SP v LP
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Moylan,MR JUSTICE MOYLAN |
| Judgment Date | 11 December 2007 |
| Neutral Citation | [2007] EWHC 2877 (Fam) |
| Court | Family Division |
| Date | 11 December 2007 |
| Docket Number | Case No: FD0501332 |
[2007] EWHC 2877 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr Justice Moylan
Case No: FD0501332
Martin Pointer QC and Deborah Bangay QC for the Applicant
Lewis Marks QC and Ian Cook for the Respondent
Approved Judgment
Hearing dates: 22/10/2007–26/10/2007
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment is being handed down in private on Tuesday, 11 th December. It consists of 28. pages and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.
The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.
This judgment follows the hearing of the Wife's ancillary relief application
The Wife is represented by Mr Pointer QC and Miss Bangay QC and the Husband by Mr Marks QC and Mr Cook.
I have heard oral evidence from the Wife, the Husband and the jointly instructed expert accountant, Mr H. I have read those parts of the bundles to which I have been referred. I have also received comprehensive written and oral submissions. I have taken all the matters raised by them into account when reaching my decision.
During the course of the hearing, the stress of the proceedings was palpably evident on the parties and particularly the Wife. It brought home to me yet again the benefits of an agreed settlement and the emotional as well as the financial cost of contested litigation. The impact of the latter are often, in my view, underestimated at the early stages of proceedings.
The Wife's case, in summary, is that she should receive broadly half of the current wealth. It is contended that this represents a fair share of that wealth and that her needs would not be met if she received any lesser amount. In total the Wife seeks approximately £9.6 million based on total resources, put by her, at approximately £19.5 million. The latter figure includes a number of contingent deferred assets and includes assets in employee benefit trusts at their gross value.
The Husband's case, also in summary, is that the Wife's award should reflect the fact that a significant part of the current wealth is non-marital as it has accrued since the parties separated. He puts the marital wealth at approximately £8.8 million net (£10.8 million gross) and the non-marital wealth at approximately £4.5 million net (£6.8 million gross). The net figures are after deduction of a significant tax charge potentially payable if the funds in the employee benefit trusts were distributed. He proposes that contingent assets (included within these totals) should be shared in kind (in differing proportions) so that the amount each party receives reflects the actual value received rather than an estimate. The Husband states that his offer would provide the Wife with £5.2 million from the accrued assets and with over £6.1 million if the contingent assets materialise. It is contended that the Wife will be able to meet her needs even if none of the contingent assets are received.
I will further explain the differences in the totals contended for by each party, and their respective positions, later in this judgment.
History
The Husband was born in England and is now aged 53. He moved to live in South Africa in 1975 and is domiciled in that jurisdiction.
The Wife was born in South Africa and is now aged 52. She remains domiciled in South Africa.
The parties married in South Africa on 20th December 1980. They signed a conventional ante-nuptial contract in South Africa on 25 th November 1980. Sensibly neither side has contended that it has any relevance in these proceedings. The parties separated briefly in 2002 but the marriage effectively came to an end when the parties separated finally in March 2005. Measured to that date it was a 24 year marriage.
There are three children: A (aged 23); B (aged 21) and C (aged 18). A is in full-time employment in South Africa. The younger two children are still in full-time education.
The Husband has spent his career in financial services. The precise details are not relevant. His career started in 1980 when he joined a firm of stockbrokers in South Africa. Since then it has progressed and developed as he has moved up the corporate ladder and as, through the businesses where he has worked, he has been part of the mergers and acquisitions which have been a feature of the financial services industry over the last 25 years. Between 1991 and 1997 he, and the family, lived in the USA where the Husband had been transferred. In 1997 they moved to live in England when the Husband was transferred here. He remains employed in England at Company Z.
As with many careers, the financial rewards received by the Husband have not followed a steady pattern. In the course of his evidence, the Husband said that most of the resources now represented in the Schedule of Assets were received in the recent past. This is not unusual. It is not unusual for financial rewards to increase substantially during the later part of a person's career. This might be predictable, reflecting the work done and experience gained during the earlier years, but can also be unpredictable as it might reflect external factors such as the state of the global economy or the flotation or sale of a business.
As the Husband's career has developed so has the standard of living enjoyed by the family. In 1998 property K , the family's home in England, was bought for £1.9 million. The property was then refurbished. It is now valued at £3.5 million. Also in 1998, a plot of land was purchased, and a house subsequently built, in Plettenberg Bay, South Africa. This has been the family's holiday home which they have used largely at Christmas and Easter. It is now valued at R21.5 million (approximately £1.5 million). In 2004 a London property, property D, was bought. This was bought for £1.8 million and a very significant additional amount was spent of refurbishing and furnishing the property (in total approximately £1 million). It is now valued at £3.5 million.
It is clear that the family have enjoyed a very good standard of living in other ways. Their holidays have been expensive and they have been able to afford other luxuries. In the course of his evidence the Husband referred to a “£200,000 event” as though this was not an event worthy of significant comment.
The Husband gave evidence that he intends to leave his present employment at some stage in the course of the next 3 to 6 months. He will join a new venture called S. This is a business set up by former colleagues of the Husband's and will focus on his specialist area, natural resources. He anticipates having to invest up to £1.5 million for an interest of up to 50%. In his written Skeleton, Mr Marks submitted that this is a “risky venture” and that the Husband will take a huge drop in income. Whilst I accept that the Husband's income will drop from its very high current level, I do not agree that this can be described as a risky venture. In his oral evidence the Husband estimated that his income with S would, over time, build up in line with his “normal” Z incentive award. He also gave no indication that he viewed his investment in the company as “risky”. Indeed, the company has been trading for over a year and appears to be doing reasonably well. The Husband did not specifically address this in his oral evidence, but in his Affidavit of 28 th September 2007 he refers to the bonus pool which the company has achieved in its first year's trading (to be split between 5 people).
The Husband first informed his current employers at the end of 2005 that he was proposing to leave. In a letter from the Husband's solicitors dated 25 th October 2005 it was said:
“It is my client's intention to leave Z in January 2006 with a view to returning to South Africa and setting up his own business. If and when my client leaves Z, his income will then be uncertain and in all probability minimal for at least the first year or two of the business.
At the moment, my client's plans are in their early stages, although he has already indicated his intention to resign to Z so as to forewarn them”.
In his Affidavit of 27 th January 2006 the Husband said: “my intention is to return permanently to South Africa in the near future” and “I have not yet made a decision about whether I will leave Z. I did inform them that I would be resigning before the end of 2005 but do not yet know whether I will leave Z at this stage”. He has explained the content of letter of 25 th October as being his solicitors, at his request, flagging up this point.
In the event the Husband was persuaded not to leave Z at that time. He agreed to stay and was granted additional deferred shares realisable on 28 th February 2008 and 9 th June 2010 as an additional incentive to stay with Z.
The position was updated in a letter from his solicitors dated 14 th June 2007.
“Prior to the FDR, it was my client's intention that he would be leaving Z shortly after the payment of his bonus in February or March of this year. My client is still at Z and it has taken him longer to leave than he had envisaged. It is still the case, however, that he intends to leave Z and he expects his departure to be finalised within the next few weeks. His intention is to take a well-deserved rest over the summer...
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