TC against LC (Court of Session) [2025] CSOH 8 (17 January 2025)

OUTER HOUSE, COURT OF SESSION

[2025] CSOH 8

F44/23

OPINION OF LORD STUART

In the cause

Pursuer

against

Defender

Pursuer: Scott KC;

Morton Fraser MacRoberts LLP

Defender: Cheyne KC; TC Young LLP

17 January 2025

Introduction

[1]

This is an action seeking for divorce and other associated orders. The parties were

married on 22 September 1995 and separated on 21 August 2021. 21 August 2021 is the

relevant date for the purposes of section 10(3) of the Family Law (Scotland) Act 1985. The

defender consents to divorce. The parties have two adult sons. They have no children

under the age of 16.

[2]

The pursuer also seeks transfer of the defender's interest in a partnership ("the

Partnership") of which the parties are equal partners. The defender does not oppose the

transfer. The defender seeks payment of a capital sum. The issues before the court therefore

relate to financial provision on divorce.

Divorce

[3]

The pursuer avers and the defender admits the parties' marriage has broken down

irretrievably. The pursuer seeks and the defender consents to divorce. The parties

separated on 21 August 2021. The summons in this action was served on the defender on

19 June 2023. In these circumstances I will grant decree of divorce.

Financial provision on divorce the legal framework

[4]

The legal framework that governs financial provision on divorce is contained in the

Family Law (Scotland) Act 1985 ("the Act"). Section 8(1) of the Act provides that, in an

action for divorce, a party to the marriage may apply for one or more of the orders specified

in that section, known as an order for financial provision. Where an application is made

under section 8(1), section 8(2) of the Act provides that a court shall make such order, if any,

as is (a) justified by the principles set out in section 9 of the Act and (b) reasonable having

regard to the resources of the parties.

[5]

Insofar as relevant to this action, section 9(1) of the Act sets out the following

principles:

the net value of the matrimonial property should be shared fairly between the

parties to the marriage;

fair account should be taken of any economic advantage derived by either

person from contributions by the other, and of any economic disadvantage suffered

by either person in the interests of the other person or of the family;

not relevant;

not relevant.

[6]

Section 9(2) defines "economic advantage" as advantage gained whether before or

during the marriage and includes gains in capital, in income and in earning capacity, and

"economic disadvantage" shall be construed accordingly and "contributions" means

contributions made whether before or during the marriage and includes indirect and non-

financial contributions and, in particular, any such contribution made by looking after the

family home or caring for the family.

[7]

Section 10(1) of the Act states that in applying the principles set out in section 9, the

net value of the matrimonial property shall be taken to be shared fairly between the parties

when it is shared equally or in such other proportions as are justified by special

circumstances. Section 10(6) includes a non-exhaustive list of special circumstances that

may be taken into account in determining the division of value. However, the existence of

special circumstances does not necessarily lead to an unequal division of value. Both parties

submit that there are special circumstances that ought to be taken into account in their

respective favours.

[8]

Section 10(4) of the Act defines matrimonial property as

"... all the property belonging to the parties or either of them at the relevant date

which was acquired by them (otherwise than by way of gift or succession from a

third party) (a) before the marriage for use by them as a family home or as furniture

and plenishings for such home or (b) during the marriage but before the relevant

date."

[9]

The "relevant date" is defined as the earlier of the date on which the parties ceased to

cohabit or the date on which the summons initiating the court action served. As above, it is

agreed in this case that the relevant date is 21 August 2021.

[10]

Once the value of each item or asset constituting the matrimonial property has been

identified and a total value for the matrimonial property calculated, matrimonial debts are

deducted to determine a figure for the net value of the matrimonial property. Matrimonial

debts are those of either or both of the parties incurred before the marriage if they relate to

matrimonial property or are otherwise incurred during the marriage, and which are

outstanding at the relevant date.

[11]

As stated above, under section 8(2) of the Act, any orders made by the court must be

reasonable having regard to the resources of the parties. For these purposes, resources

means present and foreseeable resources.

[12]

Finally, the division of the net value of the parties' matrimonial property is

essentially one for the court's discretion in the particular circumstances of each case.

Accordingly, decisions taken by courts at first instance in other cases may be of little

assistance without a proper understanding of the underlying factual matrix in those other

cases.

Assessment of the parties' matrimonial property

[13]

There was a considerable degree of agreement between the parties in connection

with the content and value of the parties' matrimonial property. The disputes arose in

connection with:

Whether the heritable property, CM Fields, was matrimonial property and, if

matrimonial property, how it should be valued as part of the matrimonial property.

ii.

Whether, in determining the extent of, or division of, the value of the

matrimonial property by either (a) excluding therefrom property inherited or gifted

or (b) through the division of the value of the matrimonial property through special

circumstances, the pursuer could relevantly deploy arguments in connection with

(a) his acquisition of the value of his parents' capital accounts in a pre-existing

partnership, (b) the sum of £10,000 paid by the pursuer's father into the business

bank account of 1 July 2010, (c) investment funds amounting to £9,835 derived from

the pursuer's father and (d) £10,000 paid by the pursuer to the defender's mother

being reimbursement of a deposit paid by the defender's mother towards a property

purchased in the sole name of the defender.

iii.

The value of the Partnership.

iv.

Whether, in determining the division of the matrimonial property through

special circumstances, the defender could relevantly deploy arguments in connection

with the defender's pension.

To what extent, if any, fair account should be taken of any economic

advantage derived by the pursuer from contributions by the defender, and of any

economic disadvantage suffered by defender in the interests of the purser or of the

family.

[14]

Given the narrowness of the issues in dispute for the court's determination, I have

decided not to narrate separately the evidence of the parties and their respective witnesses.

In preparing this opinion, I have however reviewed my notes of evidence, the affidavits

lodged and the productions either referred to in evidence or relevant to the issues in dispute.

What I will do is discuss the evidence relevant to the disputed issues within my

consideration of those issues, as set out below. I note, however, that once oral evidence had

been completed, there was much less dispute in the evidence than the parties' respective

pleadings and affidavits suggested.

CM Fields

[15]

In 1993 (pre-marriage) the pursuer was brought into partnership with his parents

("the prior partnership"). The pursuer and his parents entered into a written contract of

co-partnery (6/34 of process). On 28 November 2009 the pursuer's parents retired, and the

pursuer and his parents entered into a written retirement agreement (6/36) of process).

Under that agreement the pursuer's parents gifted the pursuer their respective shares in the

prior partnership and in the assets of the prior partnership and agreed to convey various

heritable properties (including CM Fields and the farm and farmland) to the pursuer. The

pursuer continued in the business of farming undertaken by the prior partnership (as a sole

trader) until 2015 when the pursuer and defender formed or created the Partnership. There

is no written partnership agreement. The Partnership is therefore governed by the

provisions of the Partnership Act 1890 ("the 1890 Act"). Accounts were prepared for the

pursuer as sole trade/proprietor under the trading name of the prior partnership and then

for the Partnership, again trading under the same name.

[16]

CM Fields was purchased in 2002 for £7,000 by the pursuer and his parents, as

trustees and partners of the prior partnership (6/38 of process) and entered into the fixed

assets on the balance sheet of the prior partnership for the year ending November 2002 at

that value (6/26 of process). I note at this point that the earliest accounts lodged for the prior

partnership are for the year ending November 2001 and the fixed assets of the prior

partnership are stated at £16,130 as "improvements to property". As noted above, as part of

the retiral arrangements the pursuer and his parents, as trustees and partners of the prior

partnership, disponed CM Fields to the pursuer as an individual. Other than a modest

addition of£352 in the year ending 2003, between 2002 and the relevant date the value of

CM Fields is consistently stated within the fixed assets on the balance sheet in the accounts

for the prior partnership, the pursuer operating as a sole trader and the Partnership.

[17]

On the above factual matrix, the pursuer's interest in the prior partnership was

acquired prior to the parties' marriage and was therefore not matrimonial property. Title to

CM Fields was taken as trustees and partners of and for the prior partnership. In 2009 the

pursuer's parents retired and gifted their respective shares in and in the assets of the prior

partnership to the pursuer. As part of that process, title to CM Fields was transferred to the

pursuer as an individual. That transfer merely followed the intention to gift the parents'

interest in the prior partnership to the pursuer, as an individual. I agree with senior counsel

for the pursuer that at this stage CM Fields did not form any part of the parties' matrimonial

property. However, a question arises at the point the Partnership was formed. Section 20 of

the 1890 Act provides that:

"All property and rights and interest in property originally brought into the

partnership stock or acquired, whether by purchase or otherwise, on account of the

firm, or for the purposes and in the course of the partnership business, are called

partnership property, and must be held and applied by the partners exclusively for

the purposes of the partnership and in accordance with the partnership agreement."

[18]

This includes any capital initially contributed by the partners at the start of the

partnership, or any property contributed by a partnership into the partnership. As noted

above the value of CM Fields has been consistently stated within the fixed assets of the

various balance sheets for the prior partnership, the pursuer as a sole trade/proprietor and

the Partnership. Particularly, it is included in the Partnership's first year accounts (2015)

and is stated in the pursuer's opening capital account. It is therefore partnership property of

the Partnership. There is no dispute between the parties that the parties' respective interests

in the Partnership are matrimonial property.

The gift of the pursuer's parent's interest in the prior partnership

[19]

The pursuer argues that the circumstances of the gift of the pursuer's parent's

interest in the prior partnership are relevant in the identification and/or division of the value

of the matrimonial property. As discussed above, on their retirement from the prior

partnership the pursuer's parents gifted to the pursuer the sums standing in their respective

capital accounts, the total of which was £88,522. The pursuer argues that, as a gift, this sum

is not matrimonial property and should be excluded from his capital account, which failing,

the circumstances in which the pursuer acquired the value amount to special circumstances

and should be taken into account in determining the division of the matrimonial property.

[20]

Insofar as the pursuer's argument that the sum of £88,522 is not matrimonial

property, I reject that argument. The point in time at which matrimonial property is

assessed is the relevant date. At the relevant date in this case the Partnership had been

formed. As set out above, the opening balance in the pursuer's capital account for the

Partnership includes the £88,522. It is therefore property of the Partnership and therefore

matrimonial property.

[21]

The question then arises whether the circumstances of receipt by the pursuer of his

parents' interests in the prior partnership are such as to justify their being taken into account

in the pursuer's favour in determining the division of the value of the matrimonial property.

As noted above, the existence of special circumstances does not necessarily lead to an

unequal division of value. In my judgement, the circumstances do not justify being taken

into account in determining the division of the value of the matrimonial property.

[22]

It is not disputed that the defender gave up her employment with CB in

September 1996, shortly after the parties' marriage and when she became pregnant with the

parties' first child. There appeared to be some dispute in the evidence of the parties

regarding the motivation for the defender stopping her employment. The defender avers

that the pursuer requested that she give up work and devote herself to the family and the

farming business. The pursuer's position being that the defender gave up her employment

because she did not enjoy it. Likewise, there appeared to be, at least initially, some dispute

about the defender's contributions to the family and family business. However, review of

my contemporaneous notes of the evidence records that whilst the pursuer might have

initially sought to mis-emphasise the defender's motivations for giving up her employment

and underplay, at least in relation to some aspects, the defender's contributions to the family

and family business, latterly the pursuer appeared to modify his position. The pursuer

accepted that the defender could have continued with her career and the parties could have

lived together outwith the farming business, ie with the pursuer giving up farming, but that

the parties discussed and agreed that they would both dedicate their collective efforts to

making their life at the farm and make the farming lifestyle work for them and their family.

Further, as I noted the pursuer's final position in oral evidence, he accepted that the

defender made a full contribution to their farming and family life. The pursuer

acknowledged that the defender agreed to become a farmer's wife, like the pursuer's mother

and his grandmother. The extent of that contribution can be seen from the defender's

affidavit and supplemented by her oral evidence, both of which, having seen and heard the

parties give evidence, I accept.

[23]

As set out above, the pursuer received the £88,522 in 2009 and contributed it to the

opening capital of the Partnership in 2015. That was a choice by the pursuer. He could have

chosen not to form the Partnership or not contribute the £88,522 towards the opening capital

of the Partnership. Further, review of the accounts prepared on behalf of the pursuer as a

sole trader and the Partnership shows that the value received appears to have been almost

immediately invested in plant and machinery. The pursuer's accounts for the year ending

November 2010 (6/18 of process) state that the pursuer made additions to plant and

machinery of £88,533. Cash at bank fell from £58,955 in the year ending 2009 account to £nil

in the year ending 2010 accounts and that, along with plant and machinery depreciation,

bank overdraft and the reduction in creditors, accounts for the material shift in the

business's financial position. Further, examination of the pursuer's and, thereafter, the

Partnership accounts for the years ending 2010 to 2021 show that plant and machinery alone

was depreciated by £97,188. This highlights three further relevant considerations. First, it

demonstrates that the nature of the farming business, which the defender had admittedly

committed herself to, is such that there is a constant turnover of not just livestock but also of

other items necessarily required to operate the farming business. In this case, the entire

value of the purchased plant and machinery appears to have been depreciated over the

period that the pursuer and defender were fully committed to the family and farming

business. Second, and again acknowledging the nature of the farming business operated by

the parties, the relevant funds, through the purchase of the plant and machinery and the

plant and machineries' use within the overall farming business over some 12 years suggests

that the funds became wholly intermixed with the parties' matrimonial property and the

generation of the parties' wealth derived from their combined efforts during the course of

their marriage. Third, the annual valuation of depreciation is a cost applied to the profit and

loss account, thereby reducing profits available from the business to which the defender had

committed herself, firstly entirely as the pursuer's wife and latterly as a partner of the

Partnership. These considerations, in my judgement militate strongly against dividing this

element of the value of the matrimonial property more favourably in the pursuer's favour.

£10,000 paid by pursuer's father

[24]

The £10,000 was paid by the pursuer's father into the business bank account on 1 July

2010 (6/47 of process). It was provided to facilitate the purchase of a mower for the farming

business (6/48 of process and pursuer's affidavit). Given that the mower was purchased for

the farm, I assume that its value is (or was if subsequently disposed) stated in the assets in

the relevant financial accounts. As in relation to the sum of £88,522 the pursuer submits that

the £10,000 is not matrimonial property, which failing the circumstances of its receipt justify

it being taken into account in the pursuer's favour in determining the division of the value

of the matrimonial property. For the same reasons as stated in relation the sum of £88,522,

in my judgement, the £10,000 is matrimonial property and does not justify being taken into

account in the pursuer's favour in determining the division of the value of the matrimonial

property.

Investment funds from pursuer's father

[25]

The pursuer explains in his affidavit the source of the £9,635, which is stated as

capital introduced in the year ending 2016 accounts. The pursuer's father had what was

essentially a "cash back" investment account that paid 1% plus interest on purchases. When

the pursuer's father died, the pursuer inherited the balance of the account, namely £9,635.

The pursuer argues that this sum is not matrimonial property, which failing the

circumstances of its receipt justify it being taken into account in the pursuer's favour in

determining the division of the value of the matrimonial property. In my judgement the

sum is matrimonial property; it was introduced into the Partnership, became partnership

property and thus matrimonial property. However, unlike the sums of £88,522 and £10,000,

which were used to purchase plant and machinery for prospective use within the farming

business as discussed above, the sum of £9,635 is a sum generated from retrospective

purchases, the dates of which are not know, and were not "converted" into other assets

utilised within the farming business as discussed above. In these circumstances, in my

judgement, it would be reasonable and appropriate to take the source of these funds into

account in the pursuer's favour in the division of the value of the matrimonial property. I

will do this by excluding the sum of £9,635 from the matrimonial property held by the

pursuer.

The value of the Partnership

[26]

Both parties instructed skilled witnesses to value the Partnership, AR for the pursuer

and GR for the defender. Both AR and GR are accountants, both have considerable

experience in the valuation exercises they undertook, and both are eminently qualified to

offer the valuation opinion evidence they did to assist the court. AR valued the Partnership

at £345,395 at the relevant date (after addition of £1,500 due to an addition error in a separate

valuation incorporated by AR into his own calculations). GR valued the Partnership

at £374,391 at the relevant date (after deduction of £1,221 arising in connection with assets

sold, unknown to GR, prior to the relevant date). The difference between the two valuations

arises from the difference in treatment of the value of CM Fields, or more particularly the

uplift in value from the value as stated in the relevant Partnership accounts to the agreed

market value at the relevant date, namely an uplift of £49,000.

[27]

AR excluded two thirds of the uplift as emanating from the pursuer's parents. AR

states that:

"[CM Fields] was acquired by the partnership of [the pursuer] and his parents. The

uplift in value relating to the two thirds ownership share transferred from [the

pursuer's] parents has been excluded from the revaluation of the partnership

property."

Whilst I am prepared to accept that AR's calculations are correct from an accounting

perspective, for the reasons set out above, I consider them to proceed on a misstatement of

the law. In my judgement, GR's calculations are consistent with a correct interpretation of

the law and, accordingly, the relevant date value of the Partnership is £374,391. Subject to

senior counsel for the pursuer's arguments in relation to special circumstances relating to

the Partnership capital, both counsel appeared to proceed on the basis that as the

Partnership is governed by the 1890 Act, it is appropriate for the parties to be allocated one

half of the value of the partnership.

[28]

In terms of current date values, AR calculates a valuation of £262,129, whereas GR

calculates a value of £291,894. The difference between the values is again the difference

associated with the different treatment of the two thirds of the uplift in the value of

CM Fields. Again, for the reasons set out above, I consider GR's value of £291,894 to be

correct as a matter of law.

£10,000 reimbursement paid by pursuer

[29]

When the parties' eldest son was in his second year at university the parties decided

to purchase a property for him to live in. By my calculations, given their son's birth date, I

calculate that the purchase would have been around 2014/2015, but the date is not material.

To fund the purchase of the property the defender re-mortgaged a pre-marriage property

owned by her, which is not matrimonial property. The parties also borrowed the sum

of £10,000 from the defender's mother to assist with the purchase. The property was taken

in the sole name of the defender. It is matrimonial property. At the relevant date the

property has an agreed value of £50,000 and associated borrowing of £23,486. In

December 2015 the pursuer received a sum of money by way of inheritance following his

father's death. From that sum the defender's mother was reimbursed. The pursuer argues

that the source of funds justifies it being taken into account in the pursuer's favour in

determining the division of the value of the matrimonial property. Whilst I accept that the

pursuer has contributed inherited funds towards the property, in my judgement, it does not

constitute a special circumstance that justifies being taken into account in the pursuer's

favour in determining the division of the value of the matrimonial property. The property

was purchased for the parties' son whilst at university. That, in my judgement, is for a

particularly matrimonial purpose. The evidence suggests that the parties could not afford

the property absent a loan from the defender's mother but that this changed when the

pursuer obtain his inheritance, at which point the defender's mother was repaid. The value

of the property is matrimonial property. The pursuer will share in the uplift of any value.

Post divorce the defender, as sole owner of the property, will bear the cost of repaying the

outstanding borrowings.

The defender's pension

[30]

The court was assisted by the skilled evidence of ST. ST is an actuary and is very

experienced in giving advice in litigation cases. I accept her evidence in relation to the

calculations she provided in connection with the defender's pension to assist the court

(see 7/2 and 7/3 of process). The defender joined the relevant pension scheme on 21 June

1982 and left on 15 May 1997 (the date of the parties' marriage is 22 September 1995). The

defender was thus an active member of the scheme until 15 May 1997 and thereafter a

deferred member. The CETV value of the defender's pension at the relevant date

was £148,374.54. As is agreed between the parties, applying the appropriate regulations,

provides a value attributable to the period of the marriage of £98,166. The defender argues

that special circumstances apply in respect of the defender's pension and that these justify

being taken into account in the defender's favour in determining the division of the value of

the matrimonial property. The defender argues that only the proportion of the CETV

derived from post marriage contributions, namely £16,386, should be included for the

purpose of the court's division of the value of the matrimonial property, the

remainder (£81,780) being excluded by special circumstances. The argument deployed by

the defender is not uncommon and, as was appropriately acknowledged by senior counsel

for the pursuer, whether to give effect to the argument is a matter for the court in the

relevant circumstance. In my judgement, the general principle underlying the 1985 Act is

the fair sharing of the value of the property acquired by the spouses' efforts or income

during the marriage. I am satisfied that part of the CETV of the defender's pension can

properly be traced to the defender's pre-marriage contributions and as such justifies the

defender retaining that element. Accordingly, I include only £16,386 in my calculations for

division of the value of the matrimonial property.

Economic advantage and disadvantage

[31]

As set out above, section 9(1)(b) of the 1985 Act provides that fair account should be

taken of any economic advantage derived by either person from contributions by the other,

and of any economic disadvantage suffered by either person in the interests of the other

person or of the family. In this case counsel for the defender sought to argue only that the

defender has suffered a relevant economic disadvantage through (1) the loss of opportunity

to earn a salary (or at least one commensurate with that she might have earned if she had

not married the pursuer) and (2) the loss of opportunity to accumulate a pension. Counsel

for the defender also submitted that the fact that the defender will have to leave the

farmhouse where she currently resides will compound her economic disadvantage. Counsel

for the defender led skilled evidence from an employment consultant (SA) and a consulting

actuary (ST) in support of her case. Counsel for the pursuer also led evidence from an

employment consultant (KC).

[32]

Senior counsel for the pursuer submitted that the correct approach to the court's

assessment of economic disadvantage can be found in Lady Smith's opinion in the case of

Coyle v Coyle 2004 Fam LR 2. In Coyle Lady Smith eschewed a compensatory approach to the

application of economic disadvantage. Under section 9(1)(b) the court is directed to take

"fair account" of any economic disadvantage, along with any other of the other principles as

are relevant in the circumstances of the particular case, in the overall task of a fair sharing of

the parties' matrimonial property. I agree with the distinction Lady Smith draws. However,

as Lady Smith herself recognised, it is necessary to have an understanding of a parties'

economic position both at divorce having been married and had they not been married.

These two economic positions will provide the court with the material to make a

comparative or relative assessment inherent in the concept of disadvantage (or advantage).

Although it does not arise in this case given it is only the defender who raises the principle

under section 9(1)(b) and only in relation to economic disadvantage, under section 11(2) the

court is directed to take into account the extent to which any economic advantage or

disadvantage sustained by one party is offset by economic advantages or disadvantages

sustained by the other party.

Loss of opportunity to earn a salary

[33]

There are, in my judgement, two relevant periods to consider. The first is the period

of the marriage. In relation to this period, the two vocational experts (SA and KC) provided

various employment scenarios to assess the defender's likely cumulative earnings over the

period 1996 to 2023, some 27 years. SA for the defender provided four scenarios. The first

assumed the defender would remain in full time employment progressing to the position of

bank manager. Under that scenario the defender would have had cumulative earnings

of £544,618 net. SA's second scenario assumed full time earnings as a personal customer

advisor. Under that scenario cumulative earnings were £436,288. SA's third scenario

assumed part-time earnings post maternity, returning to full time earnings as a personal

customer advisor. That scenario would have cumulative earnings of £369,331. I do not

consider the fourth scenario relevant. KC considered it was likely that a post maternity

period of part-time earnings would apply, and that the defender would likely make a

one-step promotion to the position of supervisor or line manager. Under KC's scenario

cumulative earnings would be £435,638. Comparing the various scenarios, SA's scenario 3

and KC's scenario both anticipate post maternity part-time earnings. The difference

thereafter appears to be KC's assumption that the defender will make a one-step promotion.

SA does not provide an equivalent scenario. Senior counsel for the pursuer was critical of

SA's relevant experience and invited me to prefer the evidence of KC. I do not accept that

the criticism was justified in the circumstances of this case. Much of the tasks of the

vocational consultants in this case was the collation of relevant data. To the extent that the

skilled witnesses did engage in a more nuanced exercise of applying experience, it seemed

to me that KC's assessment was more favourable to the defender. Considering the two

skilled witnesses' evidence on the issue of cumulative earnings, in my judgement, it is

reasonable to conclude that the defender was likely, had she maintained her employment, to

have had net cumulative earnings, broadly, in the region of £400,000 net.

[34]

Standing the decisions I have made above regarding (i) the pursuer's arguments in

relation to special circumstances on a division of the value of the matrimonial property,

(ii) that the defender will receive 50% of the value of the partnership and (iii) the pursuer

will purchase the defender's interest in the Partnership, this gives a combined value of

around £200,000, suggestive of a financial disadvantage of £200,000 (£400,000 less £200,000).

However, in addition, I accept Mrs Scott's submission that had the defender remained in

full-time employment, even assuming a post maternity period of part-time work, there

would have been additional costs that the defender and the family would also have

incurred; travel, work clothing, a nanny are possible examples. These additional costs

would have been incurred over the 27 years. Assuming the financial disadvantage

of £200,000 is spread over the 27 years, this gives an annual amount of around £7,500.

Again, broadly, it is likely that a significant proportion of that £7,500 might be taken up with

the sort of additional costs to be incurred had the defender stayed in employment, as

discussed above. In these circumstances, I am unable to reliably conclude that in relation to

the first of the two periods, namely the period of the marriage, the defender has suffered a

material economic disadvantage.

[35]

The second relevant period is the post marriage period looking to the future. In

relation to this period, in my judgement, the evidence of the two skilled witnesses do

support, with sufficient reliability, that the defender has suffered a loss in earning capacity

during the period of the marriage. Both SA and KC assess the defender's likely current

earning capacity at around £20,000 net. Both SA and KC assess the defender's likely current

earning capacity had she remained in employment, including a post maternity period of

part-time employment, at around £24,000 net. Accordingly, in my judgement, the evidence

supports a loss of the defender's earning capacity of around £4,000 net a year. The defender

is currently 59 years old. ST gave evidence that most people work to the statutory

retirement age. That evidence was not challenged, and, in any event, there is no contrary

evidence. Capitalised, this gives a figure to retirement in the region of £30,000 to £35,000.

Loss of opportunity to accumulate a pension

[36]

As referred to above, the defender led evidence from a consulting actuary, ST. ST

also gave evidence in connection with the defender's case that she had suffered a loss of

opportunity to accumulate a pension. ST's assessment was, broadly, to follow the earnings

scenarios set out by SA. Counsel for the pursuer challenged ST in relation to a number of

assumptions that underpinned ST's calculations. The first related to the rate at which

benefits were accrued as a fraction of pensionable final salary. ST had used 1/60th and had

described this as relevant to more senior roles. ST accepted that for more junior roles a 1/80th

rate might be more appropriate. That might be so but ST, who is the skilled witness in the

case, selected 1/60th in light of her experience and there is no evidence to suggest that she is

wrong. The second related to ST's assumption of continuous employment. Although ST, in

her oral evidence, acknowledged the assumption, in fact, ST's calculations incorporate an

adjustment of 0.83 for contingencies other than retirement (including, for example being out

of employment) in the assessment of future loss. Further, the scenarios used by both SA and

KC, which I have accepted as the most likely, assume a period of post maternity part-time

employment. The third related to ST's assumption of 8% employer pension contribution.

ST confirmed that this was correct and explained that in her experience 8% was likely to be

accurate. On the basis of SA's employment scenario 3, ST assessed a total loss in connection

with an opportunity to accumulate pension of £197,744. I note here that KC's relevant likely

employment scenario provides for a greater deficit than SA's and, accordingly, ST's pension

loss based on SA's scenario 3 might underestimate the pension loss associated with KC's

likely employment scenario. The matter was not explored in evidence.

[37]

Drawing the two strands of the defender's loss of earning capacity and loss of

opportunity to accumulate pension together, gives a figure, based on the evidence of SA, KC

and ST, of around £230,000. As noted above, the court does not take a compensatory

approach to the application of economic disadvantage. Rather the court is directed to take

"fair account" of any economic disadvantage, along with any other of the other principles as

are relevant in the circumstances of the particular case, in the overall task of a fair sharing of

the parties' matrimonial property.

[38]

Applying that approach, I consider it fair and reasonable in the overall task of a fair

sharing of the parties' matrimonial property, to make a discrete award under section 9(1)(b)

of the 1985 Act of £115,000 in favour of the defender.

Transfer of defender's interest in the Partnership to the pursuer

[39]

The pursuer seeks transfer of the defender's interest in the partnership. No

argument was made that the sum payable should be other than that standing in the

defender's capital account in the Partnership accounts for the year ending November 2023,

namely £18,934. I will make the appropriate order for transfer.

Division of matrimonial property in light of arguments advanced

[40]

I set out in Appendix 1 a table of matrimonial property, its value and its division in

light of my conclusions above.

Orders

[41]

To summarise that which is set out in the table. I assess the value of the parties' net

matrimonial property £465,090, after excluding the pursuer's inherited investment account

of £9,635. One half thereof is £232,545. The defender holds £69,868. In order for the

defender to receive one half of the value of the parties' net matrimonial property, the

pursuer requires to pay to the defender the sum of £162,677. Thereafter, for transfer of the

defender's interest in the Partnership, the pursuer requires to pay to the defender the sum

of £18,934. Finally, in terms of section 9(1)(b) of the 1985 Act, I make a further discrete

award of £115,000 in favour of the defender. That brings out a total capital sum due by the

pursuer to the defender of £296,611, which, in my judgement is justified by the principles set

out in section 9 of the 1985 Act and reasonable having regard to the resources of the parties.

[42]

I shall put the case out by order in respect of any matters arising.

Appendix 1

Table of matrimonial property and its division

Matrimonial property

Pursuer

Defender

Assets

The Partnership

£ 374,391 £ 187,196 £ 187,196

Account ending 6950

£ 722 £ 361 £ 361

L Plantation

£ 160,000

Account ending 4306

£ 2,046

SL pension

£ 27,525

Aviva pension

£ 16,843

Nationwide account

£ 575

NS&I ISA

£ 192

Property in Ayr

£ 50,000

Defender's CB pension, after special circumstances

£ 16,386

Car

£ 1,000

Premium Bonds

£ 5,425

Account ending 4872

£ 7,600

NS&I ISA

£ 886

RL account

£ 2,348

NAB shares

£ 2,353

Fidelity ISA

£ 2,829

Account ending 4856

£ 4,166

Caravan

£ 2,000

Contents of farmhouse

Total assets

£ 396,738 £ 93,354

Less investment account special circumstances

£ 9,635

Total assets after special circumstances

£ 387,103 £ 93,354

Liabilities

Barclaycard

£ 1,516

Mortgage

£ 23,486

Total liabilities

£ 1,516 £ 23,486

Net matrimonial property

£ 395,222 £ 69,868

Total net matrimonial property after special circumstances

£ 465,090

One half thereof

£ 232,545

Sum due to defender to meet one half of matrimonial property

£ 162,677

Purchase of defender's interest in partnership

£ 18,934

£ 181,611

Section 9(1)(b) in favour of defender

£ 115,000

Capital sum payable by pursuer to defender

£ 296,611

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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> TC against LC (Court of Session) [2025] CSOH 8 (17 January 2025) URL: http://www.bailii.org/scot/cases/ScotCS/2025/2025csoh8.html Cite as: [2025] CSOH 8

Scottish Court of Session Decisions