England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		5 April 2011

1.  MR JUSTICE COLERIDGE:  Mr R, the husband, and Mrs R, the wife, married in August 2002.  It was the third marriage for both of them.  The husband was then 48 and the wife 35, so there was quite an age gap.  The wife was not in employment and already had a daughter, who was then four, from her first marriage.  The parties went on to have a child of their own, G, in January 2003, four months after their marriage.
2.  At the time of the marriage, the husband was already a successful and established chartered surveyor and a long-established equity partner in a well-known firm.  He is now the managing partner of that firm.  He also owned a nice home in Hertfordshire, worth about £800,000, and other properties including a holiday home in Spain, and he says he had other savings.  He was also a high earner.
3.  Sadly, this marriage was not to last, although of course they had the joy of the birth of G.  It broke down acrimoniously at the end of May 2009 and the parties have been separated since then.  Decree nisi was pronounced on 7 October 2010.  Following the breakdown, this application for ancillary relief was issued by the wife on 23 July 2009.  I heard it last week over the best part of four days.  It was the culmination of very expensive pre-hearing processes, which have left the parties with costs bills totalling in excess of £600,000, including costs of the suit and some costs referable to proceedings over contact.
4.  The assets in the case are by no means large, in the region of a little more than a total of £4 million net of debts.  Only half of this is available now for distribution and the other half it is agreed is not accessible for a number of years.  However, precisely how many years is largely guesswork.  This second element of the assets I shall refer to collectively as the "deferred fund".  This deferred fund is invested in a property development enterprise which, it is hoped, will eventually be sold very profitably. 
5.  In fact, the parties are now not really very far apart as to their preferred outcomes, albeit that the gaps have been unbridgeable by negotiation.  The issues have been compounded because of a determined effort to squeeze this case into one to be decided on modern post-White v White [2000] case law principles, where in the end perhaps that degree of sophistication is not merited or even possible.  Both agree that the wife must have a large portion of the presently available assets and income for her own immediate support, and in due course a portion of the deferred fund too, but after that their views diverge, both as to the amount and as to the form any provision should take.
6.  Of the assets available now, the wife seeks enough to enable her to remain in the former matrimonial home with the aid of a very large mortgage, albeit about a half of what it stands at today.  She also seeks a sum sufficient to pay off her huge costs bill owed partly to her solicitor and partly to her litigation creditors, a total of some £466,000.  She also seeks substantial periodical payments for herself and the children in a total of £103,000 per annum, and finally she seeks a half share (however much that then is) of the deferred fund when it is realised at some time in the future.  Her approach to the application is one relying on the now increasingly familiar post-2000 principles encapsulated in expressions like "sharing" and "needs".  She does not agree to a clean break now having regard to receipt of a share of the deferred portion of the capital, but would not rule it out at the time if the figures then justified.  Further argument would then of course be needed.
7.  The husband, on the other hand, has moved his position a little recently and does not now press for a sale of the matrimonial home.  He says the wife can retain it if she wants to, but not as a way of justifying a greater proportion of the capital or income now.  The husband says the wife could probably rehouse herself in a much less valuable property and without any mortgage, but if she can fund the necessary large mortgage out of the periodical payments which she is otherwise entitled to, that is her choice.  However, he takes very strong objection to being, in effect, made to pay all or substantially all of her costs, which he says are grossly inflated (being about double his) although he recognises that in accordance with modern "no order principles" she can and must look to him or the overall assets to pay part of the bill.
8.  His offer in relation to periodical payments is a total of some £60,000, £45,000 to the wife and £15,000 for the two children plus the school fees of £10,000 until a clean break is achieved.  He argues that the objective of finality can be provided for now to avoid later arguments and possibly later litigation.  He would like the wife's entitlement to a share of the deferred fund to be fixed numerically now and for it then to attract interest at a commercial rate, perhaps at the rate of CPI, and when it is paid, he seeks an automatic clean break.  The husband also advances his case largely on "sharing" principles, but relying heavily on the now-familiar arguments about the impact of pre-acquired assets.  In short, he says almost everything which now exists, apart from the deferred fund, either existed prior to the marriage or has derived from such pre-existing assets.  Looking at the wife's claim on this basis alone, there is no doubt that it is somewhat limited.
9.  So the live issues involve a determination of the proper approach to a limited means short-ish marriage case like this, and accordingly, precisely how the cake should be carved up in a way as fair that is as possible to both sides.  As with most non-big money cases, the practicalities of translating clever so-called principles into a result which accords proper respect to principle whilst also providing reasonably for both the spouses, and most importantly the children, calls for a deal of creativity and a large measure of commonsense.
10.  Let me now turn to the chronology in more detail.  In this respect, I am grateful to Mr Southgate's document which he provided at the outset of the hearing.  The relevant dates are few and can be quite shortly set out.  The husband is 57 now and the wife is 44.  Both parties were married twice in the period before their marriage to each other.  In 1991, the husband became an equity partner of his firm and so for the last 20 years or so he has been a participant in the profits of that firm.
11.  In 1992, it is interesting to note that the wife's parents built X House, which is the property where the husband now lives.  The following year, between 1995 and later in the 1990s, the wife's father divided the X House land and out of the portion carved out redeveloped the stable block into the barn, which then became the parties' matrimonial House.
12.  The husband's second marriage ended by decree in 1998.
13.  Reverting to the wife's side of the story, S, her elder daughter, was born on 17 September 1998, her father being the wife's previous husband.  The wife was then living in the United States.  She returned to this country and began living at the barn, then of course owned by her parents.  In 2001, the wife's second marriage was dissolved, so both parties were free to marry.  In the same year, the husband bought P Lodge, one of the assets still available today.
14.  In November 2001, the parties met.  The husband was then 47, the wife was 34 and S was just over 3.  They began living together in March 2002.  They did so at the husband's then property.  They married, as I have already indicated, in August 2002, some nine months or so after their meeting.  In October 2002, they moved to live in the barn, the property then owned by the wife's parents.  In the following year, the parties remortgaged the barn to release £250,000 from the equity, which was used to invest in the Stirling property development venture, to which I will make extensive reference in a moment.  However, it is important to notice that particular portion of the borrowing was repaid out of the husband's earnings quite swiftly.
15.  On 19 January 2003, the parties' daughter G was born, so she is now eight.  The wife sadly suffered from postnatal depression, and it is said that the parties began occupying separate bedrooms from about 2005.  In the same year of G's birth, the parties bought the Barn from the wife's parents for a total of £1.1 million and it was bought in joint names.  In 2006, the husband was appointed the managing partner of his firm.  In the same year, the property which is owned in Spain ('the Spanish Property') was bought, and in 2007 the parties bought X Hall for £2 million, again in their joint names, entirely with borrowed money.  The intention was to move in, but they never did, and in due course, in September 2007, the parties let X House for £5,000 a month.
16.  On 31 January 2009, the parties separated, so the marriage lasted some seven years or so, or a little more if the period of pre-marriage cohabitation is included.  Following the separation or at about the same time, the wife bought L Way, a flat to which I will make reference later on, and the divorce proceedings were begun by the wife's divorce petition on 6 July 2009.  Sadly, those proceedings in the early stages were defended.  The wife's application for financial orders was started by a Form A on 23 July 2009.
17.  As at today, the husband is living at X House.  He has a new partner, but is not living with her.  His days are taken up working as the managing partner of his firm.  The wife is living at the barn and caring for the two children with the help of a maintenance pending suit order.  She too has a new partner, who is also not resident.
18.  To complete the pre-final hearing litigation history, the interim periodical payments position was in the end settled by an order dated 27 November 2010, so that as at today that consent order provides for the husband to pay the mortgage, interest and capital on the mortgage at the barn, to pay the electricity, fuel and telephone accounts and a number of the other regular outgoings on the property, including the council tax and garden costs, and in addition, monthly payments of £2,418 a month or £29,016 per annum.  In addition, he is required to discharge the school fees and extras in relation to G at her primary school and those payments are directed to be made to the school.  So that is the position as at today.
19.  My aim in this application is to try and achieve fairness by application of section 25 of the Matrimonial Causes Act 1973, and the modern case law principles which are designed to aid the court in achieving fairness.  The question that I have been troubled by in this application is whether it is really helpful or even possible to adopt and use that modern approach in this case.  Let me consider some of the factors under section 25.  They remain, despite the blanket of judicial interpretation which now overlays them, in this case, I find it most helpful to look at the relevant ones very closely.
20.  Plainly, the first consideration is the children.  That is to be found in section 25(1) of the Matrimonial Causes Act 1973 by way of a later inclusion.  I shall read it for the benefit of those who have not heard it before:

"It shall be the duty of the court in deciding whether to exercise its powers ... and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child in the family, who has not attained age of 18."

21.  In this case, that provision is very important because the children have been caught up in an acrimonious contact dispute which is some way from resolution.  A very well-known child psychiatrist has been employed by the parties and neither party escapes criticism in the report, which I was shown and which I have read.  This is a case which amply justifies the later inclusion of this factor into section 25 in its statutory history.  It is plain that it would be better not to subject these children to a disruption of their home at this point in their lives if it is avoidable.  In the end, however, it may not be.
    
22.  Let me turn to the assets, liabilities and income in the case, and before doing so looking at them in detail with the question of disclosure. 
23.  Before trying to come to final figures, it is necessary to consider these issues of disclosure in the first place.  In other words, can I now rely on the figures presented by the husband?  Much of the hearing has been taken up with examination of and cross-examination by Mr Southgate of the husband's disclosure.  The husband thinks that the research into his means, past and present has been too detailed and unnecessarily oppressive.  The wife counters this by pointing to areas where disclosure has been inadequate.  I shall return to those cross-assertions in due course when considering Mr Chamberlayne's argument that the costs on the wife's side are excessive and this should be reflected by adding back a portion of her bill.  At this stage, however, I say only that I am satisfied now that I do have the whole picture.
24.  There is no significant dispute on the headline figures and both sides have produced very helpful and accurate schedules, although approaching the case from slightly different angles.  For the sake of convenience, I shall annex Mr Chamberlayne's latest schedule to the judgment, the one which is headed, "Without costs add-back".
25.  Let me comment on some of the property assets which occur on the schedule.  (a) The Barn.  This was bought in 2003, shortly after the marriage, entirely with assets which belonged to the husband at the time.  It was bought mortgage-free.  I think the proper way of looking at it now is to say that it would have remained mortgage-free but for the need to borrow against it to buy the husband's current property, X House, and maybe to pay for some of the improvements to it during the marriage.  It has an agreed value of £1,450,000 gross and a net equity now of some £567,000; (b) X House.  That was bought for £2 million during the marriage in 2007 with 100 per cent mortgage finance, although the mortgages were spread over both this property and The Barn.  I collect that information from page A26, paragraph 30 and 31, of the husband's own statement.  It would now have next to no equity had the borrowing and security not been shared with The Barn.  It has not increased in value since its purchase.  Indeed, it seems to have declined in value and is now worth £1.9 million, with an equity of just under £1.1 million; (c) The Lodge and the Spanish Property were similarly owned before the marriage or derived from property owned before the marriage.  The equity figures appear on the schedule; (d) L Way is owned by the wife, but it was bought out of income and savings generated and saved during the marriage.
26.  I mention these facts to highlight the extent to which the husband had assets at the time of the marriage.  I will return to the significance of them later.  So far as the other assets are concerned, I propose to ignore watches, jewellery and numberplates and recent extravagant presents.  Both sides have a fair share which they will keep.  Apart from the property interests, the husband then has left about £275,000 worth of cash and ISAs, so after debts about £250,000.  To the wife's account, there is nothing save the litigation loan of -£467,000.  So that is the net assets position.
27.  Let me examine the debts in a little more detail.  The husband, having paid some of his costs, still has unpaid costs of £27,000.  A great deal of time has been spent at the hearing considering the level of the wife's costs and whether they are, in the end, explicable and reasonable, or as the husband asserts, exorbitant and at a level which should attract a notional add-back.  This debate has not been uncomplicated and it is the result of the change in the costs arrangement brought about by the rules changes, so that the no-order principle is the starting point, combined of course with the new emphasis on sharing of assets.  The simple financial fact is that the wife's total costs are £466,000 and the husband's are £233,000.  These figures do include costs generated by the suit itself, which was defended until late in the day, costs generated by dispute over contact, costs generated by arguments about the maintenance pending suit, and finally £46,000 spent on expert valuation fees, which was evidence sought by the wife in relation to the Stirling valuation.
28.  Mr Chamberlayne, relying on a case of Singer J, RH v RH2 [2008] FLR 2142, says that £200,000 should be added back into the schedule on the wife's side to equalise the cost figures.  Despite the date, that case was in fact decided under the old rules which allowed for Calderbank offers.  The arguments about the justification of an add-back involve necessarily a very detailed examination of the course of the litigation and the extent to which non-disclosure and litigation misconduct can be made out against the husband.
29.  Mr Southgate, for the wife, has been at pains to point out during the evidence, factors which he maintains have driven up the costs on his side to defend himself against Mr Chamberlayne's arguments about adding back.  He highlights and summarises these points in his final note in support of his oral submissions entitled, "Non-disclosure, litigation misconduct and costs".  In large measure, having heard the evidence, I accept Mr Southgate's complaints and analysis as legitimate and also necessarily very costs-generating.  Having listened to the evidence and considered his points, Mr Southgate has satisfied me that it would be arbitrary to apply any add-back at all, despite the very great difference in the two costs bills.  It is always easy to be wise after the event and demonstrate that actions taken by one side's lawyers have been, in the end, as it turns out, unnecessary, but I am not persuaded here that the wife's advisors can be criticised.
30.  I accept the point made by Mr Southgate that a wife often has higher costs because she has to make the running, and particularly where, as here, there was deep, and to some extent justified, suspicion caused by the wife being told (as I accept) by the husband that in his previous divorce he had hidden resources from his then wife.  Indeed, as late in the day as the third day of the hearing, £109,000 of extra income in 2009/10 appeared for the first time and this was a case where full and frank and careful explanation was required especially of the husband's large and fluctuating income.  As Mr Southgate put it, at times it has been like pulling teeth.  I think that is partially an apt description.
31.  I appreciate the husband has found this all, as many husbands do, very irritating, and from his perspective, oppressive and unnecessarily time-consuming but advisors in the position of the wife's advisors in this case cannot provide proper advice without having confidence in the numbers which are presented.  I think they have been justified in soldiering on, although the injunction to prevent the disposal of a numberplate was definitely erring on the wrong side of the line and went too far.
32.  As a matter of principle, I am driven to say that I would discourage the pursuit of this add-back principle or approach, which inevitably leads to a quasi-taxation or assessment of costs during the hearing, but without the court having all the material which would be available to, for instance, a costs judge.  It also rather flies in the face of the no-order starting point and leads to debates about costs by the back door, which the new rules were designed to try and reduce or prevent.
33.  Let me move on down the schedule.  The deferred fund: this is made up of a minority interest in two property development businesses.  One is a 29.4 per cent interest in Stirling Land and Development Limited, and the other a 3.1 per cent interest in Exemplar Real Estate Management.  Shortly after the marriage, the husband and a group of other investors established these vehicles to invest in high-value residential projects.  The husband brings his specialised valuation expertise to the ventures, apart from his financial investments, initially at £250,000, and then very recently a further investment in the project in the same amount.  Others involved bring other expertise needed to buy and develop these high-value sites.
34.  The initial investment for this venture came from mortgage finance on the former matrimonial home, but I was told in evidence that the mortgage was repaid very soon out of earnings by the husband during the marriage, so it is properly considered a matrimonial asset in every sense.  It is accepted that all profits have been reinvested thus far and so this is very much a long-term project designed to accumulate capital via the property market.
35.  The husband argues for a discount because of his minority shareholding.  The Stirling shareholding is valued by Saffery Champness via their expert, Mr Lane, at £2,382,000 without a minority discount, or £1,668,000 with a discount and subject to CGT.  Exemplar is worth £73,668 without a discount and £22,081 with.  The argument about a discount in these cases is advanced on the basis that such a discount is ignored if in reality Stirling is a quasi-partnership where all the parties are likely in fact to act in concert at the time of the disposals and so full value will be received.  Having heard the evidence and arguments, I am satisfied that these are hardnosed business arrangements and if the husband wants to get out sooner than the others, he will certainly suffer a discount.  I expect if that were to happen, there would indeed be a very lively negotiation, which might, I suppose, end up with a lesser discount being paid but only if the projects were viewed by the other participants as very worthwhile.
36.  In this respect, it is pertinent to note that the initial investment of £250,000 is now worth getting on for ten times that amount, and the husband has, during only the last year, committed a similar sum to a valuable new property enterprise taking place in Fulham.  If I say that the value of that investment now to the husband is in the region of £2 million before CGT, I am sure I am not being unfair to the husband.  He has no idea when precisely it will be sold or distributed and at what rate.  He sees it as part of his pension fund and would like to get out when he is 60, i.e. in about 3 years' time, but I accept that it is all still somewhat speculative.  Exemplar, on the other hand, because it is such a small interest, I shall accept at the fully discounted figure.
37.  Let me look at the parties' income and earning capacities.  The relatively modest assets in this case belie the high income generated by the husband during the marriage.  Since 2008, the annual gross figures have been as follows: £1,364,000 in 2008; £615,000 in 2009; £682,000 in 2010 and £353,000 for 2011.  In each previous year before the current year there has been included in those figures in the nature of a year-end discretionary bonus paid to the partners to reflect their earning performance and their contribution to, for instance, the management of the partnership during the very difficult days in the property market over the past few years.  These bonuses are called pool payments.  They have been paid in every previous year.  However, it is said that this year really is exceptional and there will not be one.  I am a little sceptical about that for all the reasons urged on me by Mr Southgate, and the fact that even in worse years than the last, there has been one paid in the end.  I shall take for the purposes of my calculations now the husband's net income as £186,000 after tax as his share of the profits, but I shall provide for the eventuality of a pool payment on top, which is perfectly possible on the evidence.
38.  The husband asks me to ascribe an earning capacity for the wife.  She is 44 and has no up-to-date qualifications.  She has the job of looking after the two children, who have had a torrid time as a result of the breakdown of the marriage.  I really see no realistic prospect of the wife generating any useful sum of money on a regular and reliable basis within the next five years or so, or even longer.  She has modest child benefit of about £7,000 and some contribution from her previous husband for the support of S.  In the reasonably foreseeable future, I see no real prospect of the wife earning a living, but she should not necessarily regard herself as totally dependent on her ex-husband in the much longer term.
39.  Contributions: both parties have played their full part during the marriage and no one has suggested otherwise.  However, in any outcome decided on sharing principles, pre-existing wealth brought into the marriage has to figure fully in a case like this, particularly where the husband was an established professional with a high income and significant assets.  The marriage is not long and there is little evidence of what is sometimes called "mingling" of assets, although there may have been some improvements to property during the currency of the marriage, paid for out of borrowed money.
40.  Adopting this preliminary approach reveals, at a glance, that of the present assets, really everything apart from the recent purchase of L Way was pre-existing.  The Barn was mortgage-free until it was used as collateral for the purchase of X House, which has anyhow declined now in value, despite its improvements.  On the other hand, the investments in Stirling and Exemplar are all post-marriage, the initial investment of borrowed money being repaid over a short period of time out of the husband's high-earned income.
41.  Needs: before turning to consider the implications of these various points in the overall scheme of things, let me consider the parties' needs in the more conventional way.  I am quite confident I shall have to make findings under this head before very long.  The wife is desperate to stay in her home, which was originally a property belonging to her own parents and a property in which she lived after the breakdown of her previous marriage.  She is prepared to sacrifice in other departments of her expenditure to meet the cost of a large mortgage if it means she can stay there.  However, looking at the accommodation of the Barn strictly, I find it is undoubtedly bigger than is necessary.  I was treated to some conventional evidence derived from estate agents' particulars.  I agree with Mr Chamberlayne that looked at strictly £800,000 would meet the housing requirements of the wife and children, and the wife was, to be fair to her, honest enough to admit that there were properties in the particulars collection produced at about that figure which would be "okay" or "adequate", to quote the wife directly.
42.  Let me turn to the parties' final positions.  Both sides have approached the outcomes to this case on the basis of the principles of sharing.  The wife invites me largely to ignore any pre-acquired assets as she says they are not properly established.  In cash terms, what the wife seeks would mean that she would receive the equity in the Barn, The Lodge and L Way, a total of about £925,000, together with a lump sum of £577,750.  By this route, taking into account the value of the pension, Mr Southgate calculates that the wife would get 43 per cent and the husband 57 per cent of the assets after paying all the considerable costs loans.  As for the deferred Stirling funds, the wife seeks an order for 50 per cent whenever it is to be paid, secured by a complicated agreement annexed to an order.  He also aspires on Mrs R's behalf to £85,000 per annum income for the wife and £18,000 for the two children, split into £12,000 for G and £6,000 for S.
43.  The husband, on the other hand, says the pre-acquired assets must be factored in, but suggests doing that by adjusting the overall percentage of the total.  In cash terms, he has no quarrel now with the wife retaining the equity in the Barn, The Lodge and L Way, but the lump sum he says should be limited to £341,000, assuming no add-back, as I have already earlier determined.  By this route and including the pension figures, she would have 33 per cent and the husband about 66 per cent, ignoring Stirling.  This would not be sufficient to enable the wife to pay her costs unless she sold the barn. 
44.  As for the deferred fund, Mr Chamberlayne invites the court to calculate the wife's entitlement as a monetary figure now to avoid future debate about the value of the fund and any new investments.  That figure should be paid out on an eventual sale of the husband's share or other profit share and in priority to the husband receiving his share, which would be increased by the rate of the Consumer Price Index to protect it against inflation.  When it is paid, the husband aspires to a clean break, providing he has reached 60 and accordingly has ceased work, as he hopes.  As for income, the husband suggests £45,000 for the wife and £15,000 in total for the two children.
45.  So what should the outcome be?  Applying principles extracted from recent case law to achieve fairness, the approach ideally seems to me to be to define the pre-existing assets and remove them from account and then split the remaining value 50:50 as being the sum generated during the marriage.  Having done that, the assets are then, it seems, split in species somehow to reflect the notional division.  There are other more "by and large" approaches to this essentially discretionary exercise, but this one does at least have the benefit of some logic to it.
46.  If I approach the case on this basis here, it seems to me the following result is achieved.  Almost the entirety of the currently available assets are the fruit of the husband's earlier assets.  Only L Way, the husband's current savings of about £275,000 and a small portion of his pension are new money, plus of course the deferred fund.  As I have already emphasised, if the Barn had not been remortgaged to pay for X House, there would be precious little equity in X House there, if any.  Accordingly, of the total assets of about £4.5 million, about £2 million would need to be removed.  The result would be a remaining fund of about £2.5 million.  If that was divided in half, the wife would exit with a little over £1.2 million.  If she were to take that from the existing and available funds to meet her immediate needs, that is to say her housing and other immediate costs, it would leave her with no entitlement to any portion of the deferred fund, for plainly by this route she cannot have it twice over.
47.  In the end, as I suspected during the hearing, I have been driven to look much more closely at the practicalities of this case and the needs of the parties to try and achieve a fair result, reflective of all the facts and figures.  From the housing point of view, a basic fund of £800,000 is reasonable, but I accept that it is desirable, especially in the children's interest, for them to stay at the Barn for the moment, if possible.  To achieve that figure now, she needs the equity in the Barn, The Lodge and L Way.  That much is not contentious.
48.  The wife has this very large costs bill, but I have already explained why, in the end, I do not think that should attract any special treatment other than being a pressing debt which has to be repaid from the family funds somehow and soon.  To cover that, I shall award the wife a lump sum of £450,000.  In other words, the wife will receive most of the presently available funds, if the pensions are ignored, and still more than half, even if they are included.  On one view, applying only sharing principles, that could be said to be that, save for periodic payments. 
49.  However, the matter cannot end there and does not because pursuant to section 25A I have to consider whether a clean break is achievable between the parties, and if so, when?  In my judgment, it is highly desirable to have a clean break in this case, given the animosity between the parties, the relative shortness of the marriage, the husband's retirement in the not too distant future and the likely availability of the very valuable Stirling deferred fund.  If that fund continues to accumulate at the previous rate or anything like it, it will be worth many millions of pounds, although most of it will have been the product unquestionably of post-separation effort and possibly further injection of capital on the husband's part.
50.  Having considered the various options to deal with this part of the case, I am in the end in broad agreement with Mr Chamberlayne's points about the very real desirability of fixing any sum to be paid to the wife now so as to avoid complex arguments about the value of the percentage in the future and future post-separation investment.  So this further amount should be achieved by reference not so much to a percentage share of the fund (because for reasons I have explained, the wife has had her strict sharing entitlement in the form of her share of the existing assets) but to a fixed sum designed to provide for a clean break at a proper level as soon as possible.  I think that is the practical proposition today and does not need to await the eventual payout to the husband and inevitably further expense, argument and litigation.
51.  However, before deciding on the figure, I think logically I should consider what the right level for periodical payments now should be.  Taking the husband's income of £186,000, ignoring any pool payment, I have decided that the proper level of periodical payments for the children is £15,000, split into £10,000 for G and £5,000 for S.  Those periodical payments will run until the end of tertiary education.  That later date only provides a presumption that they will be payable until then.  If of course circumstances change adversely, the husband can then always apply to vary and have the court re-look at the matter.  School fees, and I suppose nowadays logically any tuition fees, must be paid on top.
52.  So far as the wife is concerned, bearing in mind her previous standard of living and present budget and the reduction in the husband's recent profit share, I will order that they be paid at the rate of £55,000 on top of the child periodical payments.  As for any further payment in the event of a pool payment, the wife should receive 20 per cent of any sum paid to the husband, with a cap of a further £20,000.  This is to reflect the husband's very real cash flow problems, as I believe them to be.
53.  So now reverting to the question of a clean break on receipt of the deferred fund, I bear in mind that after a fairly short marriage, the wife's entitlement to continue to receive a very high income order long after separation is limited and I also make the reasonable prediction that the husband's income will fall considerably and eventually disappear in the years after he is 60.  Taking into account all these matters, I shall order a further lump sum of £650,000 payable to the wife, but inflated at a fixed rate of 5 per cent per annum net until payment.  On payment in full, the wife's claim for periodical payments will then stand dismissed.  In my judgment, she will then have a sufficient capital sum to provide for herself, whether on Duxbury principles or any other principle.  The orders of course for the children will remain and will be payable on the existing basis until the dates I have already specified.
54.  I am satisfied that this division provides fairly for both sides.  The wife may, with careful management, be able to stay where she is in the Barn by managing her income carefully.  If not, she may have to downsize in due course.  The same can be said of the husband.  He will need to borrow, and if he cannot, X House may in due course have to be sold.  In the longer term, I anticipate the husband will have far greater resources than the wife, but that is fair and as it should be.
55.  Finally, I would only add this: the injection into the process in this case of the new principles that have been collected from the well-known recent cases (for example, White, Miller v Miller and Charman) may have provided a greater degree of sophistication in the never-ending quest for fairness in cases where there is a large surplus over and above the parties' financial needs.  However, as this case graphically demonstrates, this has been done at the expense of simplicity where as I find the resources are only barely able to cover the debts and needs, a quart out of a pint pot case, or even perhaps a quart out of a quart pot case.  The extra evidence and calculations called for when trying to pin down precise values for 'sharing' and, for example, the extent of pre-acquired assets leads to many extra layers of complication, forensic debate and expensive evidence on the part of both legal teams.
56.  At the end of the day, the result in this case has been driven mostly by needs and practicalities.  Where in a case that seems to be likely from an early stage, I would, if I may say so in all humility, suggest that those who do these cases waste not too much time and energy in the preliminary theoretical discussions, but rather move swiftly to look at the practicalities of the suggested outcomes whilst keeping the primary considerations generated by section 25 in the forefront of their mind.  Having said that, I wish to emphasise that such remarks are not intended in any way to be critical of counsel, who have wasted not a minute of time and who have conducted the case with careful and well-focused argument.