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Contributions & Non-Matrimonial Property

Divorce and Finances

In the case of K v L [2011] EWCA Civ 550, The Court of Appeal heard arguments from a husband who had been awarded £5m in ancillary relief proceedings.  The case looked at whether the judge who made the award had erred when limiting the award to the husband to a generous assessment of his needs.

The parties in this case had been together for 21 years.  When the wife was 15 years old she inherited shares which increased in value dramatically over time.  On their separation in 2007 they were worth £27m and at the time of the hearing they were worth £57.4m.  Despite this the parties lived a very modest lifestyle.  With three children and a property worth £225,000, the family’s annual expenditure was £79,000.  Throughout the marriage neither party generated any earned income.  Instead they lived off the proceeds of the sale of a small number of the wife’s shares.

In his claim for ancillary relief the husband proposed a budget for himself of £105,000 per annum and a £2m property.  The judge awarded £5m (9.3% of the parties’ assets) in light of their modest standard of living.  The judge held that the award was generous on assessment of the husband’s needs.

The husband appealed asking for a figure of £18m.  The Appeal Court ruled that the judge had been correct when recognising the great importance of the wife’s financial contribution to the marriage as it correctly recognised a substantive difference.  It also held that there was nothing to suggest that the importance of the parties’ source of entire wealth had diminished over time.  The shares had been kept ring fenced at all times by share certificates in the wife’s sole name.  The Appeal Court also held that a special contribution arises in this case from the wife’s contribution.  It therefore lends itself to a departure within the sharing principle from the ordinary consequence which would be an equal division.

The Court of Appeal upheld the judge’s award of £5m to the husband and the appeal was dismissed.