AT v BT

Under section 25 of the Matrimonial Causes Act 1973, financial remedy cases are not necessarily confined to needs or sharing. The court must consider all the circumstances and may adopt a blended approach.

Compensation may be significant where a spouse gives up a proven and highly successful career because of the marriage. It is not assessed as a tortious loss-of-earnings claim. Pre-acquired assets and trust assets may be brought into the computation while allowing for appropriate liabilities and risks.

Pre-marital cohabitation requires a relationship which moves seamlessly into marriage. A nuptial agreement is relevant but may be given no contractual effect where pressure, timing and lack of independent advice make it unfair to hold the parties to it.

The parties were involved in contested financial remedy proceedings following the breakdown of their marriage. The husband had substantial pre-acquired wealth and assets held through trusts. The wife argued that the assets should be subject to sharing and that she should receive compensation for ending a successful private-equity career in connection with the marriage.

The court also determined the date on which cohabitation commenced, the effect of an antenuptial contract, the treatment of the N Trust, the valuation of the former family home, tax risks and the appropriate overall award.

1. Outcome. The court awarded the wife just under £6.9 million, including her retained property, on a clean-break basis. No income award was made. The court left costs open.
2. Section 25 of the Matrimonial Causes Act 1973 confers a wide discretion requiring consideration of all the circumstances. Cases may involve a blend of needs, sharing and compensation; they should not be classified absolutely as either a needs case or a sharing case.
3. Pre-marital cohabitation must move seamlessly into marriage without a major alteration in the way the couple lives. The court should examine the parties’ intentions and the emotional and practical nature of their relationship, including such matters as location and pooling of resources. The wife bore the burden of proving the relevant date. On the evidence, cohabitation began in late 2005 or early 2006.
4. The wife had suffered genuine marriage-generated disadvantage. Her established private-equity career had ended at 37 for reasons directly connected with the relationship. Compensation therefore had to be addressed. The court treated pre-acquired wealth and the N Trust as being on schedule, balanced by including the potential tax on winding up the trust.
5. The antenuptial contract was useful evidence of pre-marital assets, but it was not contractually enforceable. The wife had signed it while four months pregnant, shortly before the wedding and while leaving her career in private equity. Those circumstances amounted to undue pressure, viewed with the importance of timing, pressure and independent advice.
6. The N Trust was a nuptial settlement capable of variation, but no variation was made because none had been sought and the trustees had not been served. The court instead made the financial award and required reasonable assistance with lawful tax mitigation.
7. The court made its own findings on credibility and did not adopt findings of dishonesty from separate Children Act proceedings merely because they had been made by another judge.