Does my new partner’s wealth affect my divorce?


This is a commonly occurring aspect in divorce cases and the Court of Appeal has  recently dealt with this issue in the case of John Hart and Karen Hart which featured prominently in the national press recently.

The case attracted media attention as Mrs Hart was awarded a divorce settlement of £3.5million despite her ex-husband arguing it should be less as she lived with another man, a point which was readily accepted. The parties had been married for 20 years and had amassed £10m by the time of their divorce.

Press coverage prompted some on social media to refer to Mrs Hart, rather predictably, as a ‘money-grabber’. It is perhaps unlikely that any of those tweeters would have read the actual judgment in the case before providing their own. Others have hailed the judgment as a victory for women’s independence.

It is unsurprising although a little unfortunate that the media seized on the ‘big-money’ aspect of the case when Mr Hart’s application for permission to appeal (and indeed Mrs Harts own cross appeal) raised more about the nitty-gritty of the case and what were described as the main parts of the appeal.

In summary, Mr Hart complained (amongst other things) that his former wife should not receive all of her money due from the award the judge had made due to  the fact that she was living with another man. He believed that the trial judge’s finding after a 20 year marriage that; “I do not consider that the presence of [the new partner] in the life of Mrs Hart should in any way diminish her needs” was wrong and the fact of the relationship should not have been ignored.

Mrs Hart countered that, after more than 20 years of marriage, she was “anxious to remain financially independent”. She gave evidence at the final hearing that she cherished her independence and didn’t want to effectively be forced to have to rely on another man for money anymore to maintain her lifestyle and that she had no current intention to marry.

The President of the Family Division Sir James Munby heard the renewed application for permission to appeal but agreed with the trial judge’s decision upholding the original award.

He determined that in a long marriage such as this, the trial judge had been correct to conclude that Mrs Hart’s sharing of household bills with her new partner of many years simply had no bearing on her right to seek a fair share of the matrimonial assets – which was made up of a mixture of cash, shares and other realised investments.

Was the judge right to allow Mrs Hart to have a right to independent living without calling on the wealth of her new partner?

Mr Hart had sought to rely on what had been said in another leading High Court case on the issue;

“(new) Relationships like this always are a significant fly in the ointment in the assessment of need.  One cannot make assumptions, if it is not full blown cohabitation akin to marriage, that it will grow into that, because if it does not the wife may be left stranded….if the assumption is wrongly made.  On the other hand, if one makes a needs assessment on the basis that she is a single woman and she soon cohabits, then the paying party in the ancillary relief proceeding can rightfully feel significantly aggrieved.”

Reading this, it is understandable why Mr Hart may have been confused by what he saw as conflicting judgments.

So when is a new partner’s wealth relevant to financial determination?

The horridly typical but perfectly proper lawyer’s answer is that it will depend on the prevailing circumstances, but simply stated, the court can have no interest in dividing up assets solely belonging to another person not a party to the marriage. Similarly the court cannot order a ‘non-party’ to pay maintenance, however judiciously encouraged they may be to play a part in such cases.

The relevance comes into play when the new partner’s resources are utilised to help the spouse who would otherwise be paying outgoings or other obligations which he/she would otherwise be responsible for.

The rationale is that if a party’s disposable income is freed up by virtue of these other contributions from the new partner, either there will be greater disposable income available for maintenance to be paid or conversely for the other party that there will be less need for maintenance from the other party to the marriage.

The same rationale applies to restrict capital need say when one spouse is to buy a new property with a new partner also investing and therefore the capital need is lower. It will depend on the nature of the relationship and what is intended. In Mrs Hart’s case she gave evidence that she did not intend to remarry and prized her independence – the sharing of bills was mundane and was not connected to her claims for a fair share of capital.

The duty to disclose

Regardless of how this decision is perceived, it remains important for parties to be completely open during the whole of the case as to their plans to remarry or cohabit. Certain pro-forma court documents will require answers to be given on this issue and the party that seeks to hide a relationship may come to grief even after the case has finished as if a judgement was obtained on the basis of material non-disclosure of fact  then the judgment is at risk of being set aside with costs. Flagrant non-disclosure may also be punishable by further court sanction or even criminal penalty.

What information the new partner might have to provide

This will depend on the case but the usual starting point is for the spouse in the new relationship to provide as much information as they are reasonable able to ascertain. Beyond that, to get to the truth of the issue, the new partner should be aware that the court has the power to summons third parties to provide witness statements, to produce bank accounts and other documents and they may wish to take their own advice as to the extent of their own disclosure before doing so.

Conclusion

Although Mr Hart robustly told the court that ‘if the case had come before 10 judges, 9 of them would have agreed with him’, he was ultimately too bold in that analysis. At least 3 thought he was wrong.

It does appear from the Court of Appeal judgment that that Mr Hart perhaps went a little off piste in his criticism of the trial judge – it will hardly ever help to argue unfair treatment in general as shown in this case and it just detracts from any sensible main arguments which were valid arguments for Mr Hart to raise in general but not on the facts.

For further reading click here.

 

If you require any further guidance or advice please call 020 7631 4141 and ask for a member of the Family team.

 


Category: News | Author: |

Tags: