Friday, February 19, 2016

Rapp v Sarre: A needs case, not conduct

Lady Justice Black
A brief summary of Rapp v Sarre (Formerly Rapp) [2016] EWCA Civ 93 (18 February 2016), an appeal by a husband against an ancillary relief order granting the wife a greater than half share of the capital assets.

The background: The parties began to live together in 1993 and married in September 1994. The wife is in her late forties and the husband is in his mid fifties. There are no children. In August 1993 the husband moved to London to work as an oil broker. The wife joined him there a few months later. Her role was to look after the household and she has not worked since then.The marriage ran into difficulties in about 2003 when the wife discovered that the husband was taking cocaine and drinking excessively and suspected that he was using female escorts. Attempts to address the problems, including attendance by the husband at rehabilitation clinics, were unsuccessful. In 2009, in the light of the husband's addictive behaviour, the wife concluded that the marriage was over and the parties separated in December 2009. They were divorced in 2014.

The order: The assets of about £13.5 million were divided as to 54.5% to the wife and 45.5% to the husband, on a clean break basis. The reasons given for departing from equality were in part to cater for the wife's needs and in part the husband's conduct, which the judge accepted had led to "the reckless frittering away of family money".

The appeal: Lady Justice Black gave the leading judgment of the Court of Appeal. I will deal here with the three primary grounds for the appeal:

1. That the parties' needs should have been treated as identical: Lady Justice Black was not persuaded by this argument, considering that the judge's approach to need was open to him. For example, she said: "On the judge's findings, whereas marriage had left the wife with no effective earning capacity and constrained to rely on a Duxbury fund, the husband was not confined to conservative investment of his capital but would be able to make it work for him. This was something that the judge was entitled to take into account in sharing the assets between them."

2. That the husband had been left with the illiquid and risky assets: Lady Justice Black accepted the argument put forward on behalf of the wife that the assets which are now said to be illiquid and risky are those in which the husband had invested - it would have been quite unfair for the wife, who is not financially astute, to be given a share in those assets.

3. That the judge erred in his approach to the husband's addictive behaviour: Lady Justice Black took the view that the order that the judge made was justified on the basis of the wife's needs alone, and therefore even if the husband succeeded with this argument the Court of Appeal would not interfere with the order. Accordingly, she did not consider this ground for appeal.

For these reasons, Lady Justice Black indicated that she would dismiss the appeal

Mr Justice Baker and Lord Justice Patten gave concurring judgments.

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