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E v L [2021] EWFC 60[1] (Judgement 13 July 2021) Phase 1 (Short childless marriage, elderly parties, lump sum - date of trial important.
This case caught my eye because it is another useful contribution from Mostyn J where White, Miller, Sharp and others are examined and Queen Elizabeth I is cited. Phase 1 deals with the substantive case, save for costs which was dealt with in phase 2 of the hearing (15th July) (see separate article)
Brief facts. The relationship began in December 2015 when H provided W with monthly support (£5,500 - £10,000). It was disputed when cohabitation began (either January 2016 or June 2017 when the parties married); separation was towards the end of 2019, and from January 2020 financial support for W was reduced to £2,500pcm.
The husband a production manager, had an interest in six businesses, providing the audio-visual equipment for music events. The value of the business entity was an issue.
W sought a lump sum of £5.5m, which, she claimed, was half of the marital acquest. H said no, only £600,000!
H claimed it was not a case for equal sharing of the marital acquest because it was a short childless marriage and that the wife should be confined to very conservatively assessed needs.
Mostyn J said it was extremely dangerous for the court to attempt an evaluation of the quality of a marriage or of the arrangements made within it, as to do so would almost inevitably trigger subconscious discriminatory practices.
Childlessness needed to be banished from any consideration of whether there should be a departure from the application of the equal sharing principle ([29], [34] of the judgment).
The fact that it is platonic, and without a sexual component, is, as a matter of long-established law, neither here nor there and in truth no concern of the judges or of the State. As the first Elizabeth put it, we should not make windows into people's souls.
With regard to the shortness of the marriage, the judge continued, there was no logical reason to draw a distinction between an accrual over a short period and an accrual over a long period. The statutory factor of the duration of the marriage would be reflected in the nature of things by the fact that, in a short marriage, the accrual would almost inevitably be less than in a longer marriage [43].
Assets generated by one spouse alone during a short marriage which had been kept separate and where both spouses had been financially and independently active, might be non-family assets; but a case where there could be a legitimate non-discriminatory unequal sharing of matrimonial property earned in a short marriage would be extremely rare [44] & [45]. [Mostyn J may have had in mind a ‘white leopard event’]
He continued: where at the beginning (or end) of the marriage an actual transaction was under way or in view, which, in due course, yielded a considerable new asset, there was no difficulty in principle (even if there might be some difficulty in valuation) in accepting that part of that asset might have to be excluded from any assessment of the matrimonial acquest or included in what the parties had brought into the marriage. That exercise did not conceptually involve a departure from the principle of equality of division of the marital assets. Rather, it excluded some of the assets from the acquest, because that part represented the fruits of a pre-relationship project [49].
Mostyn J re-affirmed the principle that an earning capacity was not capable of being a matrimonial asset to which the sharing principle applied [66] & [67].
But, as to when the clock stopped for the purposes of calculating the acquest, the law needed to be transparent, accessible, readily comprehensible and had to propound simple and straightforward principles.
As for the date of calculation of the acquits the judge said this - save in cases where there had been undue delay between the separation and the placing of the matter for trial before the court, the end date for the purposes of calculation of the acquest should be the date of trial. That rule of thumb would apply forcefully to assets in place at the point of separation which had shifted in value between then and trial. For new assets, such as earnings made during separation, the court would generally not allow a post-separation bonus to be classed as non-matrimonial unless it related to a period which commenced at least 12 months after the separation (Mostyn J follows his own dictum in Rossi 2006)[73].
In this case the starting point for the purposes of calculation of the acquest, would be January 2016 (W’s case of when cohabitation began). The end point would be the present time, the time of trial. The acquest that arose in the period January 2016 to June 2021 would be divided equally [75] & [77].
The judge ordered the wife should be paid a lump sum of £1,514,769, [99] [I will add that W’s starting point was very high]
So once again, useful guidance from this eminent judge who has contributed so much to the law on financial remedy.
Costs and comments of the judge are dealt with in a short phase 2 article!