McFarlane v McFarlane

JurisdictionEngland & Wales
CourtFamily Division
Judgment Date18 June 2009
Neutral Citation[2009] EWHC 891 (Fam)
Docket NumberCase No: FD01D08002
Date18 June 2009

[2009] EWHC 891 (Fam)

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Charles

Case No: FD01D08002

Between:
Julia Helena Chocholowska Mcfarlane
Applicant
and
Kenneth Irvine Mcfarlane
Respondent

Nicholas Mostyn QC and Jonathan Southgate (instructed by Family Law in Partnership) for the Applicant

The Respondent in person

Hearing dates: 19, 20 March and 17 June 2009

Charles J :

Introduction

1

For convenience (as was done during the hearing) I shall refer to the parties as the wife and the husband. This judgment is to be treated as a public document and it incorporates my reasoning and conclusions in the light of the arguments at the hearing and the written and oral points made by the parties following the circulation of drafts.

2

This is one of the cases considered by the House of Lords in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, [2006] 1 FLR 24. Paragraph (7) of the head note of that report of the case reads:

“(7) McFarlane was a paradigm case for an award of compensation in respect of the significant future economic disparity sustained by the wife, arising from the way the parties conducted their marriage. Equal division of the capital was not enough to provide for needs or compensate for disadvantage but unusually the husband's very substantial earning power was far in excess of the family's financial needs after separation. The wife, having given up her own highly paid career for the family, was not only entitled to generous income provision, including sums which would enable her to provide for her old age and insure the husband's life, she was also entitled to a share in the very large surplus, on the principles both of sharing and of compensation. The Court of Appeal had been wrong to set a 5-year time limit on the order, on the basis that the wife would save the whole surplus above her requirements and that she would have the burden of justifying continuing payments at the end of the order, especially given the high threshold. The burden should be on the husband to justify a reduction, at which stage the court could consider whether a clean break was practicable, which would depend on the amount of capital generated by the husband. ”

3

The issues now before me concern (1) the amount and period of periodical payments to the wife, whether they should be capitalised and whether there should now be a clean break, and (2) the amount and period of periodical payments for the children. These issues have not been brought before the court in the way that the House of Lords envisaged (i.e. by an application by the husband). The application before the court was issued by the wife. Initially her application issued on 17 May 2007 sought only an upward variation of the order of the District Judge dated 22 December 2002 relating to the periodical payments to be made for the children. The application was amended on 25 June 2007 to add an application for upward variation of the periodical payments to the wife. That application introduces the question whether the time has now been reached for a clean break or a deferred clean break.

4

The husband appeared in person with the assistance of his present wife, as a McKenzie friend. He produced and relied on well prepared written submissions, and he made his oral submissions and gave his evidence clearly and with sensitivity. In doing so he clearly demonstrated aspects of his abilities and character that have led to him being very successful in his work.

5

The wife was represented. When giving her evidence she became upset when describing aspects of the history concerning the move of the husband to live near to her and the children. Her affidavit sworn on 13 February 2009 does not do her justice and contains a number of passages that have the character of submissions or assertions. As will become apparent in my judgment some of these were not made out. I however hasten to add that in my judgment by her oral evidence she demonstrated that she was transparently honest and was doing her best to give an accurate account in respect of all aspects of her evidence, and thus as to the past, the present and the future. What shone through from her evidence was that she was genuinely and understandably concerned about her medium to long term future and her ability to maintain her present, or an appropriate, standard of living throughout her life.

6

In short both parties were impressive and in their own ways demonstrated their scars arising from the breakdown of their marriage and thus the existence of emotional and other factors which support and found the public and private interests in favour of a clean break. For example, I note that the husband submitted that the words of Lord Scarman in Minton v Minton [1979] AC 593 in particular at 608G that an object of the modern law is to encourage each spouse to put the past behind them and to begin a new life which is not overshadowed by the relationship that has broken down, remained wise and appropriate guidance. I found this an interesting recognition by a paying party of the benefits of a clean break and the taking of the risks inherent in it for him. The problem for both sides and the court is whether in all the circumstances a clean break can be achieved fairly.

The background facts

7

During the course of argument I was referred to the bound volume prepared for the hearing before the House of Lords. This contains an agreed statement of the facts in the following terms:

“1. The parties are aged 45 years. Their relationship began in 1980 at Durham University. They cohabited for two years and then married on 1 September 1984. There are three children: J, born on 30 May 1989 ————, S, born on 20 April 1991 —————; and H, born on 21 June 1996 ————-—. The family lived in South-West London. The children are being educated at private schools. The parties separated in December 2000.

2. When they began to cohabit in 1982, the Appellant was about to commence work as a solicitor's articled clerk working at Clifford Turner, a well-known City firm of solicitors. The Respondent was a trainee chartered accountant working for Touche Ross. Prior to their marriage, the parties purchased the first of four homes that they bought together during the course of their relationship and marriage. By about the time that they married in 1984, they had both qualified in their respective professions. In 1985, the Appellant moved to 3i, a large venture capital company, which provided the parties with the benefit of a reduced rate mortgage. After the birth of J she returned to work for 3i. In 1990, the Respondent became a partner in Touche Ross. Until this time, the Appellant earned as much as and, for a period, more than the Respondent. In 1991, just before S's birth, the parties agreed that the Appellant should give up work. They agreed to concentrate on the husband's career in order to provide the funding of the family's lifestyle. The Appellant has not since returned to work as a solicitor, but has on two occasions begun to re-train. When J and S were in full-time education the Appellant started a P.G.C.E. (Professional Graduate Certificate in Education) course with a view to becoming a full-time teacher. This was abandoned when H was born. Later the Appellant trained as a teacher of English as a Foreign Language, having some paid employment in 2001 and 2002. In Summer 2002 the Appellant sat and passed two of the three exams required to become an Independent Financial Adviser. Her case was that this was primarily so that she could understand the advice she was being given in relation to her wish to secure her future and that of the children.

3. The Respondent is still with the successor to Touche Ross, namely Deloittes. He was head of corporate tax planning, but is now responsible for the operation of the tax practice.

4. In 1994, the parties bought the house known as 12 Ranelagh Avenue, Barnes, London SW13, which was valued at trial at £ 1.5m. It was purchased in the Appellant's sole name in an attempt to protect it from possible claims arising from the Respondent's profession. The parties resolved to and did pay off the large mortgage on the property in 1999. Shortly before they separated, the parties had purchased in their joint names a holiday home in Salcombe, Devon, which at trial was valued at £255,000. In June 2000, a flat was bought in the Respondent's name in Clerkenwell for £415,000. This gave rise to borrowings of approximately £450,000, which he paid off almost entirely in some 16 months. By 1 March 2002 he had reduced the borrowing to £50,000. After the parties separated in December 2000, the Respondent moved into this flat.

5. On 10 December 2001, the Appellant issued divorce proceedings in the Principal Registry. These were not defended. There was a decree nisi on 22 February 2002. This was made absolute on 28 May 2003.

6. By the early summer of 2002, the Appellant and the Respondent had agreed on a broadly equal division of the capital of approximately £3 million owned by then, all of which had been accumulated during their marriage, apart from an inheritance of approximately £40,000 that the Appellant had received from the estate of her father in 2001. The parties agreed that the Appellant was to retain the former matrimonial home in Barnes, in which she and the children continue to live, and which at the trial before the District Judge had an agreed value of £1.5 million and no mortgage. The Appellant also had some modest investments and funds at the bank. The Appellant and the children continued to live in the former matrimonial home until the judgment of the Court of Appeal, when the Appellant then sold 12 Ranelagh Avenue for £1,790,500 and purchased a property in South Kensington for £2.542 million, including costs of purchase.

7. The parties further agreed that the Respondent...

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