Slaying the dragon

Divorce cases are often in the news, and few more so than the Appeal Court decision in the case of John and Beverley Charman, which involved a 25 year marriage and £131 million of assets. While the pay out of £48 million to Mrs Charman was the main press headline, the case also raised important points of principle for matrimonial lawyers and their clients.

One of the main points concerned a trust that had been set up in 1987 by Mr Charman, the ‘Dragon Holdings Trust’, which contained assets worth £68 million. Mr Charman maintained that it should be excluded from the matrimonial pot as he had never benefited from it, whilst Mrs Charman argued that it should be treated as another resource of her ex husband. The Court preferred Mrs Charman’s argument, accepting that as the trust assets would be available to Mr Charman on demand, it would be unfair to exclude them.

Nobody was claiming the trust was invalid, and the trustee was a professional trust company. This led to concerns that the Family Courts were driving a “coach and horses” through legitimate trust structures that had specifically been set up to protect family wealth.

Although the Court refused to exclude the trust assets, they did invoke the doctrine of “special contribution” in Mr Charman’s favour. This required them to take into account the respective contributions of both parties during the marriage. Whilst this is unlikely to apply to every “big money” case, it was recognised that Mr Charman’s contribution was “exceptional” and so Mrs Charman only received 36.5% of the matrimonial pot.

For confidential information on how assets might be divided up on a divorce, please contact:

Barbara Reeves
Tel +44 (0)20 7440 7037
barbara.reeves@mishcon.com