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Husband whose wife gave him £5m loses 'discrimination' appeal

16 May 2011

A husband whose wealthy wife gave him £5m as part of a ‘clean break’ divorce settlement was not discriminated against, the Court of Appeal has ruled.

The man, known only as ‘K’, argued that under the ‘sharing principle’ he was entitled to £18m or around a third of his wife’s £57m fortune.

‘L’, who is Jewish, and ‘K’, who is not, left Israel in 1991 and married in England, and now have three children aged nine to 16. The court heard that the wife had inherited founder shares in a large Israeli company at the age of 15.

Lord Justice Wilson said that, until their divorce, K and L had pursued an “extraordinarily modest” lifestyle, living in a three-bed semi currently worth £225,000.

“For many years until the breakdown of the marriage the parties ran the same modest motorcar,” Wilson LJ said.

“No chattel in the home was worth more than £500. Until very recently, when one of them began to attend a fee-paying school, all the children attended state schools.”

Delivering the leading judgment in K v L [2011] EWCA Civ 550, Wilson LJ said L’s shares had “massively increased” in value, from around £700,000 when they got married.

He said that neither husband nor wife went out to work, and they contributed equally to domestic life.

However, following their separation, K decided he wanted to buy a £2m property near Regent’s Park. He said he also wanted to spend £450,000 on a second home in Israel and buy a new car for £60,000.

Wilson LJ said that the judge’s decision at the ancillary relief hearing to award £5m to the husband reflected the “open offer” made by the wife which would allow her husband to buy the £2m flat and spend an annual net sum of £130,000, inflation-linked, “for the rest of his statistical life”.

He said this award “went further than very generously to meet the husband’s needs; and the judge therefore observed in passing that an element of the award could be regarded as a top-up referable to the sharing principle”.

Counsel for K now argued that the award “betrays discrimination” and was disproportionate.

Wilson LJ said that equal division was not the “ordinary consequence” of the sharing principle when, as here, non-matrimonial property was involved. Often, he said that one party received no share at all of the non-matrimonial property.

He dismissed K’s appeal. To protect the rights of the three children under article 8, Wilson LJ maintained reporting restrictions. Lord Justices Jacob and Laws agreed.

Wilson LJ added: “The fact is that the children live with a mother who is abnormally wealthy but who over many years has, together with the father, assiduously sought to create for them a normal life in which they and the family’s friends are unaware even of the broad scale of her wealth and over which she has been astute to cast no trappings indicative of it.

“For example, the wife does not provide, and, for reasons entirely unrelated to cost, does not wish to begin to provide, the security customarily provided for their children by wealthy celebrities.

“We concluded that, unless we made the order, the normality of the current lives of the children would be forfeited, with results likely to be substantially damaging, perhaps even grossly damaging, to them.”

Categorised in:

Discrimination Divorce Children