Very rich people tend to get used to enjoying very expensive lifestyles and their assessment of their financial ‘needs’ post divorce can appear mind-boggling to the less well off. Monneka Tahir looks at a recent High Court ruling in a so-called ‘big money’ case which provided perfect confirmation of the truism that everything is relative.
The case concerned the end of a woman’s roughly 10-year marriage to a billionaire property entrepreneur. During their relationship, they led an enormously wealthy lifestyle. Employing a retinue of staff at their London home, which was estimated by the husband to be worth over £30 million, they owned other luxurious properties around the world and spent millions on holidays and international travel.
After their marriage broke down, financial disputes between them focused on a pre-nuptial agreement they had entered into. The husband asserted that the agreement, as subsequently amended, meant that the wife’s entitlement was limited to a capital sum of £23.5 million together with a right to continue living in the London property until their children reached adulthood. He contended that such provision was, on any objective view, sufficient to meet her needs.
She disputed that assertion and denied that she had spent profligately. She argued that she had been placed under financial strain when the husband took immediate steps to reduce his provision for her after they separated. She applied to the Court for interim financial maintenance pending finalisation of the divorce. For his part, the husband characterised her financial claims as grossly excessive and said that the time had come to impose financial discipline.
Ruling on the matter, the Court found that it was fair and reasonable that the wife should receive interim maintenance that reflected the full amount of her expenditure during the final phase of the relationship. The husband’s argument that her past freedom to spend extremely large amounts of money on holidays should be curtailed was rejected.
The Court ordered the husband to pay the wife interim maintenance of £855,600 a year. That sum represented her expenditure on the children, living costs, holidays and discretionary spending in the final calendar year of the relationship. The enormous cost of staff and property overheads – which came to almost £2.8 million a year – would continue to be borne by the husband. Overall, the Court’s order imposed on him an annual financial liability of about £3.64 million.
If you are divorcing, a number of issues may arise on which sound legal advice is essential. We can talk you through alternative dispute resolution options, to help mitigate the need for expensive and drawn-out court proceedings.
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