Julie Anne Murphy (Petitioner) v Julian Murphy
| Jurisdiction | England & Wales |
| Judge | Mr Justice Holman |
| Judgment Date | 04 July 2014 |
| Neutral Citation | [2014] EWHC 2263 (Fam) |
| Court | Family Division |
| Date | 04 July 2014 |
| Docket Number | No. FD13D01583 |
[2014] EWHC 2263 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Mr Justice Holman
(Sitting in public)
No. FD13D01583
Mr J. Tod (instructed by Brookman Solicitors) appeared on behalf of the petitioner wife.
Mr S. Webster (instructed by Hughes Fowler Carruthers) appeared on behalf of the respondent husband.
I have heard this whole hearing in public and now give this judgment in public. The situation with which I am faced today is a somewhat unusual one. Following the breakdown of their marriage and divorce, the parties participated in a financial dispute resolution (FDR) before a deputy district judge at the Principal Registry of the Family Division on 7 November 2013. Very commendably, on that day and occasion the parties were able, in large measure, to reach agreement and to compromise the financial issues. Indeed, a recital to the subsequent formal order reads:
"… at which hearing they reached a compromise (on most but not all issues)…"
The parties were able to agree final capital apportionment between them, including the making of a pension sharing order. They were able to agree the rates of periodical payments for their two children and the proposition and basis that the husband would pay current nursery school fees. They were also able to agree current levels of periodical payments to be paid by the husband to the wife.
The two areas upon which they could not agree were whether or not there should be some "step down" in the relatively near future (that is to say, within a small number of years) in the level of periodical payments payable to the wife; and whether or not those periodical payments payable to the wife should be the subject of some ultimate term or cut off.
As a result, an order, which in all respects has the appearance of, and takes effect as, a "final" order as to ancillary relief was made by consent on 7 November 2013. But paragraph 9 of the order then provided that the case should be transferred to the High Court, and paragraph 10 provided as follows:
"10. The following issues shall be determined at a hearing listed on the first open date after 1 June 2014 before a High Court judge:
(a) whether the initial step down in the petitioner's maintenance should be defined in time, and whether there should be further step down in the provision; and
(b) whether the maintenance for the petitioner should be paid during joint lives (per the petitioner) or should be the subject of a term order, ceasing when the children finish their secondary education (per the respondent)."
Provision was made, and has been complied with, for the parties to exchange further short statements related to earning capacity and current incomes in preparation for the present hearing, and that has been done. This, therefore, is the hearing for the determination of those two issues that were identified in paragraph 10 of the order made at the FDR on 7 November 2013.
The reason why I say that the situation is a somewhat unusual one is that issues around the duration of periodical payments and potential cessation of periodical payments are not normally completely separated out from issues with regard to capital. It does, for instance, commonly happen that as part of a negotiated outcome (or even a court imposed outcome) there is some further capital adjustment or capital provision from a payer to a payee spouse to reflect or compensate for subsequent cessation or reduction in levels of maintenance. But in this particular case the parties have completely and finally resolved all capital issues and I am, in fact, left in the somewhat unusual and not entirely comfortable situation of having to adjudicate on the two issues that were identified in paragraph 10 as a somewhat abstract exercise, when no power has been left to me to make any further or alternative capital adjustment at all.
Further, it is a striking feature of this case that by their agreement, and by the terms of the consent order of November 2013, the parties have already clearly contemplated that the wife will seek and obtain work, and that once she has done so there will be a reduction, which is already provided for, in the level of maintenance payable by the husband to the wife. Undertaking (J) in the order is that the wife "will inform the [husband] as and when she commences remunerative employment, including disclosing her net income". That undertaking, in the overall context of this case, when coupled with paragraph 6(i) of the order itself [see below], clearly contemplates that the wife does wish and intend to seek and obtain remunerative employment.
Paragraph 6 of the substantive order itself provides as follows:
"6. The [husband] shall make or cause to be made to the [wife] periodical payments until the [wife's] remarriage or further order of the court as follows (the question of a term on the maintenance order being determined in accordance with paragraph 10 below):
(a) at the rate of £21,000 per annum payable monthly in advance by way of standing order into the [wife's] bank account with effect from 1 January 2014;
(b) £10,000 per annum payable annually with effect from 30 October 2014.
It is further directed that:
(i) the maintenance payable to the [wife] shall reduce by an amount equal to 50% of the [wife's] earned income at the end of her first year of paid employment."
Pausing there, it is necessary just briefly to explain why the primary provision of maintenance is divided into two portions under sub-paragraphs (a) and (b). That is because the husband's own remuneration consists of a combination of regular monthly salary and one off annual cash bonuses and stock awards payable in the autumn. So the primary order is, in effect, an order for periodical payments at the rate of £31,000 per annum, but a part of it is to be paid in a single payment of £10,000 around the time that the husband receives those annual bonuses or awards. Most importantly, it can clearly be seen from paragraph 6(i) that the order already makes clear and express provision that as soon as, and whenever, the wife starts to earn income, there will be a 50p in the pound reduction in the amount of periodical payments payable, once she has been in employment for a year. I mention that although the word "net" does not appear in paragraph 6(i), it is common ground that the reduction shall be based upon the wife's net earned income not her gross earned income, and my order today will include a recital making that plain for the avoidance of doubt.
It is now necessary to record the essential facts and chronology of the case within which I have to decide these two issues. The wife is now aged 42. The husband is aged 35. They met in 2004 and began living together in 2005. They actually married in June 2007. Sadly, their marriage broke down and there was final separation around the beginning of April 2013, when the wife petitioned for divorce. It thus follows that the duration of the marriage itself was about 6 years, but there were about 2 years of seamless pre-marital cohabitation, so the context here is a case of an enduring relationship of about 8 years. That is not, of course, a particularly long one, but nor is it an especially short one amongst those marriages and relationships which, sadly, later break down with separation and divorce.
At the time of the marriage, and indeed right up to shortly before the parties' children were conceived, both had good employment and good working histories. In the case of the wife, she has a degree in English and psychology from Strathclyde University in Glasgow. She worked for several years in the field of publishing, and then later in the field of web-based marketing. Her last job, between June 2008 and September 2009, was working for Selfridges as a "website trading manager". In that employment she was paid £30,000 a year.
On New Year's Eve 2011 the parties' twins were born. They are a boy and a girl and now aged about 3 1/2. Until recently the wife, very understandably, did not work again. Her husband was, as he is, a relatively high earning businessman in secure employment, and she obviously had her hands full with caring for their babies and growing children. The demands on a parent of caring for twins hardly needs to be emphasised.
By the time of the FDR hearing last November, the wife was still engaged full-time in looking after the twins and did not have any employment. She had stated at that stage, in answers to questionnaire, that her plan was to embark on teacher training as soon as she reasonably could, with a view to working as a teacher from about September 2017. But at that stage she had not actually embarked on any of that.
The broad agreement at the FDR was that the available capital between the parties would effectively be evenly divided and their then pension CETVs equalised. A document headed "Net effect of the consent order", prepared for today, indicates that the resulting financial position of the wife is in general terms as follows. She now owns the former matrimonial home in Twickenham. This is said to have an open market value of about £700,000. She reduced the previous mortgage substantially as a result of the lump sum payable to her by the husband, but it is still subject to a mortgage of around £250,000 for which she is responsible. So she lives in a home with a net equity currently of about £430,000. Her remaining capital from all sources is around £50,000, against which she has liabilities (mainly legal costs) shown...
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