Hart v Hart \[2017\]: needs and 'mingled assets' ================================================ In *Hart v Hart* , the Court of Appeal has again [reaffirmed](https://www.familylawweek.co.uk/site.aspx?i=ed179877) that the parties' needs is the fundamental factor when considering how much each should be awarded in an ancillary relief claim. Responding to the ruling, Vardags' Senior Director [Simon McKirgan](https://vardags.com/staff/simon-mckirgan/) [told](https://www.lawgazette.co.uk/law/divorce-ruling-leaves-law-in-state-of-flux/5062617.article) the *Law Gazette*: > "If there are not enough assets to meet the financially weaker party's needs, then the court will award them a portion of the other side's pre-acquired wealth to ensure that those needs are met. Needs are always regarded as more important than protecting pre-acquired wealth and, in such a scenario, trump all else." While the case did begin to consider the issue of how non-marital assets should be dealt with in financial remedy proceedings, in this case the husband's litigation misconduct and disclosure meant that the judge could not reliably calculate the value of his non-marital assets. Therefore, the court decided that they did not need to explore when, if ever, the sharing principle should apply to non-matrimonial assets, as it was not necessary here. This case is useful insofar as it reaffirms that if needs can be met without using non-marital assets, the court will award the financially weaker party a sum to meet their needs only and no more. However, Moylan LJ said "The question of whether, if it is open for this court so to decide, the sharing principle only applies to matrimonial property must await another case". The facts of the case --------------------- The parties married in 1987 and separated in 2006, having cohabited for 23 years. By the time the couple met, the husband had already started developing his wealth in several different but overlapping business interests, including property development. At the time of the decision at first instance by HHJ Wildblood QC, the wife was 59 and the husband 80. The total assets in the case were £9.4 million, £1.64 million of which were held in joint names. £490,000 was held in the husband's sole name, and £1.75 million were held in the wife's name. The remaining £5.5 million, over half of the parties' total wealth, was held in a trust. HHJ Wildblood QC held that all of the trust funds should be treated as resources available to the husband. The decision at first instance ------------------------------ The judge at first instance found that the wife should be awarded the sum of £3.47 million, as he had calculated that this was the sum necessary to meet her needs. In reaching this decision he considered 4 different approaches of calculating how much the wife should be awarded: - Needs: this includes figures for a housing fund and capitalised income (£3.47 million). - 'Mingles assets': this includes awarding the wife half of the assets in joint names, half of the assets in the wife's sole name, half of the wife's own non-marital assets, and 25% of the trust funds (£3.53 million). - 'Non-matrimonial calculation': this removed both parties' non-marital property before dividing the figure equally. The judge held this was unreliable due to the husband's litigation misconduct and disclosure (£3.85 million). - Wife's current proprietary rights plus 25% of the trust assets: however this ignored the origins of the wealth and the judge held it was 'too high'(£3.94 million). HHJ Wildblood QC found that there was in reality no difference between the needs figure and the 'mingled assets' approach and held this was the most principled and scientific of the awards. The husband's appeal -------------------- Prior to the Court of Appeal case, the husband had already appealed HHJ Wildblood QC's decision last year. He claimed that the initial award of £3.47 million to his ex-wife was unfair and ignored the fact that she was living with another man. His appeal was dismissed by Sir James Munby, President of the Family Division of the High Court, who found that the "presence of new partner in her life did not diminish her needs". At the time of the decision, Vardags Director Georgina Hamblin [commented](https://www.telegraph.co.uk/news/2016/05/26/top-judge-hands-divorcee-35m-despite-husband-arguing-it-should-b/) in *The Telegraph*: > "The Court of Appeal reaffirmed the well-established principle that all financial 'needs' must be met by the parties to a marriage and that these responsibilities cannot be shirked." The wife's appeal ----------------- The wife subsequently also sought to appeal the original decision on two grounds: - Because the court was unable to carry out the 'formulaic approach' to calculating the husband's non-matrimonial assets (due to his litigation misconduct) as set out in *Jones*, the court should have awarded the wife half of the total assets (i.e. half of £9.4 million). - If a departure from the equal sharing principle was justified on the basis of non-marital assets despite H's litigation misconduct, the decision to ground the award on the basis of W's needs was arbitrary and incorrect. This denied her the greater figure she should have received if the marital and non-marital assets had been properly quantified. Providing the leading judgment, Moylan LJ dismissed both grounds of appeal. Considering the first, he said that the court is not required to adopt a formulaic approach set down in [*Jones*](https://vardags.com/law-guide/important-divorce-cases/jones-v-jones)in order to achieve consistency or guarantee a fair outcome. On the contrary, due to the husband's litigation misconduct it was very difficult to establish exactly how much pre-marital wealth he had. Furthermore, Moylan LJ said that the notion of property being marital or non-marital is in fact a legal construct. It must be remembered that an asset can be both matrimonial and non-matrimonial in its nature. When an asset is a combination of both types of property, it is artificial to seek such a sharp division - "the exercise is more of an art than a science". The court must undertake a detailed evidential enquiry and exercise 'flexibility' (advocated by Lord Nicholls and Lady Hale in *Miller*) when considering whether assets are marital or non-marital. Moving on to consider the wife's second ground of appeal, Moylan LJ held that the only reason for HHJ Wildblood QC's consideration of the second two calculations, which formed a 'tension'with the former two, was because he felt compelled to try and adopt a formulaic approach. However, due to the lack of certainty over the origins of the wealth, the non-marital calculation was not reliable. Therefore, by undertaking a broad approach and considering the merits and pitfalls in the different calculations, the award could not be successfully challenged. Read the judgment in full [here.](https://www.familylawweek.co.uk/site.aspx?i=ed179877) Glossary Reference ------------------ ### A v A order See [Legal Services Order](https://vardags.com/guide/glossary/?letter=l). ### Needs principle (in divorce finance cases) The idea that both parties' needs should be catered for in a divorce settlement. ### Non-matrimonial property Non-matrimonial property refers to assets that were built up other than during the marriage. "Ayesha Vardag - Britain's top divorce lawyer." ![The Huffington Post](https://vardags.com/images/logo/huffpost.png) "Ayesha Vardag - Woman of the Year"![GG2](https://vardags.com/images/logo/gg2-3.png) "Leading, Magic Circle law firm."Mr Justice Coleridge "A handful of firms dominate the so-called 'glamour' end of the market ... Vardags"The Times "One of the best divorce lawyers in the country"Marie Claire "Ayesha Vardag - 'diva of divorce' for the world's super rich" ![BBC](https://vardags.com/images/logo/bbc.png) "Dr Stephen Bence is a financial genius."Lewis Marks KC "Ayesha Vardag - the Queen of divorce"Daily Mail "Vardags brilliantly argued my case to a resounding victory"Pauline Chai (client) "Britain's top divorce lawyer" ![The Telegraph](https://vardags.com/images/logo/telegraph.png) More Divorce news ----------------- [A Pyrrhic victory? Chinese court refuses to grant couple a divorce due to relationship exam success](https://vardags.com/family-law/chinese-court-refuses-to-grant-couple-divorce-relationship-exam-success "A Pyrrhic victory? 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