Burrow v Burrow
| Jurisdiction | England & Wales |
| Judgment Date | 1999 |
| Date | 1999 |
| Year | 1999 |
| Court | Family Division |
Financial provision – Divorce – Pension benefits – Husband’s pension fund producing a capital sum and an annuity on his retirement – Whether appropriate to earmark 50% of both capital and annuity for payment to wife – Matrimonial Causes Act 1973, ss 25, 25B, 25C, and 25D.
The parties separated after a marriage lasting 16 years. They had two minor children who stayed with the wife on the separation. In divorce proceedings the wife applied for ancillary relief. There were significant family assets principally comprised in the matrimonial home, the husband’s share in his company, and his interest in a pension fund valued at £297,000. The trust for the pension fund provided that on his retirement on or after his fiftieth birthday, the husband would be able to commute by way of tax-free capital provision one quarter of that fund, the remaining three quarters being available to provide him with an annuity. The parties had made equal cash contributions to the purchase of the matrimonial home and the husband had bought his first shares in the company using savings jointly owned by him and the wife. A district judge, who found that the marriage had operated as a joint enterprise of sharing and equality, made orders that the matrimonial home should be sold and that the wife should receive a substantial proportion of the proceeds; also that the husband make periodical payments, the order for the wife being on a joint lives basis. Exercising her powers in relation to pensions under ss 25B and 25C of the Matrimonial Causes Act 1973 the district judge further ordered that as from the husband’s retirement the wife should receive one half of the maximum possible lump sum commutable and one half of the annuity under the husband’s pension scheme. The husband appealed.
Held – The effect of the provisions of ss 25B to 25D of the 1973 Act was not to produce an entitlement in the sense of some accrued right acquired by one spouse against the other’s pension fund and in determining whether to make an earmarking award and the amount, if any, thereof the court should exercise its discretion under the well-established criteria arising under s 25 of the 1973 Act. Applying that approach the district judge was not justified in making the earmarking order against the annuity as there were disadvantages in making such an order well before any sums could be expected to become available under it: in particular it was difficult to predict with any reliability what might be the quantum of periodical payments it might be appropriate for the husband to pay at the end of that period if the wife had not remarried and still had an entitlement to periodical payments from him. Also, as and when the husband received his annuity the amount he received would be taken into account as and when any
assessment of the correct periodical payments order was made. However, different considerations applied in regard to the capital amount of the pension, which would not terminate on the remarriage of the wife. On the particular facts of the present case the wife’s contributions in the building up of the family assets were properly reflected in an equal distribution of the capital fund. In so far as the orders for periodical payments and the division of the proceeds of the matrimonial home were concerned, there were no grounds for interfering with the decision of the district judge. The appeal would be allowed in so far as the order relating to the annuity was concerned but dismissed in so far as the other orders were concerned.
Case referred to in judgmentT v T (financial relief: pensions) [1998] 2 FCR 364.
AppealThe husband appealed from orders made by District Judge Bowman on 17 December 1997 in ancillary relief proceedings under which the proceeds of the matrimonial home were to be shared, periodical payments made, and 50% of the capital and 50% of the annuity of the husband’s pension fund were to be earmarked for payment to the wife. The facts are set out in the judgment.
Valentine Le Grice (instructed by Gordon Dadds) for the husband.
Nicholas Carden (instructed by Collyer-Bristow) for the wife.
Cur adv vult
8 April 1998. The following judgment was given.
CAZALET J.This is an appeal in ancillary relief proceedings from an order made by District Judge Bowman on 17 December 1997. The parties to the divorce proceedings are Stephanie Marjorie Burrow, who is the petitioner, and Richard Burrow, who is the respondent. I shall refer to them as ‘wife’ and ‘husband’ respectively. The husband is the appellant. Both the husband and the wife have made claims for ancillary relief.
In the event, and stated shortly, the district judge ordered that the wife was to receive £349,500 from the proceeds of sale of the former matrimonial home so that she could provide herself and the two children of the family with a suitable home and motor car. The district judge also made orders by way of periodical payments for the wife and the two children, as well as earmarking to the wife 50% of the husband’s pension fund.
It is accepted by the parties that this is not a case in which a term or clean break order should be made. However, it is a case in which the wife seeks, and in which the district judge ordered, some provision against the husband’s pension fund under the more recent provisions of ss 25B and 25C of the Matrimonial Causes Act 1973, as amended.
Before I come to the detail of the orders and the basis on which the husband puts his appeal, I refer shortly to the background history.
HistoryThe wife is aged 50, the husband 48 years. In 1974, when he was 24 years of age, the husband started work in a family building firm, AJ Willson & Son Ltd (AJW). In about the summer of 1977 the parties met. At that time the wife was in the process of buying her own cottage, working as a senior stewardess and in-flight trainer for Britannia Airways. On 27 May 1978 the parties were married. The husband then sold his property and went to live with the wife in her cottage. In April 1979 the husband became a director of AJW.
In 1979–80 the parties bought a plot of land in Hadley Wood, Hertfordshire, built on it and then moved into 45 Parkgate Crescent, each making, so it appears, an approximately equal cash contribution towards the cost of their new property. On 6 February 1981 their elder child, L, was born, so she is now aged 17 years. On 5 April 1986 their younger child, C, was born, so she is now just 12 years of age. In 1985 the property at 45 Parkgate Crescent was extended to provide additional accommodation for the family. In the spring of 1988 the building industry improved and the parties decided to purchase a plot of land in the same road in order to build a larger house for the family. Due to the ensuing fall in the property market in 1990, when they moved into the new property at 51 Parkgate Crescent they found that they were obliged to take out a much larger mortgage than they had anticipated. The property was held in the joint names of the parties and the mortgage in fact taken out amounted to £125,000.
Later the marriage ran into difficulties and the parties separated in December 1994 with the husband leaving home. The wife and the two children continue to live at 51 Parkgate Crescent. Shortly thereafter the husband set up home with a Mrs Rosalind Leach; they intend to marry. Mrs Leach has four children from her marriage, which is in the process of being dissolved. Of these four children the two youngest only, boys aged 11 and 9 or thereabouts, make their home with their mother, Mrs Leach, and the husband in this case.
On 31 January 1997 the wife obtained a decree nisi of divorce. That decree, as I understand it, has not yet been made absolute. In the later part of 1996 the ancillary relief proceedings were started. The appropriate Forms A and E were duly filed. Affidavits and detailed answers to questionnaires have been filed. The parties were not able to resolve their differences and, accordingly, the ancillary relief applications were heard on 4, 5 and 6 November 1997. The district judge reserved judgment, later delivering judgment, and making the orders against which the husband now appeals.
From the time of the marriage until separation the parties cohabited for more than 16 years. Prior to the marriage the wife worked as I have indicated for Britannia Airways. During the marriage the wife worked part-time and somewhat irregularly until shortly before L was born in early 1981. More recently she has continued to work part-time with the Betty Barclay fashion house in London. She works on collections. It is part-time work but is very intense for the six weeks of its duration which is spread over a six month period because of the timing of the various collections. The husband has continued to work in the family building business. He is now managing director and, in circumstances to which I will come in a moment, he owns 98.6% of the shares.
The two girls continue to attend a private school for girls. L is mildly dyslexic. Their total school fees per annum amount to about £13,000. These are paid out of a trust fund which initially was set up to provide for their tertiary education.
AssetsThe main items of substance are the equity in the matrimonial home, the husband’s shares in his building company and his interest in the pension fund which he has built up, that being built up within the company. There are various other, in particular insurance, holdings which I will come to. I deal shortly with the three main items before coming to the other assets of value.
When the appeal was opened, I was told by Mr Le Grice, on behalf of the husband, that the district judge had erred when she had stated in her judgment that the parties had agreed the value of the former matrimonial home at £525,000. Mr Le Grice’s skeleton argument sets out in detail how he contends that this misunderstanding had arisen. In fact I do not need to refer further to this because, as a result of inquiries made...
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