Case No. BV20D0029

made sliding scale provision for W in the event of divorce up to 1 September 2014, but was silent as to provision thereafter. It provided for a review “if requested by either party on ten years elapsing from the date of the marriage”. In the event, no such review was sought. There was some debate about whether the Pre-Marital Agreement had thereby lapsed or not, but it seems to me that on any view it has been overtaken by subsequent events and I do not need to grapple with that legal nicety. I will, however, need to consider the circumstances in which it was reached as (i) W says she signed it as a result of undue pressure, which H disputes and (ii) the contents of the Pre-Marital Agreement may inform later issues which I must examine. Of note, H’s wealth at that time (all non-marital in nature) was put at £4,317,754 which, with RPI, is over £6m in today’s terms.6.After marriage, the parties lived in London at the ‘X’ Street property. H left the City in 2005, and started to work in the family business, assisting in managing the wider family wealth (which essentially means his father’s wealth) and sitting on the Company 2 board. He spent increasing amounts of time in Switzerland, from where the family office was run. In 2009, he bought a property in Y town. In 2010, W and the children moved to join H in Switzerland. 7.The standard of living was very affluent, albeit not, it seems to me, of the extravagant super-rich variety. They have had the benefit of access to a fine property in the U area owned by H’s father, as well as their own properties in London, Y town and Z town. But their expenditure was not of the eye-watering variety often seen at High Court level, and they did not enjoy expensive trappings such as high-end cars or valuable chattels. Their homes in London and Y town are comfortable, and in sought after areas, but not vastly expensive. The competing expenditure schedules demonstrated, broadly, that in 2019 the total family budget on everything (in England, Switzerland and elsewhere, and including all children’s costs) exceeded £600,000 which, in my judgment, gives a helpful guide to the standard of living. 8.The family lifestyle was largely funded by the generosity of H’s very wealthy father albeit the provision of annual gifts was a tax efficient way of rewarding H for his work. Although the sums varied from year to year, H says in his Form E that “Over the course of the last three years I have received from my father donations totalling £1.17m”, which is about £370,000pa. In the schedule attached to the Post-Marital Agreement referred to below, he said that he received gifts from his father of £500,000-£600,000pa.9.From about 2015 onwards, the parties contemplated, and by 2017 agreed, that the children should attend school in England, feeling that both needed a more challenging academic environment than they were receiving in Switzerland. In March 2017, the children were offered places at London schools and in April 2017, notice was given on their Swiss schools. The intention was for W and the children to live in England, initially at ‘X’ Street, albeit there was an expectation of travel to and from Switzerland where H would continue to be based. 10.On 24 June 2017, H raised with W the idea of entering into a Post-Marital Agreement, to which W was clearly opposed from the outset. Nevertheless, both parties engaged lawyers, a first draft was prepared by H’s solicitors on 21 July 2017, and the parties, and their lawyers, attended a without prejudice meeting on 8 August 2017 at the offices of W’s solicitors, Hughes Fowler Carruthers, in London, which lasted most of the day. Further correspondence ensued and on 22 August 2017 agreement was undoubtedly reached. Arrangements were made for the document to be signed on 29 August 2017. In the event, W declined to do so, although her solicitor signed the relevant Certificate Annexe.11.Broadly, the Post-Marital Agreement provided for W to receive a total of, in today’s terms, about £7.1m plus child provision. It recorded the parties’ assets as follows:i)Husband £12,444,101£2,230,000 mortgage liability £10,214,101 netIn addition, it recorded the receipt by H of £500,000-£600,000pa from his fatherand his anticipated inheritance prospects exceeding €100m.ii)Wife £2,360,191 net12.Thus, of the combined net assets of £12,574,292 (excluding prospective inheritance), W’s entitlement under the Post-Marital Agreement in the event of divorce was about 56% thereof. 13.W, having decided not to sign on 29 August 2017, left Switzerland the next day to take Child A to a school induction day in London. They returned that weekend. A day or two later, W and the children travelled to England where they lived at ‘X’ Street. H lived at Y town but at weekends during term time flew to London. During holidays, W and the children joined H in Y town, Z town and the U area. All three properties were being used and it seems to me that they had two main family homes, in London and Y town. After the parties separated in 2019, W and the children moved into rented accommodation in late 2020 in London; the tenancy expires in November, with a break clause which has bene exercisable since June 2021. 14.In circumstances to which I will return, H says that his father has now ceased the previous annual payments to him, and has side-lined H from his role in the family office. 15.On or about 21 January 2019, before the parties separated, H’s father transferred assets worth about €23m into a trust of which the father is the principal beneficiary and H is a discretionary beneficiary; these monies were intended to benefit H, his siblings and their issue in due course on his father’s death. In January 2020, W’s petition was served. On 21 February 2020, the assets were transferred out of the trust and back to H’s father pursuant to an instrument of partial revocation. I will need to consider these transactions in more detail. Computation16.Inevitably, the attrition of litigation has dented the parties’ resources. Putting to one side the disputed territory of potential future wealth accretion by H from his father, the net assets are:Joint property (‘X’ Street) £2,045,791H property: Y town £640,564H property: Z town £2,546,530H properties: B property (ignoring usufruct) £2,818,489Joint bank accounts £21,634H bank accounts £285,334H investments £3,519,065H personal assets/cash £21,890H Company 3 liquidation -£18,018H pension £80,011H liabilities -£204,621W bank accounts £990,103W investments £15,343W liabilities -£399,847W pension £117,036GRAND TOTAL £12,479,304This schedule is based on figures which are largely agreed. I have taken H’s updated figures for his own resources, notwithstanding W’s objections, because it seems to me, they give a more accurate picture. The total of H’s assets is reduced by about £461,000 since the previous round of disclosure because of legal fees and general living expenses, as well as the recent decline in stock market values. A detailed explanation has been given by counsel for the reduction which I am willing to accept. I make clear that the outcome of my decision, based as it is on W’s needs, would be the same whether allowing for these reduced figures or not.17.H’s earned income is modest; his non-executive director salary at Company 2 is €49,000pa net, and last year his dividend share was €15,600 net. In reality, he, and by extension W and the children, have lived off the very significant largesse of his father. I am satisfied that his earning capacity at his age, and outside his work for the family office which has now reduced, is not particularly high; for nearly 20 years he has depended on his father’s munificence. I am also satisfied that W has no meaningful earning capacity. Sharing principle18.Almost the entirety of the wealth available to the parties originates from gifts and inheritances on H’s side during the marriage and/or was owned by H before the marriage:i)‘X’ Street was bought by H in 1999 with monies gifted to him by his father. It was subsequently transferred from H’s sole name into the parties’ joint names pursuant to the Pre-Marital Agreement. ii)The B properties came to H as a result of inheritances and family transfers in his favour between 1987 and 2011. iii)The Z town flat was bought by H in 1992, long before the marriage.iv)H received an inheritance of CHF 500,000 in 2009 which was used to renovate his property in Y town, and his father subsidised the purchase in the sum of about CHF 1m.v)The bulk of the liquid investments (and I do not consider I need to be absolutely precise) were gifted to H by his father and grandfather.19.The sharp delineation between marital and non-marital assets at the time of gift or inheritance has blurred over time as a result of (i) the length of the marriage, and (ii) the fact that the funds have been used to fund the family’s needs and lifestyle, and (iii) the use of some of the properties as matrimonial homes. Since both parties approach this case principally by reference to needs, I do not therefore need to embark on an attempt to delineate between marital and non-marital property. However, the general background of non-marital wealth sourced on H’s side is separately relevant in two ways:i)First, it informs, or may inform, the circumstances surrounding the Pre-Marital and Post-Martial Agreements; andii)Second, it is, or may be, relevant to an assessment of W’s needs.The Issues20.The main issues before me are:i)The circumstances surrounding the Pre-Marital Agreement, and whether any weight should be attached to it.ii)The circumstances surrounding the unsigned Post-Marital Agreement, and whether any weight should be attached to it.iii)Whether H can anticipate a resumption of the inter vivos gifts previously received from his father.iv)Whether prospective inheritance from H’s father is a relevant factor.v)W’s needs.The Law21.The general law which I apply is as follows:i)As a matter of practice, the court will usually embark on a two-stage exercise, (i) computation and (ii) distribution; Charman v Charman [2007] EWCA Civ 503.ii)The objective of the court is to achieve an outcome which ought to be "as fair as possible in all the circumstances"; per Lord Nicholls at 983H in White v White [2000] 2 FLR 981.iii)There is no place for discrimination between husband and wife and their respective roles; White v White at 989C.iv)In an evaluation of fairness, the court is required to have regard to the s25 criteria, first consideration being given to any child of the family.v)S25A is a powerful encouragement towards a clean break, as explained by Baroness Hale at [133] of Miller v Miller; McFarlane v McFarlane [2006] 1 FLR 1186.vi)The three essential principles at play are needs, compensation and sharing; Miller; McFarlane.vii)In practice, compensation is a very rare creature indeed. Since Miller; McFarlane it has only been applied in one first instance reported case at a final hearing of financial remedies, a decision of Moor J in RC v JC [2020] EWHC 466 (although there are one or two examples of its use on variation applications).viii)Where the result suggested by the needs principle is an award greater than the result suggested by the sharing principle, the former shall in principle prevail; Charman v Charman.ix)In the vast majority of cases the enquiry will begin and end with the parties' needs. It is only in those cases where there is a surplus of assets over needs that the sharing principle is engaged.x)Pursuant to the sharing principle, (i) the parties ordinarily are entitled to an equal division of the marital assets and (ii) non-marital assets are ordinarily to be retained by the party to whom they belong absent good reason to the contrary; Scatliffe v Scatliffe [2017] 2 FLR 933 at [25]. In practice, needs will generally be the only justification for a spouse pursuing a claim against non-marital assets. As was famously pointed out by Wilson LJ in K v L [2011] 2 FLR 980 at [22] there was at that time no reported case in which the applicant had secured an award against non-matrimonial assets in excess of her needs. As far as I am aware, that holds true to this day.xi)The evaluation by the court of the demarcation between marital and non-martial assets is not always easy. It must be carried out with the degree of particularity or generality appropriate in each case; Hart v Hart [2018] 1 FLR 1283. Usually, non-marital wealth has one or more of 3 origins, namely (i) property brought into the marriage by one or other party, (ii) property generated by one or other party after separation (for example by significant earnings) and/or (iii) inheritances or gifts received by one or other party. Difficult questions can arise as to whether and to what extent property which starts out as non-marital acquires a marital character requiring it to be divided under the sharing principle. It will all depend on the circumstances, and the court will look at when the property was acquired, how it has been used, whether it has been mingled with the family finances and what the parties intended.xii)Needs are an elastic concept. They cannot be looked at in isolation. In Charman (supra) at [70] the court said: "The principle of need requires consideration of the financial needs, obligations and responsibilities of the parties (s.25(2)(b); of the standard of living enjoyed by the family before the breakdown of the marriage (s.25(2)(c); of the age of each party (half of s.25(2)(d); and of any physical or mental disability of either of them (s.25(2)(e)". xiii)The Family Justice Council in its Guidance on Financial Needs has stated that:“In an appropriate case, typically a long marriage, and subject to sufficient financial resources being available, courts have taken the view that the lifestyle (i.e “standard of living”) the couple had together should be reflected, as far as possible, in the sort of level of income and housing each should have as a single person afterwards. So too it is generally accepted that it is not appropriate for the divorce to entail a sudden and dramatic disparity in the parties’ lifestyle.”xiv)In Miller/McFarlane Baroness Hale referred to setting needs “at a level as close as possible to the standard of living which they enjoyed during the marriage”. A number of other cases have endorsed the utility of setting the standard of living as a benchmark which is relevant to the assessment of needs: for example, G v G [2012] 2 FLR 48 and BD v FD [2017] 1 FLR 1420.xv)That said, standard of living is not an immutable guide. Each case is fact-specific. As Mostyn J said in FF v KF [2017] EWHC 1093 at [18]; "The main drivers in the discretionary exercise are the scale of the payer's wealth, the length of the marriage, the applicant's age and health, and the standard of living, although the latter factor cannot be allowed to dominate the exercise". xvi)I would add that the source of the wealth is also relevant to needs. If it is substantially non-marital, then in my judgment it would be unfair not to weigh that factor in the balance. Mostyn J made a similar observation in N v F [2011] 2 FLR 533 at [17-19].The Law: Pre-Marital and Post-Marital Agreements22.I do not need to look beyond