The owner of the Ivy and Le Caprice is worth approximately £700 million. Did his wife Jacqui receive 50 per cent of his fortune? Fiona Turner reports.
Jacqui Caring and her husband, multi-millionaire restaurant tycoon, Richard Caring (both aged 68) are getting divorced. The owner of the Ivy, Le Caprice and others, separated from his wife earlier this year after 45 years of marriage and is said to be living with a much younger woman with whom he has a young child. He is said to be worth approximately £700 million and is a close friend of Sir Philip Green. He left school at sixteen and made his fortune in the rag trade before investing in high end restaurants and nightclubs.
His wife is a former model who gave up her career reportedly within days of meeting her husband and the couple has two adult children.
What is fair? The court’s discretion...
The family court has a wide discretion when reviewing ‘all the circumstances of the case’ to reach a bespoke financial settlement which is fair and reasonable. A list of ‘factors’ set out in s25 Matrimonial Causes Act 1973 is applied, helping the judge balance the issues before coming to a reasonable and fair solution. The court has a wide discretion to make orders for property, capital division, pension sharing and maintenance payments. Each settlement is based on that particular marriage and their family’s circumstances.
Since 2000, the landmark case of White v White has provided that capital settlements are checked against a 50/50 starting point to assess whether an equal share of the assets results in a fair solution, or whether there is good reason to adjust the award otherwise.
Income is not shared on divorce in the same way that capital assets are shared. It is not a case of ensuring that separating spouses have equality of income. Case law is developing so that increasingly, spousal maintenance is generally only paid where the non- or lower earning spouse cannot support themselves financially without it.
The Caring divorce is not a ‘maintenance’ case. The parties are fabulously wealthy, and whatever share of the capital assets Mrs Caring receives, she will be self-supporting.
Where the press, and legal, interest lies is the capital division. Assuming a divorce goes ahead in England, presumably London, a 50/50 share would result in Mrs Caring having an award of £350 million, which would be the largest, reported, financial settlement awarded to date. There may of course have been higher settlements reached, but in those cases reported in the law reports, the largest British divorce settlement to date is £337 million, when hedge fund manager Christopher Cooper-Hohn divorced in 2014.
How will the court assess Mrs Caring’s settlement?
Since White, the court does not distinguish between the contributions made by the financial breadwinner and those of the homemaker. There is no bias, gender or financial, between the roles adopted by the parties to the marriage.
That said, Section 25 includes consideration of the ‘contribution’ made by one party to a marriage, which can in appropriate cases influence the financial outcome upon divorce. The ‘special contribution’ argument is often raised by the breadwinner to justify a weighting of the financial outcome in their favour. Often a party will consider that their exceptional skill in business or banking for example, should justify a special consideration within the court’s discretionary process. However, the cases where this argument has succeeded are few and far between.
The question a court has to ask is whether the contribution to the welfare of the family is so truly exceptional such as to make it inequitable to disregard when assessing the scope of the financial settlement.
In Cooper-Hohn Mrs Justice Roberts summarised the court’s approach to special contribution.
- The threshold for ‘contribution’ to influence the outcome of a settlement is a high one - the contribution must be exceptional;
- The amount of wealth generated cannot alone be sufficient reason. That said, the accrual of significant wealth could constitute a special contribution, depending on the facts;
- In Cooper-Hohn, Roberts asked herself whether the husband had made: 'some further contribution over and above that made by the wife and unmatched by her in terms of their joint endeavours within the partnership that was their marriage…is there evidence that the husband was exercising some special skill and effort which is special only to him, and if so, is it of such a quality or nature that his rights to the fruits of that inherent quality survive as a material consideration despite the partnership or pooling aspect of the marriage?'
- Is he the generating force behind the fortune rather than the product itself?
Roberts J awarded Mrs Cooper-Hohn 36.12 per cent of the assets.
Part of the discussion, and rationale, for the asset split in that case surrounded the source of the parties’ wealth. A similar argument may have some relevance in Mr and Mrs Caring’s divorce depending on the facts.
A distinction between what are termed ‘matrimonial assets’ and ‘non-matrimonial assets’ is sometimes drawn by the court. Parties on divorce usually have a strong claim to share in the ‘matrimonial assets’ that have been built up during their marriage. However, in some cases parties may have a weaker or restricted claim to share in ‘non-matrimonial assets’. There is no accepted definition, but it is commonly argued that ‘non-matrimonial assets’ tend to be assets that are pre-acquired (ie acquired before the start of the relationship or marriage) or brought into the marriage from an external source by one of the parties (without any contribution from the other). Since White, an argument that a party should be allowed to keep his or her non-matrimonial assets as an ‘unmatched contribution’, in which the other does not have an expectation to share, has been recognised and often successful.
The court needs to decide what weight to attach to that argument, having regard to the nature and value of the property and to the time and circumstances in which it was acquired. Each case is fact specific, the s25 factors must still be applied, and as such, expert advice is always a necessity.