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Cite as: [2015] JRC 108A

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Matrimonial - order sought for child maintenance and ancillary relief by the petitioner.

[2015]JRC108A

Royal Court

(Family)

18 May 2015

Before :

Judy Marie O'Sullivan, Registrar, Family Division

Between	Z	Petitioner
And	Y	Respondent

IN THE MATTER OF Z-v-Y (MATRIMONIAL)

Advocate H. J. Heath for the Petitioner.

Advocate F. C. Binet for the Respondent.

judgment

the registrar:

Reasons

1. The parties were married on the 30^th March, 1996, and have two children, Sophia (This is not her real name) who is 18, born in 1997 and will finish schooling at School 1 this summer and Grace (this is not her real name) who will be 17, born in 1998 and will finish at School 2 in a year's time. The wife is now 57 having married when she was 38 and the husband is aged 55, so was 36 on marriage. A divorce petition was filed by the wife on the 11^th July, 2014, on the grounds of the unreasonable behaviour of the husband and the Decree Nisi was pronounced on the 10^th September, 2014, the parties having separated on the 5^th May, 2014. An application for ancillary relief was made by the wife on the 19^th August, 2014. The wife is a nurse and the husband is a strawberry grower. The wife and girls continue to reside at Property 1, the former matrimonial home, but the husband is staying in his mother's property (Property 2) in St Martin. Neither party cohabits.

The history of the marriage

2. The husband's father was a grower, mainly of strawberries, and the husband worked with his father, having left school at 16. The husband was gifted prior to his marriage an area of land, approximately two and a half vergees by his father, and in return was to pay his father's legal fees and the cost of moving his parent's bungalow on to mains drainage. The parties met in 1995 and lived together for a period before getting married in 1996. The husband got planning permission to build a house and building started in January 1996. He and the wife lived rent free in an accommodation block whilst they built on the gifted land. The husband and then the parties jointly obtained credit by way of an agricultural loan of about £90,000 inter alia to build the property, to be known as Property 3. They moved into it in May 1996, having married in the March. The gifted land also comprised a small orchard, some hard standing, double garage and some agricultural tunnels, now valued in total at £75,000. The husband also owned field W before he met the wife and two fields sold in 2010.

3. The husband's father retired in 1997 and the husband continued on his own as a strawberry grower until 2002. The wife was a registered nurse having worked at the hospital since 1988 and has continued in the nursing profession ever since. There was no accommodation block of their own to house farm workers and the parties built an accommodation block in 1998. In addition to the mortgage on Property 3, they obtained an agricultural mortgage for the block of £100,000 and the husband also had two loans with RBSI of £20,000 each, part of which was for the purchase of a tractor. He had no working capital when he took over the farm so he estimates it would have cost about £25,000 to buy the plants for the first year. The lifetime of strawberry plants is about 2-3 years and he purchased an irrigation system to last the plants lifetime. During this time the wife did night shift work but the husband would look after the children whilst she was at work. The husband paid the mortgage and household bills.

4. In 2000 the husband rented a new field without telling the wife, having "had a fantastic crop." The wife discovered this when he took her to see the strawberry plants in it. Unfortunately it was a bad year for strawberries due to the weather. The husband then discovered a competitor had been given a States' grant of £90,000 whereas he had been told no such grant was available. As a result the price of strawberries was depressed and by then they were struggling with debt as the 2001 season was again flooded with strawberries. The trading loss for 2000 was £35,000. There were additional debts incurred during 2000 and 2001. The husband obtained legal advice from an advocate cousin and was told he had a case about receiving compensation from the States. However, having been told he had a good case, he was then told not to pursue it further but by then had a bill of £10,000. Whilst the wife says this was a waste of money the husband says that had he not been advised to pursue this he would not have done so and I accept his evidence. In 2001 all the immoveable property the husband owned was transferred into the joint names of the parties. In 2001 the parties got a private loan of £380,000 plus a £50,000 Royscot loan to pay back the agricultural loan and other debts.

5. The husband left farming and in January 2002 started a job working as a prison officer from 2002 to 2010, his first year earning about £25,000 per annum and did overtime when available. As the accommodation block was no longer needed for farm workers the wife says the husband decided to rent out the accommodation block as four studio units and got consent from the Housing Department. Unfortunately it became more difficult to rent out the studio units for a total of £2,400 per month. In 2003 they obtained a conventional mortgage of £500,000 with Jersey Home Loans on an interest only basis to pay back the private loan and Royscot loan. They then discussed extending Property 3 and borrowed a further £100,000 to do this so it became a four bedroomed property. The wife wrote that "Y knew we could not afford this" but she did sign the papers. The husband gave evidence that quotes were obtained for the building work and the wife spoke with the builder and was fully on board with the project. However they overspent on doing up the property, and the wife wanted "top rate" flooring rather than carpets. They therefore had to borrow an extra £56,000 in 2004. I accept this was a joint enterprise and both were fully committed to doing up and extending the property. I understand there was discussion about living there for a few years and then downsizing to release monies for the girls. They subsequently got an equity release of £50,000 in 2007 for a holiday in Australia costing £10,000, for architect's fees and consolidation of debts. They finally in 2008 got planning permission to turn the studio flats into two cottages. During this time they had the husband's salary from the prison and the wife's earnings, but could not rely on monies from the studio flats. The borrowing to convert into cottages amounted to £500,000 from JHL taken out in 2008 and they started renting in April 2009. Both the husband and wife signed up to the borrowings. The husband says the wife has a strong personality who speaks her mind and she came across as someone able to hold her own in cross-examination. The wife said she asked about budgets but "in the end let him get on with it." They therefore had borrowings of £1.2 million in 2009 on a 4 bedroomed house and 2 cottages. Because a tenant committed suicide in 2009, they sold "his" cottage for £565,000. This was used to reduce the borrowings to about £750,000. They still had had income from the other cottage, Property 1 of £1,800 per month. In 2008 the husband gave his Toyota Corolla to his mother and she gave him her Rover which he sold for £1,000. He bought a Tuscon for £11,000 with a loan. The wife says that the old car was fine and they were put further in debt. The husband denies he bought two boats in 2005 and 2006. He accepts he bought a boat in 2002 then sold for a profit but did buy a boat for £8,000 with cash in 2005.

6. The husband was unhappy working for the prison service, and as set out in his affidavit and in evidence and the wife in cross-examination agreed that he could not cope with his job. He was clearly upset that he had to help a prisoner who had raped a relative. He wrote in his affidavit there was also the trauma of the tenant's suicide. He suffered from depression. His ambition was for the family to move to Australia to have a fresh start. In November 2009 he booked to go to Australia for 2 weeks to get information about a move there. He was aware that the wife was reluctant to relocate to Australia. He was signed off for two months with stress. He gave in his notice and just after this the wife did agree in August 2010 to go to Australia. He sold two fields for £84,000. However the wife then said she did not want to go permanently to Australia. Both agreed that the marriage deteriorated after this. The husband looked for employment in Jersey. He tried for a number of jobs including at Eric Young orchid farm, Jersey Zoo and as a Parish foreman but failed to be offered anything. As a result he and the wife agreed he go back into farming, although the wife said she "knew farming was not right." The monthly mortgage was £2,700 on an interest basis and using the £1,800 from Property 1 left a shortfall of about £900 per month but the wife did not make up the shortfall from her net income of £2,500 per month. She said that she suggested it, but the husband wanted her to use her wages to pay for the girls. However he says he would have not refused such an offer. In 2010 he took the commutable lump sum of his pension of £20,000 which he used towards the mortgage and he also had an income of just under £400 from his pension. However he also started paying the mortgage shortfall on credit cards. Neither party appears to have sat down and tried to work out the finances together. It was open to the wife to help pay the mortgage shortfall, and she was asked if she was concerned about finances, why, if she did not contribute to the mortgage, she did not at least set money aside from her wages. She said she was stressed and she just let him deal with the finances. There was some cash left over from the sale of the fields, but unfortunately the husband then needed capital to buy strawberry plants, grow bags and a sprayer. He got one crop in 2011 and they borrowed £25,000 from Acorn in 2012 on a consolidated loan. 2012 was the wettest summer for 100 years and a really bad strawberry season and in 2013 there was late snow. At that time they the parties had the mortgage of £750,000 and the Acorn loan.

7. Why did they then borrow £150,000 on a private loan basis with Mrs Tupper in 2012 with interest of £1,000 per month to be repaid back in 2014? The husband accepts that he did not "carry out any proper costings on the farm". He wrote "Looking back, there was never any realistic prospect of us being able to repay the Tupper Loan without us selling the former matrimonial home, even if I had achieved a bumper strawberry season. I believe that it was the very onerous borrowing terms which made the Tupper Loan unmanageable..... It is difficult for me to try and explain how I was feeling at the time. I had no job and Z was adamant we were not going to Australia. I felt that I had no choice but to go back into farming and I somehow had to get money to enable me to do that. I thought that, if I had a reasonable season, I would be able to pay off some of the loan and then refinance the balance..."

8. Neither party budgeted their finances. The wife said she was put under pressure and she gave in to this, but just as she had refused to go to Australia, I accept that she could have refused to agree to this loan. The wife agreed she did not sit down and look at the figures which she had done with the proposed move to Australia. The wife could have decided to utilise some of the money she earned to help the overall family finances, and I do not accept therefore she can totally blame the husband without taking some responsibility herself. She was buying food for the family and clothes for the girls. She said she did not know much about finances and she "gave up." It seems clear she just let him get on with it to save any arguments and said "it wouldn't have happened if I had been stronger." The husband for his part said he was coming under verbal attacks from the wife and Sophia who would belittle him. The husband when questioned confirmed that he thought with a reasonable season he could pay off some of the loan. Of the money borrowed £10,000 was used for school fees, £20,000 to £30,000 for table tops for the strawberry plants and £15,000 on plants and stock and credit card debts were cleared, but no questions were asked as to where the balance of about £100,000 was spent.

9. In 2013 it became clear that they were in financial difficulties and they went to CAB for assistance. The husband was advised to separate out his household from farm expenditure, but it appears he did not do so, and even if he had done so their finances would still be in a critical state. The husband sought to buy the field adjoining for £30,000 without having the money to do so and incurred legal fees of £2,000. His comment was "I was not able to afford to pay for the field within the time given and the vendor took it back from me." In 2013 it appears he was not in a position to utilise monies from the £150,000 loan. This was at a time when he could not even service the pre-Tupper borrowing without the wife's assistance, let alone pay the £1,000 per month for the Tupper loan.

10. In 2014 the Tupper loan was in arrears as well as the mortgage and property 3 had to be sold on the 27^th February, 2014, achieving a sale price of £830,000. £599,260 was used towards the JHL loan and to clear the Tupper loan of £162,750 and some debts. The wife too had debts. When asked if she had just carried on life as normal and left the husband to worry about the debts she said that this was not right but then added "I don't know." Her debts were cleared from the proceeds of sale. The wife also instructed her own lawyer on the sale, which added a further £2,000 to costs. However even when the house was sold they still owed £165,000 to JHL and the balance of the Acorn finance loan. The husband did not pay off the Acorn loan as promised, and about £16,000 is still outstanding on it. The family then moved into the remaining cottage. The wife then started meeting the mortgage payments from February 2014. The marriage had broken down and it was a volatile situation. The wife referred to the husband's aggressive behaviour and pressure with constant arguments about debts, but he countered this by saying that he felt psychological abuse from the wife and Sophia, and he would go to the bedroom to get out of the way, although he has a very good relationship with Grace. I will deal with this further below. In May 2014 he was prosecuted for assault on Sophia and convicted for assault with 9 months' probation. Injunctive proceedings were commenced by the wife and as a result the husband moved out to live with his mother.

The open position of the wife

11.

(i) The wife seeks an order for child maintenance, and a lump sum with which to purchase a three-bedroom property for her and the children.

Maintenance

(ii) Child maintenance is sought in accordance with the CSA guidelines based upon the husband's earning capacity of £50,000 amount to £147.00 per week or £637 per month.

(iii) A lump sum is also sought in respect of back-dated child maintenance the husband having made no such contribution since 5 May, 2014. The lump sum payment in the amount of £7,644 (12 x£637).

(iv) University fees can range from £6,000 to £20,000 per year (not inclusive of living costs). The wife's salary means that the children should be eligible for a university grant.

(v) The wife seeks an order that the husband contributes half the balance towards the tuition and accommodation costs and living expense of the children while at university.

(vi) The wife seeks on order that the husband obtain and secure medical and dental insurance for herself and the children until they have completed their tertiary education.

Housing

(vii) The wife seeks a lump-sum of £225,000 for a three bedroom property to house herself and the children. The wife has a mortgage capacity of approximately £50,000.

The open position of the husband

12.

(i) That Property 1 be sold as soon as possible for the best price achievable.

The husband believes that the strip of land between Property 1 and the property next door (Property 3) could be retained without the value of the property being affected. He proposes that the parties approach the owner of Property 3, Mrs X, with a view to selling that strip of land to her. He believes that it would be worth up to £10,000. He proposes that any money generated be shared between Sophia and Grace;

(ii) That after the mortgage has been repaid and the costs of sale have been met, the net equity (£310,000 approximately) be divided proportionately so that the husband receives £170,000 and the wife receives the balance (approximately £140,000);

(iii) That the wife retain her pension worth £363,943;

(iv) That the land adjacent to Property 1 (worth £73,500 net) and Field W (worth £49,000 net) (both owned by the husband before the parties' marriage) be transferred into his sole name;

(v) That the parties each retain their respective cars;

(vi) That he will assume responsibility for the repayment of debts in the parties' joint names (namely the joint account overdraft and the Acorn Finance loan (totalling £20,537)) and retain responsibility for the debts in his name (totalling £147,307). For the avoidance of doubt, he will immediately repay the £11,000 each which he owes to Sophia and Grace;

(vii) That the wife will retain responsibility for the debts in her sole name (which, but for a relatively small amount on her M&S credit card, comprise debts incurred solely by her);

(viii) That he will pay child maintenance at the rate of 20% of any net income generated until Sophia completes School 1 and, thereafter, 15% of any net income until Grace completes School 2 next year. The husband had hoped, as set out in his narrative affidavit, to be in a position to capitalise child maintenance and to make an immediate payment to the wife of £10,000 from his share of the equity in Property 1. In light of the increasing legal costs and other debts in this matter, he is no longer in a position to make that offer; and

(ix) That there be a clean break.

Joint assets and liabilities

13. The property, Property 1 is valued at £485,000. There is an outstanding mortgage of about £165,000 and net proceeds about £308,000 but there is also a plot of land valued at £75,000 with agricultural tunnels on it, so the combined net equity is about £383,000. Whilst the wife suggested there was development potential on the plot of land, she produced no evidence and it is in the green belt so I do not find there is development potential. In addition Field W in which the husband grows strawberries by the "table top system" has been valued at £50,000 and with cost on sale the equity is £49,000. The wife has suggested that this too has development potential but she produced no evidence to this effect and it is also in the green belt. I do not therefore find it has a development potential. I accept the point made by the husband that if it had development potential he would have sold it to clear the debts.

14. The parties have a joint life insurance policy with Standard Life with no surrender value.

15. There is an Acorn business loan standing at £15,634 which was used in part for the strawberry business and in part for living expenses. The husband accepts that he agreed to repay this using part of the Tupper loan, and he did not do so and he accepts responsibility for this. There is also a joint HSBC current account overdraft of £4,903 outstanding. He accepts the wife "would not have spent personally on this account".

The wife's financial position

16. The wife's net income as a nurse is £37,705 per year. Her estimate of needs was listed in her narrative affidavit as being £4,094 with a current shortfall of about £1,071 per month. The mortgage payments on Property 1 are £1,305 per month. However the expenditure includes £1,500 per month for university and £200 travel to university. Sophia wants to go to university this year and has had offers dependent on her grades. Grace wants to go the following year and has an interest in midwifery. ESC are not able to give details of any assistance but may give help towards tuition fees and living expenses, and if both attend there will be an adjustment. The wife put down £100 per month expenditure for school uniforms but this is no longer necessary. She also put down £100 per month school trips based on a trip to China. She accepted in evidence that her list was "an exercise", so it is not clear what her expected expenditure will be, and this depends on where she will live.

17. The wife has a States of Jersey PECRS pension with a CETV of £363,943. Her pension of retirement will be about £21,511 per annum, but she can take a lump sum of £72,599 when she retires at 65 although she can work until 67. She has cash of £328 and owns a Ford Fiesta, which she recently purchased.

18. When the former matrimonial home was sold her personal debts were cleared. She now has credit card debts of £19,412, and her liabilities total about £47,000 including legal costs. However she purchased a car and borrowed some money to do so, but is not clear the exact level of her debt on it as paperwork was not provided but it is under £7,000.

19. Sophia receives a bursary until she finishes school and then hopes to go to university in October 2015. The girls had savings accounts started in January 2006 from monies gifted to them from relatives, the husband and wife. The accounts stood at £11,000 and the husband has taken these monies.

The wife's borrowing capacity

20. Peter Seymour of the Mortgage shop provided illustrations of her borrowing capacity on the basis that she is 58, her gross income is £37,705 per annum, her normal retirement age is 65 (although she may work until 67). He was informed she could take a cash lump sum of £72,599 from her pension when she retires but he stated this would not be taken into account in any mortgage offer. She must also be debt free. If her employers confirmed she could work until 67 this might increase her borrowing slightly. The maximum mortgage would be £90,000 with a 40% deposit to achieve the best rate. Mr Seymour provided illustrations for £85,000 over 8 years, and advised a 5 year fixed year rate and she confirmed she could pay the range of £922 to £1012 per month for this. By contrast, rent for her and the children would be between £1,600 to £2,200 per month.

The husband's financial position

21. The husband provided accounts for December 2013 just before the hearing showing a net profit of £23,329. The accounts were prepared by Grant Thornton and signed by him on the 22^nd February, 2015. His current accountant says that profit is overstated by probably £19,297 but there may be more invoices not shown. In addition there was no provision for depreciation for the plant/equipment or motor vehicle which would be at least £8,025 so there is at best a break-even situation. His Amended Notice of Assessment dated the 10^th April, 2015, showed business profits of £21,223 less capital allowances of £21,223 so business net profits of nil. Despite providing accounts which showed he was making a profit, the wife accepted that since he resumed as a strawberry grower in 2011 he has not yet made a profit, and the business has cost money. He says that in 2011 he could only work half a season and that in 2012 and 2013 there was very bad weather. His view is now that he has the infrastructure in place his "table top system", he will start to generate an income. It is noticed that his gross profit increased form £21,290 in 2012 to £42,423 in 2013. He is in receipt of a pension of approximately £5,000 per annum but has no other pension unlike the wife.

22. The combined debts both personal and in respect of the strawberry farm of the husband are now £147,000 to include legal fees.

The Law

23. Financial orders are made pursuant to Articles 27 to 33 of the Matrimonial Causes (Jersey) Law 1949, as amended. Jersey courts take into account the matters set out in section 25 of the Matrimonial Causes Act 1973.

Section 25 of the Matrimonial Causes Act ("MCA") 1973 says:

"It therefore the duty of the Court to have regard to all the circumstances of the case first consideration being given to the welfare while a minor of any child of the family who has not attained the age of 18."`

24. In the Court of Appeal case of Charman v Charman [2007] 1 FLR 1246, it was held that in most cases where there are modest or limited assets, fairness begins and ends in consideration of the parties' needs, with first consideration being given to the welfare, while minors, of the children of the family. The result must be fair as between the parties but there is no rule that an order must produce equality of outcome. A Court must apply the section 25 criteria in search of the overarching objective of fairness.

25. Thorpe LJ in the House of Lords case of White v White [2001] 1 AER 1985 said:-

"Each case depends on its own unique facts and those facts must determine which of the eight factors is to be given particular prominence."

The eight factors are:-

"a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire."

26. The wife can continue to work as a nurse until she is 65, and maybe 67. The wife maintains that as the husband's last salary was £50,000 per annum, this is what he can earn. The wife accepted "he couldn't cope at the prison", but argued that he has failed to maximise his earning capacity. The wife produced no job particulars as to what the husband could do to earn £50,000 per annum or indeed any job particulars to show what the husband could do. She accepted he had failed to find work in 2010. Given the difficulties that the husband had in getting a job when he left the prison, I therefore do not find that the husband has an earning capacity of £50,000 per annum or that he had such an earning capacity since May 2014.

27. His gross profit has increased so it may be that as he indicates he can start to make a profit but in order to do this, needs to retain Field W and the land with the poly-tunnels on it. If the land is sold, he will have to obtain employment elsewhere but no other job particulars were provided. The wife said he could retrain but gave no indication as what or how he would support himself whilst he did so. The husband has a small pension about £5,000 but no other pension.

28. The wife's pension CETV is £363,943. Her pension on retirement will be about £21,511 per annum. The wife has no inheritance prospects. The husband's mother is 80. The cottage she lives in is smaller than Property 1 and could be worth £375,000, and she owns an agricultural shed and two small fields worth £100,000. His mother has told the husband she intends to leave the fields and shed to him. The wife suggested there may be development potential in the shed but agreed there were no current plans to develop. The husband's mother may live for some years to come, and her assets may need to be sold to provide for nursing care. I will therefore disregard any inheritance prospects of the husband.

"(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future."

29. The girls are living with the wife. Sophia is intending to go to university in the autumn and Grace in 2016 and the wife would like a 3-bedroomed home for her and them on the basis that they will return to Jersey and are unlikely to be able to buy or rent until 24 i.e. about 7 years' time. Whether the girls do return to Jersey after university remains to be seen. The wife has debts she needs to clear and will be contributing to the girls overall university education. The husband has debts he says he cannot clear from his income and wishes to do this and discharge the joint debts but retain the land with poly tunnels and Field W so he can continue working. He is currently living with his mother and presumably will continue to do this but he offers 20% of any net income generated until Sophia completes School 1 and, thereafter, 15% of any net income until Grace completes School 2 next year. At present this will be nil, so the wife would have to meet all the needs of the girls.

"(c) the standard of living enjoyed by the family before the breakdown of the marriage."

30. The standard of living was reasonable and they went to Australia in 2007, they were living beyond their means even when the husband was working for the prison.

"(d) the age of each party to the marriage and the duration of the marriage."

31. It has been a long marriage and the husband is 55 and wife 57.

"(e) any physical or mental disability of either of the parties to the marriage."

32. In her affidavit of means the wife wrote that she and the children are in reasonable health although she and they have back problems. This may mean she may stop work sooner than expected. She was suffering from stress in 2013. Grace has a lower jaw protruding and she says that work needs to be done privately.

33. The husband referred to a depressive episode 13 years ago controlled by medication until the end of 2013. He was signed off with stress from the prison for 2 months. He says he has and is contemplating suicide and is seeing a psychiatric nurse on a regular basis. A letter written in March 2015 was produced written by a community psychiatric nurse because the husband reported as having suicidal tendencies.

"(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family."

34. When the parties got married the husband owned about 2 and a half vergees of land which had been gifted to him but originally acquired through the work of the husband and his family as growers, mainly of strawberries. He wants to retain part of this so he can continue as a strawberry grower.

35. The wife has worked throughout the marriage, and also helped the husband on the strawberry farm. The husband's work history has been dealt with above, and he looked after the children when the wife was working nights. Both were hard working, the issues being his alleged financial misconduct rather than work ethic.

"g) the conduct of each of the parties, [whatever the nature of the conduct and whether it occurred during the marriage or after the separation of the parties or (as the case may be) dissolution or annulment of the marriage], if that conduct is such that it would in the opinion of the court be inequitable to disregard it;"

36. The wife's position is that the husband has failed to prioritise his wife and children, he was financially reckless as he should have got a job, his needless decision to give up the prison work means he cost the family £250,000 of salary which should be added back against the money he could have earned. Advocate Heath submitted it is inequitable to disregard what has happened and that the business debts should be added back into the overall finances. The wife, it was submitted, is therefore seeking most of the matrimonial pot due to the financial misconduct by the husband.

37. The wife referred to the case of J v H [2014] JRC 140A which considered the issue of conduct. The husband's advocate referred to paragraph 39 where the Bailiff stated that:-

"parties and practitioners should operate on the premise that the expression "gross and obvious" or "gasp rather than gulp" are good indicators. In the overwhelming majority of cases, conduct will not be relevant to the exercise of any judgment..."

The court went on to say:-

"However financial misconduct during the marriage prior to separation seems to us another form of bad conduct which would not, unless gross and obvious, be taken into account. The Court should not be any more astute to enquire into a husband's gambling than it is to investigate a wife's profligacy with excessive spending on designer dresses or children's' toys. It seems to us that gambling only becomes relevant, in terms of conduct which is not gross or obvious, if it leads to consideration of a secured provision."

38. The wife argued she was in an abusive relationship, but this was denied by the husband. She referred to two incidents in 2003 when she left the home because the husband was angry but then accepted that the marriage broke down after she refused to go to Australia and said that it was at "that point the marriage started going downhill" in 2010. The wife claimed that the husband would become threatening if she did not sign financial documentation, saying they could lose the home or he would commit suicide. He refuted this. However she refused his wish to go to Australia and it was open to her to refuse to sign other papers. The professional lenders would have seen her face to face to advise her about getting independent legal advice.

39. Advocate Heath submitted in this case the husband's behaviour was "gross and obvious", as his wish to go to Australia has cost an equivalent of the whole of the assets i.e. by giving up his job at the prison he cost the family £250,000. However the wife accepted he could not continue working there. In the case of MAP v MFP [2015] EWHC 627 (Fam) at paragraphs 63 to 69, Mr Justice Moor considered the history of add-back. He said that the arguments about this essentially come down to the issue of conduct which has to be "gross and obvious".

40. He considered inter alia the Court of Appeal case of Vaughan v Vaughan [2007] EWCA Civ 1085, [2008] 1 FLR 1108 Wilson LJ said at paragraph 66:-

"'The only obvious caveats are that a notional reattribution has to be conducted very cautiously, by reference only to clear evidence of dissipation (in which there is a wanton element) and that the fiction does not extend to treatment of the sums reattributed to a spouse as cash which he can deploy in meeting his needs, for example, in the purchase of accommodation...'"

41. At paragraph 68 he said:-

"Mr Molyneux, in closing submissions, argued that there needs to be a deliberate, unprovoked and morally culpable conduct. The most obvious example would be where a spouse deliberately dissipates a fund simply to prevent his or her former partner receiving a fair share of that fund. The court cannot permit such conduct, I further accept that there will be other situations where conduct justifies a financial penalty although such cases will undoubtedly be rare.'"

42. At paragraph 69 of MAP v MFP, Mr Justice Moor said:-

"you have to take your spouse as you find him or her."

43. It was accepted by Mr Justice Moor that the husband had "significantly overspent." He said at paragraph 90:-

"I do not find that the husband overspent to reduce the wife's claim. In part he did it because he could not prevent himself from doing. It was down to his flawed character. The court could not possibly add-back the expenditure on drug therapy...as he was ill and needed treatment."

44. At paragraph 91 he said:-

"Equally I cannot add-back items of expenditure that were simply extravagant or part of his obsession with perfection. I have had the most difficulty with the expenditure on cocaine and prostitution. I have, however, come to the clear conclusion that I should not add-back even these items. As I have already noted, a spouse must take his or her partner as he or she finds them. ...This was not deliberate or wanton dissipation."

45. As indicated in Vaughan, the fiction of add back has to be conducted very cautiously. I do not find that there should be an add-back of £250,000 as clearly the husband could not cope with prison work and has been unable to get another job earning £50,000 per annum. I do not find that there has been wanton dissipation or that the husband's behaviour has been "gross and obvious". This is a man who was a strawberry grower before he met the wife, and who had land on which he and the wife could then build. The husband had left school at 16 to work with his father and was already 34 when he first met the wife. He said that he and his father in an exceptional year could earn £80,000 between them. The wife seeks to benefit from this but does not accept the negative aspects of farming where there are good and bad years. She accepted that she went along with his decision to go back into farming. She blames him for what has happened but this was a man who was hard-working but has not been able to make a living since he went back into strawberry growing, partly he says due to poor weather, and it was not disputed there was bad weather for 2 years. The wife did accept in cross-examination that she had to accept some share of their financial predicament and she agreed she "just let him get on with it". She apologised and said that she concentrated on the girls. It was put to her that she could have helped pay the mortgage as her salary was spent on food and the girls, as until early 2013 he paid the mortgages and most of the children's school fees. Even if she did not help pay the mortgage, she was asked why she did not save money and her response was "I don't know." She alleged she was under duress on the borrowing but accepted that "I signed on the bottom line." She therefore acquiesced in the borrowing but put her foot down to prevent the family going to Australia which she knew the husband really wanted to do. It was put to her that she could have done the same for the joint borrowings and said that "I have no choice but to accept that." She also accepted that she did not sit down and go through the figures apart from when considering the move to Australia. Even in 2012 with the Tupper loan of £150,000 she carried on as normal and left the money worries to the husband. As for the suggestion that he failed to prioritise the wife and children, the husband was paying most of the school fees until 2013 and the mortgages on the properties and all of the utilities and he "did not interfere in how she spent her salary". Having considered the case law, the fact that the husband has been unsuccessful and lacked financial acumen does not mean that there should be an add-back of business debts or £250,000 and that his behaviour was "gross and obvious".

"(h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring."

46. This is not relevant.

Litigation misconduct

47. The husband should have filed his accounts which were signed off on the 22^nd February, 2015. They were only made available the afternoon before the hearing. The case was being run both by the husband and the wife on the basis that the farm was operating at a loss but the accounts show a profit, albeit a modest one. The wife is seeking £25,000 because of lack of disclosure. The accounts were prepared by Grant Thornton, the husband's then accountants, his accountant now being Mr Ogden. He informed the advocate for the husband that the husband had failed to provide invoices of £15,000 and therefore the accounts are incorrect, so in fact he is just about breaking even. In addition he disclosed his tax return on the afternoon before the hearing and the information in it does not tally with the accounts. Advocate Heath makes two points: first that the husband would have been legally advised he should make continuing disclosure and a party should know the case being made. She did not seek an adjournment with the husband paying the costs as it would lead to more overall costs and she understood he was not making a profit anyway. She pointed out he was willing to sign up to accounts which were misleading, and therefore the court should prefer the wife's evidence in the proceedings. Advocate Heath however said her client accepted the business was loss making. Advocate Binet said that the husband was in a poor state of mind as evidenced by the letter from a psychiatric nurse, although this does not excuse him from failing to provide her with the information. She submitted that he answered a lengthy and extensive questionnaire and when he did so the 2013 accounts were not then available. However he did fail in his duty to be full and frank. I would have thought that both lawyers would have asked about the accounts but at the end of the day the onus was on him to produce them. Reference was made to paragraphs 78 to 84 of the J v H case. In that case the lack of timely disclosure led to increased legal costs and the husband conceded there was some delay. Although the husband in that case was suffering from depression, he was not working so had the opportunity to provide documentation. Advocate Binet said the absence, unlike in the J v H case did not lead to increased costs and delay as the business is not generating a profit. The failure to produce accounts therefore did not affect how the case was presented. However, the husband should have produced the accounts and I would have adjourned the case and made a costs order had I been invited to do so.

48. The wife is seeking costs of £25,000 because of this and the circumstances surrounding the evidence of the re-mortgage. The husband put forward an open position on the basis that she could borrow against her pension lump sum and the wife made her own enquiries and understood this was correct. Subsequent to this, the husband's advocates received information that this was not correct but did not inform the wife's lawyers. However each party should have produced evidence of their or the other's party's mortgage raising capacity from a mortgage broker, indicating (i) the maximum mortgage that the broker believes the wife would be able to secure and (ii) the repayments that would be required on that mortgage on a repayment basis and on an interest only basis.

49. In the two bundles there were 35 cases comprising about 661 pages in total but only two cases were referred to by the two advocates in submissions. I have read the cases and am puzzled as to how some of them are even relevant to this case. The inclusion of these cases must have added to the legal costs unnecessarily on both sides and this more so as there are such limited assets. I make this point as there has been criticism in the English court about matters included in bundles and the size of them.

50. In the case of Seagrove v Sullivan [2014] EWHC 4110 (Fam) Mr Justice Holman said:-

"The bundle of authorities should comply with the requirements of Practice Direction: Citation of Authorities (2012) and in general -

(a) have the relevant passages of the authorities marked;

(b) not include authorities for propositions not in dispute; and

Although it is true that subparagraph (c) makes reference to "the appeal", it is, frankly, inconceivable that more authorities should be liable to be cited at the level of first instance than at the level of an appeal. So the clear starting point is that a bundle of authorities should not contain more than ten authorities, unless the scale of the case warrants more extensive citation."

51. Whilst there is no such practice direction in Jersey, we do have in the overriding objective the principle of proportionality.

Decision

52. This is a needs case. Both parties agree that Property 1 has to be sold. Because I do not accept that there should be a notional add-back for the husband, I have to take the financial situation as I find it. Nor do I consider the husband has an earning capacity of £50,000 per annum and therefore owes back dated maintenance of £7,644, i.e 12 months of £637 per month. Because the case has been contested on a conduct basis, unfortunately there was no possibility of settling it and legal costs have continued to accrue, which because there are limited assets means that neither party will end up with what they want. I pointed out at the Case Review Hearing the danger of a contested hearing not only because there would be increased costs they could not afford but pointed out that they may end up with an order that neither wanted.

53. The total joint net value of the land held by the parties is about £432,000. The net proceeds from Property 1 is £308,000. If the wife is allocated £225,000 as she requests, she can clear her debts of £47,000 having agreed she could sell her car to clear her borrowing and if necessary rent a car. This would leave her with £178,000 and she will seek to raise a mortgage of £90,000 over 8 years. There will be stamp duty on purchase and legal fees. The cheapest 3-bedroomed property in her bundle was £279,950 so even on her figures she will have difficulty in buying a 3-bedroomed property, so at best she is looking at a two bedroomed property. The cost of a £90,000 mortgage is £11.91 per £1,000, a cost of £1,071 per month, a sum less than the current mortgage payment of £1,305 per month. When she retires she will have a mortgage free property and a pension with a current CETV of £363,943. I note in the schedule of assets provided by the wife she did not discount the pension and although this was referred to in open correspondence from the husband, neither advocate submitted the wife's pension be discounted. The case of Downes v Marshall [2010] JRC115B was in the bundle but this was not referred to in submissions. The wife has a PECRS final salary pension with 8 years to go before retirement. In the Downes case the husband had 7 years to go until retirement, and the pension was not discounted so I agree it should not be discounted.

54. By contrast, the husband will on the wife's proposals receive £83,000 from the net proceeds to meet debts of now £147,000 plus the joint debts of £20,000, so the agricultural land will have to be sold. He would receive £207,000 in total and having paid debts of £147,000 plus the joint debts of £20,000 up front would be left with under £40,000. He would therefore lose the strawberry farm and have no job but the wife says he can get a job without specifying what. The wife says he will never make any money from the farm, and it is best he comes away from the marriage having cleared his debts and ending up with a small lump sum. He says the farm is turning round and if he can clear debts can be profitable and the gross profit, if the figures are indeed accurate, should increase. The husband will have to remain living with his mother. He has an income of under £5,000 per annum and no other pension. The proposal put forward by the wife is not a fair division of the assets, even when first consideration is given to Grace who will be 18 next May.

55. The husband is seeking £170,000 from the net proceeds of Property 1, with the wife receiving about £140,000. He could then clear all his debts without selling the land and may have a limited amount of capital left over. However, the wife on this basis, if she gets a mortgage of £90,000 and clears the debts, will have to look at properties of about £183,000. If she receives £160,000 this would give the husband £148,000 which means he can clear the bulk of the debts and there will be outstanding debts of under £20,000, which he may be able to service through the business as some of them are business debts. Having cleared her debts, the wife will have a total of £203,000. The husband will then retain the agricultural land, on which it is hoped that he can generate a profit, will still be left with debts to service and has a small pension of £5,000 per annum. The wife by contrast will have her debts cleared, and will have some money to purchase a property however small, or she can rent and has the benefit of her PECRS pension.

56. Each party will retain assets in their sole name and be responsible for their debts and the husband will take responsibility for the joint debts. There will be a dismissal of any spousal maintenance claims.

57. The husband will pay child maintenance to the petitioner for the benefit of Sophia and Grace until each child completes tertiary education to first degree or equivalent, or Grace reaches the age of 18, whichever is the later. This will be at the total rate of 20% of any net income. There will be a review of the level of child maintenance if Grace commences tertiary education to first degree or equivalent, and if she does not do so, the respondent will then pay child maintenance for Sophia at the rate of 15% of any net income. The husband is required to provide business accounts within two months of December of each year. If he is making a profit he is expected to pay maintenance, so if it transpires he should have been paying money and did not set payments aside, let alone offer payments then there will be little sympathy if he then turns around and says he cannot pay arrears that may have accrued. Currently the husband is unable to help with tertiary education fees and travel costs.

58. As agreed by the husband, he will immediately repay the £11,000 each which he owes to Sophia and Grace.

59. I am not going to order that the husband pays medical insurance as he does not have the funds to do so, and they have never had this before.

60. There will be no order for cost as neither party has achieved what they want so each party will have to meet their own costs. I have read the letter sent on the 28^th January, 2015, and had the wife negotiated on the basis of that letter to achieve a deal, the costs that have accrued since then would have been avoided and she could have purchased a more expensive property.

Husband		Wife
House proceeds	£148,000	£160,000
Field	£49,000
Land	£75,000
Cars
Van	£5,000	£8,000
MG	£4,000
Bank accounts
Total	281,000	168,000
Pensions	(in payment)	£363,943.43
Total	281,000	£531,943
Less debts
	£147,00	£47,000
Joint debts	£20,537
Total	114,000	484,943