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Cite as: 1999 SC 537, 1999 Fam LR 46, 1999 SLT 992, [1999] ScotCS 75

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JISCBAILII_CASE_FAMILY_SCOTLAND

Lord McCluskey

Lord Milligan

Lord Marnoch

C46/10/91

OPINION OF LORD McCLUSKEY

in

RECLAIMING MOTION

in the cause

MRS. DOROTHY LOUISA HILLIS or CUNNIFF (A.P.)

Pursuer and Reclaimer;

against

KEVIN GEORGE CUNNIFF (A.P.)

Defender and Appellant:

_______

Act: J.J. Mitchell, Q.C., J.M. Scott; Morton Fraser

Alt: Smith, Q.C., G.M. Henderson; Campbell Smith, W.S.

12 March 1999

On 31 August 1994 the Lord Ordinary granted the pursuer decree of divorce from the defender and awarded the pursuer the custody of the youngest child Tara, born on 27 July 1983. The two older daughters of the marriage were over 16 at the date of the divorce. The pursuer did not seek, and was not awarded, aliment for Tara. The Lord Ordinary was not invited at the conclusion of the Proof to make any order for periodical allowance. The interlocutor of 31 August 1994 was pronounced after a Proof and hearing lasting seven days. The only matters in dispute at the Proof were matters arising out of the parties' conflicting claims anent financial provision on divorce. Parties entered into a Joint Minute agreeing inter alia (a) the value of the defender's pension entitlement as at the relevant date (27 March 1991), (b) the value of the matrimonial home and the outstanding mortgage thereon both at the relevant date and as at the start of the Proof, (c) the value at the relevant date of the car retained by the pursuer. The matter which has given rise to this reclaiming motion is that the Lord Ordinary ordered the transfer to the pursuer of the defender's whole right, title and interest in the matrimonial home at 9 Mayville Park, Dunbar in terms of section 8(1) of the Family Law (Scotland) Act 1985 ("the 1985 Act").

The task of the court of first instance in dealing with an application under section 8 of the 1985 Act for an order for financial provision is to make

"such order, if any, as is

(a) justified by the principles set out in section 9 of this Act; and

(b) reasonable having regard to the resources of the parties".

The principles which the court is obliged to apply are specified in section 9(1). Mrs. Scott, who appeared as junior counsel for the respondent in the reclaiming motion, and to whom I am indebted for a lucid and comprehensive analysis of the statutory provisions and of the decisions of the courts in relation to them, suggested that the principles listed in section 9(1) as (a), (b), (c), (d) and (e) are "cumulative". I should prefer to say that it is the duty of the court to apply (a) and also to apply whichever of the other specified principles which are relevant in the light of the facts of the case as established to the satisfaction of the court. It is obvious, for example, that principle (c) applies only in cases where there is, at the time of divorce, a child under the age of 16 years and not in cases where there is no such child. I agree with the submission made by Mrs. Scott that, while principle (a) relates to the sharing of the matrimonial property, if the court has to apply one or more of the other listed principles the result could be that the court might make an order for financial provision the amount of which goes beyond the net value of the matrimonial property; indeed I did not understand this to be disputed. The broad statement of principle contained in 9(1)(a) is developed in 10(1), which requires that the net value of the matrimonial property is to be shared equally or in such other proportions as are justified by special circumstances. The meaning of "special circumstances" in subsection (1) is then explained in the important section 10(6). That reads as follows:

"(6) In subsection (1) above 'special circumstances', without prejudice to the generality of the words, may include -

(a) the terms of any agreement between the parties on the ownership or

division of any of the matrimonial property;

(b) the source of the funds or assets used to acquire any of the matrimonial

property where those funds or assets were not derived from the income or efforts of the parties during the marriage;

(d) the nature of the matrimonial property, the use made of it (including

use for business purposes or as a matrimonial home) and the extent to which it is reasonable to expect it to be realised or divided or used as security;

(e) the actual or perspective liability for any expenses of valuation or

transfer of property in connection with the divorce".

It is important to note that, although "special circumstances" may include the examples specified as (a) to (e), that provision as to inclusion is "without prejudice to the generality of the words". It is clear that the court of first instance is not obliged to ignore relevant and material circumstances just because they are not specified in the five particular paragraphs, but must take account of any material circumstances special to the case. In Jacques v. Jacques 1997 S.C. (H.L.) 20 at page 22, 1997 S.L.T. 459, at page 461, Lord Jauncey of Tullichettle said:

"The provisions of subsec (6) give guidance to the court of first instance but they do not fetter its discretion in applying the principle set out in sec 9(1)(a). This is the approach which one would expect Parliament to have adopted in a field where individual cases vary so greatly, where legislation cannot reasonably provide for so many different eventualities and where the court which has heard the evidence is best equipped to deal with each situation as it arises".

His Lordship goes on to find support for this view in the Opinion of the Lord President (Hope) in Little v. Little 1990 S.L.T. 785 at 787B. At page 24 (page 462) Lord Clyde added:

"The words 'special circumstances' do not have any technical meaning but refer to any circumstances which are special to the case. Section 10(6) gives illustrations of what may be included. But that subsection states expressly that the illustrations are given without prejudice to the generality of the words. Moreover in stating that the words 'may' include the stated illustrations it is indicating that there is no necessary conclusion that any of the illustrations must require some unequal sharing...As matter of construction it is sufficient to understand that in the ordinary course an equal division will be fair, but that where there are special circumstances some unequal division may be justified".

As noted earlier, section 10(6)(d) expressly empowers the court to consider:

"the nature of the matrimonial property, the use made of it (including use for business purposes or as a matrimonial home) and the extent to which it is reasonable to expect it to be realised or divided or used as security".

The meaning of "matrimonial home" is that given in section 22 of the Matrimonial Homes (Family Protection)(Scotland) Act 1981, as amended, and includes any house which has become "a family residence". It should also be noted that in the Opinion of the Lord President in Little v. Little supra, at page 787B-C the Lord President states of the detailed provisions:

"But despite all the detail much is still left to the discretion of the court. This is clear from an examination of s. 8(2), which provides that the court shall make such order, if any, as is justified by the principles set out in s. 9 and reasonable having regard to the resources of the parties. The concept of sharing the net value of the matrimonial property fairly, the flexibility which is given by the expression 'special circumstances' in s. 10(6) and the repeated references in s. 11 to all other circumstances of the case serve to emphasise that, despite the detail, the matter is essentially one of discretion, aimed at achieving a fair and practicable result in accordance with common sense. It remains as important as it always has been that the details should be left in the hands of the court of first instance and not opened up for reconsideration on appeal".

It would not be difficult, but is quite unnecessary, to multiply examples of this approach in other cases decided since the 1985 Act. I should, however, note that the Little v. Little approach was expressly adopted in Peacock v. Peacock 1993 S.C. 88.

Paragraph (b) of section 9 requires the court to take a fair account of economic advantage and economic disadvantage accruing to either party in the past. Principle (c) looks to the economic burden of caring, after divorce, for a child of the marriage under 16. It is unnecessary to quote in full the provisions of section 11; but it is clear that if the facts of the case are such that it is apt and appropriate to apply the principles (b) to (e), or any of them, then the factors to be taken into account are those respectively specified in section 11. Section 11(7) requires the court not to take account of the conduct of either party unless in the circumstances there specified. It will be seen from a close examination of these detailed provisions that there is a degree of overlap. Thus, for example, the "resources" of the parties come in in section 8(2)(b), section 11(3)(g), 11(4)(d) and 11(5)(d). There is, in my opinion, no reason to treat "resources" as limited to capital resources. The interpretation section, section 27, provides that "resources" means present and foreseeable resources and can include prospective income, for example from a pension: that was the approach taken by the court in McEwan v. McEwan 1997 S.L.T. 118. I see no need to treat the provisions of section 4(1) - relating to aliment - as restricting "resources" so as to exclude "the earning capacities of the parties" [cf. section 4(1)(b)]: there is plainly a degree of overlap between the items indicated by paras. (a), (b) and (c) of section 4(1), which because it appears in a fasiculus of sections concerned with aliment, emphasises the highly relevant matter of earning capacity. After taking account of the relevant statutory provisions in sections 9, 10 and 11, the court goes back to section 8(2) and makes a judgment on the basis of the factual findings in relation to the application of the relevant principles, considerations and factors.

The first task of the Lord Ordinary in the present case was to determine the facts upon the basis of the evidence led before him. There was no challenge to his findings in fact (except in respect of certain matters of relatively minor detail which will be noted later when I come to deal with the specific grounds of appeal). The Lord Ordinary identified the main issue by saying:

"The particular bone of contention is what should be done with the former matrimonial home. This is the house at 9 Mayville Park, Dunbar, which is owned jointly by the parties".

He summarised the history of the marriage especially in relation to the financial aspects and determined the net value of the matrimonial property at the relevant date (27 March 1991). That real value was found to be £41,421. He also considered the evidence regarding the house, and, in accordance with the agreement in the Joint Minute, held that as at the first day of the Proof the house had a market value of £84,000, that there was an outstanding mortgage of £40,777, and the result was that each party's share in the house was then worth about £20,000. He examined section 8(2), section 9, section 10 and the relevant parts of section 11. It is clear - and it is undisputed - that he was invited by counsel for the parties to choose one of two courses, either to transfer the house to the pursuer or to order its sale with a view to dividing the free proceeds between the parties. He gave consideration, in the penultimate paragraph of his Opinion, to the appropriateness of adopting a third course, that of making an order entitling the pursuer (and the child under 16) to reside in the matrimonial home for a period. Of that he says:

"It is raised in the pleadings as an alternative but at the proof both parties said they did not want me to take this course".

The choice which parties offered to him was a stark one, namely to have the house sold and the proceeds divided between the parties, thereby putting the pursuer and Tara out of the family home and necessitating their moving from one temporary dwelling to another, or, alternatively, to make an order transferring the house to the pursuer, thereby making it likely that the defender would be unable to pay his debts and indeed to become absolutely insolvent with a risk of being made bankrupt. The Lord Ordinary carefully considered how the pursuer might obtain accommodation suitable for herself and the child Tara and very clearly concluded that the retention of the matrimonial home would be to the benefit of the family life of the pursuer, Tara and the two older daughters. This is a set of circumstances resembling those which the court considered to be of importance in Peacock v. Peacock supra. I shall return to this matter later.

On a fair reading of the Lord Ordinary's Opinion, I cannot detect any significant and material failure by him to take account of any matter that was properly established in evidence and placed before him for consideration. Nor can I find any basis for criticising the method of his approach to ascertain the applicability of the principles and other statutory considerations to the facts established by him. In relation to the resources matter raised by section 8(2)(b) he deals in some detail with the financial consequences for the defender of transferring the house to the pursuer in the light of his financial position as disclosed at the Proof. He does not specifically re-assess the value of the family car. At the relevant date (27 March 19991) it had been worth £2,500. Three or so years later its value must have been considerably less. The value of the pension in 1994 was not disclosed at the Proof. So the only items of matrimonial property still counting as significant resources in 1994 were the house and the pension.

I turn first to consider the particular criticisms narrated in the Grounds of Appeal for the defender and appellant. Apart from the general criticisms in Grounds 1, 6, 8 and 9 they refer to what are said to be errors by taking into account matters which it was not appropriate for the Lord Ordinary to take into account. In considering these particular criticisms, however, it is important to bear in mind that the appellant made little attempt to argue that the Lord Ordinary had misinterpreted the evidence; and that, in any event, the approach of the appeal court to the Lord Ordinary's determination of what were essentially factual matters is that found in Thomas v. Thomas 1947 S.C. (H.L.) 45.

The first matter that arises logically is that raised by Ground 4, as it bears upon the net value of the matrimonial property. Of this the Lord Ordinary says:

"There was some evidence that the defender owed the Irish tax authorities some 1,635 Irish punts which converted, I was told to £1,521 sterling. That liability arose before March 1997 and the last letter seeking payment of it was dated 19 March 1997. In evidence the pursuer said that the defender had said that he would not repay the debt. The defender said he did intend to pay it but I did not accept that. He had ample opportunity to do so when he was earning a good salary and did not do so. In these circumstances I agree with counsel for the pursuer that it should not be taken into account".

In my view, it is impossible to fault the Lord Ordinary's approach to this matter. He had evidence before him from both parties, and was referred to a letter, which is produced, dated 19 February 1987 seeking payment of this sum to the Irish Tax Authorities. There was no evidence to show how much would have to be paid in 1994 to extinguish the liability and, given that the defender claimed to have no liquid assets and had not paid this debt when he did have such assets, the Lord Ordinary was, on a balance of probabilities, well entitled to conclude that the defender had no intention of repaying this "debt". It is a matter of trite law (see Anton "Private International Law" (2nd Edn.) at pages 229/230) that this debt would be unenforceable in the United Kingdom courts. So the Lord Ordinary was entitled to determine as a matter of fact that it was not a "debt" for the purpose of the Act. I therefore conclude that this Ground of Appeal is unsound.

It is appropriate next to consider Ground of Appeal 5 which relates to the Lord Ordinary's conclusion that the defender's conduct adversely affected "the financial resources which are relevant to the decision of the court on a claim for financial provision" in terms of section 11(7)(a). What the Lord Ordinary finds upon the basis of the evidence is that the defender controlled the family finances and did not share his knowledge and information about them with the pursuer. Between the end of 1989 and the relevant date, 27 March 1991, the defender's bank overdraft rose from £1,673 to "£10,196, or £8,825 after taking into account his salary for that month". It is worthy of note that at the material time the defender was in employment and his gross earnings exceeded £25,000 per year. The Lord Ordinary accepted the defender's assertion that the increase in the overdraft was entirely due to household and family expenditure "of one kind or another"; but he was not persuaded that such expenditure was entirely necessary, sensible or reasonable having regard to the parties' circumstances and the final deterioration in their relationship during the last 8 month period - when much of the additional expenditure was incurred. The Lord Ordinary was suspicious, but could not hold, that the defender deliberately allowed the overdraft to rise. He concluded, however, that his doing so was "certainly foolhardy" and he noted the fact that the defender continued to run an overdraft of comparable size down to the date of the continued proof in May 1994; thus, the Lord Ordinary, considered he had chosen not to reduce his indebtedness though he could have done. In fact, the defender became redundant in January 1994 and we are told that he received a modest redundancy payment of about £1,000. The Lord Ordinary also concluded, though he was unable to assess the amounts involved, that the defender, after leaving the matrimonial home in October 1991, contributed more of his earnings into his pension scheme and failed to make payments in respect of the mortgage on the matrimonial home as he had undertaken to do (through his counsel) when the court was entertaining a motion for interim aliment.

In my view, the Lord Ordinary was well-entitled to entertain suspicions that the defender used his exclusive control of the family finances to take monies out of the bank account so as to leave an overdraft. He was also well-entitled to conclude that the defender was less than frank in revealing the state of his finances from the end of 1989 until the continued Proof, with the result that the Lord Ordinary had more difficulty than he should have been faced with in determining the resources of the defender and his financial intromissions at the material times. Nonetheless, the Lord Ordinary could not, and did not, conclude that the defender was guilty of deliberately dissipating or alienating the property relevant to the claims for financial provision. I am not satisfied that, in the absence of proof which was in fact lacking, the Lord Ordinary could properly hold that the defender was guilty of "conduct [which] has adversely affected the financial resources which are relevant" within the meaning of section 11(7). In this respect, therefore, I would differ from the Lord Ordinary's conclusion. It does not follow, however, that the Lord Ordinary has materially misdirected himself in such a way as to necessitate a complete reconsideration of his overall conclusion. The Lord Ordinary himself makes no attempt to quantify the extent to which the defender's intromissions with the relevant monies between December 1989 and May 1984 diminished the resources and it appears unlikely that his conclusion on the aspect played any significant part in the final decision. I conclude that if the Lord Ordinary was in error in this regard his error was of no materiality in the decision he took.

In Ground of Appeal No. 7 it is argued that the Lord Ordinary could not hold upon the basis of the evidence that the pursuer had suffered an economic disadvantage in the interests of the reclaimer or the family, because there was no evidence to the effect that the pursuer was in 1994 in any worse position in the job market than she would have been had she not married the reclaimer. In my view, the Lord Ordinary was doing no more than stating the obvious. He was not required by the Act to close his mind to common sense: cf. Little v. Little, supra, at p. 787C. The Lord Ordinary was considering this matter in relation to section 9(1)(b) which requires fair account to be taken of

"any economic advantage derived by either party from contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of the family",

and the resultant balancing desiderated in section 11(2). This was, in my opinion, a matter of fact. There was ample material to show that the pursuer gave up work shortly after the marriage and, within a year or two, had two daughters to raise at home. When they were still quite young, Tara was born. The defender, however, continued to work full time and to gain additional qualifications. He was able to work in different parts of the world and the condition of his doing so was plainly that the pursuer remained at home and could not acquire additional relevant experience or further qualifications to increase her earning capacity. The Lord Ordinary was plainly not in any position to quantify these matters with any precision but I consider that he was clearly entitled to conclude that on an overall view there was a resulting imbalance between the parties relevant to this principle and warranting a correction of the kind envisaged by section 11(2)(b).

The appellant made submissions in relation to the Lord Ordinary's treatment of the contributions made by the reclaimer to his pension fund (see Grounds 2(a) and 3). I fail to see why the increase in the value of the reclaimer's pension scheme entitlement as a result of contributions he made, after the relevant date, should not be regarded as a "resource" within the meaning of section 8(2)(b). That pension had a calculable and calculated value as at the relevant date and equally it had a calculable value at the date when the court had to have regard to the resources of the parties, i.e. the date of making the order for financial provision. There was evidence to justify the finding that the reclaimer did in fact make contributions to the pension scheme over the period between the relevant date and the date of the Proof; and the Lord Ordinary concludes, "The amount of these contributions was not revealed in the evidence but my impression was that it was not insubstantial". The reason why the matter of the value of the pension was not properly ascertained as at the date of the proof appears to be that the pursuer and respondent believed and averred that the defender and reclaimer had "ceased to pay into a pension scheme, in order to frustrate the pursuer's claims for financial provision" (cf. the Record page 28E). However that may be, the reclaimer was more than guarded in his responses to questions on the matter and simply claimed not to know how much he had put into the pension scheme after learning from his advisers that it was substantially underfunded. It is, I should have thought, within judicial knowledge that, by putting cash into the pension scheme, a person of the reclaimer's age could expect to obtain a good return in 15 or 20 years time although, in the meantime, with commission charges and other well understood circumstances, the increased surrender value related to the additional payments would be relatively very small in the short term. The Lord Ordinary plainly concluded that the reclaimer had intentionally diminished his resources by this form of investment but that he nevertheless ended up with a pension entitlement which was worth more than it had been at the relevant date, albeit its paper value would be unlikely to reflect exactly the amounts newly invested. This matter is relevant both to the application of the section 9 principles and to the assessment of resources. I conclude that the Lord Ordinary was entitled to regard this as relevant to his overall decision. The disbursements by the reclaimer plainly affected his indebtedness and plainly added something, albeit something not quantifiable, to his resources. However, once again the Lord Ordinary does not appear to me to have attached any considerable weight to this matter, particularly in the light of the stark choice which the parties, and in particular the reclaimer, forced upon him.

Ground of Appeal 2(e), (f) and (g) raise matters which the Lord Ordinary treated as relevant to the application of section 10(6)(d). This paragraph entitles the court to treat as one of the "special circumstances" within the meaning of section 10(1)

It has already been noted that "matrimonial home" includes family residence or home. It was clear on the evidence that the house which was in issue had been used as a family home over a period of years and that the three daughters of the marriage had all been brought up in it. The Lord Ordinary had regard to the fact that although the two older daughters had left the family home they had an interest in returning to it. His treatment of this is the subject of criticism in those Grounds of Appeal. The Lord Ordinary, in considering the application of section 10(6)(d), referred to the fact that the house had been home to Anna and Phillippa for six years after the family moved to Scotland, although they were now forisfamiliated. He says, "...it is still important in my view that they have a settled home base to which they can return" and he discusses the possible stresses upon "the family as a whole and on each member of it individually" if the family had to leave the family home; in particular he refers to his view that the pursuer's health could be adversely affected. In my view such considerations may properly be taken into account by the court. Of course, it is the relationship between the use of the matrimonial home by and for the pursuer that is relevant to the application of section 10(6)(d); but the fact that the family includes the daughters now in their twenties is not necessarily to be ignored. I do not read the Lord Ordinary's observations on this matter as introducing an irrelevancy that vitiates his overall conclusions. It could be relevant to the welfare of the child, Tara. It is also quite clear that consideration of the occasional home visits by the older daughters to the family home was a matter of peripheral significance in the judgment. In the whole circumstances, it was, in my opinion, something which the Lord Ordinary could take into account It was for the Lord Ordinary to determine what weight to attach to it in the light of all the other circumstances.

In relation to the position of the Scottish Legal Aid Board, referred to in Grounds 2(b) and (c), I have some difficulty in understanding what the reclaimer's position truly was. There was ample material before the court to warrant the conclusion that, if the house had to be sold, the Scottish Legal Aid Board would be entitled to make a claim against the proceeds of the sale in respect of the net liability of the fund on the account of either legally aided party. This consideration, it appears to me, has little, if anything, to do with possible awards of expenses by the court in these proceedings. By the date of the Proof both parties were legally aided. By the time the Lord Ordinary came to issue his final interlocutor the Proof had lasted seven days and there had been numerous other costly developments in the litigation since the date of signetting the summons, 27 March 1991. As both parties were on legal aid and as the only substantial asset they had between them was the house it appears to me to be clear that the legal aid authorities would be entitled to seek to make good their claim against the house, albeit the claim might not be realised for a number of years. The Lord Ordinary dealt with this in his opinion, and it appears to me to follow from Hanlon v. The Law Society 1981 A.C. 124 that the Legal Aid Board would be entitled to exercise this right. Furthermore, a careful examination of the Lord Ordinary's opinion shows that he reached a conclusion as to what should happen to the matrimonial home before he attached weight to attitude of the Legal Aid Board in relation to the possible recovery from the parties, or either of them, of the monies recoverable under the provisions of the Legal Aid (Scotland) Act 1986 and incidental regulations. The Lord Ordinary was, in my opinion, entitled to conclude that if he ordered that the house be sold and its proceeds distributed among the parties, whether equally or otherwise, a likely consequence would be that the pursuer and the child would be rendered at least temporarily homeless and subject to the vagaries of trying to obtain suitable accommodation, all as detailed in the Lord Ordinary's opinion. It was not shown that the defender would necessarily be much better off. These were circumstances which I consider the Lord Ordinary was well entitled to have regard to in making his final judgment in the light of the fact that, as discussed later, the parties, by their submission, pressed him to take one of two irreconcilable options and to avoid a compromise solution in determining how to resolve the sharp issue placed before him.

The Lord Ordinary concluded that "before long" the reclaimer and defender would find employment again at a salary commensurate with his qualifications and experience. In Ground of Appeal 2(d) it is suggested that this finding in fact does not bear upon the matter of determining what order is to be made. I disagree. I have already referred to the fact that the resources of the parties may be relevant in a number of ways. Section 27(1) contains the provision: "'resources' means present and foreseeable resources". Having regard to the natural meaning of these words I should have no difficulty in holding that if a person, albeit unemployed, has an early prospect of earning a substantial income there are "resources" within the meaning of the Act for the purpose of section 8. The contrary argument was that section 4(1) referred to "resources" in paragraph (a) and to "the earning capacities of the parties" in paragraph (b). The argument was that, if "resources" included "earning capacities" there would be unnecessary duplication in section 4(1). It may be that there is unnecessary duplication there but I see nothing in section 4 to deprive the word "resources" in section 8 of its ordinary meaning. When one looks at the words "the needs" appearing in section 4(1)(a) one has to take into account the fact that the needs at the actual moment of the award are not exactly the same as the needs which will arise in the immediate or foreseeable future. When a court is required to assess "the needs" of a party it must look to the future and make a judgment as to what those needs are likely to be. Exactly the same exercise must be done in relation to resources and it would be unrealistic to ignore any likely source of capital or income, whether by way of earnings or pension payments or otherwise. Both future needs and prospective (but uncertain) future income appear to me to have been treated in this fashion in McEwan v. McEwan 1997 S.L.T. 118. At p. 120C the court, which adhered to the Sheriff's interlocutor, noted that the Sheriff "considered that...there should be capital from his [the husband's] salary from which he could pay by instalments". The resources available to the defender in the future from prospective changes in the pattern of his regular expenditure were also considered relevant: p. 121F-G.

I can detect no material error in the approach of the Lord Ordinary, under reference to the criticisms contained in Grounds 2, 3, 4 or 7.

Ground 6 asserts that

"no reasonable Lord Ordinary would have failed to regard the granting to the pursuer of a right of occupancy in said house as an appropriate way in which to share fairly the net value of the matrimonial property".

For myself, and in the circumstances of this case, I regard this ground of appeal as bordering on the offensive. As the Lord Ordinary specifically narrates, he did consider if it would be appropriate to make an order entitling the pursuer to reside in the matrimonial home for a period. He pointed out that this possible solution was raised in the pleadings. It should be noted, however, that it was raised in the pleadings only on behalf of the pursuer and the respondent. The reclaimer and defender did not suggest this as an alternative in his pleadings. The Lord Ordinary specifically states that "at the proof both parties said they did not want me to take this course". Junior counsel, who appeared for the reclaimer both at the proof and at the reclaiming motion, informed this court that at the time of the hearing before the Lord Ordinary he had taken specific instructions on this matter from the reclaimer and that the reclaimer had specifically instructed that he ask the court not to make an order entitling the pursuer to reside in the matrimonial home until Tara was 16. Mrs. Scott, who also appeared at the proof, confirmed that the pursuer herself did not seek such an order. She further pointed out, however, that, although the pursuer was seeking an order in terms of the ninth conclusion, she had placed before the court the option of an alternative order in conclusion 10. Had the court been inclined to favour this course, however, she would have been seeking a payment of a capital sum and would have pursued her claim for a periodical allowance for three years after the date of granting the decree of divorce. A real advantage of granting decree in terms of the ninth conclusion was that there would be an immediate clean break between the parties. Not only was the Lord Ordinary specifically invited by both parties not to give the pursuer and respondent a right of occupancy but he spelt out good reasons to illustrate that this course, although obviously one that had to be considered, was not the only course reasonably open to him. He refers to these matters in the penultimate paragraph of his Opinion and there draws attention to the desirability of achieving a clean break when he says:

"In addition, it would inevitably prolong the period of potential conflict between the parties in relation to this matter. It therefore seems to me that there is little advantage in taking this alternative course and much to be said against it".

I do not consider that it lies in the mouth of those representing the reclaimer to suggest, in these circumstances, that "no reasonable Lord Ordinary" would have failed to do what the reclaimer, and indeed both parties, invited him not to do. It was, of course, clear that it was a matter that had to be considered. It would probably have secured the matrimonial home for the pursuer, her child and, as far as necessary, the other daughters. It would have had no bearing upon the defender's own poor financial position, but I reject the assertion that it was unreasonable for the Lord Ordinary to fail to take a course which neither party asked him to take and both specifically asked him not to take.

It is in the light of these considerations that I turn to the aspect of the matter which has given me the greatest difficulty. The effect of what the Lord Ordinary has done was that the matrimonial property was not, in the ordinary sense of the word, "shared" between the parties to the marriage. Leaving aside the cash and the debts, the pursuer got the house and the car, while the defender got the pension scheme entitlement and retained the liability to meet the debts. Arithmetically, at least, the pursuer got the whole matrimonial property and a little more. The defender was left insolvent and facing the possibility of bankruptcy. This possible distribution of the assets and liabilities was a result which, in my opinion, the Lord Ordinary was entitled to arrive at on the basis of his conclusions as to how the principles referred to in section 9 applied to the case. The difficulty is to characterise the making of the order he made as "reasonable having regard to the resources of the parties". For it is clear that the pursuer and respondent would end up at once with virtually all the assets, while the defender and reclaimer would end up with no resources, beyond his pension entitlement, and with substantial debts.

In my opinion, despite these considerations, the Lord Ordinary was entitled in the exercise of his discretion to hold that, in view of the submissions of the parties and the additional considerations taken into account by him, that this order was "reasonable". The reclaimer knowingly and deliberately gambled by in effect asking for a half share of the house immediately, or nothing. Furthermore, although the tangible and immediate resources available to him were exceeded by his indebtedness, he had a real and, in the Lord Ordinary's view, fairly early prospect of earning a substantial salary. He was a man who would be in effect single, with no continuing liabilities towards his ex-wife or family and freed of any mortgage liability. He would be free to seek employment wherever he could find it, in this country or abroad. In the light of his careful consideration of all the matters that were relevant, having regard to the approach which is vouched by Little v. Little supra and in the light of the decision of this court in Peacock v. Peacock supra, the Lord Ordinary was, in my opinion, entitled to arrive at the overall conclusion at which he did arrive. As the Lord President (Hope) said of the Lord Ordinary's decision in Little,

"...it has not been shown to be either unreasonable or unjust. On the contrary I consider that his decision stands up to examination as a sound exercise of his discretion with which we should not interfere".

I am of opinion that the same observation falls to be made here.

For these reasons, I would refuse this reclaiming motion.

I should not wish to leave this case without some reference to the length and character of the proceedings themselves. The summons was signeted on 27 March 1991. After substantial preliminary procedure, leading to the issuing of twenty-five interlocutors, the Proof, including the hearing on evidence, lasted seven days. The interlocutor now reclaimed against was issued in August 1994. The appeal proceedings were sisted for over 20 months, (the total length of the periods of sist in the whole proceedings is of the order of three years). As a result, the reclaiming motion was not heard until some five years after the start of the Proof, and eight years after the relevant date. The costs of the whole litigation to date seem likely to exceed substantially the net value of the matrimonial property. The respondent's counsel, Mrs. Scott, attempted to avoid the necessity for a lengthy summar roll hearing of this reclaiming motion by pointing out at the By Order Roll on 16 December 1998 that the sum involved (half of the value of the matrimonial home) would be swallowed up by liabilities likely to be incurred to the Legal Aid Board. However, the reclaimer insisted in going ahead with the reclaiming motion, which it was said would last three days and in which senior counsel would be instructed. Mrs. Scott's apprehensions were fully justified. The reclaiming motion appears to me to have resulted in a regrettable waste of public resources and the court's time, for which those advising the reclaimer must bear at least some responsibility.

Lord McCluskey

Lord Milligan

Lord Marnoch

C46/10/91

OPINION OF LORD MILLIGAN

RECLAIMING MOTION

in the cause

MRS. DOROTHY LOUISA HILLIS or CUNNIFF (A.P.)

Pursuer and Respondent;

against

KEVIN GEORGE CUNNIFF (A.P.)

Defender and Appellant:

_______

Act: J.J. Mitchell, Q.C., J.M. Scott; Morton Fraser

Alt: Smith, Q.C., G.M. Henderson; Campbell Smith, W.S.

12 March 1999

I agree with your Lordship in the chair that this reclaiming motion should be refused for the reasons given by your Lordship. I respectfully disagree with your Lordship only on two points, both of which are immaterial to the decision of the case. The first point is that I do not consider the Lord Ordinary misdirected himself in holding that the defender was guilty of conduct which adversely affected the financial resources which are relevant, within the meaning of section 11(7), albeit that that conduct involved recklessness or carelessness and not deliberate dissipation or alienation. I do agree that it is not material for the purposes of disposal of this appeal, anyway.

The second point is that in the particular circumstances of this case I do not find difficulty in the practical effect of the Lord Ordinary's decision so far as the defender's financial position is concerned. The 1985 Act makes provisions to be applied in the absence of agreement between the parties as to financial matters arising on divorce. Ideally, the Act does not require to be used at all to achieve settlement of such financial matters. At worst, the Act requires to be used fully because the parties cannot agree on any aspect of such matters. Between these two extremes lie the cases, such as the present, where parties reach a measure of agreement whether in detail or in principle, and the court requires to apply the Act in determination of outstanding questions, properly taking into account in such determination such agreements as have been reached. Just as parties can disqualify court intervention by agreement on aspects of financial settlement, they can tie the hands of the court in application of the provisions of the Act by restricting by pleadings or by submission the options open to the court. This is what has happened in the present case. Parties agreed certain matters of value by joint minute, and the positions which they adopted at the proof left what was to happen about the matrimonial home as the only outstanding matter in issue. As a result of the submissions of parties the only options presented to the Lord Ordinary were outright transfer of the house, subject to mortgage, to the pursuer, as sought by the pursuer, or sale of the house forthwith, and division of the proceeds, as sought by the defender. In the result, the Lord Ordinary chose the former option for reasons which I find understandable and wholly satisfactory, his discretion in the matter apart. The cases where a court decision leaves one party with what amounts to a negative apportionment of matrimonial property, whether with or without potential bankruptcy resulting, may prove to be few and far between but I have no difficulty with that result in the particular circumstances of this particular case.

Lord McCluskey

Lord Milligan

Lord Marnoch

C46/10/91

OPINION OF LORD MARNOCH

RECLAIMING MOTION

in the cause

MRS. DOROTHY LOUISA HILLIS or CUNNIFF (A.P.)

Pursuer and Reclaimer;

against

KEVIN GEORGE CUNNIFF (A.P.)

Defender and Appellant:

_______

Act: J.J. Mitchell, Q.C., J.M. Scott; Morton Fraser

Alt: Smith, Q.C., G.M. Henderson; Campbell Smith, W.S.

12 March 1999

While I do not dissent from your Lordships as to the manner in which this Reclaiming Motion should be disposed of I confess that I have had rather more difficulty, than perhaps have had your Lordships, in coming to that conclusion.

In particular, I think it must be a fairly extreme and unusual result under the 1985 Act that one party is left absolutely insolvent following an unequal division of the matrimonial property. In the present case, however, I am of opinion that there was just enough material before the Lord Ordinary to entitle him to take the view that that state of affairs had, to a material extent, been contributed to by the defender himself. Further, there is the important consideration that in this case, when it was before the Lord Ordinary, the defender, through his counsel, chose explicitly to dissuade the court from adopting the middle course of granting the pursuer a right of occupancy in the matrimonial home until the youngest child attained the age of 16 years. While the Lord Ordinary - quite correctly in my view - did not regard the defender's attitude in this matter as conclusive, it was nonetheless a very relevant factor in his disposing of the case as he did.

For the rest, I desire only to reserve my own opinion, first, as to how far it is proper, within the ambit of section 10(6) of the Act, to have regard to the interests of children over the age of 16 years; second, as to how far the mere hope of employment can, or should, be regarded as a "resource" or even "future resource" within the meaning of sections 8(2) and 27(1) of the Act; and, third, as to how far one can or should have regard to the impact on any particular award of the liabilities of parties to the Legal Aid Fund. The present case may be somewhat special in that there was little prospect of either party being found liable in expenses but in general a person's liability to the Fund could clearly be covered, in whole or in part, by such an award. As was pointed out by the Lord President (Hope) in Little v. Little 1990 S.L.T. 785, at p. 790, the manner in which expenses are dealt with may itself be influenced by what financial award has been made and there are obvious dangers in taking into account, at the earlier stage of making the award, considerations which are truly applicable at the later stage. In this connection I refer to the recent decision of the Court of Appeal in England in Collins v. Collins [1987] 1 F.L.R. 226.

All that said, the matters referred to in the preceding paragraph were, I believe, peripheral to the central reasoning of the Lord Ordinary which, for the reasons given by your Lordship in the chair, can, I think, withstand the attacks made on it.

In the result I agree that this Reclaiming Motion should be refused.