L v L (Financial Remedies: Deferred Clean Break)
| Jurisdiction | England & Wales |
| Judge | Mrs. Justice Eleanor King |
| Judgment Date | 15 August 2011 |
| Neutral Citation | [2011] EWHC 2207 (Fam) |
| Docket Number | Case No: FD08D04694 |
| Court | Family Division |
| Date | 15 August 2011 |
[2011] EWHC 2207 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs. Justice Eleanor King
Case No: FD08D04694
Mr. Jonathan Cohen QC (instructed by Mercy Messenger) for the Appellant
Miss Nichola Gray (instructed by Family Law in Partnership) for the Respondent
Hearing dates: 26th and 27th July 2011
This is an appeal by the Appellant husband from a financial remedy order made following the breakdown of his marriage to the wife by District Judge Bowman on 27 October 2010. The order followed a nine day contested hearing which had started on 1 February 2010. After 4 days the case was adjourned part heard for a further five days in July 2010 after which the hearing was concluded.
The order was not finalised until 22 December 2010 although the Appellant husband's Notice of appeal was filed on 8 November 2010. Amended Grounds of Appeal were filed on 9 May 2011.
Background
The wife was born in 1966 and is now 44yrs. The husband was born in 1961 and is 50 years of age.
The parties met in the mid 1990s and married in 1998. It was the first marriage for the wife and the second for the husband. The parties separated in April 2008 the wife petitioned for divorce in September 2008. Decree nisi was pronounced in October 2009.
The husband has two children from his first marriage; A who is 21 and a student at university and B who is 18 and has learning difficulties such that he lives in accommodation provided by the local authority.
There are two children of the marriage: E born 21 December 1998 (12) who it is hoped will be going to public school in September 2012 and F who was born on 23 July 2002 (9). Until 2009 the children were educated at a London day school, thereafter they were enrolled as day pupils at a preparatory school in the West Country where they remain.
Whilst in all other respects the litigation between this husband and wife has been marked by its length, bitterness and quite astounding cost, (the learned District Judge called it intense, disagreeable and expensive [25]), the parties have to their credit, been able to work together in the interests of their children. They have developed a shared care arrangement which appears to work to the satisfaction of all involved; Each of the parties has a house in the area of the children's school. The children split their week as between their parents and generally speaking, the parent who does not have the children with them uses the time to go to London to work
The parties' position at trial
The total assets at trial were found by the District Judge to be in the region of £3.4m net [7] this is essentially represented by the value of each of their respective homes and the husband's business premises. The husband's home has a net equity of £1,361,750. There is a mortgage of £893,497. The wife's home, a farm and surrounding parcels of land, appears in the schedule of assets at £2,735,885 inclusive of the £249,000 in the discretionary trust. From this needs to be deducted about £380,000 the current mortgage which is going to be repaid by the sale of land and CGT of approximately £429,000 leaving a net equity of £1,926,885. (it should be noted that these figures are approximate for reasons articulated in argument but upon which it is not necessary to adjudicate.)
The husband's business premises in London were valued at £3.3m with a net equity of £451,000 less CGT of £384,000. The business was valued on an earnings basis at £144,180 and his Directors Loan Account at £211,980.
The costs were over £450,000 by the time of the trial. Since then the appeal costs amount to a further £92,600 of which £75,800 relate to the husband's costs of the appeal.
The parties' open positions for trial were that the wife sought a lump sum of £100,000 and joint lives maintenance at the rate of £60,000 (to include the children's maintenance but excluding school fees). The husband sought a lump sum from the wife of £200,000 on a clean break basis.
The District Judge ordered that
i) The husband pay the wife a lump sum of £35,000, this was as 'payment' for tools and farm equipment the husband had removed from her farm without her permission
ii) Global periodical payments for the wife and the children at the rate of £47,500pa on a joint lives basis.
In addition it was recorded that the husband would pay the school fees. These are currently running at £24,000 pa but when E goes to public school they will be substantially more.
The husband, now represented by Mr. Cohen QC but represented by Mr. Marshall at trial, appeals both elements of the order and his Grounds of Appeal can be summarised as follows:
i) Grounds 1 and 2 Capital: That the learned District Judge failed to have sufficient regard to the fact that the wife would have the greater share of capital, that he had invested at least £200,000 in her farm and that the equipment removed had either been paid for by the husband either directly or indirectly as he ran the farm which generated the income to purchase the equipment. (The issue of the farm equipment was at the time of the trial the subject of a separate hearing yet to be resolved).
ii) The husband complains that the District Judge over calculated the assets by including business assets which would have to generate periodical payments on the assets schedule.
iii) Grounds 4 – 9 Income: the District Judge was wrong to order a global figure of £47,500 on a joint lives basis by:
a) Failing to make findings as to either parties current and likely future income or their needs
b) Failed to assess the husband's ability to meet the order and to reorder his finances in the way suggested by those representing the wife
c) Failed to have regard to the capital assets available to the wife from which it was reasonable to expect her to meet her needs
d) Failed to have regard to the existence of the 'shared care' arrangement and its associated costs or the cost to the husband of paying the school fees.
e) Failed to consider a deferred clean break
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] 1FLR 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 saying:
[32] …any appeal from a decision of a district judge in ancillary relief shall only be allowed by the circuit judge if it is demonstrated that there has been some procedural irregularity or that in conducting the necessary balancing exercise the district judge has taken into account matters which were irrelevant, or ignored matters which were relevant, or has otherwise arrived at a conclusion that is plainly wrong
Furthermore, in considering whether or not District Judge Bowman has been plainly wrong in whole or in part of her decision-making process, I take into account and apply the principles to be found in the speech of Hoffman in Piglowska v Piglowski [1999] 2 FLR 763 at 784. I do not propose to cite the whole of that passage, all of which I have borne in mind and propose to apply. I would, however, in particular draw attention to the observation of Lord Hoffman at page 784, that the reasons given by the District Judge:
"Should be read on the assumption that, unless he has demonstrated the contrary, the judge knew how he should perform his functions and which matters he should take into account. This is particularly true when the matters in question are so well known as those specified in section 25(2). An appellate court should resist the temptation to subvert the principle that they should not substitute their own discretion for that of the judge by a narrow textual analysis which enables them to claim that he misdirected himself."
I also bear in mind that, as Lord Hoffman observed, cases of this sort inevitably involve value judgments upon which reasonable people may differ and it is therefore inevitable that there will be some degree of diversity in the outcome of cases such as this.
I am reminded by Miss Gray on behalf of the wife that the District Judge had the benefit of 12 lever arch files of documents and that she heard oral evidence from the parties for approximately 4 days each. She underlined that which is well recognised, namely that the court of first instance has a significant advantage having heard the parties give such extensive evidence. This court should accordingly be slow to conclude that DJ Bowman failed to take any relevant matters into account or did not properly exercise her discretion.
The Assets
The wife's farm was originally held in a discretionary family trust established by the wife's father in 1969. In the...
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