Scottish Sheriff Court Decisions

PAISLEY, 8 MARCH 2004

The Sheriff Principal having resumed consideration of the cause Allows the appeal and Recalls the interlocutor of the sheriff dated 4 December 2002 in so far as it repelled the pursuer's fourth plea-in-law, sustained the defender's third plea-in-law and dismissed the third crave of the initial writ; Sustains in part the said fourth plea-in-law for the pursuer, Repels in part the said third plea-in-law for the defender and in terms of the said third crave Grants decree for payment by the defender to the pursuer of a capital sum of SEVEN THOUSAND THREE HUNDRED AND FIFTY POUNDS (£7350) Sterling with interest thereon at the rate of eight per centum per annum from 4 December 2002 until payment and Decerns; quoad ultra Adheres to the said interlocutor of the sheriff but Varies same (first) by adding to the table shown in the sheriff's sixth finding-in-fact a final entry in the following terms "(i) Contents of matrimonial home - £1000" and altering the total shown therein by deleting "£71,680" and substituting therefor "£72,680" and (secondly) by adding at the end of the first sentence of the sheriff's seventh finding-in-fact the words "and contents" and at the end of the third sentence thereof the words "and also item (i)"; Certifies the appeal as suitable for the employment of junior counsel; Finds no expenses to be due to or by either party in respect of the appeal procedure and Remits the cause to the sheriff to proceed as accords; Supersedes extract hereof until such time as the court is satisfied by the pursuer and appellant that intimation of the present proceedings has been made to Halifax plc in terms of the eighth crave of the initial writ and they have been given an opportunity of being heard by the court if so advised in terms of section 15(2) of the Family Law (Scotland) Act 1985.

BA Kerr

NOTE:

In this action of divorce the sheriff having heard proof dealt with the financial (and only) dispute between the parties by transferring to the wife pursuer the ownership of the former matrimonial home in Johnstone (found by him after dispute on the matter to have had a reversionary value of £17,000 at the relevant date in 1996) which had previously been in the sole title of the husband defender together also with the husband's half-share (worth at the relevant date £4160 being one half of an agreed value at that date of £8320) in an endowment policy which had been in joint names with the National Provident Institution. He declined to make any further order in favour of the pursuer for a number of reasons given by him although the pursuer had craved in addition payment of a capital sum and also payment of a monthly periodical allowance for three years following on divorce. Against this refusal of further orders the pursuer now appeals. The other matrimonial assets he left in the possession of the party who prior to the proof in October 2002 had retained possession of them ever since the separation of the parties as long ago as June 1996. These consisted of (i) the contents of the matrimonial home valued by him (again after dispute at proof) at £1000 as at the relevant date and retained by the pursuer; (ii) deposits in certain building society and Clydesdale Bank savings accounts agreed to have been worth at the relevant date (a) £3400 retained by the defender and (b) £760 retained by the pursuer; and (iii) certain Seagram's pension provisions to which each party was prospectively entitled, namely (a) the defender's pension valued at £36,750 at the relevant date together with some additional voluntary contributions worth £3540 at that date and (b) the pursuer's pension valued at £1910 at the relevant date (these valuations also having been agreed). The total value of the matrimonial property at the relevant date he thus placed at £72,680 whereof the pursuer was to receive by his calculations £28,990 and the defender £43,690. There was a discrepancy between the sheriff's note appended to his interlocutor and his findings-in-fact in that he dealt in his note with the contents of the matrimonial home and included them there in his calculations but omitted to mention them in his findings-in-fact (where he found the total value of the matrimonial property in the sixth finding-in-fact to be £71,680). The value of £1000 placed by him on those contents was however so small in relative terms that I regard this discrepancy as minor and of no practical significance. For the purposes of this appeal I proceed on the basis of the total value of £72,680 attributed to the matrimonial property by the sheriff in his note.

From his note at pages 10 to 12 it appears that the sheriff perceived himself to be seeking to achieve what he variously describes as "an equitable division" or "equal benefits to each party" in the division of the matrimonial property and to be "doing justice between the parties" in terms of the 1985 Act. Whatever phraseology he employed at different points however it is apparent that the sheriff has decided upon an unequal distribution of the matrimonial assets in that the pursuer is to receive (at 1996 valuations) some £14,700 less than the defender in consequence of his disposal. His reasons for reaching this conclusion in the whole matter appear to be the following. First (though not necessarily in order of importance), he considered the pursuer to be in receipt of a "windfall" by reason of the increased value since 1996 of the former matrimonial home now to be transferred as to title into her name. This he mentions at several points, although it is not clear what evidence if any he had before him as to the extent of that increase in value. He also refers to an increase in value of the endowment policy (in the fourth line at page 12 of his note appended to the interlocutor), again not quantified. The increases in value he states in the tenth finding-in-fact to be "substantial in each case". Secondly, he viewed the pursuer as having lived "rent free" since the separation (and indeed, he said, throughout the marriage) while the defender has had to find alternative accommodation for himself (see the second paragraph at page 11 of his note). This I take to be a reference to the admitted fact (found in the seventh finding-in-fact) that the defender has continued since the separation in 1996 to fund the mortgage and related endowment policy in respect of the matrimonial home inhabited by his wife and children while he has lived elsewhere. We are not told by the sheriff what has been the cost to the defender of thus funding the heritable loan since 1996 or for that matter since 1981 when the house was purchased. These considerations so far summarised seem to have been viewed by the sheriff as constituting a windfall and/or economic advantage to the pursuer with corresponding economic disadvantage to the defender. From the tenor of his note it is I think apparent that the sheriff regarded these considerations as by themselves sufficient to justify his view that no further award by way of financial provision should be made to the pursuer. Thirdly however, as "a further consideration", the sheriff thought it to be "at least on the fringes of judicial knowledge" that the defender's principal asset to be retained by him, namely his Seagram's pension valued at £36,750 as at the relevant date would "almost certainly have fallen in value in the present economic climate" (paragraph 4 at page 11 of his note). Fourthly, and with specific reference to the pursuer's crave for payment of a periodical allowance, the sheriff considered (final paragraph of his note at page 12) such an award to be unjustified because the pursuer's financial problems were largely self-inflicted, the son of the marriage was by now able to earn his own living and substantial outlays incurred by the pursuer were for non-essential items.

These reasons and the sheriff's general approach were variously attacked by the appellant's solicitor and variously defended by counsel who appeared for the respondent. Counsel had, I thought, for the most part the more difficult task. One substantial difficulty with which I think she was faced arises out of the fact that nowhere in that part of his judgement where he gives his opinion on the case does the sheriff make any direct mention of any particular provision of the Family Law (Scotland) Act 1985 applied or not applied by him in reaching his decision. It is difficult therefore to discern which of the principles set out in section 9 of the Act he applied and how and resort has to be had instead to other "signposts" which may or may not give a true indication of which principle is being applied or considered at any point. In respect of the sheriff's ideas about increased value of the house (and impliedly of the endowment policy also) since the separation in 1996 it was said for the appellant that these were irrelevant considerations having regard to the provisions of the Family Law (Scotland) Act 1985 as construed by the House of Lords in the well-known case of Wallis v Wallis 1993 SC (HL) 49; I was referred also to the opinion of Lord President Hope in the Court of Session report in 1992 SLT 676. There is however no mention of the Wallis case anywhere in the sheriff's judgement and it is not clear that he was even referred to it by either party's agent appearing before him.

For the pursuer and appellant before me the motion was for the making in her favour of orders additional to those already made by the sheriff for payment to her of both a capital sum of £7850 with interest thereon from the date of separation and a periodical allowance at a rate of £150 per month for four years. The appellant did not seek to challenge the sheriff's disposal on the expenses of the action whereby he found none due to or by either party.

I can say immediately that no award of interest can or should run in my view on any capital sum which may be awarded from any date earlier than the date of the sheriff's interlocutor granting a decree of divorce: an entitlement to such a capital payment if awarded accrues only at the time of divorce and it is from then at the earliest that interest may become payable. I can also say at this stage that the reasons given by the sheriff for his refusal to award a periodical allowance are in my opinion entirely adequate as a justification for refusing (or dismissing as his interlocutor seems to say) the pursuer's second crave for a periodical allowance: these are set out in the final paragraph of the sheriff's note but it should be noted in addition that in his eleventh finding-in-fact the sheriff finds that the pursuer is working and able to support herself while demanding no contribution towards his upkeep from her son. If her current income is derived from only part-time employment there is no clear reason in the case why she should not expand her hours of employment and her income. I am not persuaded that the sheriff's decision not to award a periodical allowance can or should be interfered with and I proceed accordingly to consider the correctness or otherwise of his disposal in respect of the orders made by him for distribution between the parties of the matrimonial assets.

The appellant's motion for payment of a capital sum of £7850 would represent if granted in addition to the property transfer orders made by the sheriff an equal sharing between the parties of the net value of the matrimonial property as valued at the relevant date (here 10 June 1996), all as shown on a schedule which the appellant's solicitor presented for my consideration. The calculations therein however left out of account the sheriff's finding in his note (but not as yet in any finding-in-fact) that the contents of the matrimonial home retained by the pursuer had a value of £1000 at the relevant date. The sheriff's finding in this respect was attacked on the appellant's behalf as a valuation figure "plucked from thin air" but I prefer the respondent's submission on this matter to the effect that there was evidence before the sheriff as to value, albeit in broad and vague terms, from which he could legitimately come to the view expressed by him in the penultimate paragraph at page 10 of his judgement. Counsel for the respondent suggested under reference to Walter Wright & Co Ltd v Cowdray 1973 SLT (Sh.Ct.) 56 that I could competently remit the cause back to the sheriff for him to add a further finding-in-fact covering the matter but she acknowledged at the same time that the amount involved rendered such an exercise hardly worthwhile and it seems to me both competent and sensible in a situation of this nature for an appropriate additional finding-in-fact to be incorporated by my varying the sheriff's interlocutor at my own hand to reflect the clear finding which he has made in his note. Once that is done the total value of the matrimonial property becomes £72,680 in all sections of the sheriff's judgement and the proper figure for any capital sum now to be paid to the pursuer and appellant, if her motion be well-founded, is £7350 as calculated by the sheriff in his note and mentioned in the first line at the top of page 12 thereof. That would, in the absence of any special circumstances, represent a fair sharing of the net value of the matrimonial property for the purposes of the principle enshrined in section 9(1)(a) as read with section 10(1) of the 1985 Act.

For the defender and respondent it was represented inter alia that the dispute at the proof was not chiefly concerned with section 9(1)(a) but that the argument centred at least equally on section 9(1)(b) and was concerned with the balance of economic advantage or disadvantage derived or suffered by either party. This involved the proposition that an increase since the relevant date in the value of the matrimonial home and/or the relative endowment policy, while admittedly irrelevant under section 9(1)(a) in accordance with the decision in Wallis, was nevertheless a relevant consideration for the court when applying the principle in section 9(1)(b). The case of Wallis was decided on an application of section 9(1)(a) alone, it was said, and different considerations applied where section 9(1)(b) was in issue. That the present case turned on an application of section 9(1)(b) could be seen from the final paragraph at page 11 of the sheriff's note going on to the top of page 12, where the sheriff first declared the pursuer to be entitled to one half of the value of the matrimonial property (thus correctly applying section 9(1)(a)) but then went on to consider the balance of economic advantage or disadvantage under section 9(1)(b) and decided that the economic advantages already enjoyed and likely to be enjoyed by the pursuer precluded him from making any further award (such as a capital sum of £7350) in her favour - those economic advantages favouring her being her occupancy rent-free of the matrimonial home since the separation (a house wholly owned by the defender) and the increase since that date (ie the "relevant date") in the values of that house and of the associated endowment policy. In all of this, it was maintained, no legal flaw or misdirection could be detected and the approach thus set out by the sheriff was reflected in the preceding findings-in-fact (notably the seventh, ninth, tenth and twelfth findings-in-fact). It was accepted (as it was for the appellant too) that the sheriff's decision was not founded on any special circumstances under section 10(1) and (6) of the Act and none such were founded on by either party in their pleadings or submissions to him: the sheriff here had clearly based his decision to divide the matrimonial property in unequal proportions on an application of section 9(1)(b) and not of section 9(1)(a) with special circumstances taken into account. In connection with the sheriff's application of section 9(1)(b) I was referred by counsel to the cases of Dougan 1998 SLT (Sh.Ct.) 27 (a decision of a sheriff at Edinburgh) and Cahill 1998 SLT (Sh.Ct.) 97 (a decision of the sheriff principal at Glasgow), which were said to be conflicting but the latter to be authority for the view that it was permissible to have regard under section 9(1)(b) to changes occurring or continuing subsequently to divorce. In summary it was contended for the respondent that although the sheriff had in terms of section 9(1)(a) and section 10(1) opted for an unequal sharing of the net value of the matrimonial property that decision was justifiable and here justified by the principle in section 9(1)(b): the wife pursuer would in any event derive an economic advantage from the increased value since the relevant date of the house and the policy and such increases were a relevant consideration for the purposes of section 9(1)(b).

In my opinion the sheriff's judgement in this case contains a major legal flaw stemming from a failure to recognise the consequences of the decision in the case of Wallis in the Court of Session and House of Lords and to apply that decision to the circumstances of the present case. The main question in this appeal is to determine what must be the consequence of this error and whether or not the result arrived at by the sheriff can stand despite it: determination of this question I have found not at all easy. There is also in my view a lesser flaw in the sheriff's judgement concerning his supposed judicial knowledge of the later value of the defender's pension but this of itself, if it were the only flaw, might not require the decision on orders for financial provision to be overturned. There is in addition a basic flaw in the sheriff's approach to matters of supposed economic advantage or disadvantage derived or suffered by either party if, as the respondent's counsel maintained, his decision is based on such considerations.

The case of Wallis v Wallis is reported in the Court of Session at 1992 SC 455 and 1992 SLT 676 and in the House of Lords at 1993 SC (HL) 49 and 1993 SLT 1348. In the Court of Session the leading opinion was given by Lord President Hope and simply concurred in by the other two judges. Their decision was appealed unsuccessfully to the House of Lords where there was no appearance for the respondent and the principal speeches were delivered by Lords Keith and Jauncey with whose views the three non-Scottish judges concurred. Lord Keith made direct reference to the opinion of Lord President Hope and quoted some parts of it. At no point was any disapproval of or disagreement with the views of Lord President Hope expressed and in these circumstances his pronouncements carry weight as great or almost as great as those of their Lordships in the superior court. Somewhat surprisingly, indeed very surprisingly, the sheriff in the present case was not so far as I am aware referred to the Wallis decision despite the subject-matter of some of the central submissions made to him. Nowhere in his judgement does he make any reference to it although I find it hard to believe that he was unaware of its existence. It is a decision of the highest court in the land which is directly in point in relation to the submissions made to the sheriff about "windfalls" likely to be enjoyed by the pursuer on account of the increases in value of the matrimonial home and relative endowment policy since the relevant date. If the sheriff has accurately summarised the submissions made to him by the defender's solicitor at the close of the proof then it appears to me that some of those submissions (summarised at the foot of page 9 and top of page 10 of the sheriff's note, which summary fits with some of the content of the handwritten copy of submissions now number 16 of process) were positively misleading, although presumably not intentionally so: yet the sheriff seems to have accepted the submission that he could not exclude such increases in value from consideration without giving the pursuer a windfall to which she was not entitled and been persuaded by that submission as a major component of his decision to make no further financial provision in the pursuer's favour beyond the property transfer orders sought by her. All this flies directly in the face of the Wallis decision whose effect was in my opinion to construe the 1985 Act in sections 9(1)(a) and 10 as deeming a fair sharing of the net value of the matrimonial property to flow from an equal division (in the absence of any special circumstances) thereof as valued at the relevant date without need for any adjustment to take account of any change in value since that date. If the financial provision ordered by the court includes a property transfer order based on property values taken at the relevant date then the result, assuming all other matters to be correctly attended to, is deemed by the Act to be a fair sharing. There is no room as the law currently stands for any idea that a change in property values since the relevant date can result in an unfair sharing unless specially rectified by the court. Such certainly was the import of the decision in Wallis in the House of Lords as reported in 1993 SC (HL) 49 where the judgement of their Lordships appears to have proceeded entirely on a consideration of the principle set out in section 9(1)(a) in relation to section 8(2), that being the only section 9 principle apparently suggested to them as being relevant to the case (per Lord Keith at 53C). The words of Lord President Hope on the matter, quoted by Lord Keith at 54F, seem crystal clear when he said: "Accordingly any subsequent changes in value must be left out of account when calculating the value of the matrimonial property and the way in which it is to be divided between the parties.".

It was however represented to me for the respondent, as indicated above, that the present case differed from Wallis in not being concerned exclusively with the principle in section 9(1)(a) but as turning also on consideration of the principle in section 9(1)(b) to which changes in property values since the relevant date were not irrelevant and so could be taken into account as had been correctly done here by the sheriff. That proposition however was expressly negatived by the Court of Session in the case of Wallis and appears not to have been revived when the case went to the House of Lords. It appears from the Court of Session report in 1992 SC 455 and 1992 SLT 676 that the principle in section 9(1)(b) was brought into play there and it was expressly submitted that an economic disadvantage would flow to the party required to transfer property to the other spouse if that were done at the value pertaining to the relevant date: the other spouse would obtain an undeserved economic advantage unless the transfer were effected at the value pertaining to the date of proof and accordingly the balancing exercise envisaged by section 11(2) of the Act required to be carried out. It was held however that the economic advantage or disadvantage envisaged by section 9(1)(b) and defined in section 9(2) could not encompass a loss or gain occurring in consequence of a property transfer order since the provision in section 9(1)(b) was concerned not with the consequences of an order for financial provision but with a principle to be applied in deciding on the matter of financial provision. In other words an economic advantage or disadvantage within the meaning of section 9(1)(b) cannot arise where the court is making a property transfer order from a change in value of particular items of matrimonial property between the relevant date and the date of proof. These matters are the subject of Lord President Hope's opinion at page 461 of the Session Cases report in the third paragraph and at pages 679J to 680B of the SLT report. This conclusion is not in my view detracted from by anything said by the sheriff principal in the case of Cahill v Cahill 1998 SLT (Sh.Ct.) 96 where it was held that an economic advantage from which the benefit had admittedly accrued subsequently had nevertheless been gained during the marriage. It thus appears to me that the chief "economic advantage" supposed by the sheriff to be likely to be enjoyed by the appellant in consequence of a property transfer order made in the present case was no such thing in terms of the Act and that attempts to invoke in the context of a property transfer order the principle in section 9(1)(b) of the Act in respect of any "windfall" flowing from an increase in property values since the relevant date are misconceived.

It is not entirely clear from the manner in which the sheriff's judgement is worded in that section of his note which contains his opinion (pages 10 to 12) whether he was indeed proceeding on an application of the principles set out in section 9(1)(b) of the Act, as was submitted for the respondent, but I have taken that to be the position for the purposes of this and the immediately preceding paragraph of my own opinion on the case. The sheriff nowhere in his opinion mentions section 9(1)(b) or indeed any other section of the Act expressly but I take his use of the phrases "economic advantage" and "economic disadvantage" in the last line of page 11 and the first two paragraphs of page 12 to be a reference to the section 9(1)(b) principle. If that be correct then the second economic advantage supposed by the sheriff to have been enjoyed by the pursuer was her "rent-free" occupation of the defender's house (in fact wholly owned by him). For the avoidance of doubt I refer here only to her occupancy of his house since the date of separation on 10 June 1996, which may or may not be the period of occupancy which the sheriff had in mind. At page 11 in the second paragraph he makes a passing reference to her having lived rent-free throughout the marriage but I do not think that a co-habiting spouse who lives in a matrimonial home whose rent or mortgage is funded out of the other spouse's income can properly be thought of as living there "rent-free": in that situation the marriage is supposed to be a common enterprise involving a pooling of resources. After separation however the position becomes different and it appears to me that the pursuer here can quite fairly be described as having lived "rent-free" in the defender's house during the six years from 1996 until the proof in 2002, he having moved out but continuing to fund the mortgage and endowment policy: the only qualification to this is that there was presumably at least a moral obligation incumbent on the defender to keep a roof over the heads of his children at least initially while they continued to live with her and were not self-supporting. I have no real difficulty in accepting the idea that the pursuer's occupancy of the defender's house during those six years subsequent to the separation in 1996 constituted an economic advantage within the meaning of section 9(1)(b) derived by her from contributions by him (funding of the endowment mortgage) being an advantage gained during the currency of the marriage and representing in effect a gain in income or revenue to her. There however my agreement with the sheriff's treatment of the matter under section 9(1)(b), if that is what he was doing, ends. An immediately apparent problem is that there seems to have been no attempt by the sheriff or anyone else to quantify at the proof or in the judgement the extent of the economic advantage thus gained by the pursuer. That I would regard as an essential ingredient, even if done in broad terms only, of any exercise purporting to be carried out in application of the principle set out in section 9(1)(b) but nothing of the sort seems to have been done here even in outline. No doubt if one leafs through the productions lodged by the parties in numbers 5 and 6 of process one can find references to mortgage and endowment insurance payments made by the defender but there is nothing to indicate that any of this was properly made the subject of evidence at the proof or taken into account by the sheriff who has made no finding-in-fact about such quantification (the seventh finding-in-fact is silent on the matter of quantification) nor was any mention made to me about it by those who addressed me at the appeal. More importantly however on the assumption put to me for the respondent that the sheriff was indeed considering the application of the principle set out in section 9(1)(b) it is apparent that the correct approach to such an exercise has been entirely overlooked. The Act requires by section 11(2) that a balancing exercise should be carried out in the manner there set out for the purposes of applying section 9(1)(b), which means that any countervailing economic advantages or disadvantages sustained on the other side are to be weighed against those sustained on the one side. No doubt there will be cases in which there exist no countervailing economic advantages or disadvantages on the other side to be so balanced but this was not one such, as is clear from the second paragraph at page 8 of the sheriff's note where he summarises the pursuer's submission to him that she had in this marriage suffered an economic disadvantage of the classic type (giving up a better-paid job). Here then was an alleged economic disadvantage clearly requiring to be weighed in a balancing exercise under section 11(2). There appears to have been no attempt on the pursuer's side to quantify the extent of this disadvantage either (as was done, I observe, albeit in very round terms in the case of Dougan 1998 SLT (Sh.Ct.) 27 above referred to) but there is no mention of this feature of the case by the sheriff in his opinion or in his findings-in-fact and I am driven to the conclusion that no balancing exercise of the type required by section 11(2) was embarked on or even contemplated. In these circumstances I regard the sheriff's approach to any application by him of the principle in section 9(1)(b) as fundamentally flawed and similarly any suggestion on the respondent's behalf by counsel that I should view this as a case in which the section 9(1)(b) principle was properly applied as untenable.

From what I have said in the two immediately preceding paragraphs it will be apparent that I regard the first two of the sheriff's reasons for refusing any further order in favour of the pursuer beyond the property transfer orders made by him as both ill-founded, that is to say each based on a misunderstanding of the correct legal position as declared by the House of Lords and Court of Session in the case of Wallis and by the statute. The sheriff's third reason for that refusal, thrown in apparently as "a further consideration", was based on some supposed element of judicial knowledge despite not having been the subject of evidence or submission (see the fourth paragraph at page 11 of the sheriff's note). While I do not quarrel or query the very general assertion that it was at the time of the sheriff's judgement a known fact that pension funds generally had for some time been falling in value, so that the defender's pension would "almost certainly have fallen in value in the present economic climate", I do not think it was open to the sheriff to take account of the matter in this manner without evidence. It was suggested to me that it is not good enough for something to be "on the fringes of judicial knowledge" but, whether the general fact was on its fringes or at its centre, it surely was equally a generally known fact that for some years in the late 1990s the value of pension funds had been moving ahead and upward by leaps and bounds. What was required therefore if this matter was to be taken into account at all was appropriate evidence placed before the court as to how fluctuations in value had affected this pension during the period from the date of separation in mid-1996 to the date of proof in late 2002. Clearly there was no such evidence placed before the sheriff. In any event such an exercise would have been of the most doubtful legitimacy, flying as it would have done in the face of the decision in Wallis where the correct legal position was enunciated as being that the matrimonial property is to be valued as at the relevant date without adjustment for subsequent fluctuations: indeed an exercise of the type contemplated appears to be viewed by their Lordships in Wallis (both in the House of Lords and in the Court of Session) as productive of precisely the uncertainty which the Act avoids by pinning valuation to the relevant date. For this reason alone, as well as the lack of appropriate evidence and submissions, I regard the sheriff's third reason for refusal of the pursuer's demands as insupportable.

From the foregoing it follows that the sheriff's decision to grant no further order in the pursuer's favour beyond the property transfer orders, based as it is on three ill-founded reasons, cannot stand on that basis and must therefore be reviewed by the sheriff principal. The question is whether a re-assessment of the case on the available material can nevertheless reach the same outcome as that arrived at by the sheriff or whether it must necessarily come to a different conclusion. When I first read the sheriff's decision my initial impression, before considering it in any detail and before hearing argument at the diet of appeal, was that he might have reached a conclusion which in layman's terms was "fair enough" and that he might, again in layman's terms, have correctly perceived the overall equities of the situation. I surmised that the sheriff might have preferred the defender to the pursuer, each of whom he had seen in the witness box, and been sympathetic to the defender's position in light of the history while viewing the pursuer's demands as excessive. However all that may be, I am not in doubt that his decision was in the end not in accordance with the provisions of the Act either as they stand or as they have been interpreted in the case of Wallis. The sheriff principal in re-assessing the case can proceed only on the material which is in the case as it was presented to the sheriff and now to him. On that footing I find it impossible for me to apply the principle set out in section 9(1)(b) of the Act because that, as already stated, requires a balancing exercise to be carried out in terms of section 11(2) which in turn requires some degree in my opinion of quantification, however broad that may be, of the advantages and disadvantages to be balanced. The two most obvious matters requiring to be balanced in this way are the pursuer's diminished earnings and consequent pension entitlement over the course of the marriage and the defender's support of the pursuer's continued occupancy for six years after separation of his house at his expense in relation to payment of the endowment mortgage. There is however no finding by the sheriff in regard to quantification of these matters and I am not aware that there is or was any proper evidence in the case whereon such findings could be made. I was not informed at the hearing of the appeal that such evidence existed nor was I invited to make any additional findings to those of the sheriff on such matters. There may even be other matters which ought to enter into a balancing exercise under section 11(2) of which I have not been informed. So far therefore as division of the capital assets comprised in the matrimonial property is concerned it appears to me that the only section 9 principle which can properly or should be applied under section 8(2)(a) in this case is that set out in section 9(1)(a). No suggestion has been made that either party is unable to obtemper an order for financial provision by reason of lack of resources in terms of section 8(2)(b). In terms of section 10(1) the fair sharing enjoined by the principle in section 9(1)(a) is achieved by an equal sharing of the net value of the matrimonial property as valued in terms of section 10(2) at the relevant date in the absence of special circumstances. Neither party has pled the existence of any such special circumstance. Neither party suggested to the sheriff at the proof that such a special circumstance existed and neither party made any such suggestion to me at the appeal. In that situation it is not for the sheriff principal to embark on an exercise of inventing special circumstances out of his own head, even if he were to think of a possible suitable candidate (such as perhaps the pursuer's continued occupancy of the former matrimonial home during six years of separation while the defender funded the loan over the house). Even then there might still be a need for some degree of quantification in order to give some basis for an appropriate and justified unequal apportionment and I have heard no submissions on the whole matter of special circumstances. In the case of Wallis moreover both Lords Keith and Jauncey in the House of Lords cast doubt on any idea that a change in the value of the matrimonial property between the relevant date and the date of the proof could amount to a special circumstance. I am therefore driven to the conclusion that the only proper distribution of the matrimonial assets between the parties in the circumstances of the case as it now stands and in accordance with the provisions of the Act as currently interpreted is an equipartition of the net value of the matrimonial property as valued at the relevant date in order to achieve a fair sharing thereof. That means in light of the sheriff's findings that each party should receive assets to the value (as at the relevant date) of £36,340 which in turn means that the pursuer must receive £7350 more than the sheriff by his decision bestowed on her. I shall accordingly alter the sheriff's interlocutor in that regard and award the pursuer in addition to the sheriff's property transfer orders in her favour a capital sum of £7350 with interest thereon to run at the judicial rate from the date on which the sheriff's decision divorcing the parties would have taken effect had it not been appealed.

In reaching this result of the appeal I recognise that the effect of the decision in the case of Wallis is seen by many as giving rise to inequities and it does appear that attempts are frequently made in the sheriff courts of Scotland to circumvent its effects by various devices. The decision by the sheriff in the present case may have been one such attempt: it seems to me that the sheriff here thought he was reaching an equitable result but in doing so he ignored the effect of Wallis and reached a result which in the present state of the law was incorrect. The Scottish Lords in their speeches in the House of Lords in the Wallis case recognised that inequity might sometimes appear to result from the Act as they interpreted it there but declared the law as enacted to be clear and suggested that amending legislation would be required in order to deal with any such apparent inequity, to which they suggested consideration should be given. I am not aware that that suggestion has been taken up at all during the ensuing decade, even to the extent of there being any consultation in Scotland on the subject, and certainly no such legislative change has yet occurred. It is perhaps time that consideration be at last given to their Lordships suggestion: while the present state of the law may be satisfactory because it is clear it is at the same time unsatisfactory on account of the perceived inequities to which it appears sometimes to give rise. The present case has some of that appearance in light especially of the long period of six years which elapsed between the date of separation of the parties and the date of proof, during which there must have been a considerable increase in the value of the former matrimonial home of which account is not to be taken as the law currently stands. While I had the case at avizandum I heard an appeal in another Paisley case decided by another sheriff (Christie v Christie: case number F469/02) which raised some of the same points concerning the application of the Wallis decision and, having decided the two cases in the same manner, I have issued the judgement in that case simultaneously with this judgement on the same date.

With regard to the expenses of the appeal procedure, counsel for the respondent suggested that they should follow success either way while the appellant's solicitor pointed to the case of Little 1990 SLT 785 as indicating that such a rule might not be universally applicable in matrimonial cases. I am inclined to think that the observations of Lord President Hope in Little concerning expenses (at page 790BD) are more pertinent to the expenses of a financial dispute between spouses fought out at first instance than they are to the expenses of a case taken to appeal and that in the context of an appeal the principle of expenses following success should normally be applied. In the present appeal the pursuer came to the sheriff principal seeking both a capital sum of nearly eight thousand pounds and a periodical allowance at the rate of one hundred and fifty pounds per month for four years over and above the property transfer orders made in her favour by the sheriff. She has obtained most of the first but none of the second. The defender opposed both of these demands and succeeded in respect of the second but not the first. He made no counter-demands. In these circumstances I consider success at the appeal to have been divided and that there should be no award of expenses in favour of either party in respect of the appeal procedure. A motion was made for certification of the appeal as suitable for the employment of counsel which was not opposed and will be granted.

At the very outset of the appeal counsel for the respondent raised a matter concerning intimation of the present action to the heritable creditor who had provided the loan over the matrimonial home. She said that their consent to a property transfer order was required in terms of section 15(1) of the 1985 Act but that there had been no evidence thereof before the sheriff and that I should await an assurance that such consent had been obtained before proceeding with the appeal. At the time I thought that this matter should have been raised with the sheriff prior to the proof long ago and that it was unreasonable to delay the hearing of the appeal on account of such an obstacle being thrown up on the morning of the appeal diet. I also thought that in the absence of any clear information placed before me to indicate that actual consent was required under section 15(1) it might be sufficient for intimation to have been given in terms of the eighth crave of the initial writ in order to afford the opportunity of being heard referred to in section 15(2). On looking into the process while writing this judgement I have however found nothing to indicate that any such intimation has in fact been made to the heritable creditor. Instead I find that on 10 January 2002 warrant was granted to cite the defender and for intimation of the proceedings to Halifax plc together with a notice in Form F10. On 15 January 2002 and again on 29 January 2002 the pursuer's agent twice certified having cited the defender postally but on neither occasion made any mention of having intimated anything to Halifax plc. This I think is a matter of which the court ought to take cognisance before any property transfer order in respect of the former matrimonial home is finally made or allowed to take effect and I shall accordingly supersede extract of any decree in favour of the pursuer to follow on this judgement until such time as the pursuer and appellant's agent has been able to satisfy me that the intimation for which warrant was sought in the eighth crave and granted was indeed or has now been given. Although this means that extract is superseded for an indefinite period and not to any fixed date I do not envisage that any major difficulty will be caused thereby since this particular heritable creditor is a well-known organisation which undoubtedly still exists at the present time at a readily ascertained address. All that is required is the production to me of a suitable document demonstrating satisfactorily that intimation was/has been duly made in terms of OCR 33.7(1)(i)(ii) and that the induciae mentioned in Form F10 (21 days) have expired or alternatively that the consent of Halifax plc to the property transfer order granted in favour of the pursuer has been obtained. I shall then instruct the sheriff clerk to issue any extract requested at an appropriate date. If of course Halifax plc elect to make timeous representations to the court that will be another matter.

One further matter may require to be clarified of a technical or procedural nature. The sheriff by his interlocutor (to which I have adhered in this respect) found the pursuer "entitled to an incidental order in terms of section 14 of said Act" but did not spell out the type of order he had in mind. I have assumed him to have been referring to an order in terms of the sixth crave of the writ or terms very similar thereto. Such a warrant to the sheriff clerk is often set out in detail in an interlocutor granting a property transfer order. On this occasion it may be necessary, should the need arise, for an ancillary application to be made for such a warrant by the pursuer and appellant's agent.

BAK