Primavera v Primavera
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GLIDEWELL,LORD JUSTICE RALPH GIBSON,LORD JUSTICE BUTLER-SLOSS |
| Judgment Date | 14 March 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0314-10 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 March 1991 |
| Docket Number | 91/0271 |
[1991] EWCA Civ J0314-10
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
BOOTH J.
Royal Courts of Justice
Lord Justice Glidewell
Lord Justice Ralph Gibson
and
Lord Justice Butler-Sloss
91/0271
MR. JAMES GIBBONS (instructed by Messrs John Welch & Stammers) appeared on behalf of the Appellant (Respondent).
MR. DAVID BODEY (instructed by Messrs Judge Sykes & Harrison) appeared on behalf of the Respondent (Petitioner).
The parties to this appeal (who, like Booth J., from whom the appeal lies, I shall call "the husband" and "the wife", despite the fact they have now been divorced for twelve and a half years) were married in 1960. They have two daughters, Francesca, who is now aged 30 and married, and Louisa, who is now aged 25 and single. The decree absolute in the divorce proceedings between them was pronounced in August 1978. The husband has since re-married and has three children by his second marriage. The wife has not re-married.
The husband is a restaurateur. He has a 99 per cent share in a company which owns a restaurant in Covent Garden; indeed, if I understood it correctly from something counsel said, two restaurants. At the time of the divorce the first restaurant was popular and successful. It has since expanded. The business has become even more successful and the first restaurant is now catering to a more expensive part of the market.
Before the divorce the husband and the wife each had a half share in the matrimonial home, which was a house called Pond House, in Dulwich. Its value was then put at something like £125,000.
The wife's application for ancillary relief was resolved by an agreement made between the parties themselves, which is much to their credit. The order which followed and which was made on 28th April 1980 (and not, incidentally, on the date which appears in the transcript of the learned judge's judgment, which I think is a transposition of days and months and appears as 24th August) was to the following effect. The husband undertook to let the wife retain a number of items of jewellery, about which there had been some discussion, as her own unfettered property; to permit the wife to retain a Mercedes motor car as her own unfettered property, a car which, judging by its registration number, must have been of some antiquity at that stage; to permit her to retain items of furniture for which she had asked from the former matrimonial home; and (an interesting and slightly novel provision) to provide and/or cause to be provided to her a motor car of the current value of approximately £2,000 every second or third year and to pay the expenses of that car, except for the cost of petrol and oil. In return the wife undertook to transfer her interest in the former matrimonial home to the husband; to transfer the share which she held in the restaurant company to the husband or to his order; and to resign as a director of the company. The order then stated that upon those undertakings the respondent was ordered to make periodical payments to the wife at the rate of £10,000 per annum less tax, which, in broad terms, now comes to £8,000 net; and to pay her by way of lump sum maintenance the sum of £72,200. The £72,200 was sufficient to enable the wife to purchase a house for herself and the two daughters, who were then in their late and middle teens respectively, the younger daughter still being at school and the older daughter having left school shortly before the divorce took place. At that time the wife was 39 years of age and the husband 45 years of age.
The wife did not work and has not worked, save that to a perhaps nominal extent she was a director of and took a part in the management of the company. The husband did not expect her to work. He made it clear in one of his affidavits that, albeit he thought that if she did obtain some form of employment it might actually be a good thing from her point of view, he did not look to her to do so in order to reduce his financial obligation to her.
I take up the story after the divorce as summarised in the judgment of Booth J.:
"…she purchased and sold, not advantageously, a number of houses all of which she intended to be her home but which for one reason or another were not suitable. Finally, in February 1986 she purchased her present home at Brixton Water Lane for £100,000 with a mortgage of £30,000. This property is a modest Georgian terrace house which meets the wife's needs but has required substantial renovation and maintenance work and capital is still required for further repairs. The wife felt able to embark upon the purchase of this property, which is a house she had long since admired, because in November 1985 the husband voluntarily increased the periodical payments to £15,000 per annum less tax. He continued paying at this rate until November 1986 when there was a disagreement. This disagreement concerned the beneficial interest in the proceeds of a life assurance policy. In 1980 the wife had believed that all the life assurance policies were owned by the husband and that she had no interest in them. The husband, too, said that this was the case. When this particular policy matured it transpired that the wife was the beneficiary. The husband, who had paid the premiums up to date, asked the wife to sign over the proceeds to him. She refused to do so. So, in November 1986, the husband ceased to pay any periodical payments to her. He did not resume payments until, in March 1987, the wife issued her application under section 31 of the 1973 Act".
The wife made her application for a variation of the order for periodical payments in order to increase them on 17th March 1987. In March 1988 the husband made a counter application for a decrease in periodical payments. That appears not to have been pursued with any great enthusiasm of vigour at the hearing. Certainly the judge dismissed it and there is no appeal in respect of that.
The major bone of contention between the parties, both before the judge and in this appeal, relates to something that arose not very long after the wife had made her application for a variation because, sadly and unexpectedly, the wife's mother died in, I think, the early summer of 1987. She died as the result of an operation from which everybody including herself confidently expected her to recover. She died intestate leaving a house in Holmdene Avenue in South London and liquid assets of just under £22,500.
Again reading from the judgment:
"When she was in hospital she expressed the wish to the wife and Louisa, and probably also in the presence of Francesca, that she wished the house at Holmdene Avenue to be sold and the proceeds to be distributed equally between the wife and the two daughters. The wife was the sole beneficiary of her mother's estate, but nevertheless she regarded herself as implicitly bound by her mother's wish".
The judge found, having heard not merely the wife but also Louisa giving evidence, that it was the view of Louisa and no doubt also of Francesca that this should be the case.
Thereafter the mother's house was valued by the district valuer for the purposes of letters of administration in the sum of £105,000.
"The wife put it on the market for sale at the end of 1987 and she was negotiating with a third party, indeed she had reached an agreement subject to contract to sell the house for £130,000. But at that stage Louisa suggested that she should buy the house herself. She pointed out to her mother [the wife] that if she did so they could save fees both of estate agents and solicitors and, in the end, according to the judge, she prevailed upon her mother to allow her to purchase the property at the district valuer's valuation of £105,000 and the sale was duly completed on 14th July 1988 at this figure. But after carrying out some work on the property Louisa succeeded in selling it in December 1988 for £181,000. The wife, as she thought, shared the proceeds of sale equally between herself, Francesca and Louisa so that each received £35,000. In fact, as has been clearly demonstrated, Louisa received the benefit of a considerably larger sum by way of various discounts which were allowed to her and in addition had the not inconsiderable windfall when she sold the property".
I should say that the discounts came about in this way". Louisa had made the calculation that if the house was sold for £130,000 there would have to be deducted from that sum both fees of various kinds and also capital transfer tax. But she miscalculated the capital transfer tax and put it at substantially too large a figure. The result of that was that almost coincidentally the resultant balance on her calculation was the £105,000 at which the property was sold to her; it should have been more than that at the proper capital transfer tax figure. So, even allowing for the division into three, the sum should have been more than £35,000 each. That is the point to which the judge was referring in the passage I have just read, coupled with the fact which has not really entered into the argument but is a fact that Louisa benefited very greatly by being able to sell the house not long afterwards at a considerable profit.
The judge said:
"The wife's dealings with her mother's house give rise to the principal issue which I have had to determine. This is whether the wife was reasonable in adhering to the expressed wishes of her mother or whether she should have retained the entirety of her mother's estate (less the £10,000 given to her daughters which the...
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