Ar v Ar (Ancillary Relief: Inheritance)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE MOYLAN |
| Judgment Date | 11 August 2011 |
| Neutral Citation | [2011] EWHC 2717 (Fam) |
| Docket Number | Ref: HG09D00367 |
| Court | Family Division |
| Date | 11 August 2011 |
[2011] EWHC 2717 (Fam)
The Honourable Mr. Justice Moylan
Ref: HG09D00367
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand
London
Appearances:
For the Applicant: Miss Bangay Qc Miss Saxton
For the Respondent: Miss Stone Qc Mr Isaacs
th August 2011
This judgment follows the hearing of the wife's ancillary relief application. The wife is represented by Miss Bangay QC and Miss Saxton and the husband by Miss Stone QC and Mr Isaacs.
This case raises the issue of the manner in which the court should exercise its discretionary jurisdiction when determining an application by a wife when most of the wealth consists of or reflects resources received by the husband by way of gift and inheritance. The total wealth is in the region, very broadly, of (21 to (24 million of which all but approximately (1 million is in the husband's name.
The wife seeks a lump sum of (6 million, giving her total resources of approximately (7 million. The husband proposes that the wife should receive a lump sum of (1.3 million, giving her total resources of approximately (2.4 million.
To summarise the parties' respective cases very briefly, Miss Bangay submits that the wife's needs are just one component of her claims and that she is entitled to an additional award determined by reference to the sharing principle. In respect of the wife's needs, Miss Bangay also submits that the wife's income needs should not be confined to the award of a Duxbury sum but that, in fairness, she should receive a substantially greater sum, in particular so as to give her a greater level of income security.
Miss Stone contends that the sharing principle has no application in the circumstances of this case. She also contends that the wife's award should be calculated by adding her housing need and her income need capitalised by reference to a Duxbury calculation. She accepts that Duxbury is a guide and not a tool, but submits that the court should be "extremely cautious" before departing from Duxbury.
History
The parties met in 1981 and commenced living in about 1984. The wife believes it was 1983 and the husband believes it was in 1985/1986, but this difference is not material. They married in 1990. The husband is now aged 66 and the wife is aged 54. They have one child, who is aged 18. The husband has three children by his first marriage. The parties separated in late 2009—after a relationship of approximately 25 years—and the wife commenced divorce proceedings. Decree Nisi was pronounced in October 2010.
The source of the husband's worth is a business which his father bought shortly after the end of the Second World War and which was developed under his father's and then his eldest brother's stewardship into a large and successful manufacturer. The company was floated in the 1950s and sold in the late 1980s. From his father, the husband received property and shares in the company.
The husband's current resources comprise: (a) T Farm, a property transferred to the husband by his father in 1976 and added to by the husband with the purchase of additional land on various dates since then; (b) land at K purchased by the husband in about 1969; (c) P Farm purchased by the husband in 1993/94 using the proceeds of shares inherited from or given to the husband by his father; (d) a 25% interest in a family property company inherited by the husband on the death of his father in 1992. It owns, principally, two farms and a fishing estate; (e) a share portfolio purchased with inherited gifted assets, originally shares in the company created by the husband's father; (f) some other more modest investments.
T Farm was purchased by the husband's father in the 1950's. It has 482 acres consisting, according to the valuation obtained for these proceedings, of 325 acres of arable land and 72 acres of park and grassland. The husband has farmed this property since 1966 and it was given to him by his father, as I have said, in 1976.
Throughout their relationship, the parties lived at the house on T Farm, a property which the husband built in the late 1970's and which lies within the farm estate. The nature of the property has been the subject of some dispute during the course of the hearing and a number of photographs were produced of its interior/exterior and general setting. As set out in the valuation obtain from Savills, it is a "modern five bedroom detached dwelling in an elevated woodland setting, having views over parkland and lake". It has a tennis court and swimming pool and has a gross internal area of approximately 3,400 square feet. The house is said to be in good general repair. The decoration is described as dated and some of the rooms are said to be disappointing in terms of layout. The valuer also describes the property, somewhat disparagingly, as "not particularly attractive".
The house lies within what is described by the valuer as "a beautifully situated mixed residential farming and amenity estate extending to approximately 482 acres, of which 432 lie within a ring fence and enjoy a large degree of privacy", the whole being described as an extremely rare and valuable property. The evidence establishes that the parkland referred to in the valuation is about 12 acres which lead down to a lake. Crops have occasionally been grown on this land, but it has mainly been grass and was used for stock in the years up to 2000, when the husband sold his cattle herd.
It is clear to me that the setting of the matrimonial home, surrounded as it is by land in the same ownership, is a significant benefit which is not directly reflected in the valuation which has been obtained. The valuation will obviously reflect the setting of the property, but there is no indication that it takes into account the added benefit which derives from the fact that the surrounding land is in the same ownership.
The house and garden of about four acres had been valued at (675,000, whilst the house with 50 acres of land including the lake has been valued at (1.138 million. Both of these valuations are to some extent artificial. The house is surrounded by more woodland than is included within the four acres which have been selected by the valuer as representing "a family sized garden in order to protect the value of the property". Looking at the photographs, it is clear that the rest of the woodland owned by the husband, and indeed as I have described the overall setting of the property, form part of its character and attraction. As to the latter valuation, the 50 acres included within it consists in part of agricultural land.
The land at K was purchased by the husband in 1969 with the proceeds of sale of some of the shares received from his father. It consists of 184 acres of arable land. P Farm is an arable farm of nearly 1,300 acres and was purchased by the husband in 1993/94 again using the proceeds of sale of some of the shares received from his late father.
The husband's interest in the family property company was inherited by him on the death of his father in 1992. The husband's investment portfolio was originally acquired with the proceeds of sale of his interest in his father's company, by then held in the form of loan notes. These assets comprise most of the husband's current resources, the other more modest investments being acquired largely it appears from investment returns.
The husband has worked throughout the marriage as a farmer. The wife worked in paid employment in two local hotels until 1988. She has not worked in paid employment since then. In or about 2007, the husband gave the wife (1 million and also purchased a small investment property for her. These assets are the origin of her current resources.
When the parties separated, the wife left the formal matrimonial home and moved to a property purchased for her by the husband. The wife still lives at this property. It cannot sensibly be and has not been suggested that this very modest property represents reasonable long-term housing for the wife.
The Proceedings
The wife's application for ancillary relief was initiated in November 2009. There have been a number of orders made during the course of the proceedings, but I do not need to refer to any of them for the purposes of this judgment.
Both parties have filed Form Es sworn on 25th January 2010. They have also each provided statements dealing with Section 25.
I have heard oral evidence from the wife and the husband. I propose only to refer to some elements of the evidence during the course of this judgment, but I have taken it all into account when determining the issues in this case and how to exercise my distributive powers under the Matrimonial Causes Act 1973.
A number of minor issues were also raised during the hearing, but I do not propose to deal with them as they are too peripheral to the issues in this case.
Section 25 Factors
Financial resources: (a) Capital: As referred to earlier in this judgment, the resources in this case total between (21 million and (24 million. Of this total, the assets in the wife's name total approximately (1 million. There is some modest dispute about whether the wife's assets are worth (1 million or just over this sum. For the purposes of this judgment, I propose to take her resources as having a net value of (1 million.
Having regard to the circumstances of this case, the difference in the estimated value of the husband's wealth, of between (20 million and (23 million, although substantial would have no impact on my determination. Although Miss Bangay's final written submissions refer to the extent of the resources as being a core issue, both parties have sensibly recognised...
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