England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		6 November 2015

Sir Peter Singer:

Introduction

1. I shall refer to Mr and Mrs S as H and W notwithstanding that their marriage ended in December last year. They are aged 42 and 43 respectively and have no children.
2. Each party comes from a relatively modest financial background. Each of them worked hard to achieve the qualifications and experience which each of them brought to their relationship at the start of the six years for which their cohabitation and marriage lasted. W since before the parties met worked continuously for one employer and proved her value as a trader in a particular sector of the wholesale fuel trade. H was from before they met in mid-2007 continuously till October 2012 employed by an international company involved with IT. Their basic salaries were not very different in the early years of their cohabitation, around the £100,000 p.a. mark. But there was this significant difference, that W received discretionary annual bonuses until her trading activity recently became limited as a result of developments which affected her industry. For the central 5 years of their relationship W's bonuses totalled £10.5M, whereas any bonuses H's employment brought were comparatively trivial. The parties were both continuously employed until in October 2012 H took voluntary redundancy in circumstances which have been the source of one of the many challenges and disputes in this case.
3. The parties commenced cohabitation in rented accommodation at about the end of 2007, became engaged to marry in August 2008 and did so in June 2009. In anticipation of that marriage in November 2008 they purchased their first home, SD, in a Gloucestershire town. The property was purchased outright in joint names with funds, some £1.02M, provided exclusively by W. That figure includes some £200,000 spent on extensive works to the property undertaken over a number of months so that they did not actually move in until a couple of months before their wedding. But while they were on honeymoon it was extensively damaged and the consequent repairs made it impracticable for them to resume living there until about January 2010.
4. It was in October 2012 that the parties surrendered to the attractions of a house I shall call LC which had just come on the market at an asking price of £2.25M. They saw it and made an offer of £2M which was accepted. Speedy contract exchange was one of the vendors' requirements but there were some conveyancing complications which delayed the sale until March 2013. Meanwhile and for some months thereafter the parties remained living at SD while work was done to suit LC to their taste. He says the works were extensive: she says they were cosmetic. Either way they cost a good deal of money which, together with the purchase price, was again provided by W. LC also was purchased outright and acquired in the parties' joint names. H maintains that as with SD (but even more so given that he was now redundant) he assumed a lead role in the organisation and supervision involved in carrying through the work done to LC. W maintains that he has exaggerated his input and its value. I will say very little about this dispute save to underline its essential futility in the context of this case.
5. They moved in to LC in September 2013. SD was then placed on the market for sale at an initial asking price of £1.25 million but even successive reductions did not attract a purchaser. The single joint valuation attributed for the purpose of these proceedings to SD is £1.1 million, and to LC £1.5 million. Both parties are naturally disappointed as sales at these prices would not in effect recoup the money lavished upon them, and indeed in the case of LC would amount to a large loss.
6. As described, the parties agreed to purchase LC in October 2012 and it was not long after that when difficulties in their marriage which had led to their living increasingly separate social lives and becoming emotionally distant from each other developed an extra dimension. By late 2012 or the beginning of 2013 what H says started as an acquaintance resumed between him and another woman whom I will call C developed to the point where by February 2013 they spent a clandestine holiday together in Dubai. Wind of the affair came to W. H through lies and subterfuge parried her accusations and enquiries. W filed her divorce petition in early December of that year. Their physical separation did not take place until H moved out in July 2014. He has since been living at SD and W has continued to live at LC. He did not come clean about the Dubai trip until a court hearing in December 2014, and by then had committed himself to a number of lies and evasions in relation to the nature of their relationship and the true assignation of a number of suspicion-arousing credit card entries. More revelations were not to come until he gave evidence before me. "Not wanting to upset her" if at all true as his rationale may have been an unsuccessful tactic: such obduracy in the face of her well-founded belief concerning this area of his behaviour may have made her more upset than a frank admission would have, and to some extent may have induced W to cast the net of her suspicions wider than was either reasonable or objectively supported by anything more than mere conjecture.

The parties' polarised positions

7. They are virtually a gulf apart apart from the fact that both agree the outcome should be on a clean break basis, as must be right. The order which I make shall moreover include the exclusion of any claim by their survivor against the estate of his or her deceased former spouse.
8. Although this started in form as W's application for all forms of financial remedy, until the commencement of the final hearing before me what she in substance sought was the transfer to her alone of the parties' two successive matrimonial homes, and for the court to fix what H should receive from her in return for that redistribution and for the final financial disengagement which a clean break would bring. She suggested that £400,000 (in addition to what he otherwise has: on the figures a negative balance) would purchase outright a suitable home after a marriage of these dimensions for a man who at the commencement of their relationship had only a modest beneficial interest in a mortgaged flat which when sold in 2011 realised net only about £11,000. By the time for final submissions however her enhanced proposal was to transfer SD unencumbered to him and in addition to pay a lump sum of £130,000 which would have been sufficient to meet his outstanding costs liabilities to his legal team. Throughout she has contended that nothing should be done to reflect the disparity in the value of their respective pension schemes. Including their worth at the commencement of the parties' cohabitation by the time of the hearing W's in aggregate had a value some 5.75 times greater than his: in round figures £800,000 against his £140,000.
9. H by contrast seeks to leave this marriage and these proceedings with £3M (and would wish to keep SD as part of that).
10. In addition H seeks the transfer to him of the benefit of 23.8% of her pensions, that being the stake in them which a pensions expert instructed by H alone has determined would be required to achieve equality of benefit between the two of them in relation to the increase over the span of their relationship which there has been in their respective pensions. The calculation was not challenged although, as indicated above, the principle most certainly was. To put this into context, in CETV terms this would involve an order that H should share in £168,000 worth of W's current pension values. That would reduce the overall imbalance between them to an aggregate of £632,000 to W and £308,000 to H. I was told that this would purchase at his retirement age of 63 in 20 odd years an annual income of some £5300 (subject to income tax) for the remainder of H's life. He would need to survive to take the benefit, and although actuarially there is a good chance that he would the life tables perforce also reflect those who do not stay the course. The alternative approach which I postulated in final submissions, if indeed any compensation for this pension imbalance is to be awarded, of an offsetting capital payment by W to H which would leave her pension expectations intact, seemed not to have been considered on either side nor was it the subject of any approximation or evaluation by the pensions expert. I will deal with the pros and cons and indeed the ins and outs of this below, but Mr Feehan QC for W predictably reacted on her behalf with enthusiasm (if, that is, her objection in principle to any redistribution of pension funds were not to win the day) to the figure of £40,000 upon which, to test the water, I had invited response: whereas Mr Southgate QC who with Mr Robin Rowland represented H equally predictably suggested that anything less than £100,000 would be too little.

The parties' current financial landscape and their future prospects

11. At the end of the day there was no significant demur but that the non-pension assets (adopting for this purpose as my base the Schedule of Assets prepared on behalf of H) looked thus:

12. On each side their present and future earning capacities carry risk and uncertainty. H, having undergone some retraining, has since about March last year been attempting to establish himself as a free-lance instructor/consultant in IT-related endeavours. He told me that he was earning about £5,000 to £7,500 each month but that he had no long-term secure assignments. W says her bonus-earning days are for the moment at least over, and that if she can sustain a role with her employer it will be in a new and untested capacity which may involve her in relocating abroad. Notwithstanding these uncertainties I can and do assume that at the conclusion of this case each will be able to provide for their own income needs, albeit perhaps less lavishly than during their time together. On the domestic front, H's relationship with C continues; and he asserts that W is now established in a new relationship, as to which she made no comment.
13. I confess that I have not found this to be a case where I have easily arrived at what I hope and believe is an outcome which gives reflection, and proper reflection, to all the well-known section 25 factors and all the other circumstances of the case which are relevant. I have given it a good deal of thought, perhaps it might be thought too much particularly in the light of the length of time I took before circulating this judgment in draft to the parties in mid-September. I apologise for this but at least it has had the result that I now do feel confident that the outcome at which I arrive is both justified in law and fair in fact. I have no doubt that at least one of these parties and quite likely both will however not agree with at least that part of this judgment.

The course of the proceedings

14. I will describe these in what I hope will not be unnecessary detail, but the way in which the case developed and has been driven is relevant background when I turn to deal with a number of complications that have bedevilled these proceedings. Along the way costs (a shade over £200,000 estimated on W's side, and just over £180,000 on H's) have been driven up and what (I agree with Mr Southgate) might have been a case to be decided on submissions (although not for that necessarily any the easier to resolve) has as I shall find been allowed to develop and has been pursued disproportionately.
15. W first intimated that her case might include allegations of conduct such that it would be inequitable to disregard them in advance of the First Appointment before a deputy district judge in their local county court in April 2014. It was moreover apparent from the questionnaire which H was ordered to answer that W (who was on that occasion was represented by leading counsel) intended to challenge H's assertions concerning the extent and value of his asserted contributions in relation to works effected at both properties. It must surely at the time have been appreciated, in the context that W's Form E disclosed overall assets (including her pension) of about £6.7M, that 32 questions (many subdivided) descending as far down as a request for an explanation of £95.37 spent (it may well have been on petrol) at a garage, suggested a lack of focus. In this context I do not overlook the fact that H's replies when given were untruthful where they touched on his relationship with C.
16. At the conclusion of a failed FDR in July 2014 an order was made for the transfer of the case to the High Court and for a directions hearing prior to which W was to have provided details of her conduct case. W's solicitor offered only this by way of belated compliance in advance of that hearing which was conducted by DJ Hess (as he then was) on 19 December 2014:

"In the course of W's short childless marriage to H she has purchased 2 substantial properties and had them conveyed into her joint name with H. In the case of both properties W had the properties registered in joint names as H told her that he would feel 'uncomfortable' if the titles were registered in W's sole name. In the case of LC H told W at the time he was encouraging W to purchase it that it would be their 'forever home'.

Financial disclosure made by H … raises serious questions about his financial conduct in the course of the short childless marriage, as follows:

(i) He has to date refused to account for a substantial capital sum paid into his account by W for the specific purpose of decorating and furnishing LC, despite it being in his power to do so; and

(ii) His own financial disclosure raises serious questions about the use to which he may have put some of the capital transferred into his account by W. In particular it seems to W and her advisers that H may well have been involved in an emotional/sexual relationship with C at the very time he encouraged W to purchase LC as their 'forever home.' Various items of expenditure in H's bank statements appear to be for gifts to a female, and W did not receive those gifts. A transfer of £2000 from C to H raises questions about whether she accompanied him to the Middle East on holiday."

17. The solicitor's statement was made in support of an application for an order that C should make extensive disclosure dating back to 2012 of documents including all her bank, building society and credit card statements. C was separately represented at that hearing, which was the occasion when the admission was made that they had indeed been in Dubai together. I have read the transcript of the extensive argument which took place and of the succinct but clear judgment of DJ Hess. Mr Southgate argued that the allegations were so vague and unfocused that as an exercise in robust but appropriate case management W should not be allowed to pursue them. As to this the judge said:

"Mr Southgate is, as always, very persuasive but he has not in the event persuaded me that I should debar you from putting forward these arguments. That is not to say that I give them any encouragement of success. It will not be me hearing the case so I can express a view, I dare say. I have the feeling the wife has an uphill struggle in relation to both of them but I do not think that I can at this stage say that they are so weak that they should be struck out. It seems to me that, if you are able to get home evidentially on your two assertions, that might make a difference to the outcome of the case. And so I am going to allow you to pursue those arguments, but I think the directions which I would like to make should make sure that it is pursued precisely and clearly."

18. DJ Hess recorded the precise ambit of the allegations which he gave W permission to pursue, defining them thus in his order:

"(a) That the respondent misused or misappropriated funds given to him by the applicant for the purposes of the refurbishment of the property known as, the amount of such sums being provisionally alleged to be £136,000;

(b) That the misuse or misappropriation of those funds included the spending of significant sums on the establishment or continuation of his relationship with C at the same time as the parties purchased LC with monies earned by W during the marriage."

19. By his order DJ Hess stipulated and exercised tight and precise case management in relation to the preparation and presentation of evidence on the conduct issue, if pursued, including time limits:

"5. Order to file and serve statement dealing with conduct

a. In the event that the applicant continues to seek to run a conduct case, she shall file and serve a concise statement by 13 February 2015, restricted to addressing the following issues:

i. exactly what conduct she is seeking to rely upon;

ii. the evidential basis for her conduct allegations; and

iii. what effect the alleged conduct should have on the current financial remedy application.

b. The respondent has permission to file and serve a statement in answer, if so advised, by 13 March 2015.

8. Evidence at final hearing

a. .....

b. Any witness filing and serving a witness statement shall attend the final hearing to give oral evidence [unless their evidence is not disputed]; the identity of all witnesses shall be disclosed and confirmed not later than 30 January 2015 (including service if they are to be summoned by way of witness summons)."

20. W signed her statement in relation to conduct on 12 February 2015. The allegation that H deliberately persuaded her, with a view to his own financial gain, to acquire LC in their joint names is extended so as also to include the same allegation in relation to the purchase before their marriage of SD. She sums up her case as being that:

"… amongst other factors his conduct, namely his deliberate deception of me for financial gain and his misuse of funds transferred to him for personal expenditure and for the specific purpose of pursuing an adulterous relationship are additional important factors (that is, in addition to the obvious discrepancy in our contributions towards the acquisition of assets during our short marriage) that mitigate against such a settlement. … Furthermore I say that he should account for the substantial sum of money transferred to him by me for the specific purpose of discharging expenditure on the two properties he persuaded me to convey into our joint names, and in so far as he is unable/unwilling to do so, this sum should reduce the capital sum I pay to him to meet his future needs."

No other witnesses were identified or summoned in accordance with paragraph 8b.

21. By the time W came on 1 April 2015 to sign her 30 page / 113 paragraph statement in response to the direction for concise section 25 narrative statements (and indeed by the date of a detailed letter her solicitors sent on 26 February 2015) it appears that she had sufficiently analysed the information and documentation provided by H to establish that of £514,000 paid from her bank accounts into his in the first 10 months of October 2013 nearly £135,000 had been legitimately spent on car-related expenditure (including £110,000 in relation to the most recent of H's three Aston Martins for which she paid during the course of their relationship, and over £8000 to pay for a cosmetic operation he underwent with her approval). Of the balance of £400,000 she accepted that all but £140,000 had been spent one way or another in relation to their properties. The December 2014 directions order described the shortfall as "provisionally alleged to be £136,000." This amount she categorised as "the missing money" which, she suggested, he had misappropriated and/or spent on C. I am in fact satisfied one way and another that the total which H for whatever reason (but not, it is now accepted although previously suggested, because he has salted it away) has not been able to vouch or otherwise explain is more likely to be of the order of £90,000 to £100,000.
22. £100,000 as a proportion of £6.7M amounts to 1.5%. If a proportional approach were to be applied to that total then that might result in a shift one way or the other of half that, namely 0.75%. On one presentation contained in the opening documents submitted on behalf of H by Mr Southgate and Mr Rowland the unallocated amount is less than £32,000.
23. In the 10 pages and 33 detailed paragraphs in the section of her statement headed "Contributions" W stated not only the obvious (that in financial terms her input far exceeded H's) but concentrated on the minutiae of who did what and who paid for what and what H did not do during the course of the whole of their relationship. She makes a number of frankly inaccurate assertions about his unwillingness to provide chapter and verse and accounts and receipts to vouch for expenditure. In the section devoted to "Conduct" she adds a new complaint in relation to a chartered surveyor's structural survey and indication of value dating from November 2012 which suggested LC was only worth £1.6M rather than the £2M which they agreed to pay for it, the substance of which is that the first she knew of it was when she found it "a few weeks ago" because, she maintained, H had withheld all knowledge of it from her at the time and since, which she regarded as a "further issue of financial misconduct that should be taken into consideration by the court when fixing the settlement to be received by H."
24. The directions order contained a requirement that the parties should if possible agree (and they did) the contents of the bundle which should not exceed 350 pages "unless permission is given by the trial judge." On the Friday before the Monday fixed as a reading day at the commencement of the hearing two further "supplemental" ring binders were delivered to H's team under cover of a compliments slip.
25. At the commencement of the hearing I was asked on behalf of W to let in three witness statements. I was told that the contents covered the degree of involvement of H in the works effected to SD before and just after their marriage in 2009; a third-party commentary on events said to have occurred in the lead-up to W issuing her petition; and to the involvement or lack of it of H in preparing packed lunches for W to take to work. It will I hope be readily understood without detailed further explanation why I rejected that application, not least because of the additional but modest impact such issues might at highest have on outcome, and what potential oral examination of three additional witnesses might do to the feasibility of concluding the case within the week which had been allowed.
26. These then are factors which Mr Southgate complains, as it seems to me with justification, demonstrate a very regrettable failure of case management compliance on the part of W. I now turn to consider the impact this had on the hearing and to deal by way of necessary clearance of clutter with arguments which are and might have been perceived to be doomed, before I address the core of the case.

Clutter-clearance

27. Pre-acquired ("fledged") earning capacity. The tenor of W's statements, followed through to an extent in the pre-hearing documentation put in on her behalf, seemed to foreshadow an argument that, over the period of her working life until the point where she met and moved in together with H, W had developed qualities on which a monetary value should be placed, and that that sum should be categorised as non-matrimonial property which should on currently established principles be excluded from any sharing exercise, in the same way as inherited or gifted property or indeed capital amassed before the relevant date. The way she put it was that the seeds of her bonuses were sown long before she even met H, and just happened to bear fruit after they had met, and that this money was generated as a result of her career development.
28. But Mr Feehan chose not to plough that furrow and expressly disavowed reliance on any fledging submission. What he had to rely on was, he said rather, a "coincidence argument." I of course accept that it is a circumstance, and indeed quite a remarkable circumstance, of the case, and that it would indeed have had a quite other cast if W's bonuses had been in the bag before they met.
29. I can accept without too much substantiation via the whole line of authorities which have quarried this seam that it is impermissible to treat one spouse as coming to a marriage with fledged pre-acquired earning capacity alone, not least because of the absence of any principled approach whereby a defined monetary value can be put upon it. I will restrict myself for present purposes therefore to the proposition which emerges succinctly from the judgment of Wilson LJ (as he then was) in Jones v Jones [2011] EWCA Civ 41, [2011] 1 FLR 172 at [26] where he adopted three objections to the proposition which had been advanced in Miller/McFarlane [2006] UKHL 24, [2006] 1 FLR 1186 by Lord Mance at [172]. These should (said Wilson LJ) "lead this Court today formally to overrule the decision of Mr Mostyn in GW v RW (Financial Provision: Departure from Equality) [2003] EWHC 611 that a spouse's established earning capacity at the date of the marriage falls to be capitalised, or otherwise brought into account, for the purpose of the sharing principle."
30. Pre-acquired capital. H came to this relationship and marriage with nothing by way of savings or investments of significance in the overall context of the case. W however as at December 2007 when their cohabitation commenced had, I am prepared to accept in her favour (because there was a very unfortunate confusion in the paperwork which initially suggested a somewhat lower figure), of the order of £1.37M of which she put about £1.02M into the purchase of and work done to SD. I will consider the effect of that later.
31. Contributions. In relation to his own contribution and the subsequent intense debate as to the lack of it, it is fair to observe that it was H who set this particular ball rolling by his emphasis on what he described in his Form E as 18 to 24 months "spent project-managing the complete renovation and modernising of the two family homes." One would suspect, as a general observation, that where hindsight and perceived self-serving perspectives combine on either side of the argument they can easily become distorted. But happily I need not wade through or attempt nicely to weigh the measure of H's contributions. Although the statute requires that each party's contributions are to be taken into account it is recognised that comparative evaluation should normally lead to the conclusion that non-financial contributions as they are incommensurable should be regarded as as valuable as the contribution made by whichever of a couple is out there earning. A stay-at-home spouse does not fare worse for that fact any more than a home-making spouse who is also a breadwinner fares better. In the oft-quoted and memorable (but still not often enough remembered) image conjured up by Coleridge J in G v G (Financial Provision: Equal Division) [2002] EWHC 1339 (Fam), [2002] 2 FLR 1143 at [46] "parties are not assisted to achieve compromise when they are encouraged by the law to indulge in a detailed and lengthy retrospective involving a general rummage through the attic of their marriage to discover relics from the past to enhance their role or diminish their spouse's." The attic is indeed the one-way destination to which such expensive, time-consuming and almost invariably arid disputes should be consigned and then confined.
32. Consistent with that (as it seems to me) and on the basis of the authorities on this issue as they have developed, the earner will only rarely be heard to succeed in saying that (in this case) her financial contributions were "special" and so off the scale that the other spouse's share (if it is a sharing rather than a needs case) should be reduced to make allowance for the "genius" or "stellar" quality of that achievement.
33. The prospect that such a proposition might be raised on W's behalf in this case seemed heralded by the subliminal message that Mr Feehan's use twice of that label-word "stellar" in his opening case note. But he rightly rode back from pursuing a "special contribution" case further. In those circumstances I do not see any benefit from reviewing the authorities to which I was taken on the topic, and can simply say that W's very remarkable bonuses fall several leagues short of anything which, taken on its own, a court might regard as sufficiently exceptional to affect the outcome adversely to H. The simple fact is that the two of them had the good fortune in those years of their relationship as a result of extraneous market movements in her commodity sector that W was able to mine very profitable seams for her employers, for which £10M of bonuses was their recognition and her reward.
34. Conduct. The first strand which, it was alleged, would contribute to an overall conclusion of conduct it would be inequitable to disregard, and which should thus be reflected adversely to H in the award, was his dissipation or concealment of monies provided by W, she said, for the specific purpose of expenditure on LC. This, in my view, descended at times into bathos. There is no answer to the proposition that W's strident and frequent complaints that H had not provided full answers to questionnaire became largely unfounded when it is clear that to a large extent he did indeed provide the material from which it was possible to narrow down the target range to something between, say, £100,000 and £150,000 by last December's hearing.
35. There was much debate during the course of the hearing regarding W's assertion that he had used a credit card in her name without authority and contrary to her expectations and indeed without her knowledge. This presumably too must have been seen as a strand in the conduct rope with which W set out to entwine H. Faced with a question about such expenditure H reasonably made the point that without seeing the statements (which were addressed to and presumably received by W and to which she alone had online access) he could not answer the question. Rather than supply him with the statements he was then castigated for having agreed to answer the question when he knew he would not be able to do so! Still statements were not provided until only an incomplete run of them were produced in a lamentably desultory fashion on day four of the hearing.
36. H's case in relation to the credit card was that he had not asked for it but that yes, he did indeed use it as he had understood it was intended, not only for house but also the general, including his own personal, expenditure. Such expenditure would by its very nature have been apparent to W when she received the statements and saw, for instance, the very significant number of Amazon purchases made by H. Or when he made purchases of clothes or wore a new watch. According to him she never complained. That does seem to me to be likely to be consistent with the response of a wife who seems to have been quite content to furnish her husband with three successive Aston Martins. The complaint in relation to the last of them that he persuaded her to buy it for him on the basis that it would hold its value, but that he sold it at a loss after the separation, does seem implausible.
37. H did acknowledge from the witness box that he had lied about expenditure to do with C, and in the course of submissions produced a list of itemised occasions and acquisitions totalling just over £8500. It may be that there was more to it than he has even now admitted, although one would have expected the detailed scrutiny to which W has subjected his expenditure to have thrown up other suspicious items if indeed there were any. This is not attractive behaviour and it is compounded by the subsequent deceit. But it does not amount to nor add to a finding of conduct which it would be inequitable to disregard.
38. W asserted that it did constitute such conduct for H to allow the joint names purchase of LC to proceed at a time when his liaison with C had already developed to the point of their February 2013 trip to Dubai. As the case developed so too did the scope and scale accompanying this allegation, so that in her final section 25 statement W asserted that not only in relation to LC but also in relation to the joint names purchase of SD H had deliberately persuaded her to take the purchase in joint names with a view to financial gain. Beyond that she also developed the deliberate untruth that it was only in March this year that she came by chance across the disappointing November 2012 survey, admittedly addressed to H alone, which suggested she was significantly overpaying to purchase LC. Her written statements about this are unequivocal: she did not know about the survey, she had never seen the survey, H had never discussed the survey with her or told her of its conclusions, he must have had his own reasons for acting so contrary to her interests. Yet in opening the case Mr Feehan accepted on her behalf that she had indeed received that valuation report. I heard evidence about it from H and am quite satisfied that its contents were common knowledge prior to their acquisition of LC, and thus that for whatever reason they proceeded to complete the purchase of this strikingly attractive and clearly superbly equipped five-bedroom three-floor house set in 2 1/2 acres of grounds in what is described as a semi-rural location.
39. W described herself as "frugal" in many areas of her expenditure, and so she may have been. But this was a couple who did not flinch from what many would regard as extravagant and self-indulgent spending without much regard to value for money or the advantages of caution. It is impossible to say whether one (and if so which) was goading on the other, or whether they both equally enjoyed spending without evident restraint.
40. Add-back. No case approaching wanton dissipation of assets is made out. In a series of decisions of which the most recent is that of Moor J in MAP v MFP [2015] EWHC 627 (Fam) the restrictive and cautious approach adopted by the court he determined (albeit in a case involving far larger resources) that expenditure he estimated to come closer to £250,000 on escorts (euphemistically so-called) and cocaine in the circumstances in that case should not be subject to add-back. The facts of the case are far from these but the disinclination of the court in effect to impose a financial penalty for conduct is considerable. Add-back is not a route which on any view of the facts I would follow in this case.
41. If all of W's complaints had been established, they were never going to amount to conduct which would impact on the outcome, in my judgment.
42. I can of course appreciate that the foregoing is a pretty formidable list of criticisms of the way in which W has presented her case. I wish to stress however that none of them, whether individually or in aggregate, has any impact on the way in which I now approach the main topic of fixing upon what distribution should be made in H's favour. In particular none of these issues increases his entitlement beyond that at which I hope to arrive upon a fair and proper application of appropriate principles.

The oral evidence

43. I heard only from the parties. Each had a fair deal about which to feel nervous, and it showed. Each made significant concessions as to the inaccuracy of parts of their written case. I approach the evidence of each of them with caution. But on balance I thought that H was more likely to be telling me accurately about most of the matters in dispute: whether he had made the £2M offer for LC straight after they first viewed the house off his own bat and without even W's knowledge or consent; whether his expenditure on items both mundane and profligate was somehow hidden from W, or incurred without her at least tacit approval; whether he had cajoled and persuaded to induce her to put either house in joint names; how their plan to take a career break was overtaken by the purchase of LC… All of these and other matters canvassed really are peripheral though: my ultimate order would be no different if both properties had been in W's name alone.

The approach advocated for W

44. Unilateral assets. Mr Feehan presented these parties' marriage as an example of the "genuine dual career family" depicted by Baroness Hale from [153] in Miller/McFarlane:

"This is simply to recognise that in a matrimonial property regime which still starts with the premise of separate property, there is still some scope for one party to acquire and retain separate property which is not automatically to be shared equally between them. The nature and the source of the property and the way the couple have run their lives may be taken into account in deciding how it should be shared. There may be other examples. Take, for example, a genuine dual career family where each party has worked throughout the marriage and certain assets have been pooled for the benefit of the family but others have not. There may be no relationship-generated needs or other disadvantages for which compensation is warranted. We can assume that the family assets, in the sense discussed earlier, should be divided equally. But it might well be fair to leave undisturbed whatever additional surplus each has accumulated during his or her working life. However, one should be careful not to take this approach too far. What seems fair and sensible at the outset of a relationship may seem much less fair and sensible when it ends. And there could well be a sense of injustice if a dual career spouse who had worked outside as well as inside the home throughout the marriage ended up less well off than one who had only or mainly worked inside the home." [My emphasis]

45. I take that to be a suggested formulation which would allow family assets, assets acquired during the course of the relationship, to be treated in a non-sharing manner if one party has built up savings or reserves from their greater earnings or indeed it could be from their smaller expenditure. That too seems to have been the way in which Lord Mance understood the proposition at [170] when he wrote:

"I agree with what Baroness Hale has said in paragraph 153, which is, as I see it, also consistent with the last sentence of paragraph 25 of Lord Nicholls' speech. The present marriage had what one might call a traditional aspect. Mr Miller worked, and Mrs Miller gave up work to look after him. But there can be marriages, long as well as short, where both partners are and remain financially active, and independently so. They may contribute to a house and joint expenses, but it does not necessarily follow that they are or regard themselves in other respects as engaged in a joint financial enterprise for all purposes. Intrusive enquiries into the other's financial affairs might, during the marriage, be viewed as inconsistent with a proper respect for the other's personal autonomy and development, and even more so if the other were to claim a share of any profit made from them. In such a case the wife might still have the particular additional burden of combining the bearing of and caring for children with work outside the home. If one partner (and it might, with increasing likelihood I hope, be the wife) were more successful financially than the other, and questions of needs and compensation had been addressed, one might ask why a court should impose at the end of their marriage a sharing of all assets acquired during matrimony which the parties had never envisaged during matrimony. Once needs and compensation had been addressed, the misfortune of divorce would not of itself, as it seems to me, be justification for the court to disturb principles by which the parties had chosen to live their lives while married."

46. Mr Feehan maintains that sharing in this case is not appropriate at all once H's needs have been met, and that the wealth built up from earnings and bonuses which came to W during the relationship should remain hers. The evidential basis for this is the assertion that the couple maintained financial segregation within their marriage. True it is that they had no joint bank account nor any joint investments at any stage. They for the most part maintained contributory arrangements whereby they shared their household expenditure, he meeting the bills and she putting in a monthly amount towards them. There seem to have been times, and it may well have happened often, that each would contribute half to the cost of a meal out or some other social occasion: but this does not seem to have been an invariable rule. And W in fact bore the brunt of major items of expenditure. I have already referred to H's cars, but there were in addition their expensive holidays the cost of which W met. What is lacking is any suggestion that there was a deliberate and agreed intention on their part to maintain strict separation of their finances.
47. In the judgment of the strong court which the then President Sir Mark Potter delivered in Charman v Charman (No 3) [2007] EWCA Civ 503, reported as Charman v Charman (No 4) [2007] 1FLR 1246 at [66] and from [72] onwards considerable reflection was shone upon the principles of sharing. At [86] he continued:

"The extension of the concept of unilateral assets, suggested by Baroness Hale in Miller, at [153], was expressly endorsed by Lord Mance, at [170]. Although obiter, it clearly commands great respect. It relates to the 'dual career'. The suggestion was that, where both parties had worked throughout the marriage, had pooled some of the assets built up by their efforts but had chosen to keep other such assets under their separate control, the latter, although unequal in amount, were unilateral assets which might not be subject to the sharing principle. Because of the convincing logical objections of Lord Nicholls to the different treatment of unilateral assets, we would prefer, so far as it is proper for us to do so, to keep the room for application of the concept closely confined. Lord Mance offered, at [170], the following interesting rationalisation for the suggested extension:

'Once needs and compensation had been addressed, the misfortune of divorce would not of itself … be justification for the court to disturb principles by which the parties had chosen to live their lives while married.'

Lord Mance may there have foreshadowed future, albeit no doubt cautious, movement in the law towards a more frequent distribution of property upon divorce in accordance with what, by words or conduct, the parties appear previously to have agreed."

48. That last passage looks forward to the increasing use of prenuptial agreements and anticipates where Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, [2011] AC 534 and the Law Commission Report Matrimonial Property, Needs and Agreements (Law Com No 343) have since led. But I do not believe that this rationalisation is consistent with the principles developed since the decision of the House of Lords in White v White in 1970, and that there should be this inroad into the sharing concept to which parties in effect subscribe when they marry unless they choose to opt out (or attempt to do so) with a prenup. The pre-White regime where reasonable needs were the be-all and end-all which regularly left financially fruitful husbands with the pick of the harvest and domestically contributing wives with, in comparison, the crumbs was rightly swept away by the twin cleansing winds which brought to an end the then prevalent discrimination and imposed an overdue re-evaluationary realignment with the words and principles of the statute. "Not to share" as Baroness Hale speculated might be appropriate in cases where there are unilateral assets seems to me, with every respect, a retrograde step which would incidentally open up fresh arenas of factual dispute for spouses to rummage through.
49. Certainly I am fortified in that belief by the patent lack of enthusiasm of the Court of Appeal in Charman for the concept of unilateral assets, and by those judges' express intention to keep the application of the concept closely confined. Indeed it is difficult to think of a case in which it has been applied as opposed to being discussed.
50. But as I say I am not persuaded that there is evidentially established any sufficiently clear and consistent pattern of separate finances as might found such a finding in this case. The pattern rather is, to my mind, one of open-ended liberality regularly maintained to meet the wishes and even the whims which W afforded them both. It was in this way that their incomes were pooled, and in addition clearly both contributed to regular household outgoings and other expenditure.
51. Short marriage. This was not so desperately short from cohabitation to separation as some, but still by no means lengthy. What impact if any does that make upon the sharing principle, if it applies as here I conclude it should? Lord Nicholls in Miller/McFarlane from [18] considered the approach upon breakdown of the short marriage and was firmly of the view that the same sharing principle (at that stage described only as a yardstick) should apply because to do otherwise "it would be to re-introduce precisely the sort of discrimination the White case was intended to negate." At [17] he said:

"This principle [equal sharing] is applicable as much to short marriages as to long marriages: see Foster v Foster [2003] EWCA Civ 565, [2003] 2 FLR 299, at 305, para [19] per Hale LJ. A short marriage is no less a partnership of equals than a long marriage. The difference is that a short marriage has been less enduring. In the nature of things this will affect the quantum of the financial fruits of the partnership."

52. Foster v Foster was a case of a short childless marriage which endured only four years. In the course of her judgement in the Court of Appeal Hale LJ as she then was made the following observations at [17 and 18];

"Miss Boyd, on behalf of the wife, however, argues that these cases [White and Lambert] were concerned with the problem of evaluating the very different contributions of breadwinner and homemaker over a long marriage where there have been children to bring up. They are of no relevance to a short childless marriage where both parties have been working. The court has to consider the duration of the marriage under s 25(2)(d). Here the only contributions to be considered under s 25(2)(f) are those in money or money's worth and so the court is entitled to take account of the fact that one has contributed more than the other.

This is a surprising proposition. Although White v White was a long marriage with children, both parties had made a financial contribution as well. The Matrimonial Causes Act 1973 was designed to move away from the application of strict property law principles, with their dependence upon evaluating contributions in money or money's worth, towards the recognition of marriage as a relationship to which each spouse contributes what they can in their different ways. There can be no justification for treating differences in income any differently from differences between breadwinning and homemaking. These days things are rarely as simple as one breadwinner and one homemaker. Both may work equally hard but in jobs which are unequally remunerated. They may agree that one should work part-time, or take a career break, in order to enable the other to move or take promotion. They may agree that one should work full-time at the outset to enable the other to gain qualifications which will then enable the first to concentrate on domestic responsibilities. As it happens, differences in income and career progression are also frequently the result of inequalities in earning power between the sexes, although not always, as this case shows. If both go out to work and pool their incomes or spend a comparable proportion of their incomes for the benefit of the family, it would be a surprising proposition indeed if they were not to be regarded as having made an equal contribution to the family home or other family assets. Two of the homes acquired here were matrimonial homes and the others (with the possible exception of Rectory Lane) were obviously acquired as joint assets by their joint efforts." [My emphasis]

53. In Miller/McFarlane at [143] Baroness Hale had this to say about her earlier decision:

But there are many cases in which the approach of roughly equal sharing of partnership assets with no continuing claims one against the other is nowadays entirely feasible and fair. One example is Foster v Foster … , a comparatively short childless marriage, where each could earn their own living after divorce, but where capital assets had been built up by their joint efforts during the marriage. Although one party had earned more and thus contributed more in purely financial terms to the acquisition of those assets, both contributed what they could, and the fair result was to divide the product of their joint endeavours equally. …"

54. Does the sharing principle apply? It is in my judgment consistent with current principle that the matrimonial acquest, the value of the assets and savings built up during the marriage, irrespective of the very different proportions in which the parties contributed them, should be subject to the equal sharing principle.
55. Pre-acquired capital. The equal sharing principle does not in the first instance apply to the £1.37M or thereabouts which W had available to her in December 2007. But as to about £1.02M thereof she used it to buy and to improve SD which became their matrimonial home. That is a classic example of mingling, that is to say using pre-acquired capital in such a way during the course of the relationship that it falls to be treated in the same way as matrimonial property acquired during the relationship or marriage. Strictly, therefore, that £1.02M (or rather the value of the house by which it is represented) could fall for equal division along with the truly marital acquest.
56. However, in JL v SL [2015] EWHC 360 (Fam) Mostyn J expressed coherent views on the question of the appropriate treatment of non-matrimonial property which it is decided, as a result of mingling, is available for division. At [25] he expressed the view that the court should always attempt to determine the partition between matrimonial and non-matrimonial property; and once that has been done the matrimonial property should usually be divided equally and there should usually be no sharing of the non-matrimonial property. But he continued at paragraphs [28 and 29]:

"This leads to the treatment of pre-marital or other non-matrimonial property which has become 'part of the economic life of [the] marriage … utilised, converted, sustained and enjoyed during the contribution period.' In N v F I stated at para 14:

"It seems to me that the process should be as follows:

i) Whether the existence of pre-marital property should be reflected at all. This depends on questions of duration and mingling.

ii) If it does decide that reflection is fair and just, the court should then decide how much of the pre-marital property should be excluded. Should it be the actual historic sum? Or less, if there has been much mingling? Or more, to reflect a springboard and passive growth, as happened in Jones?

iii) The remaining matrimonial property should then normally be divided equally. …"

In that case the husband brought £2.116m into a 16 year marriage. It was well and truly mingled into the economic life of the partnership. But, as I found in para 44 it was "the bedrock on which [the] marriage was founded". But for the question of need I would have excluded the initial £2.116m but not any growth on it. I adopted the same approach in my earlier decision of FZ v SZ and Others (Ancillary Relief: Conduct: Valuations) [2011] 1 FLR 64. In contrast in Jones Wilson LJ excluded not only the initial £2m of pre-marital property introduced by the husband but also £7m of growth on it.

It can be seen that this technique maintains the purity of equal division of what is found to be the matrimonial property and in my judgment is the path that should be generally adopted. However the fact of mingling may nonetheless lead to an unequal division of the matrimonial property, most likely where it is the matrimonial home which was provided solely by one party, as was the case in Vaughan."

57. If I were to follow that approach then I would need to decide whether the mingled value of SD should be divided other than equally, as in Vaughan. Thankfully I am spared that task for reasons which will become apparent when I explain the position adopted by H.
58. It remains the case however that the remainder of W's pre-acquired and unmingled assets, namely about £350,000, should be excluded from equal division on sharing. I have no evidence one way or the other to show whether since 2007 any identifiable growth may have occurred which would make it reasonable to deduct more than £350,000 from what now is available overall.
59. No sufficient reason has been identified in this case for departing from equality of division. The fact that this is in effect a husband's claim against a wife rather than the more conventional claim of wife against husband emphatically does not call for a discount. Thus the principled outcome would be that of the £6.9M of current assets (that is to say at this stage ignoring pension entitlements) H should receive sufficient to leave him with £3.275M (that is to say half of £6.9M but after deduction off the top of the £350,000 referred to in the last paragraph).

The outcome H promotes as acceptable

60. There is however in this case another circumstance to which I am entitled to have regard under section 25 of the Matrimonial Causes Act 1973. It is not a circumstance which so far as I am aware or can recall has assumed prominence in reported decisions. It is a simple, but I hope not a too simple, proposition. If one party puts forward a coherent case for an outcome less advantageous to (in this case) himself, is the court in any sense under an obligation to make a higher order in line with what the court regards as that individual's entitlement upon principled application of the relevant provisions and considerations?
61. The answer must surely be "no." The concept of individual autonomy must encompass not only the right of an adult party to settle for less than the court would award him or her, but also the right to invite the court to resolve a dispute by ordering less than it otherwise might. A party may often have his or her own notion of what is the fair outcome and that may be based upon or influenced by factors wholly unknown to the judge, and beyond the judge's perception or indeed even his or her understanding. But there can surely exist no embargo on the court's ability to award an adult and competent party less than the court regards as that party's entitlement.
62. So, here, H has for some time consistently now put forward his case on the basis that he should receive SD outright and in addition a sum to bring his capital worth up to £3M or thereabouts. (I repeat that this is quite apart from and before consideration of what if anything is appropriate in relation to pension entitlements.) In arriving at this outcome Mr Southgate explained that whereas (as I have explained and as I agree) the purchase of SD with W's pre-acquired assets means that strictly speaking it has now merged with and should be treated as matrimonial property, H was prepared by way of concession not to adopt that stance. In this case H's willingness to make that concession supplies both the justification and the rationale for departing from equality.
63. To reflect that concession in my view £1.1M, the current assumed value of the property, rather than the £1.02M which (with the money spent on works to the property) it cost W in 2008, should be excluded from the operation of the sharing principle. With the further reduction of £350,000 to reflect the balance of pre-acquired assets, the matrimonial assets to which the sharing principle applies comes down from £6.9M to £5.45M. Adopting H's concession and applying it as I believe I have appropriately to the circumstances of the case, that predicates the transfer to H of SD (for this purpose treated as worth its valuation) plus a lump sum of £1.625M.
64. (i) There are in this case no liquidity problems. After meeting this award W will, on the basis of the Schedule, retain the home in which she lives valued at £1.5M plus about £2.725M in investments: a total of £4.225M.

(ii) I appreciate that H once he discharges outstanding liabilities will have perhaps nearer £1.55M than £1.625M but I do not propose to fine-tune the amount of the lump sum award to any greater extent than this.

(iii) In thus broadly assessing their respective net capital positions, apart from their respective homes, I have ignored cars, jewellery and watches, and the fact that H's outstanding costs are to an extent still at large. Furthermore it will be observed that I have in arriving at this net assessment paid no regard to the notional costs of sale of the two homes, taking the view that neither party is likely to have any need to move as things now stand.

(iv) But I will take up the offer which Mr Southgate made on behalf of H having taken his instructions on the suggestion I made that he might volunteer some compensatory payment to W to reflect his expenditure on C during 2013, and £15,000 will be deducted from his lump sum on that account but on the basis that the offer and the deduction are made entirely without acknowledging that there is any legal obligation to make them.

The parties' pension entitlements

65. Although instructed by H alone Mrs Janet Ford whose report on pension sharing and offsetting in this case is dated 24 June 2014 has acknowledged that her duty is to inform and advise the court while maintaining a fair neutrality between the parties. I was not invited to a detailed consideration of her report during the course of the hearing, but it is the case that no points of dispute were raised on behalf of W in relation to anything in this report.
66. Mrs Ford's starting point was to evaluate each party's pension entitlement as at December 2007, the date when they commenced cohabitation, because her instructions were to consider only the growth of their respective pension provisions during the period of their relationship from then until December 2013. From that she proceeded to calculate the value in terms of notional annual return in today's terms of the pension benefits each had accumulated during the period under consideration. In round terms this produced an annual figure of £3600 for H and £16,000 for W. Mrs Ford then calculated what adjustments would be necessary to arrive at equality of benefit based on these intra-relationship contributions and entitlements. Her conclusion was that to equalise their pensions from age 63 considering only what had accrued during the relationship period would involve a 23.8% pension share award in H's favour from specified elements of W's pensions with her employer.
67. By comparison with the annual figures stated above the result would be that W's pension income would reduce from £16,000 to approximately £8900, whereas H's would increase from £3600 to the same amount, namely £8900. Thus it can be seen that in order to achieve a £5300 annual increase for H, W would lose £7100. In today's tax regime these amounts when received by each party would be subject to the prevailing rate of income tax at their marginal rate.
68. The figures given are, lest there be any misunderstanding, entirely theoretical abstracts arrived at by simplifying down the manifold complexities of the parties' various pension schemes in an attempt to achieve common denominators. I do not thereby mean to be disparaging, but simply to recognise that in order to achieve comparisons which are as valid as possible a high degree of technicality and some artificiality is required. This is on any view a theoretical exercise about which one can be very confident that things will turn out differently.
69. Pausing there, I can see why the pension adjustment route would be seen by W as a deeply unattractive outcome. Moreover, bearing in mind that the benefit for H of such an arrangement depends upon him surviving to age 63 and is until then deferred, the offsetting option should be explored.
70. Offsetting is a technique whereby W's pension would be left intact and H would be compensated with a capital sum to replace what might otherwise have been a pension sharing order. Subject always of course to the amount of the compensatory payment, the advantage in terms of future security to W is obvious. The advantage to H is the accelerated receipt of spendable capital in place of a 20+ year wait to commence receipt of a taxable lifetime income stream. The advantage of offsetting from my perspective is that it seems to me the fairer alternative, viewed objectively and overall.
71. In her report Mrs Ford makes the point that pension funds are not directly comparable with other assets, and that this always gives rise to difficulty in deciding the value to place on the pension rights. The starting point remains her conclusion on the adjustment that would be necessary to produce equality of income in retirement. In making this calculation the value of the pension fund is usually discounted to allow for the fact that its benefits are not recognisable as an immediate lump sum cash asset, and that the pension income is taxable.
72. Her conclusion is that "H will require a pension cash transfer to the value of £248,067 to fully match the additional pension income receivable by W." She suggests that "as a result of my research, allowing for [that figure] and the greater value (due to immediate access and difference in taxation) generally put on an immediate cash sum … to offset against a pension share, I suggest that a cash payment of £210,856 to H … would be a fair equivalent value."
73. It is at this point that I part company with Mrs Ford. No submissions at all were made by either party in relation to this suggested outcome, other than the responses I have already recorded to my temperature-taking suggestion that £40,000 might be an appropriate sum. But I shrink from the suggestion that a payment in excess of £200,000 should pass from W to H to compensate him for the potential loss in 20+ years of a lifetime income stream of (at today's value) £5300 annually subject to such tax consequences as may prevail at that time and for that uncertain term.
74. I am aware from my general reading that there is at present debate but as yet no conclusion on precisely this topic of appropriately arriving at an offsetting figure. I am not aware from my own knowledge nor have I researched what the competing methods might be. I am thus left in the unsatisfactory position where I must alight upon an amount which will necessarily be arbitrary if, that is, H is indeed to receive as part of the overall distributive process consideration for the fact that during this marriage unequal pension benefits have arisen.
75. In my judgment it would be appropriate for me to make a pension sharing order to at least reduce the imbalance in pension benefit entitlement which has arisen during the course of the parties' relationship. I would not necessarily make an order for as much as the 23.8% suggested by Mrs Ford's calculations. Offsetting is in this case and in my view by far the preferable and fairer course to take. But I certainly regard a cash payment of over £200,000 as very significantly excessive. Given all the uncertainties which would beset any attempt at principled evaluation I simply take £60,000 as the amount which in all the circumstances of this case W should pay H in order to maintain her pension entitlements intact.

Permission to appeal

76. In the course of communications between Mr Feehan, Mr Southgate and myself since this judgment was first handed down in draft form Mr Feehan has advanced reasons in support of an application by W for permission to appeal against the order which will reflect this judgment. It was agreed that I should determine that application without convening a further oral hearing, and I am content to take that course. I refuse the application, of course without prejudice to W's ability to renew it to the Court of Appeal. I extend the time for pursuing that appeal, as I stated I would, so that it starts to run from the hand-down date of this judgment.
77. The first available date for determination of costs applications is 10 December, when I will deal with any other first instance issues which may meantime emerge.