V v v
| Jurisdiction | England & Wales |
| Judge | Charles J |
| Judgment Date | 21 December 2011 |
| Neutral Citation | [2011] EWHC 3230 (Fam) |
| Court | Family Division |
| Docket Number | Case No: FD09D05113 |
| Date | 21 December 2011 |
[2011] EWHC 3230 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Charles
Case No: FD09D05113
Brent Molyneux (instructed by Payne Hicks Beach) for the Appellant husband
Jonathan Swift (instructed by Beyer Family Law) for the Respondent wife
Hearing date: 6 October 2011
Introduction
This is an appeal from a decision of District Judge Cushing. She gave her judgment on 23 February 2011 at the end of a hearing which began on the 21 February 2011. Her judgment was therefore given at, or very shortly after, the end of submissions. A transcript of that judgment, and of the hearing, is included within the appeal bundle. I would like to pay tribute to the quality of the judgment.
The application before the judge was an application by the respondent to this appeal (who, for convenience, I shall refer to as the wife) for financial relief under the MCA 1983 against the appellant (who, for convenience, I shall refer to as the husband). Both parties were represented by the same counsel and solicitors before me and the judge.
The judge heard evidence from both parties and she gives a helpful summary of the relevant history. As she sets out:
i) the parties started to live together in October 2002, when the husband was 33 and the wife was 23. He is Italian and she is Swedish,
ii) they became engaged in April 2003, when the wife was pregnant, a university student (I was told on a business management course) and was about to take her final examinations. She obtained her degree,
iii) the husband was working as an investment banker and the wife told the husband that she was very happy to be engaged and it was common ground that there was no immediate pressure from either party to get married,
iv) their oldest child was born on 4 July 2003,
v) in due course, the wife felt the time had come for the parties to marry, the husband agreed but made it clear that it was important for him that before they married they entered into a prenuptial agreement,
vi) the husband is 10 years older than the wife and before the commencement of their relationship he had amassed a certain amount of wealth as a result of his endeavours and through inheritance,
vii) the wife had no objection to entering into a prenuptial agreement, and what was described as "a marriage settlement" was drawn up by a Swedish lawyer known to the wife's family, with whom she communicated by e-mail (the e-mails were before the judge),
viii) the marriage settlement was entered into on 5 June 2005, and was re-executed on 5 August 2005 to correct a small error in the inventory of the husband's property set out in the schedule to it,
ix) the parties married on 27 August 2005 in Sweden,
x) their second child was born on 9 June 2006,
xi) the wife stayed at home with, and so was the main day to day carer of, the children. There was no need for her to go out to work during the marriage and the parties' choice was that she would not do so. She has a degree but no professional qualification and has not worked since she was 19,
xii) the parties separated in May 2008,
xiii) the wife remained living at the former matrimonial home with the children, and was living there with them at the date of the hearing before the judge. It was a rented flat in the Old Brompton Road,
xiv) the husband was made redundant in June 2009, and
xv) in September 2009 he took up new employment at a bank in Milan at a salary of 125,000 euros per annum (net around £55,000 per annum) which was significantly below his rate of remuneration in his earlier job.
There was little difference between the asset schedules provided by counsel to the judge. Excluding chattels and pension, the capital totalled £1,289,347 of which £1,155,413 (made up of assets, investments and cash less liabilities) was in the husband's name and £133,934 (made up of cash and a small investment, less liabilities) was in the wife's name. The liabilities included outstanding legal fees. The husband also had a pension fund of £94,214.
The income position was that the husband was earning £55,000 per annum net and the wife was in receipt of benefits (tax credits and child benefit) of £6,849 per annum.
The mix of the assets in the husband's name was:
| i) A house in Italy | £273,772 |
| ii) Land in Italy | £59,019 |
| iii) Bank accounts | £13,427 |
| iv) Investments | £692,752 |
| v) Guaranteed bonus from his previous employer | £582,782 |
| vi) Liabilities | (£466,339) |
The house in Italy was bought in June 2003, and so shortly after the engagement. At the date of the marriage it had an estimated value of around £340,000. It is not a practical home for the husband having regard to where he works. It is not, and has not been, let out. The possibility that it might be let was recognised by the judge but apart for that the possible rent was not quantified or brought into account.
The land in Italy was bought by the husband's father in 1983 and was transferred to him and his sister equally in 1985. In 2005, it had an estimated value of £140,000. Both of these properties are included in the inventory of the husband's assets attached to the Marriage Settlement together with "assets as funds and bonds on deposit in bank accounts in Sweden and Switzerland". The total value of those properties and assets listed in that schedule was about £1,080,000.
About £350,000 of the husband's guaranteed bonus from his earlier employment was outstanding and was due in 2011 and 2012, the next tranche in March 2011.
The award made by the judge was as follows:
i) the husband was to pay the wife a lump sum of £667,100 which, with the assets in her name less liabilities, gave her capital of £800,000 (rounded), and
ii) the husband was to pay global periodical payments of £30,000 prefaced by a recital recording that the wife's household income should equal £40,000 before any income earned by her should be capable of impacting on the quantum of her maintenance award. The spousal element was payable for joint lives until remarriage or further order of the court.
The case was argued on the basis that the wife intended to remain in England with the children and so was not planning to return to Sweden, and that the husband would be living in Italy and travelling regularly to England to see the children. The thinking behind the lump sum was to enable the wife to buy a home in a small area close to the former matrimonial home, the judge having found that:
"34. The wife came across in evidence as a particularly nervous person which was acknowledged by the husband, very fairly, in my view. He said she had always been anxious and nervous. She is particularly anxious about health matters, both for herself and the children and about safety. She only feels safe in that very small area of London. This is not to say that the wife has any physical or mental disability —I was not provided with any evidence that she does —but it is certainly the case that she is acknowledged to be very anxious. I've thought long and hard about how this should be managed and I asked her, if she had a certain amount of money to buy a house, what would her priority be: The safety issue or the size of the accommodation? She did not hesitate to say that for her it was safety that came first."
This award left the husband with: (a) £489,000 of non-pension capital of which £156,000 (rounded) was liquid, or would be paid as part of his guaranteed bonus from his previous employer, and (b) his income and prospects.
In percentage terms (including pension) the wife received 58% and the husband 42% and, if pension is excluded, the wife received 62% and the husband 38% and present income (excluding any rent that might become payable for the Italian house) was effectively shared equally.
The task facing the judge was complicated by the fact that the husband had been a much higher earner during his previous employment and so the lifestyle enjoyed during the marriage could not be replicated from his present earnings. As to the income award, and the husband's prospects, the judge said:
"30. I find that the parties each have a need for approximately £40,000 of income to live at a standard not unrelated to the way they lived during the marriage, but by no means at the standard that they enjoyed during the marriage. The husband said that he did not expect to be able to obtain better paid employment than the employment he has with [the bank in Milan]. I do not know if he is right, but he is certainly an ambitious man and at 41 he is not too old to think in terms of a better paid job once again though I recognise the difficulties that face him in the current climate and with his particular experience —————-—"
The judge continues:
" 32. As the resources are not there to meet the budget which I find is appropriate for each of the parties to the marriage, I decided that the fairest thing to do was to share the available income equally and they will both have to manage as best they can ——————"
To my mind that is not a finding on the husband's evidence concerning his prospects of obtaining better paid employment, and the judge did not make such a finding elsewhere. Rather, she dealt with this factor on the basis that there is an obvious possibility that the husband might, at some unspecified time in the future, get a better paid job. This approach necessarily carries with it, when considering the husband's prospects, a need to recognise the possibility and thus the risk that, as he asserted in evidence, the husband would not do so, or at least that he would not do so in the short term. But, in my judgment, this is overlooked by the judge later in her judgment when she is taking the husband's earning capacity and prospects into account.
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