Robson v Robson

JurisdictionEngland & Wales
JudgeLord Justice Ward,Lord Justice Thomas,Lord Justice Richards
Judgment Date21 December 2010
Neutral Citation[2010] EWCA Civ 1171,[2010] EWCA Civ 1484
Docket NumberCase No: A2/2009/1602,Case No: B4/2009/1640
CourtCourt of Appeal (Civil Division)
Date21 December 2010
Between
The Hon. Erik Maurice William Robson
Appellant
and
Chloë Annabel Robson
Respondent

[2010] EWCA Civ 1171

Mr Justice Charles

Before: Lord Justice Ward

Lord Justice Hughes

and

Lord Justice Patten

Case No: B4/2009/1640

FD07D05188

IN THE HIGH COURT OF JUSTICE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM FAMILY DIVISION

Mr Tim Amos QC and Mr Oliver Wise (instructed by Bircham Dyson Bell LLP) for the appellant

Mr David Balcombe QC and Mr Nicholas Westley (instructed by Farrer & Co) for the respondent

Hearing date: 3rd March 2010

Lord Justice Ward

Lord Justice Ward:

1

This is in the argot of divorce lawyers “a big money case” where the distinguishing feature is that the “big money” was inherited by the husband. For convenience I will refer to the parties as the husband and the wife.

2

By a detailed and complex order incorporating recitals and undertakings, Charles J. ordered in essence that, subject to decree absolute, the husband pay the wife a lump sum of £8 million on or before 1st January 2010. If it were not paid by that date interest would be payable at judgment debt rates from that date until payment was actually made. Specified properties were to be placed on the market on or before 20th August 2009 and sold at the best price reasonably obtainable as soon thereafter as was reasonably practicable. Provision was made for the transfer to the wife of a large number of valuable chattels. The husband was to pay the wife maintenance pending suit and thereafter periodical payments at the rate of £140,000 per annum from 9 July 2009 until the lump sum was paid in full whereupon a clean break was to be effected. The two children of the family were to receive maintenance at the rate of £15,000 per annum each from 9 July 2009.

3

The husband sought permission to appeal. Wilson L.J. directed that application to be heard by the full court with the appeal to follow if permission were granted. Having heard the well-presented, concise but cogent arguments from Mr Tim Amos Q.C. who with Mr Oliver Wise now represents the husband after a change of solicitors and counsel, and Mr David Balcombe Q.C. with Mr Nicholas Westley for the wife, the test for granting permission is satisfied and I would give leave accordingly. Both parties seek to admit fresh evidence which we have looked at de bene esse.

The background

4

The parties were married on 7th September 1985 when the husband was 41 years old and the wife aged 29 years so they are now 66 and 54 respectively. They have two children, a son aged 20, now studying at the Cirencester Agricultural College, and a daughter aged 17 doing her A’ levels at a boarding school. The marriage broke down in 2006. The wife commenced divorce proceedings in September 2007 and decree absolute was granted on 11th February 2010. It was, in the jargon, “a long marriage”.

5

Charles J. gave a characteristically very long and detailed judgment. Many matters which troubled him do not concern us and I shall be savage in pruning the judgment to its essentials. Having dealt at length with the law, he correctly said this:

“190. That discussion of the law, and the opening and closing arguments of the parties show that important factors in this case are:

(i) the nature and value of the assets,

(ii) the lifestyle during the marriage and in broad terms the agreement, arrangements or understandings underlying it and thus, for example, the approach of the parties to the inherited wealth of the husband,

(iii) the expenditure of the parties during the marriage and their budgets by reference to that and their estimates of future income needs,

(iv) the value of properties that were, or might be, suitable for the wife and children, and

(v) the ability of the husband to raise finance to meet the wife's claims, and thus the financial impact of an award such as that sought by the wife on him and, by reference thereto, the fairness of such an award.”

I shall concentrate on those aspects as found by the judge and the check-list of factors set out in section 25 of the Matrimonial Causes Act 1973..

The husband's property and other financial resources

6

The husband's father was the founder of a well-known accountancy firm. Both his mother and his father were “hardworking, energetic and resourceful individuals” and the father was extremely successful, not only as a highly respected member of his profession but in a number of astute property and investment speculations that he made. “It was essentially the professional and entrepreneurial skills of the husband's father that produced the wealth which has been handed on to the husband, his two sisters and [his eight grandchildren.]” (Quotations are lifted from the judgment.) The accumulated wealth is represented by a number of assets of which some demand closer examination.

The Oxfordshire Estate

7

The husband's father bought the family's Cotswold estate in 1954 and it has been home to the husband ever since. It has been his pride and joy and, having seen the particulars of sale, I can well understand why. It is accurately there described as

An unknown jewel in the heart of Oxfordshire

Magnificent grade II listed country house with five reception rooms, orangery and nine principal bedrooms in a Capability Brown park

39 further estate houses and cottages including the majority of the village of K.

Commercial business premises totalling 6165 sq ft

In-hand farming enterprise, tenanted farm and woodland

An excellent pheasant and partridge shoot

In all about 2050 acres (829 ha).”

It is without doubt a magnificent property and one has to have some sympathy with the husband over his reluctance to contemplate its sale.

8

In the mid-1960s the husband's father settled what has been called the “Farm Estate” on a Bermudian trust company under a discretionary trust. In 1977 maintenance and accumulation trusts were created, the result of which was that the Farm Estate was to be held in one third shares for the children of each of the husband's two sisters and the children of the marriage at 25 for life with power to appoint capital to them. The family trust therefore skipped the husband's generation in favour of the grandchildren of the husband's parents.

9

In 1965 the Farm Estate was leased back to the husband's father under a lease for a term of 21 years with a full repairing covenant but no covenant against assignment.

10

The husband's father died in 1982, survived by his widow, leaving his estate to his three children subject to his widow's life interest and with powers to advance or appoint capital to her. Sometime later there was an assent in favour of the husband's mother of the main house (“the Hall”), the Dower House, other cottages and some land but she almost immediately made a gift of this, excluding the Dower House, to the husband. When she died, she left the Dower House to her daughters, but the husband then purchased it from them. In the result, he became the owner of all the freehold estate not in the Family Trust.

11

When they married, the husband and wife lived in one of the large properties on the estate. In 1989 the husband's mother moved into the Dower House and the husband and wife were able to enjoy the Hall as their matrimonial home. After the marriage broke down the wife removed to another substantial farm property on the estate.

12

As for the Farm Estate held by the trustees, the position was pregnant with doubt and confusion. It was one of the several matters which understandably vexed the judge and much of his detailed judgment deals with those matters. A summary is sufficient for this judgment.

13

In 1973 a farming partnership was formed between the husband and his parents. The last partnership seems to have been between the husband and the wife on a 90/10% share. There was a distinct lack of clarity about the lease of the Farm Estate and what, if any, lease was a partnership asset. Moreover, as the judge observed:

“39. … there has been a lack of attention over the years to ensure clarity and fairness between the competing and conflicting interests of the Family Trust and the tenant in respect of the Farm Estate.”

14

The assumption, accepted by the judge, was that the husband had an annual tenancy of the Farm Estate on the terms of the Fixed Term Lease. His landlord was the trust company of which he and his sisters had become directors. He, as chairman, was the person responsible for the day-to-day affairs of the trust company and for the proper management of its interest as the freehold owner of the Farm Estate. There was thus an obvious, but perhaps not always properly heeded, potential conflict of interest.

15

That conflict assumed importance in the case because the husband without notice to or prior discussion with the other directors of the trust company, assigned his yearly tenancy to two companies owned by him and acquired for that purpose. The intended effect was to avoid the possibility that the landlord (the trust company) would serve notice under section 6 of the Agricultural Holdings Act 1986 requesting the tenant (the husband) to enter into an agreement in writing embodying all the terms of the tenancy. Arbitration would have been likely to follow with the result that the rent would inevitably have increased and a covenant introduced to prohibit or limit assignment. By this pre-emptive strike, the husband increased the value of his leasehold interest at the expense of the trust company and the family trust. This did not escape the judge's criticism:

“50. Unsurprisingly, and in my view correctly, the wife's solicitors raised the point that these assignments were, or might be, in...

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