Woodhouse v. Mooney [2006] ScotSC 42 (21 April 2006)

F333/04

JUDGEMENT OF

SHERIFF WILLIAM SEITH STANNERS IRELAND

in the cause

ROBERT BOAM WOODHOUSE

Pursuer

against

DEBORAH NOYAN MOONEY or WOODHOUSE

Defender

KILMARNOCK : 21 April 2006

The Sheriff, having resumed consideration of the cause, Finds the following facts admitted or proved:

FINDINGS IN FACT

1. The parties were married at Newton Mearns on 22 August 1987.

2. There are 4 children of the marriage, namely Mark Boam Woodhouse, born 26 October 1988, Grant Nicholas Woodhouse, born 26 April 1993, Stewart James Woodhouse, born 19 September 1995 and Rachel NoyonWoodhouse, born 3 January 1997. All of the children are in full time education and reside with the Defender at the former matrimonial home. Only the 3 youngest children are now under the age of 16 years.

3. The parties separated on 10 February 2003, and since that date they have not lived together nor had marital relations. The marriage has broken down irretrievably. There is no prospect of reconciliation.

4. The relevant date for the purpose of Section 10(3) of the Family Law (Scotland) Act 1985 is 10 February 2003.

5. At the relevant date there was matrimonial property in the Pursuer's name as follows:

(i) the matrimonial home at Braeheads Maunshaeugh Road, Fenwick is worth £460000.00 and subject to a mortgage of £66000.00;

(ii) Scottish Provident Endowment Policy number 206969301, worth £13944.00;

(iii) Heritable property at 73a Portland Street, Troon, worth £35000.00;

(iv) Heritable property at 12 Townend, Kilmaurs, worth £42000.00;

(v) Heritable property at 2 Kilmarnock Road, Monkton, worth £60000.00;

(vi) Heritable Property at 9a Cheapside Street, Eaglesham, worth £67000.00;

(vii) Heritable Property at 86 Main Road, Fenwick, worth £44000.00;

(viii) An account with Ameritrade Brokers (formerly Aufhauser), with a balance of $643.61-£380.00;

(ix) Sum at credit at Clydesdale Bank PLC, account number 10582085 of £1591.50;

(x) Sum at credit at Clydesdale Bank, account number 20582085 of £80.00;

(xi) Sum at credit at HSBC, bank account number 91083163 of £127.05;

(xii) Sum at credit of Saudi American, bank account number 72863 of $162355.00-£95800.00;

(xiii) Cash deposit (for car) £10000.00;

(xiv) Share holdings with Aviva and Cable & Wireless, worth £300.00;

(xv) Pension policy with Prudential (previously Scottish Amicable, previously M&G), number M105B246, with a cash equivalent transfer value of £1129.00;

6. At the relevant date there was matrimonial property in the ownership of the Defender as follows:

(i) heritable property at 105 Wellbeck Crescent, Troon, worth £45000.00;

(ii) heritable property at 40a Main Street, Fenwick, worth £48000.00;

(iii) heritable property at 34 Main Street, Fenwick, worth £44000.00;

(iv) Abbey National TESSA account number 56790710, worth £5169.15;

7. At the relevant date there was matrimonial property in the joint ownership of parties as follows:

(i) sums at credit at Clydesdale Bank, account number 343093 of £1627.25;

(ii) sums at credit at Clydesdale Bank, account number 343085 of £2177.80;

(iii) the furniture and contents of the matrimonial home.

8. Prior to the relevant date the parties opened various accounts for the benefit of the children as follows:

(i) Abbey National, account number R15862709WOO in the name of the Defender as Trustee for Mark Boam Woodhouse, which had a balance of £16675.41;

(ii) Abbey National, account number X12145240WOO in the name of the Defender as Trustee for Mark Boam Woodhouse which had a balance of £133.15;

(iii) Abbey National, account number X11648464WOO in the name of the Defender as Trustee for Rachel Noyon Woodhouse, with a balance of £270.33;

(iv) Abbey National, account number X10637100W00 in the names of both parties as trustees for Stewart James Woodhouse with a balance of £300.00;

(v) Abbey National, Bond number 84729 in the name of the Defender as Trustee for Grant Nicholas Woodhouse, with a balance of £13312.25;

(vi) Abbey National, Bond number 847390 in the name of the Defender as Trustee for Mark Boam Woodhouse, with a balance of £3245.86.

9. Immediately following the parties separation, the Defender withdraw all sums at credit in each of the Clydesdale Bank accounts, with the exception of account number 20582085. In addition, she withdrew a total of £22000.00 from accounts in the children's names to fund the purchase of a motor vehicle.

10. At the relevant date, the Pursuers had a credit card debt in the sum of £2497.55 due to HSBC, Master Card number 5434 6030 2765 7689

11. Between 29 August 2003 and 2 April 2004 the Pursuer sold his investment properties referred to at paragraph 5, items (iii) to (vii) inclusive. The cumulative sale price of said properties was £268450.00. The Pursuer currently has about £363000.00 in offshore accounts.

12. The Defender has retained her investment properties referred to at paragraph 6 (i), (ii) and (iii). Said properties yield a rental income to the Defender. The current values of the properties are as follows:

(i) 105 Wellbeck Crescent, Troon - £65000.00,

(ii) 40a Main Road, Fenwick - £70000.00,

(iii) 34 Main Road, Fenwick - £65000.00,

13 The Pursuer owned heritable property at 77 Milton Avenue, Barnet, Herts during the course of the parties' marriage. In September 1999 the Pursuer sold that property. The net free proceeds of sale amounted to £161516.34. The Pursuer deposited the net free proceeds of sale into an offshore account. Interest accumulated on the proceeds of sale until the account closed in June 2002. The closing balance of the account on 13 June 2002 was £180115.66.

14 With exception of a period in 1988 and 1989, the Pursuer has worked abroad, mainly in the Middle East, throughout the parties' marriage. At the time of the parties' separation, the Pursuer was living and working in Saudi Arabia. The Pursuer's most recent overseas contract of employment ended in August 2004. The Defender also worked abroad during the parties' marriage. She has not worked at all since early 1993. She was living in Scotland at the date of the parties' separation.

15. On 17 December 2004, the Pursuer suffered a heart attack while in Bahrain.

16. The current value of the former matrimonial home is £550000.00. The terms of the report and valuation by CKD Galbraith, dated 19 May 2005 and produced at 5/38 are true and accurate.

17. For the purposes of proof in the present action, copy documents may be treated as principals.

18. The property at 77 Milton Avenue, Barnet, England was purchased by the Pursuer prior to the marriage of the parties and was not imported into matrimonial property.

19. There are special circumstances to exclude the proceeds of sale of the property at 77 Milton Avenue, Barnet, England from matrimonial property, and the interest earned on the sale price, amounting to a sum of £180115.66.

20. There are no grounds, in terms of special circumstances, to exclude the difference between £180155.66, and the sum of £213000.00.

21. The Pursuer invested the proceeds of the sale of the said 77 Milton Avenue, Barnet, England, and the interest subsequently earned on that sum, in the ultimate purchase of 4 properties. The Defender was involved in selecting, fitting out and managing those said properties.

22. The property at 13 Oakley Court, Barnet, England was the property of the Pursuer's late father. Title to that property, on his death, was not immediately taken by the Pursuer's mother. The property was leasehold. The Pursuer, with the assistance of his sister, obtained an extended lease for that property. The Pursuer contributed £16000.00 or thereby to the cost of obtaining that extended lease. That on the sale of that property, that sum of £16000.00 was repaid to the Pursuer and that the free proceeds, subject to any other legal expenses, were paid to the Pursuer's mother. The Pursuer was not the owner, nor had any other propriety interest in that property, during the course of the marriage.

23. The Pursuer has no other assets which he has not disclosed to the Defender, nor the Court.

24. Between October and December 2004, after the Pursuer's dismissal from his own employment in August 2004, the Pursuer was engaged in assisting colleagues in a business plan in Bahrain. He did so in the hope that this might lead to further employment for him in the Middle East in the oil industry. He received only expenses for this assistance to his colleagues in that period.

25. The Pursuer, after his recovery from his heart attack, has sought employment. He has sought employment in his original field of working with a computer software programme called "SAP". He has not been successful in gaining employment.

26. Whilst the Pursuer was employed in the Middle East, he earned substantial sums in excess of the equivalent of $100000.00 per annum. Because of his age, he has not been able to obtain similar employment subsequently.

27. He has researched the possibility of employment in the UK, but has not yet obtained employment. If he finds employment, it is likely to provide an income in the range between £30000.00 and £45000.00, the latter sum being at the top of the range of possible salaries he may obtain.

28. He has not worked since he suffered his heart attack and has not generated any income, excepting interest on his capital accounts, held in banks. He has not hidden, nor has he not disclosed, any sources of income, either to the Defender or the Court.

29. On 4 August 2005, the Pursuer purchased a property for residential use at The Grange, The Grove, Houghton Conquest, Bedfordshire, England. The purchase price for the property was £550000.00. In addition, the Pursuer paid £22000.00 stamp duty. The Pursuer applied £342000.00 of his capital to the purchase price. There is a secure loan over the subjects, in the sum of £230000.00. The Pursuer, who had previously lived with his mother, had been looking at purchasing a home in England since the parties' separation. The property is a substantial one, but the Pursuer purchased same partly in the hope that in due course of time, the children of the marriage would visit him for residential contact.

30. The Defender and the children of the marriage, presently live in the former matrimonial home at Braeheads, Maunsheugh Road, Fenwick. This is a substantial property enjoying 6 bedrooms and 4 public rooms. It has substantial grounds.

31. Since the date of separation the Defender has only looked one other property of a similar type to the matrimonial home. To purchase that would have taken between £320000.00 and £340000.00. The Defender has not looked at other properties which she might be able to purchase, should she require to purchase a smaller property to accommodate herself and the children.

32. Since the date of separation the Pursuer has continued to pay the mortgage of the matrimonial home and also has remitted the sum of £450.00 per month to the Defender. The matrimonial home has deteriorated.

33. The Defender hopes to obtain employment as a foster carer. The matrimonial home has been approved by the relevant local authority for that purpose. The Defender has not commenced employment as a foster carer and her earnings from that employment are not certain.

34. The Defender, due to indebtedness, and lack of remunerative employment, is not in a position to maintain the matrimonial home and to continue to live there with the children of the marriage. It would be best that the matrimonial home was sold, a capital payment be made to the Defender, by the Pursuer, and thereafter for the Defender to buy a home, on a smaller scale, suitable for herself and the children.

35. From the flatted properties in her name, the Defender generates annual income in or around £12600.00, which after deduction of necessary costs of running said properties, would be in the region of £12000.00 per annum.

36. The Defender has obtained, in principle, indication that she may be able to borrow £66000.00, which could be used to assist her in purchasing a suitable home for herself and the children.

37. The 3 younger children, Grant, Stewart and Rachel, all attend Belmont House School, Newton Mearns, Glasgow, this is a private fee paying school. Since the date of separation the Pursuer has paid those school fees, notwithstanding that he has had no income. He has drawn the monies from his capital resources. The eldest child, Mark, attended Belmont House School, but is now a pupil at Glenalmond School, which is also fee paying. The Pursuer is agreeable to paying the equivalent sum for the school fees for Mark at Belmont House School, to allow Mark to attend at Glenalmond School. The Pursuer would prefer that all the children attend private schools, but he is unable, having no income, to continue to pay such fees beyond the summer term of 2006.

38. The Pursuer, when he worked abroad, saw the children only when he had holidays of approximately 7-8 weeks per year. After the parties separated, he had infrequent contact with the children due in part to the reluctance of the Defender to such contact, but also due to concerns the Defender reasonably had about the Pursuer's engagement with the children, and especially the Pursuer's insight into a hyper activity condition from which the child Stewart suffers from, which requires a special diet.

39. The Pursuer does wish to have contact with the children. He has, under order of the Court, had telephone contact and subsequent periods of personal contact with them in Scotland. It would be in the best interests of the children that they continue to enjoy contact with the Pursuer. It is not necessary, in order that that contact take place, that the Court now requires to make a formal contact order. The Defender will facilitate contact by the Pursuer with the 3 youngest children of the marriage under 16 years of age. It is not necessary, given the attitude of the Defender to contact, that this be subject to a formal Court order. The arrangements for contact are best left to be arranged between the Pursuer and the Defender.

40. The Pursuer presently pays £450.00 per month to the Defender. The Defender's outgoings exceed her income by the figure of £240.00 or thereby per month. The Defender, who has not worked, and is not immediately likely to obtain remunerative employment as a foster carer, will require a period of readjustment after divorce. It is reasonable that the Pursuer be required to pay a periodical allowance for a period of 6 months after the decree of divorce.

FINDS IN FACT AND LAW

1. That the marriage between the parties has broken down irretrievably. There is no prospect of a reconciliation. The parties have lived apart for 2 years. The Defender, by her oath, consents to decree of divorce, on that basis.

2. Contact by the Pursuer, with the children Grant, Stewart and Rachel, would be in their best interest. That the Defender is now willing to facilitate contact between the Pursuer and the children. It is better that no order is made than that an order is made as regards contact. The arrangements for future contact between the Pursuer and the children, are best regulated by the parties themselves.

3. That in order to make provision for a division of matrimonial property on divorce, there are no special circumstances to justify transferring the matrimonial home from the Pursuer to the Defender.

4. That the best way to order the division of matrimonial property on divorce would be to ordain the Pursuer to make a capital payment to the Defender.

Therefore Finds that the marriage between the parties has broken down irretrievably, there is no prospect of reconciliation, the parties having lived apart for a period of 2 years, the Defender consenting to divorce, therefore divorces the Pursuers from the Defender; Ordains the Pursuer to make a capital payment to the Defender is the sum of THREE HUNDRED AND SIXTEEN THOUSAND FIVE HUNDRED AND EIGHTY POUNDS (£316580.00) STERLING with interest from the date of decree at the rate of 8% per annum until payment; Ordains the Pursuer to pay the school fees of Belmont House School, Newton Mearns, Glasgow in relation to Grant Nicholas Woodhouse, Stewart James Woodhouse and Rachel Noyon Woodhouse, including all tuition fees and all additional fees in respect of extra-curricula activities, until the term ending in Summer 2006; Ordains the Pursuer to pay to the Defender, as regards the child Mark Boam Woodhouse, the sum equivalent to that which would have been paid to Belmount House School, for the said Mark Woodhouse, and that until the end of the summer term 2006 (to assist in the said child's schooling at Glenalmond School); as regards contact, Makes No Order; Ordains the Pursuer to pay to the Defender the sum of FOUR HUNDRED AND FIFTY POUNDS (£450.00) STERLING per month, in advance, as periodical allowance, for a period of 6 months; Capitalises that in the sum of TWO THOUSAND AND SEVEN HUNDRED POUNDS (£2700.00) STERLING with interest at the rate of 8% per annum from the date of decree until payment; Accordingly, Sustains the Pursuer's first plea in law; Repels the Pursuer's second plea in law; Repels the Pursuer's third plea in law as no longer necessary, or insisted upon; Sustains the Pursuer's fourth plea in law, in part; Sustains the Pursuer's fifth plea in law; Sustains the Defender's first plea in law; Sustains the Defender's second plea in law in part as regards the payment by the Pursuer to Defender of a capital sum; Repels the Defender's third plea in law; Sustains, in part, the Defender's fourth plea in law; Repels the Defender's fifth plea in law; Sustains in part the Pursuer's sixth plea in law; Appoints parties to be heard on the question of expenses on Wednesday 17 May 2006 at 10.00 am; Reserving to pronounce further.

INTRODUCTION

This is an action for Divorce, originally on the basis that the marriage had broken down irretrievably due to the alleged adultery of the Defender, but now as amended, on the basis that the parties have lived apart for a period in excess of 2 years and the Defender consents to Decree of Divorce on that basis, given that the marriage has broken down and there is no prospect of reconciliation. Each of the parties, as discussed below, had financial craves which required to be determined on the Court granting Decree of Divorce. There is also a crave by the Pursuer for contact with the 3 younger children, of the marriage, under 16 years of age. The question of the expenses of the cause, I have, as parties invited me so to do, reserved for a hearing which I have appointed for that purpose. The Pursuer was represented by Mrs McLachlan, Solicitor and the Defender by Mr Hayhow, Counsel.

I heard evidence on the 1 June 2005 from the Pursuer and on the 2 June 2005 from the Pursuer, the Pursuer's mother Norah Mary Woodhouse, Susan Anne Pretty, the Pursuer's sister and William Adair, a private investigator. Unfortunately, the next diets of Proof which could be identified as convenient to the Court programme and the availability of parties and their representatives was 3 October 2005. Prior to that date the Pursuer had lodged a Minute of Amendment (number 28 of process) which had not required Answer and I also, notwithstanding the Pursuer had closed his Proof, but of consent, allowed the Pursuer to be recalled. On that date I also heard an additional witness for the Pursuer, Mrs Linda Johnstone, the wife of the gentleman whom it was said had been in a relationship with the Defender. I also heard evidence on that day from the Defender and again from the Defender on 4 October 2005. At that stage, the conclusion of the Proof, on Pursuer's unopposed motion, I allowed amendment of the Pleadings to effectively change the ground of the Divorce from one of adultery to that of the Defender consenting to the Divorce on the basis that the parties had lived apart for a period of 2 years.

I heard parties on their submissions on 6 October 2005. Unfortunately, due to the lateness of the hour, submissions were not concluded and again, most unfortunately, the only further suitable date which could be identified was 9 December 2005. On that date, having heard parties further in their submissions, I made avizandum.

It is, however, important to state that given the Court's obligation to obtain the views of the children where there is an outstanding crave for contact, I arranged, as I report more fully below, to interview the 3 younger children of the marriage and their older brother Mark, who is now over 16 years of age, on 11 July and appointed that date as a Child Welfare Hearing. Having dealt with the issue of contact at that time, I appointed a further Child Welfare Hearing for 15 August. I again report more fully on these hearings under the section "Contact" below.

In writing this Judgement, I have not, as is sometimes the case, simply summarised the submissions of parties representatives, but rather have felt it appropriate to identify the essential issues in dispute between the parties in this cause and to deal with parties submissions under a number of headings. However, given the inter-relationship between certain of these matters, there may well be an element of repetition of the submissions, but it seems to me that by adopting this methodology, the issues are not only more clearly identified, but my reasoning in reaching the conclusions which I made is, I trust, clearer.

BASIS ON WHICH PARTIES OUGHT TO BE DIVORCED

As I have stated, the Pursuer's action for Divorce was originally on the grounds of the Defender's adultery. Evidence on this allegation was led from the Pursuer, the private investigator and Mrs Johnstone and to some limited extent from the Pursuer's other witnesses. However, at the conclusion of all the evidence, given that the Defender, although she had denied adultery, accepted on oath, that the marriage had broken down irretrievably, that there was no prospect of reconciliation and that she consented to Divorce, the Pursuer has amended the basis of the ground on which Divorce is now sought. I have therefore not been called upon, nor of course did I hear any submissions on the evidence, as to the Defender's alleged adultery, to reach any concluded view on that matter and, of course, I have not done so in my Findings In Fact. However, I am satisfied by both the evidence of the Pursuer, on oath, and the Defender, on oath, that the marriage has broken down irretrievably, that they have lived apart for a period in excess of 2 years, that there is no prospect of a reconciliation and that the Defender consents to Divorce. Parties invited me to grant Decree of Divorce on that basis and I have done so.

FINANCIAL ISSUES

Parties had entered into a joint minute of admissions (number 26 of process) which sets out the matters agreed as to the financial affairs of the parties as at the relevant date. Further, in their submissions, parties were agreed that the figures listed in 5/42 of process were accurate and those figures indeed form the basis of their respective submissions on the financial matters. Mrs McLachlan had taken some time in her submissions to bring to the attention of the Court the statutory provisions in the Family Law (Scotland) Act 1985 and principles arising from the case law. Mr Hayhow, in his submissions, commented upon those which he believed were most relevant to the Court's decision in this case and I am grateful to both Mrs McLachlan and Mr Hayhow for their assistance.

I now turn to the issues which I have identified as being in dispute between parties in this cause.

WHETHER THE PURUSER HAS ADDITIONAL CAPITAL AND INCOME RESOURCES WHICH HE HAS NOT DISCLOSED

Mrs McLachlan drew to the Court's attention, Defender's averment that he has additional assets, but submitted that the Defender had not proved this, nor had the Defender set out in Record, nor established in her evidence that this was the case, with the exception of a property at 13 Oakly Court, Barnet. This property was sold in August 2004. This property was clearly the property of the late father of the Pursuer, had been inherited by the Pursuer's mother and not by the Defender. It was not, as the Defender claimed, the property of the Pursuer. Mrs McLachlan pointed out that the Pursuer had granted a power of attorney to the Defender whilst he had been working abroad as regards the Defender's financial affairs in the United Kingdom. Moreover, the Pursuer provided monies to the Defender to allow her to purchase properties in her own name. These circumstances, said Mrs McLachlan, were not indicative of a secretive or controlling man. She reminded the Court that in cross examination, it had been suggested to the Pursuer that he had an undisclosed bank account in Saudi Arabia, but that in re-examination it had become clear under reference to productions 5/26 and 5/27 that what had seemed to be a separate account, given a particular reference number, was in fact a sender's reference number. Accordingly, it could not be inferred that there was any additional bank account which had not been disclosed. The only contrary evidence that the property in Barnet was that truly of the Pursuer, had come from the Defender, who had a recollection of a conversation, in which it was said that the Pursuer intended selling his half share. The Court was asked, however, to consider this apparent recollection by the Defender which had not been put to the Pursuer in cross examination and had to be read against a background of Defender's evidence, taken as a whole, which showed she had a poor memory as regards financial details. As regards the Pursuer's income, the Pursuer had been candid. He had given evidence of his present unemployment, his search for work and had explained that visits to Bahrain in October and December 2004 (which occurred after his dismissal from his own employment in August 2004) were to assist colleagues in a business plan and that that assistance might to lead to further employment for the Pursuer in the Middle East. The Pursuer had given evidence that he had only received expenses for those attendances in the Middle East in October-December 2004. Further his evidence, in October 2005, as to possible future earnings, showed those to be considerably less than the salary he had previously earned.

He had, of course, since the Proof in June, purchased a new property in August 2005. However, importantly, the source of funds was his previously held holdings in offshore funds and he had taken out a substantial mortgage, which he hoped to reduce on obtaining a financial settlement, hopefully on the sale of the matrimonial home, which was in his name. Mrs McLachlan submitted that there was no evidence that he had either additional capital, had any sources of hidden income, nor any expectation of substantial earnings, should he in fact be fortunate to find employment.

Mr Hayhow, in his submissions on this aspect, as indeed on the other matters arising in this case regarding financial settlement, submitted that the view that the Court took on the Pursuer's credibility, was crucial.

Mr Hayhow drew to the Court's attention the admission, by the Pursuer in his evidence, that in compiling his curriculum vitae, to assist his search for employment, he had deliberately omitted his age, which should be regarded by the Court, as showing that the Pursuer had a propensity for deceit. Moreover, that by pretending to be his late father, to accomplish the purchase of an extended lease to increase the value of the property in Oakly Court, Barnet, on its resale, he had clearly been deceitful. The Court could also have regard to his evidence as to why he had been in the Middle East between October and December 2004. It was submitted that those reasons had not been volunteered by him, but had required to be brought out in cross examination. Moreover, the Court should have regard to the Defender's evidence that she had been told that the Pursuer was working in Bahrain, as a result of her own enquiry, and had also heard that from a friend. All of that had to be read against a background that the Pursuer was a chartered accountant, with experience in SAP (a particular software programme for the oil industry). The Court should take a view that he was working in a remunerative capacity whilst in the Middle East between October and December 2004. The Court should also have regard to the Pursuer's evidence, that he could subsequently have obtained employment, with a very high salary, in Tehran. This showed that he had a continuing high earning capacity and that if he was not at present working, he soon would be and at a highly remunerated level. The Court should also have regard to his evidence that he had gone to Orlando, Florida, USA, after the separation of the parties and that that visit had included a search for property in the USA. This showed again, submitted Mr Hayhow, that the Pursuer enjoyed a high lifestyle. The Pursuer had taken on a high mortgage on the purchase of his new home in England. The Court should carefully consider whether he would have taken on such a high mortgage if the Court were to believe his evidence that he was likely to obtain employment in the salary range of only £30000.00-£45000.00. This was not a sustainable position for the Pursuer to hold. It rather pointed to an expected income of £80000.00, although as Counsel accepted, he could not suggest ultimately a particular figure for the expected income, either the Pursuer might have, might shortly enjoy or might enjoy in the future. The Court, however, should draw an inference that the Pursuer anticipated a much higher income which could be around that figure, taking a "broad brush" approach. Moreover, the purchase of the new home in England, which could be inferred by its very size, was too big for the Pursuer alone, was indicative too, of the Pursuer anticipating a high income in the future. He had also denuded himself of capital by that purchase. He had given evidence that preservation of capital was more important to him than paying school fees for his children in the future and this was an additional factor which called into question the Pursuer's credibility. Further, the Pursuer was the owner of a Porsche motor vehicle.

In summary, Mr Hayhow submitted that all of these factors pointed to a man who was hiding his true assets and his true expectations of income.

REASONING

I had the advantage of Mrs McLachlan and Counsel's submissions and, importantly, the opportunity to consider the evidence in light of those submissions. Importantly, too, I have had the advantage of hearing and seeing the witnesses, especially the Pursuer and the Defender, being examined on oath.

It is a fair impression of the Pursuer, that sometimes in his evidence he gave brief answers, both to his solicitor and indeed to Counsel for the Defender. As an example, he often only used the word "correct" in an answer to a question put to him. However, in reviewing his evidence and my notes on same, I have been drawn to the view that the Pursuer has not sought to mislead the Court on his assets, as to his time in Bahrain between his dismissal in August 2004 and the event of his heart attack in December 2004, nor do I find that he has sought to mislead the Court as to his likely future income. I have accepted his evidence as both credible and reliable, that having lost his job in August 2004, he was hopeful in finding new employment in the Middle East. To that end he did visit Bahrain on 3 occasions between October and December 2004. I have accepted his evidence that he did so to assist a friend, but also that had the submission of a tender being successful, he was hopeful that he might, as a result thereof, gain further highly remunerative employment in the Middle East. I accept from him that that opportunity did not arise. I accept that he received sums of money for his living expenses. Despite trenchant cross examination, I have been drawn to a view in watching him, that I could accept that that was all he was in Bahrain for and all that he anticipated. He was not earning a substantial salary during that period. Thereafter, the Defender had a heart attack on 17 December 2004 whilst in Bahrain. I accepted his evidence that since that time he has not worked or earned income. He has tried, through employment agencies (which appears to be the normal method of obtaining employment in his industry) to find work. I accept his evidence, under reference to productions 8/46-49, that his prospects of salary in any new employment he might find, is likely to be in the region of between £30000.00 and £45000.00, depending on whether employment was to be in Manchester or London. I accepted his evidence that he had omitted his age in his curriculum vitae because he thought that his age was a barrier to him getting interviews for employment. He gave evidence which I accepted that he would be 50 in February 2006 and based on his own experience of employment in the specialism of the oil industry in which he has been employed, that prospective employment would not readily be made available to someone of his age if he revealed it. An example of this was his submission of his curriculum vitae for employment for which he was otherwise eminently suitable, which job vacancy was still unfilled. In that curriculum vitae he had submitted his true age. It was a reasonable assumption for him to believe, I hold, that his age was proving a barrier. I cannot find that he was trying to deceive anyone, but rather to maximise his chances of employment by simply setting out his relevant qualifications and experience and leaving out any question of age which might otherwise have proved a barrier to him obtaining interview.

The matter of the Saudi bank account, referred to in Mrs McLachlan's submissions, was not made an issue by Counsel in his submissions. In any event, I am satisfied from the Pursuer's evidence, under reference to the productions to which I have referred, that this was not a further bank account in Saudi Arabia but rather that the difference numbers were indicative of a senders reference as the Pursuer has deponed. I could not rely on the Defender's evidence that her own enquiry and information she said she had obtained from friend was indicative that the Pursuer was truly in gameful employment in Bahrain. The friend was not produced before the Court, and I must say I found the Defender's evidence on this and on other matters relating to financial details to be of poor quality as regards reliability. Even if I were to accept that she had been told by her own enquiry to the company in the Middle East that the accused was working, this does not contradict the Pursuer's own account that the form of "working" was on the basis which he has outlined and which I have accepted. The Pursuer has explained that the trip to Orlando was a holiday - to a property owned by another - and whilst there he had taken the opportunity to see whether any investment opportunities existed in the USA. This visit requires to be set against the Defender's evidence, that as a man of 49, who has no pension, he has to look to the future and to any sources of future income and one way of doing that, would be to make property investments. I accepted his evidence as credible on this point. As regards the Porsche motor car, nothing in my view could be made of this. He had purchased the vehicle relatively cheaply in Saudi Arabia and imported the car back to the UK. It was not in my view to be seen as an extravagance, given the life style which he had enjoyed whilst in Saudi Arabia. Moreover, I accepted his evidence that at the present time he was living off his capital. As regards the question of the Pursuer enjoying a particular high life style which much be indicative of sources of funds, I am not persuaded that this is the case. Both parties enjoyed a high life style during the currency of their marriage. Indeed the Defender had, shortly after the separation, purchased an expensive Range Rover motor vehicle, and indeed had taken monies to do so from the children's accounts. This in my view shows that each of the parties had expectations of particular high life style and I cannot infer, as Counsel invites me to do, that it's indicative that the Pursuer is in some way hiding assets or sources of income now or for the future.

As regards the property at Oakly Court, Barnet, I accepted the Pursuer's evidence and that of his mother and sister, that the property had indeed belonged to the late Mr Woodhouse. I accepted their evidence that after his death Mrs Woodhouse had not completed title to that property in her own name. An opportunity had arisen, due to the change in the law in England, whereby the value of the property could be increased if, together with other lessees of the block of flats, they could purchase an extended lease of this particular property. It is true that the Pursuer must be said to have involved himself in the deceit in that he took advantage of a similar name, that of his late father, to carry out all the necessary conveyancing formalities, in order for this gain to be obtained. Moreover, he was frank that he and his sister, and indeed his sister and mother confirmed this in their evidence, had used approximately £16000.00 of their own money to meet the upset price and expenses incurred in obtaining the extended lease. I accepted his evidence and that of his mother that he had obtained return of the £16000.00 on the ultimate sale of the property and that the proceeds thereafter had gone to his mother. I accept that these actings are not to be commended, but on hearing him, his mother and sister in evidence, I am satisfied that this is a true position of his involvement with the property in Barnet. I do not accept that he had a propriety interest in any real sense in that property, except of course in due course he his likely to succeed, with his sister, to his mother's estate.

The Defender's recollection that the Pursuer had said to her that he was going to sell his half share, again I could not accept as reliable, set against the evidence of not only the Pursuer, his mother and sister, which in my view was both credible, consistent and therefore reliable. It is significant and bears on the Defender's reliability that this alleged conversation was never put to the Pursuer in cross examination.

As regards the Pursuer's purchase of his new property in England between the days of Proof in June and the resumed Proof in October 2005, I cannot hold that this can be described as the Pursuer "denuding" himself of capital. The capital is now in bricks and mortar, but capital it remains. It is true it is a substantial property, though smaller than the matrimonial home, which he owns and in which the Defender and the children presently reside. He has hopes, which I accept, are truthful ones that in due course the children may come to England for contact and that is why he required to purchase a house of that type. He had indicated in his evidence in June that he had intentions to buy a home, and indeed had looked for property in England, and the realisation of that by October 2005 cannot in my view be seen as an entirely new development. He has deponed, and I accepted this that he hopes to reduce the mortgage if the Court decides not to grant a property transfer order as sought by the Defender. He would hope that he would be able to sell the matrimonial home and on its sale realise capital to reduce his mortgage. This in my view is a reasonable view. Moreover, whilst he has no income at present to support the payments for the mortgage, he is effectively living off his other capital. He is looking for work, and hopes to obtain some work, but at the reduced level which I have explained above, which if he obtains same, would assist in meeting the costs of the reduced mortgage. I also accept him as both credible and reliable, and as a reasonable view that if he could not ultimately reduce his mortgage, nor indeed make payments from any income he might obtain to the mortgage, he would require to let the property out. In my view, nothing sinister arises from this account by the Pursuer and does not lead to an inference, as the Defender contends, that he has hidden assets or income nor expectation of high income.

With respect to the Defender's Counsel, much of his submissions as regards the view that I ought to take of the Pursuer, as regards his supposed assets and income, were based on supposition. I can well understand that Counsel might take this line in seeking to advance his client's position. However, I am required to proceed on the evidence which I can find to be both credible and reliable and in these circumstances, I have been drawn to the view that the Pursuer does not have hidden assets, nor hidden income, nor underestimated in some deliberate sense, his expectations of income for the future.

WHETHER THERE ARE SPECIAL CIRCUMSTANCES TO EXCLUDE ITEMS OF THE PURSUER'S PROPERTY FROM THE TOTAL OF THE NET MATRIMONIAL PROPERTY

Mrs McLachlan submitted that in this case there were special circumstances and that those related to an argument in terms of "source of funds" (Section 10(6)(b) of the Act). This source of funds argument related to 4 properties owned by the Pursuer at the relevant date. These were 12 Townhead, Kilmaurs (£42000.00), 2 Kilmarnock Road, Monkton (£60000.00), 9A Cheapside Street, Eaglesham (£67000.00) and 86 Main Road, Fenwick (£44000.00). A total of £213000.00, which she submitted, ought to be deducted from the whole value of the matrimonial property at the relevant date which was £911250.00.

Mrs McLachlan referred to the Pursuer's evidence that the Pursuer had purchased the property at 77 Milton Avenue, Barnet in England in 1987, prior to the parties' marriage. This was not matrimonial property, (this description was not disputed by the Defender as became clear). It was a matter of agreement (paragraph 13) of the Joint Minute that the property was sold in September 1999 and that the free proceeds were £161516.34, that he had deposited the proceeds into an off shore account and that interest accumulated until the account was closed in June 2002. The closing balance on the account was £180115.66. The Pursuer had given evidence that that sum was remitted to a Clydesdale Bank Account from which he withdrew sums to buy the 4 properties. It could be said, Mrs McLachlan submitted, that the source of funds and their subsequent use, was a "special circumstance", placing those properties and values outwith the scope of matrimonial property. As support for her submission she referred to the decision of Lord Eassie, in Robertson v Robertson (opinion of 7 December 1999). In that case his Lordship, in referring to an earlier case of Whittome v Whittome, 1994, SLT 115 a Scottish Law Commission Report and Professor Clive's work "Husband and Wife" at para 24, had reached the view that property accumulated during the marriage, but sourced from pre-marital capital, may be excluded from matrimonial property, if it is simply a shift in investment.

She submitted the Milton Avenue property could not be said to have been imported into family finances as the properties purchased from the proceeds of that sale and subsequently banked, were acquired only some few months prior to the relevant date and the proceeds of the Milton Avenue property had not been applied to or absorbed into, family finances.

Mrs McLachlan referred to decisions to which the Court ought to have regard. In Cunningham v Cunningham (a decision of 3 November 2000) Lord McFadyen had taken a similar approach to Lord Eassie by excluding a holiday home purchased from an inheritance. Whilst Lord Brodie in Whitlett v Whitlett (a decision of 12 February 2003), had taken a different view as regards a particular property - in that case holding a property to be a matrimonial home - he had otherwise adopted the same approach as Lord Eassie in Cunningham.

In these circumstances, her principal submission was that I should exclude that sum of £213000.00 from the matrimonial property in terms of Section 10(6)(b). In December 2005, having heard Counsel's submissions for the Defender, Mrs McLachlan then submitted that the interest earned on the proceeds of the Milton Avenue property was not significant to family finances in the context of the Pursuer then earning, prior to the relevant date, in excess of £100000.00 per annum. She did, in developing a secondary argument, then indicate that the Court might take the view that to the extent that the £169516.34 had grown to £213000.00 by the relevant date, that the Court might take the view that the difference of approximately £43483.66 might be said to have been absorbed into matrimonial property, but her principal submission that the full sum ought to be excluded.

Counsel for the Defender stressed that the word "may" in Section 10(6) was significant. In this case it was not simply the case of shares owned by one party prior to marriage being switched into other shares from time to time on the advice of a broker, which might not bring such property into the scope of matrimonial property. Nor was this case indicative of a short marriage, where such pre-marital property ought to be excluded as only being imported into the marriage shortly prior to the parties separation. In his submission, the case of Whitlett v Whitlett could be distinguished on his facts, as there the Defender had shares in a company for a significant number of years and there was a short marriage. In Counsel's submission, to exclude the present 4 flats ignored that they were converted into cash during the marriage, were transferred into a bank account and acquired interest over 3 years of the marriage, and then thereafter were changed into heritable property, that latter change was to advance a joint matrimonial purpose which was the acquisition of a portfolio of properties. Moreover it could be seen that the Defender, with funds from the Pursuer, had acquired a number of properties too. In these circumstances it could be said that there was a joint enterprise to build a portfolio of properties. Further, had not the Pursuer had the Defender to look after his children, Counsel posed the question whether the Pursuer would have been able to sit on funds of £180000.00 or thereby and generate interest for 3 years. The purpose, too, had to be examined. In this marriage, it might be said, the Pursuer generated income and the Defender was looking after the children and that that division of effort contributed equally to them being able to embark on a joint enterprise. Counsel reminded the Court of the Defender's evidence that she had, in a practical sense, bought the properties for the Pursuer and had furnished them and managed them - this again pointed to a joint enterprise. To exclude these properties from the total matrimonial property, to be divided, would be rare, in Counsel's experience and would not fit with Lord President Hope's dicta in Little v Little, 1990, SLT 785, that the object of the Court was to obtain a fair and practical result that was conform to common sense.

REASONING

By Section 10(1) of the Act, the Court is required : -

"In applying the principle set out in Section 9(1)(a) of this Act, [that the net value of the matrimonial property should be shared fairly between the parties in the marriage], the net value of the matrimonial property should be taken to be shared fairly between the parties to the marriage, where it is shared equally, or in such other proportions are as justified by special circumstances".

The Act further requires per Section 10(6)(b) : -

""In Subsection (1) above, special circumstances without prejudice to the generality of the words may include - .......

(b) the source of the funds or assets used to acquire any of the matrimonial property, when those funds or assets were not derived from the income or efforts of the parties during the marriage".

Authoritive guidance to lower Courts as to how to treat the words "special circumstances" can be found in the speeches of Lord Jauncey and Lord Clyde in the case of Jacques v Jacques, 1997, SC(HL) 20, (1997) SLT 459.

At page 462, Lord Clyde said : -

"The words "special circumstances" do not have any technical meaning, but refer to any circumstances which are special to the case, Section 10(6), gives illustrations of what may be included ...... . Moreover, in stating that the words "may" include the stated illustrations, it is indicating that there is no necessary conclusion that any of the illustrations must require some unequal sharing ...... As a matter of construction, it is sufficient to understand that in the ordinary course an equal division will be fair, but where there are special circumstances, some unequal division may be justified"".

At page 461, Lord Jauncey said : -

"The provisions of Section 10(6) give guidance to the Court at first instance but do not fetter its discretion in applying the principle set out in Section 9(1)(a)".

Against that statutory, and authoritive background, I proceeded in deciding this issue in the particular circumstances arising in this case.

It is not disputed that the property at 77 Milton Avenue was the Pursuer's property prior to marriage. I take that as a starting point. The proceeds of its sale and the realisation of £161516.34, which the Pursuer then banked, although that event occurred during the marriage, might be said simply to be changing the form of the property (heritable property) into another form (cash), that property was still under the control of the Pursuer and not - on the evidence before me - applied to support the family or its advancement, nor any joint enterprise. A similar view, in my opinion, ought to be taken of the interest subsequently earned on that sum, whereby the sum grew to £180116.66 by June 2002. Again there is no evidence to suggest that there were any intromission with these funds towards family finances. That is hardly surprising, given the high earnings the Pursuer had throughout this period, which afforded both him and the Defender a high standard of living. I find therefore to that extent that the source of funds argument, advanced by Mrs McLachlan, supported by the reasoning in the cases of Robertson and Cunningham and to an extent in Whitlett, holds some force, namely that the source of the funds and their application were "separate" from family finances.

However, there is force in Counsel's contention that the funds thereafter were applied to buy 4 properties at roughly the same time that the Pursuer provided funds to the Defender to buy 3 properties. I therefore accept the Defender's evidence as more persuasive that the purchase of properties was a joint enterprise by both the Defender and Pursuer and indeed I accept her evidence that she had played a role in selecting the properties, their outfitting and their management. It also seems to me that the Pursuer's argument that the properties were bought relatively shortly prior to separation in this case is not significant. The plan was, and would I am satisfied remained, that the properties would be a portfolio of properties for the effective use of the parties in the future. I am not, however, persuaded that the Defender's broader argument as regards the Defender being able to gain on the £180000.00 because the Defender was looking after the children has merit. The interest was earned solely on the sum deposited - there was no joint enterprise, and the growth of the funds, as I have said, did not affect the family finances, nor was it added to by the Defender looking after the children. The interest was earned as a natural consequence of its investment, alone.

There is, however force, too, in Counsel's reference to the dicta of the Lord President in Little. I require to make a judgement, which in all the circumstances is fair and conforms to common sense. In this case, I have come to the view that the rise in value of the sum, by the purchase of the 4 properties, ought not to be excluded and that because of the input by the Defender into the joint enterprise to build up a portfolio of properties.

However, whilst Mrs McLachlan at least acknowledged the possibility that the Court might have regard to the difference between the £180000.00 and the final sum of £213000.00 I do not think it would be in line with the earlier decisions I have referred to above, and which I find persuasive, to fully take that difference into account. The principle seems to me to be that the amounts to be excluded are those that cannot be said to derive from the efforts of the parties jointly or in some proportion during the marriage. It seems to me that Mrs McLachlan position is not giving full regard to the principle arising from those cases and nor would it be, to repeat Counsel's submission, fair to the Pursuer to regard the interest element as part of that joint enterprise.

In light of that, I have decided it would be a proper exercise of the Court's discretion to exclude the sum of £180115.66 from the matrimonial fund to be divided, but to hold that a sum thereafter of £32884.34 should not be, representing the increase in value of the sum in the bank of £180115.66 and the final value of the flatted properties.

In these circumstances, the Pursuer's submission in my view as regards special circumstances in terms of Section 10(6)(b), exceeds in the larger part of the sum but not as regards the increase in value in the amount that I have identified.

WHETHER IT WOULD BE AN APPROPRIATE ORDER TO TRANSFER THE MATRIMONIAL HOME TO THE DEFENDER

The Defender's submission was that there was "special circumstances" in terms of Section 10(6) and Counsel accepted that such an order would mean that the Defender would receive more than 50% of the net matrimonial property. It is important, of course, to recognise that Counsel's submission was made against his particular submissions, that "special circumstances" did not apply to exclude certain of the properties owned by the Pursuer at the relevant date, which I have written on above.

The reasoning why such an order would be justified, Counsel submitted, was that the sale of the house and the consequent need for the children to move to a new home, would be disruptive. They would be moving from a home they had know all their lives. This would be especially disruptive, if too, the children needed to move from their private schools. It was submitted that Rachel, having dyslexia, and Grant having, broadly hyper activity problems, would be particularly affected. It was also submitted to be important to recognise that if the children moved they would not be able to take their family animals with them. Further, the Defender had a plan to be a foster carer and in that regard the present matrimonial home had been found suitable by the relevant local authority. The Defender, it is submitted, had seen only one house in the local area of similar standard since the time of the separation of the parties.

Mindful of the Lord Ordinary's reasoning in the case of Adams v Adams, 1997, SLT page 149, that it may be thought to be unrealistic to transfer the matrimonial home where the wife would require to live on a stringent budget, which not be in the children's best interests, Counsel submitted that the Defender in this case, could afford to finance the house and its upkeep. Counsel further submitted that in following the case of Little the Court should be mindful of arising at a common sense judgement which would not be met if the Pursuer was to remain in a house in England, worth £550000.00, which less mortgage outstanding amounted to a sum of some £340000.00 or thereby where he would be living on his own. This was to be set against a position whereby the Defender would be expected, on one calculation by the Pursuer's agent, to buy a house with £286000.00. This was based on the Pursuer's general submissions as to how the Court ought to divide the matrimonial property, which provided for, on Pursuer's submission, a capital payment of £200000.00 to equalise the parties assets - assuming that his pre-marital property was excluded - to which was to be added £86000.00 or thereby in recognition by the Pursuer of an argument which could be made in terms of Section 9(1)(c) - the economic burden of caring for the children.

Counsel did, of course, recognise that in line with the principle stated authoritatively by the House of Lords in Wallis v Wallis, 1993, SLT 1348, that the Court could not take into account any value other than the value of the house at the relevant date (therefore not any subsequent increase in value).

Counsel's second argument was that the Defender was entitled to have the property transfer order made, leading to a division of more than 50% in her favour, because of the application of Section 9(1)(b), - the economic disadvantage she had suffered - and Section 9(1)(c), the economic burden of caring for the children after the Divorce. In applying these principles, the Court ought to make a property transfer order.

As regards Section 9(1)(b), Counsel acknowledged that the Court would have to have regard to Section 11(2), which provides that the Court shall have regard to the extent of the economic advantages or disadvantages sustained by either party, have been balanced by the economic advantages or disadvantages sustained by the other party and any resulting imbalance will be corrected by a sharing of the value of the matrimonial property or otherwise.

Counsel submitted that the economic disadvantages suffered by the Defender was apparent. She had given up a career to look after the children, whilst the Pursuer had, throughout the marriage, generated significant income. He had, it was submitted, been able to concentrate on his career because the Defender had looked after the children. Moreover, as regards capital by the relevant date, under reference to 5/42 of process, this showed that the Pursuer had capital, not excluding any matters, on his submission, in terms of Section 10(6), of £762000.00, whilst the Defender had £142000.00, which evidenced, it was submitted, a substantial deficit. In these circumstances, a greater than 50% split would be justified.

As regards Section 9(1)(c), the Defender's future earning capacity would be restricted by looking after the children, both as regards the type of work she could obtain and the hours she might be able to work.

Returning to the question of whether the Defender could sustain the upkeep of the present matrimonial home, Counsel referred to the Defender's prospects of obtaining employment as a foster carer. Moreover, she had obtained an estimate that she could borrow a sum of £66000.00. If times became straightened, she had the option of selling one of her flatted properties to meet any problem. Indeed, it might also be said, that a transfer of the matrimonial home to the Defender would obviate the necessity of the Pursuer finding money to make a capital payment to her.

Mrs McLachlan submitted that the Court had to have regard to the words "special circumstances". The emphasis had to be on the word "special", in these circumstances it could not be said to be out of the ordinary in a Divorce case that families have to "downsize", having regard to the financial realities that Divorce, and a division of matrimonial property, inevitably brings about. This was especially so, as here, where there would be capital made available, after the sale of the matrimonial home, to allow the Defender to buy a house suitable for herself and the children. In the present case, the Defender had not, unlike the wife in the case of Adams, even thought through a budget she might require.

Indeed, her financial circumstances at present, living in the matrimonial home, might be thought to be precarious. Notwithstanding that the Pursuer was presently paying the mortgage and £450.00 per month to the Defender, she had a monthly shortfall of £240.00 per month, and notwithstanding, too, the income she received from her flatted properties. Accordingly, her position was, if anything, worsening and would worsen if a transfer order was made; she could not sustain the upkeep of the home at present, nor could it be said she realistically could in the future. The matrimonial home was deteriorating, as was clear from the survey report (5/38). It was impractical for the Defender to remain there and to maintain the matrimonial home. Consequently, the Court could adopt the reasoning of the Lord Ordinary in Adams that on balance it would be better for the Defender and the children to move to a smaller and less expensive property. In that case, Lord Gill had dismissed a similar argument on "disruption" in recognising that moving house is disruptive for all concerned and that that factor, consequently, was not a special circumstance (his Lordship's opinion at page 148).

This was not a case like Cuniff v Cuniff, (opinion 31 August 1994) where a property transfer order could be granted. In this case, unlike the case of Cuniff, the Defender would not be made homeless as a capital payment to be made by the Pursuer in this case, would provide finance for the Defender to find a suitable home for herself and the children. Moreover, and more significantly, the largest financial asset was the capital in the matrimonial home, which out of fairness ought to be realised for the benefit of both parties, whereafter a capital payment by the Pursuer to the Defender would allow the Defender to buy a family home. It also had to be said, Mrs McLachlan submitted, that the Defender's debts at present included owing the children £22000.00 which would be required to be repaid some time by the Defender, which too would have to be seen against the shortfall of £240.00 per month that presently existed. Even if she were to get a mortgage, then clearly her monthly outgoings would increase because of that factor. The solution advanced by the Defender in her evidence that she could, if necessary, sell one of her rental properties makes no sense as that step would reduce the income she received from those properties.

If one considered the Defender's evidence about obtaining employment as a foster carer, this could only be said, at best, to be a possibility. It was a possibility that she might earn £500-£600.00 per week, but at the present time this could only be described as speculative. The transfer of the value of £394000.00 (the net value of the matrimonial property at the relevant date) would not be common sense and is significantly higher than equal sharing and here it could not be said there were "special circumstances" to justify that.

As regards the Pursuer's argument in terms of Section 9(1)(b), Mrs McLachlan reminded the Court that the Section had to be read in terms of Section 11(2). It was a necessary consequence of such a reading that the Court be able to identify a particular (Mrs McLachlan's emphasis) disadvantage for the Defender and advantage for the Pursuer. In that regard Mrs McLachlan referred me to the reasoning of the Lord Ordinary (Lady Smith) in Coyle v Coyle, 25 April 2003, unreported. Mrs McLachlan commended the approach adopted there by Lady Smith as a proper approach for this Court to take. Lady Smith, at paragraph 37, had opined that Parliament did not provide that wherever a couple Divorce, after a marriage in which one has been the bread winner and one has been the home maker, that the latter must receive extra compensatory financial provision on Divorce. Further, that the section was in its terms specific in that before the section of the Act could be taken into account, it must be established that there had been an identifiable, economic advantage which derives from an identifiable contribution from the other spouse and it must appear fair for the Court to take account of it.

In the present case, Mrs McLachlan submitted, the Pursuer has had a high income working in Saudi Arabia. He did earn and save but had applied that income to the family home. He has supplied the matrimonial home, afforded the Defender the opportunity to purchase rental properties, had provided the ability to support private education for the children and generally had supported the family in a most comfortable life style.

In this case it could not be said that there was any economic disadvantage or advantage to either party that would not otherwise be addressed by fair sharing of the matrimonial property. This was not a case where the Pursuer, after Divorce, would go on to profit from a business. Indeed, he was not working and had uncertain prospects of employment.

As regards any supposed disadvantage to the Defender it might be argued that she had given up her career, but it had to be said that she could not have continued in nursing due to an injury she had sustained. She has enjoyed a comfortable life style throughout her marriage and significantly has been able to acquire the heritable properties, which at the relevant date, were worth £142195.15. Even if the Pursuer's argument as regards "special circumstances" as regards exclusion of certain property, was to prove to be successful, the Defender would still share a substantial pot of matrimonial property. Mrs McLachlan had a subsidiary argument. Whilst she submitted that the Court was bound to follow the principle pronounced in Wallis - valuing the matrimonial property at the relevant date, in the present case the Pursuer might be said to have been disadvantaged in that he has continued to pay £450.00 per month, even after he became unemployed in August 2004, and has moreover paid the school fees from capital. His share of matrimonial property has therefore already been diminished.

Mrs McLachlan also referred to the opinion of Lord Gill in Adams with regards to the proper approach to take in considering Section 9(1)(b). In that case, in the circumstances of that case, his Lordship said that the wife/pursuer might be said to have suffered an economic disadvantage in that the husband/defender had been able to further his career, whereas the wife had prejudiced hers by bringing up the children. His Lordship had accepted that the wife had an economic disadvantage in that respect. However, his Lordship pointed out that during all the years of marriage the husband had contributed more than the wife to the household finances and during the periods when the wife had been out of employment, the husband supported the family on his own. Mrs McLachlan said it had not been suggested in that case, nor in the present case, that the husband had ever failed to maintain the family in a good standard of living. In the case of Adams, Lord Gill had decided that this was a counter balancing consideration which the Court was entitled by Section 11(2) to apply.

Mrs McLachlan, of course, accepted that each case must turn on its own facts, but commended Lord Gill's approach as indicative of the correct approach for the present court to take. As regards the Defender's argument in terms of Section 9(1)(c), Mrs McLachlan accepted that the greater burden for looking after the children would fall upon the Defender after Divorce. However, she submitted, that having regard to Section 11(3), the Court should consider that in terms of Section 11(3)(a) - any Decree or aliment for the children - the Pursuer was paying £450.00 per month and intended to continue to do so as far as he could. This went some way to sharing the burden of care. However, she did accept that that financial provision went only so far in sharing the burden.

Mrs McLachlan referred to the case of McLachlan v McLachlan, 1998, SLT at page 693, where Lord McFadyen has stated that the fact that one party may have to purchase a house for the children, was a factor that the Court could take into consideration in terms of Section 9(1)(c) in justifying the payment of a capital sum (at page 699).

This was a valid factor, agreed Mrs McLachlan, in considering the payment of an additional sum, but did not go so far as to require the Court to transfer the matrimonial home in this particular case. In the present case capital could only be realised by realising the capital in the matrimonial home, whereafter the Pursuer ought to make an additional capital payment to provide suitable accommodation for the Defender and the children. A capital payment recognising that factor would allow the Defender, taken too with her borrowing capacity, to have a substantial sum to allow her to buy a home suitable for herself and the children. The Court might also bare in mind that the Defender's evidence showed that she made no attempts to look for, or identify, or value a house, suitable since the time of separation apart from in one instance. A transfer order would inevitably mean the Defender getting a substantially unequal and unfair division of the property, which in the whole circumstances of the case, would not be justified.

REASONING

It seems to me that a Court would be entitled to order the transfer of the title to a matrimonial home from one spouse to the other in terms of there being "special circumstances", if these existed. That is clear from the terms of Section 10(1) and Section 10(6). This is borne out by the authoritative definition of the discretionary nature of finding "special circumstances" in any particular course by the authoritative decision of the House of Lords in the case of Jacques.

There is no necessary conclusion that any of the illustrations - in this case Section 10(6)(d) the use of the matrimonial home - must require some unequal sharing, see Lord Clyde's speech at page 462. The provisions of Section 10 give guidance to the Court at first instance and do not fetter its discretion in applying the principles set out in Section 9(1)(a) (per Lord Jauncey at page 461), which is to say that the net value of the matrimonial property should be shared fairly.

The duty of the Court in terms of Section 8(2) is to make such order, if any, as is justified by the principles set out in Section 9 and is reasonable, having regard to the resources of the parties.

The concept of sharing the net value of the matrimonial property fairly, the flexibility which is given by the expression "special circumstances" in Section 10(c), and the repeated references in Section 11 to all the other circumstances of the case, serve to emphasis the matter is one of discretion aimed at achieving a fair and practical result in accordance with common sense (Little v Little, per the Lord President at page 787).

As under this present heading, and in the other areas of dispute between the parties are regards an ultimate financial arrangement, I have had regard to these principles and authoritative guidance.

I accept that the Defender and the children have lived in the matrimonial home throughout the children's lives. It is their home and I accept that the Defender and the children would wish to continue to live there. Undoubtedly, there will be disruption to the Defender and the children if they have to move to another home, although I cannot find much force in Counsel's submission that any new home will require to accommodate the family animals. That may be a desirable outcome, but it is not one that I think in any reasonable judgement should have much, if any, force. The fact that 2 of the children have - broadly - health and educational difficulties, is not something which will be ameliorated by them remaining in this particular house. These difficulties are matters which are to be addressed, I believe, in an educational setting and are not particular to living in any particular house. The present house is some distance from the private school the children presently attend in Glasgow and it is not therefore the case that the situation of the present house can be said to be significant for those educational needs. All that can reasonably be said is that wherever the children live, it will be necessary to have regard to their educational needs and the provision for them in some school. I am reinforced in that view by the Defender's evidence that whilst the children's present school adequately caters for the children's needs, she has not examined whether these needs can be found in any school, local to where the children presently live. It cannot be said, reasonably, that continuing to live in the present matrimonial home is the only way to safeguard the children's educational needs.

Of course, in this case, it is likely that the children will also have to be moved from their private schools, if no order were to be made for future school fees and I accept that that too is likely to be disruptive to the children. However, again, I was not impressed that the Defender had given much thought to identifying suitable schools in the local area should the eventuality of them moving school arose. The Defender, as I found from her evidence, showed a lack of foresight and flexibility by not examining the facilities that might be available in local schools. She was too ready to see the necessity of continuing to live in the matrimonial home and continuing to send the children to the particular private schools. These were matters which arose in her evidence. Taken together she sought by inference to show that as being the only way to provide for the well being of the children after Divorce. She did not readily see that the unfortunate consequence of Divorce is a change in financial situation for all concerned, which requires parties to have regard to the likely change in financial circumstances which might result and to identify options against that background. She had only looked at one alternative home since the separation. In my view this was not a realistic course for her to take, knowing that there was at least a possibility, if not a probability, that a change of home might be required.

As Lord Gill said in Adams at page 148, and I respectfully agree, moving home is a disruptive event for all concerned, and I find myself in agreement with the Pursuer's solicitor submission that there is nothing giving rise to "special circumstances" in that disruption and in the particular circumstances of this case. This is not a case like Cuniff where the Defender and the children will be homeless if a property transfer order is not made. The needs of the children and the burden of their future care Section 9(1)(c) are a factor to be considered, but this can be met by an appropriate capital payment to recognise that factor. Meeting that requirement of that Section and doing justice between the parties, does not necessarily depend on making the order sought, having regard to all the other circumstances of the case.

The Defender's counsel had advanced an argument in terms of Section 9(1)(b) than any economic disadvantage she might suffer would, it may be argued, be met, in part, by making a property transfer order. It is true that the Defender has been the home maker, whist the Pursuer has worked abroad earning a substantial salary until his recent unemployment in August 2004. However, I respectfully agree with the analysis of Lady Smith in the case of Coyle that it is necessary to identify a particular advantage for one party as against a particular disadvantage for the other party, over and above the fact that one party has been the earner and the other the home maker.

Whilst the Defender did give up her employment to care for her growing family, it had to be noted that she herself in her evidence said that she could not return to her employment of being a nurse due to an injury she sustained whilst working as one. Even if I do accept that to some extent she has suffered some economic disadvantage, I have to also have regard to the terms of Section 11(2). In the present case the Pursuer through his historical high earnings has been able to provide a comfortable and high level life style for the Defender. Moreover, she has been provide with funds during the marriage, by the Pursuer, to purchase heritable properties, and obtain a capital TESSA which assets are of value and which she will retain after Divorce. That factor and the fact that during the marriage the Pursuer supported the family on his own, are also factors that I am entitled to take into consideration and are, in my view, counter balancing considerations, in terms of Section 11(2). In that regard I respectfully agree with the reasoning of Lord Gill in the case of Adams.

I am drawn to a view that the Pursuer's argument in terms of Section 9(1)(b) is not persuasive, especially as regards justifying the property transfer order sought.

The Defender has argued that if the house was transferred to her, she could afford its upkeep. I am not persuaded of that. The house has deteriorated in its condition since the date of separation. It is likely that the upkeep of that house, as was the case previously, has depended upon the substantial sums of money that the Pursuer has earned and used to support the family and run that house. The Defender is not presently working. She hopes to become a foster carer and the house in which she lives has been approved for that purpose. It is therefore possible she will earn an income. She also has income from her rental properties of approximately £12000.00 per annum. She has obtained in principle an indication that she could borrow around £66000.00. She indicated in evidence, that if finances dictated, she would, if it became necessary to support the house, sell one of her residential properties. However, at the present time, the Defender, even where the Pursuer presently pays the mortgage and remits £450.00 per month, finds herself with a shortfall of £240.00 per month. She also owes the children £22000.00, which she acknowledges she will have to repay. It is fair to say that her financial position as regards supporting the house has worsened since separation. The possibility of becoming a foster carer is there, but it is not certain, nor was the evidence led independently of the Defender, to show the likely income, nor indeed the costs of supporting the child given to her for foster case.

In the case of Adams, the wife had produced a detailed budget, although in that case such a straightened one as to cause the Lord Ordinary to decide that the request for a transfer order would adversely impact on the children and was not sustainable. In this case I have not been presented with such a budget, only submission, following upon the Defender's own evidence, that she could continue to run the home. In my view, the Defender was not realistic and could not be relied upon on this matter, that she could continue to support such a large property. If there was a financial problem and she had to sell one of her rental properties, whilst it could be said that capital would be realised, she would thereby lose income, which at present she needs and in the future is very likely to need. Her future income as a foster carer is not certain; it is not even in place to allow a judgement, based on reason, to be made as to its viability to support the house and that especially where no budget has been offered to assist the Court.

It would not be equal sharing, given that I find myself drawn to the view to reject the Defender's arguments as to "special circumstances".

Moreover, the principal matrimonial property, which is the equity in the matrimonial home, will require to be realised to allow a fair division of the matrimonial property as a whole. Capital will be realised by the sale of the matrimonial property. The Pursuer is a man of almost 50, with no present employment and no pension. I accept his evidence that for his future he requires to realise some capital.

I require to consider all the circumstances pressing on the request for a property transfer order. Having regard to carrying out that exercise, in my view, it cannot be said that having regard to all the circumstances it would be just and in accordance with common sense, to make such an order.

I should say that I have not accepted the Pursuer's argument that he has been substantially disadvantaged by paying the £450.00 mortgage, and school fees from capital as apt to decide the particular question of whether the matrimonial transfer order would be appropriate. In my view, these are not strictly relevant on the question.

THE DEFENDER'S CRAVE FOR A CAPITAL SUM

The Defender has an alternative crave, to be awarded £400000.00, if the property transfer order sought were not to be made.

It should be immediately clear that that crave was posited upon the earlier submissions by the Defender, that there were no "special circumstances" justifying the exclusion of certain of the Pursuer's assets from the net total value of the matrimonial property.

My consideration of this section begins with an acknowledgement that the Defender presently has and would retain the rented properties and the TESSA and the joint property as at the relevant date, totalling £148396.00.

Defender's Counsel conceded that if I was to accept that as fact then if I was to award the Defender £400000.00 the Defender would receive £548396.00 (approximately 60%) of the total matrimonial property and the Pursuer £362854.00 (39.8% or thereby) of the total matrimonial property.

Against that background, Counsel invited the Court, if the property order were refused, to award a capital sum of £400000.00, as the Defender would be looking to buy a house for herself and the children.

In her evidence, the Defender had said that in April 2003 she had seen a suitable house at a value of approximately £340000.00. Counsel submitted that it was realistic to assume that the price of such a home would have risen. Set against the present value of the matrimonial home of £550000.00, as at 19 May 2005, the sum of £400000.00 could not be said to be unrealistic. In any event, Counsel submitted, similar arguments as to "special circumstances" as were canvassed when seeking the property transfer order were applicable here, as were arguments in terms of Section 9(1)(b) and 9(1)(c).

The Pursuer's solicitor's argument, equally, flowed on from her submissions in terms of the transfer of property order, but were refined to the extent that she set out a proposed settlement, on the basis that the Court would accept the Pursuer's submissions in terms of "special circumstances", to exclude certain of the Pursuer's assets and the Pursuer's acknowledgement that the Court would have regard to Section 9(1)(b) in awarding an appropriate capital sum.

As regards the argument in terms of Section 9(1)(b), any disparity between the parties would be addressed by a capital payment.

REASONING

The argument as regards "special circumstances" advanced by the Defender, I have dealt with in the preceding heading as regards the property transfer order. It seems to me a proper concession by the Pursuer that the Court would have to have regard to Section 9(1)(c). I have dealt with the submissions as regards Section 9(1)(b), again in the preceding section of this note.

The question as to what would be a suitable sum to allow the Defender, after Divorce, to purchase a suitable home, is an important consideration. However, given that there are other outstanding issues, to which I now turn, it seems to me that the appropriate way to deal with the question of capital sum is in the final part of my note, whereby all the outstanding issues can be brought to a conclusion and a financial division order against all of the background of the matrimonial property which falls to be shared and the resources of the parties.

I therefore now turn to other disputed areas between the parties.

THE QUESTION OF THE PRIVATE SCHOOL FEES

In crave 5, the Defender seeks an order finding the Pursuer liable to pay the school fees, rendered by Belmount House School, and all additional fees in relation to the 4 children of the marriage, et seperatim, to make an order finding the Pursuer liable to pay the school fees and extras rendered by Glenalmond School in relation to the attendance of Mark Woodhouse from August 2005.

There is an interlocutor of this Court, of 23 February 2005, by Sheriff McKay, ordaining the Pursuer to pay the school fees rendered by Belmount House School in respect of all 4 children. It must be noted that the Sheriff's interlocutor was made in the context, inter alia, of assigning diets of proof of 1 and 2 June 2005.

After conclusion of the proof on 9 December 2005, I varied the interlocutor to the extent that the Pursuer was to pay the fees of Belmount House School in relation to Grant, Stewart and Rachel whilst as regards Mark, I ordained the Pursuer (per incurium, the interlocutor actually reads Defender) to pay a sum equivalent of the Belmount House School fees to the Defender to assist in Mark's schooling at Glenalmond School. These fees to be paid to the Easter term of 2006.

This was done, of consent, of all parties to preserve the position of the children until the matter could be finally determined by judgement in this case.

The Court has authority to make a school fees order in terms of the Child Support Act, Section 8(7), which preserves the jurisdiction of the Court, notwithstanding that calculation of aliment and collection of same is otherwise broadly remitted to the jurisdiction of the Child Support Agency.

Counsel for the Defender submitted that it was clear from the Pursuer's own evidence that he would prefer that the children remain in their private schools. The Pursuer accepted that he would pay the equivalent of Belmount House School fees to allow Mark to go to Glenalmond..

The more contentious issue was the younger children. Counsel submitted that whether the Court was to make such an order would depend on the view the Court took as to whether the Pursuer had additional capital and income which he had not disclosed (where I have already summarised and dealt with Counsel's argument). Moreover, Counsel submitted that the Court should consider that the Pursuer must have additional income by the fact that he had, since the first diets of proof, taken on a commitment to a new home which required a high mortgage which must mean that he had income to finance it.

Counsel's fallback position, was that if the Court could not make an indefinite order, the Court should make an order to preserve the 3 younger children's education at Belmount House School until the end of the Academic year, June 2006 and the equivalent payment as regards Belmount House School fees for Mark to continue in Glenalmond. Counsel accepted that this may mean a payment from capital.

Mrs McLachlan submitted that as the Pursuer was not in employment and had poor prospects of employment, the Defender's crave amounted to asking the Court to make a payment from capital. The Court ought not to order this following the opinion of Lord McFadyen in the case of MacLachlan (opcit) where at page 698 his Lordship said that school fees were to be seen as a revenue expense.

In her submissions in October 2005, Mrs McLachlan advised me that the Pursuer agreed at that time, to make a payment in addition to any capital sum awarded to the Defender of £15000.00 which would keep the 3 younger children, Stewart, Grant and Rachel at Belmount House School until the end of June, but this was dependant on resources being made available to him by the sale of the matrimonial home. By December 2005, in a reply to Counsel's submissions, Mrs McLachlan advised me that such an order by the Court should be reflected, now, by the dimunition of any capital sum to be paid to the Defender herself, to reflect the fact that the Pursuer had paid the school fees and that from his capital resources.

REASONING

I have already spelt out my conclusions that the Pursuer has no additional capital or revenue resources which he has not disclosed. He is presently unemployed and has no income. He is not in a position to pay school fees in future years if he has no income, although he recognises in his own evidence that he would much prefer the children to continue in private education.

It follows that on a revenue basis, the Pursuer is not able to continue to pay school fees.

Even if I were to take the view that I could award school fees out of capital, it is important to recognise that the Pursuer, in his evidence without any contradiction, had calculated that the sum of £140000.00 would be required for school fees throughout the children's expected educational time at school and this indeed was excluding any extra curricula activities and indeed inflation. To make such an award would be novel in my view and would conflict with the opinion, with which I respectfully agree, of Lord MacFadyen, that school fees should normally be seen as a revenue expense. There is, in my view, no realistic fair or common sense basis on which I can make an indefinite award of school fees in a position where, as here, the Pursuer is not in employment, has no income other than interest from capital and thus no real income from which an award of school fees could be made.

However, whilst Lord McFadyen did say in McLachlan, that school fees are by their nature a revenue expense, he did not go so far as to exclude the possibility of it ever being appropriate to make a capital award to enable such future expenditure to be provided for. However, his Lordship did venture that the Court should be slow to make capital provision for a revenue expense. It seems to me that circumstances therefore might exist where such an award can be made and I hold these exist partly in the particular circumstances of this case.

The Pursuer recognises that removal of the children from their schools would be disruptive to the children and he recognises, too, as the Court must, that that disruption will exist the more so if the children are required to move from their present home. It seems to me the Court, whilst it should be slow to make such an award from capital, can - in order to reach a fair and practical result in accordance with common sense - recognise that the children ought to remain at their schools until the end of the present school year, namely June 2006.

I shall therefore order that the Pursuer does pay the school fees with associated expenses for the 3 younger children until the end of the term in June 2006 and pay the equivalent, as he would have paid for Mark, had he remained at Belmount House School, to assist in Marks schooling at Glenalmond to the end of that school year, ending in summer 2006. The mechanism will be that he will pay on presentation of the relevant invoices by the schools.

I understood, although it is not entirely clear from the notes of evidence, that the Pursuer would wish to pay for Mark to the extent that Mark would complete his schooling at Glenalmond which as I understand the evidence, would be to the summer of 2007. However, I do not think it appropriate to order that payment, given that school fees ought, normally, to be an expense seen to be rising from revenue. However, it is to be hoped that after this decision is issued that both the Pursuer and the Defender will give earnest attention to what might be said to be their common obligation to ensure that Mark is able to complete his education at Glenalmond.

PERIODICAL ALLOWANCE

The Defender has a crave (number 3) for a periodical allowance to be paid to her, by the Pursuer, at £750.00 per calendar month. Counsel submitted that the Defender has been financially dependant on the Pursuer since 1993 and that consequently the Court should make an award, in principal, in terms of Section 9(1)(d) of the 1985 Act. Counsel, however, conceded that this could only be done if the Court decides in terms of Section 13(2) that such an award would be justified in terms of Section 9(1). The particular circumstances that Counsel relied on were Section 9(1)(c) (economic burden of caring after divorce for a child under 16 which should be shared fairly between the parties), (d) that where a party has been dependant to a substantial degree she should be awarded a financial provision which is reasonable to enable her to adjust over a period of not more than 3 years, and (e) a party whom, at Divorce, seems likely to suffer serious finance hardship as a result of Divorce, should be awarded reasonable financial provision to relieve her of hardship.

Counsel submitted that the second aspect of Section 13(2) is that the Court has to be satisfied that an order for payment of a capital sum would be inappropriate or insufficient to satisfy the requirements of Section 8(2) (justified by the principles set out in Section 9 and being reasonable having regard to the resources of the parties).

Counsel submitted that here the Pursuer is paying the Defender £450.00 at present. The Defender's evidence revealed that her outgoings exceeded her income by £240.00 or thereby per month, even when she was receiving the £450.00. He submitted that the transfer of the house, or a capital sum, would not amount to fair sharing. Even if the house transfer order as craved was not ultimately made by the Court, the Defender would have to look for a house and her efforts to secure employment as a foster carer would be set back in time, consequently. Whilst in the eventuality that a house transfer order might be made, an exact figure could not be ventured for the Court's consideration, the £750.00 craved was based on the present payment of £450.00 plus her present shortfall of £300.00 or thereby. Even if the house was transferred to her, the figure of £450.00 was a reasonable starting point and the Court could take a "broad brush" approach in fixing an appropriate figure. The period to be ordered might reasonably be fixed at 6 months at least, a longer period would be preferable to the Defender's interest.

Mrs McLachlan submitted that the Court, as well as considering Section 13(2), also had to consider Section 11(4)(d), the needs and resources of the parties. In the present case, she submitted, the Pursuer has no income, whilst the Defender has the rental income from her properties. As to the appropriateness of the claim, the Defender will retain the properties she had at separation and will share in the remaining property and the requirements of Section 8(2) would be met by the award of a capital sum. The Pursuer was paying £450.00 per month at present, even since the date he lost his employment in August 2004 and to order a periodical allowance for the future would further diminish his capital. She did however accept that such a payment, if ordered, could be "capitalised". She advised that the Pursuer would continue to pay £450.00 on a voluntary basis, per month, as long as he could, but the Pursuer would wish to resist a formal order being made. The purpose of an order for periodical allowance is to allow the party to readjust on the basis that a capital division is insufficient. If the Court were minded to make a formal order, it should be restricted to 6 months and that on the basis of £450.00.

REASONING

I accept that the Pursuer has no income at present. He is, however, still paying £450.00. It is likely that for any reasonable adjustment period, the Pursuer will not have an income, but he does have capital and Mrs McLachlan conceded that I could capitalise an award of periodical allowance. It is the case that the Defender has income from her rental properties and will receive payment of a capital sum, but I have formed the view that this will be insufficient in the present case.

I have had regard to the legal principles, which both Counsel and Mrs McLachlan have identified which the Court required to consider when deciding whether to order a periodical allowance. The reality is that on Divorce, whilst the Defender will receive a capital sum, she will need to find a new home and indeed the likelihood of her securing her hoped for employment as a foster carer will inevitably be set back, dependant as it is on the appropriate authority approving any new home as suitable for foster care. Counsel, I think is right, that the Court is entitled to take a broad brush approach as to the appropriate figure that ought to be made and, indeed, the timescale.

Having regard to all of these matters, and the resources of the parties too, I have come to the view that an order ought to be made in the sum presently being paid, £450.00, and it would be reasonable to make this for a period of 6 months following Divorce. This can be achieved by ordering that an additional capital payment, recognising the capitalisation of the periodical element, £450.00 per month, ought to be paid, bringing out a figure of £2700.00.

CONTACT

On record, the Pursuer has a crave for contact with the 4 children of the marriage. By the time of the Proof, the oldest son, Mark, had passed his 16^th birthday and the issue of a formal award for contact, or not, related to the 3 younger children, Grant, Stewart and Rachel.

Evidence was led at the commencement of the Proof in June 2005 of the history of contact the Pursuer had had with the children during the marriage whilst he worked abroad, the level of contact post-separation and the aspirations of the Pursuer for contact, as at June 2005, and post-Divorce.

In my view, standing all that has happened since the Proof of June 2005, it is not necessary to rehearse all of that and indeed the disagreements between the parties as to the benefits of contact or not, taken at the time of the Proof in June, as these matters are now largely historical.

I say that because I decided to obtain the views of the children after the conclusion of the second day of Proof in June 2005 and I ordered a Child Welfare Hearing for that purpose on 11 July 2005, which led to a contact order being made. On 11 July I interviewed, individually, Grant, Stewart and Rachel and also obtained the views of the oldest son, Mark, as it seemed to me and to parties that his views as the older and more mature brother, as regards contact by the Pursuer with his younger siblings, would assist.

I reported to parties, after the Child Welfare Hearing, as the children had allowed me, their views. After parties had discussed the position, I was invited to make an order for telephone contact with the 3 younger children. This, in my view, was necessary as it was clear that the lack of contact since November 2004, overlaying the historical position that the Pursuer, of necessity, not seeing his children, except when he had returned home for a few weeks, whilst working abroad and that since separation he had seen the children on relatively infrequent occasions and that not without some difficulties in the relationship between the Pursuer and the Defender and, indeed, the children.

I took into account the views of the children, giving due allowance to their respective ages and level of maturity and the position was clear to me that their views were that they would like to see their father, but had concerns that he would relate well to each of them and would be consistent in his contact. I should say also that I had been satisfied by the Pursuer's own evidence in June 2005 that he did have a genuine desire to have contact with his children, although it was also apparent to me that because he had not seen them in a normal manner - he would really only see the children when he returned to Britain 7 or 8 weeks a year - he had not enjoyed the more normal father/child relationship. It also seemed to me that he did not have a ready or always relaxed manner with children. It seemed to me the relationship between himself and the children had broken down and required to be rebuilt by telephone contact in the first instance and not an immediate award for personal contact, as had originally been sought.

Having ordered the telephone contact, I fixed a further Child Welfare Hearing for 15 August 2005. On that date, parties agreed on a scheme of non-residential, but personal contact at the weekend, on a Saturday and Sunday, and I consequently, of consent, made an order for this. Of consent again, on 7 October, I made a similar order for personal contact at the weekends in October, November and December 2005.

However, on 9 December, Mrs McLachlan advised me that after the agreed weekend contact, which was to take place in late December 2005, she had instructions to report that the Pursuer would not be able, not being in employment, and lacking financial resources to continue to exercise the weekend contact in succeeding months. Mrs McLachlan invited me, however, to make an order for telephone contact, as although it was accepted that the Defender had never breached an order, she had neither, afforded contact without such a Court order being in place.

Counsel for the Defender submitted that the Defender had facilitated contact and it was not necessary to make an order as the Defender would afford the Pursuer contact in the future. It was, in his submission, better that no order be made that an order being made and that the regulation of contact could safely be left to the parties themselves.

REASONING

I was satisfied that the evidence of the Defender that she did believe that contact with their father was in the children's best interest. She had, historically, had some reservations about the quality of contact. These are the matters which arose during the Proof, which in my view, are not necessary to rehearse ad longum at the present time. However, as an example, it is perhaps appropriate to state that perhaps the Pursuer had not fully recognised the importance of maintaining a particular diet for Grant, given his hyperactivity.

Nevertheless, I was satisfied by her evidence that if the Court were to order contact, she would obtemper any Court Order and that, because of her belief that contact with the Pursuer and the children would be in their best interests. However, I was not entirely satisfied that the contact which was achieved in 2005, would have been achieved without the Pursuer seeking an order of Court.

It is, of course, gratifying that the Pursuer and Defender, after the Court's intervention, through the 2 Child Welfare Hearings, established a pattern of contact, which I am satisfied, would be in best interests of the children now and in the future.

It was, therefore, a little disappointing to learn that the Pursuer would not be able to maintain that regular personal contact due to financial constraints. It is to be hoped for the children's sake that he maintains contact by telephone until he his financially able to travel to Scotland. I may also say that I am satisfied from the Pursuer's own evidence, on his recall to the witness stand in October 2005, that he had purchased his new home in England in part, to provide a base for a time when the children might be able to visit him for residential contact. It is to be hoped that for the children's sake, he is able to build on the telephone contact he has, and indeed the residential contact he has enjoyed in 2005.

The terms of Section 11 of the Children (Scotland) Act 1995 and the authority of White v White, 2001, S.C. 689, make clear, together, that the Court should only make an order, therefore intervene, when satisfied that it would be better to do so than not to do so. Contact should be best regulated by the parties themselves. I am satisfied it is neither necessary not desirable to make a formal contact order, at the present time, in light of the current contact arrangements, which parties, under the authority of the Court, have themselves put in place. I am satisfied it is not necessary to do so, given the attitude of the Defender at the present time to contact, as I am satisfied that Mrs Woodhouse will encourage and facilitate such contact as the Pursuer is able to accomplish. I am satisfied that Mrs Woodhouse will encourage telephone contact by the Pursuer with the children. It is, however, to be hoped for the children's long term interests, that the Pursuer, when financially able to do so, will re-instate direct personal contact with the children.

FINANCIAL DIVISION OF MATRIMONIAL PROPERTY

In this section of my Note I draw together the Findings I have made under the preceding issues, which were in dispute and move then to identify the financial division which I have determined would be in order to meet the requirements of the Family Law (Scotland) Act 1985 and the authorities and other persuasive judicial decisions which I have referred to above.

Before doing so, it is proper to set out the proposed schemes of division advance by both parties through their legal representatives.

The Defender's scheme was, of course, posited upon the success of her submission that the Court would not find that there were "special circumstances", to exclude the value of the proceeds of the Pursuer's property which had been acquired before marriage, and its subsequent increase in value. Counsel adopted the figures set out in 5/42 of process and the Joint Minute of Admissions for the parties, number 26 of process, as at the relevant date of 10 February 2003. This showed that the Pursuer's property was £762854.00. The Defender had property representing the 3 flatted properties in her name and the Abbey National TESSA. There was joint property at the relevant date of £6200.00. This brought out total matrimonial property of £911250.00, of which half would be £455625.00.

In terms of the Defender's submission, that there ought to be a transfer of the matrimonial home to the Defender, transfer to the Defender of monies in the Clydesdale Bank joint account (Joint Minute, item 7(1) and (2) and item 5/10) and transfer to the Defender of the contents of the matrimonial home. This would result in the Pursuer's property being £368854.00 and the Defender's property being £542396.00. In that submission, the Defender would retain responsibility for the debts she has incurred since separation, to the children, to the credit cards, an obligation to tax and the overdraft that she has. If the Court were not to order the transfer of the matrimonial home to the Defender, then the Defender sought a capital payment of £400000.00 by the Pursuer, which would be able to be realised on the sale of the former matrimonial home (which is in the title of the Pursuer). This would lead to a position where the Pursuer's property would be £362854.00 and the Defender's property £548396.00, where again the Defender would retain responsibility for the debts. The Defender's Counsel advanced this submission by reference to the Defender's evidence that in order to buy a similar property to accommodate herself and the children she would require in the region of £340000.00, plus legal fees and stamp duty. Either of these schemes would be unequal sharing of the matrimonial property, but would be fair sharing having regard to the principle set out in Section 9 of the Act to which Counsel referred in his submissions which I recorded under the preceding sections of my Note, dealing with the issues in dispute between the parties.

For the Pursuers, Mrs McLachlan, again under reference to 5/42 and the Joint Minute of Admission, proposed a scheme of financial division. This proceeded on the basis that the Court would exclude under Section 10(6), the value of the 4 properties acquired by the Pursuer as being the results of the proceeds of pre-marital property which he had owned. This would reduce the property standing in the name of the Pursuer from £762854.00 to £548263.00. The Defender would have the property remaining in her own name of £142196.00 and would be retaining the property in joint ownership of £6200.00 and sums retained at credit in the Clydesdale Bank account - 10582085 - of £1591.00. This division would, at that stage, leave the Pursuer with property of £548263.00, whilst the Defender would have £149987.00, the total matrimonial property being £698250.00. The Pursuer accepted he would require to make payment to equalise the disparity at that stage between the respective parties' property; this would be a figure of £200000.00. Mindful of the likely success, and in some acceptance thereof, of the Defender's argument in terms of Section 9(1)(c) and recognition for the need the Defender to be able to buy a family home for herself and the children, the Pursuer proposed an additional capital payment of £86000.00. To that required to be added the value of one year's school fees of £15000.00. The upshot of that calculation would be an effective capital payment, by the Pursuer to the Defender, of £301000.00. This would be justified by the legal principles of the Family Law (Scotland) and would be reasonable, having regard to the resources as the Defender would retain her rental properties and would have £286000.00 of capital to apply to the purchase of a new home for herself and the children. The upshot of all of that calculation would be that the Pursuer would have, from the net matrimonial property (excluding the value of the pre-marital property) of £247263.00, the Defender would have £450987.00, which together would equal £698250.00.

If the Court were not with the Pursuer as to the special "circumstances" argument, then the Court could look to a net matrimonial property of £911250.00, the Pursuer retaining £761263.00, with the Defender having £149987.00. In order to equalise, there would require to be a capital adjustment in favour of the Defender, from the Pursuer, of £305638.00. This form of division would leave at the relevant date, the Pursuer having £455625.00 and the Defender £455625.00. This would arise if the Court were not with the Pursuer as regards his argument re "special circumstances" and the Pursuer submitted that an equal division of the net matrimonial property would accomplish a division of property justified by the principles in the Family Law (Scotland) Act and the parties' relevant resources.

By December 2005, and in light of the passage of time since her original submissions, Mrs McLachlan was instructed that the capital sum ought to be £286000.00, representing an equalisation payment, on the assumption that the Pursuer's properties were excluded on a "special circumstances" basis, plus an additional capital sum of £86000.00 as an additional sum, which would meet the Section 9(1)(c) principle. This was on the basis that by December 2005 the Pursuer had already paid £7500.00 of school fees for the period ending Christmas 2005 and the practicality of being able, standing the time it would reasonably take the Court to reach its decision, to thereafter realise more capital by sale of the matrimonial home and release capital. The Court would also have regard, it was submitted, to the fact that the Defender had a borrowing capacity which would allow the purchase of a suitable home for herself and the children.

REASONING

I now turn to the drawing together of the provisional decisions I have made under each of the sub-heads regarding the areas of dispute between the parties. Thereafter, I seek to devise a practical scheme of division, conform to common sense, to effect a capital sum payment by the Pursuer to the Defender.

I have decided that there are "special circumstances" to exclude certain of the value of the Pursuer's property at the relevant date from the computation of the net relevant matrimonial property which falls to be divided. This is figure of £180115.66. I have not found that the Pursuer has hidden any capital or income and I therefore require to proceed to consider any financial settlement against that finding. I have not found that there are "special circumstances" which would require the transfer of the matrimonial home from the Pursuer to the Defender. I have not found that in applying the principles of the Family Law (Scotland) Act, that it can be said that either of the parties has suffered an economic advantage or disadvantage relative to the other. It is the case, which is agreed by both parties, which seems to me a fair concession by the Pursuer of the realities of the position, that after Divorce the Court ought to have regard to Section 9(1)(c) as regards the reality that the Defender will have the economic burden of providing a home for the children under 16 years of age. I have found, in principle, that whatever capital payment I made, this would not be sufficient and that an order for periodical allowance ought to be made for a period to allow the Defender to adjust after the Divorce is granted. I have decided that it is necessary, in the interests of the children, that the Pursuer pay the school fees until the end of term of summer 2006.

The mechanism available to the Court in this case is clearly for an order for the payment, by the Pursuer, to the Defender of a capital sum on Divorce.

I now set out in a tabular form the totals of matrimonial property, drawn from 5/42 of process, with which both parties were content that the Court should proceed upon. Within this table I have also shown the effect of the deduction of a particular sum, attributable to the successful argument, by the Pursuer, in terms of "special circumstances", and I have also shown the figure upon which I have come to the view would be a reasonable one for the Pursuer to make to the Defender in addition to any equalisation payment, to reflect the Section 9(1)(c) factor.

JOINT	PURSUER	DEFENDER	TOTAL
£	£	£	£
6200.00	762854.00	142196.00	911250.00

Defender to retain £6200.00	- 6200.00	+ 6200.00	-

Defender to retain sums at credit in Clydesdale Bank account	- 1591.00	1591.00	-

Property excluded on basis of "special circumstances"	180115.66	-	-
	581147.34	149987.00	731134.00
To equalise	216580.00	+ 216580.00	-

	364567.34	366567.00	731134.00

Additional capital in terms of Section 9(1)(c)	- 100000.00	+ 100000.00	-

	264567.34	466567.00	731134.00

I have chosen the additional capital payment of £100000.00, rather than the £86000.00 suggested by the Pursuer, as it seems to me the Court requires to have regard, in some degree, to the evidence of the Defender, that within the period from the relevant date of separation to the date of the Proof, she had only seen one property and that was a price of £340000.00. However, as I have narrated above, I was not impressed that the Defender had not seen other properties, and indeed the property that she had seen was similar in standard to that of the current matrimonial home, which has 5 bedrooms and 3 acres of ground. In my view, the Defender has, with respect, not been entirely realistic to the reality of a requirement to downsize when the Divorce takes place. It seems to me sad, though it may be, to be an ultimately irrelevant consideration that any subsequent property which requires to be purchased by the Defender for herself and the children, will require sufficient land to accommodate the number of animals which the Defender and the children have. Clearly, however, she will require to find a house of suitable proportions for herself and the children. I was not favoured by any particular valuations, other than that to which I have referred was evidenced by the Defender's search, to greatly assist me in deciding upon an appropriate figure. Moreover, I also have to have regard, in fixing a figure, not only the need to purchase a new home for the children, but I also have to have some regard to the position of the Pursuer. As Counsel for the Defender submitted, the Pursuer has now purchased a property in England at a value of £550.000.00, which is of some size. However, as I have said, it has to be recognised that there is a substantial mortgage over that property of £230000.00, which the Pursuer hopes to reduce after Divorce, by raising capital from the sale of the matrimonial home, to reduce that mortgage. He also wishes to have accommodation where, ultimately, the children may visit him for residential contact. The size of that property, taking the fact of the mortgage into consideration, requires to be weighted against his need and relative cost of properties in both England and Scotland spoken to in evidence by the Pursuer which I accept, and in the locality where the Defender and the children presently reside. There is ultimately, therefore, no particular figure which immediately presents itself. It seems to me it requires to be a higher figure than the £86000.00 ventured by the Pursuer. It also has to be a figure not so large that it otherwise would adversely impact upon any capital which would be left to the Pursuer on Divorce, given that he is now 50 years of age, unemployed, with a relatively small pension, which is, in reality, for a pension, insignificant. In balancing all these considerations, it seems to me that a figure of £100000.00 would be appropriate, which, together with the equalisation calculation which I have made, will allow a figure of £316580.00 available to the Defender to buy a house, to that requires to be added, as a consideration, the Defender's own evidence that she has an ability to borrow up to £66000.00. One also has to acknowledge that after Divorce, the Defender will also have the 3 properties which are of some notable value and from which she draws rental income of £12000.00 per annum. The Pursuer is unemployed and is, at the present time, living off his capital. Moreover, from capital, he has paid the school fees for the children to date, albeit of course, it was ordered by Court interlocutor, and will be required by the Court's order to pay these up to the end of school term 2006. I do not hold, however, as seemed to be advanced by the Pursuer's solicitor, that there was some capital value to the Defender in him so doing, albeit in reality I do accept that there has been some diminishing of his capital because of the fact that he has paid those schools fees and will be required to do so until approximately June 2006.

As regards the periodical allowance which I have decided will be an appropriate order in this case this will be required to be capitalised and I have shown this separately in the Court's interlocutor.

Accordingly, the capital payment which the Pursuer will require to pay to Defender, following Divorce, is £316580.00. Separate orders have been made to deal with the issue of the school fees payment and periodical allowance on a capital basis.

The resource from which this set of payments will be made will be the sale of the matrimonial home and the realisation of capital therefrom. There is, of course, notwithstanding the mortgage, capital in the new home, which the Pursuer purchased in England, which has not, of course, disappeared but rather has been transferred from liquid capital into bricks and mortar.

EXPENSES

Both parties submitted that the question of expenses ought to be reserved until after I had issued my judgement in the cause. It is anticipated that Counsel for the Defender, as he indicated, will wish to make a motion that the cause be certified as suitable for the employment of junior counsel. I have appointed a hearing where those issues pertaining to expenses can be addressed.

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	Scottish Sheriff Court Decisions
You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> Woodhouse v. Mooney [2006] ScotSC 42 (21 April 2006) URL: http://www.bailii.org/scot/cases/ScotSC/2006/42.html Cite as: [2006] ScotSC 42

Scottish Sheriff Court Decisions

INTRODUCTION

REASONING

REASONING

REASONING

THE DEFENDER'S CRAVE FOR A CAPITAL SUM

REASONING

THE QUESTION OF THE PRIVATE SCHOOL FEES

REASONING

PERIODICAL ALLOWANCE

REASONING

CONTACT

REASONING

REASONING

To equalise

Additional capital in terms of Section 9(1)(c)