TM v KM [2022] EWFC 155 – HHJ Hess

Moor J’s reasoning was followed by HHJ Hess in the case of TM v KM, where he set out the following in his judgment:

“In my view the present case presents very similar facts to those in RC v JC and I have reached the conclusion that the present case is one of those rare and truly exceptional cases where a discrete compensation award is appropriate. I have no difficulty on the facts of this case in concluding that the wife has made a relationship-generated sacrifice of her high earning career in investment finance to devote herself to supporting her husband’s career choices and providing child-care for her children. I have concluded that, whilst she should be able to find reasonable work now, this is very unlikely to get her back to anything like where she would have been if she had not made that relationship-generated sacrifice. In the search for fairness, in the context of the House of Lords guidance in Miller v. Miller; McFarlane v McFarlane, my view is that this sacrifice should be reflected in the outcome of this case.

How should this compensation claim be quantified? Like Moor J, I have found this the most difficult part of the exercise. The award must reflect the fact that the wife in this case has to a significant extent benefited through the sharing exercise from the upside of her sacrifice – the accretion of capital from the husband’s high earnings, including the fruits of the absence of income tax in the Middle East. I must take care not to fix the award in a way which amounts to a sharing award of the husband’s high income. I bear in mind that the wife made a voluntary choice to do what she did with her career. Although a compensation claim is an income-related claim I need to bear in mind the statutory steer in favour of a clean break arising from Matrimonial Causes Act 1973, section 25A – and there is enough capital in the husband’s hands to achieve this fairly. In the end I have concluded that I should broadly follow a similar route to the one adopted by Moor J in relation to the wife’s compensation claim. To achieve a fair outcome I propose to add five tranches of £100,000, a total of £500,000 to the wife’s award and to order that they be paid now as a lump sum on a clean break basis.”

We will analyse in the next section what family lawyers have made of these decisions, and what are the key take away points, looking at it from both sides, as we would with any divorcing couple who comes to us for expertise.