean break was ordered when the instalments had been paid. A section 28(1)(a) order prevented extension of the wife’s maintenance term. There was no order as to costs.

First-instance financial remedy judgment. No prior appellate decision is stated in the judgment.