(Family Division, Roberts J, 13 July 2016)
Financial remedies – Part III, Matrimonial and Family Proceedings Act 1984 – Pre-acquired wealth – Assessment of wife’s needs
The husband was ordered to pay the wife £1,148,480 to meet her Duxbury shortfall in financial remedy proceedings following the Russian divorce.
Following the divorce in Russia the wife applied pursuant to Part III of the Matrimonial and Family Proceedings Act 1984 for financial remedies. The application fell to be determined on a needs basis.
The judge found that the timing of the wife’s application had been tactical insofar as she had waited until her flat in Moscow was sold before making her application in order to bolster her connections with this jurisdiction. Therefore, a more conservative assessment of the wife’s future needs would be taken. However, no finding was made that the wife had deliberately delayed on the basis that the husband’s financial position would improve and that she would receive a greater award.
The source of the husband’s wealth was derived from his father and none of the assets were acquired as a product of the marriage. Applying principles established in inter alia Vince v Wyatt  EWHC 1368 (Fam) the feature of pre-acquired wealth would be a limiting factor in any assessment of the wife’s needs.
The existence of a previous agreement between the husband and wife was an important factor which meant that the court could not simply consider what an English court would have done had the divorce proceedings occurred in 2009.
The husband had agreed to pay the rent on the Kensington property to allow the wife to remain living there until the youngest child completed tertiary education. However, he asserted that the wife could step down her housing need thereafter and that she should be able to meet her housing need from her own resources by then. The judge accepted that while the position might have been different in an English divorce, it would not be appropriate for the wife to remain in the Kensington property indefinitely. Transferring that property to her risked providing her with an award in excess of what she would have received in purely English proceedings.
The wife was assessed as needing a housing fund of £2.5m to rehouse herself in 2022. Her income needs were just under £139,000 pa. No account was taken of the wife’s potential earning capacity since she had continuing obligations to the children and her language difficulties would limit her employment opportunities.
The wife currently had £4.685m of assets in her name and she required a further £1,148,480 to provide her with a Duxbury fund. Given the scale of the husband’s wealth it was fair and reasonable for him to meet the shortfall.The children’s needs were assessed at £35,000 pa each and the husband would also pay such tuition as was agreed as necessary in addition to any private medical bills not covered by the insurance he provided.