Peter Nicholas Lawrence v Donald James Gallagher
| Jurisdiction | England & Wales |
| Judge | Lord Justice Thorpe,Lord Justice Moses,Mr Justice Ryder |
| Judgment Date | 29 March 2012 |
| Neutral Citation | [2012] EWCA Civ 394 |
| Docket Number | Case No: B4/2011/1714 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 March 2012 |
[2012] EWCA Civ 394
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
The High Court of Justice Family Division
Mrs Justice Parker
FD09D00474
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Thorpe
Lord Justice Moses
and
Mr Justice Ryder
Case No: B4/2011/1714
Patrick Chamberlayne QC (instructed by Charles Russell LLP) for the Appellant
Timothy Bishop QC and Nichola Gray (instructed by Boodle Hatfield) for the Respondent
Hearing date: 8 March 2012
Introduction
This is said to be the first substantial appeal concerning financial orders made following the dissolution of a Civil Partnership. The sum total of the available assets is £4,175,000. The judge awarded the applicant £1,690,000. The Respondent appeals with the leave of this court.
The fact that the claim arises from the dissolution of a Civil Partnership rather than a marriage is of little moment since it is common ground that the language of schedule 5 of the Civil Partnership Act 2004 is identical to the language of s.25 of the Matrimonial Causes Act 1973.
The proceedings
The appellant in this court, Mr Lawrence, is an equity analyst at JP Morgan. The respondent in this court is Mr Gallagher, an actor. At the date of the judgment below the appellant was aged 47 and the respondent 54.
In February 1997 cohabitation commenced when the respondent moved into the appellant's home, a flat in Clink Wharf.
On the 17 th December 2007 the parties entered into a Civil Partnership. Their relationship broke down 7 months afterwards. They separated in September 2008, the appellant petitioning for dissolution on 23 January 2009. A conditional order of dissolution was granted on the 24 April 2009, being made final on the 10 June 2009. It was common ground that the Civil Partnership should be treated as having lasted for 11 years and 7 months.
The Respondent issued his Form A on the 23 March 2009 and thereafter proceedings continued through first appointment, affidavits, valuations and questionnaires.
The trial before Mrs Justice Parker resulted in a reserved judgment of the 7 June 2011.
The history of acquisitions
The appellant had purchased his flat in 1995 as a shell for £285,000 subject to a mortgage of £183,500. He spent £140,000 on fitting out the flat.
In July 1996 the respondent bought a property in Victoria Park for £75,000 with the advantage of a mortgage of £60,000. The respondent had £27,000 to meet the balance and to pay for improvements.
This property was sold in June 1998 for £135,000, the net proceeds being invested in a property in Nutbourne for £159,500. The net proceeds were £66,000 to which the appellant added a contribution of £34,000. The respondent provided a further £60,000 by way of mortgage. As such their contributions were 21% from the appellant and 79% from the respondent.
Nutbourne was sold in May 2002 for £295,000, the net proceeds being invested in the purchase of Pine Cottage, Amberley for £618,000. The net proceeds of £230,000 were augmented by the £60,000 mortgage rolled over and a contribution of £330,000 from the appellant. A subsequent deed of trust declared their respective interests to be 62% to the appellant and 38% to the respondent. After the purchase the appellant spent approximately £307,000 on perfecting Pine Cottage.
In 2001 the appellant redeemed the mortgage on Clink Wharf from his own resources. Subsequently he has re-mortgaged in the sum of £498,000 to provide a loan to his brother of £308,000, which he anticipates will be repaid in due course, and a loan to his father of £155,000, which he regards as irrecoverable.
The appellant paid the respondent interim maintenance of £1,000 per month from November 2008 until March 2010 when the respondent obtained a leading role in a West End production.
In December 2008 the respondent put his small pension into draw down, receiving £5,000 in cash and monthly payments of £79. 99.
The Trial
The respondent's case in the court below invoked the sharing approach and discounted 5% from equality. Thus he sought 45% of the agreed schedule of assets.
The appellant's case below rejected the sharing approach, arguing that the Clink Wharf flat was not a partnership asset and further that the relationship should be characterised as a dual career relationship, a categorisation that found its origin in the decision of the House of Lords in Miller and McFarlane. The appellant contended for a needs assessment under which the respondent would receive a lump sum of £420,000 to re-house plus a pension share of £183,000.
However, in my judgment the appellant's aspirations below were quite unrealistic and his case was rightly rejected by the judge.
She broadly adopted the respondent's case, holding that Clink Wharf was partnership property and that there was no evidence to support the submission that she should adopt a dual career categorisation.
In a careful and conscientious judgment Parker J set out the issues, directed herself very fully and conscientiously on the wealth of authority now available in the determination of s.25 cases and made clear findings in favour of the respondent, although recording that the parties "seemed pleasant and intelligent individuals, but each is strongly committed to his own point of view". She conscientiously applied the s.25 criteria and stated her conclusions between paragraphs 131 and 142. The outcome was expressed in paragraphs 143 – 151 under the sub-heading "Decision".
In order to understand the issues in and outcome of this appeal it is necessary to cite those paragraphs in full:
"143. PL's proposals are very inadequate. They do not meet DG's needs for a house of reasonable standard and amenity and his need for capital to provide income; they ignore the length of the partnership, their shared lives and finances, standard of living, and the work he carried out on both country properties but especially the Amberley property. In all the circumstances it would be grossly unfair to award PL both properties and to confine DG to a smaller less attractive property, as his only asset save for his miniscule pension at the end of this partnership.
144. I approach this case on the sharing principle, but I exclude for the calculations the deferred compensation scheme, because Mr Bishop's concession that DG only seeks to share in the value of those schemes once paid, in whatever sum, and I shall deal with those assets separately. I shall not take into account at all as part of the assets to be shared the value of PL's art works and pianos which are truly personal. Other chattels will be divided by agreement. I shall also deal with the pension separately, and first.
145. I accept that there must fairly be some adjustment for the fact that the pension has grown not just by capital growth but by contribution since separation. I assess an appropriate share of £200,000 just over one third of PL's pension, plus his own pension.
146. I take the assets excluding pension and deferred compensation scheme, and art works and pianos which I do not bring into account as £3,298,857. 45% of that, which seems broadly right in the circumstances to reflect PL's initial contribution, is £1,484,485.
147. Alternatively, if I were to award DG one half of both properties and the savings and investments but give PL credit for the value of the equity in the London flat at 1997, by taking the value at £500,000 (and thus giving some allowance for inflation) but deducting the mortgage of £183,500, thus giving a net equity in 1997 of about £316,500 and also credit for the savings of £66,000 brought in by PL (although, I am aware that they could be said to be matched by the capital that DG brought in), the equity to be divided would be £1,447,033, (£1,829,533 less £382,500) of which 50% is £723,516 and the sums in total would achieve a similar figure:—
London flat
50. net equity £723,516
Amberley cottage
50. £411,000
Savings and investments
50. £320,000
Total £1,454,516
148. I accept that DG should keep the Amberley cottage.
149. In my view the right overall figure including pension is £1,600,000 made up by:
Pension
£200,000
Amberley cottage
£822,000
Lump sum
£577.778
Total
£1,600,000
150. This is just under 42% of the total including the pensions but excluding the chattels and deferred compensation schemes. It will provide DG with free capital of just under £500,000 once his debts are paid, the equivalent of a Duxbury fund of about £28,000 pa, plus the pension share. The retention of the home and provision of an income is sufficient to provide for DG's needs, generously assessed. He will continue to earn and he will be able to utilise the Amberley cottage to earn an income.
151. In addition I shall award DG 45% of the deferred schemes when they come into payment. They have vested, and they are part of the assets acquired during the partnership. On current values this could achieve a further £90,000".
Submissions
Mr Patrick Chamberlayne QC for the appellant asserted that the judge had made four erroneous findings. First that the respondent had pressed the appellant to transfer Clink Wharf into joint names but the appellant had refused. It was conceded that there was no evidence to that effect.
Second, it was asserted that the judge erred in not accepting the appellant's evidence that he had had a professional valuation of Clink Wharf at the commencement of co-habitation in the sum of £650,000.
Third, it was...
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