N v N (Ancillary Relief)

JurisdictionEngland & Wales
CourtFamily Division
Judgment Date28 April 2010
Neutral Citation[2010] EWHC 717 (Fam)
Docket NumberCase No: MS07D00596
Date28 April 2010

[2010] EWHC 717 (Fam)

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION

Before: Mr Justice Charles

Case No: MS07D00596

Between
N
Applicant
and
N
Respondent

Nicholas Mostyn QC and David Burles (instructed by Hughes Paddison) for the Applicant

James turner QC (instructed by Charles Russell LLP) for the Respondent

Hearing dates: 1 to 4 February 2010

Draft circulated 11 March 2010

Charles J :

Introduction

1

For convenience I shall refer to the Applicant as the wife (who is 54) and the Respondent as the husband (who is 55). This is the wife's application for ancillary relief. The parties met in June 1978 and married in October 1978. They formally separated in May 2007, having decided between themselves earlier in 2007 that they would separate. They have four children, three boys and a girl. The oldest, a boy (N), is now 27 and the youngest, also a boy, is aged 21. N lives in New York and hopes to remain there. He is engaged to be married. The younger three children are all involved in tertiary education and are living in England.

2

The parties met in Buenos Aires (the city of the wife's birth). The wife was then 22 and the husband was 23. The wife was taking a five-year degree in social science, which she gave up to marry, and the husband was in the middle of a PhD course at Stanford University, California. Their wedding reception was held at a house (S Hall) where the husband's maternal grandmother then lived. It is a very large Queen Anne house, set within the walls of a three and a half acre garden and surrounded by fields, parkland and woodland. It is a property that has been in the husband's family for some time. It replaced an earlier property where members of his family had lived for many years. It is now owned by a company (the “Company” or “REC”) and is subject to a 50 year lease granted to the husband in 1987.

3

After their marriage the parties lived in California whilst the husband completed his PhD. They lived in graduate student housing. The husband had a stipend from the University and a small dividend income from the Company. The wife took up some odd jobs to supplement their small income. Whilst continuing his course the husband got a part-time job at a software company in Silicon Valley (DT Ltd) and in 1981 he moved to England to start up its European Distribution. He was based in Cheshire. With the benefit of a loan from the Company of about £20,000 and a mortgage, the parties bought their first home, in Cheshire. It was a semi-detached Edwardian house, in need of repair.

4

In 1984, DT Ltd opened an office in Isleworth and the parties moved to London. They sold their home in Cheshire and bought a home in Balham, again with the benefit of a loan from the Company and a mortgage. In 1986 they moved to a slightly bigger house, in Clapham. The eldest three children were born in 1980, 1984 and 1986, and the youngest was born in 1988. Both of their homes in the London area needed work doing to them. The wife took the main responsibility for the day-to-day supervision of that work and did much of the more manageable work herself (e.g. decorating and tiling). She did this at the same time as having and looking after their young family. The husband was working long hours for DT Ltd, in which he acquired some shares.

5

In 1987, the parties sold their home in Clapham and moved to S Hall. The husband was granted his 50 year lease, and the net proceeds of the home in Clapham were largely spent on decorating and other work at S Hall, which became the matrimonial home of the family.

6

In early 1989, the husband's grandmother gave the vast majority of the chattels at S Hall to the husband. She died in 1990. At that time the husband's salary was £55,000 per annum from DT Ltd, the oldest child had just gone to prep school and the intention was that all four children would be privately educated. This is what happened.

7

In 1991, the husband ceased working for DT Ltd. This event, and the background to it, was a disappointment to both the husband and the wife and put an end to what the wife described as a dream to create a Silicon Valley type success. DT Ltd was sold the next year and the husband received about £150,000 net for his shares which, as he pointed out, enabled him to pay a lot of school fees.

8

After a short spell working as a consultant, in 1992 the husband's career took a change in direction, in that he moved to work in the Banking sector, where he found his niche in the sphere of financial market's technology. His earlier working life had given him expertise that was relevant to this area of technology.

9

In 1996, he changed Banks and in 2000/01 he was transferred to work at that Bank's New York office. He was successful and his promotion was meteoric. The parties moved to New York. At first they lived in a large rented apartment (over 4000 square feet). They bought a smaller apartment in 2004 for US$ 2.325m, with the help of a mortgage of about US$ 1.46m (which was subsequently repaid from the husband's earnings and options) and US$329,008 from a successful investment made by the husband's cousin, Mr G. This apartment has three bedrooms and a large living space. It was transferred from joint names to the wife in 2008.

10

Between 2000 and 2005, the children were at boarding schools in England and the wife did a considerable amount of travelling between New York and England to see them and to oversee the general running of S Hall (which was also used over the years for some business entertaining). By this stage the husband was earning a very high salary and the circumstances and lifestyle of the parties were very comfortable.

11

The husband loved and excelled at his work. The wife greatly enjoyed the urban life (now in New York rather than London) that she had been reluctant to give up when the parties moved to live at S Hall in 1987, and which she had missed. The wife also developed her talent for art. She is passionate about her work as an artist but has no income from it. She told me, and I accept, that if people became interested in buying her work she would be delighted.

12

The husband says, and I accept, that he planned to retire when he stopped working for the Bank in New York. But his time there was shortened by the departure of his boss in October 2004 and he left in May 2005.

13

A firm of head hunters had told the husband that he should consider the Chief Information Officer role (CIO) at another Bank in the UK. The parties discussed this and they agreed that he had unfinished business in the industry and that he would be bored and unhappy if he was to quit then and not try for this CIO post. He did apply for the post and was appointed in June 2005. This is the post he still holds.

14

When the husband took on this new post he was based in London and the parties returned to live at S Hall. In her statement the wife says that the move back to S Hall was a deeply unhappy event for her, that by then their relationship had deteriorated greatly and without New York as a back drop the differences between them became insurmountable. A significant factor in this was that the wife did not want to return to live at S Hall and wanted to have a home in London where she could live and work, and to use S Hall for week-ends. The husband took a different view. As a result of these problems the wife continued to spend significant periods of time in New York.

15

Both parties have now formed new relationships. Each asserts that they have no intention of re-marrying or cohabiting. The husband's girlfriend is not wealthy. The man who the wife described as her friend and lover (Mr B) appears to be very wealthy and lives in the USA. He has recently bought a home in New York for about US$ 30m and has embarked on considerable work and expenditure on that property, creating, for example, a gallery for his art collection.

My approach in law

16

At the heart of the legal arguments advanced in this case is the approach to be taken to inherited and gifted assets. There was inevitably common ground that the source of the husband's shares in the Company and of some of the chattels provided a “good reason” for a departure from equality in the application of the sharing principle.

17

This case therefore raises points that I have addressed recently in R v R [2009] EWHC 1267 (Fam) and J v J [2009] EWHC 2654 (Fam). Neither side argued that my analysis and approach in those cases was wrong. Indeed, the wife through her Counsel adopted and invited me to follow my conclusions in paragraph 424 (i) to (xvii) in J v J.

18

I shall not repeat my lengthy discussions of the law in those cases. I adopt and apply them and in particular the passages relating to (a) the “general starting point”, (b) the relationship between the application of the need principle and the sharing principle, (c) the way in which the parties led and organised their lives together, (d) the analysis of how the court is to assess the departure from equality for good reason in the application of the sharing principle (and see Behzadi v Behzadi [2009] 2 FLR 649), (e) the impact of post separation events, (f) cohabitation and new relationships after the breakdown of the marriage (and see Grey v Grey [2009] EWCA Civ 1424), (g) the spring board based on pre-acquired or gifted assets, (h) budgets and (g) clean break.

19

Having earlier adopted my approach in J v J, Counsel for the wife in his final submissions reminded me of, and placed weight on, (a) paragraphs 66 and 67 of the judgment in Charman (No 4), and (b) the point that, as acknowledged in R v R and J v J, the sharing principle applies to all the assets. This reference to Charman (No 4) was in connection with the assessment of the departure from equality for good reason and the overall percentage division of all the relevant assets after an award.

20...

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