In family proceedings concerning finances, whether in connection with divorce or otherwise, a central rule is that both parties must usually make full disclosure of their means to the court and to the other party.
The rationale behind the rule is of course obvious: how can the court or the parties determine what is a reasonable settlement without full information regarding the means of both parties?
But parties often do not wish to disclose the private details of their financial affairs, particularly as details disclosed in financial remedy proceedings may become public knowledge.
And there is one situation where a party may avoid having to make full disclosure of their means, although it only occurs in exceptional cases.
The situation occurred in a recent case that took place in the Family Court in London.

Hugely privileged lifestyle

The case concerned a mother’s application under Schedule 1 of the Children Act for financial provision for her two children, from their father. (The parties had married in a Nikah ceremony in London, but that does not constitute a valid marriage under English law, hence the Schedule 1 application, rather than a financial remedies application on divorce.)
A brief look at the background to the case hints at its exceptional nature.
When the parties met the mother was a professional equestrian. The father, who is a member of a Middle Eastern royal family, also has a particular interest in horses, and co-owns with his brothers a holding company with business interests in that area.
The parties met in in late 2017 at an American equestrian event, and swiftly started a relationship. They had two children, now aged 4 and 2.
During the course of the relationship the parties enjoyed a lifestyle that Mr Justice Peel, hearing the case, described as “hugely privileged”, involving private jets, first class commercial flights, staffing, luxurious holidays, high end cars and the like.
The parties separated in 2021 and the mother issued her application the following year seeking, amongst other things, a $5.5 million housing fund in the USA (where the mother and children had relocated), $150,000 for two cars (one for herself and one for the nanny, to be replaced every 4 years), £602,400 for horses for the children as they grow older, and $780,000 per annum total child maintenance.

Resources to meet any reasonable orders

The father did not make full disclosure of his means, but in correspondence he did produce a schedule asserting net assets of about £70 million, and an average net income of about £4.3 million per annum. At a hearing he accepted that he had the liquidity and resources to meet any reasonable orders that may be made by the court for the benefit of the children, up to the level of the mother’s claims.
This, said Mr Justice Peel, is a standard version of the so-called “millionaire’s defence”, which is deployed to avoid, or reduce, the need for financial disclosure which is otherwise almost universally required in financial remedy proceedings. To put the “defence” in simple terms, the party raising it is essentially saying that: “I do not need to make full disclosure, as I can afford to pay anything that the court may reasonably require me to pay”.
The millionaire’s defence does not, however, necessarily mean that no disclosure is required. As Mr Justice Peel explained, provision of some disclosure is usually necessary, as it enables the claimant party, and the court, to have some understanding of the scale of wealth, and how it is structured. Whilst he accepted that the defence applied here, he therefore ordered the father to file a financial statement, but without the usual obligation to file documentation in support.
The financial statement actually indicated that the father had assets of about £111 million net, significantly more than the figure of £70 million previously mentioned.
In the event Mr Justice Peel made an award that was not too far short of what the mother was seeking, including a $5 million housing fund, car provision at $100,000 every 5 years for the mother and $50,000 every 5 years for the nanny, and child maintenance of $250,000 per child per annum. (The mother’s claims for horses for the children were adjourned until the children are older.)

Conclusion

The millionaire’s defence is allowed by the court not just to spare that party from having to make full disclosure, but also to avoid unnecessary expense. It is, however, clearly only open to those possessed of great wealth, as few people are in a financial position to say that they can meet any reasonable orders that may be made by the court (bearing in mind that the amount of the award will usually reflect the standard of living that had been enjoyed by the family).

In fact, the term “millionaire’s defence” is perhaps something of a misnomer, as the possession of a ‘mere’ million pounds is unlikely to be sufficient to persuade the court to make an exception to its rules.

Contact us on 020 3440 8000 or email family@tvedwards.com should you require advice on your family’s financial issues if you are separating, divorcing or dissolving a civil partnership.

Disclaimer: The information on the TV Edwards website is for general information only and reflects the position at the date of publication.