W v W (Financial provision)

JurisdictionEngland & Wales
CourtFamily Division
JudgeNicholas Mostyn QC
Judgment Date09 October 2003
Neutral Citation[2003] EWHC 2254 (Fam)
Date09 October 2003
Docket NumberCase number: EP87D00361

[2003] EWHC 2254 (Fam)


Royal Courts of Justice





Mr Nicholas Mostyn QC

Case number: EP87D00361



Howard Shaw (instructed by the The Family Law Partnership) for the Petitioner (Wife)

Lewis Marks QC and Mark Saunders (instructed by Hughes Fowler Carruthers) for the Respondent (Husband)

Dates of Hearing: 8 – 11 July, 8 September 2003



In my decision of GW v RW [2003] 2 FCR 289 I made some observations about the responsibility of a party when filling in a Form E. There a husband had ascribed zero values to certain share options that were highly likely to eventuate above their strike price, but had included as hard liabilities loans he had taken out to buy the options. Even though the husband referred to the existence of the options in the text of his Form E I was critical of his presentation. I said at Paragraph 16

The very point of Form E is to give an honest and conscientious estimation of the true net worth of the party at the time of swearing it. For these purposes sensible and fair figures have to be attributed to unrealisable or deferred assets. The maker of the Form E is fully entitled to qualify those figures in the narrative part of the section. But a proper figure has to be put in. It is unacceptable, in my view, that simply because an asset is not realisable on the day that the Form E is sworn, but is assuredly realisable, or likely to be realisable, at some future date, for a zero figure to be inserted.


The consequence of the husband's presentation in that case was an example of what I have referred to during argument in this case as Newton's Third Law of Motion, namely that every action produces an equal and opposite reaction. There the wife immediately instructed a forensic accountant who valued the husband's options on an entirely incorrect basis at £6m, when the correct figure, net of tax was about £640,000. The case then moved to accusation and counter-accusation which took a great deal of time and costs to sort out. A great deal of this would have been avoided had the husband realistically and carefully filled in his Form E in the first place.


The theory behind the new procedure is that it should be possible, if the Forms E are filled in truthfully, carefully and fully, and are accompanied by all the prescribed essential documents, for the case to be tried without further inquiry or disclosure. Of course, it is idealistic to think that this actually happens in practice and in the majority of cases further inquiry is authorised. But that does not mean that the ideal is not something to be strived for. For this reason the Form E has an almost numinous status, and where it is found that a party has deliberately filled in a Form E falsely or has misrepresented facts then he must expect judicial censure and penalties in costs.


In this case the husband (H), who is a Chartered Accountant, has filled in a Form E dated 18 March 2002 which I find to be deliberately false and misrepresentative. At trial he accepted primary responsibility describing the Form E as shoddy, unprofessional, something of which he was not proud, and a "cock-up". But he has sought to turn the blow by blaming his previous solicitors (to whom I shall refer as Z partners), specifically a part-time assistant solicitor in that firm (to whom I shall refer as X) for the manner in which the Form E was finally prepared. He explicitly said that X did not follow his instructions. He has opened up the privileged solicitor and own client file and a considerable time in court has been spent scrutinising parts of it.


In fairness to Z partners I directed that a statement setting out the gist of the allegations should be served on them; that X should be permitted to file a statement in response; that she should be allowed to give oral evidence; and that Z partners could make representations to me in their defence. Such statements were duly filed and I have heard submissions on behalf of Z partners from Mr Philip Moor QC.

The background to this case


H was born on 7 August 1944, and is therefore 59. In 1964 he began his professional career as an articled clerk with Coopers and Lybrand. On 19 February 1966 he married W, who was born on 13 August 1942, and is therefore 61. They have two children: R, who is 37 and who is a consultant anaesthetist and married with a family, and J who is 27 who still lives with W, and who plans to become a journalist. According to W, R and J each intend to emigrate in the near future to New Zealand and Australia respectively. H disputes this.


In 1987 H and W separated, after a marriage of 21 years. They were divorced by Decree Absolute on 4 December 1987. The final ancillary relief order was made by consent in the Epsom County Court on 9 January 1989. A Mesher order was made in respect of the final matrimonial home in Leatherhead. An order for spousal maintenance was made in the sum of £27,173 less tax. There was an order for child maintenance and school fees. The spousal maintenance order was expressed as a variation of an earlier interim order so that it qualified for the purposes of tax relief as an order made before 15 March 1988, when tax relief was severely restricted for orders made after that date.


The final ancillary relief order provided in a recital that W could earn up to £7,500 without triggering a variation application.


H left this marriage with some considerable debts, a deferred 30% interest in the marital home, and over £120,000 of pensions. His income at that time was about £144,000 gross, £89,000 net. W left with 70% of the home, the use of the other 30% on Mesher terms, child maintenance, and a maintenance order for herself which after tax gave her £20,769 to spend.

H's life since


In 1987 H commenced cohabitation with a lady to whom I shall refer as W2, who was born on 23 May 1951, and who is therefore 52. She also worked for Coopers and Lybrand, and went on to become one of the first female tax partners of that firm. They married on 10 September 1988. In that year they purchased a property in Wimbledon.


Following the final ancillary relief order in January 1989 H moved to Ernst and Young, where he became managing partner of that firm.


The income of H (and of W2) has risen spectacularly since the date of the final ancillary relief order. The following table, prepared by W's forensic accountant, Mr Levitt, sets out his gross income in the period of separation (some of these figures have been estimated)

Year ending 5 Apr







































As this table shows W2 gave up work with Coopers and Lybrand in 1993. Since then she has not worked remuneratively, and has been supported by H. Whatever is now in the name of H and W2 derives very largely from savings made from H's income.


In 1996 H and W2 purchased their present home, also in Wimbledon. They have undertaken major works on it. It is now worth about £2m.


In 1998 H was appointed to a senior position in the consulting division of Ernst and Young. In May 2000 the consulting division was sold to Cap Gemini. H moved over to Cap Gemini in an important role. The terms of the sale gave H shares in Cap Gemini but were " strange" (the word used by his expert) in that the CGT payable exceeded the proceeds of the shares initially sold. This was because CGT was levied on the gain on goodwill and because large amounts of the proceeds of sale of the shares were retained by Ernst and Young to pay the costs of the sale. I was told that this was at the behest of the American partners who were indifferent to the interests of their foreign partners. That said, H retains shares in Cap Gemini some of which are restricted for a further period of time. Between the hearing in July 2003 and the final submissions on 8 September 2003 the price of these shares moved from €28.70 to €40.95, so that the value of these shares increased by about £100,000.


According to his evidence given in July 2003 H will retire on his 60 th birthday in August 2004. He told me on 8 September 2003 that recent developments may mean that he will be made redundant before that date. He produced no documentary evidence to support this contention. Doing the best I can, I conclude on the balance of probabilities that he will stay in his job, and receive his income and bonuses until his planned retirement date. From the date of his 60 th birthday he will receive an annuity from Ernst and Young of £73,000 gross for four years. This annuity was not mentioned in his Form E, and was not disclosed until January 2003. H said he had forgotten about it. Along with his annuity H has other pensions, which I will detail below, including one from Scottish Widows worth £177,000 and which also was not mentioned in his Form E, because, so H asserts, his pension advisers at Ernst and Young did not know about it.


H told me in his evidence in July 2003 that after his retirement he intends, if they present themselves, to take up two or perhaps three non-executive directorships, at £15,000 £20,000 each per annum. On 8 September 2003 he gave me more pessimistic evidence based on conversations with three head-hunters. Again he produced no documentary evidence to support his contentions. I consider it to be more probable than not that he will achieve some income in the future from non-executive directorships, although the amount and duration is uncertain. W2 has no plans to engage in...

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