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FINANCIAL REMEDIES: AH v PH (Scandinavian Marriage Settlement) [2013] EWHC 3873 (Fam)

Date:11 DEC 2013
Law Reporter

(Family Division, Moor J, 12 June 2013)

The Scandinavian husband and wife met and married in England. They had two children together, now aged 5 and 4, and were married for 4 years during which time they enjoyed a good standard of living. The husband came from a wealthy family and had inherited large sums of capital including company shares prior to the marriage.

As was common practice in their home country, the parties entered into a marriage settlement. Both parties received legal advice and negotiations took place. At an early stage a figure was agreed as to the wife's separate property. They elected a partial separation of property and the agreement was signed. The agreement provided for the wife to received £850,000 in order to purchase a property in Scandanavia on the event of separation. No provision for maintenance of the wife or child was mentioned.

When the settlement was sent for registration it was declined due to a provision allowing for the husband to buy out the wife of the matrimonial property. Although re-drafting took place, a final draft was never signed and registered.

When the marriage ended, during financial proceedings the husband agreed to honour the settlement and pay the wife £1.1m in line with the settlement and taking into account indexation. After paying legal costs she was left with £760,000. The husband had assets, held in Jersey based settlements, of £76m. The husband raised the millionaire's defence that he could meet any reasonably award with the proviso that not all his assets were liquid and he would need between 6 and 12 months to access some funds.

The wife's revised Form E stated she required £27,269 per month for herself and the children. The husband had been paying £10,000 pm on an interim basis as well as the children's school fees and several additional voluntary payments. Although she found that sum insufficient.

The wife sought an award on a clean-break basis of £12.38m including £7.5m for a property in England plus a sum for a Scandinavian property. The husband proposed £4.6m.

Applying the principles of Radmacher, the wife did not have a full understanding of the implications of the marriage settlement given that the issue of her remaining in the UK was not explored at the time and it was clear that the husband had a much greater understanding. As the settlement failed to provide for housing in England and for maintenance, in most respects it would be ignored, aside from the intentions of the parties at the time to protect the husband's inherited wealth. Therefore, the husband's inherited capital would only be invaded in order to satisfy the wife's housing needs which were now different from those envisaged by the settlement.

The wife's reasonably housing needs for a 5-bedroom property in Kensington and Chelsea could be met by an award of £5m subject to a Mesher order in respect of the husband of £2m (based on a £5m property). Provision would not be made for a Scandanavian property but generous provision for holidays would be made.

The wife would be awarded £200,000pa maintenance capitalised over 14 years, or until the younger child completed secondary education. In relation to the children she would receive maintenance of £20,000 pa per child. The wife would receive a total capital award of £7.775m. The husband was given 12 months to raise the sum and in the meantime would continue to maintain the wife and children.