England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		17/03/2009

Mr Justice Singer:

Preamble

1. I heard these applications for ancillary relief over six days between 4th and 12th February 2008. The issues to which they gave rise are wide-ranging and I had no option but to reserve judgment. I had no reason to anticipate that it would not be until now, a year later, that I would be concluding preparation of that judgment. The parties would in the normal course of events long since have received this and been able to regulate their affairs in its light. But, as they know, I have in the intervening months sustained two successive and lengthy periods of ill-health which, I regret, have led to this delay.
2. I have received no information concerning either party or their personal financial affairs since final submissions concluded last year. I can only deal with the case upon the evidence and in the circumstances in which it was when I heard it. This judgment is therefore to be read as speaking as of that date.
3. The case concerns Mr and Mrs G (H and W). They were represented before me by Mr Dyer QC (for W) and Mr Pointer QC and Miss Davidson (for H). A large section of the controversy relates to H's situation as an employee of one or other company within an international financial conglomerate to which I will refer as ACo. Mr Blair QC appeared for ACo on the opening day of the hearing. Some of the information which I received is commercially sensitive from the point of view of ACo. Accordingly this judgment will only be available in anonymised form.
4. The formal applications before me, all launched by W, were (by application dated 12th May 2006) for the full range of ancillary relief, including adjustment of property orders for the five properties (three in London, one in Dublin and one in Spain) to which I shall refer. W also seeks periodical payments for the parties' child, which the court has jurisdiction to order notwithstanding the provisions of the Child Support Acts as W and the child are habitually resident outside the United Kingdom.
5. On 30th October 2006 W made application for maintenance pending suit, which was compromised at a hearing on 29th November 2006, no doubt based so far as W and her advisers were concerned upon information at that stage provided by H as to his income situation. The consent order provided for H to pay £7,500 per calendar month from 1st December 2006, and remains in force.
6. In relation to W's dissatisfaction with the disclosure made by H of his financial arrangements with ACo three inspection appointments took place before Mr Justice Charles on 10th December 2007, before Mr Justice Bodey on 11th January 2008, and subsequently before a deputy judge.
7. Only days before the final hearing commenced, on 28th January 2008, W issued an application to set aside pursuant to section 37 of the Matrimonial Causes Act 1973 what was alleged to be the reviewable disposition whereby H elected in April 2006 to have £1 million paid into an International Pension Plan (his IPP: see below). That application was, rightly, not pursued at the hearing before me.

Background

8. H and W were born and brought up in Ireland and met when in their early teens. That a serious relationship was well established between them by June 1997 is evident from the fact that W followed H to live in London once, in that month, he had moved here to take up employment with ACo. That employment continued at the time of the hearing before me.
9. The spouses celebrated what transpired to be an ineffective marriage in Spain in September 1998. Notwithstanding the technical (but obviously important) impediment that the ceremony was not validly recognised they clearly regarded themselves as married from that point onwards, and emphatically remedied the defect by 'remarrying' four years later in England in September 2003. Meanwhile their only child, a daughter, B was born in September 2001. There was no dispute but that I should treat marital cohabitation as having commenced in September 1998, preceded by some period of cohabitation.
10. Less free from controversy is the question when their cohabitation ceased. The break came after a disagreement in February 2005. The rights and wrongs of the break-up were not debated before me. W claims that the marriage lingered on until the summer of 2005, or even later. H claims that what indeed proved to be the permanence of their rupture can safely be dated from March or April, or at latest May 2005 when he purchased and moved to a new home in London. By then W and B were effectively living in Ireland, initially with H's parents. In their evidence H and W disagree about the duration and extent of the concluding phases, post February 2005, of their physical relationship.
11. Not only can I not divine where the truth lies on this, more to the point I do not believe anything turns on it. I suspect that H's account may be nearer the truth than W's, because she no doubt believes that her financial case is stronger the later she can establish the marriage lasted. Sadly this has been an application, both during its gestation in documentation and its investigation in oral evidence, where both H and W have undoubtedly (and sometimes deliberately) reprocessed elements of the history for perceived tactical advantage.
12. The marriage was no longer viable within weeks after the February 2005 arguments, in my view. W accepted in her evidence that marriage counselling efforts which followed were regarded by H as a means to help her to accept that the marriage was over, rather than to investigate the potential for its repair.
13. This then was a relatively short marriage comprising cohabitation over around seven years. More significant than its short duration ending when the parties were both in their early thirties, however, is the fact that W is likely to continue to be (as since the separation she has been) the primary day-to-day carer of B who will not reach the age of 18 until September 2019.

The employment history of the parties

14. From June 1997 H has been continuously employed by one or other company within the ACo conglomeration. His employer until April 2006 was an England-based company and since then has been an associated entity in Singapore. H trades, in London, as a broker in exotic derivatives.
15. A somewhat simplified account of his very complex remuneration package over the years is as follows. From at least 1999 until April 2006 his pay was primarily made up of two elements: a basic salary (£100,000 p.a. in his November 1999 contract, raised to £250,000 from December 2003); plus a bonus payable quarterly and calculated as the sum whereby a percentage (30% in November 1999, raised to 35% from July 2000) of the preceding quarter's revenue attributable to him exceeded the basic salary element. A further factor which might have come into play (but which, such was H's success, rarely did) was a guaranteed minimum annual bonus.
16. H's efforts (which involved long and, I have no doubt, punishing endeavour) were valued by ACo such that in May 2001 and in November 2003 they established (for him and for others) Employee Benefit Trusts (the 2001 EBT and the 2003 EBT) with which I later deal in more detail.
17. The last contract which followed the pattern I have described in the penultimate paragraph was that dated 15th December 2005. Its key elements were to continue the £250,000 basic pay and the 35% fixed bonus calculation described above. In addition H was to receive £750,000 (described to me as a loyalty bonus) if he remained employed by ACo until the expiry of that contract on 31st March 2009. By side letter it appears that for a time in late 2005 and early 2006 he was entitled to receive that £750,000 entirely up-front. Indeed it is referred to by him and by others in internal communications as his 'up-front' or as his 'sign-on' payment. But (for whatever reason and as eventually was made clear - or became the case - at the end of a succession of contradictory side letters) H was entitled (if ACo agreed, which as it happens it always did) to draw down in anticipation of that entitlement, although he would be due to reimburse if indeed he left ACo's employment. That is a facility which, by the time of the trial, he had utilised to the tune of £605,000, so that there remained £145,000 (£86,000 after tax) available.
18. A further and now (as became apparent on day three of the hearing) contentious (as between H and ACo) element of the December 2005 contract was the provision for guaranteed minimum bonus (on the face of it, therefore, in addition to his basic £250,000 salary) of £750,000 in year one and £500,000 in each of years two and three. On this basis his guaranteed total salary for the three year contractual period would be (£ 250,000 x 3 = £750,000) plus (£750,000 plus £500,000 plus £500,000 = £1,750,000 guaranteed minimum bonuses) plus (£750,000 loyalty bonus): a total of £3,250,000. That seems to be the mathematical conclusion which clearly flows from that December 2005 contract and the side letters. That all might not be so clear did not emerge clearly or at all until day three of the hearing, when I heard the evidence of two employees of ACo. They were Miss C, the chief financial officer with overall responsibility for remuneration, and Mr J, a managing director and H's immediate superior. I will deal with this controversy in due course.
19. H's contractual arrangements changed radically from the end of March 2006. Meanwhile the parties (until about December 2005) had been investigating the possibilities of reaching a settlement with the help of Irish solicitors (and with some involvement from W's father, Mr H). In January 2006 W issued a divorce petition in London (in respect of which decree nisi has now more than two years ago been pronounced, but not as yet made absolute).
20. H took and strongly maintains the opinion that from the day of separation W should be no longer entitled to share in the wealth he accumulates. He therefore quite deliberately withheld from his own advisers, and from W and her legal team and from the court, information about the changed arrangements which in spring 2006 were put in place, and consequently significantly understated the rewards from which he was benefiting at (for instance) the time when in November 2006 the consent order for maintenance pending suit at the rate of £90,000 p.a. was agreed.
21. A narrow window of opportunity arose around the end of ACo's trading year at the end of March 2006 for non-UK domiciled employees of ACo to participate in an IPP. H remains, he has asserted, domiciled in Ireland. The advantages of the plan are very considerable. A member can commute the entire fund for cash from age 50 without (I assume) being taxed in any way on paying into the fund, and without any obligation to pay tax on any capital gain made within the fund. The only mandatory requirement relevant for present purposes (apart from the precondition of foreign tax domicile) is that the participant must be employed by a non-UK company with only a discretionary rather than a fixed entitlement to bonuses. To meet those requirements H entered into a Secondment Agreement, and then a contract with the Singapore entity within the ACo spectrum. That contract provides for him to receive his basic salary of £250,000, plus wholly discretionary bonuses.
22. H elected to put £1 million into the plan. As ultimately it emerged in the latter stage of these proceedings, £155,674 was due to H in guaranteed but at the relevant time unpaid bonus for the period to the end of March 2006, and was therefore put towards the £1 million contribution. The document demonstrating that figure bears at the foot the instruction 'Do not pay [the sum calculated as net bonus provision] but ask RG every quarter'. It was first produced on 4 January 2008 in response to Mr Justice Charles' production order and would seem to indicate that the hiatus on payment or allocation depended on H's say-so. But for his election to enter the IPP (and the contractual rearrangements necessary to facilitate his eligibility) H would have continued to receive those and subsequent bonus entitlements by way of quarterly remuneration, on top of his basic £66,500 per quarter basic salary.
23. The remaining contribution of some £844,000 was paid by ACo by way of an advance against H's (now wholly discretionary) bonuses. However, no-one who gave evidence before me suggested that there was any real risk that ACo would exercise its discretion to pay bonuses to H at any lesser rate than before. As Mr J succinctly put it, no-one in their right mind would forego the advantage of guaranteed bonuses such as these without the expectation that they would broadly be paid at the same rate.
24. An early suggestion that £750,000 of the advance might be paid in March 2006 from the loyalty bonus was ruled out, as any accelerated payment from that source would be recoupable if H resigned during the three-year period, and could not in fact be recouped once paid into the IPP. And so the source for repayment of the balance which ACo advanced was the bonuses which, everyone assumed, would continue to be paid at the same rate as previously, albeit on a basis stated to be discretionary.
25. While this was happening, in the intervening period any payments made to him in addition to his basic salary came from advances from time to time and at his request from the balance of the loyalty bonus.
26. H produced documentation from ACo which, in purported explanation of his remuneration situation, referred only to these sporadic loyalty bonus payments, but wholly omitted mention of the notionally accruing and notionally discretionary '35% less basic salary' payments held pending. A prime example is a letter written by ACo and produced by H in the evidence he submitted for the maintenance pending suit application. It is dated 24th November 2006, and states 'in good faith' [sic] that H's bonuses in that financial year had amounted to £155,000 and that 'it is not anticipated that the employee will be eligible to receive another bonus payment until April 2007'. That however, as Miss C immediately accepted, ignores the £155,674 to which he became entitled under the old bonus guarantee for the last three months of its operation, and put towards the IPP. His true bonus (including loyalty bonus) benefits so far that year came to £310,673. Unless I have miscalculated the figures, in the remaining three quarters of the year to end-March 2007 he would (on the fixed bonus basis of calculation) have been entitled to receive a further £446,458: a notional total for the year of £757,131. These are gross figures before tax. If the same '35% less basic salary' calculation is applied to H's results since April 2006 he would by the date of the hearing in January 2008 have 'earned' sufficient to repay the £844,000 IPP advance, and could anticipate resuming actual receipt of bonuses via his pay packet from July 2008 onwards.
27. It was not until day three of the hearing before me that Miss C introduced a breath of fresh air and a shaft of light into the fug and muddle created (or, at the most charitable, left viscous and opaque) by H. She explained the position by reference to spreadsheets produced only after extensive and determined enquiries by W's solicitors and counsel (including the three production appointments) and then only five working days before the hearing. They showed, quarter by quarter to the end of 2007, the bonus to which H would be entitled if the discretion under the Singapore contract is exercised in accordance with the pre-existing fixed bonus system. In these documents was notionally accrued this undeclared and still elastic bonus destined towards the £844,000 IPP advance.
28. The asserted reason why the discretionary bonus was still in so fluid a state became somewhat clearer when Mr J gave his evidence. He had never, since April 2006, done what until then had regularly been done each quarter: Mr J would award H a bonus broadly (to demonstrate that it was discretionary) equivalent to the amount he would have earned on the 35% basis.
29. Why were there no such allocations after March 2006? According to Mr J, because he knew that H was working off the ACo advance to the IPP, so there was no urgency. Mr J seemed very relaxed, even casual, about this. It suited H for his part, in my judgment, to leave this aspect of his remuneration in apparent limbo, as he would necessarily have to conceal it from W or risk revealing that it was earmarked to repay the advance on the concealed IPP.
30. I do not propose to do more than outline a further potential issue regarding H's remuneration. His December 2005 contract reads as though he is entitled over the three-year period to gross compensation of £3.25 million (including the loyalty bonus) rather than £2.5 million. But Mr J asserts, and H confirmed in his evidence to me, that the contract was probably drawn in error, and that references to a minimum bonus of £750,000, £500,000 and £500,000 over the three-year period exceeded each party's understanding or expectation which had been that these amounts would subsume the £250,000 basic pay, so that the minimum bonus would really only be £500,000, £250,000 and £250,000 in those years.
31. H explained that he agrees that the lower compensation was what had been envisaged in the negotiations leading to the December 2005 contract. He also explained that he customarily resigned as the time that each contract-renewal negotiation approached. He had for instance done so in August 2005 in advance of the negotiation leading to the December 2005 contract. He expected to do the same later in 2008. Any new deal would be negotiated essentially between him and Mr J (subject on Mr J's side to authority from his CEO). Each party to the negotiation would have cards to play. His included the mistaken but apparently unambiguous wording of the December 2005 contract. Mr J for his part might have some leverage in the fact that the April 2005 onwards bonuses are contractually discretionary, so that whatever might be the undoubted strength of universal expectation that the discretionary bonuses would turn out to mirror those under the previous fixed system, the discretion could be exercised less generously. That would leave H at the disadvantage that he would still owe money in relation to the IPP advance. I suspect that both these swords/shields will be brandished and raised, and then swept into and subsumed in the negotiations for the next contractual period.
32. I will therefore not speculate about the outcome in relation to the December 2005 contractual discrepancy, if that is what it is. I am satisfied that H will not turn out to have done worse over the period to January 2008 under the Singapore discretionary system then he would have fared when the bonus was fixed at 35%. But, equally, I think it improbable that he will see any benefit from the higher minimum guarantee arrangement which the December 2005 contract appears to provide until his next contractual negotiation is resolved.
33. As can be seen, the disclosure achieved by H has been far from full, frank and clear, even after in November 2007 he put his hand up to his deliberate deceit over the IPP, and even after Mr Justice Charles gave him the clearest encouragement to clarify his remuneration presentation. H ducks and dives. I have no doubt that he has manipulated the details of his employment remuneration to his advantage.
34. W's employment history will take less time to describe. Before the marriage she was employed by her father on graphic design work for one of his businesses. Her evidence is that work of that sort is no longer available, and that she has no experience of computer-aided design by which it has been superseded. H suggested that her father might make work available to her and put her on the payroll. So he might, but that is a matter for him. More to the point, in my view, is the fact that W has effectively neither qualifications nor experience and, even in the more rosy employment market of February 2008, stood little chance of securing part-time employment (and her responsibilities for B would be inconsistent with a full-time job). Any income which she might derive from such employment could make only the most modest contribution to the income requirements of her family unit. If (as W contends) this is a case for continuing maintenance then whatever is the right liability for H to bear will not be significantly diminished by anything W might earn at this stage.
35. I reach that conclusion quite irrespective of the fact, as emerged only during the course of W's evidence, that she was in January 2008 expecting a child by a man I will call L. I will consider below the evidence concerning her relationship with L and its impact on the outcome of this case.

Capital position: real property

36. The parties jointly own the former matrimonial home, a house in NW8 subject to a substantial mortgage. That mortgage was recently unilaterally and significantly increased by H, an act which (as Mr Pointer realistically conceded in final submissions) was discreditable. However I also agree with Mr Pointer that it has no impact on this case. The agreed net sale proceeds were about £525,000. As the property has been let during part of the period since the family ceased living there a capital gains tax liability arises. But if the house is transferred to H by court order the accountancy evidence suggests that the capital gains tax liability on W will or may be eliminated under Irish tax rules. On that basis (which may need to be confirmed) the equity which would be achieved by H on sale by him alone thereafter would seem to be about £520,000. H said in his evidence that he would prefer to return to live at this house rather than remain where he now is, and transfer to him would enable him to do so if that is practicable in the light of my overall order. That will be a matter for him.
37. The parties also jointly continued to own as an investment a property in W9 which was their first matrimonial home until February 2003. It has been let. The net proceeds were agreed at £137,200. Similar capital gains tax considerations arise, and if the property is transferred to H in the first instance pursuant to my order, and then sold by him, the total capital gains tax liability may be mitigated somewhat. But the estimated capital gains tax on notional sale would seem relatively modest in any event, and so (as have both sets of advocates in their final asset schedules) I have taken the net value after capital gains tax of the W9 property as £134,000. There would seem no good reason to retain this property (indeed it was agreed that it should be sold) and I proceed on the basis that the net proceeds will be equally divided.
38. In August 2005 the parties purchased in joint names the Dublin house since occupied by W and B, free of mortgage. H has offered to transfer it to W's sole name. She vacillated in the weeks preceding the hearing and in her oral evidence as to whether she wishes to continue to live there or not. She has not put forward concrete priced suggestions for any alternative. It represents, I am satisfied, adequate provision as her and B's home. If she wishes to move elsewhere that is a matter for her.
39. I take the property's value on a notional sale by her at the (virtually agreed) figure of £615,000, while noting that credit should be given to H for the capital gains tax of about £4,500 which he will bear on the transfer to W's sole name. She will bear no Irish tax on any sale of what has since purchase been her principal private residence.
40. In March 2000 the parties invested in a flat in Marbella on land adjoining a more extensive villa owned by W's father, Mr H. The property is the only asset of a Spanish company owned by the parties. The flat, it has been agreed, should be sold. The prudent way to do so is by sale of the company shares. W's schedule shows net proceeds after Spanish taxes (but before UK and Irish capital gains tax) of £133,500. H's schedule arrives at a higher pre-CGT figure of £185,000. I believe that neither accurately reflects the accountant's advice and workings concerning the net proceeds of the Marbella flat. The mid-valuation gross sale price adopted is £249,000. Disposal of the company shares for this amount would trigger Spanish corporation tax of £39,500, and the parties would on distribution also bear a Spanish capital gains tax liability totalling £24,000. If the accountant and W's schedule are correct in showing an outstanding mortgage liability of £76,000 (rather than the £51,328 shown in H's schedule) then the amount available after Spanish taxes would be £54,750 each. As I read the accountant's report (adjusted for the abolition of indexation relief) there would be no further liability on H for UK CGT at 18%. If, contrary to this analysis, he would bear such a liability then it would only arise upon remission of the funds to this country and could (it may be) be legitimately avoided by remitting the funds to Ireland. So far as W is concerned she would bear a further liability to Irish capital gains tax in the modest sum of £1,336 which is allowed for in the summary below.
41. Finally, in May 2005 H bought an extensive modern flat in NW8. He paid £625,000 for it and by good fortune made a killing. He offered a knock-down price when he discovered that the owners were anxious to sell, but that the title was defective as only part (both horizontally and vertically) of the actual flat was included in the existing title. His offer was accepted, and for something of the order of £1,000 in additional costs to his conveyancing solicitors he then achieved rectification of the title. He took some risk and acted against the (no doubt conventionally conservative) advice of such solicitors. But it paid off.
42. His case is that the property should only be regarded as worth the sum he paid for it, for the purposes of assessing the value of W's entitlement, rather than the agreed valuation of £1,100,000. He argues that it was his entrepreneurial flair which led to the coup. But he financed the purchase with the use of funds built up during the marriage, including borrowing £400,000 interest-free from EBT 2003. Although the virtually immediate significant increase in value of the flat is clearly not attributable to any general increase in London property values, the reality is that he would receive sale proceeds of £432,000. But that proceeds on the basis that the whole £635,000 which H has borrowed from that EBT and which is secured upon the flat will be repaid from the sale proceeds, rather than just the £400,000 which H put from that source towards its purchase. If £400,000 is repaid to the EBT then I assume the trustees would be content (as before) to leave the £235,000 balance (borrowed for other purposes) unsecured, for it appears that security is only required when H's borrowings exceed 60% of the fund. For that reason I take the equity for present purposes at £667,000, which in my view is the amount to be taken into account when dealing with W's claims.
43. The practical solution in relation to real properties seems to me to be that the Dublin house should be transferred to W; the Spanish property sold (as has been agreed) and the net proceeds divided; the other joint names properties transferred to H alone; and a balancing figure to achieve equal division be paid by H to W (subject to a minor adjustment of £1,575 in H's favour to represent half his £4,500 CGT liability on the Dublin house, less half her £1,350 Irish CGT on the Spanish sale proceeds). I of course appreciate that the parties may prefer for good reason to deal with the properties in a different fashion, but if this proposal were adopted the net values of the five properties, on the bases postulated above, and the balancing figure would look like this:

	H	W
NW8 former matrimonial home	£520,000
W9 investment property	£134,000
W's Dublin home		£615,000
The Spanish company/flat	£66,750	£66,750
H's NW8 home	£667,000
Netted off adjustments re CGT (paras 39 and 40 above)	£1,575	(£1,575)
Total	£1,389,325	£680,175
Balancing payment to W	(£354,575)	£354,575
Leaving each with	£1,034,750	£1,034,750

44. As I hope is obvious, this outcome in relation to the properties is illustrative only, and not fixed. On this basis W would retain the Dublin property and have a residual cash fund approaching £420,000.
45. H furthermore asserts that W has a beneficial interest in a property on a new development outside Dublin called CD, to which he asks me to attribute a value of £1,285,000. I do not propose to do so for the reasons upon which I will expand below.

The EBTs

46. The evidence concerning these is agreed and so I need only state the conclusion. The payments into these Trusts were made during the period of marital cohabitation.
47. H has received £265,000 by way of loan from the 2001 EBT. If he called for the funds to be allocated to him he would effectively repay those loans and then receive, after deductions for income tax and national insurance, a balance of £17,800 net. W remains (until decree absolute) a potential beneficiary under this Trust.
48. The 2003 EBT has a similar structure, but it is unclear when a request for distribution to H would meet with the trustees' approval. H has had £635,000 advanced to him on loan, which is charged on his NW8 property. He borrowed £400,000 from this EBT towards the purchase of that flat, which I will have treated as notionally repaid when calculating its net proceeds of sale. As and when H receives a distribution from this Trust it will (on the latest valuation available at the date of the hearing) amount to £456,000 net. After repayment of the remaining £235,000 advanced H would receive £221,000. W is also a beneficiary of this Trust until decree absolute.

Pension provision

49. There are in fact two IPPs, both established in March 2006, in similar terms and with a combined total value of £1,072,350. They are illiquid till H reaches the age of 50 in 14 years' time. They nevertheless represent a valuable asset as they can then be commuted for the totality of what the underlying investments are then worth. There is lively debate as to the extent to which (if at all) regard should be had to them when determining W's entitlement.
50. H has two modest conventional UK pension plans. The value of each is about £43,000. It is conceded that one policy should be the subject of a pension sharing order in W's favour.

Costs paid and outstanding

51. Each party had by the end of the hearing last February incurred broadly equivalent costs: H's amounted to about £327,000, W's to about £362,000. They can already be regarded as closer to parity as those figures do not reflect interlocutory costs for which H has already accepted responsibility. H had paid all but about £25,000 of his total costs to that date, and I propose (for asset schedule purposes) to treat that unpaid balance as a liability. W had paid all but £64,000 of hers, and that too I treat as a liability. But the bulk of what had been paid to her solicitors came from borrowings from a bank and the rest from her father, Mr H. H would have me infer that the overall amount of about £250,000 which W and Mr H calculate as the amount he provided (to include advances towards her living expenditure) should be treated as a 'soft loan'. I see no reason to do so. Mr H is under no obligation to support W with her legal costs as a gift or to subsidise her and B's living expenditure. I am not prepared to conclude that these advances will not or need not be repaid, or should somehow be regarded as not repayable. Accordingly I treat them as a legitimate component of the total of £299,000 shown for these debts on W's side of the assets schedule.

Other assets

52. W's other funds are negligible. She has jewellery valued at £35,000 and a Porsche Cayenne car, as to both of which I say more below.
53. H's residual assets are not at all substantial when I leave aside the value to be attributed to his Ferrari and his sailing boat and defer consideration of 'add backs' (in relation to his expenditure on a gift to his siblings and payments made for participation in the Fastnet race) which W says should be disallowed. Before coming to those other items H has a positive balance of only about £13,000 which I propose to leave out of account.

Motor vehicles

54. H acquired the Ferrari during the marriage at a cost of some £80,000. He maintains that he has been trying to sell it and that the best offer received was for £59,000.
55. During cohabitation W had the use of an earlier Porsche Cayenne. At some point and for whatever reason H removed the car, still in his name, which W had taken to Ireland. W then through her solicitors agreed to accept £19,500 with which to purchase a more modest vehicle. However she did not do so and that money went to her solicitors in relation to their costs. In due course W chose to replace the previous Cayenne with a brand new one, purchased in Dublin and paid for initially by her parents. She says that subsequently she repaid them with funds derived from a hire-purchase agreement into which she entered. W agreed when I asked her whether there was, in effect, an element of tit-for-tat in the decision to buy an identical car.
56. There was a tangled sub-plot which led W (driven or assisted, I have no doubt, by her father) to export that car to England for six months and to arrange for it to be 'domiciled' for (at least) insurance purposes here. It was linked in insurance documentation with both the former matrimonial home (by then let) and, surprisingly, with H's new home address and his garage there. To add to this there are strong reasons to support H's belief that this was not the only vehicle with which other members of her family dealt in similar manner. The motive for this may well have been, as H suggested, to evade Irish import duty.
57. W's attempt to account for all this was woeful, confused and contradictory. She had been given every opportunity in advance of the hearing to explain what was going on, if she had chosen to do so. I do not accept that she has no memory for the sequence of events, and do not for a moment credit her suggestion that a Dublin garage and Porsche Assistance in Ireland should or could have written to H's address without obtaining it from her. As against that, I do not believe W to have been the prime mover in any such scheme, to the extent that she may actively have participated in it. I regard the whole episode and the obfuscation evident in her manner of dealing with it before and at the hearing as discreditable. But I do not regard these issues as more than marginally material to this inquiry. It has not been established that conduct such as this would produce an income for W, and certainly not one which H could pray in aid as in any sense 'regular'.
58. So far as the value of their respective vehicles is concerned, I believe that broad justice will be achieved by disregarding them on each side of the equation. If H achieves a sale of his Ferrari he will need to purchase a replacement car. If W reverts to the view that she could make do with something less than her Porsche she could no doubt pay off the hire purchase and trade down. So in all the circumstances I propose to disregard her hire purchase debt as a liability.

Other peripheral issues

59. I should make it clear that it is I who regard these as peripheral. They were keenly argued in preparation for and at the hearing.
60. H's boat cost about £24,000. He in effect says that he made his brother a joint owner and effectively gave him a half interest because his brother would undertake various maintenance tasks which, over a period, would make that a fair exchange. W asks me to disregard the arrangement and to treat H as having the whole vessel. Maybe £12,000 turns on this issue. Sailing, and H's boat, are his prime leisure activities. I would be reluctant to categorise them as frivolous or extravagant expenditure for a man in this family's financial position who works as hard as undoubtedly he does. A related issue concerned the fact that H had drawn down £100,000 from his loyalty bonus to meet expenditure incurred by his team in participating in the Fastnet race. By the end of his oral evidence on this topic I am disposed to accept that the net cost to him of so doing was in fact only of the order of £5,000.
61. My pragmatic but I believe also fair solution is to disregard this leisure investment and expenditure on H's side, and W's jewellery on hers.
62. A further issue relates to the fact that in December 2005 H gave the equivalent of £54,000 to his brother and sister to assist them in purchasing their first home. W reluctantly conceded, after initial denial, that there had been discussions before the separation about the proposal to make such a gift which she had not at that stage opposed. But, without telling her until after the event, H transferred these funds. In my view H's generosity, so soon after the separation and prior to any financial settlement, is not something towards which W should be obliged to contribute. So I will treat H as not having parted with that £54,000, and he will pay her £27,000.

The house that Mr H bought

63. It is beyond doubt that very bad feeling has since the breakdown of the marriage developed between H and W's father. Mr H has been supportive of W, not least financially. One example of the extent to which he was prepared to help her relates to another tangled tale about which W has been significantly reticent: the purchase, commenced in July 2006, of a newly built (or perhaps, then, still to be built) detached four-bedroom, three-bathroom property on a luxury golf-course development outside Dublin, to which I shall refer as CD. Briefly, H's investigations have led to the discovery that a preliminary deposit was put down on the property by a friend of Mr H, and that he (Mr H) signed the contract to purchase 'as trustee'. There can be no doubt the intention was that W should occupy this property, with B. She commissioned a superior kitchen in place of that offered as standard, but then changed her mind and cancelled the order. According to W, she was to repay her father the cost of the property (had she moved in to live there) from the sale proceeds of the existing Dublin house and from the lump sum that she anticipates receiving in these proceedings. By the time of the hearing (as H discovered) the house was back on the market at an asking price 'in the region of' €1,775,000 which H asks me to attribute to W as its value to her. W for her part asserted that her parents would look to her to repay them any shortfall on sale. In the witness box she contended that in a recent conversation her father had agreed to let her off this liability. The original assertion that there was such a potential obligation to her father appeared to me to be as unpersuasive as was W's last-minute show at his having resiled from it.
64. Again, the way in which information had to be winkled out about this situation showed W up as seriously lacking in candour. Her reticence no doubt fortified H in the suggestion that the smoke screen concealed a gift of the house by W's undoubtedly wealthy parents. There is nothing to suggest that any of W's four siblings have benefited from parental largesse on anything like this scale. And although the information to support that conclusion comes only from W as its suspect and unreliable source, I believe it likely that H would have unearthed any conspicuous expenditure upon his brothers and sisters-in-law beyond what was put to W, none of it approaching this magnitude. So I cannot accept that the evidence in any way establishes that W beneficially owned this property, although I believe H is correct in suggesting then it was intended for her occupation (on whatever basis) once these proceedings were concluded, and that W concealed that intention until presented by H with the evidence he had painstakingly assembled. If, at that point or hereafter, her father wished or wishes to establish his daughter (whether by way of gift, loan, or for that matter via a trust) once more in occupation of a property approaching her former matrimonial home in London in value and prestige then that is a matter for him and for them. Mr H is not obliged to do so and H cannot rely on any such intention as a resource to be treated as available to W in these proceedings.

W's trust entitlements

65. H has asserted that W is the beneficiary of a family trust or trusts established by her father. Mr H through solicitors and a Guernsey-based trust company have denied that there is any such trust. As against that: according to H, during the marriage W referred to an expectation that she would benefit from a trust; when Mr H signed the CD contract he qualified his signature with the words 'in trust'; and H has on more than one occasion provided Mr H at his request with sterling cheques drawn in favour of the trust company. Although it may be correct that Mr H has no sterling account or chequebook, it would be ludicrous for him to suggest that he could not have arranged for a sterling payment through his bank if he had wished, and indeed it was with a sterling draft on an Irish bank that he paid English VAT on W's Porsche. So maybe these requests for payment (for clearly he made them) were to distance himself from a trust, as H suggests.
66. An alternative explanation for the cheques is that Mr H undoubtedly is the beneficial owner of the shares in the company which owns (at least) his Spanish property. The shares are registered in the trust company's name. Declarations of trust by the trust company 'as nominee of and trustee for' Mr H, and blank but otherwise effective transfer forms, were sent to him as part of a stereotypical nominee arrangement. The trust company made annual charges for company registration and nominee officer services, towards which H's payments may have been dedicated.
67. W's assertions that she knew nothing, not even what a trust is, were (to say the least) unconvincing.
68. I am far from persuaded that there is no trust or other such arrangement under which W may one day benefit. My suspicions are highly engaged. But the evidence does not establish that there is such an entity. Furthermore, if indeed there is, it is likely in the nature of these things that W's interest is potential only, as one of a class of discretionary beneficiaries. I cannot draw any inference, quantifiable or not, against W on the basis of such material.
69. In short, therefore, and as with the assertions that Mr H will provide W with a job, or support her financially and generally benefit her, so well may he. But H cannot in my judgment rely on any of these as current or reasonably prospective or sufficiently probable events to relieve him of whatever is otherwise his obligation to make financial provision for W.

W's relationship with L

70. Once more the truth concerning this is confounded behind W's reluctant, unsatisfactory and (I am satisfied) partial presentation. She and L appear to have been in relationship since about the end of 2006 at the latest. Until shortly before the hearing she was coy in her responses to enquiry, when indeed she deigned to deal with them. Confronted by H with enquiry agent evidence and details of the observations made by her father-in-law (for H's parents live just three doors away from her home in Dublin) she was constrained to admit that L had spent most of his January leisure hours and nights at her home. Not until cross-examination did she reveal that she was 17 weeks pregnant by him.
71. Her suggestion that she had not thought to mention that because she thought it insignificant in these proceedings is not credible. Disclosed her pregnancy clearly should have been. But its relevance and effect must be considered dispassionately. L was not free to marry her, were that their intention, although one assumes that that impediment could in time be removed. There was no evidence to suggest that he made any effective or material contribution to her living expenditure on any sustained basis. Their expected child is likely to increase their mutual dependence, but will not inevitably do so. They may or may not cohabit - an unsatisfactory word and concept, in my long-held view, vague as to quality and duration and not a reliably valid indicator of anything long-term. The helpful decision of HHJ Tyrer in Kimber v Kimber [2000] 1 FLR 383 contains a useful check-list of potentially relevant considerations, but there can be no cut-and-dried test: in a number of situations reliance on the opinion of more than one 'reasonable person[s] with normal perceptions' could lead to different conclusions.
72. The presence of L on W's scene, and indeed the presence of their child, do not in my opinion affect at all the quantum of capital provision with which W should exit this marriage, any more than did the presence of Mr Black affect Mrs Duxbury's entitlement: see [1992] Fam 62n, [1987] 1 FLR 7, CA.
73. As to income provision (for this is not in my opinion a clean break case), I was invited to review the authorities. They are really all one way until one gets to Coleridge J's first instance decision in K v K (periodical payments: cohabitation) [2005] EWHC 2886 (Fam), [2006] 2 FLR 468, where he potently puts the case for a revised approach, praying in aid the undoubted changes in public perception of cohabitation as 'normal, commonplace and acceptable as marriage'. In that case the former wife had for three years lived in settled cohabitation with her partner and they had been fully involved in each other's financial affairs. That is by no means this case, and it is to be observed that the outcome arrived at by Coleridge J nevertheless would have continued the husband's (albeit reduced) liability for maintenance provision but for an order capitalising it in a sum representing more than 8 years' purchase at the reduced rate.
74. But however much I may feel sympathetically attracted by Coleridge J's philosophy, it must be the line of authority in the Court of Appeal rather than his (viewed in their light) heretical observations which I am constrained to follow. Change in this area must come from Parliament, or from a court with authority to make new law or to change the old. The Court of Appeal in Atkinson v Atkinson [1988] Fam 93 and Fleming v Fleming [2003] EWCA Civ 841, [2004] 1 FLR 667 has consistently held the orthodox line. Thorpe LJ reaffirmed the principle at [9] and [10] of Fleming thus, in response to the former husband's submission that the increasing tendency of couples to cohabit rather than to marry justified a more rigorous approach to cases involving applicants who are in stable, long-term, quasi-marital relationships:

[9]   Nor do I think that the decision of this court in Atkinson v Atkinson calls for revisitation in the light of whatever social changes there may have been over the course of the last 15 years or so. The judgment of Waterhouse J on the point of principle is broadly expressed. His conclusion that cohabitation is not to be equated with marriage remains as sound today as it was then. Equally it seems to me that the direction that the court, in assessing the impact of cohabitation, should have regard to the overall circumstances, including financial consequences, remains the proper course to be followed. Of course, in a case such as this, where the length of cohabitation is now greater than many a marriage that comes before a court for assessment, the range of discretion given to the judge enables him or her to place considerable weight on that circumstance. There is no indication that His Honour Judge Michael Taylor did not regard the continuing cohabitation as other than a central feature of the case.

[10]   The statutory distinction between remarriage, which terminates financial obligation (by virtue of s 28 of the Matrimonial Causes Act 1973), and cohabitation, which does not, would fall for Parliamentary consideration if the Government's present plans to legislate rights and responsibilities for same-sex partners were extended to cohabitees.

That was a case of over five years of settled and uninterrupted relationship. Making every possible allowance for lack of candour or even downright dishonesty on the part of W, her relationship with L is some way off from that.

The fruits of post-cohabitation endeavour

75. Given that equal sharing is now the basic premise (subject to departure within that principle and exercise) rather than merely the yardstick (see Charman v Charman (No 3) [2007] EWCA Civ 503, sub nom Charman v Charman (No 4) [2007] 1 FLR 1246, CA, a vexed question in this case and in others is when to stop the accruing (or reducing) clock, to draw the line, to close the book and to divide. I do not propose in this judgment to contribute to the judicial discussion on this topic. On the one hand there is the workable but (in my current view) over-simplistic one year post-separation watershed proposed by Mr Mostyn QC sitting as a deputy judge of the Division in Rossi v Rossi [2006] EWHC 1482 (Fam), [2007) 1 FLR 90.
76. In the case of my own of S v S (ancillary relief after lengthy separation) [2006] EWHC 2339 (Fam), [2007] 1 FLR 2120, at [111] I said that I regarded Mr Mostyn's formulation as helpful. Mr Justice Charles disagreed at [57] of H v H [2007] EWHC 459 (Fam), [2007] 2 FLR 548, pointing out that in neither Rossi nor in S v S were bonuses involved, and explaining moreover why he rejected the one-year arbitrary cut-off point. The essence of his preferred approach is to be found at [83] to [87] which are in these terms:

[83]   In my view the position changes when the marital partnership ends. This is because the joint venture and participation of the parties as equal partners in that marital partnership whose contributions to it are to be assessed in a non-discriminatory way ends. After that termination the focus is no longer on the effects of the contributions of the parties as equal partners in assessing the product of their partnership but with the effects of their separate contributions as the source of the husband's income in the future.

[84]   In considering the position after the termination of the marital partnership in my view it is the role and contribution of a wife during the marital partnership that forms the basis of the element of the husband's earning capacity and future income (i.e. his enhanced income or earning capacity) that can be said to be a fruit of that partnership. As Lord Nicholls of Birkenhead points out in para [85] in Miller and McFarlane the spadework for rewards received towards the end, and after the end, of the marital partnership has been done during it. The wife's role and contributions have enabled the husband to create a working environment which has produced greater (enhanced) rewards of which she should have a fair share.

[85]   However, in my view the balance of his future income and earning capacity is the product of the husband's talents, energy and good fortune, notwithstanding that he has been supported by the wife, and they have been applied, expended and enjoyed during the marital partnership.

[86]   I, of course, accept that a wife who continues to act as the primary caretaker of the children of a marriage in a separate household continues to make a contribution to the family (my emphasis), or the marriage, after the end of the marriage (see for example Lord Nicholls of Birkenhead at para [85]). In my view so does the husband who continues to meet their financial needs. But as this is looking at the position after the marriage is over, these contributions, whether described as being to the family or the marriage, are not, in my view, contributions to the marital partnership because that is over.

[87]   I do not accept that such contributions by a wife to the family after the end of the marital partnership can generally be said to warrant a conclusion that a proportion of the husband's future income continues to be attributable to the wife's domestic contribution and thus a fruit of the marital partnership.

77. The Court of Appeal did not refer to H v H in Charman (No 3). Mr Pointer has been able to clarify however that H v H was brought to the attention of the court during the period when the Charman judgment was reserved. Charman was in financial scope a very different case from this. Its main influence on the judicial approach to be adopted is that already noted: to promote equal sharing as a principle to be applied rather than as a yardstick against which to check.
78. In my view, the approach I should take in this case must be to attempt to evaluate the available assets as at the date of the hearing and then to consider their nature and provenance. If they derive from pre-marriage acquisition or gift, or from intra-marriage gift or inheritance, then (subject to needs requirements) fairness may dictate that they should be wholly or partially left out of the dividing exercise. Here too the circumstances may differ widely: there is a world of difference between the approach to be adopted to (for instance) a pre-marriage property which has been the parties' matrimonial home; and a gifted or inherited fund kept separate from and never mingled with the matrimonial budget; and a gift or inheritance fully deployed and utilised for family purposes and needs.
79. A discretionary exercise must also be applied to the question now under consideration, when does the clock (or the meter) stop in a case where one spouse continues once cohabitation has ceased to accrue savings or wealth from earnings or elsewhere?
80. Mr Dyer argues that the opportunity to take part in the IPP in March 2006 and the contributions to it made by H are so closely linked to the period of married cohabitation that W should effectively receive a share of its value. He suggests an award of £317,000 which is about 30 per cent of its gross valuation. He points out that the December 2005 contract (which was superseded by the Singapore arrangements only to make way for the IPP) was concluded but months after the marriage ended. Under it H's bonuses were to have been fixed at the rate of 35% of the revenue he generated, with the new feature of the £750,000 loyalty bonus. Mr Dyer also points out and relies upon the fact that £155,000 of the IPP funding came from the bonuses earned by H in the period from January to March 2006, again within months of the end of cohabitation. In effect H invested that part of his income for that period.
81. But this overlooks what only in the later stages of the hearing became crystal clear: that with the exception of those £155,000 of bonuses actually due and owing at the date of entry into these arrangements one year after the effective end of the marriage as a partnership, the £845,000 balance represents bonuses earned over the period stretching between 12 months and 33 months after that effective end.
82. The resultant product is indeed a valuable asset, but on the evidence before me cannot be touched before 2023. I do not subscribe to the view that it would be fair to require H to share, in whatever proportion, the value of this fund with W. During the period of its accumulation W of course continued to care for their child but H was supporting W from his income, until December 2006 when the order for maintenance pending suit took effect at a rate and on a basis which she regarded as unsatisfactory, and since then pursuant to the consent order agreed in ignorance (on the part of W and her advisers) of the fact that H was leaving his bonuses untouched to accrue (however notionally) against the £1 million advance. The terms of the letter I have already referred to at paragraph [26] above are thoroughly misleading, as H must have known when it was produced at his instigation.
83. Maintenance pending suit is retrospectively variable if it transpires at the substantive hearing that the amount ordered was excessive or inadequate. I see no reason in principle why that should apply any the less in the case of an agreed maintenance pending suit order. With the benefit of hindsight, the order for £90,000 p.a. was inadequate and unfair. In my judgment an appropriate award might have been £150,000 p.a. For the period from 1st December 2006 to 31st January 2008 the shortfall is £70,000, which I will include as one ingredient in the lump sum which I propose to order. I order that gross amount as a lump sum although I appreciate that W is liable to approximately 40% Irish income tax on maintenance payments she receives for herself. That will be in addition to the £420,000 which (for illustrative purposes, I repeat) I have taken as the cash fund available to W after the adjustment of the real property interests.
84. There are other elements in respect of which, in fairness, H should make a distributive payment to W.
85. I regard it as appropriate to divide the EBTs between the parties, but only to the extent that they have value surplus to the amount of the loans already drawn against them. Mr Dyer suggests that H should with funds which will be available to him once properties are sold repay the £265,000 borrowed from the 2001 EBT, and that W should receive half (namely £141,400) of the restored value (net of tax and National Insurance contributions) of that trust arrangement. He points out that almost half of H's borrowings had been used towards his costs. To conduct that exercise would be to depart from the approach I have adopted, of making no add-back for costs paid and to deduct costs outstanding, before considering what division should be made. W should be paid (as part of a lump sum order) half what is left (after tax and National Insurance contributions) in that 2001 EBT, which amounts to about £9,000.
86. There has been a dispute concerning the tax treatment of the 2003 EBT which was not resolved at the time of the hearing. The outcome seems to me likely to be that H will at some stage be entitled to receive less than he has so far borrowed against this. But £400,000, be it remembered, relates to his acquisition of his own home in May 2005. The calculation of the net proceeds of sale of that flat at £667,000 at para [42] above proceeded on the basis that £400,000 of the 2003 EBT would be repaid. W should therefore share in the restored value of that fund, subject only to the other £235,000 of borrowing. The net value of the trust after allowance for that loan, tax and National Insurance is in my opinion likely to be £221,000. Mr Dyer suggests that W should take a 25 per cent discount to allow for accelerated payment, but it seems to me that there should be no discount. The period before pay-out is possible may turn out to be protracted, but as against that an offer to resolve the dispute had been made and was under consideration at the time of the hearing. The value of the fund may well increase during any lengthy period of quarantine, and history demonstrates that H has been able to borrow beyond even the net amount which he seems likely to receive. For these reasons H should in my view pay W the full £110,500 which represents half the value of this fund as calculated above.
87. As for H's loyalty bonus, he remains entitled to about £86,000 net (after deductions from the undrawn balance of £145,000 left from the original £750,000). This payment will be due on 31st March 2009, subject to ACo having agreed (as hitherto they have) to make further advances in the meantime. H will have earned this bonus from his employment activities since December 2005. I do not propose W should share in it. Having regard to the imminent date of this payment I treat this £86,000 as currently available when considering H's resources, below.
88. I calculate the lump sum payment to W as £216,500, thus:

Re gift to siblings	£27,000
Maintenance pending suit adjustment	£70,000
Re 2001 EBT	£9,000
Re 2003 EBT	£110,500
Total	£216,500

89. When added to £420,000, the illustrative cash amount receivable by W on the equalisation of the real property assets, W's available cash will be £636,500, from which fall to be deducted £363,000 in respect of monies due to repay loans from the bank and Mr H, and to pay the outstanding balance of her legal fees. On this basis she would emerge with her house worth £615,000 on notional sale, and £273,500 available for investment: a total of £888,500. For the reasons given, I have deliberately not taken into account the hire purchase loan in relation to the Porsche.
90. On his side, H would have available assets (to include whichever home he chooses to stay in or to acquire) totalling £1,138,750. I calculate this thus:

His illustrative share from real property	£1,034,750
Re 2001 EBT	£18,000
Loyalty bonus balance	£86,000
Total	£1,138,750

91. From this H will need to make payment to W of £216,500, and pay the £25,000 balance of his costs: a total of £241,500, leaving him with £897,250.
92. Of course I do not ignore that he is likely at some stage to receive £221,000 net from the 2003 EBT, and whatever in 2023 his IPP will be worth. He will however (unless circumstances change) have a continuing liability for periodical payments to W. For I do not consider it appropriate to bring H's financial obligations to W to an end at this stage as at this stage this is not a case for a clean break. Nor will W be able to adjust without undue hardship to the termination of her financial dependence on H within a foreseeably definable term.
93. The outcome to the case suggested by H was that W should retain the Dublin house, and that he should keep the rest and in addition pay her £300,000 (an increase from the £200,000 suggested in his opening document) for a clean break. Mr Pointer conceded the sharing of the conventional UK pensions, and realistically appreciated that having regard to B's age and W's income prospects (whatever they might be) a nominal order for spousal maintenance would most likely be made. But this proposal is unrealistic.
94. For W Mr Dyer suggested that W should retain her Dublin home and receive a lump sum (as best I can calculate it) of about £1 million, and the UK pension policy. In addition he asked for a spousal maintenance order of £150,000 p.a. which would be subject to Irish income tax in W's hands and would produce the equivalent (at then current exchange rates) of just short of £90,000 net.

Maintenance provision

95. So far as child maintenance is concerned, the parents were agreed that H would contribute to B's living expenses at the rate of £15,000 p.a. She did not as yet attend a fee-paying school, but I believe in principle that it was common ground that if the school is in due course agreed then H would pay the fees. There remained an issue as to whether or not these child periodical payments should be index-linked. In my view it would assist these parties if their prospects of returning to court could as far as reasonable be reduced by an arrangement such as that.
96. W will be able to achieve an income return on the (approximately) £275,000 of capital which she should retain after meeting the debts to which I have referred. In attempting to assess the income return she may realistically achieve I must ignore the turmoil in the financial world since last summer which has brought most investment returns crashing down. I shall adopt a Duxbury amortisation approach as a guide to the return she might theoretically achieve. According to the computer program Capitalise (2008 edition) W might with £275,000 achieve a net return (based on a UK tax environment) in year one of £13,000, and I shall adopt that figure as the (inevitably imprecise) contribution towards her budget which she will make from investment income.
97. In August 2006 each party estimated their annual expenditure requirement. W put hers at £104,400, H his at £273,000 rising to £375,000. I accept that H's income only really took off from about 2003, but do not feel that either budget represented a helpful or accurate picture as at January 2008. Neither party put in any revision although H had pruned W's down to £62,000, possibly over-vigorously in some areas.
98. But as in so many cases the budgets presented and their rebuttal may be little guide to what is reasonable. Needs are not the only or the strict test. H is to be treated as having earned average bonuses for the calendar years 2006 and 2007 of £475,000, bringing the gross income which I shall attribute to him for current purposes as £725,000 p.a. Applying a broad tax deduction of 40% reduces this to an approximate net spendable income of £435,000.
99. In my view, ongoing maintenance (subject to variation, of course) for W at the rate of £125,000 and to B at the agreed rate of £15,000 is appropriate. W's maintenance will net down to £76,200 at the January 2008 Irish tax and euro exchange rates then prevailing, to augment which she will have £28,000 from B's untaxed maintenance and from her own investment income. A spendable income for the household of about £100,000 seems to me to be fair, and affordable for H who on the basis of his previous two years' average remuneration will be left with £295,000 for himself (subject to any maintenance adjustment for currency movements).
100. But should sterling be the currency of account, given that W must meet her and B's needs in euros? At 1 February 2008 exchange rates, £125,000 would have produced €166,767 gross and €101,655 net in W's hands from her own maintenance, and £15,000 to B would have produced €20,000. But the rate is subject to fluctuation and indeed the euro has strengthened significantly against sterling in the interim. To take what one hopes will prove to have been the worst case, the euro at parity with sterling, then W's maintenance from H would need to rise to an annual rate of £166,767 to produce the same net euro amount from W's periodical payments, and from £15,000 to £20,000 to do the same for B. That would impose on H (were that to be the rate for a full year) an extra liability of £46,767. His spendable income after making those payments would be reduced to about £248,000.
101. The spendable income disparity in his favour, even on the sterling-euro parity scenario, to my mind adequately reflects and rewards the fact that his income is hard-earned, and takes account of all the other factors in the case.

In conclusion

102. The parties will need some further time to consider how to implement the structure and outcome set out in this judgment. My own estimate is that a full day should be listed for this, but it may emerge that longer will be required. I do not intend that time for any appeal should start to run until I have heard the parties and adjudged on outstanding issues including the form of the order and costs.
103. Since this judgment was circulated in draft I have been informed that:

• H will from the date when this judgment is handed down commence interim payments of maintenance for W and B, in sterling, at the rates I have ordered. This however is subject to argument as to the extent to which, if at all, payment at those rates should be back-dated. His payments are also made and accepted on the basis that the issue of the currency of account for maintenance will be argued and decided at the next hearing.

• W has received advice that she has an Irish income tax liability on court-ordered maintenance paid before decree absolute. It may be proper to mitigate the effect of that liability (which would otherwise arise on maintenance paid at £90,000 p.a. from December 2006 to January 2008) by retrospective apportionment of that sum between W and B as (I doubt not) would have been done without any demur if at that time it had been appreciated that B's maintenance would not be liable to income tax. I anticipate accountancy evidence to establish the amount of W's liability, on each scenario. W will seek an adjustment to the lump sum order to reflect this overlooked liability. H does not agree that he should meet it.

• The quantum of the payment H should make to W to equalise the property portfolio is being reconsidered in the light of more up-to-date valuations, which may or may not be agreed.

• Other issues may well emerge for decision, in addition to what I anticipate will be a keen costs argument.