A leading Family Judge has given valuable guidance in terms of the impact a new partner might have when deciding how assets should be divided on divorce.
Mr Justice Mostyn was hearing the case of AB v CB in the Family Court in Swansea during June of this year. It concerned a couple in their early 40s who had been married for around 12 years.
When considering the wife’s needs in that case, the judge was required to look at the circumstances of the wife’s partner. The partner was a former army office in the Signal Regiment and had been together with the wife for nine months.
The wife did not disclose the relationship to her husband’s solicitors and it only came out when they made their own enquiries. It transpired that the partner was about to buy his own home for a price of around £500,000. Although she was very clear that she was not going to be living with him, the judge took the view that the wife’s new relationship with this partner was very strong.
An underlying difficulty in this case was that the matrimonial home, which would ordinarily be the principal source of wealth used to provide the wife and the child of the family with a home, was held in trust by the husband’s parents. This farmhouse was located on family land that they were anxious should remain available as an estate asset to the wider family should the need ever arise. Although the couple had resided in it and undertaken work to it over the course of nearly 10 years, it was still an intrinsic feature of the wider family farm.
The judge assessed the net value of the farmhouse as being £314,000. He halved that sum and put to one side the amounts the wife had invested during the years of the marriage – that element he said ought to be returned to her. The remaining £134,000 of her half share, he adjudged should be advanced to her by the trust on a life tenancy basis, i.e. she would have the monies to use during the period of her lifetime, after which time it would be returned to the trust.
Together with equity she had elsewhere this left her with something in the region of £250,000 to meet her housing needs, subject to the means of her partner.
Mr Justice Mostyn commented that were it not for the partner, he would have “had doubts as to whether a net capital position, excluding pension, which will not be accessed for a long time, of just over £250,000 would be enough in the circumstances where she intends to live, not unreasonably, in north Oxfordshire, near her family and her friends”.
He took the view however that he could not ignore the existence of her new relationship and so in those circumstance £250,000 was adequate to meet her needs.
Were there more equity available in the matrimonial home and her notional half share was clearly sufficient to meet her needs it is questionable whether the judge would have felt the need to place such an emphasis on her new relationship. Instead, the necessary division left the judge having to place an unusually high emphasis on this new relationship, even though the wife and her new partner were not living together nor expressing any intention to do so.
Had the wife disclosed the relationship in the ordinary course of events, one also wonders whether the judge would have quite so readily placed such an emphasis on it.
Instead, the reporting of this case means that it could feasibly now be argued that:
• There might be an onus on the parties to disclose a new relationship rather than just one in which they are cohabiting.
• The role of enquiry agents in determining the existence of a new relationship may increase.
• The financial circumstances of a new partner might gain increasing prominence.
It will be interesting to see the extent to which this change of approach to new partners takes root over the months that follow.
Andrew Barton is a partner in the Stephens Scown Exeter Family solicitors team and a Resolution Accredited Specialist in complicated financial matters arising from divorce. He regularly advises clients in relation to pre-nuptial agreements, as well as divorce and financial matters.
Stephens Scown has offices in Exeter, Truro and St Austell. Its top-rated family team advises clients on a wide range of family law issues including divorce and family finance. To contact Andrew, please call Exeter 01392 210700, email solicitors@stephens-scown.co.uk or visit www.stephens-scown.co.uk