AZ v BZ: Wife not entitled to 99% of assets, despite damages award

Photo by Nick Fewings on Unsplash

A financial remedies order awarding 99% of the (non-pension) assets to one party almost inevitably has 'appealable' written all over it.

And so it proved, in the recent case AZ v BZ (financial remedies appeal) heard, once again, by Her Honour Judge Vincent at the Family Court at Oxford.

The background

The parties had been together since 2011, married in June 2013 and separated in April 2018. There were no children of the marriage.

In 2015 the wife received the sum of £550,000 in settlement of a medical negligence claim in connection with cancer treatment. The parties used some of this money to buy a property in Spain and the rest was spent, including £70,000 by the wife after the separation.

At the financial remedies hearing the total net assets, including the Spanish property, were valued at £192,500. The wife had a pension worth £44,873 plus a small NHS pension, and the husband had a pension worth £18,412.

W's circumstances

The wife was earning around £1,000 a month as a GP’s receptionist. She continued to live in the four bedroom housing association property which had been the matrimonial home, and the tenancy of which had been transferred to her.

H's circumstances

The husband was earning £25,000 a year net. He lived in a privately rented flat, but wished to purchase accommodation for himself.

The order

The district judge found that the wife would need £180,000 to cover future loss of earnings, loss of pension and other expenses, because she was not able to work at the level she had before receiving treatment for cancer. She directed herself that the determining factor in the case was need, saying that she had to balance the husband’s need for accommodation against the wife’s need for capital to supplement her income in the long term.

She concluded that the wife’s need outweighed the husband’s, and made an order that left the husband with £2000 plus his pension, and the wife with £190,500, plus her pensions.

The appeal

The husband appealed, arguing that the outcome was unfair because it departed so dramatically from equality.

Judge Vincent agreed.

The district judge had fallen into error by relying upon an extract from counsel's opinion in the medical negligence claim as to the wife's needs. That opinion had been prepared five years earlier, and the district judge did not have any information from the wife about what she might expect to earn in the future.

She had also erred in concluding that the wife’s needs outweighed any consideration of the husband’s needs. The fact that a damages award had been received may indicate that one party to the marriage has specific needs which must be taken into account as part of the section 25 analysis, and may weigh heavily in the balance. However, there is no presumption that those needs will outweigh the needs of the other spouse. The husband had been left with no means by which to house himself, while the wife had the benefit of an assured tenancy.

The wife had already had the sole benefit of a substantial part of the marital assets.

The award was unfair in all the circumstances, and the appeal was therefore allowed. The award was set aside, and replaced with an order that had the effect of leaving the wife with 60% of the assets, reflecting her lower income.

You can read the full judgment here.