S v S
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bodey |
| Judgment Date | 15 December 2014 |
| Neutral Citation | [2014] EWHC 4732 (Fam) |
| Court | Family Division |
| Date | 15 December 2014 |
| Docket Number | Case No. FD13D02074 |
[2014] EWHC 4732 (Fam)
IN THE HIGH COURT OF JUSTICE
(FAMILY DIVISION)
The Royal Courts of Justice
The Strand
London WC2A 1LL
Mr Justice Bodey
Case No. FD13D02074
Mr Southgate QC AND Mr Calhaem appeared on behalf of the Applicant
Ms Bangay QC AND Mr Sear appeared on behalf of the Respondent
A: INTRODUCTION:
This is an application by Mrs S for financial remedy orders against Mr S. For convenience I will refer to them as "the husband" and "the wife." It raises questions as to how to deal fairly with the fact that the husband brought into the relationship and marriage substantial wealth (£13 million) upon which the current kitty of some £25 million is directly or indirectly based. It also raises fiercely disputed factual issues as to when the parties' 'relationship leading to marriage' began; whether in 1995 or 1997. This is said to matter because within that disputed period the husband received a crucial payment of £9 million from a particular business transaction which enabled his business to grow. It is a case of considerable bitterness as between the parties which has impacted negatively on their attitudes to one another and on their approach to a fair overall outcome.
The wife has been represented by Mr Southgate QC and Mr Calhaem; the husband by Miss Bangay QC and Mr Sear. I have been provided with extensive written and oral submissions together with a bundle of authorities regarding pre-marital wealth and the so-called 'marital acquest'. There are two core bundles and some 14 lever arch files of documents which would certainly not have satisfied the new dispensation as regards bundling in financial remedy cases. I have heard evidence from the following witnesses: (i) the wife; (ii) her accountant, Jason Lane; (iii) the husband; (iv) his accountant Julia Wallace-Walker; (v) the husband's daughter B; (vi) his son, C, and (vii) his PA, Mrs D.
There is a drive for shorter judgments in financial remedy cases (see eg per Wilson LJ as he then was at paragraph 24 of K v L [2011] 2 FLR 980). But there is much ground to cover here and I have failed in my objective of brevity. Apart from the 14 issues set out in the undated 'agreed composite statement of issues' there are numerous sub-issues and mini-disputes. An attempt to resolve them is neither necessary nor proportionate for the resolution of the simple underlying issue: 'how much should the wife be awarded?' I have however read and re-read my notes all the documents to which reference has been made and so have all these sub-issues well in mind.
B: THE PARTIES' OPEN POSITIONS
The wife seeks a 33% to 40% share of the current 'kitty' which, on the figures used, translated to a lump sum of £9,150,000. That would be on the basis that she would transfer to the husband a property ("The Small House") in the country adjacent to the former matrimonial home at a value of £450,000 gross. This would leave her worth £8.7 million on a clean break basis with no order as to costs. She accepts that the husband will retain the former matrimonial home ("The Big House") and the seaside holiday house ("The Seaside House").
The husband maintains that this is a so-called 'needs' case because the wealth brought by him into the marriage, coupled with 'passive growth' on it, means that there is in fact no 'matrimonial property' or so-called 'marital acquest'; all the assets are non-matrimonial property. Alternatively, he says that the maximum amount of 'matrimonial property' as calculated by the wife's accountant is only £6.3 million, which he accepts would be insufficient shared equally to meet the wife's needs. His open offer, ignoring timing of payments, is to pay the wife £3.5 million, comprising a lump sum of £3.3 million and preference shares worth £200,000 in the main company, redeemable after five years. He would retain The Big House and The Seaside House. The wife would transfer to him her interest in The Small House, being responsible for her own tax on the transfer. There would be no order as to costs. So the parties' open positions are £5.2 million apart (£8.7 million sought, £3.5 million offered).
Leaving aside the disputed question of the duration of the parties' pre-marriage cohabitation, the core issues are as follows:
(a) Is this essentially a 'sharing' case? If so, at what percentage?
(b) Or is this essentially a needs case? If so, what are the wife's needs? Should any such needs award, if it seems inadequate, be enhanced to take account of the 'sharing' principle?
(c) What award would be a fair outcome in all the circumstances of the case having regard to section 25 of the Matrimonial Causes Act 1973?
C: SIMPLIFIED BACKGROUND
The factual background is long and detailed. It appears from a 'Composite Chronology' dated 10 th November 2014, which Mr Calhaem has prepared in an attempt to combine both sides' chronologies, for which I am grateful, I adopt it as a working document. Reference may be made to it for any greater detail than appears herein. To make this judgment free-standing, I highlight the more important features of the history as follows.
In 1943 the husband was born, making him now aged 71. He has two adult children by his first wife, Mrs E (whom he married in 1969) namely B aged 42 and C aged 37. As I say, he called them as witnesses at this hearing. In 1964, aged 21 (some 50 years ago), having qualified at night school as a Chartered Surveyor, he began property holding and development as his business. He has continued in that business ever since. He has a particular interest in giving new life to historic old buildings, which he has combined with a significant degree of charitable work. He holds a number of prestigious positions which it is unnecessary to describe.
In 1967 the wife was born making her now 47. She has no children. The parties tried IVF but unhappily were unsuccessful.
On 13 th July 1973, aged 30, the husband incorporated F Ltd which later became G Ltd. In October 1996 it changed its name to H Ltd, the husband's current main company. As from the date of a Declaration of Trust dated 31 st March 1976, creating a Settlement for B and C ("the children's trust"), the ownership of the shares in F Ltd / G Ltd / H Ltd became and remains: the husband's 77.5%; the children's trust 22.5%.
In 1973 the husband incorporated J Ltd, a property company which was subsequently floated in 1981 and later collapsed in 1993.
In 1981 the husband bought land and built on it a seaside property, The Seaside House. By now he and Mrs E had their two children, B and C, whose names were incorporated into the brickwork. The husband says he regards himself merely as a custodian of The Seaside House for them and has in mind conveying it to them. The wife said in evidence that she thought this would be reasonable. In 1986 the husband set up a charitable trust.
In August 1988 the husband purchased the long leasehold of a property in London W1 ("the London House") for some £600,000 odd via one of his property companies. Originally it was an investment property but much later, having been renovated and converted by the husband from medical use into a fine five storey Georgian residence, it was to become the parties' first matrimonial home.
In about 1992 or 1993 the husband and Mrs E separated. He moved to a flat in Mayfair, London, W1, which he or one of his companies already owned.
At about the same time as separating from Mrs E J Ltd collapsed with debts of around many hundreds of millions. According to the husband's Form E dated 24 th April 1997 in his financial proceedings with Mrs E, the value of his assets reduced thereafter to some £2 million.
On 1 st October 1993 the husband purchased a one third share in K Ltd for £1. It bought out divisions of a government agency and subsequently 'turned them around'. K Ltd was a genius project which, within a few years, made the husband a great deal of money.
On 5 th October 1993, aged 26, the wife moved to London from Ireland where she had been brought up. She had been an insurance clerk there from 1986 when she was 21 and she wanted to make a change. She moved into rented accommodation with her sister, a cousin, and a couple of others in East London ("the East London House"). A few days later she commenced working as a PA with K Ltd, which is how she came to meet the husband.
In and after November 1994 the parties' relationship started, initially with dinners out at good restaurants. The husband originally said it started in 1995 but I am satisfied from all the evidence, including the wife's diaries, that it was in 1994. He was then aged about 51 and the wife about 27. He was still living on his own in the flat in Mayfair and was comfortably off. The wife accepts that she had no capital.
At about the beginning of 1995, as I am satisfied on the evidence, the husband moved into The London House whilst the renovation works there were still going on.
On or about 8 th September 1995 the wife gave up her job with K Ltd and a few days later started a year's floristry course. At the end of that month (September 1995) her sister returned to Ireland. No significant investigation occurred at the hearing as to what exactly happened to the East London House at that time.
During 1995 the husband purchased the long leasehold of The London House from his company which owned it, at a price of £1,050,000 with a mortgage of £650,000. He thus became personally the owner of the property.
At the end of October 1995 (the husband says it was not until late 1997) the wife says she moved into The...
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