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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 191
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F101/05
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OPINION OF LORD MALCOLM
in the cause
C.
Pursuer;
against
C.
Defender:
________________
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Pursuer:
Scott, Q.C.; Anderson Strathern
LLP
4 December 2007
[1] In
this now undefended action the pursuer seeks decree of divorce and a capital
sum of £500,000. She also applies for
certain further orders which I shall mention below. The undefended proof in the action consisted
of both affidavit and oral evidence. I am
satisfied that decree of divorce should be granted, and I will pronounce decree
in terms of the first conclusion of the summons.
[2] Turning
to the matrimonial property, the parties separated on 28 January 2004 (the relevant date). The matrimonial property at that date
consisted of the following:
(a) The former matrimonial
home, the free proceeds of which are worth £114,379. Although it was bought by the defender before
the parties' marriage, I am satisfied that it was purchased for use as the
parties' family home.
(b) Three joint life policies
worth in total £5,170. This includes a
Prudential policy worth £3,774. The
evidence indicates that the pursuer did not surrender her interest in that policy.
(c) A joint bank account
worth £2,756.
(d) Various pension policies
in the name of the defender worth in total £112,411. These include a self-invested pension policy
(SIPP) which owns half of the property at 24A Haddington
Place, Edinburgh. I accept the evidence of Mr Ounsley, a
chartered surveyor led on behalf of the pursuer, that at the relevant date that
property was worth £140,000, of which one-half belonged to the SIPP.
(e) The defender's shares in
Medical and Professional Financial Management Limited, in respect of which I
accept the evidence of Bruce Graham, CA (report 6/88 of process), that at the
relevant date the defender's interest in the company was worth £228,886. I also accept the evidence of Mr Ounsley
(report 6/83 of process), which Mr Graham relied upon, with regard to the
valuation of certain properties owned by the company.
(f) At the relevant date the
said company owed the defender £146,779.
(g) The defender's interest
in the firm of Medical and Professional Financial Management, in respect of
which, with the exception of the matter mentioned below, I accept
Mr Graham's evidence (report 6/88 of process). The exception relates to the valuation of the
firm's interest in ongoing or "trail" commissions. Such are the uncertainties that, rather than
use of a multiplier of 3.5 years, I consider it prudent to adopt the more
cautious figure of 2.5 years. This
reduces Mr Graham's calculation by £110,000, giving an overall figure for
the defender's interest in the firm of £225,233.
(h) Various policies and
plans in the name of the defender worth in total £40,177.
(i) A Clydesdale Bank
account in the name of the defender which was overdrawn in the sum of £9,802.
(j) Various motor vehicles
owned by the defender worth £148,000.
(k) Pension plans in favour
of the pursuer worth £12,552.
(l) Life policies in her
favour worth £4,328.
(m) Bank accounts of the
pursuer containing a total of £1,811.
Both parties had various debts, the
pursuer to a value of £3,492, and the defender to a value of £46,597.
[3] The
total matrimonial property at the relevant date had a net value of £982,591, of
which the bulk belonged to the defender.
[4] Given
the age of the action, I require to approach this matter by reference to the
provisions of the Family Law (Scotland)
Act 1985 before it was amended by the Family Law (Scotland)
Act 2006. The main general principle
relied upon by the pursuer under section 9 of the 1985 Act was fair sharing,
and in particular equal sharing of the net value of the matrimonial property. There has been an interim payment of £60,000, and taking into account the matrimonial
property belonging to the pursuer and certain other adjustments of about £1,000
relating to cashed and transferred policies, and rounding down, this would
indicate a capital sum of £413,000.
However Mrs Scott asked me to innovate on this in certain respects.
[5] Firstly,
she asked me to award interest from a date earlier than the date of
decree. Broadly, this related to certain
conduct of the defender in the course of the proceedings which it was said
delayed the ultimate resolution of the case.
However, an incidental order of this kind can only be made if justified
by the principles set out in section 9 of the Act. I was not addressed on this and I am not
persuaded that the justification put forward for an award of interest from an
early date falls within any of these principles, thus I am not prepared to make
such an order.
[6] Next
I was asked to make a pension sharing order under section 8(1)(baa) of the Act
in respect of two pension policies in the name of the defender, with a value of
£70,000 and £17,021 respectively at the relevant date. In particular I was asked to order that they
should be transferred such that the pursuer receives a pension credit of 100%
of the value of the rights in the policies, with the charges to be paid by the
defender. The policies in question are
the defender's SIPP managed by Hornbuckle Mitchell Trustees Limited, and the
defender's pension plan with Standard Life, no.K675537000. The basis for this application is that there
is reason to anticipate that the pursuer will have difficulty in enforcing her
capital sum award against the defender, who spends much of his time in Cyprus,
and often communicates through an agent in Larnaca. If granted there would require to be an
offsetting reduction in the amount of the capital sum awarded in favour of the
pursuer. There is a recent history of
the defender selling assets and business interests in this country, and I am
satisfied that an order of this nature would promote and facilitate the fair
sharing of the matrimonial property in terms of section 9(1)(a) of the
Act. I shall therefore grant a pension
sharing order in terms of conclusion 6(a) and (b), and order that any
charges be the responsibility of the defender.
I shall make an offset against the capital sum which would otherwise
have been awarded in order to recognise this transfer. Given that the action pre-dates the reforms in
the 2006 Act, which reversed the decision in Wallis v Wallis 1993 SC (HL) 49, this offset shall be calculated by reference to the value of the
pension policies at the relevant date.
This reduces the capital sum to £326,000.
[7] As
to the resources of the parties, I have identified no reason to restrict that
which would otherwise be the appropriate award by reference to such
considerations. In all these
circumstances, I will grant decree against the defender for payment to the
pursuer of a capital sum of £326,000, with interest at the judicial rate from
one month after the date of decree until payment.
[8] I
was informed that the pursuer may have to rely on the terms of
article 5(2) of Council Regulation (EC) No.44/2001 of 22 December 2000 on jurisdiction and the
recognition and enforcement of judgments in civil and commercial matters. So far as relevant that article provides:
"A person
domiciled in a contracting state may, in another contracting state be sued:
...
(2) In matters relating to maintenance, in
the courts for the place where the maintenance creditor is domiciled or
habitually resident ...".
As explained in Van den Boogaard v Laumen [1997] 1 Q.B. 759, this provision was designed to ensure
that married but separated women could enforce maintenance claims in their
local courts, in that some contracting states provide that a married woman shall
have her husband's domicile, hence the alternative ground of habitual
residence. It is not entirely clear to
me how or why article 5(2) is likely to be of importance in the present
case, but I will proceed on the basis that it may be of importance.
[9] Mrs Scott
submitted that all or part of any capital sum should be attributed to a
maintenance obligation towards the pursuer.
In addition to Van den Boogaard,
I was referred to a recent decision of Lord Brodie in AB v CD [2007] Fam L.R.
53, in which his Lordship identified one-half of a capital sum award of
£1 million as relating to the maintenance of the pursuer. Mrs Scott said that AB was a stronger case than the present, given that there had been
voluntary payments of aliment. I also
note that Lord Brodie was able to choose a sum which reflected a Duxbury
calculation which had regard to the pursuer's current income, and which was
intended to generate a certain level of income.
I have no evidence as to the needs of the pursuer, nor as to the
parties' respective incomes, thus I cannot carry out a similar exercise. I also note that the relevant order in Van den Boogaard involved a capital sum
which was expressly in lieu of periodical maintenance payments of £30,000 per
annum, and was designed to benefit a former wife who had no earning
capacity. In all the circumstances I do
not consider that I should attribute any part of the capital sum as relating to
the maintenance of the pursuer, as opposed to the sharing of the matrimonial
property in terms of the Act. The fact
is that my calculation of the capital sum has been based on the sharing of the
matrimonial property. On the face of it
this exercise relates more naturally to "rights in property arising out of the
matrimonial relationship" in terms of article 1.2, and thus is excluded from
the Council Regulation.
[10] For completeness I should record that the pursuer also sought
the transfer of two remaining joint life policies, but, given their relatively
small value, I do not consider it necessary or appropriate to make such an
order.
[11] The pursuer also seeks interdict of the defender from (1)
transferring any of his property outwith Scotland pending further order of the
court; (2) transferring or arranging for
the transfer of the pensions subject to the sharing order with the pension
scheme managers; and (3) effecting any
transfer of or transaction involving his property that has the effect of, or is
likely to have the effect of, defeating in whole or in part the pursuer's claim
for financial provision on divorce. The
long and complicated procedural history of this case reveals a defender who has
regularly failed to co-operate with the judicial process. He has taken steps which can reasonably be
interpreted as aimed at thwarting the pursuer's claims, for example his sale of
expensive motor cars; the transfer of a share in the said company to an
undisclosed purchaser; and the purported
transfer of his interest in the said firm to business colleagues. In these circumstances I am prepared to grant
the interdict mentioned above.
[12] The action was hotly contested on the financial aspects until
defences were withdrawn at the eleventh hour.
I will award the expenses of the action in favour of the pursuer. I will also certify Howard Ounsley, Bruce
Graham, Stephen Cosslett and Steven Hammond as skilled witnesses in terms of
Rule 42.13(3). I am also asked to
award an additional fee. I do not
consider that it would be right to deal with this in the absence of intimation
of the application to the defender. While
there is no opposition to the other orders sought, so far as I am aware the
same cannot be said about the application for an additional fee. If the matter is insisted in, it will be open
to the pursuer to renew the motion.
[13] Thus to summarise, I grant decree of divorce; a capital sum payable by the defender of
£326,000; a pension sharing order in
respect of the said policies such that the pursuer receives a pension credit of
100% of their value, with the charges to be paid by the defender; interdict in the terms set out above; expenses in favour of the pursuer; and certification of the said four skilled
witnesses.
