Scottish Court of Session Decisions

The parties were married at Glasgow on 29 April 1977. There are three children of the marriage, of whom the youngest Gregor John McAdam, born on 3 May 1985, is still under sixteen years of age. The present action for divorce together with custody and financial provision was raised in July 1994. The parties finally separated in about August 1994 and have not had marital relations since July 1994. During the course of the marriage the pursuer has been engaged in looking after the household and caring for the children of the marriage. The parties were residing in the matrimonial home at Clover, Monaughty in Morayshire in August 1994. The pursuer continued to reside there until July 1996 when she removed with the children of the marriage to her present address at 124 Macdonald Drive, Forres. This is a three bedroomed terraced local authority house of which the pursuer is tenant. The parties' son has his own bedroom in the house. He is happy and content to remain with his mother. The parties' younger daughter also lives with her mother. The eldest child, a daughter, now lives in Aberdeen.

The evidence presented for the pursuer including the material in the affidavits sworn by the defender's father and the parties' eldest child, satisfies me that the defender was violent and abusive to the pursuer during the course of the marriage. I therefore hold that the marriage has broken down irretrievably by reason of the defender's conduct and that decree of divorce should be pronounced as concluded for. I am also satisfied that the pursuer should be granted custody of the youngest child, Gregor, as concluded for. The defender did not resist either conclusion.

The only substantial issue at the proof concerned the question of financial provision for the pursuer. It became clear during the course of the proof that the defender had been very reluctant after the parties' separation to make any provision for the pursuer or indeed his children. He agreed that he had paid nothing for his children after the separation and that he had been in dispute with the Child Support Agency in this regard. The only payments he made were as presents to his younger daughter on her birthday and at Christmas. Further although it was abundantly clear that he had access to substantial funds from time to time, he informed his father, as appears from the latter's affidavit, that the pursuer had had enough over the years and that he had no intentions of giving her any more. In his own evidence he spoke to having placed the pursuer upon a restricted monthly sum for housekeeping shortly before the separation and having assumed control of a joint bank account and taken responsibility for the payment of all other bills. He also said that he had arranged matters so that the pursuer had no access to the joint bank account. The documentary evidence indicated that by November 1994 the pursuer was already in receipt of income support and that the Department of Social Security were then making payments on her account for mortgage interest payments on the loan with the Bank of Scotland secured over the matrimonial home. These payments apparently continued until the pursuer removed from the matrimonial home. It is symptomatic of the defender's attitude to the pursuer that when he discovered that these payments were being made in addition to sums which he himself had been making to the bank on account of the mortgage payments due, he demanded and received repayment from the bank of some £1200, notwithstanding that the bank had been applying some part of the total of the sums received by them from both sources to repayment of the mortgage. Following this payment the mortgage was restored to a figure of £30,000.

I found the defender an unsatisfactory witness. He was at times evasive in answering questions from counsel for the pursuer. He also appeared anxious to excuse his conduct towards his wife for reasons which left me with the clear impression that he refused to recognise that he bore substantial responsibility for the break up of the marriage and any rift existing between himself and his children. Where his evidence diverged to a substantial degree from that of the pursuer, I had no hesitation in preferring her evidence. This she gave in a straightforward manner although it is fair to record that she accepted that some of what she said of the defender's financial affairs was necessarily based on surmise.

Until May 1993 the defender was employed offshore by Shell International. He gave evidence that he had become disenchanted with his employment and that this disenchantment had been strengthened by ill health. He was allowed to retire early from his employment under an agreed severance package. In terms of that agreement, the defender received a sum of £57,907 net of tax. In addition he elected to commute part of his pension and to receive a lump sum payment of just over £16,000 from his pension fund with a reduced pension of some £571 per month. He also had an entitlement to an additional pension by virtue of additional voluntary contributions made by him. He elected to commute this entitlement and to receive a further lump sum payment of some £18,620. At his request these capital payments were paid into a personal bank account in the Isle of Man in August 1993. He explained that he did this on advice in order to secure tax advantage. He also was entitled to two tranches of Shell shares obtained by him as an employee. These shares were held in his name with the Halifax Building Society. One tranche was subsequently sold by him for a sum of £12,000. According to his evidence he has made over the second tranche held by the Halifax Building Society to his younger daughter and this tranche continues to be held by the Society for her benefit, though no documentary evidence to this effect was produced by him.

The matrimonial home was purchased some years prior to 1994 by the parties. It was a farm steading which the parties proceeded to develop as a dwelling house. For the purchase of the house the pursuer contributed money from a bequest from an uncle in late 1989. She then received a sum of £47,500. From that sum she contributed money not only towards the purchase of the house but also of a car and to meet expenses for the development of the house paid through a building account held with the Bank of Scotland in joint name. She also met the cost of electrification of the property. These payments amounting in all to some £48,000 were wholly derived from the sum that she received from her uncle's bequest. As a consequence the title to the property was taken in the name of the pursuer. It appeared that at some stage some part of the building account was converted to a mortgage account in joint name. I accept the defender's evidence that prior to his retirement a substantial sum had been borrowed from the bank on the joint bank account. The evidence of a bank manager, Mr. Gibb, was that the joint bank account amounted to some £73,000 in the period 1992 to 1993. The bank statements for the mortgage account referred to in evidence showed that by July 1994 the sum on that account had been reduced to £30,000. I am satisfied that the reduction was achieved with payments made by the defender from the monies received by him on retirement from his employment with Shell and from a sale of one tranche of Shell shares amounting in all to about £43,000. This sum of £30,000 was the subject of a loan agreement which provided that the loan was granted for a minimum period of ten years and, as appeared from the subsequent call up notice, was secured by a standard security granted in July 1992.

There was also evidence from both parties that at some point prior to the separation the defender had entered into a business arrangement with a friend who was a builder and property developer. This concerned the purchase of a building plot and the erection of a house on it which was then to be sold and the proceeds divided between the defender and his friend. It appeared from the evidence that for this purpose an unspecified sum of money had been borrowed through the building account in joint names with the bank. It was not clear that the pursuer had agreed to this borrowing though she appeared to be aware both of the fact that a building account in joint names had been set up for the development of the parties' home and that the defender had entered into an arrangement with his friend for the development of a plot of ground elsewhere. It appeared from the evidence of both parties that she was wholly unaware that the loan was also secured by the standard security over the matrimonial home. As at July 1994 in addition to the mortgage loan amounting to £30,000, the building account was overdrawn to the extent of some £73,300 and at January 1996 it was overdrawn to the extent of some £88,000. At no stage thereafter was it reduced and indeed had risen to a figure of some £91,000 by August 1996. The defender said that he had received no money from his business partner against the money handed over. He was unable to give any clear explanation of the reason why the business arrangement entered into had left him without recourse against his partner other than indicating that the money had not been applied for the intended purpose. Instead, according to him, it had been used to build a house on another site and title to that property had then been taken in the name of the partner's wife to avoid any attempt to secure recovery of the sum advanced by the defender.

Prior to the separation of the parties the defender entered into an arrangement with his parents whereby a contract for a capital investment bond combined with a temporary immediate annuity was entered into with the Standard Life Assurance Company. A single premium of some £35,000 was paid for the annuity and one of £17,775 for the investment bond in October 1993. Of the total sum, according to the defender's father, the defender contributed some £23,000 from the monies received from Shell. Thereafter by agreement between the defender and his father a sum of some £200 per month was paid from the annuity received by the defender's father into an account in the defender's name with the Halifax Building Society. Payment of the annuity was made from November 1993. The last payment of the temporary annuity was made in October 1998. The capital investment bond was held for the joint lives of the defender's parents but from the affidavit of the defender's father it appeared that it had been surrendered in about November 1998 and that the defender's parents had then received some £14,000 and the defender himself some £16,000.

In August 1996 the bank gave notice requiring immediate repayment of a sum of some £91,000 debited on the joint building account and of the further sum of £30,000 owed by the parties secured by the standard security. At that time the defender was continuing to reside in the matrimonial home. The pursuer attempted to persuade the defender to allow a sale of the property to take place. He was not willing to allow this and attempted to negotiate its purchase on his own account. In his evidence he suggested that his idea was to take over the mortgage and to hand over certain endowment policies to the bank. The pursuer was not willing to agree to his purchasing the property from her. He had ceased then to continue the mortgage payments. Although the title was the pursuer's own name, as a non-entitled spouse the defender's consent to the sale was also required. In the event action required to be taken under section 14 of the Family Law (Scotland) Act 1985 to enable the sale of the property to proceed. After this was obtained the bank obtained possession of the property in 1997. The evidence of Mr. Gibb was that it then became necessary to obtain building warrant and to execute works to put the property into a condition in which it could be sold. Mr Gibb spoke to the cost of the necessary work undertaken on behalf of the bank as heritable creditor. A sum of £112,000 was received from the sale. From the bank records it appears that after extinction of the parties' indebtedness and payment of legal fees and the necessary expenses incurred to allow the sale to proceed, a balance of some £10,000 remained. This balance was paid over to the pursuer.

Against this background I now turn to consider the extent and value of the matrimonial property at the date of separation. The items and amounts claimed on the pursuer's behalf are set out in the document number 52/15 of process. The first and major item was the matrimonial home. By reference to a report from a firm of chartered surveyors dated December 1995, it was claimed that the value could be set at about £145,000. However the report states that such a figure would require to be revised downwards if, as was in fact the case, there was neither building warrant nor planning permission for the upper accommodation. The report also made reference to the difficulty in achieving sales of such country properties in the previous two years. It was the lack of requisite permissions which gave rise to expenditure being incurred prior to sale of the property by the bank. Standing these factors I am satisfied that the value claimed is overstated and that a more appropriate figure would be the final sale price of £112,000. A figure of £35,000 for contents of the matrimonial home derived from a renewal notice for an insurance policy dated February 1996 seemed to me also not to be substantiated on any of the evidence. No items of any substantial value were mentioned or spoken to other than two specific items, namely guns and a telescope, which were valued at sums of £2650 and £800 respectively. The evidence regarding the defender's guns also was that following a police investigation in 1997, they were confiscated and no compensation was paid to him. At best I would place a figure of £5,000 on contents other than these specific items. From the evidence of the defender, which was not challenged on this point, it appeared that when the pursuer removed from the matrimonial home, the parties agreed to a division of the contents. There was evidence relating to two vehicles, a Ford motor car, purchased by the parties some three or four years prior to the separation, for a sum of about £13,500. I accept the defender's evidence that by 1994 its value would have been substantially depreciated to a figure of about £4,200. It was not in dispute that in about 1994 the defender had purchased a Toyota tourer in South Africa for a figure of about £12,000. I am prepared to accept the defender's evidence that for reasons connected with the withdrawal of his passport after the police investigation in 1997, he was unable to recover the Toyota vehicle which was in Zimbabwe at the time and that it has now been sold in order to cover the costs of storage. The Ford vehicle appears to have remained in the possession of the defender. He stated that it had been recently written off after it was stolen while it was parked and off the road because he could not afford to licence and insure it. On the other hand his father speaks to his disposal of it for a sum of £100. In the event, it does not appear that it was of any substantial value at the time. Apart from the tranche of Shell shares which remained in the possession of the defender with the Halifax Building Society at the date of separation, the pursuer spoke to having been given by the defender a holding of oil shares in a company named Cluff Oil Holdings. It did not appear that these latter shares had any value by the date of separation. The pursuer said that she had received few payments previously by way of dividend. The Shell shares were said by the defender to have a value similar to those which had been sold for £12,000 prior to the separation. The defender had during the course of the marriage entered contracts for five endowment policies. As at the date of separation these had a total surrender value of about £41,000. It appeared that at some stage after repossession of the matrimonial home four had been surrendered and the proceeds used to reduce the amount outstanding and due to the bank. There were in addition certain small sums held in bank accounts totalling about £50

I am further satisfied that so far as the pursuer's present circumstances are concerned she has very limited funds. There is at present some £2650 in her bank account derived from the sum which she received from the sale of the matrimonial home. The remainder of that sum was spent on repayment of outstanding debts and on necessaries for the children and for the home. Her only source of income is derived from income support and child benefit amounting to about £430 per month. She has been attempting to obtain employment after taking a training course in 1998 but as she is without relevant work experience, there is limited opportunity for employment in the area in which she lives and she is particularly hampered by lack of transport.

The defender is in receipt of disability allowance amounting to some £500 per month. In addition he receives his pension from the Shell Pension Trust of £582 per month. An account with the Halifax Building Society is the subject of an arrestment. It is in the names of the defender and his fiancee. There is presently a sum of about £16,800 at credit. I am satisfied that this sum at credit is derived wholly from funds contributed by the defender. I have to conclude on the evidence before me that this is his only substantial present capital resource. In so doing, I am by no means satisfied that the defender has been candid either in his dealings either with the pursuer or in evidence before the court. It appeared that legal aid was withdrawn from him because he had not made full disclosure of his means. He was unable to explain certain statements that he made when examined on commission as a haver and in which he denied the existence of accounts and policies which have since been proved to exist. His dealings with the pursuer since the separation indicated a deliberate concern to avoid making any payment to her from any resource, capital or income. He has produced no documentary material in relation to the account with the Halifax Building Society, though it is plain from the evidence that this has been in existence for some considerable time. No clear account was given by him of what was done with the monthly sums which he obtained from his father over the period between November 1993 and October 1998 nor with the capital sum paid to him when the capital investment bond was surrendered in 1998. From the documents before the court it appeared the net sum by way of annuity paid to the defender's father during that period amounted to over £30,000. There must remain a lurking suspicion that the defender has deliberately concealed other accounts in which sums are held in his name or to his order. He explained that the name of his fiancee had been added to the Halifax Building Society account with a view to providing her with funds to enable her to remain as a foreign national in this country. He admitted that he had sought to change his name and gave as his reason for doing so an allegation about his father's conduct which appeared to me to be wholly incredible and wholly inconsistent with his recent dealings with his parents. Moreover he has on two occasions in recent months sought and obtained the court's leave to withdraw funds amounting to £2000 in all from the Halifax Building Society account in order to enable him to make payments for legal advice in connection with the present action. It appeared from his own evidence that he had in fact only withdrawn £1000 and from that sum paid out some £810 in payment of an amount outstanding and due by him to the local authority. He did not speak to having received any legal advice since being granted leave nor being in any way indebted to any person for legal advice received before or after leave was granted. Counsel for the pursuer suggested that the defender was also in receipt of a sum of £650 per month derived from a policy with the Standard Life Assurance Company. This was said to be supported by the evidence of the defender's father. However when his affidavit is read against the information about the policies it is plain that the temporary annuity policy terminated after October 1998 by which time payment had been made in full of the annuity and that the related capital investment bond has been encashed for its surrender value, of which the defender has received some £16,000. Accordingly I proceed upon the basis that the defender's present income is derived from his Shell pension and disability allowance alone. Counsel for the pursuer also suggested that the defender has since the date of separation been involved in a business venture for the sale of cars from the United Kingdom to Zimbabwe. This was taken from the affidavit of the defender's father but I

In her final submissions counsel for the pursuer invited me to make an award of a capital sum of £15,800 and in addition to order payment of a periodical allowance for the next three years of one half of the defender's pension from Shell Pension Trust. She pointed to the lack of candour on the defender's part in revealing his assets both capital and income. She suggested that having regard to the principles set out in section 9(1)(c),(d) and (e) of the Family Law (Scotland) Act 1985 it would be appropriate to assess the pursuer's share of the matrimonial property at a proportion greater than one-half. On separation the pursuer had possessed only a very small sum at credit in her bank account. As regards the matrimonial home, although the title was in her name it was burdened by a joint debt. The defender had made no contribution to the maintenance of her or the children of the marriage after the separation. Looking in particular to section 11 (4) of the Act, she had throughout the marriage until separation been dependent on the defender for her financial support. It was reasonable that she should be awarded some financial provision to enable her to adjust to the loss of that support for a period of three years from the date of decree of divorce. Furthermore her share of the matrimonial property upon a fair division was greatly in excess of the only known capital resource presently available to the defender. Under reference to Shand v. Shand 1994 SLT 387 counsel submitted that it would be reasonable to award her the whole sum presently available to the defender.

I have reached the conclusion that it is not possible to speculate as to what other funds the defender may have access to in addition to the sum at credit with the Halifax Building Society which has been arrested. On the other hand it is proper to look to the fact that during the course of the marriage not only did the pursuer look after the family household and the children of the marriage but she invested the most substantial part of the monies received from her uncle's bequest in the purchase and development of the matrimonial home. The defender did maintain the household until the separation. He also used some part of his capital assets to reducing the sum borrowed for the matrimonial home prior to the separation. He was responsible for making the mortgage payments of some £171 monthly. But after the separation he took advantage of the fact that the benefits payments made for the support of the pursuer and the children met the outstanding mortgage payments until the pursuer left the matrimonial home in 1996 in obtaining repayment of the amounts paid by him during that period. That advantage was secured at a time when he refused to make any contribution to the maintenance of the pursuer and his children although he was in receipt of income not only from his pension but also from some part of the annuity being paid to his father out of funds which he himself had invested. He also used the building account an account in joint names, to which the pursuer had contributed for the development of the matrimonial home, as a means of borrowing money to invest in an unsuccessful business venture from which he has derived no benefit and in respect of which he apparently has no recourse against his business partner. As a consequence the loan remained outstanding after the separation and amongst other things was repaid by recourse against the matrimonial home to which the pursuer had title. As to the future it would appear that the prospect of either party being able to secure any steady employment is doubtful. In the pursuer's case this is because of the limited opportunity for such employment. In the defender's case he appeared to me to be unwilling to consider the prospect but this may in part be due to health problems.

Looking to the whole circumstances and in particular taking account of the fact that on the basis of equal sharing of the matrimonial property at the date of separation the pursuer would then have been entitled to a payment of some £50,000, I consider that the dissipation of the assets thereafter must be laid to the defender's door and that the only fair way in which to compensate the pursuer in terms of the 1985 Act in relation to her claim for a capital sum is to allocate to her a sum of £15,000. This can be met from the sum at credit with the Halifax Building Society. I shall pronounce decree accordingly

I also consider that the pursuer has made out her claim for a periodical allowance. In this matter I take particular account of the fact that the defender has persistently refused to countenance making any payment to her either for her own maintenance or indeed that of the children. The pursuer has, for instance, required to use a substantial proportion of the money received by her from the balance of the sale of the matrimonial home for ordinary necessities for herself and the children. She presently has a monthly income derived from income support and child benefit which is less that that which the defender derives from his pension. I consider that taking into account the factors set out in section 11 (4) of the 1985 Act and the circumstances in which the claim comes to be made, the pursuer is entitled to a sum of £200 per month which sum shall remain payable over the period of three years after decree of divorce. This will leave the defender with a sum which allied to his disability allowance is substantially in excess of that which the pursuer will receive. I shall make an order for payment of a periodical allowance by the defender to the pursuer accordingly.