Divorce and Family Law

The McCartney - Mills divorce

The wife, Heather Mills aged 40, was acting in person (with McKenzie Friends) and she already owned two properties. She sought a Clean Break based on annual income needs for her and the parties’ child, aged 4, of £3.25 million per annum, representing a Duxbury award of around £99.5 million. She also sought two further properties and capital of £8-12 million for a London home and £3 million for another New York property, £500,000-£750,000 for an office in Brighton, transfer of mortgage and another property connected to her family, chattels and compensation for “loss of earnings contribution and conduct”. The value of her claim was £125 million although an earlier open offer when legally represented had sought around £50 million.

The husband, Sir Paul McCartney, aged 65, sought a clean break settlement of £15 million. This represented a deduction for the wife’s conduct, capital which Heather Mills held, or had held, and security expenses for 2 years, her two UK properties and her relative’s mortgage and property, chattels and a balancing lump sum, on the basis that certain artworks were to be returned to Sir Paul. The proposal also provided for periodical payments of £35,000 for the parties’ daughter and £25,000 per annum for a nanny as well as school fees and extras. He had made an earlier open offer of £20 million.

The partnership had lasted only 3 years 10 months.

It was the husband’s case that he had acquired substantial wealth before the marriage, that this was a short marriage, that the wife’s award should be based on needs and reduced for her post-separation conduct, and that she had no entitlement to a share in the wealth which had been acquired before the marriage.

It was the wife’s case that she was already wealthy in her own right before the parties cohabited, with a good career, and that her relationship with her husband had restricted her career progress, for which she sought compensation. She claimed she had contributed to his career during his relationship and counselled his children after they lost their mother. She asserted that her husband was worth £800 million, that she was entitled to a share of the what her husband had acquired before marriage, and that there should be an award which reflected his conduct post-separation.

The Court found as follows:-

A. Wife’s pre-marital position

The Court found that the wife was not already wealthy and independent prior to the parties’ cohabitation and that her evidence was inconsistent and “wholly exaggerated”. This reflected upon her claim for compensation.

B. The wife’s claim to cohabitation

The Court found in favour of the husband that the parties had only been in a settled relationship from the date of their marriage in 2002, and not since 2000.

C. The wife’s claim to compensation

The Court found that the husband had encouraged and supported his wife in her career and that her income had increased, rather than decreased, during their time together, therefore the question of compensation was irrelevant.

D. The wife’s claim to exceptional contribution

The Court concluded that it was the wife upon whom the later demands of their daughter’s care would fall. However, the Court did not accept her alleged exceptional contribution and found her evidence to be exaggerated and “devoid of reality”.

E. The wife’s claims to husband’s capital value

The Court found in favour of the husband, dismissing the wife’s claims that he was worth £800 million. The Court determined that the husband was worth circa £400 million.

F. The husband’s claims to wife’s overspend and wasted costs

The wife overspent on herself by £262,000 and incurred unnecessary expert costs on the value of the husband’s assets in 2000. The Court ruled that the wife should not be allowed to continue enjoying the standard of living that they had during the marriage. The Court found that a proportion of the £262,000 overspend as unjustified and added that amount back into the wife’s assets.

Section 25 Criteria

(a) Accommodation needs
The Court found that the wife’s present home with the help of a lump sum was sufficient for her primary accommodation with her daughter. In addition in was found that she should have a three-bedroom flat in London to assist her earning capacity.

(b) Earning capacity
Reports concluded that she did have an earning capacity which she could maximise over the next 2 years assuming she adopted a less aggressive stance in the public eye.

(c) Reasonable needs
The Court found that the wife had wholly exaggerated her budget for herself and her daughter and assessed her needs as a self-sufficient woman. As for the child’s provision the husband’s offer of periodical payments of £35,000 per annum was deemed appropriate as were the school fees and additional security costs for his daughter while she remained a dependent.

(d) Conduct
The Court made no findings in relation to conduct.

(e) Needs, compensation and sharing
The Court did not give the wife a compensation award. In considering the sharing principle the Court repeated a passage from Charman namely:

“it is clear that, when the result supported by the needs principle is an award of property greater than the result suggested by the sharing principle, the former result should in principle prevail: per Baroness Hale of Richmond in Miller”.

That, if the fair sharing of any marital acquest had any legitimate role to play in such a case, and excluding for the purpose any agreement the husband may have that such an acquest was the result of an exceptional contribution by him, then the same must be a cross-check of the provisional assessment by the Court of the wife’s needs.

The wife’s needs were not just one of the factors to be considered but rather a factor of “magnetic importance”. In this case the majority of the fortune was built up by the husband prior to the marriage before they even met, the marital acquest is comparatively small against the total asset value, the marriage was short, the standard of living enjoyed only whilst the marriage lasted, and once the wife’s and the daughter’s needs had been covered, any other approach would be manifestly unfair.

Whilst this case has generated substantial media attention disproportionate to its legal value, there are a few key lessons to be learned:-

1. The importance of realistic open offers
There was a huge discrepancy between the wife’s original open offer and the one she subsequently adopted at trial. This significantly damaged her credibility.

2. The importance of being able to prove assertions
The wife was unable to do this and as a result lost credibility with the Court.

3. The importance of setting a realistic budget of income needs
The wife presented a ridiculously high budget which prevented settlement at the FDR.

4. Conduct
...is extremely hard to argue and will only be successful in extreme cases.
 

To discuss your own situation or to make an appointment, contact one of the lawyers in the Matrimonial department, Lisa Bolgar Smith or Eleanor Hoare on 020 7242 7000 or use the Contact Request Form.

© Ambrose Appelbe 2008
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