Hart v Hart in detail, part 1: did the law get it wrong on premarital assets?
By:0 commentsSeptember 12, 2017
The Court of Appeal’s judgment in Hart v Hart has now appeared on Bailii, about a week after the judgment was handed down and news of it spread across the mainstream and specialist media, and social media. It is a pity that it took so long for the judgment to be published, as obviously without it it was difficult to determine exactly why the wife’s appeal was dismissed.
Anyway, now it has been published, I thought I would have a closer look at the case, and the important issues it raises. There are several points upon which I would like to concentrate, and I originally intended to split this discussion into two posts. However, whilst reading the judgment and considering the issues it became clear that there was too much material for even two posts of reasonable length, and I will therefore be splitting this into three posts: the first, as the title above suggests, dealing with the law on pre-marital assets; the second dealing with the issue of the husband’s failure to make proper disclosure; and the third considering whether there might be a better way for these cases to be resolved.
But before I go any further I should just briefly recap on the background to the case, and the original judgment.
The parties met in 1979 and started living together in about 1983. They married in 1987 and separated in 2006. They have two children, now both adults. The wife commenced divorce proceedings in 2011, and a financial remedies hearing took place before His Honour Judge Wildblood QC, sitting as a Deputy High Court judge, in 2015. Judge Wildblood found that the parties’ combined capital resources totalled £9.4 million, and that the total value of the husband’s wealth at the start of the parties’ relationship was about £2.6 million. He decided that the wife should receive/retain assets with a combined value of approximately £3.5 million, which he considered was sufficient to meet her needs. The reason for the wife receiving less than half of the assets was that he considered it would be unfair to the husband if the order did not reflect the husband’s pre-marital (and therefore ‘non-matrimonial’) wealth. The wife appealed against the order, to the Court of Appeal.
Early media reports prior to the publication of the Court of Appeal judgment suggested that the wife was arguing that after a 23 year relationship to which she had made a full contribution it was no longer appropriate to say that pre-marital assets were ‘non-matrimonial’. However, a reading of the full report of the Court of Appeal’s judgment indicates that she was not actually arguing that. Rather, her primary argument appears to have been that the husband had failed to provide full and accurate disclosure, which “meant that it was impossible fairly to assess the extent of any non-matrimonial property with the result that all the parties’ wealth should be treated as matrimonial property.”
Nevertheless, I find myself feeling uneasy about the whole idea of the husband still being credited, apparently in full, for his pre-marital wealth, after such a long relationship. I should emphasise that I am not for one moment suggesting that the court was wrong in law, but rather wondering whether the law itself is wrong. I have of course already speculated here as to whether there should be some cut-off point beyond which pre-marital assets should no longer be considered non-matrimonial, and I wonder whether this is a case where that point was passed.
As Lord Justice Moylan makes clear in his leading judgment in the Court of Appeal, the law does of course recognise that the passage of time has an effect upon pre-marital assets:
In paragraph 45 he points out the submission of the wife’s counsel in relation to how pre-marital assets can ‘mingle’ with matrimonial assets during the course of the marriage, quoting the following from Mostyn J:
“… the longer the marriage goes on the easier it is to say that by virtue of the mingling of the property with the product of the parties’ marital endeavours the supplier of that property has, in effect, agreed to share it with his spouse”
In paragraph 64 he quotes Lady Hale in the Miller case, when she said that it was recognised that the source of the assets might be a reason for departing from the yardstick of equality, though “the importance of the source will diminish over time.” He also points out (at paragraph 70) that Lady Hale commented that: “As the family’s personal and financial inter-dependence grows, it becomes harder and harder to disentangle what came from where.”
Lastly, in paragraph 80 Moylan LJ sets out how in the case K v L Wilson LJ picked up upon Lady Hale’s comments and gave three examples of how the importance of the source of assets may diminish over time:
“(a) Over time matrimonial property of such value has been acquired as to diminish the significance of the initial contribution by one spouse of non-matrimonial property.
(b) Over time the non-matrimonial property initially contributed has been mixed with matrimonial property in circumstances in which the contributor may be said to have accepted that it should be treated as matrimonial property or in which, at any rate, the task of identifying its current value is too difficult.
(c) The contributor of non-matrimonial property has chosen to invest it in the purchase of a matrimonial home which, although vested in his or her sole name, has – as in most cases one would expect – come over time to be treated by the parties as a central item of matrimonial property.”
So, we have these principles yet in Hart they were not sufficient to stop the husband from recovering all of his pre-marital assets after a 23 year relationship. This seems a little surprising to me, and a little unfair to the wife who, I think it is accepted, made a full contribution throughout those 23 years. Surely the husband ‘invested’ some of that £2.6 million wealth into the marriage, for example in the ownership or acquisition of the matrimonial home (which surely after such a long marriage must, by definition, be matrimonial property – see paragraph (c) above)? And surely paragraphs (a) and (b) above must also apply to at least some extent after such a long relationship?
As I said above, I’m not suggesting that the court got the law wrong, but just exploring whether the law itself is wrong. A reading of the judgment suggests to me that it is quite possible for pre-marital assets to be ‘ring-fenced’ forever. That just doesn’t seem to me to sit well with the concept of marriage being a joint enterprise. Of course, it would not have been fair for Mr Hart to lose his pre-marital assets (or at least half of them) if the marriage had only been short, but at the same time I’m not sure that the law has been fair to Mrs Hart.
You can read the Court of Appeal’s judgment here.
September 12, 2017
Categories: Finances and Divorce