Strand, London, WC2A 2LL
B e f o r e :
| James Paul McCartney
|- and -
|Heather Anne Mills McCartney
Mr Nicholas Mostyn QC and Mr Timothy Bishop instructed by
Payne Hicks Beach Solicitors for the Petitioner/Respondent
Hearing dates: 11 February 2008 - 18 February 2008
Crown Copyright ©
Mr Justice Bennett :
"We submit that fundamentally this is a straightforward case. Because of H's enormous pre-marital wealth and because of the brief duration of this marriage W's claim should be determined by reference to the principle of need alone. This is not a case where the principle of sharing of the "marital acquest" is engaged at all. Nor is it a case where the principle of compensation will arise. W's needs fall to be fairly assessed, not predominantly by reference to the standard of living during the marriage. W's award should be reduced to reflect her post-separation misconduct. That misconduct is based on three distinct episodes as explained in our Conduct Note."
"In early 1993 my trips to Croatia became less and less frequent, as my modelling career in the UK began to take off. I got work modelling all over the world including in the Bahamas, Malaysia, America and the Middle East. I won lucrative contracts with Marks and Spencers, River Island and Slix, the swimwear company . I believe I was earning at that time in the region of £200,000 per annum. I do not have my tax returns although I did request the same from the Inland Revenue who informed me by letter that they are not available ."
"After my accident in 1993, I raised money through public speaking in aid of charities. I became one of the top 10 female speakers in Europe. Between 1993 and 1999 when I met Paul my income spiralled for example in 1997 I had a modelling contract for £750,000; I wrote, with a ghost writer, a best selling autobiography called Out on a Limb and in the year prior to marrying Paul I earned $1,000,000 for 14 days work. In order to support myself and to help with my charity work, I did a lot of television presenting, for example, Good Morning with Anne & Nick, Keanu Reeves interview, BBC TVAM, Chill Out With Heather series (where I interviewed a number of well known people), The Holiday programme, Wish You Were Here, Travelogue, First Say (after Panorama show), radio hosting, The General hospital, Richard and Judy, etc etc the list is endless. I also continued modelling. I would contribute a lot of my earnings to charity .
Before I met Paul in 1999, examples of my work included:
a. That's Esther Show with Esther Ranzten I was a co-presenter, making and presenting reports. I did approximately 25 programmes focusing on the struggles of amputees, and the quality of services available to them, as well as other issues such as chip pan fires, police sirens, male nannies, safe children's playgrounds, waste pickers in Cambodia;
b. Panorama I worked as a senior producer making programmes called 'First Say' concerning issues such as Clinton's impeachment, European working time directive and Prince Charles 50th birthday; This was the flagship's commission for the digital channel 'Choice' on the BBC. My role involved producing, researching scripting, directing and presenting.
c. Travel programmes I was a presenter on Summer Holiday, Wish You Were Here and Travelog;
d. The General I was a presenter on this programme based in Southampton General Hospital which was broadcast live five days a week;
e. Pebblemill Chill Out with Heather series and Croatian documentary
As mentioned previously, before I met Paul, I was speaking all over Europe and was considered one of the top ten female public speakers in Europe. I would speak on the same bill with eminent individuals such as Mark McCormack, Neil Armstrong and others. I commanded a fee ranging from £10,000 to £25,000 for a one hour speech ."
"The assets I held at the time that I met Paul included the following:
a. A penthouse flat in Piccadilly worth approximately £500,000;
b. A property on Cross Street in Brighton, worth £250,000.
c. I rented a 5 bedroom barn in Hampshire, at a cost of £750.00 per month. I had maintained a London apartment and a country property since 1992. An example of this is attached .
d. I also owned a Green Mercedes, a Saab, and then a Rover as, I was sponsored by Saab and Rover. I also had my own driver, Trevor, and a free Saab limousine .
e. I often lent money to friends, as I could afford to do so. An example of such loans is shown in my Form E.
I was wealthy and financially independent in my own right prior to our marriage."
"After our marriage, the nature of our relationship to my mind, changed significantly. I was and remain fairly old-fashioned about marriage. We decided upon a proper wedding for that reason I did not want any suggestion that we were in any way furtive or ashamed about our marriage. I believed it was for life and that it put everything on a very different footing. I drew up a Will to include Heather which I executed on 5 June 2002. We stopped using contraception the night we were married. There was never any question of us doing so before the wedding. Heather had one miscarriage before Beatrice was conceived in the first year of our marriage. Neither of us contemplated children without marriage."
"Beatrice has a family history in Brighton . I often visited the area as a child and as an adult lived here before I married Beatrice's father ." (emphasis supplied)
"Living on my own in a great big echoing barn, I started to get quite scared Perhaps, I thought, I could find a new, secret address, where I could go to ground. I found a small house quite quickly. It was near the coast, a lot closer to Paul's home, and in a part of the world I loved."
"Even after we were married I continued to use my own money to live. Paul repeatedly told me that he would make sure that I was financially secure, should my money run out. My income stream and my savings did start to run out drastically. I was no longer able to support my standard of living as I had substantially reduced my workload in order to spend time with Paul and to support him and his children emotionally. My ability to earn the same level of income I had been earning diminished once my relationship with Paul became serious.
Countless lucrative business opportunities were made to me once Paul and I married. Sadly, Paul advised against 99% of all of them. He stated that they were only interested in me because of his name and that I should just stick to charity work and he would take car of me. When I was asked to design clothes, create a food line, write books, make a video, write music or do photography, Paul would almost always state something like "Oh no you can't do that, Stella does that or Mary does that or Heather (his adopted daughter) used to do that or Linda did that." even though I had been involved with fashion and modelling for years. If I had been free to pursue my TV career, especially in the US, then I believe, and have been told by other professionals, I would have made millions. Paul would not allow me to work in the US. For example he would not allow me to work on the Larry King show. He would tell me "we won't be living there and you would be a bad mother if you worked." Therefore, Paul made it impossible for me to pursue a career in the U.S. Shortly after telling me I would be a "bad mother" if I worked, Paul booked a 3 month US tour dragging Beatrice and me around America. If we had been able to base ourselves in one place I would have been able to accept the hosting of some of the Larry King shows or to do something to further my career. I believe now that Paul's reason for refusing to support me in doing something career wise was his fear of losing my undivided attention. He also needed to be the centre of attention at all times."
A point of a similar nature concerns the approach to be adopted when evaluating the contributions each party made to the welfare of the family. Apparently, in this post-White era there is a growing tendency for parties and their advisers to enter into the minute detail of the parties' married life, with a view to lauding their own contribution and denigrating that of the other party. In the words of Thorpe LJ, the excesses formerly seen in the litigation concerning the claimant's reasonable requirements have now been "transposed into disputed, and often futile, evaluations of the contributions of both of the parties": Lambert v Lambert  Fam 103, 117, para 27.
On this I echo the powerful observations of Coleridge J in G v G (Financial Provision: Equal Division)  2 FLR 1143, 1154-1155, paras 33-34. Parties should not seek to promote a case of "special contribution" unless the contribution is so marked that to disregard it would be inequitable. A good reason for departing from equality is not to be found in the minutiae of married life."
Assets of the husband
"I made an unmatched and enormous contribution of the great wealth which I brought into this marriage. The very great majority of my assets were owned by me prior to my marriage. The only properties purchased by either of us during the marriage were Thames Reach and Pandora's Barn (albeit for completeness, I made other purchases of parts of property from my late wife's estate). The Cabin was also built during this time. The vast majority of my wealth has been acquired over the last 45 years. Moreover, I did not merge my assets with Heather's upon our marriage nor did I convey them into joint names. I kept them separate throughout.
During the marriage I was the financial provider. I managed to generate a substantial profit from touring, although the great majority of those concerts was the music created during my time with The Beatles and with Wings. More recent income from touring, promotional fees and the like, earned during the marriage, is for the most part directly referable to the music I wrote over the previous 45 years. I have also created new work during the marriage which though critically acclaimed, has not been profitable.
I am advised that the court will be interested in the wealth which has been generated during the marriage. To that end I have asked my advisors to prepare a schedule (appended at File A, tab 4) which gives the balances as at June 2002 (our marriage) equivalent to the balances provided within this Form E. I believe the 2002 figures to be accurate although I have not extended an already long Form E with supporting documentation. This, of course, can be made available.
It will be seen that there has been an overall increase in my wealth of £39.6 million. The reasons for this increase are: (a) the money made by my tours and to a lesser extent other projects; and (b) passive growth in the value of my properties, investments and business interests by operation of market forces.
This latter factor accounts for a good part of the increase (say £12 million). It is in no way referable to my endeavours. For instance, in relation to the MPL Group I do not have a day to day executive role in the management of the business; that is left to a professional staff. Of course, I am consulted in key decisions. The Ernst & Young Report makes clear that the revenue of these businesses is largely comprised of collecting copyright income. Indeed, the passive growth in relation to my business would have been greater but for the weakening dollar. This factor has also affected the value of my US properties and investments.
Thus it is my case that the wealth built up during our marriage is approximately £39.6 million. This was the result of market growth in the value of the pre-marital assets, and from tours, where I was mainly performing works created prior to my marriage. As it happens, this analysis is in line with a letter written by me to Heather shortly before our marriage which reflected our belief as to what would be fair were the marriage to fail. A copy of the letter is appended in File VII, tab 4.3"
"Rule 2.6(1) (d) of the Ancillary Relief Rules require the first appointment to be conducted with the object of defining the issues and saving costs. This is so for a number of sensible reasons, including in big money cases. There has been in some cases a marked tendency for the costs to run out of control. The assets in this case are enormous and probably at the very top end of big money cases to come before the Family Division. The wife, in the context of the size of the assets, is asking for a sum which represents approximately 12.5% of them. In my judgment she appears to have had no difficulty in formulating her claim on the basis of the discovery and reports given so far. This, most emphatically, is not a case where the wife can legitimately say, "I cannot formulate my case or make an open offer because the husband has not given sufficient discovery and information". Mr Pointer told me that the husband told the wife in the course of the marriage that he was worth £800 million. I am in no position to judge the accuracy of whether the husband did or did not say that to the wife. But I have seen no evidence to suggest that the husband may be worth more than (very roughly) £400 million, nor that Ernst and Young's assessment of the value of his assets is not very broadly correct. Mr Pointer beguilingly put it to me that all Lee and Allen were doing and indeed all that the wife was doing was seeking a meeting between Lee and Allen and Ernst and Young to see if Ernst and Young were in the right area of £389 million; could there not just be a meeting between the accountants?
The problem to my mind with that approach is that accountants operate on the instructions of their clients, perfectly properly. One party's accountant may make demands which are quite unreasonable, and the other may refuse demands which are quite reasonable. I suspect that any further investigation would lead to confusion, not clarity, and I have no reason to suppose that the broad picture of the husband's vast I repeat vast wealth is substantially inaccurate.
The husband can satisfy the award the wife is seeking without any difficulty at all. Mr Mostyn says it is wholly a needs case. Again I cannot now, for obvious reasons, make a finding about that. But there is some truth in what he says. The wife's needs are likely to be the dominating issue at the final hearing. The amount of the assets in this case are so vast that the husband will be able to pay the lump sum awarded to the wife without there having to be a detailed inquiry into the extend of his assets.
I must have regard to proportionality. I am mindful of what Coleridge J said at paragraph 128 of J v V  1 FLR 1042. In my judgment nothing is going to be gained by permitting any further investigation that Mr Pointer asserted should be done subject to paragraphs 23 to 25 below. As to the properties, what possible difference would it make even if it is demonstrated that the properties the wife wants valued are shown to be by further valuation, say, 20% more valuable than what the husband's valuers have opined?
Mr Pointer very properly sent late yesterday evening to my clerk, with copies to the other counsel, an e-mail that he had omitted to make an important point in relation to the valuation of Peasmarsh. As I understand it, he is saying that it is not a valuation of the whole. What has been done is to parcel up the estate into small lots and value them separately. Accordingly, the wife believes that the estate may have a much greater value were it to be sold as a whole. That may be so; it may not be so. But I am afraid, with all due respect to Mr Pointer's point, it does not affect my judgment.
However, I am of the view that the wife is entitled to investigate the asset position as at March 2000. I cannot just dismiss out of hand the wife's sworn evidence by way of affidavit. It seems that the parties met in mid-June 1999. The wife's case is that they were dating from about July 1999 and a sexual relationship rapidly developed. She says that in early March 2000 she gave up her Hampshire property and moved to a property in Sussex to be nearer the husband. They then, according to her, decided to move in together and the relationship developed seamlessly into marriage. That is, broadly speaking, her case.
The husband's case is very different. I have read with care his affidavit. He controverts many of the wife's essential allegations.
I am in no position at the moment to judge which is right. Mr Mostyn asks: "What is the relevance anyway in the context of a short marriage?" I am not prepared at this stage to say it has no relevance. At the end of the final hearing it may turn out to have no impact on the case at all. But, on the other hand, it might significantly affect the amount of the matrimonial acquest. If it does not, or if the exercise of valuing the husband's assets as at March 2000 turns out to have been unnecessary, then, as Mr Pointer put it in paragraph 16 of his skeleton argument, it will be open to the court to say that the husband has been put to unnecessary expense and that the wife should reimburse him. I agree that the wife at this stage is not to be debarred from pursuing her enquiries in respect of what I broadly call March 2000. I will hear counsel in a moment on the form of the order that is necessary to put that decision on the point of principle into practice."
"Mr Wallis has valued the majority of the Petitioner's business assets at 1 March 2000 by the application of a multiple to a five year average of the earnings from the relevant income stream. Different measures of earnings have been used in the valuations, two examples being "Net Publisher's Share" (as defined in Mr Wallis' second report) and royalty income. While Mr Allen agrees the overall valuation methodology used by Mr Wallis, he is unable to agree certain of the multiples used by Mr Wallis in his valuation at 1 March 2000. This is the only area of disagreement between Mr Wallis and Mr Allen. Mr Allen's position in relation to the multiples is explained further in section 3 below."
Paragraphs 3.14 and 3.15 state:
"Lack of evidence. In Mr Allen's opinion, in order to support the use of higher multiples at the earliest valuation date there is a requirement to demonstrate a significant change in sentiment in relation to music industry related assets over the period to 2002/2006. The later valuations in 2002 and 2006 both use, with one exception, identical multiples. In Mr Allen's opinion, the relevant change in sentiment is not evidenced by the transaction multiples referred to by Mr Wallis in the second report (which, as noted above, all took place after the valuation date). In Mr Allen's opinion, as Mr Wallis has not produced evidence of a consistent downward trend in multiples in the 2000 to 2002/2006 period, the use of higher multiples in the 2000 valuation is not justified.
Conclusion. In Mr Allen's opinion, unless and until further evidence is produced to support the use of higher multiples in the 2000 valuation (when compared with those used in the 2002/2006 valuations), the multiples used in the 2002 valuation should be adopted when valuing the Petitioner's business assets."
"The property is suitable for the following reasons:
a) It is 10 minutes from Vinehall school;
b) It is in a village in which our client has a friend, which makes the prospect of our client moving to this area significantly more attractive to her, for obvious reasons;
c) It is 5 minutes from a railway station, providing easy access to London;
d) It is contained within 14 acres and can provide vital privacy and security for Beatrice. Unless one is lucky enough to live on a private estate running to hundred of acres, such as your client, this kind of privacy can be extremely difficult to achieve;
e) It is available almost immediately. Our client estimates she would be able to move in prior to the start of the Autumn term, having done some work to it over the Summer; and
f) Finally, and most importantly, this is a house which our client feels confident she could make into a warm and comfortable home for Beatrice."
"We can also confirm that our client is willing to make the sum of up to £3 million immediately available for the purchase of Pean's Wood, (to be paid directly to the solicitors instructed by your client in relation to the purchase) if that is your client's chosen property.
As to this, we would make the following points:
i) Our client appreciates your client's willingness to move to the area.
ii) The payment is a further payment on account of your client's ultimate financial award. There is no question of it being 'in addition' to any overall financial settlement.
iii) Our client is willing to make such an advance for any reasonable property within range of Vinehall, but it goes without saying that such an advance would only be made in relation to a property that met those criteria.
iv) In making a payment of this size our client is prioritising the benefits of agreement for Beatrice. He is not to be taken as accepting that a property on the scale of Pean's Wood with its associated outgoings, is necessary or desirable. He produced examples of properties that are available for under £2 million which are more in line with the sort of places that Beatrice is used to. Your client should not be surprised that it will be argued in the financial proceedings that a property of the scale of Pean's Wood will constitute your client's main home. Whilst of course your client cannot be compelled to sell her Brighton property, it will be treated as her capital resource and not form part of her housing requirements or income needs in terms of its running costs; further the running costs of "Pean's Wood" in so far (by way of example) as its extensive grounds, equestrian facilities and out buildings are concerned will similarly not be accepted as forming part of your client's needs going forward.
v) With that in mind, the sum he will provide covers most but not all of the costs of purchase and associated expenses of this particular property. If your client wishes to purchase a property in this bracket, she has the wherewithal to make up the balance."
"The overspend, i.e. the expenditure over income of £350,000 in a little over 2 years, at a time when he was about to and then did enter into protracted litigation with the wife, can only be classified as reckless, and particularly as a time later on when the dot.com and the stock market collapsed. A modest overspend in the context of a rich man would be understandable and could not be classified as reckless. But in the circumstances of this case, as I have set them out, in my judgment, the scale and extent of the overspend was reckless. I do not think it appropriate to add back the entire overspend, but I do not consider it unfair to add back into the husband's assets the figure of £250,000. In my judgement, there is no answer that the husband can sensibly give to the question, 'Why should the wife be disadvantaged in the split of the assets by the husband's reckless expenditure?' A spouse can, of course, spend his or her money as he or she chooses, but it is only fair to add back into that spouse's assets the amount by which he or she recklessly depletes the assets and thus potentially disadvantages the other spouse within ancillary relief proceedings."
"Such was a rare legal error on the part of the district judge. Miss Ward tells us that it was curious that he should refer to an absence of legal principles in that she and counsel for the husband had referred him to a recent example of such re-attribution, namely Norris v Norris  1 FLR 1142. Although such a decision was at first instance, it is the last in a line of authority which stretches back to the decision of this court in Martin v Martin  Fam 335 that, in the words of Cairns LJ at 342H,
"a spouse cannot be allowed to fritter away the assets by extravagant living or reckless expenditure and then to claim as great a share of what was left as he would have been entitled to if he had behaved reasonably"
The only obvious caveats are that a notional re-attribution has to be conducted very cautiously, by reference only to clear evidence of dissipation (in which there is a wanton element) and that the figure does not extend to treatment of the sums re-attributed to a spouse as cash which he can deploy in meeting his needs, for example in the purchase of accommodation .."
"Even without the former statutory objective, the court has to take some account of the standard of living enjoyed during the marriage see section 25(2) (c). The provision should enable a gentle transition from that standard to the standard that she could expect as a self-sufficient woman."
The House of Lords' decision in that case was handed down on 24 May 2006.
|[Note - the rate in excess of £150,000 p.a. which the husband asserts is reasonable]|
|London property rental||56,141|
|[Note - this was separately provided by the husband]|
|All business expenses||682,425|
Wife's Capital Needs
Disability of the wife
Wife's Earning Capacity
"Q: Let me take it then that you are not going to be thinking of moving to Slovenia with Beatrice? A: I am not thinking of moving anywhere and there are 20 statements live on TV shows to promote Dancing with the Stars - - -
Q: It will help us - - - A: - - saying I will never move abroad, I will never live abroad, because I want to keep my daughter near her father. I am renowned for saying that, and to suggest anything else is just speculation on what Paul or the press have put together. Live, I have been asked it a million times and I have said I will never move abroad. I want Beatrice to be near her father - - - -
Q: So we can ignore any thought that you might want to take Beatrice to Los Angeles or any other part of the United States or anywhere - - - A: 100%. 100%. I have turned down huge amounts of work. This Dancing with the Stars was a one-off short thing that Judge Waller knew everything about in the last case and is not a tour, is not anything. It had cleared my name- - -"
Wife's Income Needs
"I have based my claim on reasonable needs that I was accustomed to, before and during the marriage"
"Our life in Brighton is really beginning to shape in Brighton . I am so much happier now with life since the tabloid press have slowly begun to lay off me. Yes, there are a few stories here and there; and yes, a few paparazzi still follow me around, but I expect this to pass and I am feeling very positive about our future"
"Before Heather and I were married I had a fairly limited and low key security presence (unless I was on tour, which creates a very different set of circumstances). There were never any bodyguards at Peasmarsh. The general farm employees kept a look-out for anything suspicious. There was virtually no security at Cavendish Avenue. At the office complex in New York there would be one guard on the door given the location of the office in mid-town Manhattan. There was an off duty police officer who provided night cover when I was at Long island, and on trips to and from the airport. There was no permanent close protection during this period unless I was on tour or attending high profile events. This was how I had lived with my first wife and our four children.
There were no real changes after Heather and I married until Beatrice was born. However Heather then began demanding, increasingly stridently, far more "security" to protect her from what she viewed as Press intrusion. She did not suggest that she needed security for her or Beatrice's personal safety. Rather her aim was to erect a barrier between her and the photographers. Accordingly, whilst there was no security at the Cabin over and above the presence of farm hands, security was increased when we were at Cavendish Avenue, and was increased when we went to my American properties. I must stress that I believe there was no need for this increase other than Heather's insistence. Indeed, I have reverted to my former pattern of security in recent months."
"Since the summer, I have, to my great relief been able to revert to the security arrangements which were in force for most of my "celebrity" life before late 2003, when Beatrice was born and when Heather began her campaign to increase security. I now only have semi-permanent security cover at my Peasmarsh Estate. Basically the farm staff working on my land keep a look out for anything suspicious. There are no bodyguards. The only person with me on a permanent basis is my PA, John Hammel who has been with me for thirty years. The court will be aware that Heather now maintains several members of staff including a driver and a personal trainer. Mr Hammel is only with me during the day or when I am working in the evenings. I am alone at night (apart from when Beatrice is with me). Mr Hammel has no security background or training in protection skills and cannot therefore be classified as a bodyguard. When I am at Cavendish Avenue I have no level of close protection, save for the electronic systems already in place. Obviously, when I go on tour, I have specifically assigned security.
My real concern with Heather's demands for bodyguards 24 hours a day is our daughter. Unless on tour, my older children had very little security. They all attended local state schools. It is not healthy for a child to have security 24/7. It sets them apart from their peers and makes them an object of curiosity and, at times, ridicule. Such children live in gilded cages. I do not want this for Beatrice. I am rarely photographed with Beatrice. She needs as normal an upbringing as possible, and surrounding her with round the clock security is not the way to achieve this."
The husband's capital and income needs
"On 11.2.08, having heard oral submissions from Ms Mills (i.e. Heather) and Mr Mostyn, I shall rule whether or not any (and if so, which) allegations of conduct raised by either you and/or Sir Paul in affidavits pursuant to para 6 of the draft order of Coleridge J on 20.12.07 are relevant to these financial proceedings. You and Mr Mostyn must therefore come prepared to make submissions to me on 11 February as to why the conduct raised in those affidavits is relevant in these financial proceedings see in particular section 25 (2) (g) of the Matrimonial Causes Act, 1973."
"the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it".
"In our Conduct Note we identify the three discrete episodes of post-marital behaviour by W which we submit pass the s25(2)(g) threshold. The evidence in support of H's allegations is extensively laid out in his s25 affidavit at Paragraphs 146-176 [X3/B13/58-74]. The court will also be invited to take into account other informative context namely W's unreasonable defence of the divorce (see the affidavit of Mrs Shackleton [X1/A/63] and pursuit of the libel/privacy proceedings [X3/B13/74-77])."
"why the matter cannot proceed undefended or by way of cross decrees based on the minimum requirements to prove each party's case."
"Right. I shall make a direction that within 10 days you [I interpolate, this must mean the husband] reconsider this question, and if you decide that you are in the circumstances not going to raise any conduct on the basis that she does not raise any conduct, then you must communicate it straightaway."
Mr Mostyn indicated he wanted to make submissions after the wife had finished.
"it is a beguiling submission, is it not: "I will not raise the matrimonial conduct", which Mr. Justice Bennett has already said was unlikely to affect the result, "if he will drop his conduct", and then the Trojan horse of course, "We will leave his complaints to be sorted out in the open court 17 day libel proceedings", in which of course Lady McCartney does not have the disadvantage the inconvenience of Sir Paul even being a party to it, and in which of course, to her satisfaction no doubt, it will be conducted in open court and reported in the world's press without even the protection of the 1926 Act. So, I mean, if Lady McCartney were to say: Of course they will not be in any libel case", then we would give serious consideration to the suggestion ----"
"Mr Mostyn: That is the very well, fair enough. That is the very issue that is going to be thrashed out in the libel. There are two points in the libel. One, are the contents of her answer in cross-petition true? The newspapers say it is not, it is completely untrue. She says: "No, no, that is a libel".
Mr Justice Coleridge: I understand that.
Mr Mostyn: And, secondly, did he or she leak it? Now, those are precisely the issues which form the husband's case in relation to matrimonial misconduct.
Mr Justice Coleridge: I see that.
Mr Mostyn: So what she cannot do is have a sort of proxy case conducted in open court before the world's press in which the husband is not even a party, whilst at the same time inviting your Lordship to say: "Oh, would it not be nice and peaceful if in the ancillary relief we do not mention it".
Mr Justice Coleridge: It has got to be ----
Mr Mostyn: We have got to be realistic. If she wants conduct off the table, then it is all off the table. But it is her decision. We are not making it a condition of any offer. She can do what she wants with it."
"So far as 4 is concerned, this is the section 25 affidavit in relation to conduct. There has been a great deal of discussion this morning about that. The husband's position is that he limits his case of conduct to those matters mentioned in his Form E, which might be loosely described as post-separation conduct. He will also answer any allegations that the wife has already made. The wife has indicated that her position is that if conduct in any shape or form is raised and pursued, then she will find it necessary to deal with the whole question of conduct during and after the marriage.
I have listened to both sides and I am as sure as I can be in relation to these matters (about which of course I only have a preliminary view) that it is not in anybody's interests for these conduct allegations to be pursued in detail at the hearing. So I have directed that the husband is to re-consider his position in relation to conduct, setting our very clearly what he is prepared to do in relation to that and what conditions he attaches to the dropping of conduct. Mr. Mostyn has made it clear this morning, but I think it would be very helpful for the judge to have an open document setting out exactly what his position is. He has said to me that if all conduct allegations were not pursued, that is to say in these proceedings and in the libel proceedings, then he would quite possibly take the matter no further and the whole matter could be dealt with in that way. But of course he feels vulnerable that if he drops the allegations, they will be raised again in another court in this building. So it is not entirely straightforward and needs to be thought about. So that is the direction I shall make in relation to para.4.
The position in relation to conduct is to be revealed within seven days. If conduct is to go ahead, then both sides have to produce what are called section 25 affidavits. These are simply statements one statement each setting out in as much detail as they want those matters upon which they rely. It may be that in Lady McCartney's case, she will simply make reference to, for instance, other court documents, the answer, or whatever, but the court must be entirely clear which allegations she is pursuing and which she is not, because the husband must know so that he knows what case he has to meet. More importantly, his lawyers know what case he has to meet and can prepare for it. It is not necessary for this to be a minor novel, but in clear terms the allegations that are going to be pursued must be set out in an affidavit. The husband says he can do it by 11th January. I should have thought the wife can do the same. "
"Pursuant to the direction of Mr Justice Coleridge made today we write to set out our client's position in relation to the question of conduct.
1. For as long as your libel/privacy proceedings remain alive our client will pursue his allegations of post-marital conduct against you in the ancillary relief proceedings (as you know this includes the leaking of the Answer and Cross-Petition, bugging of his private calls and the breaching of undertakings and Court orders). He will also seek to rebut your allegations of conduct in that forum. He is not going to countenance a situation where he does not pursue his allegations against you (and meet allegations you have made against him) in proceedings to which he is a party and which are protected by confidentiality, when those same or very similar allegations are then going to be ventilated in open court in proceedings (before a jury) to which he is not a party. The Judge accepted this.
2. If you discontinue, settle or otherwise get rid of the libel/privacy proceedings, our client will give consideration to not pursuing his conduct allegations in the ancillary relief proceedings, provided that you do likewise. But we emphasise that our client will not even get to that position while the spectre of the libel/privacy proceedings being fought out in any way remains"
"..once the assets are seen as a pool, and the couple as equal partners, then it is only equitable to take their conduct into account if one has been very much more to blame that the other: in the famous words of Ormrod J in Wachtel v Wachtel  1 All ER 829 at 119,  Fam 72 at 80, the conduct had been 'both obvious and gross'. This approach is not only just, it is also the only practicable one. It is simply not possible for any outsider to pick over the events of a marriage and decide who was the more to blame for what went wrong, save in the most obvious and gross cases."
"I do believe that Heather's misconduct since our separation, her concerted campaign to destroy my reputation through leaks, lies and breaches of confidentiality, should be taken into account by the Court to reduce the award she could otherwise have expected to receive. It will be for my legal representatives to explain this further."
"Thus the principle of need requires consideration of the financial needs, obligations and responsibilities of the parties ; of the standard of living enjoyed by the family before the breakdown of the marriage ; of the age of each party ; and of any physical or mental disability of either of them "
"It is clear that, when the result supported by the needs principle is an award of property greater that the result suggested by the sharing principle, the former result should in principle prevail: per Baroness Hale of Richmond in Miller paragraphs  and ."
"In a short marriage where the assets were all in place prior to that marriage and where the assets have not increased by reference to "partnership" activity the wife should get a needs-based award. The principle of sharing is simply not engaged. This, of course, is the guidance of those passages of White and Miller that deal with inherited or pre-marital resources. Pre-marital wealth is a very important factor and can act so as to displace the sharing principle altogether. Put another way, there can be a departure from sharing to need in a case where virtually all the assets are pre-marital or derive therefrom."
"I think that Mr Lawrence of Coopers & Lybrand has right principle and good sense on his side when he distinguishes between the years of maternal responsibility and the potential years of dower beyond. He has in his computations drawn a distinction after 17 years to reflect the youngest child attaining the age of 21. At that stage his models postulate the introduction of £1m of capital. I think that there is in this case a particularly sound basis for that postulation. It is not simply the possibility that at that stage of life the wife would choose to occupy a smaller home. It is very precisely that the capital cost of her primary home is inflated by the confines of the geography of the children's present schooling. But when that phase of the children's life is complete there will no longer be the geographical confines expressed by the circle around the Berkshire house, and the expert evidence on both sides shows that the cost of a comparable property which is not so confined geographically is approximately £1m less than one that is. So I find secure rational foundation for Mr Lawrence's assumption of a capital introduction at that stage of the contemplated future landscape. I also find substance for his second assumption that the income requirements would at that stage reduce to 60% of the initial level. Of course, I accept the force of Mr Pointer's submission that superficially there is an element of double deduction. The child expenses have been combed out and provided for by periodical payments. That provision will cease not at a stroke but by stages. However, it is quite unrealistic not to recognise that future expenditure, like past expenditure, is never uniform but always evolving. At different ages of the human span the character of individual expenditure is very variable. The wife, in her middle 30s, is at a stage of life when her expenditure is on the flood. She has established social relationships with very rich cosmopolitan people. She has no doubt a position to maintain in that world which justifies an annual budget as high as it stands even after pruning. But as she ages so will her tastes, her recreations, and her values change. I accept the worldly wisdom with which Mr Drew emphasises that, save in the area of medical expense, the graph of expenditure is a declining graph as age progresses."
i) Her budget of £430,000 falling to 60% of that figure in year 17 when Beatrice is 21.
ii) The introduction of £1.75m capital in year 17 (her London property)
iii) Earning capacity of £110,000 p.a. gross from age 41 to 60.