Jersey Unreported Judgments

[2010]JRC206C

royal court

(Family Division)

16^th November 2010

Before     :

V. J. Obbard, Registrar, sitting alone.

 

IN THE MATTER OF RR

REASONS OF ANCILLARY MATTERS AND CHILD MAINTENANCE

Advocate M. R. Godden for the Petitioner.

Advocate H. J. Heath for the Respondent.

The Co-Respondent did not appear and was not represented.

judgment

the registrar:

1.        In this case the petitioner, who is the husband, has obtained a decree of divorce on the grounds of his wife's adultery.  He is 50 and she is 42.  He is a financial adviser paid on a commission basis and she is a personal assistant to a chief executive.  They have a son D (19) and a daughter E (17). 

2.        The decree nisi was granted unopposed on 21^st April, 2010.  On 22^nd April, the husband made his application to make the decree absolute. 

Ancillary matter proceedings to date

3.        On 24^th May, (less than 2 weeks from the earliest day to grant the decree absolute) the wife filed an application in relation to ancillary matters, including child maintenance, a lump sum and a transfer, sale or settlement of the former matrimonial home. 

4.        On 25^th May, 2010, there was a hearing before me to decide the application of the wife to delay the grant of the decree absolute "unless all ancillary matters have been agreed between the parties". 

5.        With some reluctance, I refused the application for a delay. The petitioner (in this case the husband) can apply for a decree absolute six weeks after the decree nisi, provided arrangements for the children are satisfactory.  In addition to consideration of the Jersey divorce Rules and Law, I also considered the recent UK authority of Miller-Smith v Miller-Smith (No.2) [2009] EWHC 3623 (FAM).   

6.        However, in refusing the application, I accepted the undertaking of the husband to continue to pay:-

(i)        the mortgage on the former matrimonial home;

(ii)       the home insurance;

(iii)      his pension;

(iv)      the pet plan;

(v)       he Aviva joint life policy;

(vi)      Unum Limited income replacement policy;

(vii)     the Aviva policy on the respondent;

(viii)    the respondent's pension and D's education fees. 

7.        A hearing on the wife's application for interim child maintenance for E took place on 4^th August, 2010.  The parties' son, D, is learning to be a pilot and is supported by the husband.  The husband had already paid £150 in July as child maintenance for E.  On an interim basis, I ordered that maintenance at that same rate should continue until further order and that maintenance at that rate should be backdated to May.  I was told that he voluntarily paid £100 per month to E as pocket money in addition to the maintenance.  His earnings for 2009 were £42,000.  This is considerably less than some previous years.  Advocate Heath (for the wife) called for the rate to be calculated on the basis of the average of the last three years which worked out at £118,311 per annum.  This could have resulted in a maintenance rate of £273 per week if the Child Support Agency figure were used as a guide.  However, the wife would have been content with a figure of £225. 

8.        On 8^th November, 2010, not being satisfied that the husband had supplied full details of his commission earnings, the wife's advocate insisted on an emergency hearing to force further disclosure to be made by the husband.  A request was made for a printout of his firm's 2010 commission book, to be redacted as considered necessary by an Advocate or legal assistant at the petitioner's lawyers.  The commission book has not been produced.  Further details were ordered to be supplied by the husband in relation to the set up of a Skandia Multi-fund holding and other disclosure in time for the final hearing on 15^th and 16^th November. 

The Issues

9.        My task today is to divide the parties' capital fairly between them and to decide upon a fair rate of child maintenance for E.  

(i)        Each party has applied for a lump sum;

(ii)       The husband's lump sum application relates to sums which he says were drawn from the parties' joint account by the wife without his agreement.  The wife's lump sum application relates to the depletion of assets by the husband in selling jointly held Skandia shares without her consent. 

(iii)      The wife has applied for spousal maintenance. 

(iv)      The wife maintains her allegations that the husband has not made full disclosure. 

10.      The assets as they presently stand are relatively straight forward, consisting of a house, (valued at £467,500).  In addition, the wife's assets amount to the following:-

(i)        Skandia shares         £14,809;

(ii)       Aviva pension            £52.068;

(iii)      work pension            £26,905;

Total                                 £93,782. 

The husband's assets under his control amount to the following:-

(i)        Skandia shares         £123,422;

(ii)       Aviva pension            £151,064;

Total                                 £274,486. 

The husband says that his Skandia holding should be "ring fenced" to provide for the children's education.  The wife says they should be included in the assets for distribution between them. 

11.      The case is complicated by:-

(i)        the distrust of the wife and her concern that the husband is not being honest;

(ii)       the reluctance of the husband to provide information, although I am satisfied that finally, he has tried to be fully honest with the Court, but still refused to answer some of Advocate Heath's legitimate questions in cross examination; and

(iii)      his insistence that some matters were "private" and beyond the reach of anyone, partly, I believe, caused by his emotional hurt in going through the process of divorce;

(iv)      his passionate desire to help his children above all else, resulting in, perhaps an unrealistic open position;

(v)       the uncertain extent to which his obviously generous parents support him at present and the extent to which they are prepared or should be expected to support him in future. 

12.      The wife left home on 29^th November, 2009.  The separation was not easy for either party and the parties' relationship was, at the time of the hearing on 16^th November, 2010, still acrimonious.  She and E (17) live in rented accommodation, shared with the wife's new partner.  This is a three bedroomed property.  The rent is £2,400 per month.  The wife contributes £1500 to pay rent and expenses. 

13.      The parties' son, D, is training to be a pilot, and, to this end, is supported by the husband.  During vacations, he stays with his father.  The total of the father's subsidy for college fees, tuition and residence plus travel is just under £35,000 per year. 

14.      The agreed value of the former matrimonial home is £875,000 and there is a mortgage of £390,000 secured upon it.  If one allows sale costs of £17,500 the net realisable cash from the sale would amount to £467,500. 

15.      The husband's Skandia shares have depleted to their present value by the husband.  £52,500 has been cashed in order to pay on-going expenses of both parties, including D's flying and pilot training costs. 

16.      Both parties also have significant pension funds.  The CETV of the husband's is £151,064 and the wife's pensions have a combined CETV of £78,974.  There are several small bank accounts, the home contents, items of jewellery and motor vehicles. 

17.      At the time of the hearing, there remained some uncertainty as to what the husband presently earns and what he is capable of earning.  I am reminded that the Court must take into consideration earning capacity and the potential earning capacity of the parties.  On the other hand it is wrong to impose a rate of maintenance upon parties when they have little chance of paying the amount without help. 

18.      Advocate Heath asked him about how he had in fact funded the financial undertaking given on 25^th May, 2010, (see paragraph 6).  £52,500 had been withdrawn from the Skandia account.  During the time it had been spent, the husband could not accurately explain what had happened to all of it and to his income received during the same period.  He said he could not account for all the detail.  He had however used it to support the undertaking and to support D.  He had also repaid a loan to his parents.  He was, however, adamant that, if an investigation were to be carried out on all his spending, all his transactions would be proved to be above board and honestly carried out. 

19.      She asked him why certain Aviva pension premiums had not been paid as they should have been in accordance with the undertaking.  He maintained it was not his fault, that the fault was with Aviva and that all would be put right.  The company had made several errors and wrongly wanted to instigate "claw back" procedures.  Unfortunately, I reached no accurate conclusions as to what actually happened to the proceeds of sale of the Skandia shares.  Paragraph 44 of the affidavit sworn by him for the purpose of this hearing, does set out when amounts were withdrawn and what debit entries were made on his Barclays account between February 2010 and October 2010.  However, I did reach the conclusion that the husband had done his utmost to support his children with what money he had, at a time that he was suffering emotionally from the breakdown of his marriage.  There is no reason why the Aviva policy can not be re-started. 

20.      She asked too how the holding in Skandia had come into existence, and what funds had been used to create it.  The husband had control of the parties' finances at the time.  During the hearing it was not possible to elicit exactly what funds were used except that previous holdings were sold in order to place in Skandia.  

21.      How must I resolve the issues and to what extent was Advocate Heath's questioning relevant?  Advocate Heath submitted that I should first carry out the "Section 25 exercise" and secondly consider making adverse inferences to be drawn from her cross examination of the husband that he was not being honest with the Court. 

22.      I think I can more easily deal with the second matter first.  A brief review of the husband's evidence both written and oral should, I think, dispel the wife's concerns.  His pay slips were produced and set out in full from June 2009 to 31^st October, 2010.  The method of payment on a commission basis was explained.  There is no "up front" commission.  He now receives "trail" commission during the life of the insurance policy sold.  It transpired that he no longer performs a management role as he once did.  There might be a situation in which a company could retain some commission from an employee as a "buffer" against loss if an employee left with commission paid to him, but I was not clear if this could have applied to the husband in his firm.  There have indeed been large changes in the insurance policy industry in which the husband works.  Although he did not provide a redacted commission book as Advocate Heath was calling for, I was not convinced that it would have added greatly to her argument unless it could have shown that the husband was not telling the truth.  I doubt it could have done that.  At the end of her cross examination I was left with the impression of a man desperately try to retain his credibility and defend himself against allegations of deception, when he could have done so earlier to greater effect, if only he had co-operated more fully with requests for disclosure. 

23.      So how to distribute the remaining assets?  I do not think I need to look back to exactly how monies from the joint account and money from the Skandia shares was spent.  It may well be that the husband took a holiday and that the wife made some extravagant purchases for her own and E's benefit.  Substantial assets remain, including the former home.  If Skandia shares were sold, the husband has shown that they were spent substantially on fulfilling his undertaking to provide for his wife and family.  

24.      I have no doubt that the remaining Skandia shares should be included in assets for distribution and not to be retained by the husband as a fund to pay education expenses or to be settled in trust for this purpose.  There are two reasons for this. 

25.      In the first place, it has not been suggested that the husband is unable to pay maintenance for E or that support for D cannot be funded from his income.  As I understood it, it was his suggestion to spend the share capital in order to fund maintenance.  This struck me as unnecessary. 

26.      Secondly, I could see no reason to deprive the wife of an immediate benefit by including the shares in the capital for distribution.  In the case of Lambert-v-Lambert [2002] EWCA Civ 1685, the judgement of Thorpe LJ makes it clear that no one can claim that certain assets can be given special status on the grounds that one party has made a superior contribution to the marriage.  In that case £6,000,000 had been placed on trust for the children.  The outcome was that the wife was awarded 50% of all assets. 

27.      The distribution has already been explained in the sheet which accompanied my order of 16^th November.  The husband is to keep his remaining Skandia funds and the wife keeps hers.  They each keep their pensions.  In order to balance the capital distribution, the wife will have 75% of the net value of the house or at least £350,000.  This results in the wife having 53% of assets and the husband 47%.  The wife will have a greater share in liquid assets.  This is not unfair in view of the husband's greater earning capacity and the need for the wife to provide a home for E. 

28.      I have decided therefore to follow the pattern of the wife's open position insofar as it closely relates to my decision on capital matters.  Where I differ is with regard to the payment of any lump sum to the wife.  Each party should keep the assets presently in their possession.  The wife does not need to have the security of nominal spousal maintenance.  The children are young adults.  However the position is different with regard to child maintenance. 

Child Maintenance

29.      As explained above, the parties have already attended a hearing on 4^th August, 2010, about the payment of interim maintenance.  The decision was that the husband would pay £150 per week for E.  At this hearing, the wife was asking for £175 on the basis that the husband had not revealed the true extent of his commission earnings. 

30.      I have thought long and hard about the correct level of child maintenance in this case.  On one view of the case, because E lives with her mother and D spends his vacations with his father, each parent should be responsible for the "child" in their care.  On the other hand both children are over compulsory school leaving age and more individual attention should be given to the cost of further education and the extent to which either parent should be expected to fund it.  I know very little about the time each of the children intend to spend in further education, except that D is presently training to be a pilot and E is at Highlands College.  It would be better to have a further look at the husband's contribution for E in a few months' time when perhaps more is known about their plans.  For the time being, I have decided to reduce the maintenance for E to £110 per week.  In effect the wife and E live in her partner's property and contribute £1500 towards rent and living expenses.  However, the expenses listed in the wife's affidavit come to a total of £662 per month.  So maintenance at £110 per week (=£476.60 per month) may be inadequate, even taking into account the wife's net earnings of £29,000 but I have to take into account the enormous cost of maintaining D at flying college which apparently costs the husband about £35,000 per annum (£2,916 per month).  The husband has some assistance from his parents, but he was reluctant to say how much. 

31.      So I have decided to adjourn the matter of child maintenance until a date to be fixed after 1^st May, 2011, but, in the meantime to order that further interim maintenance for E at the rate of £110 per week should continue at least until E reaches the age of 18.  I hope the needs of the children and the ability of each parent to care for the children may be clearer by then. 

Authorities

Miller-Smith v Miller-Smith (No.2) [2009] EWHC 3623 (FAM).

Lambert-v-Lambert [2002] EWCA Civ 1685.