Divorce and reasonable needs

In the event of a dispute between a husband and wife as to the distribution of capital assets upon divorce, the matters to which the Court is required to have regard to the 8 factors set out in Section 25 of Matrimonial Causes Act 1973.

These include:

  • The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the future
  • The standard of living enjoyed during the course of the marriage

Sheikh Walid Juffali and Christina Estrada

The High Court was recently presented with an extremely wealthy husband, Sheikh Walid Juffali, and his wife, Christina Estrada, a former supermodel, who had been married for 12 years, during which time the husband had paid for them to live a very lavish lifestyle.

The wife sought £62.8 million for a home in London, £4.4 million for a country mansion and capitalised maintenance of £127 million. She presented a budget of £6.5 million per year, which included £1 million for clothes, £335,000 for staff and £600,000 for private jets, which was said to meet her reasonable needs and the life she had become accustomed to.

The Court was asked to determine her reasonable needs and the extent to which the excessive standard of living enjoyed throughout the marriage should be reflected in their assessment.

There is no definition of ‘needs’ in statute and case law only refers to ‘needs generously assessed.’ It is, therefore, a very broad concept. Every analysis of a party’s needs will begin with their budget, but the Court will consider all the circumstances of the case, in particular by reference to the standard of living during the marriage and the availability of resources.

The Court’s decision

In Ms Estrada’s case the Court held that, although a party’s needs had to be assessed by reference to the standard of living enjoyed prior to the breakdown of the marriage, it would be the ‘benchmark’ and not the ‘lodestar’. The longer the period during which those needs have to be met, the more likely they would not be assessed on the basis of the marital standard of living, if this had been extravagant.

The Court granted the wife a housing fund of £18 million, but said that she was not entitled to have the marital standard of living replicated. It was not realistic to include provision for a second home and she could not expect to continue to travel by private jet. The Court also held that the wife could meet her reasonable needs with an annual budget of £2.5 million.

The total settlement was about £75 million, which is said to be the largest needs award ever made by an English Court. Of course, not every married couple will enjoy a standard of living quite this high, nor will parties often have such a wealth of assets to divide.

How we can help

Our family team is able to advise on all issues regarding claims for financial relief, and the associated budgets upon which these applications are based, in cases involving substantial assets, and those where the parties have recourse to only limited assets. The assessment of needs remain fact specific and highly discretionary, but with a working knowledge of case law and how the Courts have approached the issue, we are able to advise accordingly.

For more information or guidance please contact:

Caroline Penfold
Partner and Head of Family
T. 020 7227 7448
E. caroline.penfold@rlb-law.com

Lucy Bridger
Trainee Solicitor
T. 020 7227 7348
E. lucy.bridger@rlb-law.com


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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