A v A
| Jurisdiction | England & Wales |
| Judge | Mr Justice Charles |
| Judgment Date | 15 December 2004 |
| Neutral Citation | [2004] EWHC 2818 (Fam) |
| Docket Number | Case No: FD02D05882 |
| Court | Family Division |
| Date | 15 December 2004 |
[2004] EWHC 2818 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Charles
Case No: FD02D05882
The Applicant in person
Robert Peel (instructed by Miles Preston & Co) for the Respondent
Hearing dates: 25 to 29 October 2004
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
………………………..
This judgment is being handed down in private on 15 December 2004. It consists of 31 pages and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.
The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.
Mr Justice Charles
Introduction
I have before me a claim for ancillary relief. In giving this judgment I shall refer to the members of the family and to the relevant family company that are involved by letters which are not the first letters of their names. I do so because in my judgment the unhappy circumstances of this family, and the business interests of the company, merit confidentiality if this judgment was to be reported in any form.
I shall refer to the parties as either Mr and Mrs A or the husband and wife. I do this for convenience. I shall refer to the wife's family of birth as the B family. I shall refer to the company as X Ltd.
Mr and Mrs A were married on 8 March 1981. Mr A's divorce petition is dated 21 August 2002. Mr A is 48, Mrs A is 47. She left the former matrimonial home on 25 April 2003. Mr A remained in that home with the four children of the marriage.
The four children are now aged 22, 19, 15 and 10. The oldest child has recently graduated from university. The 19 year old is at university and the two youngest children are at fee-paying schools.
A sad feature of this case is that the three oldest children will have nothing to do with their mother. They have sought to cut her out of their lives. I have seen a letter from the oldest child to Mrs A which demonstrates the divide, and the unhappy and troubling situation, that exists in the relationships between these parents and their children.
The youngest child has contact with the mother pursuant to a contact order made following a hearing. The mother told me that that child is indicating that when he can bring it about that contact will be brought to an end.
As was to my mind correctly common ground I am not in a position to form a view as to (i) the reasons for this hostility of the children towards their mother, or for example why it was the mother who left the matrimonial home, (ii) the effect on the children of the father's attitude and what he has said and done, or (iii) the effect on the children of the mother's attitude and what she has said and done.
Over the period that the problems came to a head in the marriage the two oldest children were witnesses to some of the events and their effects. Thus they were able to form their own views. Nevertheless it is likely (if not inevitable) that they have been affected by what their parents have said and done.
I was told by Mr A that the children are a strong sibling group and I have no doubt that they have influenced, and are influencing, each other.
I was told during the hearing that the two older children are prepared to meet with the mother in the presence of an independent third party. I expressed the hope that this meeting will occur. Further I urged both parents and all of the children to address the problems that exist in their relationships.
I mention the problems in these relationships not only because they are part of the relevant background but also because of:
a) the first consideration referred to in s. 25(1) MCA 1983, and
b) their consequence, namely that in this case the father has stayed at the matrimonial home looking after the children and the mother has moved out to rented accommodation.
On 13 September 2004 a notice that Mr A was acting in person was filed. Until then he had been represented in these proceedings by solicitors and counsel. During the hearing Mr A has been assisted by his brother-in-law (Mr C).
Assets and Liabilities
Assets
There are four main assets:
i) The former matrimonial home. This is a large family home. It has been valued twice because Mrs A did not accept the first valuation. Both valuations were the same, namely £950,000. The mortgage is some £300,000 and the agreed net value (after costs of sale) is £626,000.
ii) Two endowment policies in Mr A's name which are assigned to the motgagees but which can, I was told, be released. Their surrender value totals £41,000.
iii) Both Mr and Mrs A are members of a money purchase pension scheme the CETVs of which were last valued at 29 August 2002 at £192,380 (Mr A) and £124,710 (Mrs A). No orders are sought in respect of these pensions. Their relevance is therefore in their existence and the imbalance between husband and wife.
iv) A 25.37% shareholding in X Ltd which is owned by Mrs A. I return to this. This shareholding was initially valued by an accountant acting on behalf of the wife (Mr Nedas) for the purposes, as I understand it, of completing her Form E. There was then a direction for another accountant (Mr Walton) to value this shareholding as a jointly instructed expert. That valuation was not accepted by Mrs A and she was given leave to instruct Mr Nedas who had given the initial valuation included in her Form E to value the shares as an expert.
Liabilities
The wife
Leaving her liabilities for costs aside the case has been presented and argued on the basis that Mrs A has no current liabilities. This result has been reached by netting off the sum standing to the credit of her bank account (approximately £30,000) against her outstanding tax liability which equates to that sum.
Costs
So far as costs are concerned the wife has an outstanding liability of approximately £40,000 and has already paid around £230,000. Of the total for costs of approximately £270,000 (i) £60,000 has been attributed to the Children Act proceedings, and (ii) disbursements of £53,400 are included for accountancy fees (this figure includes an estimate to the end of the hearing).
The husband's position as to costs is that he has paid approximately £125,000 towards his costs and approximately £2,000 remains outstanding. The sum paid forms part of his indebtedness to his brother-in-law (Mr C), which I return to later.
Of the costs paid (i) £45,000 has been allocated to the Children Act proceedings, and (ii) approximately £10,400 to accountancy fees (as I understand it this figure does not include an estimate to the end of the hearing).
I pause to record that in the Children Act proceedings the court made no order as to costs.
I also pause to record that the total spent on accountancy fees is at least £63,800. I suspect that it is a bit more because as I understand it the figure included within the husband's costs does not include an estimate to the end of the hearing. On any view expenditure of around £65,000 on accountancy evidence in this case is a considerable expenditure.
Additionally, and as is not unusual, the total of costs incurred is clearly a significant burden on the parties and when the court considers the Calderbank correspondence and exercises its discretion as to costs (which is a different discretion to that under s. 25 MCA), an order for costs could have very significant consequences on the effect and purpose of the award made under the MCA.
The husband
Leaving aside loans from his family the husband has liabilities to banks, and in respect of credit cards, of approximately £21,000.
The assets and liabilities as presented to me did not include an estimated liability of the husband for income tax on his earnings on a self-employed basis.
I heard quite a lot of evidence directed to the quantum of these earnings which I shall return to. But as appears later I accept that he earned approximately £19,000 gross for the period from January 2003 to April 2004 and since then that he has earned approximately £20,000 gross.
He has not yet prepared accounts, or identified his deductible business expenses and thus the amount of his income that will be taxable.
I take this tax liability to be about £5,000.
The husband has borrowed £4,500 from his parents. He also owes his brother-in-law (and sister) (Mr and Mrs C) approximately £158,000. This makes a total of approximately £162,500 of family loans.
The husband's indebtedness is therefore:
i) £21,000 banks and credit cards
ii) £5,000 tax
iii) £33,000 family loan (brother-in-law).
iv) £4,500 family loan (parents)
v) £80,000 family loan (brother-in-law / costs)
vi) £45,000 family loan (brother-in-law / Children Act costs)
vii) £2,000 costs outstanding.
The husband's income and earning capacity .
The husband worked for X Ltd. from 1979 to mid 2002 and thus effectvely throughout the marriage. The wife also worked for X Ltd. in an administrative capacity but since the birth of the oldest child as I understand it she has taken no active day to day part in the company.
On the written evidence there is a dispute as to the reasons why Mr A's employment with the company was brought to an end. He had become a main board director in September 1991. Thus he had worked his way up the company and throughout that process was...
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