Scottish Sheriff Court Decisions

Act: Miss Catriona M Macleod, solicitor, Taggart Meil Mathers, Aberdeen

Alt: Mr Ewan Campbell, solicitor, Burnett & Reid, Aberdeen

Stonehaven: 5^th November 2003

The sheriff principal, having resumed consideration of the cause, refuses the appeal and adheres to the interlocutor of the sheriff dated 1^st May 2003 subject to the deletion of the words "Appoints defences to be lodged ......" to the words "..... in the case all in terms of the rules"; reserves meantime the question of the expenses of the appeal and appoints parties to be heard thereon at Aberdeen Sheriff Court on Monday 17^th November 2003 at 3.00 pm.

Note

1. In this case the pursuer and respondent craves the court to grant decree of divorce against the defender and appellant on the ground that the marriage has broken down irretrievably by reason of his behaviour. They were married at Aboyne on 9^th November 1991 and have one child, Karl, who was born on 6^th March 1995. They separated on 6^th January 2001. The action was raised on 13^th September 2002, and on 3^rd March 2003 a motion was lodged on behalf of the pursuer in terms of which she sought interim aliment for herself at the rate of £250 per week and for Karl at the rate of £140 per week. It should be explained that the defender at that time resided in Germany and hence was not amenable to the jurisdiction of the Child Support Agency.
2. The motion was first called before the sheriff on 20^th March 2003 when the cause was continued to 10^th April 2003 for investigation and negotiation. On the latter date there was a further continuation until 1^st May 2003 when the sheriff, having heard parties' solicitors, pronounced an interlocutor in terms of which he found "the pursuer entitled to interim aliment payable by the defender in the sum of £100 per week, payable weekly and in advance; Ordains the defender to pay aliment in respect of the child Karl ....... in the sum of £150 per week, payable weekly and in advance backdated to 20^th March 2003". It is this interlocutor which is the subject of the present appeal. It will be noted that the sum awarded for the child was £150 per week notwithstanding that the amount sought in terms of the pursuer's motion had been only £140 per week. But no issue was made of this at the appeal. Moreover, the interlocutor may be read as meaning that only the award for the child was to be backdated to 20^th March 2003. But it appears to have been accepted by both parties that both awards were to be backdated to that date, and this is consistent with the final sentence of the interlocutor dated 20^th March 2003 which reads: "Any award of aliment to be backdated to today's date".
3. In the note of appeal lodged on behalf of the defender the grounds of appeal were stated as follows:-

1. The Sheriff was invited to have regard to the various productions lodged on behalf of both parties including inter alia a Third Inventory of Productions for the Pursuer lodged at the Bar. In support of the Defender's case the Sheriff was asked to have regard to a First Inventory of Productions for the Defender. It is respectfully submitted that the Sheriff has placed undue emphasis upon the Pursuer's (sic) ability to earn an income based upon documents produced in the Pursuer's Third Inventory which only disclosed the Defender's income back in February 2000, July 2000 and January 2001. It is submitted that the Sheriff failed to take proper account of the Defender's current circumstances as vouched by the Defender's First Inventory of Productions i.e. that the Defender was not in employment.
2. That the Sheriff failed to exercise his discretion reasonably in weighing the relevant considerations to which he required to have regard in terms of the Family Law (Scotland) Act 1985, namely, the needs and resources of the parties, the earning capacities of the parties and generally all the circumstances of the case. The level of aliment awarded in respect of the Pursuer and also the parties' child Karl is excessive having regard to the resources of the parties and in particular the Defender.

1. In response to the note of appeal the sheriff helpfully wrote a note explaining the basis of his decision. This speaks for itself, and it is unnecessary to set it out in full here. But it is worth noting that the sheriff records that he was advised by the pursuer's solicitor that the defender was a computer consultant and at the date of the separation was employed with Compaq Computer in Germany and had a net income in the region of £2500 per month. According to the sheriff's note, this does not appear to have been disputed by the defender's solicitor but it was said that he was now unemployed and had no income of his own. The sheriff was thus faced with the familiar situation of a wife who clearly needed funds to support herself and her child and who knew what her husband's earnings had been in the past but not what his current earnings, if any, were and, on the other hand, a husband who maintained that he was presently unemployed and unable therefore to pay anything towards the maintenance of his wife or child. After recording the parties' submissions, the sheriff explained his decision as follows:

I considered carefully the submissions that had been made. Clearly the Pursuer had a need for some additional form of income and in particular needed support for the child. Had the Defender been in the United Kingdom he would have been subject to the Child Support Agency which could have made further inquiries as to whether he was or was not in employment and whether he was genuinely unemployed or merely had given up employment to avoid his responsibilities to his wife and child. As he was resident in Germany it was impossible to verify the Defender's position.

In such a situation it is extremely difficult to come to any conclusion regarding an award of interim aliment. I did however consider that the Pursuer had a genuine need for herself and her child. I also considered the position of the Defender. I formed the view that he had a substantial earning capacity and although I am aware of an economic downturn in Germany, I was surprised that a person with the background of the Defender as a computer software consultant could not find any gainful source of income. In all the circumstances therefore I decided that the Defender had an earning capacity of at least £2500 per month and that I was not satisfied that he could not obtain such an income through employment. Although it was intimated that he has a new child to his present partner, that does not relieve him of his obligation to maintain the child of the marriage. In all the circumstances therefore I decided that an interim award of £100 per week for the Pursuer and £150 per week for the child was not unreasonable.

2. Opening the appeal, the defender's solicitor acknowledged that the sheriff had accurately recorded in his note the history of the case and the information which had been put before him on 1^st May 2003. The pursuer's income and expenditure were set out in no. 5/2/1 of process, and it was not disputed that she was in need of an award of interim aliment. Her income was £775 per month and her outgoings amounted to £1,243 per month after a small adjustment had been made of the amount of her coal account (which was not disputed by the pursuer's solicitor). Thus she was left with a deficit of £468 per month. The sheriff had awarded her effectively £1,000 per month for herself and the child, and this was excessive given her needs as brought out in no. 5/2/1 of process. Moreover, in awarding her this sum, the sheriff had ignored the defender's inability to pay this amount. The sheriff had been advised that the defender was a computer consultant, and in no. 5/3 of process the pursuer had produced copies of the defender's payslips for February and March 2000 and January 2001. The first two of these in particular were almost three years old and were of limited use to the sheriff in determining the defender's ability to pay aliment at present. The pursuer had submitted that he earned £2,500 per month, but his position was that it had been closer to £2,200 per month. This had been the extent of the information produced by the pursuer about the defender's financial position. The only up to date information about his circumstances had come in his first inventory of productions, no. 6/1 of process. No. 6/1/1 was a schedule of his monthly income and outgoings, while no. 6/1/2 was a letter from a Mr Bob Poole dated 12^th March 2003 which in short stated that the defender had not worked since September 2002. The court was not asked to put much faith in this letter. On the other hand, the defender had produced two recent bank statements. No. 6/1/3 was a copy of a statement from the Royal Bank of Scotland which showed that the balance at credit of the defender's account on 21^st January 2003 was £324.06. No. 6/1/5 was a copy of a statement from a German bank of the defender's account with the bank. This showed that on 31^st December 2002 the account had been overdrawn to the extent of EUR 5,881.61.
3. The defender's solicitor accepted that the documents which the defender had produced to vouch his financial position were not what they might have been. But he submitted that there had been no information before the sheriff on 1^st May 2003 to indicate that the defender had then been working or had had funds in a bank account which would have enabled him to pay aliment to the pursuer for herself and the child at the rate of £250 per week. The sheriff appeared to have preferred the pursuer's vouching of the defender's income some two to three years ago rather than his more up to date vouching. This was clear from the second paragraph of his note quoted above. It was submitted that the sheriff, in making the awards which he had, had erred in basing these on the defender's earning capacity. There had been no evidence before the sheriff to support the view that the defender was currently able to earn £2,500 per month or to pay £250 per week in aliment. And even if there had been any such evidence, the total amount of aliment which had been awarded was excessive and should have been restricted to the sum of £468 per month.
4. The defender's solicitor then drew attention to section 4 of the Family Law (Scotland) Act 1985 which provides that in determining the amount of aliment to award in an action for aliment the court shall have regard (a) to the needs and resources of the parties, (b) to the earning capacities of the parties, and (c) generally to all the circumstances of the case. Reference was made also to section 27(1) of the Act where it is said that the word "resources" means present and foreseeable resources. It was accepted that the provisions of section 4 of the Act did not strictly apply in the case of an application for interim aliment. But it would be strange in such a case not to have regard to these provisions. On the information before the sheriff on 1^st May 2003 it had not been foreseeable that the defender would be earning £2,500 per month, or anything like that amount. The expression "earning capacity" meant, so it was submitted, actual or reasonably foreseeable income and not merely potential income. The defender's potential to earn £2,500 per month was not a sufficient basis to award the sums of interim aliment which the sheriff had awarded in this case. Reference was made to Adams v Adams 2002 SCLR 379, and in particular the observation of Sheriff Principal Dunlop at page 381G where he stated: "That is not to say, however, that there is no suspicion about the defender's position, but suspicion is in my view an inadequate basis upon which to proceed". In the present case the sheriff had taken into account an irrelevant consideration, namely the defender's potential earning capacity, and had left out of account a relevant consideration, namely the fact that his actual income was virtually non- existent.
5. The defender's solicitor then referred to the sum of £55,000 which had been deposited in a joint account pending agreement between the parties about the division of the proceeds of the matrimonial home following its sale. For present purposes I think that I need say no more about this since it does not appear from his note that the sheriff took this into account in fixing the amount of interim aliment for the pursuer and the child, nor did the pursuer's solicitor found on the existence of this joint account in seeking to support the sheriff's decision.
6. In conclusion, the defender's solicitor submitted that I should recall the sheriff's interlocutor. In that event the pursuer could always renew her motion for interim aliment given that there had been a recent change in circumstances in that the defender was now living and working in London. And if I was not prepared to recall the interlocutor altogether, then I should at least reduce the amount of the interim aliment payable to the sum of £468 per month. If awarded, this should all be in favour of the pursuer and the amount of interim aliment for the child reduced to nil upon the basis that, since the defender was now living in London, the Child Support Agency would have jurisdiction in the case and would be in a position to make an assessment in favour of the child.
7. In response, the pursuer's solicitor explained that the pursuer had previously worked as an administrative assistant but had given up her employment shortly before the child's birth. She had been financially dependent upon the defender who throughout their marriage had been employed as a computer consultant. Following their separation she had had to apply for benefit and had been awarded Income Support. She had been unemployed and in receipt of Income Support when the present action had been raised. In January 2003 she had obtained part-time work as a technician in a school, and she was still working there on a part-time basis. She had originally agreed to move to Germany after the defender had himself moved there in connection with his work. He had gone there about the middle of 2000 and had then been employed by a company named Compaq Computer. When the parties had separated in January 2001 he had been earning £2,500 per month and in addition his accommodation costs were being paid and he was in receipt of a car allowance. At the time of the hearing before the sheriff on 1^st May 2003 she believed that the defender was working on a self employed basis, but it was accepted that she had been unable to provide any vouching or other evidence for this. After the separation the defender had made intermittent voluntary payments of aliment at the rate of £300 per month in January and February 2001, £130 per month between March and August 2001 and £600 per month between September 2001 and January 2002. Since then he had made three further isolated payments, namely £602 in April 2002, £300 in June 2002 and £300 in January 2003. In addition, he had made two further payments, each of £300, in about November and December 2002, but it was not clear whether the sheriff had been advised of these payments.
8. After referring to the pursuer's current financial circumstances (which, as indicated, are not in dispute), the pursuer's solicitor drew attention to the documents incorporated in no. 5/3 of process which, although he does not specifically refer to them, it was accepted were before the sheriff at the hearing on 1^st May 2003. No. 5/3/1 is described as an "Account Transaction History" and is dated 10^th April 2000. It appears to be a narrative of a number of credit and debit entries in an account numbered 00186339 held by the defender with the same branch of the Royal Bank of Scotland as issued the statement which forms no. 6/1/3 of process (and which bears to relate to an account in the defender's name numbered 00184697). This Account Transaction History was issued before the defender moved to Germany and shows in particular his salary for the months of January and February 2000 being credited to the account on 16^th February 2000 in the sum of £6,621.46. Nos. 5/3/2 and 5/3/3 of process appear to be German payslips issued by Compaq Computer to the defender for the months of February and March 2000. The amounts stated therein are shown in Deutsch Marks. The first is dated 16^th February 2000 and appears to show the defender's net pay of 13,717.56 DM being credited to the same account with the German bank which features in no. 6/1/5 of process. The second is dated
   17^th July 2000. There is a narrative in German which appears to indicate what happened to the defender's salary for March 2000. But neither solicitor was able to offer a translation of this narrative, and it is beyond my own limited knowledge of German.
9. Attached to this last payslip is a further payslip issued by Compaq Computer to the defender for the month of January 2001. The pursuer's solicitor drew attention to the fact that the details of the bank account to which the net payment due to the defender of 6,602.08 DM had been transmitted had been "doctored" with the result that it was impossible for the pursuer to identify the bank account into which this payment of salary had been made. It was submitted that this raised the question whether the defender had made a full disclosure of his income and the bank accounts which he had had while he had been working in Germany. There would be no other reason, so it was said, for him to delete the bank details on this last payslip than to keep them from the pursuer. No. 5/3/4 is a statement of a house purchase loan account issued by the same branch of the Royal Bank of Scotland as has already been referred to. The account is in the name of the defender and shows an initial advance to him of £30,000. The second page of this item of process is a further statement issued by the bank relating to the same account and shows a final payment of £16,000 having been made by the defender into the account on
   26^th July 2001 with the result that the account was closed on 16^th August 2001. Finally, no. 5/3/5 is one page of a statement of the defender's account with the same German bank as before. It shows that on 30^th January 2001 there was a credit balance in the account of 33,636.20 DM (which corresponded to EUR 17,197.92).
10. The pursuer's solicitor submitted that in no. 5/3 of process there had thus been evidence before the sheriff of at least some of the defender's financial circumstances. He had also had before him the productions which formed no. 6/1 of process. No. 6/1/1 purported to be a schedule of the defender's income and outgoings, but no documents had been lodged to vouch the outgoings stated by the defender with the exception of a single telephone account (which is no. 6/1/4 of process). He had not lodged any bank statements which would, for example, have shown direct debits or other regular outgoings being paid out of his bank account. It was accepted that the statement which formed no. 6/1/5 of process showed that this particular account was overdrawn to the extent of EUR 5,881.61 on 31^st December 2002. But the final page of this statement showed that three payments had subsequently been made into the account. In particular, a payment of EUR 2,000 had been made into the account on 30^th January 2003, but no indication had been given by the defender of the source of this sum. It was accepted that the sheriff had been in a difficult position but, given all the productions which had been lodged and the whole circumstances of the case, he had been entitled to hold that the defender should pay the amounts of interim aliment which he had ordered and further that he was capable of paying these amounts. The sheriff had, so it was said, correctly looked at all the factors referred to in section 4(1) of the 1985 Act and had balanced each of these with the others and had come to a reasonable decision in the exercise of his discretion. Reference was made to the definition of "resources" in section 27(1), and it was submitted that there had been no evidence before the sheriff to establish that the defender had been unemployed and without income at the time of the hearing on 1^st May 2003. One had to question the quality of the productions which the defender had lodged and the conspicuous absence of details such as a run of bank statements which would have shown his financial circumstances over a substantial period of time. It was submitted that he had not made a full disclosure of his financial position at the hearing before the sheriff. In the event the sheriff had reached no conclusion upon the question whether or not the defender was employed but, given his employment history and the income which he had derived from his employment on a regular basis in the past, the sheriff had been entitled to conclude that, whether he was currently employed or not, the defender had the earning capacity to meet the awards of aliment which he had made. The defender had had ample opportunity to lodge more satisfactory evidence of his financial circumstances than he had so far done. If he was indeed unemployed, then he had not supplied any evidence to demonstrate what he had been doing to secure further employment. He maintained that he had not been employed since September 2002, yet all he had lodged to vouch his current financial position were the two statements which formed nos. 6/1/3 and 6/1/5 of process. This was despite the fact that he had been called upon to lodge full details of his financial circumstances both in the initial writ and in correspondence between the parties. In all the circumstances the sheriff had not erred in the exercise of his discretion and his interlocutor should therefore be adhered to and the appeal refused.
11. In a brief reply, the defender's solicitor acknowledged that the defender had been his own worst enemy and that the vouching produced by him had not been adequate. But there had been nothing before the sheriff which had been inconsistent with his position that he had not been in employment since September 2002 and that since then he had been living off his partner's income. An order could have been made under section 20 of the 1985 Act requiring him to disclose details of his financial circumstances. But this had not been done. As Sheriff Principal Dunlop had made clear in the case of Adams v Adams, suspicion was not an adequate basis upon which to proceed in a case such as this, and the sheriff, so it was said, had not been entitled to make the awards of interim aliment which he had because of his suspicions about the defender's financial position.
12. In my opinion the submissions for the pursuer are to be preferred. Having separated from the defender early in 2001, she was always likely to be in difficulty in producing documents to vouch his current financial position at the hearing before the sheriff. But the documents which she did produce demonstrated that at the time of the separation the defender was in receipt of a substantial monthly income from his employment. As already indicated, it was represented to the sheriff on behalf of the pursuer that the defender had a net income in the region of £2,500 per month at that time. It does not appear from the sheriff's note that the solicitor who appeared before him for the defender challenged this, albeit that before me it was stated on behalf of the defender that his income had been closer to £2,200 per month. On 30^th January 2001 he had a credit balance in his German bank account of EUR 17,197.92. He continued to work until September 2002 when, according to him, he became unemployed. But there was nothing before the sheriff to support his own assertion to this effect beyond the letter from
    Mr Poole, and this was of limited value as his own solicitor acknowledged. And even if it be true that he had then become unemployed, there was nothing to indicate why this might have happened or what he had been doing since to secure alternative employment. In contrast to the pursuer's statement of income and outgoings, many of the entries in which were vouched by documents produced by her, the entries in the statement of income and outgoings prepared by the defender were unvouched with the exception of the telephone account and the overdraft on the German bank account. This was EUR 5,881.61 on 31^st December 2002, but had been reduced to EUR 4,039.77 by 3^rd February 2003 largely as a result of the payment of EUR 2,000 which was credited to the account on 30^th January 2003 and the source of which, as indicated, was not disclosed by the defender. The statement of this particular account covered only a very short period between 20^th December 2002 and 3^rd February 2003, and the only other document vouching the defender's current financial position was the statement of his account numbered 00184697 with the Royal Bank of Scotland. This covered an even shorter period between 20^th December 2002 and 21^st January 2003 and showed a credit balance at the latter date of £324.06. But, in contrast to the situation in Adams v Adams, what neither of these statements did was to show the movements of money in and out of any of the defender's bank accounts over any significant period of time such as the time since the parties' separation or since the defender had supposedly become unemployed. All they did was to give a very narrow, and quite probably misleading, snapshot of his financial position at the end of 2002 and early in 2003.
13. Against this background the sheriff was in my opinion amply justified in proceeding upon the footing that here was a man who had been capable of earning £2500 per month and who claimed now to be out of work but had produced no satisfactory evidence to vouch this claim. Nor, if it was true, had he explained why or what he had been doing since to secure alternative employment. In this situation, and given the otherwise very limited picture afforded by the defender of his current financial position and the undisputed shortfall in the pursuer's own income, I do not consider that the sheriff can be said to have erred in the exercise of his discretion in deciding in principle that the defender should be ordered to pay a not insignificant amount of interim aliment for both the pursuer and the child. It is true that the shortfall in the pursuer's income had been shown to amount to £468 per month so that, on one view of the matter, it might have been reasonable to restrict the total amount of interim aliment to be awarded for the pursuer and the child to this sum. But, given that he was justifiably assuming that the defender had an earning capacity of £2,500 per month, I do not think that the sheriff can be said to have acted unreasonably or otherwise erred in holding that a total award of approximately £1,000 per month for his wife and child would be appropriate in all the circumstances.
14. It was agreed that the question of the expenses of the appeal should be reserved for a further hearing.