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Joint lives award still fair in special cases, says England and Wales judge

Thursday, 3 January, 2019

Mostyn J has made a joint lives maintenance award to Li Quan against her former husband William Bray, in a long-running matrimonial dispute connected with their work for a wildlife conservation trust.

The couple married in 2001, when both were already working in Chinese tiger conservation. In 2002, they used Bray's fortune, earned from structured finance trading, to set up a Mauritius trust called the Chinese Tigers South Africa Trust, and spent 12 years working together for the cause through this charity.

But the relationship failed in 2012, and Li Quan applied to the English courts for a financial settlement, claiming that it should be based on the trust's GBP25 million assets. She alleged the trust was established not only to advance the tiger cause but also as a long-term fund for the husband and wife, and as a tax mitigation exercise, even though neither party is named as a beneficiary of the trust, nor ever could become one.

This claim was defeated in the England and Wales High Court in 2014, and in the Appeal Court in 2017, in decisions that came as something of a relief to charities and families with trusts. However, Quan has continued with her financial remedy claim against Bray's personal assets, and this has now been decided by Mostyn J in the England and Wales Family Court.

Mostyn rejected Bray's argument that the trust is unlikely to pay him much for his financial services in the future, and decided he could easily earn GBP200,000 a year from it. He considers that Bray and the trust are colluding to hide something in the trust's finances that would be significantly to Bray's disadvantage if revealed, probably that he has helped the trust become financially very profitable, but it has deferred paying him for his services until his divorce is safely concluded. Mostyn also noted that Bray has failed to comply with previous disclosure and interim maintenance orders made by the English courts, and now owes arrears of about GBP10,000.

Finding that Quan's claims to be homeless, and to require GBP54,000 for living expenses, were reasonable, Mostyn duly ordered Bray to pay her GBP64,000 annual maintenance from March 2019. Exceptionally, he ruled that the award should be for joint lives rather than term-limited, in view of Li Quan's lack of any capital base, limited earnings capacity, and the large sums she owed to her lawyers. The couple's legal costs so far are about GBP7 million.

'In this unusual case I am not satisfied that were a term maintenance order to be imposed, even if extendable, the wife would be able to adjust without undue hardship to the prospective cut-off', he said. Mostyn also drew attention to Bray's litigation misconduct, which he described as 'contemptuous, arrogant and grossly insulting' (Quan v Bray, 2018 EWHC 3558 Fam). Further litigation will be required to determine any capital sum due to Li Quan.