G v G (Financial Remedies: Short Marriage: Trust Assets)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CHARLES,Charles J |
| Judgment Date | 24 February 2012 |
| Neutral Citation | [2012] EWHC 167 (Fam) |
| Docket Number | Case No: FD10D01149 |
| Court | Family Division |
| Date | 24 February 2012 |
[2012] EWHC 167 (Fam)
Mr Justice Charles
Case No: FD10D01149
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Ian Cook (instructed by Irwin Mitchell) for the Applicant Wife
Deborah Bangay QC and Dakis Hagen (instructed by Levison Meltzer Pigott) for the Respondent Husband
Approved Judgment
Hearing dates: 21 to 25 & 28 November & 15 December 2011
This judgment is being handed down in private on 24February, 2012. It consists of 67 pages and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.
My conclusions are set out under the last heading in this judgment.
General Introduction
The application before me is for financial remedy under the MCA 1973. For convenience, I shall refer to the Applicant as the Wife and the Respondent as the husband. It is a case relating to a short marriage between two people now in their thirties with one child. At least potentially, it engages the needs, sharing and compensation rationales, but at one level it can be said that it ought to have been a case that could be resolved fairly easily and economically. This has not proved to be the case, even though the latest exchange of open offers show that the main remaining live issues related to:
i) the quantification of the lump sum to be paid to the wife to meet, or go towards meeting, her housing needs, and
ii) the quantum and period of periodical payments.
The sad result has been that the parties have paid a high price in emotion and costs (circa £650,000).
Complicating factors are, and have been, that the wife has interests under 11 family trusts and she has over the years received capital, loans and income from the trusts and gifts from her father. These interests and assets existed before and are not a product of the marriage. Disputes arose and remain concerning the information that should have been provided by the wife, the trustees and the directors of the family holding company (the shares of which are trust assets). Also, issues arise as to how the wife's trust interests, and the support she has received from her father, are to brought into account in reaching a fair overall result, applying the s. 25 exercise.
During the hearing arguments on costs relating to the expenditure in respect of disclosure issues were "flagged up". After I have heard those arguments, I shall consider taking up the invitation to make suggestions on a procedural approach that might in future similar cases lower the costs burdens suffered by the parties and the trustees of trusts in this case. These burdens lay behind the submission made to me on behalf of the wife that the law relating to applications for a financial remedy is not fit for purpose. However, in light of the level of costs in this case, I repeat my view that the profession and first instance judges can, and should, closely consider what modifications should be made to the preparation and presentation of such cases, to seek to ensure that the costs are not disproportionate and, for this purpose, that the issues and evidence relating to the application of the s. 25 exercise applying the needs, sharing, compensation and autonomy rationales are identified and provided at the appropriate times.
Some general background that is agreed or is realistically indisputable.
The wife is now 33 and the husband is 38. They met in 2003, they became engaged and began living together in April 2004. They married in early June 2005. The petition is dated 24 February 2010 and they are now divorced. After the breakdown of the marriage, they continued to live in the same house until the summer of 2010.
They have one child, a boy, who was born in August 2007. There have been Children Act proceedings which were settled at (or shortly after) the conciliation appointment. As a result, by consent a shared residence order, containing a regime as to the time that the child should be in his two homes, was made. As a result of that, the wife is directly responsible for the care of the child for significantly longer periods of time than the husband, but his time with his son is significantly longer than that first offered. The husband moved out of the matrimonial home when the Children Act proceedings were concluded. The Children Act proceedings and that co-habitation must have added to the upset of both parties and the antagonism that exists between them.
The longer periods of time that the child spends at the home of his mother reflects the point that she gave up work, and so was his main day to day carer during the marriage. But the shared residence order is a proper recognition and reflection of the point that this child's welfare is likely to be best promoted by him having two homes and a continuing and developing close relationship with both his parents.
During the wife's pregnancy, the father was diagnosed with a genetic medical condition which can be passed on to his children. This condition can have serious clinical effects. The child of the family is not demonstrating any of these at the moment but there is a risk that he might do so in the future. The parties were keen to have more children but recognised that, unless the risks of any child they may have suffering from the same condition could be reduced, this would involve them taking significant risks that could impact not only their lives, but also, those of their present child and any other child they may have. The common theme of their evidence was that both parties would have very much liked to have more children but that they recognised that, absent the reduction of those risks, this was not a sensible option.
In line with their strong wish to have more children, they sought extensive advice and the husband and his family underwent a number of tests and examinations to see if a modified IVF solution would be available to them. This can be available to some sufferers of the same genetic medical condition. The wife also carried out research on the internet and contacted, amongst others, doctors in America. Sadly, by the time that their relationship was on the rocks the position was that a solution that would reduce the risks had not been found.
If their relationship had not foundered it is clear that they would have continued their researches and efforts to reduce the risks of them having another child and thereby fulfil their wish to have more children.
The worry that the child has inherited the genetic condition, and so might develop clinical symptoms that could be very serious, is one that the parents share. It is of course hoped that, and there is a good prospect that, the child has not inherited the genetic problem and that, if he has, the clinical symptoms will not be severe.
It is plain that there is now considerable animosity between the parties and their respective families. Both parties are highly intelligent and talented, as are the two members of the wife's family (her father and one of her sisters) who gave oral evidence, but the calm, persuasive, pleasant and urbane way in which they all gave their evidence did not disguise the fact that considerable antagonism lurks just below the surface. However, to their credit it was common ground that the child has been shielded from a great deal of the damage that can flow from such a situation.
The husband's mother lives nearby and helps the husband in his care of his son. The wife is clearly very close to her parents and her two sisters. Her parents and one of her sisters live nearby, and one sister is at present in America (and she has studied and lived there in the past). The wife's mother helps in the care of her grandchild. The wife, her parents and siblings are a close knit and mutually supportive and loving family who cherish their privacy.
Both of the parties graduated from Cambridge University, but at different times.
When the parties met the husband was working for a firm in the field of head hunting and earlier he had become the youngest ever partner in a well known firm in that field. He moved on to a new firm of which he was not a partner, and from which he was dismissed in 2005. But he was not out of work for long and, later in 2005, he started working in the same field for a firm of which he is now a full partner. He has been and remains successful and a high earner. His earnings are divided between a fixed profit share that is paid monthly and an additional share of the profits voted by a majority of the partners each year. The additional profit share is paid during the year after it is earned but he is taxed on an earnings basis. In the last four years (i.e. since 2007/8) his net income shown in his tax returns has in round figures been £458,000, £407,000, £350,000 and £330,000. Sensibly, the wife has not pursued issues relating to (a) discrepancies between the husband's tax returns and other information provided, and (b) a more precise estimation of his future income which for next year the husband put at the same, or a slightly higher level than this year, because it is clear that the level of income shown by his tax returns makes the level of financial remedy she seeks affordable on the basis that over the years the husband will be able to build up considerable savings.
It has been the prudent practice of the husband throughout the marriage to make provision for tax by setting aside sums from the regular payments of his fixed profit share and from the payments of the additional profit share. By this method he has created an account as a reserve to meet his tax.
The wife...
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