Case No: FD06D05237 

IN THE PRINCIPAL REGISTRY OF THE FAMILY DIVISION

First Avenue House

42-49 High Holborn

London

WC1V 6NP

 

Thursday 26^th June 2014

 

BEFORE:

 

HER HONOUR JUDGE LYNN ROBERTS

 

 

-------------------

 

BETWEEN:

 

IAN MALCOLM WRIGHT

Appellant/Claimant

- and -

 

TRACEY SUSAN WRIGHT

Respondent/Defendant

 

-------------------

 

 

MR JAMES EWINS (instructed by Edmondson Hall) appeared on behalf of the Claimant

 

MR MARK JOHNSTONE (instructed by Adams Harrison) appeared on behalf of the Defendant

 

-------------------

 

Judgment

 

-------------------

Digital Transcript of Wordwave International, a Merrill Communications Company

101 Finsbury Pavement London EC2A 1ER

Tel No: 020 7421 6131  Fax No: 020 7421 6134

Web: www.merrillcorp.com/mls       Email: mlstape@merrillcorp.com

 (Official Shorthand Writers to the Court)

1.              HER HONOUR JUDGE LYNN ROBERTS:  This is the final hearing of the application of Mr Ian Malcolm Wright for a variation of an order to pay periodical payments to his former wife, Mrs Tracey Susan Wright.  Mr Ewins has represented Mr Wright and Mr Johnson has represented Mrs Wright.  Helpfully, these are the barristers who represented the parties in the original financial proceedings in 2008.  

 

2.              I have read a note of the judgment of DJ Penny Cushing, as she then was, dated 1 February 2008, which determined the cross-applications the parties have made for ancillary relief, the resulting order, which is dated 25 April 2008, and the documents which counsel agreed I should read, which include each party’s Form E and two statements from each party.  I read opening notes from each party.  I have heard all evidence from Mr Wright and from Mrs Wright during the hearing on 2-3 June.  There was insufficient time to prepare and deliver judgment at the end of the hearing and I am delivering it today on 26 June.  Mr Campbell has attended for Mr Wright and Miss Placido for Mrs Wright.

 

3.              The background, in brief, is as follows.  The parties married in 1997 and separated some nine years later in 2006.  The ancillary relief proceedings were between were between 2006 and 2008, culminating in DJ Cushing’s order, and the decree absolute was made in 2008 as well.  During the marriage the parties had two children: B, who is now 16, and C, who is now ten, and both children live with their mother.

 

4.              At the time of the breakdown of the marriage Mrs Wright was a full-time mother whilst also assisting in the family project of Mill Hall Stud.  Mr Wright was, and is, an equine surgeon.  The original order provided for an unequal division of the family capital, Mr Wright securing more; and the reasons for this were that Mr Wright’s pension had accrued before the marriage, that he had a property before the marriage which he was to retain, and because both parties’ housing needs could be met in this way, with Mrs also obtaining additional capital in the form of properties for her long-term security.  Provision was made for Mrs Wright’s debts and costs to be paid off.  Neither party was expected by the judge to need a mortgage and indeed Mrs Wright was already in the property which she now occupies and it had no mortgage. 

 

5.              The order also provided for Mr Wright to pay Mrs Wright and the children global maintenance of £54,000 divided as to £33,200 for Mrs Wright and £20,800 for the children.  Mrs Wright’s maintenance was expressed as a joint lives order.  Mr Wright was also to pay school fees and reasonable extras and in 2008 that amounted to £19,440. 

 

6.              The situation now is that Mr Wright is 59 and Mrs Wright is 51.  Mr Wright must retire when he is 65 in March 2020, although he would wish to stop earlier.  He cohabits with another vet in his practice.  Mrs Wright has not worked since the order and has not undertaken any training or education towards work.  B is just completing her GCSEs and has been boarding at X School, which has meant that the school fees have risen a great deal.  Both parties agreed to this choice for B subsequent to the 2008 order.  C is a day pupil at a prep school.  It is not envisaged that she becomes a boarder, but private school is planned by both parents, and both parents anticipate B, and probably C, going on to university.

 

7.              Mr Wright’s case is that his income has generally been going down since the 2008 order; that amount of money and the proportion of his income which he is paying to support Mrs Wright and to support and educate his children is much higher than DJ Cushing had envisaged and that it is not affordable now or in the period leading up to his retirement or after retirement.  He emphasises that, although DJ Cushing made a joint lives order for maintenance, that was because it was not possible to look so far into the future, and Mrs Wright had not worked outside the home for some nine years, and that the District Judge had made it crystal clear to Mrs Wright that she was expected to start to utilise her own earning capacity within the near future.  As Mrs Wright has done nothing at all in that regard, his obligation to support her cannot fairly go on, and he needs to be able to use that money to prepare for his retirement and to be able to meet his obligations towards his children going forward, which will reach beyond his retirement.

 

8.              Mrs Wright’s case is that Mr Wright’s income has not really gone down and that the proportion of his income going to his former wife and children has not substantively changed save for the boarding fees for B.  As both parties agreed on that course of action for B it would not be right for Mrs Wright to suffer financially because of that decision.  She says that Mr Wright’s relationship with his daughters, in particular with B, has deteriorated since 2008, so that she has them in her care for more of the time than was envisaged, and there are more demands on her as they have needed her support.  She has prioritised raising her children in a rural setting and there has not been time to work or to prepare herself for work.  Her plan now, only revealed on the Thursday before the Monday start of the hearing, is to move with the children sometime after the end of the next school year to live in York, where she thinks she will be able to find work.  She says that it is premature to determine what should happen at the time of Mr Wright’s retirement now and she asks that Mr Wright’s application is dismissed. 

 

9.              The parties therefore appear to be completely apart.  The issues I have to decide are whether the order of DJ Cushing should remain as it is, or whether I should discharge the order relating to spousal maintenance, or whether I should reduce it, or whether I should end the periodical payment order whilst ordering Mr Wright to pay Mrs Wright a lump sum.  I need to look at the original order and how it dealt with the parties’ resources and needs and what has changed since then, and must look at the parties’ positions now.

 

10.          The law I have to apply is set out in section 31, and in the absence of the parties I will not go through subsections (7),(7)(b), et cetera.  Section 31 refers back to section 25 of the Matrimonial Causes Act, and again in the absence of the parties I will not go through the relevant parts of that section, in particular subsection (1) and, in subsection (2), paragraphs (a), (b), (d) and (f).  I have also been referred to and reminded myself of the case in particular of Hvorostovsky [2009] EWCA Civ 791. 

 

11.          The witnesses.

Mr Wright gave evidence first.  Much of the four ring-binders of evidence in the case results from the financial disclosure he has given.  Mr Johnson properly put to Mr Wright that there were unhelpful gaps in his Form E and underestimates of his future earnings and Mr Johnson suggested in closing that Mr Wright had made deliberately false statements and that the court should treat what he says about his income with caution.

 

12.          Mr Ewins asked me, in contrast, to find that Mr Wright is a man of integrity, a very honest witness who has not sought to mislead the court.  I agree with Mr Ewins.  I found Mr Wright to be a straightforward witness and I accept his evidence that he was relying on his accountants for various forecasts and that all the relevant information was attached to his Form E in a clear way, even if all the boxes were not filled in.  Mr Wright has not sought to manipulate the accounts so as to appear to earn less and he is not guilty of any financial wrongdoing.  I find that over the last six years, since the 2008 order, Mr Wright has strived to provide for Mrs Wright and his children, and indeed I find that he has been generous, and on various and recurring occasions he has chosen to pay for his children rather than antagonise Mrs Wright or indeed the children or risk the children going without or being told that they were missing out because of him. 

 

13.          I found Mrs Wright to be a less satisfactory witness.  She included in her most recent statement much about the difficulties which Mr Wright has had in maintaining his contact with his children.  The sensible reason for including this was to give some of her justification for not having worked or trained over the past six years.  I think she gave a distorted version of what has happened and I prefer Mr Wright’s evidence over the key incident in April 2009 and its interrelationship with other events.

 

14.          Mr Wright was clearly telling me the truth in an unvarnished way.  I believe Mrs Wright was in part trying to make me have a dim view of Mr Wright before the hearing started.  Furthermore, although this whole case has been about Mrs Wright’s earning capacity, she was evasive under cross-examination and did not want to answer many of Mr Ewins’ properly put questions.

 

15.          I have not conducted a Children Act hearing but I was concerned about why B has had such difficulty since the ending of the marriage.  I was troubled to hear that, at a time when B was having no contact with her father, save for meetings in the presence of school staff, she knew the FDR hearing was happening and had understood that that hearing was about domestic violence inflicted by her father: a complete nonsense, of course.

 

16.          My worry intensified when Mr Wright made a request through counsel that I should reserve my judgment until the end of B’s GCSEs on 18 June because he feared that she would be told things which could upset her at such an important time, and Mrs Wright’s response through counsel was to ask that the judgment be given forthwith and that I should order that nobody should be able to show any document to B from these proceedings, with the implication that she had not been responsible for telling B anything to date.  This was a difficult position for Mrs Wright to take, especially as she had just had to admit in the witness box that she had discussed with the girls a plan to move them to York before the idea had been discussed or even mentioned to Mr Wright.

 

17.          Where the evidence of Mr Wright and Mrs Wright differ, I prefer the evidence of Mr Wright.

 

18.          The basis for the original order

There has been much debate in this hearing as to how DJ Cushing reached her original decision, and unfortunately there is some ambiguity in a note of the judgment we have, the original tape having been lost and therefore no transcript being available.  The difficulty arises as to whether DJ Cushing did or did not include the income which Mr Wright also derives from a venture called Newmarket Premixes into her calculation of Mr Wright’s overall income.  From the judgment and the papers from both parties I can see valid arguments both ways, but on the balance of probabilities I have concluded that she did not.  Despite the fact that both parties acknowledged that there was such income, it seems to me that DJ Cushing did not factor that income in going forward because she could not quantify it.  I have reread the relevant passages of the note of the judgment several times and cannot conclude anything else.

 

19.          The proportion of Mr Wright’s net drawings awarded by way of global maintenance at the time of the order was 31 per cent, because the district judge was working on the year end 2006 figures.  Incidentally, I am going to use Mr Ewins’ figures for Mr Wright’s income as they seem to me to give a fairer picture.  The fact is that Mr Wright has had that additional income, which indeed has been hard to predict, as Mr Wright expected and the district judge found.  However, I do not see this as such a key point as both counsel have done.  The Premix money coming to Mr Wright has been not much more than has gone on the much greater school fees that were not envisaged at the time of the order, on the extras which Mr Wright has to pay but is not consulted about, and on orthodontic fees which Mrs Wright unilaterally incurred for B and which Mr Wright has had to pay for, even though NHS work of sufficient quality was available.

 

20.          The current obligation to pay spousal and child maintenance has reached £63,200 because of changes in RPI, and by my calculation that amounts to about ten per cent more of Mr Wright’s net income, not including the Premix, than at the time of the original order.  If I do look at the proportion that Mr Wright is paying now off his total net income on spousal and child maintenance, it is nearly 34 per cent.  When DJ Cushing made the original order it was about 22 per cent.  I have excluded school fees, both because I have said that the Premix money seems in broad terms to equate to them and because the increase in school fees to include the boarding fees was agreed by Mr Wright.  However, if they are included, then Mr Wright’s outlay altogether has gone from about 30 per cent of his net income in 2008 to 59 per cent in 2013.  The figures show that Mr Wright’s income from the equine hospital has not reached the amounts DJ Cushing expected; Mr Wright’s income has been on a downward trend.

 

21.          I am not going to spend much time on capital, save to say that both parties have incurred mortgages.  Mr Wright’s mortgages related to renovating a property he chose to buy and his capital has also been affected by the arrangement he has reached with his fiancé about his home, which seems to me to be a reasonable one.  Mrs Wright has managed her finances in a less reasonable way and did not have the need to have a large mortgage, certainly not after receiving her share of the proceeds of the former matrimonial home, which were to pay off any debts or borrowing to pay debts.  She was housed without a mortgage at the end of the 2008 hearing and she has chosen to mortgage her home long term.  She has chosen to put her money into a Swedish chalet, but only started renting it out in 2014 and for a minimal time each year, for reasons which did not sound convincing.

 

22.          For the purposes of my decision, Mrs Wright has her remaining investment property and her chalet, which she regards sensibly as her pension.  She is also prepared to sell her home and buy a cheaper property to get rid of the mortgage.  I have not been in a position to decide if her proposal to move to York is a reasonable one because of lack of evidence and because such a decision involved moving the children and deciding on C’s school, which is not a matter for this hearing.

 

23.          The two properties, when sold and invested at the time of Mr Wright’s retirement, could produce equity similar to the amount of Mr Wright’s pension.  Mr Wright has not managed to add to is pension or to increase investments because he has not had a free income.  Currently his pension is predicted only to produce about £10,000 for him gross.

 

24.          Mrs Wright’s earning capacity

The paragraphs in DJ Cushing’s judgment which dealt with Mrs Wright’s earning capacity have been read out several times in the hearing and I am not going to repeat them again, especially in the absence of the parties.  My interpretation is that DJ Cushing made a joint lives order because at that time it was not possible to predict how things would go, and C was only three.  However, DJ Cushing made it very clear that within a couple of years Mrs Wright should be expected to start to contribute financially and that it was important that this happened whilst fitting in with her child care responsibilities.  She did not say that the joint lives maintenance order was in fact time limited, but she did emphasise that Mrs Wright needed to work and to contribute to her family financially.  She left open the possibility of Mr Wright having to continue to support Mrs Wright into his retirement.

 

25.          The evidence was stark.  Mrs Wright has made no effort whatsoever to seek work or to update her skills.  She has skills because she used to work as a legal secretary and an administrator, to name just two of her previous roles, and she has not taken any courses even since these proceedings started in 2012.  I am satisfied that Mrs Wright has worked on the basis that a joint lives order meant that she would be supported for life, even though she took her own note of the judgment, so knew that was not likely, and even though she knew that her former husband was unlikely to have the financial resources to support them both. 

 

26.          I do not accept that her childcare responsibilities have prevented Mrs Wright from either working or from undergoing training to prepare for work.  B has been at boarding school and has not needed day-to-day care during term time.  C does need care each day, but it is both possible to find work which fits in with childcare responsibilities and it is possible to obtain cheap childcare both at C’s school and elsewhere.  I do not accept that the distress either or both girls have experienced because of the destruction of their relationship with their father has prevented Mrs Wright from working or training.  I reject her other reasons relating to responsibilities for animals or trees or housekeeping.  Vast numbers of women with children just get on with it, and Mrs Wright should have done as well.

 

27.          The world of work has innumerable possibilities these days, from part-time to school-term working to homeworking.  The downsides of Mrs Wright’s failure to utilise her earning capacity include failure to relieve pressure on Mr Wright and his resources; failure to prepare for independence; failure to augment her pension.  Mrs Wright has known since the 2008 proceedings of the need and expectation for her to earn and contribute and that the existing pension provision was not going to be able to provide for Mrs Wright and Mrs Wright.  She has also known, or should have known, that the demands on Mr Wright’s income have been such as to prevent him from increasing his pension provision.  Not only has she failed to earn, she has also failed to save or add to her pension provision.  Instead, she has incurred and increased a mortgage. 

 

28.          There has been a change in Mr Wright’s financial position which means that I should look at the 2008 order again.  The children’s maintenance and school fees will continue to be paid, albeit Mr Wright will probably have to pay out of capital after his retirement.  Mr Wright has told me he will help them through university and I am sure he will, and that can be recorded in the preamble to this order.  The children will still have a home with Mrs Wright regardless of her maintenance provision, even if life becomes more frugal.  I do not think the children will suffer if Mrs Wright has to work, and indeed a working mother at this stage in their lives may well provide them with a good role model.  I have dealt with the parties’ resources now and going forward.  I agree with what Mr Ewins has said about Mrs Wright’s income needs.  They are in the region of £36,000 for herself and the children and she will need to meet her legal costs in the immediate future only.  I find that she has had more income than she has required for her needs and should have been saving, but, probably because of mismanagement of her capital, she has not done so.  Mr Wright’s income needs have very much been tailored by what has been left.  He needs to be able to meet his outgoings and start to save hard.  I have found that he has been unable to add to his pension or add to his savings over the past six years and that it is imperative that he now does so, as retirement looms whilst his children are still only 16 and ten.  His fiancé assists by sharing her income in his household.  Mrs Wright is eight years younger than Mr Wright and her retirement may be some 16 years away.  It is essential, as I have said, that she starts to work now or prepare for work by training so that she can start to support herself and add to her retirement fund.

 

29.          Both parties to this marriage have contributed since the last order in different ways, Mr Wright by his financial contributions and both by their care for the children, Mrs Wright at this time doing most of that.  Looking at all the circumstances together, it is my view that, by the time Mr Wright retires, there should be no spousal support for Mrs Wright.  He will still be funding C’s school fees and maintenance and then probably her university costs, much of this probably coming from capital.  That is a time when Mrs Wright will need to rely on her own earnings and provision she has made for her retirement, which will be several years later, as her state pension starts at 67.

 

30.          Section 31(7)(a) requires me to consider whether, in all the circumstances and having regard to any change, it would be appropriate to vary the order so that payments under the order are required to be made only for such further period as will, in the opinion of the court, be sufficient to enable the party in whose favour the order was made to adjust without undue hardship to the termination of those payments.  In my view, I cannot find it appropriate now, but I am able to say that it will be appropriate in the future.  These parties have litigated almost continuously since 2006 and they have spent over £250,000, perhaps £300,000 on legal fees.  I see no purpose in putting that decision off to a time when Mr Wright retires.  Even if I cannot say that Mrs Wright can manage today without support, Mrs Wright will have, by my judgment, time to adjust.

 

31.          In my judgment, in the year since the application started eighteen months ago at the very latest, Mrs Wright should have started to contribute to her own support.  By that time she had had plenty of time to be trained and to start work.  It would have been reasonable in the year from the application for Mr Wright to have paid £32,000 in spousal support, not £37,245.  In the year November 2013 to November 2014 that figure should be £24,000.  In the year November 2014 to 2015 it should be reduced to £18,000, and it should remain at that level until the end of June 2016 when B finishes secondary school.  During this time, of course, Mrs Wright will continue to receive child support and will be able to meet her current income needs as I have assessed them, even without working.  Of course, that would be most foolish, as B’s maintenance will end and for all the reasons I have given.  It gives Mrs Wright a further two years of a cushion during which she can retrain, or train and start work, and she will of course continue to have Child Benefit and Child Tax Credit or its equivalent.  From June 2016 to December 2019 the spousal maintenance should be £12,000 each year until the end of December 2019, when it should cease.  By June 2018 C will then be 14, and any requirement for child care should be greatly reduced, if any. 

 

32.          Finally, (inaudible) maintenance at the rate of £12,000 per annum for 18 months will be to supplement any income Mrs Wright has secured herself.  The maintenance will therefore have ceased by the time Mr Wright retires if he manages to go on until 65.  In my judgment, Mrs Wright will then have had ample opportunity to adjust and there should not be undue hardship going forward.  Mr Wright in the meantime will have some of the financial pressure removed from him and be able to prepare for his retirement, which he is entitled to do after such a demanding career.  Because neither parties admitted that a lump sum may be appropriate, I have not ordered that Mr Wright could meet his obligations by the payment of a lump sum, which will be in the region of £70,000, depending on how much Mr Wright has paid this year.  The parties can, of course, agree that if they wish.  I have not ordered a bar on Mrs Wright being able to apply during the term of this maintenance as I was not asked to and because there remains uncertainty going forward.  However, Mrs Wright must be aware that if she does apply for a further variation, the burden will be on her to show that there should be such a variation and the court will want to know what she has done to support herself.  The court will also have to take a realistic view in the future, as there is no point in ordering what cannot be afforded.  It is not possible for me to say what percentage of Mr Wright’s income he will be paying for Mrs Wright and the children going forward with any certainty.  I estimate that if he is earning a similar amount as he is currently, and if C’s school fees and extras are in the region of £20,000, which may not be an accurate estimate, then in his last year of paying spousal maintenance Mr Wright will be paying over 23 per cent of his income to support Mrs Wright and C under the order, but will also be supporting B at university, and this seems to me the right sort of balance.

 

33.          If the proposed move by Mrs Wright of the children from the Suffolk area cannot be resolved by mediation and negotiation, any application in relation to it shall be reserved to me, and I anticipate being able to hear it in Suffolk.  Any such application can only be made after an attempt at mediation.

 

34.          Finally, I am prepared to say that B should not be shown a note of this judgment until she is 18 without my permission or agreement in writing between her parents.  If I hear that B has been given misinformation which is causing her distress, or to have a distorted view of either parent, I will have to consider allowing her to read what I have said.  I hope she never has to see it, now or as an adult.  I remain prepared to meet B if either of her parents think it will help for her to obtain a more balanced view of what these proceedings have been about, but only to alleviate distress, not just to satisfy curiosity.