This judgment was handed down in private on 18 March 2005 with a prohibition on reporting without leave of the judge. It consists of 20 pages and was  signed and dated by the judge.
The judge has given leave for it to be reported only as per this anonymised copy and 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.
Case No: FD03D07706
Neutral Citation Number: [2005] EWHC 402 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 18/03/2005

Before :

THE HONOURABLE MR JUSTICE BENNETT
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Between :

	 Q	Petitioner	
	- and -		
	 Q	Respondent	

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Philip Cayford Q.C. and Laura Heaton (instructed by Wendy Hopkins and Company) for the Petitioner
Lucy Theis Q.C. and Rowena Bridge (instructed by Messrs Clifton Ingram) for the Respondent

Hearing dates: 21 to 23 February 2005
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Judgment
Mr Justice Bennett : 
1.	This case is a sequel to the decision of the Court of Appeal in McFarlane v McFarlane; Parlour v Parlour [2004] EWCA Civ 872, [2004] 2 FLR 893. In the instant case the parties have agreed to split their net capital assets equally. Precisely how that is to be done is in dispute. So far as income provision for the wife and children are concerned, the husband earns per annum considerably more than is necessary to “maintain” (generously construed) the wife, their four children, himself and his new partner. The wife seeks an equitable share of that surplus over a four year period to enable her to go a long way to achieving a clean break. The husband accepts that in the light of McFarlane; Parlour he must not only maintain the wife and children but also pay over a proportion of the surplus. How much is in dispute. Both the level of maintenance for the wife and children and the sharing of the surplus are in dispute.
2.	On 23 June 1992, the wife then 25 years old and the husband then 21 years old, married. The wife has a child by a previous relationship T born 16 November 1988 therefore now 16. The husband accepted her as a child of the family. The husband was and is a professional footballer. In June 1992 the husband joined W FC. The wife, husband and Taylor moved to the area of WFC.
3.	On 11 February 1993 R was born. She is now 12 years old. On 16 February 1994 D was born. He is now 11 years old.
4.	In September 1996 the wife and husband jointly purchased property A, a substantial property. Its current agreed value is £1.25 million. The mortgage is presently £571,801. Subject to capital gains tax and costs, the net equity is £639,699.
5.	The husband is a gifted footballer.
6.	In June 1999 the husband moved to XFC. On 29 July 1999 S was born and he is now 5 years old.
7.	In July 2001 the husband moved to YFC. In September 2001 property B was purchased in the parties’ joint names for £1,125,000. Its current, agreed value is £1,350,000. The mortgage outstanding is £818,937, which, together with sale costs, leaves a net equity of £490,563. The mortgage costs a lot to service. It is a ten year term. The current, monthly payments are just over £12,000, i.e. in excess of £144,000 per annum. The husband and the wife are joint mortgagors. 
8.	In November 2001 the parties jointly purchased property C for £150,000. Its current, agreed value is £270,000. The husband and wife jointly mortgaged the property which now stands at £125,858. Its net equity, before CGT, is £136,042.
9.	In March 2003 the parties jointly purchased property D for £250,000. That property’s net equity is £135,941 (before CGT) after taking into account the joint mortgage of £133,234. A further property E was also bought in joint names. In the summer of 2004 it was sold and the net profit divided equally between the wife and husband.
10.	In April 2003 the parties separated. The marriage thus lasted not quite eleven years. There was no prior cohabitation.
11.	In July 2003 the husband purchased in his sole name property F. The property, to be built thereon, is scheduled to be completed in 2006. The husband is restricted from selling it until 2008. At the time of purchase the husband executed a document confirming that it was to be held in trust for the wife and himself. Its current agreed value is £1.31 million. A loan was obtained which now stands at £300,000. The wife says its net equity before CGT is £957,600. The husband contends for £936,952 because conveyancing costs of £22,500 ought also to be deducted. 
12.	In January 2004 the husband joined ZFC. He is contracted to the club until 30 June 2006. I will return to his remuneration later in this judgment.
13.	In March 2004 the husband agreed to invest £1 million in R LLP, a technology partnership relating to the rights to use and exploit e-mail related technology in the United States of America. In its first year R LLP made a loss, of which the husband’s share is said to be £5 million. This, it is hoped and expected, will give him an estimated tax refund of £2 million. He will have to repay borrowings of £1 million from the Royal Bank of Scotland (£250,000), HSBC Private Bank (£550,000), and from T Limited (£204,000) plus interests and costs. Thus, if the scheme is approved by the Inland Revenue, it could provide him with a net amount of some £900,000. The husband’s accountants expect the Inland Revenue to approve the scheme by the end of this year.
14.	In October 2003 the wife petitioned for divorce. On 21 July 2004 the decree nisi was pronounced.  The decree has not been made absolute.
15.	The parties’ open positions are defined in the inter-solicitor correspondence in February this year.
  The wife’s proposals as to capital. 
(1) The wife will retain as her property absolutely the properties B, C and D, subject to the existing mortgages.
(2) The anticipated net tax rebate arising out of R LLP of circa £900,000   will be paid to the wife.
(3) The husband will make to the wife what is called a “balancing payment” of   £200,000 to achieve “approximate balance sheet equality”. [£200,000 was, in the course of the hearing, reduced to £140,000.]
(4) The husband will transfer to the wife the two policies with Clerical Medical.
(5) The husband will discharge the wife’s loan of £120,000 with the Butterfield Bank.
(6) The wife will retain the Peugeot car; the wife will retain the BMW X5 and take over the obligation to finance its purchase.
(7) The wife will transfer her half-share to the husband absolutely in F property.
(8) The wife will transfer her half-share to the husband absolutely in property A
(9) In respect of all the properties, such transfers as are required will be executed at the husband’s expense. Each party will bear their respective CGT liability upon each transaction.
(10) The husband will retain    
     a) his pensions
     b) his toy collection   
     c) any other assets and chattels in his possession.
(11) The wife will retain the contents of property B and all other assets and chattels in her possession.
(12) The jewellery will be divided by agreement [achieved during the course of the hearing].
(13) Upon discharge by the parties of their respective obligations there shall be a clean break as to capital.
16.	The husband’s proposals as to capital.
	(1) Agreed, save that the husband must be released from the mortgages on properties B, C and D. If evidence from the wife is not forthcoming as to how she will service the mortgages on the three properties, C and D should be sold and the net proceeds used to reduce the mortgage on B
	(2) Agreed.
	(3) Only in the event of R LLP producing the anticipated net tax rebate of £900,000 would the husband make a “balancing payment”, and then only in the sum of £45,000 [increased during the final hearing to £54,000].
	(4) Agreed.
	(5) Agreed, subject to the wife producing documentary evidence that £120,000 is the sum due.
	(6) Agreed subject to the wife producing evidence  that she will take over the finance or pay the sums outstanding.
	(7) to (11) inclusive – agreed.
	(12) Agreed. [Agreement was reached on day two of the final hearing].
	(13) Agreed.
17.	The wife’s proposals as to income. 
	(1) The husband should pay to the wife 50% of his net income from all sources for an extendable term of four years, to cover both maintenance for the wife and the children but also monies to be invested by the wife as further capital to facilitate a clean break as to income in due course.
	(2) A reasonable allowance for the wife’s own maintenance should be £120,000 per annum for four years and £20,000 per annum for each child, to include holidays and all expenditure. The husband should also pay the school fees.
	(3) In the event that R LLP scheme succeeds, the proportion of the husband’s net income payable to the wife would reduce to 45% for the four year term. [This particular proposal was withdrawn at the start of the final hearing].
18.	The husband’s proposals as to income.
	(1) The percentage should be 37.5%, but reducing to 32.5% over the four year term if R LLP succeeds.
	(2) The figures should be £80,000 per annum for the wife and £15,000 per annum for each child, plus school fees.
19.	Costs. The wife suggested that the husband should pay her outstanding costs of £55,000. The husband offered £30,000.
20.	The wife is 38 years old. Her eldest child is 16 and the youngest 5. With the help of live-out nannies (they are better described as “au pairs”) the wife is the children’s principal carer. If S were to go on to tertiary education until, say, 22 years old, the wife will not be completely free of her child caring responsibilities for another seventeen years. She will then be 56 years old.
21.	The wife was a hairdresser. She did not, and was not required by the husband to, work during the marriage. She has no qualifications. Her life is inevitably going to be dominated in the (medium term) future by bringing up the four children. The onerous physical nature of that responsibility will diminish as the children get older, but the general strain imposed by that responsibility will not. Thus the wife’s opportunity to foster and develop a financially productive career will be hampered for some time. The wife told me that she had thought of going to college. She has ideas of starting a business to manage musical artists. Her daughters have good voices and if either of them were to become professional singers or artists, she would like to manage them.
22.	In my judgment, a) the wife has already made and will make a very substantial contribution in the future to the upbringing of the children and b) her earning potential for the next four years is effectively nil. However, at the end of the term of four years S will be 9, D 15, R 16 and T 20 years old. She ought then to be able to start building up an earning potential.
23.	The husband is now 34 and a half years old. He, too, has and will make his important contribution. He is a very talented footballer. Although his contract with ZFC is due to expire in June 2006 it may be extended until June 2007. He will then be nearly 37 years old. The husband hopes to continue playing  for as long as he can. After his playing days are over, he would like to do media work. My assessment is that broadly speaking the husband, a very fit man as he told me, is likely to play top class football until he is about 40. Whether his earnings will remain at their present high level after he has left ZFC is doubtful. I have no figures as to what he might be able to earn from media work – assuming he can break into that field – but the impression I got was that his earnings are likely to fall, and fall substantially, after he ceases to play.
24.	In 2002 the husband caused to be set up T Limited, of which he is the only shareholder. It receives payments for product endorsements, sponsorship and media work, from broadly SM, ZFC Image Rights and Umbro. The Umbro contract expires in 2006.
25.	The husband’s annual basic wage, according to his contract of employment, is just over £900,000 per annum. In addition he may be paid bonuses and incentives. A signing on fee of £400,000 is payable in three equal instalments of £133,333 on 30 March 2004, 2005 and 2006. If he completes twenty five first team appearances in 2005/2006 the contract will be extended for a further season. If he does not receive a contract for 2006/2007 he will be paid a one-off payment of £200,000.
26.	ZFC agreed, under the contract of employment, to enter into an agreement with T Limited in respect of the image rights and to pay T Limited £137,500 on 30 June 2004 and £300,000 on 30 June 2005 and 30 June 2006.
27.	The husband has valuable pension rights. He has two pension arrangements with the Football League worth £629,399 which will be paid to him in cash when he attains the age of 35 on 1 August 2005.
28.	In his Form E the husband put his net income from all sources (i.e. including withdrawing dividends from T Limited) at £1.038 million for the 2003/2004 and estimated it would be of the same order for 2004/2005.
29.	I now turn to capital. It is not in dispute that in the light of White v White [2001] 1 AC 596 and Lambert v Lambert [2002] EWCA Civ 1685, [2003] 1FLR 139 the capital assets should be split equally between the parties. The actual difference in money terms between the parties’ assessment of the net capital assets is small, i.e. c. £123,000. I say it is small because the difference represents c. 3.4% of £3,677,855, the wife’s assessment of the net capital assets and c. 3.5% of £3,554,638, the husband’s assessment. The husband’s costs are in total just under £105,000. The wife’s costs are of a similar order. A substantial proportion of those costs must be referable to the dispute about capital. I would hazard that the amount spent in costs in determining what is the exact figure of the net capital assets is disproportionate to the difference between the two assessments. Further, the resources of the legal system are limited and should not be deployed on the exploration of disputes the resolution of which ought to be capable of agreement. However, as the parties have explored this dispute it would be churlish of me not to methodically resolve the differences, tempted though I am to take a rough and ready approach.
30.	The net value of the real properties (excluding CGT) differs because the husband says that these should be included in the deductions re F property some £22,500 potential conveyancing costs if and when the property is sold after 2008. How that figure is arrived at is, I have to say, remarkably vague. Miss Theis told me it was made up of £10,000 to £13,000 (being the likely cost of conveyancing a property in England of similar value) plus an enhancement because it was an “unusual” property.
31.	Although the calculation is imprecise and the costs are unlikely to arise until a sale and then only some three or more years away, sale costs have been taken off all the other properties. Furthermore, both parties agree that the notional CGT should be deducted in full. It thus seems inconsistent not to allow something for notional conveyancing costs. I shall allow £10,000. The total net values of all the properties is thus £2,349,845.
32.	There is a dispute as to the value of the cars. The residual value of five out of the six cars is very small. The husband purchased a motor car for his mother which I would exclude from the husband’s assets. He has put down a deposit on a new car. I propose to value the residual values on the cars at £20,000.
33.	The next item arises if the husband were to receive a repayment of tax of approximately £2 million. £1.1 million will then repay the loans or advances raised by the husband (including costs of approximately £100,000) to invest in R LLP. Thus £204,000 plus interest at the agreed rate of 5% will be returned to T Limited, in repayment of its loan to the husband taken out to enable him to invest in R LLP.
34.	Miss Theis’ contention is that he can only draw out of T Limited dividends after tax of 40% is deducted and thus the repayment of £204,000 plus interest must be netted down to arrive at the true value to him of this asset. Mr Cayford submits that that is unduly technical and ignores the statutory language in s. 25 (2) (a) of “… other financial resources which [the husband] has or is likely to have in the foreseeable future…”                     
35.	The husband, by virtue of his control of T Limited, procured it to put up £204,000 as part of his investment in R LLP which investment will return to him personally (i.e. after repayment of his loans) a very substantial benefit. Furthermore, if he is able to control T Limited in such a way once, he is likely (or it is within his power) to do it again. Thus he has the use of T Limited monies to invest in projects for his benefit, should he choose to do so.
36.	In my judgment Mr Cayford’s argument is persuasive, and I accept it. I further accept the interest should be taken at the gross and not the net figure. Furthermore, the figure of £17,851 which stands in T Limited’s bank should not have 40% deducted from it, for the same reasons.
37.	Both Mr Cayford and Miss Theis have included in their respective schedule of assets the anticipated repayment of £900,000 from the Inland Revenue. There is no dispute that if the Inland Revenue, after its investigation into R LLP, makes a repayment to the husband, it will be of the order of £2 million, i.e. 40% of £5 million, which latter sum is said to be the husband’s share of the losses of R LLP in its first year of trading.
38.	The parties and their legal advisors are optimistic that the R LLP scheme will succeed and a repayment, net of borrowings, of £900,000 will be made.
39.	I have to say I am not surprised that the Inland Revenue may be casting a sceptical eye on the scheme, for to invest £1 million, for a net return of £900,000, in an entity that produces “losses”, in its first year of trading, attributable to the husband, of the order of £5 million, could be said to look just a little bit too good to be true.
40.	Miss Theis, supported by Mr Cayford, asks me to find on the pretty scanty evidence that I have (Bundle 2, tab G) that the scheme is likely to succeed. I am not going to be rash and even tiptoe into that particular alleyway. However, I am prepared to act on the basis that both parties, backed by skilled legal and accountancy advice, are confident that the scheme will succeed and have agreed to include £900,000 as a capital asset. If the scheme fails, then the parties will have to take the consequences of including this “asset” in the computation.
41.	In my judgment the husband’s outstanding costs must be adjusted to £60,000 in the light of his costs schedule put in by Miss Theis. The wife’s outstanding costs are said to be £75,000.            .
42.	I am asked to make an adjustment to the husband’s assets in the sum of £14,880 which the husband has had to spend to redeem pawn tickets relating to jewellery which the wife pawned in 2004. I agree that that adjustment should be made. The wife pawned jewellery of his, without his consent or knowledge, in the spring of 2004. She did not redeem them. During the final hearing the husband agreed to redeem them and has done so.
43.	In October 2004 the wife took out a loan of £110,000 from the Butterfield Bank. The only document provided of this loan is a copy of an equitable charge on the wife’s interest in property B. No proper details have been given of the loan nor a copy of the application form provided. The wife says that the loan now stands at £120,000 but with no explanation or documentary evidence. I accept that, from an analysis of the wife’s bank statements that £47,510 was used to pay off her credit card debts and £33,500 was paid to her solicitors. However the balance of £29,000 is not properly accounted for. If it has been spent by the wife, no adequate details have been forthcoming and she ought, therefore, to be “credited” with £29,000. Put another way she has only truly spent £81,000 with the balance of £29,000 unaccounted for.
44.	In October 2004 the wife, unwisely in my judgment, sold her “story” to two national newspapers for £10,000 each. They were inaccurate in significant respects. The husband was understandably upset. The wife put £10,000 into T’s account. Of the other £10,000 she lost close to £7,500. She spent £2,500. Although the circumstances of the loss outside  property C are a trifle bizarre, the wife’s evidence did have the ring of truth about it. Accordingly I credit her with only £10,000 in the asset computation below.
45.	The division of the jewellery was agreed and neither Mr Cayford nor Miss Theis asked me to incorporate the division into the capital assessment.
46.	I set out below, in tabular form, the division of the assets (following the parties’ open proposals) and the values. I have adopted the format of Miss Theis’ schedule.
Asset 	Wife 	Husband	
			
Property B	490,563		
Property D	135,941		
Property C	136,042		
Property A		639,699	
Property F		947,600	
Insurance policies	75,862		
Cars		20,000	
Shares		4,000	
Pensions (including			
Friends Provident, Scottish Mutual and Skandia)		692,065	
Butterfield loan	120,000	(120,000)	
R LLP	900,000		
T Limited		216,463	
Coutts account		4,941	
Coutts account (Husband sole)		76,244	
T Limited		17,851	
Natwest loan		 (41,157)	
Woolwich savings		920	
Payment to Wife for Newspaper articles	10,000		
Toys		15,000	
Pawnbroker debts		 (14,880)	
Z4 car loan		(4,000)	
Credit cards		 (15,000)	
Legal costs	(75,000)	(60,000)	
Butterfield monies	(81,000)		
Husband’s CGT (on sale of  property E, transfer of properties D and C)		 (34,520)	
Wife’s CGT (due on sale of property E and transfer of property A) 	(12,618)		
Husband’s CGT (re Property F, Husband will pay Wife’s liability on transfer to him and remainder due on future sale)		 (367,508)	
Wife’s CGT (if sold Property D and Property C)	(18,647)		
	1,681,143	1,977,718	

47.	The husband offered, in his open letter, to pay £30,000 towards the wife’s costs. The wife in her open proposal sought £55,000. I was told that the wife’s outstanding costs are now approximately £75,000. Since the husband is effectively funding the wife’s litigation costs it would seem unreal now to expect any lesser sum than £55,000 to be made available by the husband. Accordingly the wife’s assets increase to £1,736,143 and the husband’s decrease to £1,922,718. The difference is £186,575 in favour of the husband and thus the balancing figure payable by the husband to the wife should be £93,288. This balancing figure is, of course, only payable in the event of the wife receiving £900,000 from the R LLP scheme i.e. it is successful. 
48.	The husband is concerned that when his interests in properties B, D and C are transferred to the wife he will still be liable under the mortgages. The wife has agreed that, upon receipt of £900,000, she   will discharge the mortgage on property B. So far as the other two properties are concerned the wife does not know what rental income she may be able to obtain. Furthermore, the evidence she put before me of how she is going to re-mortgage the properties in order to release the husband from the current mortgage is vague and unsatisfactory. Miss Theis submitted the properties should be sold. Mr Cayford submitted that the wife should have a further three months. If there are then no concrete proposals to re-mortgage them, they should be sold. I am prepared to accede to Mr Cayford’s submission.
	Income
	For the children.
49.	By the time the husband had completed his evidence he had made concessions in relation to items of the children’s maintenance so that it is common ground that his case on child maintenance is now in the global sum of just under £70,000. The wife says that the children will cost some £114,000 but she has restricted her claim on behalf of the children to £80,000 i.e. £20,000 per annum each. In my judgment, having looked carefully at the figures and the individual items, and given the scale of the husband’s income, I consider that he should pay periodical payments for each child in the sum of £20,000 per annum.
	For the Wife
50.	I have set out the husband’s income at paragraph 28 above. Mr Cayford submitted that it fluctuates between £1 million and £1.2 million depending on bonuses and similar payments. I agree that it may fluctuate but I doubt if an upper limit of £1.1 million is exceeded. 
51.	The husband supports N. She lives  not far from the father of her two children of 6 and 3 years old. Their father pays £2,400 per annum for both children’s maintenance. The husband pays the rent on her home (£9,000 per annum). She is paid £30,000 per annum gross from T Limited. However, that may have to be rethought in the light of the husband’s evidence that she does next to no work for T Limited. She and the husband are looking for a property to purchase.
52.	The wife, for her part, has no income other than child benefit and maintenance. Currently the husband pays all the outgoings on property B including the mortgage, the monthly hire purchase payments on the three cars in her possession, maintenance of £10,500 per month to the wife directly, and £1,000 per month to her solicitors.
53.	I am satisfied that during the marriage the standard of living was high and neither party stinted themselves. Both accepted they had been extravagant. Much time and effort was spent during the hearing in each party blaming the other for overspending after they had separated. To be fair it was the husband who first accused the wife of overspending post the separation. The wife responded in kind but as an essentially defensive measure. Miss Theis drew my attention to the scale of the wife’s expenditure particularly in late 2003 and 2004 when the husband was anxious to restrain expenditure generally. In March 2004 the wife spent £27,950. The wife pawned some of the husband’s jewellery, she said, to pay the builder but produced no documentary evidence of such a payment. Miss Theis suggested that in 2004 alone payments were made out of the joint account to or for the wife of £166,835. The wife’s share of property E of £33,000 was spent and there is no documentary evidence to show upon what.
54.	For his part Mr Cayford countered effectively. For the six month period 1 August 2004 to 31 January 2005 the husband received income from ZFC and T Limited of £556,000 (annual rate of £1.1 million). He spent £505,000 including payments for the wife and children but which included £67,000 on credit cards, and payments to and cash withdrawals by himself of £45,000.
55.	In my judgment in the result the inquiry into the spending habits of the wife and husband was an unproductive exercise. They were each as spendthrift as the other. If the husband’s objective was to persuade me that the wife dissipated assets and/or that her share of the surplus income should thereby be less, I reject those contentions. She was, indeed, as Miss Theis submitted, untruthful about the pawn tickets, see paragraph 42 above. But I do not accept that the extravagance of the wife after the separation, her failure to hand over some of the husband’s jewellery to the jeweller, and her pawning of jewellery make her out to be inherently unreliable in handling money.  
 56.	I have already dealt with the wife’s and the husband’s earning capacities. 
 57.	Mr Cayford has submitted that a figure of £120,000 per annum for the wife’s maintenance is reasonable in all the circumstances. The wife had drawn up a budget for herself and the four children in the annual sum of £229,000. In her open proposal that was adjusted to £200,000 of which £80,000 would be covered by the children’s maintenance. Thus she seeks for herself maintenance of £120,000 per annum. In his open proposals the husband suggested annual maintenance for the wife of £80,000.
 58.	Miss Theis took the wife through her budget. Some items, e.g. £12,000 for domestic cleaners, were clearly excessive. On the other hand, it is instructive to look to see what the husband says are his annual needs. In his Form E his annual needs under “household”, including mortgage payments of £90,000, are put at £134,400, cars at £25,360, personal expenditure at £49,700 and insurance at £26,000. In fact, in the six months to 31 January 2005 it is now known that he spent £112,000 on credit cards and by withdrawals of cash.
 59.	In my judgement to limit the wife’s maintenance, in all the circumstances of this case, to an annual figure of £80,000 is thoroughly mean and unfair, given the size of the husband’s income and his personal expenditure. Bearing in mind all the s. 25 (2) factors it does not adequately reflect what in my judgement ought to be the appropriate level of maintenance. I conclude that, even taking into account the excessive amounts claimed in the budget, an annual sum of £120,000 is appropriate.  
60.	I now turn to the final and important issue in this case, namely whether the order for periodical payments (for the wife and children) should be at the rate of 50% of the husband’s net income or at the rate of 37.5% reducing to 32.5% if R LLP “succeeds”.
61.	So far as I am aware this case is the first to come before the court, post the    Court of Appeal decision McFarlane; Parlour, in which the court is being asked to determine the size of the split of the husband’s net income over an agreed (but extendable) term of four years. The Court of Appeal awarded Mrs Parlour £444,000 per annum which represented 37.5% of Mr Parlour’s net income. As I read the judgements of the Court of Appeal that figure was arrived at on an entirely pragmatic basis. The court was unwilling to remit the matter for further determination with all the further costs that would have entailed [see, in particular paragraph 141 of the judgment of Wall L.J.]. Mrs Parlour did not seek more than 37.5%. Further the Court of Appeal were satisfied that within the figure of £444,000 per annum was a large reserve (£294,000 per annum) which could be laid up against the discharge of her periodical payments order in the future. I refer, generally, to paragraph 77 of the judgment of Thorpe L.J. and paragraphs 141 and 142 of the judgment of Wall L.J. where he described the percentage as “an arbitrary figure”. Thus the fact that the Court of Appeal sanctioned a split in favour of Mrs Parlour of 37.5% does not in itself provide much guidance in the instant case.
62.	Mr Cayford’s submissions were as follows. For the wife to receive 50% of the   husband’s net income is fair, affordable and consistent with McFarlane; Parlour. It would put the parties on an equal footing for the next four years during which the husband’s earning capacity is likely to be at its peak. There is nothing abhorrent in such a split which is designed to achieve a level of saving to enable a clean break to come about in due course, and sooner rather than later. It gives the parties the best chance of a clean break; both would have the opportunity to save equal amounts and be in similar capital positions in four years time. Thereafter the husband will be in a stronger position by reason of his much greater earning potential. Furthermore, it is submitted that there is still a “nexus” between the parties. The separation was only twenty months ago. To put the parties in a substantially different position during the next four years is discriminatory, particularly in the light of the wife’s past, present and future contribution in bringing up the children. Finally, Mr Cayford was at pains to make it clear that he did not advance the argument for an equal share of the income on the basis that the capital had been split equally, nor did he seek to advance the submission made in McFarlane; Parlour based on “entitlement” or “compensation”.
63.	 Miss Theis’ submissions were as follows. The court must consider the criteria set out in section 25(2). The court does not have to consider the “yardstick of equality” as it is not “dividing the accumulated fruits of past shared endeavours” [per Thorpe L.J. paragraph 106 of McFarlane; Parlour]. The court is directed and has a duty
“to consider whether it would be appropriate so to exercise those powers that the fundamental obligations of each party towards the other will be terminated as soon after the grant of decree  as the court considers just and reasonable” s.25A(1).
64.	The court is also directed to consider whether the order should be made for such term as would be sufficient to enable the party to adjust without undue hardship, section 25A(2).
65.	  Thorpe L.J. said at paragraph 66 of Parlour as follows:-
“In any case in which, despite a substantial capital base available for division, clean break is not presently practicable, the court has a statutory duty to consider the future possibility. That duty assumes particular prominence in cases where there is a certain and substantial surplus of future income over future needs. If, as in one of the present appeals, the surplus will be predictably short-lived, the first option for consideration should be the planned progress to clean break by means of a substantial term order open to a later application for extension. The obligation on the parties to achieve financial independence is mutual. The earner must give proper priority to making payments on account out of the surplus income. The payee must invest the surplus sensibly, or risk that her failure so to do might count against her on an application for discharge under s 31(7A) and (7B). Given the mutuality of the obligation, the opportunity and responsibility to invest should, in my judgment, be shared. It strikes me as discriminatory, and, therefore, wrong in principle, for the earner to have sole control of the surplus through the years of accumulation. The preferred mechanism by which the surplus is to be divided annually must be periodical payments. They are variable, which lump sum orders are not. They can, therefore, reflect fluctuations in the payer’s income. They are determined by the court in the event of dispute. They terminate on the remarriage of the recipient. The practicality of such an order will depend upon many factors. Essentially the completion of the process must be foreseen within a relatively short span. A term of 5 years which these cases illustrate may be towards the limit of the foreseeable.”
66.	Miss Theis further submitted that, on the information available now to the court and taking into account the statutory criteria, the target for saved excess income and surplus capital of the wife should be a fund sufficient to secure her through the minority of the children, i.e. after the term of four years has ended in 2009 until 2020 when S will be 21 years old. She submitted that this is not a Duxbury case where the wife is entitled to fixed lifetime maintenance. She is only 38 years old and Fournier v Fournier [1998] 2 FLR 990 and F v F (Ancillary Relief: Substantial Assets) [1995] 2 FLR 45 would suggest that the instant case is not a Duxbury type case. In four years time, it was submitted, the wife should have a sufficient sum to take her through to 2020. In four years time there can then be a clean break.
67.	Thus it is submitted on behalf of the husband that the court, having considered the statutory criteria, should reach its decision on the percentage figure as follows:-
a. set the “baseline figure” for the maintenance needs of the wife and children
b. decide the period of time for which the wife will require support after the term order ends
c. apply the appropriate multiplier to the wife’s baseline figure to calculate what lump sum is needed to provide her with maintenance at her baseline rate over the period assessed in b.
d. assess how much available capital the wife is likely to have after her term order ends (leaving aside any capital from excess pps)
e. assess how much extra capital the wife needs to reach the lump sum in c.
f. divide the amount of the extra capital by the years in the term order 
g. make a periodical payments order in the sum of the baseline figure.
If that procedure is followed then that leads to an award of 37.5% - see paragraph 49 of Miss Theis’ final submissions.
68.	The resolution of this particular dispute between the parties presents not a little difficulty. There is no obvious solution proposed by the statutory considerations under section 25(2). There is no body of case law to inform the court as to how, in the instant case, it might go about its duty in deciding what share of surplus income the wife should have. I have, of course, read and reread McFarlane; Parlour. But those cases were concerned with a principle which is not in dispute before me, namely that the court must strive, where appropriate, to bring about a clean break between husband and wife and that may involve transferring surplus income to the wife from the husband. Having made its deliberation on the principle, the Court of Appeal restored the District Judge’s award to Mrs McFarlane (but made it subject to an extendable term) and adopted the figure of 37.5% for Mrs Parlour in order to put that principle into practice. More particularly it did not enunciate specific guidelines or parameters within which a court should assess what actual percentage of the husband’s net income should be subjected to a periodical payments order in a case when the net income substantially exceeded the needs (generously construed) of the parties and their children. That is hardly surprising since no argument was addressed to the Court of Appeal upon the application of section 25A – see paragraph 119 of the judgment of Latham L.J.
69.	In my judgment there are three sources which guide the court and which, indeed, must be taken into account. The first is section 25(2) of the Matrimonial Causes Act, 1973 and the factors therein stated. The provisions of section 25(2) are so well known that I do not set them out. The second is section 25A. It is a section with which the Court of Appeal was concerned in McFarlane; Parlour and which formed the bedrock of its decision. I have set out/referred to those provisions in paragraph 63 and 64 above.
70.	 The third source is the Court of Appeal judgments in McFarlane; Parlour, where there are important passages which must be noted. Thorpe L.J. spoke [at paragraph 75 in respect of Mr and Mrs Parlour] that “the imperative to achieve finality is even stronger. The husband’s income is substantially greater but the graph is likely to plummet within four or five years, in contrast to Mr McFarlane’s prospect of steady ascent until retirement”. In the instant case it is right to emphasise that at the end of four or five years from now the husband’s income is likely to plummet. 
 71.	At paragraph 104 Thorpe L.J. asked rhetorically why Lord Nicholls of Birkenhead’s demonstration in White of the discriminatory nature of the reasonable requirements measure in capital awards should not apply equally to income awards. Having cited the familiar passage from Lord Nicholl’s speech, Thorpe L.J. asked at paragraph 105 why the principle defined should not be of equal application in the assessment of periodical payments. As I read his judgment he sought to answer these questions at paragraph 106, where he said:-
“106. My present view is that in this jurisdiction we should not flirt with, still less embrace, any of the categorisations of the defining purposes of periodical payments advanced by academic authors. The judges must remain focused on the statutory language, albeit recognising the need for evolutionary construction to reflect social and economic change. The statutory checklist and the overall circumstances of the case allow the judge to reflect factors which are said to be inherent in either the entitlement model or the compensation model. But to adopt one model or another or a combination of more than one is to don a straitjacket and to deflect concentration from the statutory language. Clearly in the assessment of periodical payments, as of capital provision, the overriding objective is fairness. Discrimination between the sexes must be avoided. The cross-check of equality is not appropriate for a number of reasons. First, in many cases the division of income is not just between the parties, since there will be children with a priority claim for the costs of education and upbringing. Secondly, Lord Nicholls of Birkenhead suggested the use of the cross-check in dividing the accumulated fruits of past shared endeavours. In assessing periodical payments the court considers the division of the fruits of the breadwinner’s future work in a context where he may have left the child-carer in the former matrimonial home, where he may have to meet alternative housing costs and where he may have in fact or in contemplation a second wife and a further child.”
72.	Other passages in the judgments are helpful. At paragraph 118 Latham L.J. said:-
“118. The problem is that the concept of fairness is elastic and often subjective. Attempts to identify what society would consider to be an appropriate yardstick to use to determine fairness have found the answer elusive and the material with which we have been provided from other jurisdictions has merely underlined how difficult the search for the answer has proved to be. In the absence of a consensus, decisions will have to continue to be made on a pragmatic and individual basis, which is inevitably unsettling for litigants and their advisors.”
73.	At paragraphs 134 and 135 Wall L.J. said:-
“134. Mr Singleton and Mr Mostyn are, however, I think, right when they submit that a payee’s right to periodical payments is to a share of the payer’s income which the payee (in each of the current cases the wife) has, through her domestic contribution, helped the payer develop. I, therefore, agree that where the payer’s income is sufficiently large (as here) a cut-off point for periodical payments based on generously interpreted needs, thereby leaving a large surplus of income for the payer to do with as he pleases, has no foundation in the statute and is discriminatory. But the danger of this approach seems to me to be that it runs the risk to reintroducing the repealed tailpiece of s 25 of the Matrimonial causes Act 1973 by the back door. If the payee has, in effect, a vested, life-long interest in such an income, is she not being placed in the position in which she would have been if the marriage had not irretrievably broken down? And is the principle contained in s 25A not being simply by-passed?
135. I am the first to acknowledge that periodical payments based on a proportion of joint incomes (for example, the old ‘one-third’ rule) was discriminatory and may well have caused injustice to women payees. The balance which, it seems to me, needs to be struck in a case such as the present, is the need to achieve fairness to both wives whilst fulfilling the obligation imposed by s 25A. In my judgment, that is not achieved by open-ended orders of the type sought by both Mrs McFarlane and Mrs Parlour. It is achieved by orders which exceed need in amount, and which divide equitably the very large income enjoyed by both husbands. But with that division, in my judgment, comes a responsibility on the payee to use the surplus over needs towards financial independence and self-sufficiently.”
74.	At paragraph 145 Wall L.J. said:-
“145. The profession inevitably craves certainty so that it can advise its clients appropriately. That, of course, is not a new aspiration. In Martin (BH) v Martin (D) [1978] Fam 12, (1977) FLR Rep 444 in which this court upheld the right of a wife to remain indefinitely in a very modest matrimonial home against the claim of her former husband that it should be sold and the proceeds equally divided, Ormrod L.J. said, at 20 and 449 respectively:-
‘I appreciate the point he (Mr Aglionby, counsel for the husband) has made, namely that it is difficult for practitioners to advise clients in these cases because the rules are not very firm. That is inevitable when the courts are working out the exercise of the wide powers given by a statute like the Matrimonial Causes Act 1973. It is the essence of such a discretionary situation that the court should preserve, so far as it can, the utmost elasticity to deal with each case on its own facts. Therefore, it is a matter of trial and error and imagination on the part of those advising clients. It equally means that decisions of this court can never be better than guidelines. They are not precedents in the strict sense of the word. There is bound to be an element of uncertainty in the use of the wide discretionary powers given to the court under the 1973 Act, and no doubt there always will be, because as social circumstances change so the court will have to adapt the ways in which it exercises discretion. If property suddenly became available all over the country many of the rationes decidendi of the past would be quite inappropriate.”
75.	Thus having reminded myself of sections 25(2) and 25A of the Matrimonial Causes Act and of the judgments of the Court of Appeal in McFarlane; Parlour I must, within the wide discretion given by Parliament, come to a fair, just and sensible decision taking into account all the circumstances of the case.
76.	In my judgment there is an important consideration to be borne in mind in cases like the instant one. The court is not making a final, clean break order re income. It is making an order as to income which is in itself a step along the way to an anticipated clean break. I do not want to belittle the importance of the “step”; indeed a better and more descriptive word might be “bridge”. Nevertheless the payments that I am being asked to sanction cannot be more than payments on account of an undefined and indefinable amount to be finally assessed, if it cannot be agreed, in four or five years time. Thorpe L.J. in paragraph 66 of McFarlane; Parlour spoke of a “planned progress to clean break”. It seems to me therefore that Miss Theis’ approach set out in paragraph 67 above is effectively an invitation to anticipate the decision, and hence its surrounding and underlying circumstances which the court may have to take in the future. On the other hand if the subtext of Miss Theis’ argument is that the court must proceed with caution given that its ability to second guess the future is restricted then I think she is on firmer ground.
77.	I agree with Mr Cayford that a 50/50 split would be affordable. The husband would retain, depending upon the exact amount of his income, approximately £519,000 (£1,038 million ÷ 2) which, in my assessment, would leave sufficient for him and N to live off and for him to make substantial savings. If he lived at the rate of £250,000 per annum he could save £1 million over four years from his share of the income alone.
78.	Furthermore, it must be borne in mind that, although his income may plummet in four or five years time, his earning capacity will be and remain probably indefinitely, much greater than the wife’s. But that points up another factor. If, as is likely, his income does plummet then the wife cannot be expected to live at a rate of £120,000 per annum. Any periodical payments order for maintenance would be likely to be reduced substantially.
79.	I agree with Miss Theis’ submission that, at this stage, the wife now being 38 years old, it cannot seriously be said to be a Duxbury case. The authorities do not suggest that it is an appropriate case for a Duxbury calculation to be used. I cannot see that it is right to make the husband bear the burden of effectively maintaining the wife for their joint lives. This would negate, in the instant case, an important objective i.e. to free the parties from each other financially. Mr Cayford sought to persuade me that there should be no cut off for the wife after S reaches 21 years old. If, as I understand it, his submissions as to a 50/50 split was to further the wife along the road of a clean break based on lifetime maintenance, then I would emphatically reject that argument in this case.
80.	Mr Cayford put his arguments beguilingly. However, in the instant case I respectfully adopt what Thorpe L.J. said at paragraph 106 of McFarlane; Parlour. There is a priority claim of the children of £80,000 per annum for periodical payments and school fees (which will inevitably increase over the next four years). The accumulated fruits of past shared endeavours have been determined in the division of capital I have made. The husband now has N to support and to an extent her two children, whose father, in the context of the husband’s lifestyle, is making a very modest contribution financially. That is not a criticism of their father but I have no doubt that the husband will subsidise their living costs, particularly after he buys a new home for them all to live in, and their holidays and sundry other expenditure. Further, periodical payments are capable of variation. As the husband’s income is bound to drop dramatically when he ceases to play football, it seems to me the wife cannot expect to be maintained thereafter at the rate of £120,000 per annum. I accordingly reject Mr Cayford’s submissions for 50/50 split.
81.	In my judgment, payment to the wife of 40% of the husband’s net income will go a long way along the road towards a clean break on income. It would provide savings for the wife over four years of £860,800 (i.e. £1,038 million x 40% = £415,200 less £200,000 per annum maintenance for the wife and children = £215,200 x 4 = £860,800). If, after receipt of £900,000, the wife paid off the mortgage on property B (thereby releasing the husband), and remortgaged it in the sum of £200,000 she would have remaining cash of approximately £300,000. In addition she will have the net equities of properties D and C, less CGT, of £240,718, the insurance policies of £75,862 and approximately £73,000 of the balancing payment after paying the balance of her costs. Thus she would have assets of £1,550,380. In addition, the net equity (if remortgaged as above) of property B would be worth, on current values, £1,150,000. Property B is not, of course, a free asset but if and when it is appropriate for the wife to move to less expensive and smaller accommodation, then capital can be released for investment to produce income. I consider such a result to be fair and just in all the circumstances of the case and meets the objective placed on the court by section 25A(1) and (2) of the Matrimonial Causes Act, 1973, as amended.
82.	I, of course, accept that if the husband’s income declines at the end of his current contract with ZFC in 2006 or 2007 then the wife’s anticipated savings will not be as great as if his income remained in the region of £1,038 million. But neither will the savings of the husband. Yet, her percentage share of his net income will remain the same.
83.	I reject Miss Theis’ submission that upon receipt of the R LLP monies the wife’s share should decline to a lower percentage of the husband’s net income. There is no warrant to reduce her income entitlement simply because she will receive £900,000 as part of the equalisation of the capital assets.
84.	I should add that there has been little or no argument on the  (extendable) term of four years. Each party considers four years to be an appropriate term. In the light of McFarlane: Parlour I respectfully agree.