H v W
| Jurisdiction | England & Wales |
| Judge | The Honourable Mrs Justice Eleanor King,Mrs Justice Eleanor King |
| Judgment Date | 20 December 2013 |
| Neutral Citation | [2013] EWHC 4105 (Fam) |
| Court | Family Division |
| Date | 20 December 2013 |
| Docket Number | Case No: FD11D00892 |
[2013] EWHC 4105 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mrs Justice Eleanor King
Case No: FD11D00892
Mrs Rebecca Bailey-Harris (instructed by Dawson Cornwell Solicitors) for the Appellant
Mr Mark Johnstone (instructed by Anthony Clapp Solicitors) for the Respondent
Hearing dates: 8 November 2103
This judgment is being handed down in private on 20 December 2013 It consists of 10 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.
This is an appeal by the Appellant husband (H) against part of an order made by DJ White on 20 March 2013 and thereafter amplified by a supplementary judgment in relation to an application for permission to appeal on 20 March 2013.
The Order made in financial remedy proceedings following divorce provided for:
i) The former matrimonial home to be sold; from which W was to receive £403,561 + 50% of any excess in the event that the property sold for more than £670,000 gross
ii) The H to retain (i) an American property in which there was negative equity and (an investment property in the UK
iii) The W to have a pension share of the H's pensions of 81.3%
iv) W to have periodical payments on a joint lives basis at the rate of £3,750 pcm
v) W to be paid a sum equal to 25% of all H's annual bonuses (net of tax and National Insurance) also on a joint lives basis.
Although contracts have yet be exchanged, it is now agreed that the former matrimonial home is likely to be sold for rather more than had been hoped, giving (in round figures), W £454,000 and H £50,000, Once the negative equity in the American property is taken into account and the pension share included, the final capital position is that W has capital of £967,170 (of which £100,000 relates to household contents) and H capital of £250,362.
The H filed an Appellant's notice on 10 April 2013 by which he sought to appeal:
i) against the order for periodical payments on a joint lives basis seeking the substitution of a non extendable term of maintenance until H attains the age of 60
ii) the order providing for the payment of 25% of H's annual bonus to W which he sought to be removed in its entirety.
Unfortunately for the parties the matter has been cursed with delays not of their own making. The hearing took place on 18 & 19 July 2012 with written submissions submitted afterwards by Counsel. The judgment is dated 20 October 2012. District Judge White responded to requests for clarification of the judgment on 4 December 2012 and he refused permission to appeal his order on 20 March 2013. The matter came on for an inter partes permission to appeal hearing in front of Mostyn J on 26 June 2013.
Mostyn J gave permission in relation to Ground 1 only of the grounds of appeal that:
"The learned District Judge erred and was plainly wrong in awarding the wife 25% of all the husband's net bonuses on a joint lives basis"
Mostyn J concluded his permission judgment saying:
"If the interpretation advanced by Professor Bailey-Harris is the right one and that the percentage award of the bonuses was formulated solely on a sharing basis, then I do believe that that gives rise to an issue of legal principle which I have identified in my earlier decision of B v S and that does most certainly warrant appellate review. If Mr Johnson's interpretation is the correct one then I would have given conditional permission namely, that the only aspect that can be advanced on appeal is whether there should have been a numeric or monetary cap on the sum received under the percentage sharing award."
In the course of his judgment Mostyn J gave a strong 'steer' that in his view the right solution was for there to be a cap on the share received by W on the H's bonus. To this end he directed that the parties engage in mediation to see if the matter could be resolved consensually and H agreed to bear the costs of the mediation in the first instance. In the event that the mediation was unsuccessful, Mostyn J directed that he would deal with an application by W for a legal costs order in relation to the appeal on paper.
The mediation did not take place as agreement could not be reached as to the identity of an appropriate mediator and W accordingly made an application for a legal costs order. On 30 October 2013 Mostyn J refused her application, saying in his ruling that the W had been unreasonable in her approach to the mediation; first in her insistence on using a top-drawer and top- price mediator and secondly that her insistence on attendance of legal representatives at mediation was neither necessary nor reasonable; in my experience this would be unusual and arguably unhelpful. Mostyn J pointed out that there was still time for mediation to take place. Unfortunately it has not done so and out of this modest matrimonial pot H's costs of the appeal are £22,320 and W's £25,372.
Background
At the date of the hearing H was 43 and W was 55 years of age. The parties started to cohabit in about 1992 marrying on 7 May 1997 and separating on 7 January 2011. There was therefore a total period of cohabitation of about 19 years.
There is one child of the marriage who was born on 15 June 1993. The4 child is no longer in education but lives at home with her mother. Decree Nisi was pronounced on 22 November 2011.
Since May 2010 the H has been the managing director of bank. In the financial year to April 2011 he had an income of £250,000 gross (£11,441 net pcm) plus a bonus of £225,000 gross of which £67,500 was deferred, giving him a net income of £214,467. (£17,872 pcm net). In the year ending April 2012 his income was £250,000 gross plus a bonus and cash deferral award of £195,750 + £18,000 of shares vesting over three years from April 2013.
When asked about future bonuses in cross examination the District Judge recorded at paragraph 25 that the Russian holding company had made an injection into the bank which had made a significant loss. His anticipation was that in the future he would receive a very low bonus or nothing at all. Indeed it was a surprise when his latest bonus statement fell through the letterbox"
Given the delay in the proceedings "bonus time" had come round again by the time the matter came on. Both sides agreed that I should be told that the H's pessimism was unfounded and he in fact received a bonus very similar to that which he had received in the preceding two years namely approximately £200,000. The pattern for the 3 years H has been at the Bank has therefore been a salary package of in the region of £450,000; made up as to Salary of £250,000 and a non guaranteed bonus made up of cash and deferred cash and shares of about £200,000.
The wife was until the later 1990s a legal secretary but has not worked for about the last 15 years. The District Judge noted that W's original budget (£12,154 pcm) and revised budget (£6,352 pcm equated to a gross income in excess of £100,000) merely transposed the costs of the substantial matrimonial home [para 35 & 36] and W had said a few days prior to the hearing [para 41] that my budget is based on the court allowing me to retain my home. These are the other bills I know of. I would not be able to prepare a list based on a property I am not in.
The wife's open position in relation to maintenance was periodical payments of £4,500 pcm together with 35% of all net bonuses each upon a joint lives basis.
In dealing with capital the District Judge referred to the H's offer of capital (effectively all the net proceeds of sale of the former matrimonial home as they were thought to be at that time) as clearly generous. The District Judge was critical of the wife for running up costs in respect of allegations of non-disclosure for which there was no evidence, which had not ultimately been perused and had the effect of derailing negotiations. He was equally critical of W for running an ' add back' case at trial which was not, on any level, made out.
The Law
The Law: Appeals
The new Family Procedure Rules 2010 apply to this appeal. FPR 2010r30.12 provides:
(1) Every appeal will be limited to a review of the decision of the lower court unless –
(a) an enactment or practice direction makes different provision for a particular category of appeal; or
(b) the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing.
(2) Unless it orders otherwise, the appeal court will not receive –
(a) oral evidence; or
(b) evidence which was not before the lower court.
(3) The appeal court will allow an appeal where the decision of the lower court was –
(a) wrong; or
(b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court.
(4) The appeal court may draw any inference of fact which it considers justified on the evidence.
(5) At the hearing of the appeal a party may not rely on a matter not contained in that party's appeal notice unless the appeal court gives permission.
This appeal has to be considered in accordance with the principles laid down by Thorpe LJ in Cordle v. Cordle [2001] EWCA Civ 1791; [2002] 1 WLR 1441; [2002] 1 FLR 207 where Lord Justice Thorpe restated the test laid down in the G v. G (Minors) Custody Appeal [1985] 1 WLR 647; [1985] FLR 894 by...
To continue reading
Request your trial
-
Ankita Goyal v Amit Goyal
...is commonplace. Such orders are regularly made where the payer has a basic salary and a bonus (see, for example, the decision of King J in H v W [2013] EWHC 4105 (Fam)). 43 In his judgment at paragraph 46 McFarlane LJ stated: "Miss Toch accepted that it was not open to the judge to make a f......
-
SS v NS
...clearly survey the wood as well as the trees. 37 Sometimes the respondent's income comprises a base salary and a discretionary bonus. In H v W [2013] EWHC 4105 (Fam) an order had been made granting the claimant wife an uncapped share (25%) of the husband's bonus on a joint lives basis. I gr......
-
B (Appelant) v B
...That percentage should be capped by reference to her needs in accordance with the analysis undertaken by Eleanor King J (as she then was) in H v W [2013] EWHC 4105 (Fam): see paras 38 and 39. Whilst she was clear in her judgment in that case that such orders cannot be calculated with arithm......
-
Whose Bonus Is It Anyway?
...whether or not the bonus was in the sum £1,000 or £1 million. There is however some good news. In the recent English case of H v W [2013] EWHC 4105 (Fam), the High Court gave guidance about the correct approach to assessing, making and drafting spousal periodical payments orders payable fro......