Scottish Court of Session Decisions

[1] In this action of divorce the Lord Ordinary (Marnoch) granted decree of divorce and awarded the pursuer a periodical allowance at the rate of £1,000 per month on 18 October 1995. The defender reclaimed. On 8 November 1995 the Lords decerned against the defender for payment to the pursuer of the sum of £1,000 per month as interim aliment and sisted the cause to enable the defender to apply for legal aid. Ultimately he obtained legal aid. On 12 February 1997 the Lordships pronounced the following interlocutor:

Thereafter a Record on the Minute and Answers was closed on 11 December 1997 and a proof allowed to proceed on 23 June 1998. In March 1998 a Lord Ordinary decerned against the defender for payment to the pursuer of interim aliment at the rate of £400 per month.

[2] On 24 April 1998 the Inner House directed that the proof set to proceed on 23 June 1998 should not proceed before the Honourable Lord Marnoch. That proof was however discharged on 23 June and a Minute of Amendment was allowed to be received. On 4 September 1998 a Lord Ordinary, of consent, reduced the award of interim aliment contained in the interlocutor 5 March 1998 for £400 per month to nil. Thereafter, further amendment occurred, including one on the day prior to the proof heard by me in March 2001.

[3] Lord Marnoch's Opinion, which is reported in 1996 S.LT. 321, narrated that he found the defender to be "essentially a credible and reliable witness in the case". He then proceeded at page 323 to narrate the extent of the defender's indebtedness. Having accepted that the defender had a free balance of only £2,000 against his income of £74,000 net, he indicated where he thought repayment of the indebtedness could be re-arranged in order to achieve a free balance of £12,000. He awarded that sum to the pursuer. That "free balance" included an annual figure of £2,500 in respect of potential bonus from his employers.

[4] While the defender's reclaiming motion was before the Inner House, he lost his employment with the European Bank for Reconstruction and Development in London. That loss of employment was the result of perceived conduct inappropriate for an employee of the European Bank. He had it was discovered a conflict of interest with the Bank in his association with and financial interest in companies with whom the Bank was dealing. As a result of losing his employment, he lost bonus, he lost any prospect of a capital sum from the Bank and he lost any prospects of pension. Thus the pursuer lost any prospect of a capital sum related to the defender's employment pension, which was rendered the option given to her by the interlocutor of 12 February 1997 to substitute capital sum for periodical allowance valueless. For a time he was unemployed. Thereafter he has required to secure such employment as he can which is associated with his previous technical expertise in consultancy functions for communications companies. That employment is on a contract to contract basis and is not guaranteed. The defender has no rights in relation thereto being engaged through the services of a placement company Tekinda, who operate from Cyprus.

[5] At the time of the proof in June 1998, the defender was unemployed and it was agreed that he should provide an affidavit outlining his then position. On the faith of the information in that affidavit, the pursuer agreed that she would not oppose a motion to dispose of the reclaiming motion by reducing periodical allowance to nil, backdated to 12 February 1997.

[6] The defender, although having the aliment reduced from £400 to nil on 4 September 1998, took no steps to dispose of the reclaiming motion. For her part, the pursuer took no steps thereafter to attempt to have any award of interim aliment reinstated.

[7] The circumstances which occurred after the affidavit were that the defender was further engaged through the agency of Tekinda and worked for them for a time in London. After that he worked for various enterprises; as a consultant in Brussels, near Frankfurt and, currently, in Berlin. When so engaged he receives the sum of £3,000 net per month, on average.

[8] At the hearing before me, counsel for the pursuer maintained the defender had not demonstrated a material change of circumstances such as to justify a variation of the periodical allowance awarded in 1995. The pursuer's counsel made further submissions as to the quantum of any variation should that be recommended.

[9] The defender's counsel sought variation to nil, backdating that, as I understood her, to the date of the present application, which failing, to reduction of interim aliment to nil from 12 February 1997.

[10] The defender gave evidence over the course of about a day. He spoke to the affidavit which he had previously lodged dated 24 June 1998. He outlined the changes which had taken place since that time, but did so by way principally of oral evidence without any significant vouching. Having heard the defender and his response to cross-examination, I am unable to accord to him the certificate of credibility given by Lord Marnoch. I accept the contention of the pursuer's counsel that the defender has not disclosed his financial position in such a way as to allow the court to be certain about his circumstances at the present date. The current variations from his affidavit, which I accept, are that he has employment and that he has managed to compromise the substantial debt he owed to his parents, who are now deceased. He spoke to a total debt, after some sporadic repayments of about £100,000. That figure of liabilities from the evidence available, I can accept. There is however more difficulty in knowing whether the defender has any other resources beyond his declared income. He still maintains some connection with and some financial interest in the company in Vilnius, Lithuania to which the Lord Ordinary referred. Nor was it at all clear what precise outgoings the defender now has in relation to his expenditure.

[11] The defender's outgoings vary from place to place so, for example, his rent in London was some £1,000 per month; his rent in Berlin is £400 per month; and when near Frankfurt was, in June to August 2000, slightly in excess of £1,000 per month. In addition, he requires to maintain himself and his position as a consulting engineer to an appropriate standard. He said that he had very little left and was making some small payments only towards his considerable indebtedness in Norway and elsewhere. He was making no payments towards his credit card debt or his substantial overdraft debt to the National Westminster Bank, and was adopting a policy of lying low in relation to that institution.

[12] Making the best assessment I can from the information supplied to me, I think that the defender may by July 2001 have a free balance of about £1,000 per month.

[13] My reasoning for arriving at that sum lies in the fact that he felt able to borrow at interest from Messrs Tekinda a sum to repay his indebtedness to his father's estate. The repayment, by instalments, will finish about July 2001, but in the meantime the defender can manage on the sum of £1,750 or thereby which is left after repayment of the Tekinda loan each month, while in Berlin.

[14] The defender said that his Berlin contract was probably being completed and that his next contract if he got one could well be in London where his expenses would be very much higher.

[15] Accordingly, by July he will be left with Norwegian debt which he will require to settle if he ever hopes to return to Norway and achieve a Norwegian old age pension. These Norwegian debts amount to at least £46,854, but interest may well require to be added. He has debts to the National Westminster Bank, amounting to about £23,000, plus interest, plus his credit card accounts which amount to about £30,000. In addition, he has new debts, one for £4,500 to his former solicitors. Another is of about £10,000 to his son Eric, whose student loan he managed to persuade his son to give him to "help him out". He has a debt to British Telecom of £1,346 because of a liability in relation to a telephone which he had rented when in London which will require to be settled if he returns to London and needs, as he will, a telephone for his work.

[16] Because the pursuer has not been receiving any money from the defender she is entitled to £46.50 weekly as income support. Should the defender pay her any weekly sum, that would disappear and, accordingly, unless the defender pays more than £200 per month, the pursuer will not be better off. She is due arrears of interim aliment in respect of the interlocutors above mentioned, of £15,000.

[17] In the above circumstances, in compliance with the interlocutor of the Inner House, I find that there has been, since the date of decree, a material change of circumstances affecting the defender. He cannot afford to pay £12,000 a year to the pursuer. He has never paid any sum beyond £800 to her since the date of decree. He is due considerable debt, which is in substantial degree matrimonial debt and there is little prospect in the foreseeable future of his being free from debt. Some of his creditors, of course, may, get so discouraged by the situation, that they will never require him to pay. Making allowance for the unsatisfactory nature of the defender's proof, and my reservations about his reliability, I am still of the view that there is no practical prospect of the pursuer ever achieving a periodical allowance of any substance or with any regularity. She would be well, in my opinion, to concentrate on trying to obtain the undoubted arrears, and I do not consider that she would be in any better financial position had there been no divorce.

[18] Accordingly, my recommendation is, that the court follow what was provisionally agreed between the parties in 1998 and reduce periodical allowance to nil, backdated to 12 February 1997.

[19] If periodical allowance is reduced to nil from that date, it is open to the pursuer to return to court if there is any realistic prospect of her being able to establish that the defender has available and accessible funds to be obtained. In light of events to date, that seems in the highest degree unlikely and it is for consideration by the Inner House whether the award of periodical allowance should not be varied (as happened in McPherson v McPherson 1989 S.L.T. 239) by terminating it at that date of 12 February 1997. If I correctly read the interlocutor of the Inner House, and am asked to make a general recommendation, that is the recommendation I make. Both parties have conducted this pointless litigation with the benefit of Legal Aid since 1997, and it may well be considered proper to bring an end to it.