ON APPEAL FROM THE HIGH COURT OF JUSTICE, FAMILY DIVISION, PRINCIPAL REGISTRY
MR RICHARD ANELAY QC, sitting as a deputy judge of the High Court
Lower Court No: FD84D09776
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE HUGHES
LORD JUSTICE PATTEN
| PHILIPPA MARY VAUGHAN
|- and -
|DAVID ARTHUR JOHN VAUGHAN
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Mr Nicholas Mostyn QC and Mr Timothy Bishop (instructed by Withers LLP, London EC4) appeared for the Respondent.
Hearing date: 4 March 2010
Crown Copyright ©
Lord Justice Wilson:
B: THE BACKGROUND
C: THE WIFE'S FINANCIAL CIRCUMSTANCES
D: THE HUSBAND'S FINANCIAL CIRCUMSTANCES
(a) first that the existing mortgage on the home, together with other liabilities of the husband, will, after netting off against them not only certain liquid assets belonging to him but also one quarter of the value of his pension fund which he is able to draw by way of a lump sum, require clearance by the application of £309,000 out of the proceeds of sale; and
(b) second that the smaller home will cost £2,250,000.
Upon these hypotheses the excess liquid proceeds were estimated at £1,806,000, namely £4,365,000 minus (£309,000 plus £2,250,000).
(a) a cottage in Wales given to him when he was an undergraduate by his father, worth £175,000;
(b) an interest in a wood in Wales, worth £35,000;
(c) Lordships of the Manor in Wales, worth £39,000;
(d) chattels which have been in his family for generations, worth £330,000; and
(e) fees owed to him in the sum of £53,000 net of tax.
I accept that many of the judge's marginal decisions seem to have gone in favour of the husband but, in the light of the origin and/or nature of the above assets, I am not persuaded that his refusal to ascribe any income to them was plainly wrong.
E: THE JUDGE'S REASONING
(a) income upon his half share of the excess liquid proceeds of the home estimated in all at £1,806,000, so £903,000, 3% gross, viz £17,000 net;
(b) income upon his half share of the portfolio valued in all at £330,000, so £165,000, 3% gross, viz (correcting the judge's error) £3000 net;
(c) a one half share of the private pension, amounting in all to between £75,000 and £100,000 gross, so between £38,000 and £50,000 gross or between £23,000 and £32,000 net; and
(d) his state retirement pension, namely £5000 gross or £3000 net.
Thus the judge calculated the husband's total annual income at between £46,000 and £53,000 net.
"In my judgment, it should not be overlooked that virtually the whole of the husband's current capital has been built up by him during his second marriage. I consider that [the second wife] has an entitlement to a substantial proportion of those assets. In view of the length of the marriage and her contribution to the welfare of the family, particularly, being a mother to two children, I consider that she must be entitled to at least 50% of those assets."
(a) by his reference to the length of the second marriage and the second wife's contribution to the welfare of the family, the judge was appraising the extent of her claims against the husband in the (entirely) hypothetical event of their divorce;
(b) the judge was then elevating her claims into the realms of an existing proprietary entitlement on her part; and
(c) he was treating the claims of a second wife, thus elevated, as directly and substantially reducing, indeed in the event as eliminating, the claims of a first wife.
(a) decided, at 3E, to survey the relevance not only of a husband's moral obligation to support a cohabitant but also of an ex-husband's legal obligation to support a second wife (on the basis that the claim of the former could not rank higher than that of the latter);
(b) held, at 6E to 8B, that not only an ex-husband's legal obligation to a second wife but also a moral obligation of a husband or ex-husband to a cohabitant had to be brought into account in assessing the level of his obligation to maintain a first wife; but
(c) held, at 8G, that "on general principle, a spouse must on marriage be presumed … to take the other subject to all existing encumbrances, whether known or not – for example … an obligation to support the wife or child of a dissolved marriage"; but
(d) considered, at 8H to 9F, that English law did not, as did some Commonwealth courts, take the principle to its logical conclusion by affording "primacy" or "priority" to the claims of the first wife; yet nevertheless
(e) concluded, at 5D and 10D, that a decision, such as that of the justices, to give such "priority" to the claims of the cohabitant (or second wife) as virtually to ignore the claims of the first wife was plainly wrong.
Lord Justice Hughes:
Lord Justice Patten: