I v I (Divorce: Ancillary relief)
| Jurisdiction | England & Wales |
| Judge | Charles J |
| Judgment Date | 23 June 2008 |
| Neutral Citation | [2008] EWHC 1167 (Fam) |
| Court | Family Division |
| Docket Number | Case No: FD05D06161 |
| Date | 23 June 2008 |
[2008] EWHC 1167 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Charles
Case No: FD05D06161
Martin Pointer QC and Nicholas Yates (instructed by Hughes Fowler Carruthers) for the Applicant wife
Jonathan Cohen QC (instructed by Shentons) for the Respondent husband
Hearing dates: 18 to 20 February and 4 April 2008
Judgment Approved by the court
Introduction
1. I will for convenience refer to the parties as the wife and the husband.
2. This is an application by the wife to set aside an order for ancillary relief made by a District Judge at an FDR on 20 July 2006.
3. The grounds relied on were non-disclosure and a supervening event. In my judgment correctly, counsel for the wife did not pursue an argument based on supervening event. In their opening note for the purposes of the hearing Counsel for the wife asserted that the husband was:
“engaged in negotiations for a new position; had agreed terms of employment; and was in consequence materially financially better off (as to both capital and income) than under his old employment contract”.
It is asserted on behalf of the wife that this information was suppressed by the husband and thus, and less contentiously, that it should have been disclosed by him. This allegation focuses on a comparison between the alleged agreed terms for a new position and the husband's old employment contract.
4. In her final statement stated 8 February 2008 the wife said that as at 20 July 2006 she did not know that the husband “was about to sign a new contract of employment” and then sets out incorrectly the amounts payable under what became his new contract of employment (in that they were too high). She went on to state that this gave the husband considerable guaranteed and increased liquidity and that if he had made her aware of:
“the terms of his new contract of employment I would not have agreed to settle the case on the terms that I did, whereby [the husband] retains a charge over the matrimonial home in which the children and I continue to reside, nor would I have settled my maintenance claims at £55,000 per annum.”
She gave oral evidence to similar general effect to the quoted passage. Following disclosure of the FDR material, and in the light of the documents evidencing the history of the negotiations and the terms of the new contract the wife was not either (a) asked further questions in chief as to her thinking as at 20 July 2006 when the parties put their agreement before the court and it was approved and became an order, or (b) cross examined on that assertion by reference to that material and documentation.
5. It is accepted that in the period leading up to 20 July 2006 the husband was in negotiations relating to a new job and that he did not disclose the existence of such negotiations, or the position reached in respect of them, to the wife. In his oral evidence he accepted that he decided not to do so. He asserts that given the position reached in those negotiations (a) he was under no duty to do so, and if he was (b) disclosure of the position relating to them would not have caused the court to make an order that was substantially different.
6. Those assertions raise issues of fact relating to the credibility of the husband on which I heard evidence. For example as asserted by counsel on behalf for the wife in their opening statement: Had he agreed terms of employment? Or as asserted by the wife, in her statement: Was he about to sign a new contract of employment? In addition the point arises whether the husband had in his possession or control a new contract of employment, or a draft of that contract at the FDR. As will appear later, in my judgment the answer to all of those questions is in the negative.
7. If there was a duty to disclose, issues arise as to the materiality of the non-disclosure and thus the true position reached concerning the husband moving job.
8. Jenkins v Livesey [1985] 1 AC 424 is high and long standing authority on both the existence of the duty of full and frank disclosure and the consequences of its breach when a consent order has been approved. Unsurprisingly both sides referred me to it and relied on it.
Background
9. The parties met when they were at university. They lived together from 1992 and were married in August 1996. When they were married the husband was 28 and the wife 27, they are now respectively 40 and 38. When they were married they were both employed but neither had any significant resources. They have two children, both girls, one of them is 10 and the other is 8. They bought their first house in 1996. That house was sold in 2004 and shortly thereafter they bought a larger house from the proceeds of their first home, savings of about £200,000 and a mortgage of about £150,000. Substantial renovations were then carried out to that property. This house is an attractive family home.
10. The parties separated in June 2005. So they had lived together for about 13 years and been married for about 9 years.
11. The husband has been described as a stockbroker and an investment banker. Nothing turns on the description and from 1989 to July 2006 he had had seven employers in the financial sector. He resigned from his employment with AA on 31 July 2006 (i.e. 11 days after the order) and took up his present employment with BB on 4 September 2006.
12. In early August 2006 the husband told the children that he had left his employment at AA. This led to enquiry being made by the wife as to his new employment which was followed by the application to set aside the order. That application was issued on 30 October 2006.
The position as at 20 July 2006
13. I have been provided with (a) figures that were under discussion, and in the papers, in July 2006, and (b) figures for the purposes of this hearing. There are some differences. In looking at the position as at July 2006 I have had primary regard to the figures then in the papers.
14. There is common ground that as at 20 July 2006 the relevant assets had all been acquired during the relationship. As is not uncommon in his field of work the husband's remuneration package was made up of a basic salary and bonus some of which was paid in shares, or stock units, which were to vest over a period of time. The wife had no relevant income and, as I understand it, had not been in employment for some time. The marital partnership therefore was one in which, by agreement between them, the husband was the earner and the wife the home builder and the primary day to day carer of the children.
15. The position was that over the years of the relationship the couple had been able to make savings from income the great bulk of which were represented by the matrimonial home. It was common ground that the savings, assets and borrowing power of the parties did not enable there to be a clean break.
16. To my mind, the position was that the moneys representing assets acquired, savings made and income earned during the continuance of the relationship, which became a marital partnership, and the co-operation and agreed lifestyle based thereon (and thus up to separation in 2005) were moneys to which the approach that they should be shared equally applied with considerable force. This is because they were the product of that relationship. In my view that approach would effectively apply to all income up to and including the bonus declared at the end of 2005 and thus to the vested assets (and the unvested RSUs) as at July 2006.
17. However an issue existed (and exists) as to how later income, and savings (and thus capital) derived from it, should be approached, shared and taken into account having regard to (a) the point that the income was earned after the end of the relationship and agreed lifestyle, and (b) the common ground that there should be periodical payments set at a level that has regard, amongst other things, to the level of the lifestyle enjoyed during the marriage.
18. The former matrimonial home still remained subject to a mortgage of £150,000 and, after provision for selling costs at 3%, had a net value of £723,000. The husband had an account at the Halifax which had been funded primarily by his bonus for 2005. In July 2006 the credit balance on that account was approximately £140,000. That account, together with the husband's basic salary, was used to pay day to day expenses and was therefore an “income sinking fund”. At the end of the year a balance would be left that would constitute savings for that year.
19. The husband held the following (a) 151 shares in AA, (b) 410 RSUs in AA, which had vested, which needed to be valued on a net basis after tax, and (c) some shares in Regent Pacific Group (his Vested Assets). If their net value is netted off against his liabilities the credit balance is approximately £33,000. The wife had a small overdraft liability of about £1,100.
20. The husband had pensions totally approximately £110,000 and the wife had pensions valued at approximately £10,000.
21. The husband also had an entitlement to unvested RSUs in AA which would vest in November 2006, 2007, 2008, and 2009 (and deliver in the following January). At current values the total net value of those unvested RSUs, after deduction of tax, was of the order of £230,000 to £250,000 (different figures are included in the papers as at 20 July 2006 and now).
22. The husband's remuneration package at AA was that he was entitled to a basic annual salary of £100,000 payable monthly, and a bonus decided at the end of each trading year (30 November) paid part in cash and part in RSUs. This complicates the position because part of his remuneration does not vest for some time, also unvested RSUs would generally be lost if he moved job....
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