While the principle of fairness is central to the conjoined appeals determined (see here also McFarlane v McFarlane), the two cases required differing approaches due to the duration of each marriage and the financial circumstances surrounding them.
Miller v Miller
In the first appeal, the arrangement of the marriage and financial footing of the two parties were unequal from the outset; and so, with consideration of the reasons cited for divorce, the presented facts displayed evidence of a self-entitlement that undoubtedly polluted the relationship and led to a generous settlement in favour of the weaker party.
When entering the relationship, the wife occupied a highly paid position that while enviable to most, paled in comparison to the recently acquired wealth of her new husband; who himself, was now a multi-millionaire and on his way to significantly increasing that sum through strategic investment in hedge funds management and a new business partnership.
After less than three years, the couple separated and divorce proceedings began on the part of the husband, and while he filed under accusations of her unreasonable behaviour the wife cross-petitioned on grounds of adultery, given his disclosure of intent to re-marry; further noting how she never sought to end the marriage nor conducted herself in any way to suggest otherwise.
When bought before the judge, it was found that with consideration given for both his estimated current wealth of around £17.5m, and the potential resale value of his company shares which rested around £16m, his wife’s position showed debts above £200,000 were she to become be liable for her costs.
Through a division of matrimonial assets of both a property and lump sum award, the wife was legally entitled to a £5m settlement that enabled her to remain living in the home shared by both parties during their brief marriage, and provided enough capital to sustain the standard of living afforded her throughout the course of their relationship.
This decision was felt to represent the fairest terms on which to end their marriage, and one that was uniformly upheld under appeal to the House of Lords.
McFarlane v McFarlane
While bearing some similarities to Miller v Miller, the couple enjoyed over fifteen years of marriage and the joy of having three children of their own.
Of particular note, is that at the outset of their time together, the wife and mother of the children had a successful law career; and at that time, earned more than her husband, who was himself about to become partner of a well established accountancy firm.
It was later decided by them both that in order for the children to benefit from a grounded upbringing, the wife would surrender her position as a solicitor and become a full-time mother until they had grown into secondary school age; after which, she would return to paid work, or retrain for a new career.
At the point of their separation, the annual household income was over £1m; however, this was made up from the husband’s income, with average family living costs of around £150,000 per year.
When deciding how best to end matters, the court felt that in addition to the equal division of join assets worth £3m (made up of three properties), a joint lives order would best suffice, as the estimated annual living costs of the wife (and children) fell around £215,000 per year.
The husband countered that £160-180,000 per year would sustain a comfortable life for the family; at which point, the wife then claimed for £345,000 per year, whereupon the judge settled upon £310,000 per year, which was a figure deemed fair and reasonable.
The husband duly appealed, whereupon the Court of Appeal held that the amount determined was far in excess of the wife’s actual living expenses, and was such that would allow her to invest, and thereby accumulate, increased capital from his payments.
In light of this perceived inequality, the figure was readjusted down to £240,000 per year, whereupon the wife cross-appealed and the Court again upheld the award on grounds that in specific instances, periodic payment orders can be used as a means to enable recipient accumulation of monies, albeit with a determined liability period of only five years.
When submitted by the wife for final consideration at the House of Lords, it was wholly agreed that the original judgment must remain.
And so, while the essence of a ‘clean break’ was observed through the ability of each party to secure a tenable degree of financial freedom, it was done so under the assumption that at some point in the future, the joint lives arrangement would be mutually terminated through the reasoning of fairness, while the House reminded the parties that:
“The courts should have the discretion to provide for a longer period where, in exceptional circumstances and applying the overriding criterion of fairness, the judge finds that one party to the marriage whose contribution to the marriage has resulted in a reduction of his or her earning capacity ought to be compensated out of the other party’s future income because the capital needed to provide this is not available.”