England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/10/2011

Mr Justice Mostyn:

1. In this case I have to consider the treatment to be accorded to a lottery prize of £500,000 in financial remedy proceedings following divorce. There have been at least five reported decisions on the subject in Australia, but the statute there is different to ours, both in its framing and in its judicial interpretation, although there are obvious similarities. To my knowledge there has been no reported decision on the subject here. In Cowan v Cowan [2001] 2 FCR 331, CA Mance LJ (as he then was) stated at para 160:

There are many perplexing situations that may one day require examination. What, for example, of the individual spouse who each week invests a small part of his or her spare cash in the National Lottery, and one day wins £1m, or £10m? Should this asset be viewed like any sudden accretion to the value of the joint home or other matrimonial investment, due to market movements? Or might it, in some circumstances at least, be more analogous to property brought into a marriage or inherited property? Would it for example make any difference, if the other spouse was opposed to all gaming as a waste of money, or if the very limited money expended came from inherited property? There appears to have been a quite extensive jurisprudence in this area in Australia, including Zyk v Zyk (1995) FLC 92-644, 19 Fam LR 797 (referred to in Lynch v Lynch (26 October 2000, unreported) (Full Court of the Family Court of Australia), cited to us). In the circumstances there, a husband's lottery win was equated with a contribution by the husband to the joint assets, and the final award, based on the spouses' respective contributions, was tailored accordingly. I mention Zyk's case not to suggest that the same approach to or use of contributions would necessarily apply under the English statute—but simply to illustrate some of the problems and considerations that may one day need to be addressed in this jurisdiction.

2. It falls to me to resolve, or least to seek to elucidate, the perplexing situation that Mance LJ identified.
3. My task has not been made any easier by the fact that neither party is professionally represented. When I walked into Court on Monday 10 October 2011 I had only been given three documents relating to the case namely a letter dated 19 September 2011 from the Applicant's former solicitors explaining that they were no longer instructed; a Notice of Acting in Person; and a copy email from the Royal Mail purporting to show that the 2^nd Respondent had been personally served with a freezing injunction. Beyond that I knew absolutely nothing about the case. I encountered the Applicant Husband (H) and the Respondent Wife (W) each accompanied by a McKenzie friend, Mr Ison in the case of the former and Mr Caceres in the case of the latter. I allowed Mr Ison to explain the background briefly. He had some bundles which had been professionally prepared for a hearing in July 2011. He explained that the parties were both Columbian and that while his client's command of English was limited that of W was non-existent. Mr Caceres explained that his would be a dual role of McKenzie friend and translator. It was agreed that the bundles would be copied and that each of Mr Ison and Mr Caceres would prepare a short statement of issues and orders sought. On that basis the matter was adjourned until the following day.
4. On Tuesday 11 October 2011, of my own motion, I granted each of Mr Ison and Mr Caceres rights of audience pursuant to ss12-19 of and Schedule 3 to the Legal Services Act 2007. I am fully aware that special circumstances are needed to justify such an order: see paras 18 – 26 of the Practice Guidance: McKenzie Friends (Civil and Family Courts) [2010] 2 FLR 962. However, I was convinced that the case would soon develop anarchic aspects were I not to make such an order. The prospect of each of H and W cross-examining the other with translation at each end by Mr Caceres was an alarming vision indeed. In the event both Mr Ison and Mr Caceres conducted themselves impeccably and performed very creditably. Their cross-examinations were performed with moderation and civility and were, up to a point, effective, although neither, of course, was steeped in the intricacies of the applicable law. Equally their submissions were perhaps less acutely focussed than would have been the case had counsel been instructed. That said they enabled the case to proceed in an economical and efficient way and I am grateful for their assistance.
5. In two of the Australian cases it was emphasised that treatment of a lottery prize is highly fact specific (Anastasio (1981) FLC 91-093 per Baker J and Holmes (1990) FLC 92-181 per Cohen J). This is obviously true but there must be some general principles capable of being stated in relation to the phenomenon.
6. Our law draws a sharp distinction between matrimonial and non-matrimonial property. This distinction finds its origin in White v White [2001] 1 AC 596 and received its clear expression in Miller and McFarlane [2006] 2 AC 618. There has been a deal of high appellate authority on the subject which I attempted to summarise in my decision of N v F [2011] 2 FLR 533 at paras 6 – 19. Since that decision the Court of Appeal has delivered its judgments in K v L [2011] 2 FCR 597. I can do no better than to cite from the characteristically clear and concise judgment of Wilson LJ (as he then was) :

16. Mr Pointer's second charge, made by reference to the 21 years of the marriage, is that the judge failed to recognise "that the importance of the source of the assets will diminish over time". Such is a quotation from the speech of Baroness Hale in Miller v. Miller, McFarlane v. McFarlane [2006] UKHL 24, [2006] 2 AC 618, at [148]. As authority for that proposition she referred to the passage in the speech of Lord Nicholls in White, cited above, at 611B, where he said:

"The initial cash contribution made by Mr White's father in the early days cannot carry much weight 33 years later."

Lord Nicholls was there referring to an interest-free loan of £11,000, made to the parties in 1963 and later released, which had enabled them to purchase the farm upon which, until 1994, they had both worked and which, by the time of the trial in 1996, was worth £3.5m. Thus, on the facts in White, the importance of the source of the contribution of £11,000 diminished over time. The question is whether such justified the absolute terms of Baroness Hale's proposition.

17. The answer to the question, or at any rate Lord Nicholls' answer to the question, is made clear in his speech in Miller/McFarlane, cited above, at [25] as follows:

"Non-matrimonial property represents a contribution made to the marriage by one of the parties. Sometimes, as the years pass, the weight fairly to be attributed to this contribution will diminish, sometimes it will not. After many years of marriage the continuing weight to be attributed to modest savings introduced by one party at the outset of the marriage may well be different from the weight attributable to a valuable heirloom intended to be retained in specie."

18. Thus, with respect to Baroness Hale, I believe that the true proposition is that the importance of the source of the assets may diminish over time. Three situations come to mind:

(a) Over time matrimonial property of such value has been acquired as to diminish the significance of the initial contribution by one spouse of non-matrimonial property.

(b) Over time the non-matrimonial property initially contributed has been mixed with matrimonial property in circumstances in which the contributor may be said to have accepted that it should be treated as matrimonial property or in which, at any rate, the task of identifying its current value is too difficult.

(c) The contributor of non-matrimonial property has chosen to invest it in the purchase of a matrimonial home which, although vested in his or her sole name, has – as in most cases one would expect – come over time to be treated by the parties as a central item of matrimonial property.

The situations described in (a) and (b) above were both present in White. By contrast, there is nothing in the facts of the present case which logically justifies a conclusion that, as the long marriage proceeded, there was a diminution in the importance of the source of the parties' entire wealth, at all times ring-fenced by share certificates in the wife's sole name which to a large extent were just kept safely and left to reproduce themselves and to grow in value.

19. Mr Pointer's third charge is that the judge failed to follow the guidance given by this court in Charman cited above. The judge (so runs the argument) in effect found that the wife had made a special contribution to the welfare of the family. Thus he should have had regard to the guidance in Charman, at [90], that fair allowance for special contribution within the sharing principle would be most unlikely to give rise to departure from equality further than to 66.6% - 33.3%. One third of £57m is £19m so (suggests Mr Pointer) the husband's claim to £18m is well-pitched.

20. But the phrase "a special contribution" is now a term of art in the law of ancillary relief which is used to describe a contribution entirely different from that of non-matrimonial property. As this court said in Charman, at [80]:

"The notion of a special contribution to the welfare of the family will not successfully have been purged of inherent gender discrimination unless it is accepted that such a contribution can, in principle, take a number of forms; that it can be non-financial as well as financial; and that it can thus be made by a party whose role has been exclusively that of a home-maker. Nevertheless in practice … the claim to have made a special contribution seems so far to have arisen only in cases of substantial wealth generated by a party's success in business during the marriage."

21. Thus a special contribution arises in circumstances in which a spouse's contribution, direct or indirect, to the creation of matrimonial property has been so extraordinary as to dictate a departure within the sharing principle from the ordinary consequence of its equal division. It is therefore no accident that this court's reference, at [90], to the unlikelihood of departure from equality further than to 66.6% - 33.3% was of "division of matrimonial property". By contrast, although non-matrimonial property also falls within the sharing principle, equal division is not the ordinary consequence of its application. The consequences of the application to non-matrimonial property of the two other principles of need and of compensation are likely to be very different; but the ordinary consequence of the application to it of the sharing principle is extensive departure from equal division, often (so it would appear) to 100% - 0%. Although Mr Pointer recognises the difference between the "special contribution" which this court addressed in Charman and the contribution of non-matrimonial property exemplified by the present case (who could be more cognisant of it than he?), his attempt to represent the difference as immaterial is entirely unconvincing.

22. Mr Pointer's final charge is that, in relation to the awards in eleven other reported decisions "involving" non-matrimonial property and beginning with White in 2000, the judge's award to the husband of only 9.3% of the parties' assets (£5.3m out of £57m) is appealably disproportionate. Mr Pointer collects the principal figures referable to the other decisions into a schedule. As by his presentation he intended, a first glance at the schedule identifies three awards of as much as 40%. But brief enquiry into the facts of those cases – White itself, GW v. RW (Financial Provision: Departure from Equality [2003] 2 FLR 108 and C v. C [2007] EWHC 2033 (Fam), [2009] 1 FLR 8 – reveals that in each there was a substantial element of matrimonial as well as non-matrimonial property. To be fair, a further perusal of the schedule does identify at any rate one case in which the award was made solely out of non-matrimonial property. It was the decision of Baron J in NA v. MA [2006] EWHC 2900 (Fam), [2007] 1 FLR 1760 and it is, as Mr Pointer stresses, an example of an award of 23%. But, in that the respondent's assets there had a value of £40m, rather than, as here, of £57m, and in that the applicant's needs were there estimated at £9.2m rather than, as here, at (say) £5.3m, the amount of the award to the applicant, which was no more and no less than the estimated amount of her needs, was bound to bear a much higher ratio to the value of the assets than in the present case. That it there amounted to 23% demonstrates nothing. What was much more interesting was the moment during the hearing when we asked Mr Pointer to show us a reported decision in which the assets were entirely non-matrimonial and in which, by reference to the sharing principle, the applicant secured an award in excess of her or his needs. He confessed to be unable to do so. Such a decision will no doubt be made – but not in this court today.

Therefore, the law is now reasonably clear. In the application of the sharing principle (as opposed to the needs principle) matrimonial property will normally be divided equally (see para 14(iii) of my judgment in N v F). By contrast, it will be a rare case where the sharing participle will lead to any distribution to the claimant of non-matrimonial property. Of course an award from non-matrimonial property to meet needs is a common place, but as Wilson LJ has pointed out we await the first decision where the sharing principle has led to an award from non-matrimonial property in excess of needs.

While matrimonial property will normally be divided equally, this is not an invariable rule. The reason for this is that sometimes the matrimonial property in question will not be the product of the endeavours of the parties within the social-economic partnership that is marriage (as Guest J described it in the Australian case of Farmer and Bramley [2000] FamCA 1615 at para 188). Sometimes one party brings assets in which become "part of the economic life of [the] marriage…utilised, converted, sustained and enjoyed during the contribution period" (ibid at para 190). This is the concept of mingling referred to by me in N v F at para 9 (where I cited the remarks of Lord Nicholls in Miller & McFarlane at paras 24 – 25 and of Baroness Hale at para 148), and by Wilson LJ in K v L at para 18(b). But even if there has been much mingling the original non-matrimonial source of the money often demands reflection in the award. Thus in S v S [2007] 1 FLR 1496 Burton J divided the matrimonial property 60/40 to reflect this factor.

In Miller & McFarlane Lord Nicholls specified that the matrimonial home should always be designated matrimonial property, whatever its source. He stated at para 22 that "the parties' matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. So it should normally be treated as matrimonial property for this purpose." This is reflected in the remarks of Wilson LJ in K v L at para 18(c). But even the matrimonial home is not necessarily divided equally under the sharing principle; an unequal division may be justified if unequal contributions to its acquisition can be demonstrated. In Vaughan v Vaughan [2008] 1 FLR 1108 Wilson LJ stated at para 49:

Such would be the award notwithstanding that the home had been owned by the husband, free of mortgage, since well before the marriage and that, putting to one side his misconduct in dissipating assets following the breakdown of the marriage (the effect of which is intended to be rectified by the calculation), the contributions of each party to the welfare of the family during the marriage were in effect agreed to have been equal in value albeit not in kind. Although, in the words of Baroness Hale in Miller v. Miller, McFarlane v. McFarlane [2006] UKHL 24, [2006] 2 AC 618 at 663E, "the importance of the source of the assets will diminish over time", I consider that the husband's prior ownership of the home carried somewhat greater significance than either the district or circuit judge appears to have ascribed to it.

These principles lead me to try to address the questions posed by Mance LJ. Is a lottery prize to be characterised as matrimonial or non-matrimonial property? Of course, it all depends, but I believe that certain obvious points can be made.

One point of view is that the prize is a windfall. The price of the ticket, £1 or £2, is so inconsequential as can be safely disregarded. Arguments that the £1 or £2 derives from the joint matrimonial economy are, it can be said, pure sophistry. The money could just as easily have been found on the pavement. Thus in Holmes (1990) FLC 92-181 Cohen J stated:

Yet, ignoring any contribution to the price of the winning ticket, this part of the winnings was brought into the pool of family assets by the wife, and no contribution to it was made by the husband

Similar logic, but leading to an opposite result, was deployed by Mullane J in McTaggart (1988) FLC 91-920:

My view is that these arguments are misconceived. The $500,000 was a windfall. It is nothing more. It was not the fruit of some labour or skill of the husband. It was not a contribution by him to the matrimonial property. The courts have declined to recognise windfalls during the marriage as contributions by one of the parties. … I do not accept that the lottery winnings should be treated as a contribution by either party. I do not accept that they should be treated differently to any other matrimonial property acquired by the parties during the marriage.

Thus, the prize there was treated as a windfall enuring to the benefit of both parties.

It may be argued that the view Cohen J is concordant with the view of Lord Nicholls in White concerning inherited property. Why should a lottery prize received during the marriage be regarded as any less non-matrimonial as an unexpected inheritance received by one party from an eccentric uncle? Even if the inheritance were expected it would still be characterised as non-matrimonial, and that would be the case even if the parties had planned their whole marital economy on its anticipated receipt.

The contrary view is that the prize is a product of a joint endeavour and a function of the partnership economy. This was the clear view of the Full Court in Zyk  [1995] FamCA 135 (Nicholson CJ, Fogarty and Baker JJ), where it was stated:

49. In common parlance a windfall is used to describe a chance or unexpected benefit which the people involved neither anticipated nor made any effort towards. The receipt of a substantial lottery prize may in general be referred to in that way. However, we doubt whether, for the purposes of the exercise under s.79, that is the correct analysis. The parties purchase a ticket and expend part of their earnings or capital for the express purpose of winning the prize or a prize. Whilst the chances of winning the major prize are remote, the reality is that somebody does and it is the expectation, or at least hope, of each entrant that he or she may be that person. It is not the product of any particular skill but it is the product of the chosen expenditure of a small sum of money. Contributions is, we think, the preferable description within s.79 because an acquisition of a prize contributes to the property of the parties. If it or part of it still remains in existence at the time of the trial or is represented by other then existing assets that will constitute part of the property to which s.79 will apply. If it has been disposed of in the meantime in other ways that may or may not have been a contribution to property or the family depending on the circumstances. The use of the term "windfall" creates conceptual difficulties within s.79 and can lead to inconsistent outcomes (see later). The approach of treating it as a contribution is consistent with the treatment of gifts from family as a contribution by or on behalf of that party: see Kessey (1994) FLC 92-495.

50. In our view, the critical question in such cases is - by whom is that contribution made? In the ordinary run of marriages a ticket is purchased by one or other of the parties from money which he or she happens to have at that particular time. That fact should not determine the issue. Where both parties are in receipt of income and where their marriage is predicated upon the basis of each contributing their income towards the joint partnership constituted by their marriage, the purchase of the ticket would be regarded as a purchase from joint funds in the same way as any other purchase within that context and would be treated accordingly: see Anastasio. Where one party is working and the other is not the same conclusion would ordinarily apply because that is the mode of partnership selected by the parties. The income of the working member is treated as joint in the same way as the domestic activities of the non-working partner are regarded as being for their joint benefit. In the essential sense this analysis is similar to that provided by the Full Court in Hauff [1986] FamCA 16; (1986) FLC 91-747 in discussing the rationale for treating superannuation benefits of one party, including contributions by the employer, as the product of joint contributions.

51. In the sort of case to which we have referred above the conclusion would be that the ticket was purchased by joint funds and the contribution of the prize would be seen as a contribution by the parties equally. There may be cases where the parties have so conducted their affairs and/or so expressed their intentions that this would not be the appropriate conclusion, but in the generality of cases with which this Court would normally deal this appears to us to be the correct approach and the correct outcome.

52. In some cases a distinction has been sought to be drawn because the ticket is purchased by one party to the marriage in a syndicate with third persons. Whilst there may be some superficial attractions in this, we do not think that it is correct. The only relevant point of distinction is that the party to the marriage purchases not the whole ticket but a share in a ticket (or group of tickets) with other persons. That share would ordinarily be treated as coming from joint funds with his or her married partner, and any resultant prize would be a joint contribution by them to the property of their marriage. Similarly, a distinction is sometimes sought to be drawn in cases where the purchase is the continuance of a pre-marriage practice by one party. However, in ordinary circumstances the above approach would apply, because from marriage the purchase would usually be treated as coming from their joint incomes.

In my judgment, Mance LJ was right to warn against an uncritical acceptance of the Australian approach, which focuses on an analysis of contributions and where the concept of equal sharing is generally eschewed. As I have stated, the result is highly fact specific, and does not depend centrally on the origin of the trifling amount to purchase the ticket. If the parties are in effect operating a syndicate, whether formal or informal, where both are aware that tickets are being bought and where both have agreed tacitly or expressly to their purchase, then it is easy to see the prize as a joint venture and therefore as matrimonial property, normally to be equally shared. On the other hand if one party is unilaterally buying tickets, from his or her own earned income, without the knowledge of the other party, then it is equally easy to see the prize as a receipt by that party alone akin to an external donation, and therefore as non-matrimonial property. This case will be fortified if the party in question is buying the ticket as part of a syndicate with others, and more so if the marriage has become troubled and unhappy with the parties drifting into separate lives socially and economically (as I will find to be the case here).

The Australian case of Farmer and Bramley concerned a prize won by the husband well after separation, indeed after the wife had remarried. Here I believe it to be unanswerable that such a prize in such a case would be classed as non-matrimonial property, but in Australia its characterisation gave rise to much debate in the Full Court and a division between its members. I will find in this case that the prize was received during the marriage and not, as contended for by W, after a de facto separation. I do not therefore need to dwell on the reasoning save to remark on the exceptional clarity and intellectual acuity of the judgment of Guest J which contains many valuable insights into the treatment of the thorny issue of post-separation accrual.

With these preliminary observations I now turn to the facts of this case as I find them to be.

I heard oral testimony from H and W, and from their adult children J and M. I am satisfied that neither H, W nor M gave me wholly truthful evidence. W and M played up the difficulties that beset this marriage; H played those troubles down. Moreover neither W nor M gave me truthful evidence about the receipt of the lottery prize. W has gone out of her way to obscure both the receipt and the use of the lottery prize money in order to try to defeat or limit the claim of H.

The basic facts are these:

i) H and W are both Colombian. W is 51; H celebrated his 55^th birthday while he was giving evidence to me on Tuesday 11 October 2011. They were married in Cali, Colombia on 27 July 1984. There is no evidence before me as to the nature of the marital property régime under which they married.

ii) On 22 December 1986 J was born; he is aged 25. On 23 March 1988 M was born; she is 23.

iii) In about 1991 H came to this country to try to better the family's fortunes. He found a job in a Spanish restaurant. He was joined by W and the children 4 months later.

iv) Thereafter both H and W worked; H as a janitor/caretaker W as a chambermaid/housekeeper. At some point the family obtained council accommodation in a three bedroom flat in Clapham Park. They were living there in 2000.

v) On 30 December 1999 W and her friend MEM entered into a written syndicate agreement for the National Lottery Big Draw 2000. It was stated by Mr Ison that the ticket cost £2; this was not disputed by Mr Caceres. The ticket won £1m. A cheque was issued on 7 January 2000 payable to MEM and when cleared was, according to a document from RBS, "paid into accounts opened in the name of 2 syndicate members". On 10 January 2000 £500,000 was paid into an account in the name of W with RBS No. 00771586.

vi) In May 2000 W purchased in her sole name 108 A Road, London SW12 for £275,000. She says that she expended £25,000 on purchase costs and £90,000 on a complete renovation of the property. None of these figures has been corroborated by documents. After the building works were completed the family moved from Clapham Park to 108 A Road.

vii) On 1 January 2004 H was removed from 108 A Road by the police in the context of an episode of serious domestic violence. The parties have been fully separated from that date.

viii) On 20 October 2005 H registered a Notice of Matrimonial Home Rights against the property.

ix) On 7 August 2006 W mortgaged the property for £300,000; £299,503.50 was paid into her Lloyds account No. 17165960 on 19 September 2006. On 25 May 2007 she wrote a cheque (No. 000008) for £100,000; on 28 June 2007 she wrote a cheque (No. 000009) for £200,000. Her evidence as to the identity of the payees was garbled but I am satisfied that in each instance it was MR, the Second Respondent.

x) On 8 August 2006 H issued divorce proceedings here. W countered this by issuing on 14 September 2006 divorce proceedings in Cali, Colombia. Plainly she did so in the misplaced belief that she would thereby avoid any claim by H against her.

xi) On 15 May 2007 Decree Nisi was pronounced here by District Judge Million. However, on 16 August 2007 the Tribunal Superior Del Distrito Judicial de Cali, Sala de Familia, heard W's divorce action. The three judges heard oral evidence from H's sister, a friend of W, and W's mother and found, based on that evidence that H and W had not been living together "for about the last four years" and decreed a divorce and that "the matrimonial partnership formed by the spouses is declared dissolved and in liquidation. Ordered to proceed to liquidation by means authorised in Law". I have no evidence as to the economic ramifications of that order. The effect of this divorce, provided it was entitled to recognition here, was to overreach the Decree Nisi and to nullify H's English divorce proceedings.

xii) There was then a delay of nearly three years, for which I was given no explanation. On 9 April 2010 H applied under s12 and 13 MFPA 1984 for leave to apply for financial relief following an overseas divorce. In seeming response to this W paid from her RBS account No. 00771535 to MR £170,508.06 and on 6 May 2010 £80,260.83. Whether this is in whole or part the same money as that referred to in para ix) above is wholly obscure.

xiii) On 11 June 2010 Eleanor King J granted leave under s13 MFPA 1984 and dismissed the divorce proceedings. She gave case managements directions. Further case management directions and disclosure orders were given by the court on 11 August 2010, 3 November 2010, 24 November 2010, 17 December 2010, 31 January 2011, 17 March 2011 (when the final hearing before me was fixed), 15 April 2011, and 4 July 2011. On the last occasion Sir Peter Singer joined MR as 2^nd Respondent and made a freezing order against her in respect of the funds (or their proceeds) transferred to her (see para xii) above). He ordered her to file a statement detailing the use of those funds. Although there is evidence that she was served by post the 2^nd Respondent has not made the statement that was ordered, nor has she attended before me.

xiv) On a date unknown to me W was remarried to AP.

The following key issues of fact are live between the parties:

i) Whether the parties were de facto separated, albeit under the same roof, in the Santos v Santos [1972] Fam 247 sense from 1996, as W contends.

ii) Whether W in fact won £500,000 on the lottery, or whether her seeming participation was just a charade sought by MEM, as W contends.

It is clear to me that this marriage was bitterly unhappy from around the mid-1990s if not earlier. Although H sought to downplay it it is clear that from that time he had a serious alcohol problem, although he was at all times a functional alcoholic able to hold down a job. On 18 June 2010 the GP of H and W Dr S wrote "I can confirm that Mrs P and her ex-husband Mr S, who was a patient had both registered at my surgery in 1993. Mr S suffered with a history of alcoholism and Mrs P, then S, would accompany him to the surgery on his Doctor's appointments". H's alcoholism led to frequent bouts of abuse, and things became a deal worse after the lottery win. H frankly said that the win destroyed them.

It has been famously observed that every unhappy family is unhappy in its own way. It is therefore invidious to pick over the bones of this failed union. Both parties raise conduct against the other and I will deal with that later. Suffice to say that I am satisfied that W's case that the parties were de facto separated from 1996 is false. Specifically:

i) I reject W's evidence (and M's evidence also) that from 1996 she permanently slept apart from H in M's bedroom. Equally, I reject H's evidence that W never moved out of the bedroom and that normal marital relations were at all times maintained. Rather, I accept the evidence of J that for about two months when in Clapham Park and for a similar period when in 108 A Road W went to sleep in M's bedroom, but otherwise she and H shared a room.

ii) The parties continued to operate a joint economy with H paying the rent, the car expenses and most of the bills from his earnings, and W paying for the food and the children's clothes and other expenses from her earnings.

iii) The parties went on at least two holidays together to Barcelona and to Colombia after 1996.

iv) After the purchase of 108 A Road in 2000 the whole family moved there. W agreed to H joining them as "he was my husband", as she put it.

v) The evidence of H's sister, W's friend (MF), and W's mother to the Cali court was unanimous that the parties did not separate until 2003.

vi) I accept the evidence of W and both children that living with H was very difficult. He was both abusive and mean. Equally I accept the evidence of H that W was overbearing and tyrannical. It was a truly toxic admixture. There was not much in the way of true spousal society between H and W for many years. But they were not separated.

It is an agreed fact that H was wholly ignorant of W's participation in the lottery. It is also agreed that her contribution to the winning ticket came from her earnings.

W's case that she did not actually win £500,000 is impossible to credit. Her case as set out in her principal affidavit is as follows:

I did not tell the Petitioner exactly how I received the funds to purchase 108 A Road.

He was however aware at all times that I had received money from a friend to enable me to purchase it for myself.

I did not win and nor have I ever won the National Lottery.

It was my close friend MEM who won the National Lottery on the 31/12/1999.

MEM [also from Colombia] did not wish to disclose the winning or her identity to anyone including her own extended family and friends. In fact this was the advice given to her by the National Lottery. MEM enlisted me as a close friend to assist her in sharing her winnings. She was aware of my disastrous marriage and the abuse the children and I were experiencing. She offered to loan me the money to enable me to buy my own home.

In fact her help was on the condition that I purchased the home in my sole name.

I received the sum of £415,000 from MEM

There are legion problems with this story:

i) If MEM wished to obscure her win why would she agree to present herself to the world as a joint winner with W?

ii) W admitted signing the syndicate agreement with MEM dated 30 December 1999.

iii) RBS acknowledged that the win was by two syndicate members.

iv) RBS opened an account in W's name and paid into it £500,000.

v) W used that money as her own.

vi) MEM in a letter dated 9 March 2011 to H's then solicitor specifically confirmed that W was a co-winner. That account was not challenged by W. She did not call for MEM to attend to be cross-examined.

vii) In her affidavit M stated "Since my mother won the lottery in 2000, my father started to drink even more". In her oral evidence she rowed back hard from this saying that this was just an assumption, that she had never been told this and that indeed the word "lottery" never was used in the family language. I do not believe any of this. It is clear that M was put up to changing her story by W.

viii) In his evidence J confirmed that W had won the lottery.

I therefore find that W did indeed win £500,000 on the lottery which she received on 7 January 2000.

I now turn to the present financial circumstances of the parties.

W lives in 108 A Road with her husband Mr P and J and M. W works as a housekeeper for C W Lamley & Co who provide serviced apartments in Earls Court. She earns net £1,182 per month. Her husband works as a buildings maintenance supervisor earning about £1,070 per month net. J works as a sales assistant and contributes £200 per month to his bed and board. M works as a receptionist in a school and also contributes £200 per month. The household income is thus £2,652 per month. W puts the family budget at £3,655 per month but this includes £700 for legal costs and £577 on the mortgage which presently stands at £304,000. As I will explain, even after meeting H's claim, W will have no need of a mortgage of this level. I am satisfied that on a bona fide basis the household income is sufficient to meet the necessary expenditure.

Mr Ison suggested that W's present capital comprised the equity in 108 A Road and the monies held by the 2^nd Respondent. W asserted that the money paid to MR was in discharge of debts owed to her. I reject that argument entirely. In my judgment the funds were sent to her to avoid H's claims. Therefore on the basis argued for by Mr Ison W's capital is as follows:

A Road (per Savills valuation)	495,000
less costs of sale	(14,850)
less mortgage	(305,000)
Monies transferred to MR	250,768
	425,918

In addition, W owns a property in Cali, Colombia. Initially H provided a modest deposit in 1994 and his sister raised a mortgage to buy it. In 2003 W says that she paid off the mortgage in the sum of £15,000. However, W now says that the property is worth 20m pesos or £6,700. H accepts that W is solely beneficially entitled to this property and my order will record that admission by him.

Even after meeting H's claim W will have a sufficient capital base to provide both her accommodation and revenue needs in old age. I am assuming that both W and her husband will receive full state pensions on retirement.

H's position is that he works as a porter for a hotel in St John's Wood earning £1,217 per month net. He lives in a rented one bedroom flat provided by a Housing Association in South Norwood. His rent is £83 per week. His overall expenses, including rent, are £937 per month or £11,250 per annum. This represents a very modest lifestyle. Mr Ison has established that receipt of a lump sum would not imperil his tenancy.

In my judgment H's present income and housing needs are met. However, H has an urgent need to make provision for his old age. I assume that H will retire at age 65 and will receive a full state pension.

A Duxbury calculation on £11,250 per annum for a 65 year old gives a capital requirement of £82,080 when allowance is made for a full state pension. Of course I recognise that H is 10 years off retirement and that he will invest his lump sum and achieve growth. But meantime inflation will take its effect. If I assume an inflation rate of 3% H will need to have £15,119 per annum to have the same standard of living as he has now. I think it is reasonable to assume that net investment growth will exactly balance the effect of inflation over the next decade.

I now state my conclusions. The first port of call is to apply the needs principle. This was a long marriage and both parties have needs, particularly to provide for themselves in old age. I judge that H has a need for a lump sum to be paid now of £82,000. On that basis W would be left with a capital base of just over £350,000 (£425,918 + £6,700 (Cali) – £82,000 = £350,618). By downsizing her home at the point of retirement W and her new husband will have ample funds to provide for their old age.

I now turn to the application of the sharing principle. I judge the initial receipt of the lottery prize to be non-matrimonial property. This is a case that clearly falls into the second scenario described by me at para 15 above. However, when W purchased 108 A Road she converted that part of her non-matrimonial assets into matrimonial property.

Given that the source of this matrimonial property was not joint endeavour but rather non-matrimonial property of W's, and given the relatively short period that H actually lived in 108 A Road, I do not believe that H is entitled to an equal sharing of it, or anything like it. I judge that a sharing of 15% - 20% would be fair. The value of the property after costs of sale (but ignoring the mortgage) is £480,150. My assessment of the application of the sharing principle gives a range of award to H of £72,000 - £96,000.

Standing back and weighing together the application of both the sharing and needs principles I conclude that a lump sum award of £85,000 is the right result. It will be paid in 28 days and will be on the clean break basis.

The compensation principle is not applicable in this case.

On payment of the lump sum W will be able to reduce her mortgage to just over £139,000 (£305,000 (present mortgage) + £85,000 (lump sum) – £250,768 (held by MR) = £139,332). This will be affordable from her overall household income.

Although I have not mechanically recited the provisions of s25 MCA 1973 (applied by s18(3) MFPA 1984) I confirm that I have taken them all into account and they are fully reflected in what I have already written.

Both parties have raised conduct. It is a common feature of many financial remedy cases where parties represent themselves. Although both parties behaved poorly towards each other, H perhaps worse than W, the very high threshold mandated by the authorities (Miller and McFarlane, S v S, McCartney v Mills-McCartney [2008] 1 FLR 1508) for conduct to be capable of being reckoned is not crossed. In the latter case Bennett J stated at para 287:

[The] authorities undoubtedly show that the conduct must be truly exceptional before it passes the statutory criteria.

I am required by s16 MFPA 1984 to have regard to the matters recited therein before making any order. I confirm that I have done so. None of the matters mentioned has any bearing on my award. The parties' connection with Colombia is now purely historical. While there was a delay of a little under three years following the Cali divorce before this application was made, that is not of such a length as to affect my decision.