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Buchan v. Ogg [2003] ScotSC 8 (3 March 2003)

SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT BANFF

A254/98

		JUDGEMENT of SHERIFF PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
		in the cause
		MRS BARBARA BUCHAN or OGG
		Pursuer and Respondent
		against
		CHARLES NIVEN OGG
		Defender and Appellant

Act: Mrs Scott, advocate, instructed by Masson & Glennie, Peterhead

Alt: Mr Kelly, advocate, instructed by Duthie Ward, Aberdeen

Banff: 3rd March 2003

The Sheriff Principal, having resumed consideration of the cause, sustains in part both the appeal for the defender and appellant and the cross-appeal for the pursuer and respondent and adheres to the interlocutor of the sheriff dated 25^th September 2001 subject to the following amendments:

In line 3 of page 6 delete the words "within two months of the date of decree" and substitute "not later than 30^th April 2003".

In lines 7 to 9 on page 6 delete the words "Ordains the Defender to pay to the Pursuer one half of the increase in value between 11^th January 1995 and date of decree in respect" and substitute "finds and declares (in terms of section 14(2)(c) of the Family Law (Scotland) Act 1985) parties each entitled to one half of the proceeds".

In line 10 on page 6 delete the words "all within two months of date of decree".

In line 12 on page 6 delete the word "ordinations" and substitute "declarator".

In line 12 on page 6 delete "£70,533" and substitute "£81,271.50".

In line 13 on page 6 delete "on £34,469" and substitute "thereon".

reserves meantime all questions of expenses and appoints parties to be heard thereon at Aberdeen Sheriff Court on 13^th March 2003 at 11.30am.

Note

In this action of divorce the pursuer and respondent sought various orders against the defender and appellant including decree for payment of a capital sum of £200,000. After proof the sheriff granted decree for payment of the sum of £70,533 with interest on £34,469 at 8% from
8^th January 1999 (which was the date of commencement of proceedings) until payment.

Before the sheriff there was a substantial measure of agreement between the parties as to the values to be attributed to their respective assets and liabilities at the relevant date, namely
11^th January 1995. But there was a sharp disagreement in relation to the value of the defender's shares in a company named Pitcairn Fishing Company Limited ("Pitcairn"). The principal asset of this company was a fishing boat named the Maranatha III. In the company's accounts for the year ended 31^st December 1994 the net book values of (a) the fishing vessel and its gear, (b) the vessel's pressure stock licence and (c) plant and equipment were stated respectively as £1,515,571, £61,170 and £14,341. Together these three sums totalled £1,591,082. Two chartered accountants were instructed to prepare valuations of the defender's shares at the relevant date. They both followed essentially the same method, but they differed on the sums to be substituted for the net book values which, it was accepted, did not reflect the true values of the vessel and gear, the licence and plant and equipment at the relevant date. Mr Pitman, who was the accountant instructed by the pursuer, assumed a valuation of £1,000,000 for the vessel, £250,000 for the licence and £100,000 for gear. The defender's accountant, Mrs Cuthbert, on the other hand assumed a valuation of £1,000,000 for all these items. Both accountants appear to have ignored the plant and equipment, and no issue was made of this at the appeal.

The sheriff found that Mr Pitman had been wrong to include the sum of £100,000 in respect of the vessel's gear, and on appeal counsel for the pursuer did not challenge the sheriff's finding in this respect. It was common ground that the result of Mr Pitman's valuation (subject to the deletion of the sum of £100,000 for gear) was to give a value for the defender's shares in the company of £140,205.10, while the result of Mrs Cuthbert's valuation was to give a value for these shares of £94,750.55. It was agreed too that, if the former value was correct, then the capital sum to be awarded to the pursuer should be £81,271.50 whereas, if the latter value was correct, then the capital sum should be £58,545.

The basis for the valuation of £1,000,000 which was put on the Maranatha III was to be found in a survey report prepared by Pirie & Smith Limited (Consultant Marine Engineers, Naval Architects and Ship Surveyors) ("Pirie & Smith"). The survey was carried out by Mr William Curnow of Pirie & Smith on 10^th May 1995 while the vessel was afloat at Lochinver, and the report itself was dated 18^th May 1995. It begins by narrating that Mr Curnow attended at the vessel "for the purpose of ascertaining the general condition of the hull, machinery and associated equipment for valuation purposes". It then gives a detailed analysis of the vessel and its fittings. The penultimate paragraph is in the following terms:-

This vessel is in a well maintained condition and we consider a valuation in the region of £1,000,000.00 (ONE MILLION POUNDS BRITISH STERLING) could reasonably be placed on this vessel.

There is nothing in the wording of the report to suggest that what was being valued was anything other than the fishing vessel itself. In particular, there is nothing to indicate that, in arriving at the sum of £1,000,000, Mr Curnow or any of his colleagues at Pirie & Smith took any account of the value of the vessel's pressure stock licence. But when he was called as a witness at the proof by the defender (and this, be it noted, despite the fact that Pirie & Smith had originally been instructed to carry out the survey by the pursuer's agents), Mr Curnow stated quite plainly that the valuation of £1,000,000 would have been inclusive of the vessel's pressure stock licence, and that the licence on its own would probably have been worth about £60,000. But the sheriff rejected his evidence in this respect. Thus at page 11 of his judgement he wrote: "His (Mr Curnow's) report makes no mention of licence. Although he stated that about £60,000 would be included for licence I did not consider that was a reliable estimate of the value of licences at that time. It seemed to me far more probable that he ignored the issue of licence, either because he was focusing only on the condition of the boat or he was unaware of the latest value of a high-VCU licence added to a good catching record ...... I was not persuaded that the value of licence is reflected at all in the Pirie & Smith valuation". And at page 13 the sheriff stated: "I am satisfied that Mr Curnow ..... did not take any account of licence. There is no mention of it in the report and nothing to allow inference of its inclusion".

Although he did not make a specific finding in fact on the point, it is quite clear from his endorsement of the approach to the valuation of the defender's shares in Pitcairn adopted by
Mr Pitman that the sheriff accepted that the sum of £1,000,000 should be taken to have been the value of the fishing vessel alone at the relevant date. Relying on the evidence of Mr John Hermse, a fisheries consultant called on behalf of the pursuer, the sheriff then found that a notional value to be attributed as at the relevant date to the licence was reasonably estimated at £250,000 and that Mr Pitman was entitled to include this sum in his revaluation of the assets of Pitcairn in addition to the sum of £1,000,000 for the vessel itself. He thus rejected the approach of Mrs Cuthbert which had been to take the value of £1,000,000 as the value of both the vessel and the licence. The result was, as indicated, to give a value for the defender's shares of £140,205.10.

Counsel for the defender submitted that the sheriff in reaching these conclusions had fallen into error in various respects with the result that the matter was at large on appeal. In particular, he contended that the sheriff had erred in not apparently taking into account in this context the evidence of Mr James Braid, a chartered accountant who was called by the defender to speak to the valuation of the defender's shares in Pitcairn prepared by Mrs Cuthbert (who, it seems, was not available to give evidence at the proof). Counsel submitted that Mr Braid had given relevant evidence which the sheriff had ignored without explaining why. In short, he submitted that I should find that the sum of £1,000,000 featured in the valuation by Pirie & Smith included the values of both the fishing vessel itself and the licence. Counsel for the pursuer on the other hand submitted that the sheriff had given adequate reasons for having decided as he had in relation to this aspect of the matter, and that his decision ought not to be disturbed on appeal.

It is important to consider separately the two questions which, as counsel for the pursuer pointed out, the sheriff had to determine in this context. These were, firstly, whether, despite its apparently plain meaning, the valuation by Pirie & Smith in fact included the value of the Maranatha III's licence and, secondly, what was in any event the true value of the licence at the relevant date.

The first of these questions was a straightforward question of fact. It is true that Mr Braid and the defender's witness Mr Johnston expressed the opinion that at the material time a valuation of a vessel such as the Maranatha III would have been likely to have been inclusive of the vessel's licence. But this was only an opinion, and neither of these witnesses was in a position to state as a fact that the valuation by Pirie & Smith was inclusive of the licence. The sheriff records the pursuer's witness Mr Hermse as having been "very dismissive of the idea that licence would be included in the value of the boat". I do not think that this is an accurate reflection of what Mr Hermse actually said. He spoke at some length about the value that should have been attributed as at the relevant date to the licence of the Maranatha III, but as far as I can see he had nothing to say on the subject of whether or not the valuation by Pirie & Smith would have included the value of the vessel's licence. The defender's witness Mr Strachan frankly accepted that he could not really answer the question whether the valuation would have included the value of the licence at the material time. At the end of the day therefore the only witness who was in a position to give an answer to this first question was Mr Curnow, and what the sheriff had to do here was to determine whether or not he was prepared to accept as credible and reliable Mr Curnow's evidence to the effect that, notwithstanding that the valuation by Pirie & Smith said nothing at all about the vessel's licence (and indeed gave every indication of being a valuation of the vessel alone), it was in fact inclusive of the licence. In a nutshell, either Mr Curnow was telling the truth here, or he was not, and it seems to me that it was pre-eminently a matter for the sheriff, having seen and heard Mr Curnow in the witness box, to resolve this issue.

At this point it is right to be reminded of the passage in the speech of Lord Thankerton in Thomas v Thomas 1947 SC (HL) 45 at page 55 where his Lordship stated:

It may be well to quote the passage from the opinion of Lord Shaw in Clarke v Edinburgh and District Tramways Co, which was quoted with approval by Lord Sankey, L.C., in Powell v Streatham Manor Nursing Home. Lord Shaw said: "In my opinion, the duty of an appellate Court in those circumstances is for each Judge of it to put to himself, as I now do in this case, the question, Am I - who sit here without those advantages, sometimes broad and sometimes subtle, which are the privilege of the Judge who heard and tried the case - in a position, not having those privileges, to come to a clear conclusion that the Judge who had them was plainly wrong? If I cannot be satisfied in my own mind that the Judge with those privileges was plainly wrong, then it appears to me to be my duty to defer to his judgement". Lord Shaw had already pointed out that these privileges involved more than questions of credibility; he says "witnesses without any conscious bias towards a conclusion may have in their demeanour, in their manner, in their hesitation, in the nuance of their expressions, in even the terms of the eyelid, left an impression upon the man who saw and heard them which can never be reproduced in the printed page".

Applying these observations to the present case, I have to ask myself whether, not having had the advantage enjoyed by the sheriff of seeing and hearing Mr Curnow give evidence, I am able to come to a clear conclusion that the sheriff was plainly wrong to reject Mr Curnow's evidence in relation to this first question. The short answer is that I cannot do so and, this being the case, I must defer to the sheriff's judgement.

Counsel for the defender submitted that, having rejected the evidence of Mr Curnow on this issue, the sheriff had been left with no basis in the evidence to make any finding as to the value of the vessel. In so arguing he overlooked in my view the terms of section 2(1)(b) of the Civil Evidence (Scotland) Act 1988 to the effect that in any civil proceedings a statement made by a person otherwise than in the course of the proof shall be admissible as evidence of any matter contained in the statement of which direct oral evidence by that person would be admissible. The valuation by Pirie & Smith was I think arguably a statement made by Mr Curnow otherwise than in the course of the proof and might therefore have been preferred to his oral evidence - see Walkers on Evidence - (2^nd Edn) at para 8.6.2. In any event, it was admitted on record by the defender that the valuation of the vessel at the relevant date was £1,000,000, albeit that this admission was qualified by subsequent averments to the effect, firstly, that the licence was accounted for in the valuation (which the sheriff found not to have been proved) and, secondly, that in December 1994 it would have attracted a price in the region of £60,000 had it been sold separately. A sum between £60,000 and £70,000 or so was of course the value attributed to the licence by all four of Mr Curnow, Mr Johnston, Mr Strachan and Mr Braid.

The remaining question is whether, on the one hand, the value of the licence was indeed of the order of £60,000 to £70,000 or whether, on the other hand, the value of £250,000 spoken to by Mr Hermse was to be preferred. Here I think that it may fairly be said that the sheriff erred in apparently ignoring the evidence of Mr Braid notwithstanding that he had had twenty years professional experience in the buying and selling of fishing companies, and that, while he may not have been an expert as such in the valuation of licences, he had from observation accumulated a fair amount of experience of the practice of valuing both vessels and licences during the years between 1994 and 1998 and of the tax implications of the transfer of vessels and licences. It follows that the determination of this question is at large on appeal. Nonetheless, having myself read and re-read the evidence of Mr Hermse, Mr Curnow, Mr Johnston, Mr Strachan and Mr Braid several times, I am bound to say that I think that the sheriff was quite correct to prefer the evidence of Mr Hermse on this issue to that of the remaining witnesses.

It is I think plain that between 1994 and 1998 events were moving ahead rapidly in the sphere of licence valuations, and in this situation it is not surprising that some should have been more abreast of current developments than others. Mr Curnow, Mr Johnston and Mr Braid were essentially no more than observers of this particular market, and they did not claim themselves to be experts in the valuation of licences. Mr Strachan evidently had a greater involvement in the market having had experience of buying and selling licences to meet customers' requirements. But it seems to me that of the five witnesses Mr Hermse was the only one who could truly be described as having been an expert in the valuation of licences during the years in question - and indeed it should not be forgotten that for some three to four years between about the middle of 1995 and 1999 he was responsible for carrying out valuations for Mr Strachan's own company. In the circumstances I consider that, looking to the evidence of these five witnesses, the greatest weight ought clearly to be given to that of Mr Hermse. His evidence was to the effect that the value of the licence of the Maranatha III as at the relevant date was £250,000. This valuation he explained was based on similar valuations which he had done on licences of a similar size and accrued track record at the material time, and he was at pains to point out the significance of the size of the licence of the Maranatha III and the track record associated with it (which of course included not only the record of the Maranatha III but also that of the defender's previous boat, the Maranatha II). Asked to comment on the suggested valuation of £60,000 for the licence, Mr Hermse responded (at pages I36/7): "To me it would be totally nonsensical and if I may quote an instance, there was a licence which I dealt with at a similar time. It was half the size of the Maranatha licence and nowhere near as good a track record or history of fishing and that cost £120,000 and that one actually increased in value over the relevant time, of some £30,000 in a couple of months". So far as I can see this particular part of his evidence was not directly challenged in cross-examination.

In the course of his judgement the sheriff commented in particular on the evidence of
Mr Curnow, Mr Johnston, Mr Strachan and Mr Hermse. These passages in the sheriff's judgement were subject to a number of detailed criticisms by counsel for the defender which I do not think it is necessary to deal with now since the matter is in any event at large on appeal. But it is I think helpful to look at various passages in the sheriff's judgement between pages 10 and 14 in which he explains more generally why he preferred the evidence of Mr Hermse to that of the remaining witnesses on the issue of the valuation of the vessel's licence.

At pages 10/11 of his judgement the sheriff wrote:

It is necessary to consider in a little detail the fishing vessel licensing system. It is illegal to operate a fishing vessel for fishing without a licence (cf Sea Fishing (Conservation) Act 1992). Regulation changed with some frequency as the Government struggled to find a formula which would allow conservation of threatened fish stocks and preservation of a fishing industry. A system of licensing of vessels and allocation of quotas was devised. Licences are issued to vessels depending on the vessel capacity units assessed for each boat. Technological advances in locating fish were allowing larger catches and bigger boats were being built to accommodate the catching. The licence system was adapted to allow for the transfer of licences from one boat to another and this feature of transferability was recognised to be marketable. A further feature of the annual quota allocation system was that the better catchers were awarded larger quotas for the following year by the Producer Association. Thus the licences with high-VCU and good record (liable to attract increased quota) were in demand for transfer to new larger vessels.

After commenting on the evidence of the various witnesses, the sheriff observed at page 13:

One of the difficulties is that it seemed to me that all the witnesses on the matter were looking back at the emergence of a new market created by new legislation and as there is clearly a time-lag in how quickly everyone catches on to the new potential there is a risk that hindsight contaminates the recollection of those who were perhaps slow to see the potential value in licence transfer. I find it more probable that some in the market were more aware than others and those whose business was dependent on being at the forefront of developments are more likely to be aware of the new scope for dealing than those for whom dealing was just an ancillary service.

The sheriff concluded this chapter of his judgement at page 14 by saying:

On balance I am inclined to favour Mr Hermse's evidence. He was criticised for referring to track record as being applicable to a time before it was generally reckoned to be significant. I do not accept that criticism. Track record required a greater significance when accurate records were being kept for the purpose of assessing entitlement to quota, but the potential selling value of record would not be lost on those professionally involved in marketing.

It is true that Mr Hermse was not always very clear in his evidence about the timing of the changes that took place in the valuation of licences following the introduction of the Fixed Quota Allocation based on the reference period between 1994 and 1996. It appears that it was only then that track records began to be traded separately from licences, whereas previously they had simply been treated as one element in the valuation of licences. But the essential point was, as I have indicated, that the market was moving ahead very rapidly in the years between 1994 and 1998, and in my opinion the sheriff was quite right to conclude that the evidence of Mr Hermse should be preferred to that of the remaining witnesses upon the basis that he had a broader and more extensive experience of the market than these other witnesses and so would have been likely to have been in at the forefront of developments in the market.

In summary therefore on this branch of the case I think that the sheriff was entitled to reject the evidence of Mr Curnow to the effect that the valuation by Pirie & Smith included the value of the vessel's licence. And he was correct to find that the true value of the licence was not £60,000 as assumed by Mr Curnow but £250,000 as estimated by Mr Hermse. In consequence the revised valuation of the vessel and the licence together was correctly taken by Mr Pitman to be £1,250,000 so that the value of the defender's shares in Pitcairn was £140,205.10 and the resulting capital sum payable by the defender to the pursuer £81,271.50. This figure assumes a deduction of £2,500 in respect of one half of the increase in value of the matrimonial home between the relevant date and 25^th April 2000 (when the joint minute of admissions was lodged) which was conceded by the pursuer. Without this deduction the capital sum would thus have been £83,771.50.

The sheriff explained his decision to grant decree for payment of a capital sum of £70,533 with interest on £34,469 at 8% per annum from 8^th January 1999 until payment at page 17 of his judgement as follows:

Once the title to the house is transferred the pursuer will have a house valued at £75,000, the contents valued at £3,000, and the Clio valued at £4,000. She will therefore be entitled to a payment of £72,533 from the defender offset by £2,500 due by her to him in respect of their agreement to share in the capital appreciation of the house. Thus decree will be granted for £70,533. Interest is sought from the date of commencement of the action. There is no doubt that the defender has retained a large proportion of matrimonial property despite being in a position to make substantial payment towards equalisation. Parties agreed to share the increase in value of certain assets totalling £36,064. It would seem to me to be fair that the defender should pay interest on the other sums retained by him and interest will be from date of commencement of the action on £34,469 at 8%.

Counsel were united in acknowledging that the sheriff had made various errors here. In particular he had overlooked the fact that the house was subject to a mortgage of £23,215 and that the pursuer was already the joint owner of policies issued by Friends Provident and Scottish Provident, the aggregate value of her half share of these being £11,976. It was also observed that £72,533 less £2,500 amounted to £70,033 rather than £70,533. Neither counsel was able to offer an explanation of the figure of £36,064 representing, according to the sheriff, "the increase in value of certain assets", and I have not myself been able to identify the source of this particular figure.

Counsel for the defender drew attention here to the terms of section 14(1) of the Family Law (Scotland) Act 1985 which provides that an incidental order may be made under section 8(2) of the Act before, on or after the granting or refusal of decree of divorce. Section 14(2)(j) provides that an incidental order means, inter alia, an order as to the date from which any interest on any amount awarded shall run. Counsel referred here to Geddes v Geddes 1993 SLT 494 in which an appeal was taken against the decision of the sheriff to award interest on the capital sum awarded in the action from the date of citation. At pages 500C/501B the Lord President (Hope) gave some guidance on the way in which he thought that section 14(2)(j) ought to be applied as follows:

The first thing to be said is that a claim for financial provision on divorce is unlike the more familiar categories of claim which attract interest from a date earlier than the date of decree. No part of any amount awarded under section 8(2) can be said to have been wrongfully withheld and not paid on the date when it ought to have been paid until, at the earliest, decree of divorce has been pronounced. It is not a claim in the nature of a debt on which interest is due from the date of the judicial demand, which is the date of citation ..... It is not a claim in the nature of damages, on which ...... the court may, in non-personal-injury cases, award interest from such date not earlier than the date when the right of action arises as in all the circumstances seems just..... There is no right of action for a financial provision, in the sense of a right which may attract interest on it, until decree of divorce has been granted since a reconciliation is possible at any time until decree.

On the other hand some guidance as to the cases in which an incidental order for interest under section 14(2)(j) may be appropriate may be found in the rule that, where possession is given on a sale of land, interest is due on the price from the date when possession is taken, although the price may not then be settled, or although the seller may not then be able to give a good title......

It would seem therefore to be not unreasonable to follow the guidance afforded by this rule, in suitable cases, in the exercise of the statutory power under section 14(2)(j), which enables interest to be awarded as part of the financial provision under section 8(2) of the Act from a date prior to the date of payment in terms of the decree. When it makes a financial provision on divorce the court is not, as I have said, dealing with claims in the nature of debt or damages. It is concerned essentially, so far as an order for the payment of a capital sum is concerned, with the division of property between the parties. What it is required to do, when the capital sum is awarded with reference to the net value of the matrimonial property, is to share fairly the net value of all the matrimonial property as at the relevant date. In most cases this will be the date of the final separation: see section 10(3)(a). There may be circumstances where a party who has had the sole use or possession of an asset since the relevant date, the whole or part of the value of which is to be shared with the other party on divorce, should be required to pay interest as consideration for the use or possession which he has had between the relevant date and the date of decree. An order for interest may, for example, be appropriate where the use or possession has resulted in a benefit which has not been taken into account in some other way in making the order for financial provision. It may also be appropriate where ..... the amount of the principal sum is fixed by the decree but payment of it, in whole or in part, is postponed to a later date. Whether interest should be awarded on this basis, and if so on what part of the award, from what date and what the rate of interest should be is in the discretion of the court, bearing in mind that an incidental order for interest under section 14(2)(j) is an integral part of the order for financial provision under section 8(2) of the Act.

Counsel for the defender submitted that the sheriff had not been justified in the approach which he had taken on the question of interest on the capital sum awarded. He pointed out that the pursuer had continued after the date of separation to reside in the matrimonial home which had been valued at £75,000. The sheriff, said counsel, had not indicated how he had taken this into account and he posed the question why the defender should have been required to pay interest on property retained by him when the pursuer had not been asked to pay interest on property retained by her, namely the matrimonial home of which she had had the benefit although the title to it was in joint names. Counsel submitted too that there had here been a duplication between capital and revenue issues in that many of the individual items of property in which the defender had retained an interest following the relevant date had been his business interests, including his shares in Pitcairn. Where these had generated revenue for the defender, this would have been taken into account in determining the interim aliment to be paid by him to the pursuer. It was wrong that he should then be required to pay interest on the value of these assets, and in effect he was being penalised twice over in respect of them. Finally, counsel submitted that it was not clear why the sheriff had selected the apparently arbitrary date of the commencement of the action as the date from which interest should run. Counsel referred also to Tahir v Tahir (No 2) 1995 SLT 451 and submitted that the appropriate date from which interest should run in this case should have been fixed as the date of decree of divorce.

Counsel for the pursuer submitted that interest should be regarded as the equivalent of the fruits of property retained by one party after the date of separation. Where the other party was unable to participate in these fruits, then an award of interest under section 14(2)(j) was justified. In the present case the defender had plainly enjoyed the fruits of an item of matrimonial property, namely his shares in Pitcairn, which had not been taken into account in some other way. The sheriff's finding that he had received after tax the sum of £339,000 in respect of these shares had not been challenged. It was clear from the defender's own evidence that, when he had sold these shares, he had invested the proceeds for growth rather than income and that the pursuer had had no benefit from this investment. In particular, she had not had the same opportunity to invest for growth and thus it was appropriate that an award of interest should be made to her in light of her entitlement to payment of a capital sum based on the assets retained by the defender following the date of separation. As for the issue of aliment, it was clear that the investments concerned had produced no income out of which aliment might be paid. In any event, while he had paid aliment voluntarily for a period after the date of separation, he had by his own admission stopped doing so in 1998 and thereafter had not made any payment of aliment until ordered to do so by the sheriff on the final day of the proof, namely 12^th December 2000. But he had again stopped paying interim aliment on
25^th September 2001. It had been submitted to the sheriff that interest on the capital sum awarded should run from the date of commencement of the action. The sheriff had recorded that the parties had agreed that they should share the increase in value of certain assets held in joint names, and thus it would be appropriate that interest should run only the pursuer's share of the balance of the assets retained by the defender alone. Counsel accepted that the pursuer could not demand interest on more than the amount of the capital sum awarded from the date of decree of divorce. But she proposed that interest should be payable between the date of commencement of the action and the date of decree of divorce on the capital sum awarded plus the further sum of £2,500 which, as indicated, the pursuer had conceded should be deducted from the amount of the capital sum to which she would otherwise be entitled. Counsel submitted that, if the pursuer did not receive interest on this additional sum of £2,500, she would be conceding more than had been agreed between the parties in relation to the increase in value of the matrimonial home between the relevant date and 25^th April 2000.

In my opinion it would be appropriate in terms of section 14(2)(j) of the Act to order that interest on the capital sum of £81,271.50 should run at the rate of 8% per annum from the date of commencement of the action until payment. Such an order must of course be justified by reference to the principles set out in section 9 of the Act and reasonable having regard to the resources of the parties. The principle upon which the pursuer relied in this case is that contained in section 9(1)(a), namely that the net value of the matrimonial property should be shared fairly between the parties to the marriage. In terms of section 10(1), in applying this principle the net value of the matrimonial property shall be taken to be shared fairly between the parties to the marriage when it is shared equally or in such other proportions as are justified by special circumstances. It has not been suggested in this case that anything other than an equal division would be appropriate. The capital sum of £81,271.50 to be paid by the defender has been calculated by reference, inter alia, to those assets the value, or proceeds, of which the defender alone had the benefit after the relevant date. The aggregate value of these assets at the relevant date was £241,197, whereof one half is £120,598.50, made up as follows:

Scottish Amicable Policies

£17,828

Clerical & Medical Pension

£13,359

Standard Life Policy

£7,570

Royal Bank of Scotland Current Account

£2,942

Directors Loan Account

£42,472

Wyvis Fishing Co Ltd

£16,821

Pitcairn

£140,205

£241,197

whereof one half

£120,598.50

In calculating the capital sum to be awarded adjustments have had to be made to this sum of £120,598.50 to reflect various considerations which I need not elaborate upon here. The net result has been that since the relevant date the defender has had the sole use of assets to the value of £81,271.50 which ought then to have been transferred to the pursuer in order to achieve a fair sharing of the net value of the matrimonial property. In these circumstances it seems to me to be consistent with the principle contained in section 9(1)(a) that he should be required to pay interest on this sum to the pursuer to reflect the fact that he alone has been in a position to enjoy the fruits of these assets since the relevant date. Had I been looking at this issue untrammelled by what has gone before in this case, I think that I might have been inclined to award interest from the relevant date itself. But since counsel for the pursuer did not suggest a date earlier than the date of commencement of the action I am content to settle for this.

It does not seem to me to be necessary here to make any adjustment to reflect the fact that the pursuer remained in the matrimonial home after the parties separated. For a start, it has been agreed that the defender should be given the benefit of one half of the increase in value of the property between the relevant date and 25^th April 2000. Moreover, the defender acknowledged that at least from some time in 1998 (that is, well before the date of commencement of the action) the pursuer alone had had the responsibility for paying the mortgage, the council tax and other outgoings in respect of the property. As for the point that the defender had been paying interim aliment to the pursuer, it should not be overlooked that he stopped paying this voluntarily in 1998 and thereafter paid nothing until ordered to do so by the sheriff on
12^th December 2000. Even then he only paid aliment until 25^th September 2001. Besides, whatever the source of this aliment, it appears that it was not to be found in any of the assets which I have listed in paragraph 26 above. As the defender himself accepted, he derived no income from his investments.

I did not understand it to be suggested that an order for payment of interest in terms of section 14(2)(j) would not be reasonable having regard to the resources of the parties. Indeed, it seems to me that, having received the sum of £339,000 from the disposal of his shares in Pitcairn, the defender has had ample resources out of which to pay not only the capital sum of £81,271.50 but also interest thereon from the date of commencement of the action.

I do not think that it would be competent to award interest on a sum in excess of £81,271.50 as was proposed by counsel for the pursuer. I say this since in section 14(2)(j) the words "on any amount" are qualified by the word "awarded". The capital sum to be awarded in this case is £81,271.50, and any sum in excess of this would thus exceed the "amount awarded".

Counsel for the defender proposed that a number of amendments should be made to the sheriff's interlocutor of 21^st September 2001, and I should deal briefly with these. They were as follows:

In finding in fact 22 insert the word "not" before the word "entitled". For the reasons already indicated I consider that the value of the licence was properly stated at £250,000.

Delete the first sentence in finding in fact 25. It seems to me that this particular finding was justified by the evidence, and indeed it was the defender himself who stated that he had had to buy extra VCUs in order to acquire a sufficient number to licence the Maranatha III.

Delete finding in fact 27. Again, this finding seems to me to be justified by the evidence, and in particular that of the defender to which I have just referred.

In finding in fact 29 delete "£250,000" and substitute "about £65,000", and add at the end: "Said notional value was included in the valuation of £1,000,000 of Maranatha III". I have already indicated why I think these amendments should be rejected.

In finding in fact 30 at the end of the first sentence add "or a figure of £250,000 for the licence". I have already explained why this amendment falls to be rejected. The defender proposed here too that the last sentence of the finding in fact should be deleted, but this would only have been necessary if I had accepted the initial amendment here.

In finding in fact 31 delete "£140,205" and substitute "£94,751". I have already explained why this has been rejected.

In finding in fact 32 delete "£309,065" and substitute "£263,610". Here too I have already explained why this has been rejected.

8(a) In line 3 of page 6 delete the words "and that within two months of the date of decree". I have amended this to read within two months (more or less) of my own interlocutor.

8(b) Delete from "and further Ordains the Defender ....." to ".....all within two months of date of decree" on lines 7 to 10 of page 6. I have dealt with this point by giving effect to an amendment which was proposed by counsel for the pursuer to which counsel for the defender assented.

8(c) Delete "£70,533" on line 12 of page 6 and substitute "£58,548". For the reasons already indicated, the correct figure to be inserted here is £81,271.50

8(d) In lines 12 and 13 on page 6 delete "with interest on £34,469 at Eight per centum per annum from 8^th January 1999 till payment" and substitute "with interest on said capital sum at eight per cent per year from 25^th September 2001 until payment". I have already explained why I have awarded interest on the full capital sum of £81,271.50 with effect from 8^th January 1999 until payment.

Counsel for the pursuer also proposed a number of amendments to the sheriff's interlocutor. The first three of these related to the order which should be made in respect of the three life policies in joint names. As indicated, counsel for the defender assented to these amendments, and I have given effect to them accordingly. The remaining three amendments proposed by counsel for the pursuer related to the amount of the capital sum to be awarded, the sum on which interest should be payable from the date of commencement of the action until 25^th September 2001 and the sum upon which interest should thereafter be payable. I have given effect to the amendments necessary to reflect my own conclusions and for present purposes I think that I need say no more about counsel's proposed amendments.

I have reserved the question of expenses for a further hearing. For this purpose a diet has been assigned to take place at Aberdeen Sheriff Court on 13^th March 2003 at 11.30am. I am conscious that counsel indicated that they would wish to advance various submissions in relation to the matter of expenses and, if need be, I should be prepared to consider an adjournment of the hearing on expenses to enable counsel to be present. But it may be that, in view of my own decision in the appeal, this matter will prove to be less of an issue than was originally anticipated.