VB v JP

JurisdictionEngland & Wales
JudgeSIR MARK POTTER,,PRESIDENT OF THE FAMILY DIVISION,Sir Mark Potter,
Judgment Date29 January 2008
Neutral Citation[2008] EWHC 112 (Fam)
Docket NumberCase No: FD01D01620
CourtFamily Division
Date29 January 2008

[2008] EWHC 112 (Fam)

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Sir Mark Potter,

President of the Family Division

Case No: FD01D01620

Between:
Vb
Applicant
and
Jp
Respondent

Hearing dates: 9–10 October 2007

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgmentthat copies of this version as handed down may be treated as authentic.

SIR MARK POTTER, PRESIDENT OF THE FAMILY DIVISION

This judgment is being handed down in public on 29 January 2008. It consists of 29 pageshas been signeddated 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 locationthat in particular the anonymity of the childrenthe adult members of their family must be strictly preserved.

Sir Mark Potter, P:

1

This is a wife's application pursuant to section 31(7) of the Matrimonial Causes Act 1973 (“the 1973 Act”) for an increase in the amount of the periodical payments payable under paragraph 2 of a consent order dated 28 June 2001 (“the original order”) relating to the wife's claims for ancillary relief following divorce from her husband after a marriage which had lasted some eleven years. The husband is 43the wife is 45. The parties were married on 29 September 1990. There are two children of the marriage, both boys: B born 21 August 1994 (now 13)M born 19 November 1996 (now 11). They lived with the mother. They go to separate schools. B is a day boy at a well-known public school. M attends a separate preparatory school as a day boy, but it is intended that he will proceed to his brother's school in September 2009.

2

Under the original consent order there was a capital clean break, including a provision as to pension sharing whereby the wife received approximately 60% of the capital assetsthe husband 40%. The wife received the four-bedroom matrimonial home in Welwyn Garden City, mortgage freevalued at £330,000.00 together with its contents, the family carother assets totalling some £28,100 her personal pension of £26,000. She also received a lump sum in lieu of a pension share of £50,000. The husband retained assets of £195,000 plus his pension of £147,000.

3

The husband agreed to providepay to the wife (i) periodical payments for herself at the rate of £33,000 per annum during joint lives until her re-marriage, her co-habitation with another person of not less than six months, or further order; (ii) periodical payments for the benefit of each of the children of £24,000.00 per annum until they attain the age of seventeen or cease full-time tertiary education if later, or further order; (iii) the school fees for both boyssuch reasonable extras as should be agreed between the parties; (iv) BUPA benefits for the wifechildren as long as they were in receipt of periodic payments; (v) should he cease to be partner in his solicitors' firm, a life insurance policy on the whole of his life for £600,000 at a cost of £7,000. per annum.

4

At the time of the consent order, the husband's gross income was £534,000, (net £340,000). Expressed as a percentage, including the then level of the boys' school fees, the husband was committing 34% of his net income to the maintenance of the wifechildren. It is not in issue that the total of the agreed periodical payments of £81,000 for the wifethe children were apportioned on an arbitrary basis between the wifethe childrennot based upon any calculation of their separate needs. There was clear over-provision in respect of the children at the time, from which the wife was plainly intended to benefit.

5

The parties were both living in the matrimonial home at the time of the order. However a month afterwards the husband purchased his present home in Islington for £725,000 funded by a substantial mortgage (£540,000)part of his cash resources (£68,000), plus a loan from his firm for the balance (£117,000). Within six months of the order, the wife sold the former matrimonial home realising £316,478, but rather than buying a new home, she moved into rented accommodation with the children for the next three years.

6

Three years later, in November 2004, the wife foundpurchased her present home, a three-bedroom property in Ware conveniently situated for the boys' educational needs, at a price of £585,000. Her overall costs for the purchase were just under £610, 000. She bought the house mortgage-free, the purchase being funded by the sale proceeds of the former matrimonial home (£316,500,00), her lump sum received on divorce (£50,000.00); sharesinvestments retained on her divorce (£30,000.00)an inheritance from her mother (£118,000.00). It appears that, through rigid economies, she had also accumulated substantial savings, not only from the invested proceeds of the matrimonial home but out of the maintenance payments to herselfthe children, over the period of threea half years since the original order. These sources in combination (it is not clear what the relative figures are) funded the balance.

7

The house in Welwyn which the wife sold had four bedroomsmay appropriately be described as a compact modern house, whereas the house she bought in Ware is more spacious with a large garden, as is apparent from the brochure before me in which it is aptly described as a late Victorian “Gentleman's Residence”. It is built on a larger scale than the home in Welwyn. Although it only has three (large) bedrooms, one with an en-suite bathroom, it has a further bathroom, two reception rooms, a dining room, a kitchenlarge garden. The original fourth bedroom had been converted to provide a spacious first floor landing space.

8

In February 2004, the wife sought to pursue the husband for certain arrears of maintenance which he subsequently paid. However she also requested an RPI increase in respect of the periodical payments for herselfthe children. At that stage, according to the husband, his projected gross income for 2004/2005 was £652,000 (i.e. an increase of over £100,000.00 since the original order) but it was stated that there was no certainty as to the actual amount. In February 2006 the figure proved in fact to be £807,241 (£494,410 net).

9

However, the wife was not aware of that discrepancy as at 19 September 2005, when a further consent order was made by District Judge Berry ('the RPI Order') varying the 2001 order. That order acknowledged that there were now no maintenance arrearsprovided that RPI increases would be payable on the 1 April of each year in respect of the periodical payments for both the wifethe children. However, there were provisos that (i) if the husband's income reduced from any one year to the next, no increase would be made for that year(ii) that in the event the husband's annual income from all sources reduced below the figure of £534,000 gross (which he was receiving at the time of the original consent order) such RPI increases would no longer applyany future increase would be calculated by reference to the original level of periodic payments due as at the date of the 2005 order. It also contained an unusual “claw back” provision to the effect that the husband was not obliged to pay, nor the wife entitled to pursue, any arrears of the RPI sums payable till they amounted to £10,000. There was also a provision that “reasonable extras” which the husband was liable to pay under the original order in respect of the children's education should include fees for boarding for each of the children of the family for no more than one night per week per term at the schools which they attended as day pupils from time to time, the wife being entitled to deduct £5 for each such night spent boarding from the periodical payments payable for the children under that order. As a result of the RPI order, the global level of maintenance currently payable to the wife for herselfthe children is £85,608.00 per annum but, because of the operation of the “claw back” clause, no RPI increase has yet been paid.

10

On 27 October 2006 the wife's solicitors wrote to the husband's solicitors stating that the wife's outgoings were now £51,000 “excluding any ability to save for a replacement car, unforeseen expenditure future security, nor for appropriate expenditure on items such as eating out, holidays, weekends away, clothing, health club membershipdomestic help”. It was stated that the mother's inheritancethe children's maintenance had been subsidising those outgoings, but that the children's expenses had more than doubled since 2001were no longer available for that purpose. She was no longer able to manage on the overall maintenance paid; the husband was in any event paying a lower figure than he should be upon his level of income;that she proposed to issue an application for increased maintenance, based on her needsupon the principle of compensation as propounded by the House of Lords in MillerMcFarlane.

11

In her Form E dated 8/ 1/2007 the wife set out a budget for the children which, if accurate, virtually absorbed the sum of £48,000 payable per annum for their maintenanceadvanced a separate budget for herself of £102,000 per annum as against the £33,000 currently provided. She now seeks an upward variation to £130,000.00 per annum on the basis that she is entitled to a 'premium' over budget of £28,000.00 by way of compensation overabove need for loss of the wife's earning capacity (relationship-generated disadvantage).

12

Following service of the husband's Form E, on 15 March 2007, District Judge...

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