England and Wales Family Court Decisions (other Judges)

IN THE FAMILY COURT

		Nottingham Combined Court
		31/05/2016

His Honour Judge Mark Rogers:

1. This is an application for permission to appeal with appeal to follow, if permission is granted, against the Order of Deputy District Judge Shedden made on 9^th December 2105 at Northampton.
2. The parties are Mr Gary Waudby and Ms Julie Aldhouse who were ably represented by Mr Julian Shaw and Mr Simon Lillington respectively. They were married in 1982 and divorced by Decree Absolute in 1995, having separated the previous year. Notwithstanding the passage of time I will refer to them as Husband and Wife, merely as a shorthand, if I may.
3. The Wife began proceedings for a financial remedies Order in 2014, some 20 years after separation and the Order of the Deputy Judge, now under review, was the culmination of those proceedings. Her Order contains two substantive provisions, a lump sum of £10000 and a joint lives periodical payments order of £9576 per annum.
4. I am told that there was some malfunction of the recording equipment but, happily, the Deputy Judge prepared a typewritten version of her Judgment, which, although neither in conventional format nor signed and dated, is plainly an entirely reliable and authentic record of her decision.
5. The Deputy Judge refused permission to appeal but extended the time for filing an Appellant's Notice and accordingly, the Husband filed his Notice on 11^th January 2016. I gave directions on paper, including for the combined permission and appeal hearing, and set the matter down before me. I heard oral submissions on 5^th April and reserved judgment. After the hearing I was contacted by counsel, both of whom requested the opportunity to make further submissions in writing. I granted them that opportunity and each has filed, by e-mail, an addition document.
6. The central body of material for the appeal is contained in the concise and helpful appeal bundle. However, in the course of the submissions we looked at a number of the documents before the Deputy Judge, amongst the most important being the parties' narrative statements and the occupational health documents of 17^th and 22^nd May 2013 relating to the Wife. In addition I have taken account of the additional written submissions already referred to. Bundles of authorities were filed and other decisions were mentioned in passing in the argument.
7. As well as being factually complex, this appeal has generated procedural controversy. Mr Lillington rightly emphasised the importance of a party's Grounds of Appeal and the need for the Court to restrict that party to the issues arising from the filed Grounds. He referred to Rule 30.12 (5) of the Family Procedure Rules 2010 which provides:
8. "At the hearing of the appeal a party may not rely on a matter not contained in that party's appeal notice unless the court gives permission"
9. He submitted that Mr Shaw's oral presentation went far beyond the matters canvassed in the Grounds and, in particular, amounted to a challenge to the Deputy Judge's findings of fact notwithstanding the apparent concession that there was no such challenge. He submitted that this was no mere technical quibble but an important issue as it potentially distorted the whole focus of the appeal that he had expected to meet. It was therefore necessary for me to clarify with Mr Shaw how exactly he put the case on appeal. He confirmed that the underlying matters of pure fact, as found by the Deputy Judge, were not being challenged but submitted nevertheless that he was entitled to analyse and, if necessary, subject to critical scrutiny the decision making process adopted by the Deputy Judge, particularly as it illustrated the approach taken to the exercise of discretion. I accepted that as a legitimate approach and permitted Mr Shaw to develop his argument. Mr Lillington, in the course of the argument, reiterated his discomfiture at Mr Shaw's approach and submitted that it was too wide and went well beyond the Grounds.
10. It is necessary, therefore, for me to say a few words about this issue. It is perfectly clear to me, firstly, that it is not a matter of fundamental importance or fairness in the context of this case. It is obvious from the Grounds of Appeal and Skeleton Argument what is the nature of the Husband's complaint. Although the Grounds are couched in the vocabulary of the Rules, what is intended is clear. The Husband is saying that the outcome is wrong by application of established legal principles and demonstrates an unreasonable and, in context, impermissible, exercise of discretion. I can discern no prejudice for the Wife or her advisers. To the extent, if at all, they were disadvantaged at the hearing the provision of further written submissions after a period of reflection was a proportionate and entirely satisfactory remedy.
11. A party may, of course, challenge a primary finding of fact on appeal. Such a challenge must be foreshadowed in the Grounds. Such challenges are rare for the obvious reasons that fact finding is almost exclusively the province of the trial Judge and the ability of the appellate Judge to interfere is limited. It is, however, important to identify primary findings of fact. Whether a particular event happened or a particular thing was said are examples. There are plenty of such findings in the Judgment of the Deputy Judge and they are not challenged and, if they were, would not, in my judgment, be vulnerable as they came from a firm evidential base and fell squarely within the province of the fact finder.
12. What is under consideration in this appeal is, in my judgment, something different. It is the exercise of discretion based not only on the central primary findings of fact, as defined, but also upon the deductions, inferences and value judgements drawn by the Deputy Judge. Such processes are, in my judgment, much more susceptible to legitimate appellate scrutiny. One of the central matters relied upon by the Deputy Judge, namely the issue of a causal link between the relationship and need falls into this category.
13. In my judgment, therefore, as I indicated at the time and confirm in this Judgment, Mr Shaw was entitled to advance his case as he did. It is covered by the drafted Grounds, although they are general. I reject the submission that he was, in effect, seeking a back door factual challenge and doing so in such a way as to disadvantage the Wife. The additional written submissions are a perfectly adequate vehicle for further debate. I agree with Mr Shaw that he does not need any further latitude, but if and to the extent that I am wrong, then I am content to exercise the permissive power under Rule 30.12 (5) already referred to.
14. The factual background to this case is very unusual. The chronology is not in issue although a number of specific factual matters were. They were resolved by the Deputy Judge preferring the evidence of the Wife. The Judgment which runs over 12 pages of closely typed script (A1 in the Bundle) contains a clear and thorough review of the marriage and the substantial period following. I need not repeat it but simply draw out some salient dates and events.
15. The parties met in 1979 when the Wife was about 17 and the Husband about 26. They married in 1982. They had no children. The Husband had a failed car business and was declared bankrupt. The wife worked in a bank and took on a second job. The Husband retrained and later qualified as a commercial pilot. In 1990 they bought a barn for conversion. There followed a protracted building dispute and ruinous litigation leading eventually to both parties being bankrupt. In about 1992 the Husband began an affair with the woman who is now his Wife. Their first child was born in 1994 (a second child was born a year later). Ms Aldhouse (then Mrs Waudby) discovered the affair and later the pregnancy. They separated around that time in 1994. The building dispute trial followed shortly thereafter. The Wife suffered a breakdown at the time of the Bankruptcy Petition and was retired from work on ill health grounds. Divorce proceedings were instituted by her and, as indicated, the marriage was dissolved in 1995.
16. Those facts, although somewhat tumultuous, were not in any real sense unusual. What has happened since, though, is highly unusual and makes this case far from conventional. After separation, although the Wife quickly took proceedings to dissolve the marriage she did nothing to pursue any financial claim. The parties did not resume cohabitation and indeed the Husband pursued family life with his new wife and two children, as he does to this day. However, the Wife's evidence, accepted by the Deputy Judge, was that she continued to love and trust the Husband and believed his assurance that he would make provision for her voluntarily. She held off making any financial claim in the expectation that he would "see her right", believing him to be genuine, although as it later transpired and, as found by the Deputy Judge, he was "stringing her along". Thus it was that it was only in 2014 that the Wife issued her Form A.
17. The Deputy Judge in a full narrative gives a detailed account of the progress of the parties over the intervening 20 years and makes a number of crucial factual findings, preferring the Wife's account of events. She also analyses carefully the evidence and explains why she prefers the Wife's evidence, describing her as a "witness of truth" in contrast with the Husband who is "less reliable". At A2 she records without comment the Wife's employment record post separation. She worked in part-time and full time roles, in employment, self employment and as a director of her own Limited Company. The Deputy Judge records the Wife's level of earnings, the peak being in 2002/2003 at £28000 per annum (whether gross or net is not specified) and describes the purchase of her property, subject to mortgage and her cohabitation with another man between 2003 and 2007.
18. The Deputy Judge also deals at A2 with the Wife's ill health at the time of separation, the grant of a health related pension and her continuing physical and psychological problems. At A4 the Deputy Judge describes the up to date financial circumstances of the parties, including the wife's budget shortfall of £798 per month. She records the reduction by nearly £4000 per annum in the payment of sickness pension in 2014 which led the Wife into financial difficulty (A3) and was clearly, at least in part, the trigger for the current application. What the Deputy Judge doesn't do, in my judgment surprisingly, is to explore or explain the reason for the drop in ill health payments, which, on the evidence before her and referred to by counsel in the appeal, was due to an improvement in the Wife's psychological health.
19. Against this background the Deputy Judge was bound to and did consider the impact of delay and, at A11, set out her conclusions including the key factors that the Husband was culpable and lulled the Wife into a false sense of security. There is, of course, much more in the Judgment but it is unnecessary for me to repeat it here.
20. Accordingly the Deputy Judge made the orders she did, explaining, at A12, her rationale based entirely on need.
21. The Husband, through Mr Shaw, contends that no substantive orders of any sort should have been made and argues in the Grounds of Appeal (B10) that it is "simply wrong in law and so far outwith the reasonable ambit of judicial discretion after such a delay", which delay elsewhere he characterises as "extraordinary".
22. A certain amount of time was spent in the oral and written arguments on the question of permission to appeal. I do not propose to spend much in this Judgment. Under Rule 30.3 (7) permission may be given if there is "a real prospect of success". Quite what that means has been the subject of some controversy which, to my mind, is settled in the practice that the hurdle is relatively low and requires the prospect of success to be more than fanciful.
23. I have no doubt whatsoever, irrespective of the exact formulation of the test, that permission should be granted in this case. The points raised are substantial, persuasive and deserving of careful and full analysis and plainly have a real prospect of success. In fact, given the nature of the combined permission and substantive hearing I heard the arguments in full.
24. Pursuant to Rule 30.12, an appeal is a review rather than a rehearing and will be allowed where the decision of the lower Court was "wrong". Wrong in law is easy as it is an absolute. Wrong on the facts or in the exercise of a discretion is far more difficult as there are, usually, a range of perfectly acceptable findings and outcomes so that merely because the Appeal Judge would have decided differently if sitting at first instance is no indication of error on the part of the trial Judge. Mr Lillington emphasises this point forcefully by reminding me of the lack of challenge to the facts as found by the Deputy Judge and goes on to submit that, absent an obvious error of law, it is virtually impossible for Mr Shaw to submit with credibility that the exercise of discretion based upon the facts as found is both flawed and outside the breadth of legitimate outcomes.
25. Mr Shaw attacks the Deputy Judge's decision on both bases. In terms of pure law, his attack fails. At A5 to 8, the Deputy Judge sets out her analysis of the law. It is, in fact, a mixture of legal statement and factual application but, in my judgment entirely adequate subject to two important provisos.
26. I was puzzled and troubled when I read in the Judgment the references to "contributions" (A7). The unusual facts demonstrate that because of the bankruptcy of the parties after separation there remained no marital assets. There would have been nothing to share. The Deputy Judge seems to have concluded that the Wife's support of the Husband during the marriage, particularly in relation to his career choices was a long term and continuing factor in the Husband's wealth creation abilities. I wondered, reading, for example, the passages at A11 whether the Deputy Judge unwittingly (or conceivably consciously) was introducing questions of sharing or even compensation into the equation. The inclusion of that vocabulary and approach was potentially dangerous and might have rendered her decision unsafe. However, on balance I am quite prepared to give the Deputy Judge the benefit of the doubt as, notwithstanding those passages, the ultimate decisions appear to be driven by a desire to deal with demonstrable needs identified in the evidence.
27. The second proviso relates to the articulation of the issue for consideration which the Deputy Judge sets out at A7:
    "Taking all of the above, I conclude that the legal issue for me to consider is, put simply, whether the delay by the wife in bringing this claim should be so potent a factor as to eliminate what might otherwise have been awarded……..."
28. Some lines before, she cites the Judgment of Lord Wilson in Wyatt v Vince [2015] UKSC 14 where, in dealing with the effect of delay, he speaks of the Court being likely "to reduce or even eliminate its provision". Was the Deputy Judge's failure to refer to the prospect of reduction merely an oversight or did she fall into error by not mentioning or working through the issue of reduction? Unfortunately the omission is repeated at A11, albeit in the reversed question of whether the merits of the Wife's claim are sufficient to "eliminate the contrary factor of the lapse of time". As it happens the question of reduction rather than elimination is subsumed into the bigger question raised in this appeal but I have to record my misgivings about the formulation of the questions. I appreciate this is a fine point particularly as the Deputy Judge accurately quotes Lord Wilson and I am acutely conscious of the unfairness of fine textual analysis of a Judgment prepared, no doubt, under pressure of time. Nevertheless the decision, particularly in relation to the quantum of periodical payments, is telling. It is a joint lives term for the exact arithmetical shortfall on the budget. In my judgment, this gives rise to an error of approach, but, in fact, is subject to what follows.
29. To the extent that Mr Shaw contended (and he appeared to me to come close) that an award made after 20 years was, per se, wrong in law I reject that. Notwithstanding the availability of authority from the Supreme Court, the House of Lords and the Court of Appeal, he submitted the most relevant authority was that of Mr Nicholas Mostyn QC in Rossi v Rossi [2006] EWHC 1482 (Fam) and cited extensively from it in his Skeleton. He relied upon paragraph 32 of the Judgment of Mr Mostyn QC which reads:
    "While of course no rigid rule can be expressed for the infinite variety of facts that arise in ancillary relief cases, I would have thought, generally speaking, that it would be very difficult for a party to be allowed successfully to prosecute an ancillary relief claim initiated more than 6 years after the petition for divorce, unless there was a very good reason for the delay."
30. The answer in fact lies in those very words. Whether it was wise or not to introduce an apparently arbitrary period of 6 years (although of course many limitation periods adopt that figure), the learned Deputy High Court Judge was not intending to lay down or articulate an absolute rule of law. He recognised any decision was dependent upon the facts. As Mr Lillington rightly pointed out the Supreme Court had the opportunity in Wyatt, if it wished, to impose a judge made limitation period but chose not to do so.
31. I am quite satisfied that the Deputy Judge had well in mind the need to approach this case on a fact sensitive basis. Although she appears to have taken some comfort from the obviously obiter dicta of Lord Wilson in Wyatt as to the possible outcome of that case (involving potentially a modest award), it is clear that she did not regard there as being a rigid point of time after which the prospect of making a substantive award was impossible. In that I am sure she was correct.
32. This appeal therefore turns upon the question of the discretion. To that extent Mr Lillington's argument is right. However, I cannot accept the full force of the submission contained within paragraph 26 of his Skeleton. He says:
    "Given the findings of fact of DDJ Sheddon (sic) which are not challenged, and given that DDJ Sheddon correctly understood and applied the law, it is submitted that her exercise of discretion cannot be said to be anything other than clearly within the possible range of outcomes."
33. In my judgment it is essential to look not just at the facts found and the law but at the process of evaluation and to stand back and ask whether the decision is "wrong". I reiterate that it is no part of my function to substitute my view for that of the trial Judge or to engage in the minutiae of reweighing the competing points. It is however plainly my task to "review" the decision.
34. The plain facts from the Deputy Judge's own findings are that, notwithstanding the Husband's bad faith and disreputable behaviour, the Wife pursued employment, bought a house and car, had a relationship of 4 to 5 years and survived without any financial support, irrespective of his promises and her ongoing health difficulties. The trigger for the down turn in fortune appears to have been the reduction in the ill health pension payments. Unfortunately the Deputy Judge does not afford very much comment or analysis to these obviously relevant factors. Perhaps the exception is in relation to the period of cohabitation which, wrongly, in my judgment, she describes as "relatively short" but more importantly as not "significant". Those are, in my judgment, insupportable conclusions to be drawn from the facts as found and are not rescued by the Deputy Judge's acceptance of the reason for the failure of that relationship.
35. The point which most troubles me (and accordingly which prompted further written submissions) is that of the causal link between the relationship and need. The Deputy Judge's fourth question at A8 correctly identified the issue. Mr Shaw's case at trial and on appeal is that whatever the Wife's current circumstances and, in particular, needs, they were not generated by the relationship.
36. In Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, Baroness Hale famously said, in her speech:
37. "137. So how is the court to operate the principles of fairness, equality and non-discrimination in the less straightforward cases? As Lord Justice Ward has argued non-judicially ("Have the House of Lords abused Cinderella? Their Contribution to Divorce Law", lecture at King's College, London, 23 November 2004), given that we have a separate property system, there has to be some sort of rationale for the redistribution of resources from one party to another. In my view there are at least three. Any or all of them might supply such a reason, although one must be careful to avoid double counting. The cardinal feature is that each is looking at factors which are linked to the parties' relationship, either causally or temporally, and not to extrinsic, unrelated factors, such as a disability arising after the marriage has ended.
38. 138. The most common rationale is that the relationship has generated needs which it is right that the other party should meet. In the great majority of cases, the court is trying to ensure that each party and their children have enough to supply their needs, set at a level as close as possible to the standard of living which they enjoyed during the marriage (note that the House did not adopt a restrictive view of needs in White: see pp 608g to 609a). This is a perfectly sound rationale where the needs are the consequence of the parties' relationship, as they usually are. The most common source of need is the presence of children, whose welfare is always the first consideration, or of other dependent relatives, such as elderly parents."
39. Similarly in Wyatt, Lord Wilson said this at paragraph 33:

"In order to sustain a case of need, at any rate if made after many years of separation, a wife must show not only that the need exists but that it has been generated by her relationship with her husband"

40. And in Rossi, Mr Mostyn QC at paragraph 91.8 said:

"These passages (from Miller) suggest that in order to justify a needs based award identification ought to be made of a causal connection between the need and the marital relationship."

41. In his Supplementary Submissions Mr Lillington, relying on dicta of Mr Mostyn QC in Rossi and of Mostyn J in SS v NS [2014] EWHC 4183 (Fam) and upon his interpretation of Baroness Hale's reference to elderly parents in Miller, suggests that a needs based award need not have a causal link as it is not a sine qua non (per Mostyn QC). In my judgment, we need not investigate that as plainly the Deputy Judge regarded it as a necessary ingredient. For my part, I do not regard the theoretical availability of such a free standing award as realistically the basis for upholding an Order made 20 or more years after separation.
42. The Deputy Judge dealt at length with the question of the causal link. She said she had "no difficulty" in finding one. I find that a surprising description as I regard the point as one of acute difficulty. I wondered whether it was mere verbiage but unfortunately cannot easily explain it in that way. The key passage seems to me to be that which is contained in the penultimate paragraph of A11.
43. "The wife's breakdown and subsequent health problems appear to have been a direct and wholly understandable result of the combination of the discovery of the husband's infidelity, her own childlessness, the loss of her home and her bankruptcy. There is no evidence before me as to how her mental health will have been impacted by the husband's conduct in "stringing her along" but it seems to me that, on a common sense basis, this is bound to have exacerbated the position." and later "I have no difficulty in finding that her earning capacity remains limited now by ongoing mental health problems arising in part from the husband's behaviour during and since the breakdown of the marriage and in part from the bankruptcy caused by the parties' joint decisions……and subsequent litigation."
44. I am sorry to say that I find the reasoning in this paragraph generally and these passages in particular so flawed as to invalidate the conclusion. She acknowledges the absence of evidence on the question of the Wife's mental ill- health and yet uses that as the central factor in her evaluation, employing "common sense". However, she goes on to identify a series of factors a number of which relate to the Wife's own conduct for example in relation to the building project. She fails to address the obvious question of the Wife's vulnerability or underlying susceptibility outside of any aspect of the relationship which, if applying common sense, is an equally plausible theory. She also fails to add in to the equation the evidence which was available of the Wife's apparent success in the world of employment, albeit with problems from time to time, and her ability to survive without support for such a long period.
45. In my judgment it was unwise of the Deputy Judge to draw such a fundamental conclusion with no difficulty from such flimsy and/or ambiguous evidence. There was no expert psychiatric or other medical evidence before the Court and none had been applied for. In fact such evidence as there was did not greatly support the Wife's case and warranted treatment in the judgment if it was to be disregarded. I was shown pages D56 to 59 in the trial bundle comprising letters of 17^th and 22^nd May 2013 from Drs Mikuliszyn and Stoot (both consultant occupational physicians) of Managed Occupational Health Limited both of whom speak of the improvement and good prognosis observed for the purpose of the ill health retirement review. In short, the attribution by the Deputy Judge of the Wife's mental health problems to events more than 20 years earlier and to the parties' relationship without a firm expert or other proper evidential base was wrong and invalidates the discretionary approach. There is no attempt to break down the contributory factors and to identify those which are not properly characterised as relationship generated. There is no discussion as to whether the partial causation finding calls for a different approach, for example by reducing the potential award.
46. I find the whole causation paragraph (A11) difficult and, in my judgment, it reads as if the Deputy Judge is straining to rationalise her decision in favour of a women who plainly is deserving of sympathy and who exhibited deep distress during the hearing.
47. In the concluding paragraphs of the Judgment in which the Deputy Judge quantifies her award, I regret to say that I have yet further difficulty with the reasoning. She appears to rely upon the contribution of the Wife in the Husband's wealth creation even after the lapse of time. She approaches the question of "adjustment without undue hardship" in a highly artificial way since the fact is that the Husband made no payment from which she is required to adjust and yet she regards the issue of the Wife having to sell the house at the end of the mortgage term as evidence of inability to adjust. The house, of course, was purchased by the Wife after divorce and at a time when she was shortly to reach the peak of her earnings. Although the Deputy Judge refers in terms to the fact that the Husband's assets were all accumulated post marriage she identifies his circumstances (ownership of three cars and some savings) as appropriate for the making of a lump sum payment to relieve some of the Wife's personal liabilities. As I have said the reasoning is not sound.
48. The decision to award joint lives periodical payments is perhaps the most surprising and controversial. Mr Shaw submitted that such an award after 20 years was, according to his researches, unprecedented. He may well be right. As I have said such an award is not impossible as a matter of pure law viewed in isolation. However, it would, in my judgment, represent a highly unusual, if not unique, decision. Whether the Deputy Judge took that view is not clear. Having made the findings she did and found the relationship generated causal link she appears to have moved quickly to the decision to make an award designed to make good the shortfall on the Wife's budget indefinitely. Ironically, any order referable to the Husband's pension was simply not available given the date of the Petition. Unfortunately the short passage in the Judgment in relation to periodical payments seems driven by arithmetical necessity rather than the need to balance the positions of the parties and all the circumstances of the case in order to achieve a fair outcome.
49. Mr Shaw, aptly in my judgment, asked rhetorically during the argument whether, if an order had been made at or shortly after separation, it would have been for joint lives. The parties were in great financial difficulty and so no substantive order may have been made in any event. Even leaving that aside, a joint lives order was by no means inevitable and would probably not have survived the period of cohabitation by the Wife and her relative prosperity in the first decade of this century. It is, in my judgment, unfortunate and amounts to an error of approach that the Deputy Judge did not seem to put all of the crucially relevant material into the balance when exercising her discretion as to periodical payments.
50. For all those reasons I am satisfied that the exercise of discretion was fatally flawed and cannot stand. No-one has suggested that the case be remitted for hearing in this event. It would serve no purpose. The Deputy Judge's factual findings are clear and robust, but even taken at their highest do not provide the basis for any substantive award. Accordingly, having granted permission to appeal, I allow the appeal and discharge the substantive awards in paragraphs 4 and 5 of the Order of 9^th December 2015 and substitute a dismissal of all financial claims between the parties.
51. Although I have been critical of the Deputy Judge's approach, I have some sympathy for her predicament. It is clear to me that much of the hearing time was taken up in resolving disputed factual matters. The Husband lost the factual points and was found to be unreliable and lacking in insight. In short, he behaved badly and therefore it is no great surprise to me that his stock was very low in the eyes of the Deputy Judge. Equally it is clear from the Judgment how rightly sympathetic the Deputy Judge was to the plight of the Wife whose distress was palpable. I recognise the pain that this decision will cause. I wish it could be otherwise, but, in my judgment, the position is clear.
52. The normal order at the appellate stage is for the unsuccessful party to pay the costs of the successful party and I would propose that order, unless within 14 days of the hand down of this Judgment I am contacted by solicitors or counsel. I will then either entertain further written submissions or convene a short oral hearing.