Rose v Rose
| Jurisdiction | England & Wales |
| Judgment Date | 2002 |
| Neutral Citation | [2002] EWCA Civ 208 |
| Docket Number | B1/2001/2383 |
| Date | 20 February 2002 |
| Court | Court of Appeal (Civil Division) |
[2002] EWCA Civ 208
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE – FAMILY DIVISION
(MR JUSTICE COLERIDGE)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Phillips – the Master of the Rolls
Lord Justice Thorpe and
Lord Justice Buxton
B1/2001/2383
FLORENCE BARON QC and DEBORAH BANGAY
(instructed by Radcliffes of London SW1P 3SJ) appeared for the appellant
NICHOLAS MOSTYN QC and LEWIS MARKS
(instructed by Charles Russell of London EC4A 1RS) appeared for the respondent
THORPE LJ:
Mr and Mrs Rose married on 19 September 1984. They have since been divorced but for convenience I will refer to them as the husband and the wife. From their marriage there are two children, a girl of 16 and a boy of 14. Both attend well known London day schools. The parties separated, partially in February 2000 and completely in September 2000. The divorce proceedings, at first contested, were compromised, a decree nisi being pronounced on the husband's cross petition and made absolute on 21 February 2001. At the time of this skirmishing the husband sought injunctions to restrain the wife from molestation and from bringing the party cited into contact with the children. In support of these applications the husband filed extensive evidence in which he dealt with the wife's conduct and character according to his perceptions.
However the real issue between the parties was the price to be paid by the husband for a clean break. A sensible agreement had been reached between the parents for a joint residence order under the terms of which the children shared their time between the former matrimonial home in Chelsea Square and a temporary home that the wife had rented in the vicinity.
The financial issue was created by the extent of the husband's fortune. In the most general terms he had outright ownership of assets approaching £7.5M and in addition he and his sister were equal beneficiaries in a family settlement worth just over £12M. Having regard to the fact that other family trusts, worth about £10M, had been accelerated to benefit the children of the marriage it was not unrealistic to regard his half share in the trust which he shared with his sister as being effectively his money.
The wife initiated her financial claim on 17 March 2000. Forms E were exchanged on 18 May. The husband's Form E did not make conduct an issue. Accordingly, given the fact that much of the husband's fortune was inherited, the real issue in the case was what capital sum would satisfy the wife's needs, particularised as a good house in Chelsea, the costs of acquiring it and kitting it out, and a Duxbury fund. The first FDR hearing took place on 15 January 2001 and achieved a short-term agreement to provide the wife with substantial maintenance pending suit as well as the substantial rent of her temporary home. However it was considered premature to attempt to compromise the longer-term and the FDR was adjourned to 3 August 2001 and certified fit for vacation business. An order was made for the filing of full affidavits setting out the respective cases on all issues relevant to the exercise of the judicial discretion, but subsequently the husband's solicitor sensibly proposed that affidavits should be deferred until after the adjourned FDR to ensure that contentious allegations should not prejudice the prospects of a negotiated settlement. Since the trial had been fixed for November there would be ample opportunity to file such evidence should the adjourned FDR fail.
The FDR was fixed before Bennett J. In preparation for the hearing the husband's solicitors filed all the documents that they considered relevant, comprising two lever arch files. In addition to the essential information as to family finances they included the husband's affidavits as to the wife's conduct and character sworn in the injunction applications and expert reports, from agents as to the valuation of the wife's housing needs and from forensic accountants as to the reasonable level of her future expenditure. Gauging the weight of those files without any detailed inspection I would hazard that it must have taken Bennett J at least half a day to prepare for the adjourned FDR hearing for which the full day had been set aside. In further preparation the judge had the advantage of written submissions and appendices, extending to 20 pages, prepared by Miss Baron QC for the wife. Mr Singleton QC, leading Mr Marks, filed their skeleton argument with appendices extending to some 14 pages.
It is necessary to record the events of 3 August 2001 in some detail. The judge sat at 10.30am to hear Miss Baron enlarge upon her written skeleton. Her oral submissions account for the first 48 pages of the transcript. Mr Singleton responded over the course of the following 31 pages of the transcript. Miss Baron's reply covered three pages. Throughout those 84 pages of transcript the main issues debated were:
i) Whether the wife's needs should all be met by a conventional unrestricted payment or whether a substantial portion of her needs should be met by a life interest in a trust fund.
ii) The reasonable cost of buying and kitting out the wife's future home.
iii) What budget would the wife reasonably require to meet the costs of an appropriate standard of living in a new home. Although the husband had a substantial earned income from his employment as well as a substantial unearned income he emphasised that his practice had always been to live modestly and to devote a substantial proportion of his annual income to increase his capital worth.
At the conclusion of counsels' oral submissions Bennett J said that he would retire briefly to consider the broad indication he would give as to outcome should the case go for contested hearing in November. He returned after approximately twenty minutes to give that indication in a reasoned statement extending over five pages of the transcript. First he said that the husband's life interest in the settlement would be regarded as his capital resource, giving him for the purposes of the litigation a fortune of approximately £13M. Next he held that it would be reasonable to allow the wife £1.875M for her house purchase. Apart from shaving her claim for kitting out the house he accepted her other immediate needs, namely costs of purchasing the home and the cost of a new car. However the judge was robust in criticising the suggestion that the wife would require to spend £110,000 per annum. Although he dismissed the suggestion that she had a notional earning capacity he put her annual budget, excluding periodical payments for the children, at £65,000 per annum. On what was for the husband the key question, namely whether her provision should be outright or partly in trust, the judge indicated that it was not a case for such restriction having regard to the fact that the children were already very well provided for and that the wife should not be restricted in the control of her own home. The overall cost to the husband of a clean break on these promises would be £3.6M.
After short exchanges with counsel the judge adjourned, it then being 1.05pm, to enable the parties to negotiate.
We are able to establish what then occurred both from Miss Baron's recollection and from an attendance note subsequently prepared by the husband's solicitor Miss La Follette of Charles Russell. It seems that after approximately an hour of discussion with his team the husband instructed Mr Singleton to offer to bring the wife's assets up to £3.4M, about £200,000 less than the judge's indication. Before receiving any response the husband instructed Mr Singleton to advance an alternative proposal of £3.7M, £1M of which would be in trust. Miss Baron's counter proposal was £3.5M outright, giving credit only for the value of the wife's portfolio, approximately £270,000 and all derived from the husband.
The solicitor's attendance note shows that the husband then agonised and each member of the legal team offered advice. It is clear that Mr Singleton eventually advised the husband to break off negotiation and to reflect, on the basis that the wife's counter-offer would not go away overnight. However the husband grasped the nettle and instructed Mr Singleton to accept Miss Baron's counter-proposal.
The judge was summoned and the court resumed at 3.40pm. Miss Baron said:
"I have to tell your lordship that we have come to terms. The terms are that my client will receive a clean, clear package, which is £3.5M, and it will be monies that are paid to her and there will be no trust. She will receive as well her costs paid in full in an agreed sum of £149,396."
There followed the explanation that the precise sum to be paid by the husband in order to bring the wife's assets to £3.5M net depended upon ascertaining the value of the portfolio as at that day together with the amount to be allowed for CGT. In conclusion Miss Baron said that she would draw up an order and agree it with Mr Singleton. The judge then turned to Mr Singleton who effectively offered brief assent without correction. The day's proceedings concluded with this exchange:
"Mr Singleton: Unless there is anything I can add?
Mr Justice Bennett: I am very happy to record it.
Miss Baron: My Lord, we are very grateful for the time and trouble.
Mr Justice Bennett: Congratulations to you all.
Miss Baron: Thank you very much indeed my lord. Is your Lordship available in the next week for the order to be approved?
Mr Justice Bennett: Yes, certainly.
Miss Baron: Thank you very much.
Mr Justice Bennett: Not at all."
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