JL v SL
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Mostyn |
| Judgment Date | 07 October 2014 |
| Neutral Citation | [2014] EWHC 3658 (Fam) |
| Court | Family Division |
| Date | 07 October 2014 |
| Docket Number | No. FD12D00611 |
[2014] EWHC 3658 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Mr. Justice Mostyn
(In Private)
No. FD12D00611
Miss A. Campbell (instructed by Family Law in Partnership) appeared on behalf of the Applicant.
Mr. R. Bates (instructed by Kidd Rapinet) appeared on behalf of the Respondent.
This is an application for permission to appeal the judgment and order of District Judge Reid. The judgment was given on 10 th October 2013, and was clarified on 8 th January 2014. The order is dated 8 th January 2014. There are three grounds of appeal.
The first is that, in her distribution of capital, the District Judge erred in not properly reflecting the non-matrimonial origin of part of the divisible pool. The second is that the District Judge's decision in relation to spousal maintenance was erroneous, specifically inasmuch as it provides for step down as and when the two children of the family complete university education. The third ground is that the District Judge erred in not providing for the spousal maintenance to be index linked. Mr. Justice Bodey has ordered that the question of permission to appeal should be heard today, with appeal to follow, if granted, with a time estimate of one day.
I have been told of events that have occurred since the judgment was rendered. Under the rule in Ladd v. Marshall, evidence or events subsequent to judgment are more readily admissible than evidence that relates to events that occurred prior to judgment, for reasons that are too obvious to spell out. The significance of those events, I will deal with later when I give my decision on the question of whether leave to appeal should be granted; if so, whether the appeal should be allowed; and, if so, what orders should be made in consequence thereof.
I say immediately that I am not satisfied that the third ground of appeal is arguable. It was not even raised before the District Judge at trial. She determined that the spousal maintenance should not be index linked, and that was, in my view, a decision that was squarely within her remit of her discretion, and I do not regard the third ground as arguable. Permission is, therefore, refused in relation to that ground.
So I turn to the first two grounds. The relevant facts referable to the first ground are these. Towards the very end of the marriage, the wife received from her mother £465,000. In fact, she received a little more than that, but some was diverted directly to the children of the family. That £465,000 which she had obtained from her mother derived from the estate of her late father. The funds were received in two tranches; £100,000 in 2009, and £365,000 in September 2010, a mere ten months before the end of the marriage, and at a time, as is recorded in the judgment, when the wife believed that the husband was forming a relationship with another lady.
The way in which the District Judge dealt with that is set out in some detail in her judgment. Before I turn to that, it is perhaps helpful if I were to set out, in short form, the relevant law in relation to the treatment of property that derives from a source other than the joint endeavours of the parties.
In my own decision of N v. F [2011] 2 FLR 533, I endeavoured to summarise the law in relation to what I described as pre-matrimonial property, although everything I said there applies with equal force to property inherited during the course of a marriage. I analysed the authorities in some detail, culminating in the decision of the Court of Appeal in Jones v. Jones, which is [2011] 1 FLR 1723, which is almost the last word on the subject from an appellate court.
In para.14, I stated, having traversed the law in some detail, that the process should, generally speaking, be as follows:
"i) Whether the existence of pre-marital property should be reflected at all. This depends on questions of duration and mingling.
ii) If it does decide that reflection is fair and just, the court should then decide how much of the pre-marital property should be excluded. Should it be the actual historic sum? Or less, if there has been much mingling? Or more, to reflect a springboard and passive growth, as happened in Jones?
iii) The remaining matrimonial property should then normally be divided equally.
iv) The fairness of the award should then be tested by the overall percentage technique".
Then I said in para.15, "Of course, all of this is subject to the question of need".
In the instant case, the District Judge had certain oral evidence from the wife, on which she made her adjudication. In the transcript that I have, in her evidence-in-chief, at p.88, the wife is recorded as saying this:
"So obviously, his savings had gone down and he was always concerned about the fact that a lot of our joint savings, the money that he had earned in the past, had been put into my name for tax reasons. Obviously, any income that was earned on those savings was at a lower rate of tax than if he had them in his name. He used to worry that if anything happened to me, if I died suddenly, he would have to go through probate in order to get hold of his own money, as it were. So the reason I transferred some of that money into his name was because most of our joint assets at the time, liquid assets, were in an NS&I bond which I could not touch. You know, it had to be locked in for a certain amount of time to earn that interest".
The wife there is referring to the fact that, of the monies that she received from her mother, which had derived from her father, she had put £190,000 into the name of the husband. This was the explanation for that transfer. She was tested in this account in cross-examination. At p.118, she said this: "I think it was put in places where it would earn those amounts of interest for … the family". Then she was asked this question:
"It is practically impossible, so far at least, to distinguish which was the money that had come in by way of gift from other money that went into this account in terms of where it went. It was all pooled, was it not?"
To which her answer was:
"In a way it might have been but, you know, for example, the two amounts of £45,000 went out and still left £100,000 in the account. I do not think we are disputing that I would try to make the best possible rate of interest on any resources that came into the family home. I think the point that is being made is that these resources came from a source outside the marriage".
Then, a little later, she was asked about certain transactions, and then this question was put, "And that was part of your continuing plan for investment, was it not?" to which her answer was:
"No. I think I have explained, madam, that SL was nervous, if you like, about the fact that a lot of our savings were in my name and he was worried that if anything happened to me he would not be able to access money, particularly as a lot of our money was tied up in a bond at the time, and he wanted there to be something in his name. He had just spent out, put a lot of money into the company that he was working for at the time and had bought two cars".
Then a little later, the Judge asked this question: "But you acceded and the money was transferred. It was a decision matrimonially", to which the wife replied:
"Yes. I could not access the money in the bond at the time because it was tied up, so I could not access that money, so I transferred money that was available to us".
Then, at p.120, counsel asked her this:
"There was not a suggestion that, 'No, this is money that has got to be separate because it is different. It needs to be treated in a different way from any of the other finances that we have got'. That has never been suggested, has it?"
To which the answer was:
"No, I do not think it was. I mean, again it was just always a matter of making the most practical decisions at the time as to where the best rate of interest could be got".
The District Judge asked, "For your joint benefit?" "Yes, Madam, [she replied] for the family's benefit".
What is clear, at least to me, from those excerpts is that the decisions that were made as to in whose name the monies at any given time were held were influenced almost exclusively by the question of where interest would most beneficially be obtained. The placement of monies in his name or her name, at least on a plain reading of the words, seems to have nothing to do with any underlying decisions by the parties as to whether such and such a fund should be characterised as matrimonial, with a concomitant consequence of equal division on...
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