Parents Assets - Are they Relevant? Chandok v Chandok [2014] EWCA Civ 1597 and AM v SS [2014] EWHC

This case concerned an appeal to the Court of Appeal with the wife claiming that the judge in the lower Court should have found that the husband’s parents would continue to provide him with financial support and on that basis periodical payments should have been more than was ordered.  The Court of Appeal criticised the wife for this approach and said that there should not be a presumption that they would continue to pay saying that there was no presumption that a donor would provide for a donee just as there was no presumption that a fiduciary would provide for a beneficiary.

An opposite approach was adopted by Mr Justice Coleridge in AM v SS [2014] EWHC 865.

In this case the husband asserted that his assets amounted to only a few hundred thousand pounds including a flat in Maida Vale with equity of around £500,000 and a salary of £100,000 per annum.

The wife’s position was that the husband’s father had wealth in the billions and could reasonably be expected and predicted, given his past generosity, to make capital available to meet a reasonable claim by the wife.  The judge was asked to make an order against the husband which in effect his father would be expected to meet.

The wife originally sought £3 million which she, during the case, reduced to £2 million and global income of £10,000 per month plus funds for a nanny and full time maid.

The marriage was short, around two years.  The available assets were just over £33,000 plus equity in the Maida Vale flat of £512,000 with the parties having in addition considerable debts.

The husband during the case conceded that he had unfettered access to two nice properties in London and Cairo and a guaranteed income stream.

The Court made the following findings:

  1. The husband’s father was hugely wealthy but it should not be assumed that a lavish order should be made in the wife’s favour on this basis.

  2. The husband’s father had helped the son financially in the past and the son lived entirely free of charge in two properties.It was assumed this arrangement would continue.

  3. What was the proper level of housing for the wife?The judge concluded she needed a home for herself and her daughter in central London with in the region of £1 million.

  4. The Maida Vale property was to be transferred to the wife with the aim of it being transferred mortgage free either immediately or in the near future.

  5. To reflect the length of the marriage two-thirds of the equity in the property was transferred to the wife with the remaining third to the wife for use for her life and ultimately to her daughter.

  6. The Maida Vale property was encumbered with a mortgage of £416,000 and secured legal fees of £150,000.

  7. The husband was ordered to redeem both these charges by way of a lump sum.

  8. The judge thought it was reasonable to expect the husband’s father to redeem the charges against the Maida Vale property but if not the son could redeem these in time.

  9. Periodical payments were ordered at £4,000 per calendar month.

  10. If the wife moved to the Maida Vale property but the mortgage was not discharged the husband would have to pay the monthly mortgage repayments by way of additional periodical payments.

  11. Periodical payments of £4,000 were split 50:50 between the wife and daughter.The daughter’s periodical payments were to continue until the end of tertiary education.

If you wish to speak in confidence to Melanie, Tanya or Nina, please telephone us on 01992 892214.