England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice
		28th October 2013

MR JUSTICE HOLMAN:

1. This is an application by a husband for permission to appeal from the decision and order of Deputy District Judge Elliot as to financial remedies made in the Principal Registry of the Family Division on 11^th July 2013.
2. The assets and means of the parties are relatively modest. There is a former matrimonial home in joint names. Since the separation, the husband has remained in occupation of that home and the wife, together with the three children of the family, has been renting elsewhere. According to the judgment of the district judge, the wife, relying upon a brief letter from estate agents called PSB Homes in March 2013, valued the property at about £450,000 gross. According to the judgment:

"Mr Walker thinks that is optimistic and unlikely to sell for more than £420,000 if sold in present state."

There is clearly very considerable borrowing secured on the property, for on the wife's valuation the equity was put at £36,500 and on the husband's valuation it was put at "20,000 or 25,000 pounds". Apart from the vehicles and trade assets of the husband's business as a sprayer of weeds, there appear to be minimal other assets in the case.

3. The deputy district judge said at page 2 of his judgment:

"After a marriage of this length, it might well be a case where one starts off with the yardstick of equality - so the assets are divided equally."

However, he said:

"This is clearly a case where needs of parties are paramount … I am satisfied in this case the primary consideration is need and it is on that basis I have looked at the case."

At page 4 he was to say, "The nub of this case is housing need". The deputy district judge clearly appreciated and recognised that the husband, just as much as the wife, needed some home in which to live and also that if he was to leave the matrimonial home, where he currently stores all his business vehicles, then he would need to rent "alternative storage".

4. Patently, they could not both live in the home together. It would scarcely have been a sensible outcome to order the sale of the property, merely to achieve division of an equity of somewhere between £20,000 and £36,000. So a choice had to be made. If the case stopped there, it does not seem to me that the decision of the deputy district judge, that, as between the two of them, it was more important that the wife, together with the children, should have the home, could possibly be faulted. He said:

"It is the home in which they [the children] lived for some years. It represents security. It involves one further move, provided Mrs. Walker can afford it. It should be the children's final move of their childhood."

That seems to me to be reasoning on the facts and in the circumstances of this case that was well within the discretion of the judge.

5. Today, Ms. Jayne Rayson, on behalf of the husband, with the cogency for which she is renowned, particularly stressed two points: first, that the husband is convinced that the wife will not, in fact, return to live there for very long but will, in fact, choose to sell the property and make a profit. That is linked with the second point, namely, that the husband believes that the property has development value because it is quite a large site and some of the land could be carved out for development. The difficulty with those points is that the husband did not raise them at the hearing. As emerges from passages I have already quoted, the position of the husband at the hearing was that the house is worth less, not potentially more, than the value that the wife was putting upon it. Ms. Rayson says the husband was acting in person and did not really know what he was saying and doing, but, quite frankly, if he was able to tell the district judge that the value put on the property by the wife was "optimistic" and that it was "unlikely to sell for more than £420,000" then, clearly, that was the time when he could and should have been raising the possibility of development value. I asked why the husband did not, at the hearing, raise the point that he was convinced that she will, in fact, sell the property and make a profit. Ms. Rayson said, on instructions, that he claims to have raised this at a late stage during his argument, but the deputy district judge said, as he was entitled to do, that that was then too late and it was a matter that should have been explored during the course of the oral evidence.
6. So if the case stood there, then I would, frankly, have refused permission to appeal today, as indeed I was inclined to do. However, the deputy district judge then went on to deal with the question of periodical payments and maintenance. He assessed the net income of the husband as "approximately £30,000 or £2,500 per month". The CSA assessment is currently about £93 a month and the deputy district judge ordered periodical payments to the wife of £425 a month. Those figures total £518 a month. I mention that some consideration was given at the hearing to whether, in fact, the current CSA assessment is lower than it should be, but even if the CSA assessment were to be increased that would not affect the global impact upon the husband of maintenance, for paragraph 4 of the order provides:

"In the event that the CSA increased the amount payable by the respondent for the maintenance of the children … then the sum payable under this order shall reduce pound for pound but shall not reduce to less than £1 per annum."

So, in reality, any current error in the CSA assessment has no impact on the net position of the husband.

7. If £518 is deducted from his next income of £2,500 per month, that leaves about £1,982 per month for his own needs. It is at this point that it seems to me the judgment of the deputy district judge may have been less calculated than it needed to be. There is no real consideration in the judgment as to what the husband would realistically have to pay out in rent, both for a home for himself (where the children could also stay with him during staying contact, which they have regularly) and also for business premises for the storage of his van, car, quad bikes and other business equipment. The only reference in the judgment is at page 4, where the deputy district judge said:

"I accept the FMH is a storage base for the business and a long van and three quad bikes and no doubt some other equipment. It is relevant, but nevertheless Mr Walker has accepted he would be able to rent, albeit at a cost, for alternative storage. It would reduce his income. I set against it, he said he was reasonably confident, once these proceedings were out of the way, he would build it back up again."

Nevertheless, at paragraph 5 of his judgment, the deputy district judge jumped into saying, "The correct figure [for periodical payments of the wife] is £425 per month …". I cannot see that anywhere did the deputy district judge give quantified consideration to what it realistically would cost the husband to rehouse himself and, separately, to rent some commercial premises where he could store the vehicles and equipment that are essential to his business and his earnings.

8. It seems to me, therefore, that, although the figures are relatively small, there is a realistic prospect of success on an appeal in this case, that the court might decide that the figure of £5,100 a year for maintenance for the wife (who does have income of her own) was too high and leaves the husband with too little with which to rehouse himself and continue to store his business assets. That conclusion might, of course, have justified an appeal limited only to the question of the level of maintenance. However, the district judge had said at page 4 of his judgment:

"The real concern I have about a transfer is whether she could afford to pay the mortgage and meet other household outgoings of £1,200 per calendar month … on her salary, assuming she does get a managerial position and given her brother's assistance on which I accept her evidence and having regard to what I intend to order in respect of maintenance, I am satisfied she would be able to afford."

The critical phrase there is the words "having regard to what I intend to order in respect of maintenance". If the figure that the district judge did order in respect of maintenance is too high, then his whole assessment about the affordability of the wife taking on the property may fall for reconsideration.

9. For that reason, but that reason alone, I have decided that I should grant permission to appeal generally, from both the capital and the maintenance aspects of this case. I have stressed very clearly indeed to the husband that if he proceeds with his proposed appeal and is not successful then it is a virtual certainty that he will be ordered to pay all the costs of the wife of and incidental to resisting the appeal, as well, of course, as his own legal costs. It is not at all difficult to foresee that very rapidly another £10,000 will be incurred in costs. In a situation where the income is relatively limited and the assets are small (on his case, an equity of only £20,000 or £25,000) then a very cold commercial assessment needs to be taken as to the wisdom and overall affordability of embarking on an appeal. That is a matter upon which the husband must reflect very carefully indeed and upon which he must receive legal advice.
10. For the reasons I have given, I am just persuaded that the proposed appeal does have a real prospect of success and I therefore grant permission to appeal. But I grant it with that very clear warning indeed to the husband that he may find that he is on a hiding to nothing except a further very considerable costs bill.
__________