JurisdictionEngland & Wales
CourtFamily Division
Judgment Date08 Dec 2006
Neutral Citation[2006] EWHC 3409 (Fam)
Docket NumberCase No: BS50D01056

[2006] EWHC 3409 (FAM)




The Guildhall Court,


Lewins Mead,




Mr. Justice Coleridge

Case No: BS50D01056


MR. CHRISTOPER SHARP, Q.C. appeared for the Applicant.

MR. NIGEL DYER, Q.C. appeared for the Respondent.

Approved Judgment

Tape Transcription of Marten Walsh Cherer Ltd.,


th Floor, 12–14 New Fetter Lane, London EC4A 1AG.

Telephone No: 020 7936 6000. Fax No: 020 7427 0093




I shall call the parties “husband” and “wife”, although the decree nisi was pronounced in 2005.


Following a total period of co-habitation lasting fourteen years, ten of them as husband and wife, the wife seeks by this application financial provision for herself and twins aged nine.


Until recently there was nothing especially unusual about the factual basis for this application. However, in the latter stages of it, during this summer, the husband, until then a high flying and highly paid chief executive officer of an international bank, gave notice to his employers that he would cease his employment with them at the end of this year with a view to becoming a self employed banking consultant based in Australia.


Unsurprisingly, that revelation excited the wife's suspicions that this was a last minute tactical move to reduce his financial exposure and potential liability to her arising out of the application. Unsurprisingly also, therefore, much of this hearing has been concerned to explore the husband's motives for this dramatic development and the financial implications for his ongoing earning capacity in the period after the cessation of his lucrative and secure employment.


Both parties are determined to achieve a clean break. Whether, in the current climate, that would have been achievable when the husband was earning in the region of half a million pounds a year, which he is until his resignation, is a moot point. However, it is now accepted on both sides that his earnings will not be at anything like that level in the period following his resignation. So what is the proper level of capital provision on a clean break basis to provide for the wife (and the children who will be with her) taking into account such earning potential as he still retains? That is the core issue in this application.


That somewhat lengthy introduction obscures the fact that, with the help and skill of their specialist advisors, by the time this application was opened some three days ago, the parties had very considerably narrowed the gap that lay between them. Most of the issues had been resolved. In so far as they were unable to bridge the final gaps their task has undoubtedly been made somewhat harder by the current confusion surrounding the law in this area.


Let me start with the areas of agreement. The husband in his open offer made the following proposal. Firstly, a transfer to the wife of the entire proceeds from the sale of the matrimonial home, now £447,851. The wife would also retain all the other financial assets presently in her own name; £546,786. These are mainly made up of the shares in the bank by which the husband was employed and which had been transferred to her. It has also been agreed that there would be a pension sharing order of the husband's pensions in the Bank of A—at a fraction which would achieve equality between them. Finally it was also agreed that such things as the wine a would be divided between them.


Further the husband has agreed that he will pay periodical payments to the children at the rate of £6,000 per annum, index linked, until each attains the age of at least seventeen or ceases full time secondary education. There remains an issue as to tertiary education. It is agreed also that the husband will continue to meet the children's school fees at their current prep school and, in support of the arrangements for periodical payments for the children and their school fees, it is agreed that a secure fund of £130,000 would be set aside by the husband out of his retained resources to ensure that the periodical payments are met in a timely way and that the school fees will be available for at least the next three and a half years whilst they continue their private education for that period.


Those then were the very significant areas of agreement before the start of this hearing.

The issues


The main issue was as to the level of further capital by way of a lump sum which would be paid by the husband to the wife. The husband's proposal is that, out of the remaining cash, he should pay her a further sum of £275,000. The wife aspires to £500,000. That is the principal issue with which I have been concerned.


Looking overall at the value of the husband's offer based on his proposed lump sum offer; out of assets totalling approximately three million pounds, including pensions, the wife would have a total of some 1.7 million pounds, leaving him with 1.3 million pounds (out of which he had offered to set up the secure fund of the £130,000 to guarantee the agreed provision for the children and their school fees for the next three and a half years). Again, looking at the overall effect of the wife's proposal; she aspired to a total provision of just about two million pounds plus the secure fund. On that basis, obviously, the husband would have been left with about a million pounds less the secure fund.


The sub-issues which drive the resolution of main issue are really these. Should the main driver for the division of the capital be the wife and children's “needs”, as the husband contends, or should I also have special and extra regard to compensating the wife for the loss occasioned by her career break whilst living with the husband and now whilst bringing up the children? The evidence is clear that her career is now getting back on its feet. And, additionally, how and to what extent should the husband's future earning capacity be taken into account? More prosaically within the context of needs, there have been the familiar arguments relating to the correct level of housing for the wife and her income/budgetary needs.


So far as the children alone are concerned, the only remaining issues are whether or not the periodical payments should be paid to the end of their secondary or their tertiary education and, secondly, whether or not the husband should be ordered today to pay school fees beyond the end of the period that has been secured by the fund. Alternatively, should that issue be left for now without an order but on the basis of the husband's stated and recorded present intention to pay those fees if he reasonably can do so when the time comes?


So far as the evidence is concerned, I have had very lengthy statements from the parties dealing with the background to the marriage and the marriage itself. I have also heard from them at considerable length in the witness box. Last but not least, I have been provided with detailed opening and closing notes from counsel which have both identified and advocated the issues with their customary economy and clarity. They have made the performance of my task, in one sense, a great deal easier but, in another, because of their quality, more difficult.


There have been very few real factual issues between the parties. The difference is largely one of emphasis and argument as to the past and future. I found both the husband and the wife were compellingly honest, straightforward and impressive witnesses. Both are obviously very strong characters with strongly held and strongly expressed views. Both are highly intelligent, talented, articulate and energetic. Unsurprisingly, this was a high octane mix for any marriage and it is accordingly unsurprising that, when the marriage floundered, these proceedings have become acrimonious for reasons which both lay at the door of the other. At one point it looked as if the case might even embrace issues of conduct. Happily and mercifully, the parties have drawn back from that debate which in this case would, I am convinced, have been sterile.


So far as the husband's resignation from D Bank is concerned; having heard him at length and having read his statements dealing with the events leading up to his decision to leave and to change direction, I accept his explanations and accept that these proceedings have played no part in the decision making process. At the end of the day I sincerely hope that, following this hearing, the parties will begin to co-operate again. There are signs that that is already happening. There is no doubt that these children will benefit hugely from their parents' sensible co-operation in the coming years. Conversely, they will suffer if the battles continue to rage.

The background


So far as the background to this matter and the basic factual matrix is concerned, I have the huge advantage of a document described as “Summary and Chronology” agreed between the parties prior to the hearing. It is, therefore, not necessary, at this point, for me to go into great detail about the background. The parties themselves, of course, are very familiar with the background. Put simply, the “Summary and the Chronology” show the following.


The wife is forty seven and living at the moment in rented accommodation in Bath. She has set up a design consultancy business and a property search company with the help of a business partner. The husband is forty six. He is currently employed by the D Bank as its CEO based in Dubai. That employment ceases at the end of this year when he plans to work as a self employed banking consultant in Brisbane. At the present time he is living in Dubai but he plans to move shortly to Australia.


Having met in November 1990, the parties began to co-habit in 1991. At the time when they met the wife...

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