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Cite as: [2004] ScotSC 2

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SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT STONEHAVEN

F45/01

		JUDGEMENT of SHERIFF PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
		in the cause
		DAWN EVELYN PACITTI or NICOL
		Pursuer and Respondent
		against
		ROBERT CLARK NICOL
		Defender and Appellant

Act: Mrs Craig, solicitor, Paull & Williamsons, Aberdeen

Alt: Mr Garden, solicitor, Kinnear & Falconer, Stonehaven

Stonehaven: 9^th January 2004

The sheriff principal, having resumed consideration of the cause, sustains the appeal in part and adheres to the interlocutor of the sheriff dated 30^th June 2003 subject to the following amendments:

Delete the words "DECERNS against the defender for payment to the pursuer of a capital sum of £35,000" and substitute therefor "FINDS that the pursuer is entitled to payment by the defender of a capital sum of £35,000",

Delete the words "the first payment being due within 12 months of the date hereof with interest at the rate of 8 per cent per annum on said capital sum from the time the same falls due until payment" and substitute therefor "and a final instalment of £1307.89, the first instalment being due on 30^th June 2004, the second instalment on 30^th June 2005 and so on annually thereafter until payment in full has been made with interest at the rate of 8 per cent per annum on each such instalment from the date upon which it falls due until payment";

Delete the sentence in finding in fact and in law 8 which reads: "Accordingly it is reasonable that interest be paid on the balance outstanding until full settlement has been made".

Reserves meantime all questions of expenses and appoints parties to be heard thereon at Stonehaven Sheriff Court on on Wednesday 4^th February 2004 at 9.45am

Note

This is an action of divorce. The pursuer and respondent is the wife and the defender and appellant the husband. The pursuer sought decree of divorce against the defender on the ground of his adultery, and decree also for payment by him to her of (a) a capital sum of £40,000, (b) a periodical allowance of £1,200 per month for a period of three years or such other period as the court thought fit from the date of decree of divorce or until her death or remarriage, if sooner, and (c) aliment for their child Jordan at the rate of £600 per month.

In due course a proof took place before the sheriff after which he issued an interlocutor dated 30^th June 2003. In terms of this he granted decree of divorce in favour of the pursuer and decerned against the defender for payment to her of the sum of £400 per month as aliment for the child and £700 per month as a periodical allowance for herself payable for a period of six years from the date of decree. He also decerned against the defender for payment to the pursuer of a capital sum of £35,000. But this I think must be a mistake since he proceeded to find that she had already received matrimonial property totalling £15,713.54 to account of this sum of £35,000 and he ordained the defender to transfer to her his interest in three life policies. These had a value of £5,978.57 so that, after allowance had been made for their transfer, there remained the sum of £13,307.89 as the balance of the capital sum of £35,000 still to be paid, and the sheriff decerned against the defender for payment of this sum of £13,307.89 to the pursuer by instalments of £2,000 per annum. The sheriff also ordered interest to be paid on these instalments. But it is not clear from his interlocutor whether this interest was to be paid on the whole balance of the sum of £13,307.89 outstanding from time to time or merely on each instalment of £2,000 from the date upon which it fell due until payment.

The defender subsequently appealed against this interlocutor. He did not challenge the sheriff's decision to grant decree of divorce against him, nor did he challenge the award of £400 per month as aliment for the child. He accepted that he should pay the pursuer a capital sum of £13,307.89, albeit only by instalments, but he maintained that these should have been at a rate of no more than £1,000 per annum. He also disputed the sheriff's award of interest on the capital sum on the assumption that this interest was to be paid on the whole balance outstanding from time to time until payment. Finally, he maintained that the sheriff ought not to have ordered him to pay a periodical allowance to the pursuer at all, and that in any event the amount and duration of the periodical allowance which he had been ordered to pay were both excessive.

In the course of his submissions during the hearing of the appeal the defender's solicitor referred in some detail to the circumstances of a second action between the parties which, it appears, had been running in tandem, so to speak, with the present action. In this second action the sheriff had, so I understand, made certain awards of interim aliment in favour of the pursuer and Jordan. I further understand that this action is currently sisted to await the outcome of the present action. In her submissions, the pursuer's solicitor referred at some length to the evidence which had been before the sheriff in the proof in the present action. But neither she nor the defender's solicitor referred me to the extended notes of this evidence, nor at the end of the day did they propose that any amendments or additions should be made to the findings in fact which were made by the sheriff in terms of his interlocutor dated 30^th June 2003.

So far as material for present purposes, the background to the present case as disclosed in these findings in fact is as follows. The pursuer currently resides at an address in Edzell. She is 35 years of age. The defender currently resides at an address in Western Australia, but his age is not stated. The parties were married in Stonehaven on 14^th August 1993. Jordan was born on 15^th April 1994 and currently lives with the pursuer.

In December 1998 the parties were living together in Dubai where the defender was then employed. He had been posted thence to Australia and the parties' intention was to live there after spending Christmas and the New Year at home in Scotland. In the event there was a disagreement between the parties with the result that the defender flew alone to Australia on 19^th January 1999. On or about 15^th February 1999 the pursuer discovered that the defender was living with another woman (Miranda Ross) and as a result she determined that the marriage was over. The sheriff accordingly found that the relevant date was 15^th February 1999 (and no issue has been taken with this finding).

Miranda Ross later returned to the United Kingdom from Australia and the defender himself then did so having given up his employment in Australia. In or around August 1999 he took up residence with Miranda Ross and her two children, firstly in Stonehaven and thereafter in Inverbervie. They remained there until about 28^th February 2001 when they all moved back to Western Australia where they are currently residing together as a family.

As at the relevant date the agreed value of the matrimonial property was £70,000. This consisted of various items of property including, in particular, three bank accounts in the name of the defender which had deposited in them respectively sums equivalent to £27,987.36, £25,415.24 and £1,842.87.

When the parties separated the pursuer was aged 32 and their child was aged 5. At the time of the marriage the pursuer was working as an auxiliary nurse, but she gave up that employment when she became pregnant with the child. Thereafter she moved overseas with the defender because of his employment, and she was unable work while living abroad. There was no expectation that she would work during the marriage. Following the separation she would have required to re-train in order to work again as an auxiliary nurse, but because of Jordan's young age she required to be at home to look after the child. After the separation she had a brief relationship as a result of which she gave birth to a daughter on 7^th November 2001. This child resides with her and Jordan. Her father does not make any contribution to her maintenance.

The pursuer suffers from a hereditary disease which is categorised by muscle weakness and atrophy. The disease is progressive and there is nothing medically that can be done about it. She requires aids to walk safely, and aids too in her home to help her to perform normal daily household tasks and to help her with her personal care. She is physically unable to obtain employment.

After their marriage the parties enjoyed a reasonable standard of living making the natural progression from a flat to a modest dwellinghouse in Stonehaven before moving to Dubai where they were provided with accommodation for which the defender's employers paid the rent. In Dubai they enjoyed a high standard of living.

When the defender left for Australia on 19^th January 1999 the pursuer was left with her parents, with no household effects, and with very limited clothing for herself and Jordan. She had no money and no home. Initially the defender agreed to pay aliment to her for herself and Jordan at the rate of £2,000 per month but he then reduced this to approximately £1,200 per month. Payments were made at this level until around August 1999 when, without any prior notification, the defender ceased the payments leaving the pursuer with no income and causing her grave financial difficulties. It was then, as already noted, that he gave up his well paid employment in Australia and returned to live in Stonehaven with Miranda Ross. In the other action to which reference has been made the sheriff on 19^th January 2000 made an award of interim aliment at the rate of £400 per month which was increased to £1,200 per month on 15^th February 2000. This level of interim aliment was subsequently reduced following an appeal to £800 per month. Whilst he remained in Scotland the defender was only able to obtain low paid employment and as a result he expended some capital meeting his own living expenses and his alimentary responsibilities to the pursuer. In consequence much of the matrimonial property as at the relevant date no longer exists. In particular, it appears that the sums at credit of the three bank accounts mentioned above have all been spent.

When the defender moved to Australia in January 1999 he granted a power of attorney in favour of the pursuer's mother which allowed her to operate a bank account into which he transferred funds. This allowed the pursuer's mother to make alimentary payments in favour of the pursuer herself and between January and May 1999 (the exact year is not stated in finding in fact 11, but I understood parties to agree that it was 1999) sums totalling US$14,700 were withdrawn from the account. The sheriff found specifically that these funds were alimentary in nature and covered aliment to be paid by the defender to the pursuer in respect of herself and the child and for school fees incurred on behalf of the child. It is not clear from the sheriff's findings whether these payments were or were not in addition to the alimentary payments, firstly at the rate of £2,000 per month and then at £1,200 per month, which, as already noted, were paid to the pursuer between January and August 1999. But I understood the defender's solicitor to accept that they were not. It seems that at least between January and May 1999, instead of making the payments direct to the pursuer, the defender achieved the same result by allowing the pursuer and her mother to operate the bank account and the pursuer herself to use his credit card or cards.

On 9^th February 1999 the defender paid US$5,000 into this same bank account to assist the pursuer to purchase a car which she subsequently retained. In consequence the sheriff found that the sterling equivalent of this sum, namely £3,072.87, should be regarded as a capital sum paid by the defender to the pursuer, and no issue has been taken with this finding, nor with the sheriff's finding that on or about 6^th December 1999 the defender paid to the pursuer £9,268.41 (the sterling equivalent of $US15,000) as a specific payment to account of capital.

The defender is currently employed in Western Australia. His salary is paid in US dollars and his average net monthly salary is the equivalent of approximately £2,700. In addition to this he is supplied with free accommodation by his employers who also meet the cost of all utilities, medical expenses and the school fees in respect of one of the children of Miranda Ross. The sheriff found that the defender is allowed annually one return trip home to the United Kingdom with Miranda Ross and her two children, but it is not clear whether this is paid for by his employers.

Miranda Ross works part-time as a waitress and receives approximately £160 per month. She is not able to work full-time on account of her responsibilities for her children. These are a son aged thirteen and a daughter aged ten. The defender contributes to their support. When he and Miranda Ross and the two children wished to go to Australia, the father of the daughter raised court proceedings to prevent her being taken there. Various negotiations seem to have ensued involving also the father of the son, the upshot of which as found by the sheriff (see finding in fact 16) was that the "defender therefore was party to an agreement between Miranda Ross and the fathers of her children that the fathers would make no contribution towards the maintenance of the children".

The pursuer and her two children reside in a house which she leases from her parents. By the time of the proof the defender was paying her £1,000 per month as interim aliment (inclusive of the sum of £250 for Jordan) in terms of an order made, it appears, in the other action. She received Child Benefit at the rate of £105 per month and was being assessed for Disability Benefit. She had been advised by the Benefits Agency that, as a single parent with two children, she would receive £579 per month in the event that she received no financial support from the defender. If this were to be her sole income she would have to rely on her parents in order to provide financial assistance for herself and Jordan. At the time of the proof her monthly outgoings amounted to £1,608 including expenditure for Jordan in the sum of £554.50. As the defender is resident in Australia the Child Support Agency has no jurisdiction to order him to pay maintenance for Jordan.

In light of his findings in fact the sheriff made a total of twelve mixed findings in fact and in law. For present purposes it is unnecessary to notice those numbered 1 - 5 inclusive. In those numbered 10 and 11 the sheriff made certain findings about sums which totalled £21,692.11 and which had been paid or were to be treated as having been paid to account of the pursuer's entitlement of a capital sum. No issue arises in the appeal about the accuracy of these sums. The sheriff's mixed findings 6, 7, 8, 9 and 12 were in the following terms:

In terms of Section 9(d) and (e) (sic) the Pursuer has been financially dependant on the Defender and should be awarded such financial provision as is reasonable to enable her to adjust to that loss of support on divorce. Having regard to her age, the duration of the marriage, and in particular to the Pursuer's ill health it is reasonable that a periodical allowance should be paid by the Defender to the Pursuer for a period of six years. An appropriate sum for periodical allowance taking account of the needs and resources of the parties would be £700 per month.

In terms of Section 11(6) the Defender maintains Miranda Ross and her two children but as he acquiesced in an agreement that the fathers of her children would pay no aliment for them it is reasonable that such maintenance be left out of account.

In terms of Section 11(7) the conduct of the Defender in dissipating the matrimonial assets has resulted in the absence of resources to pay the Pursuer her share of the matrimonial property except by instalments. Accordingly it is reasonable that interest be paid on the balance outstanding until full settlement has been made.

In terms of Section 9(1)(a) and 10(1) a fair and equal sharing of the matrimonial property would be £35,000.

The balance of £13,307.89 to meet the Pursuer's one half share of the matrimonial property should be paid by the Defender to the Pursuer. Taking account of his resources and the payment of aliment for the child and periodical allowance for the Pursuer it is reasonable that payment of the balance be made by instalments of £2000 paid annually.

The sheriff made six findings in law of which it is necessary to notice only those numbered 3, 5 and 6 which were as follows:

The Pursuer is entitled to a periodical allowance from the Defender and a reasonable sum is £700 per month payable in the exceptional circumstance (sic) of the Pursuer for a period of six years.

A fair sharing of the matrimonial property is an equal sharing. The Pursuer is therefore entitled to £35,000.

The Pursuer has already received property to the value of £15,713.54. It is reasonable that the Defender's interests in Life Assurance Policies to the value of £5978.57 be transferred to the Pursuer. The balance of £13,307.89 should be paid by the Defender to the Pursuer taking account of his resources by instalments of £2000 per annum.

The sheriff appended to his interlocutor a note explaining the reasons for the decisions made by him on the issues which had been raised during the submissions at the conclusion of the proof. For present purposes I need not rehearse the terms of this note in full, though I will have occasion shortly to refer to certain passages in it. At this point I should also record that in terms of his interlocutor the sheriff specifically sustained, inter alia, the pursuer's third plea-in-law which reads:

The order fourth craved (that is for payment of a periodical allowance) being justified by the principles set fourth in section 9(1)(d) and (e) of the Family Law (Scotland) Act 1985 and reasonable having regard to the parties' resources and an order for payment of a capital sum being insufficient to satisfy the requirements of section 8(2) of the Act, the order fourth craved should be granted.

At the same time the sheriff repelled all the defender's pleas-in-law including his second plea which reads:

The order second craved (sic - this was for intimation to Miranda Ross) not being justified by the principles set forth in section 9(1)(d) and (e) of the Family Law (Scotland) Act 1985 and not being reasonable having regard to the parties' resources and an order for payment of a capital sum being sufficient to satisfy the requirements of section 8(2) of the Act, the order fourth craved should not be granted.

Section 8(1) of the Family Law (Scotland) Act 1985 provides that in an action for divorce either party to the marriage may apply to the court for, inter alia, (a) an order for the payment of a capital sum to him by the other party to the marriage, and (b) an order for the making of a periodical allowance to him by the other party to the marriage. Section 8(2) provides that subject to sections 12 to 15 of the Act, where an application has been made under section 8(1), the court shall make such order, if any, as is (a) justified by the principles set out in section 9 of the Act, and (b) reasonable having regard to the resources of the parties. Section 9(1) provides that the principles which the court shall apply in deciding what order for financial provision, if any, to make are, inter alia, that (d) a party who has been dependent to a substantial degree on the financial support of the other party should be awarded such financial provision as is reasonable to enable him to adjust, over a period of not more than three years from the date of the decree of divorce, to the loss of that support on divorce, and (e) a party who at the time of the divorce seems likely to suffer serious financial hardship as a result of the divorce should be awarded such financial provision as is reasonable to relieve him of hardship over a reasonable period. Section 11(4) provides that for the purposes of section 9(1)(d) of the Act the court shall have regard to (a) the age, health and earning capacity of the party who is claiming the financial provision, (b) the duration and extent of the dependence of that party prior to divorce, (c) any intention of that party to undertake a course of education or training, (d) the needs and resources of the parties, and (e) all the other circumstances of the case. Section 11(5) provides that for the purposes of section 9(1)(e) of the Act, the court shall have regard to (a) the age, health and earning capacity of the party who is claiming the financial provision, (b) the duration of the marriage, (c) the standard of living of the parties during the marriage, (d) the needs and resources of the parties, and (e) all the other circumstances of the case. Section 11(6) provides that in having regard under the sub-sections just mentioned to all the other circumstances of the case the court may, if it thinks fit, take account of any support, financial or otherwise, given by the party who is to make the financial provision to any person whom he maintains as a dependant in his household whether or not he owes an obligation of aliment to that person. Section 11(7) provides, inter alia, that in applying the principles set out in section 9 of the Act the court shall not take account of the conduct of either party unless (a) the conduct has adversely affected the financial resources which are relevant to the decision of the court on a claim for financial provision. Section 12(3) provides that the court, on making an order under section 8(2) of the Act for payment of a capital sum, may order that the capital sum shall be payable by instalments. Section 13(2) provides that the court shall not make an order for a periodical allowance under section 8(2) of the Act unless (a) the order is justified by a principle set out in paragraph (c), (d) or (e) of section 9(1) of the Act, and (b) it is satisfied that an order for payment of a capital sum or for transfer of property or a pension sharing order under that section would be inappropriate or insufficient to satisfy the requirements of section 8(2). Finally, section 13(3) provides that an order under section 8(2) of the Act for a periodical allowance may be for a definite or an indefinite period or until the happening of a specified event.

Before turning to the grounds of appeal specified in the defender's note of appeal and the submissions which were made on his behalf at the appeal itself, I think that it is important to be reminded, as the provisions which I have just quoted demonstrate, that a very broad discretion is conferred upon a court of first instance in determining what orders, if any, to make under section 8(2) of the Act with the result that an appeal court may not interfere in such decisions unless, broadly, it is shown that the judge at first instance has misdirected himself in law, failed to take into account a relevant and material factor, taken into account an irrelevant factor or reached a decision which was manifestly inequitable or plainly wrong in the circumstances - see Little v Little 1990 SLT 785, Peacock v Peacock 1994 SLT 40 and McVinnie v McVinnie (No 2) 1997 SLT (Sh.Ct.) 12. And in short the submission for the pursuer in the appeal was that none of these conditions had been made out by the defender with the result that the appeal should be refused.

The defender's solicitor began his submissions by referring to the procedural history of the other action between the parties to which reference has already been made. He suggested that the circumstances of this other case had been within judicial knowledge and had coloured the sheriff's judgement in the present case. But I did not understand him to maintain that the sheriff might have been in error in taking into account the circumstances of this other case. Nor, as indicated, did he propose that any amendments or additions should be made to the sheriff's findings in fact.

In a nutshell, the defender's solicitor explained that at the time of the parties' separation the defender's net income had been of the order of £2,225 per month. This was what he had been earning when he had first gone to Australia early in 1999. By allowing the pursuer to withdraw money from his bank account and to use his credit card or cards he had effectively paid aliment to her for herself and the child at the rate of £1200 per month until August 1999. Following a downturn in the oil business in Australia, he had then returned to the United Kingdom on leave of absence and, as I understood the defender's solicitor, had continued to pay aliment to the pursuer out of capital, namely the sums at credit of his various bank accounts. But he evidently stopped doing so after a while since on 10^th November 1999 the pursuer enrolled a motion in the other action for interim aliment for herself and Jordan. This was initially continued by the sheriff since he wished to be given evidence of the defender's earning capacity. On 24^th November 1999 the sheriff apparently took the view that in the meantime the defender should pay the sum of US$15,000 to the pursuer to account of the capital sum which would be due to her on divorce. On 19^th January 2000 he ordered the defender to pay £400 per month as interim aliment for the pursuer and Jordan to be increased to £1200 per month on 15^th February 2000. At this stage the defender was working as a farm labourer earning £200 per week and was spending capital to meet his ongoing alimentary obligations to the pursuer and Jordan. When it became clear that he would not be able to get another job in Australia a motion had been enrolled on his behalf in June 2000 to vary the award of interim aliment previously made by the sheriff. This had been refused on 29^th August 2000 but on appeal the then sheriff principal had on 6^th October 2000 reduced the amount of interim aliment to be paid by the defender for the pursuer and Jordan to £800 per month. In February 2001 the defender returned to Australia. His income then was about £2,400 per month and in addition he received certain other benefits, and the upshot was that the interim aliment for the pursuer and Jordan had been increased to £1,000 per month with effect from 1^st June 2001. This was the rate at which interim aliment was being paid at the time of the proof. As I understood him (and despite his earlier suggestion that the sheriff's judgement had been coloured by them), the defender's solicitor maintained that the sheriff had erred in failing to take into account these matters inasmuch as there was no explicit reference to them in his mixed finding 6. But in my opinion it is perfectly clear from his findings in fact that he was well aware, and took account, of them (and see also the first sentence of his note which reads: "I have had dealings with the parties over several years in relation to payments of interim aliment").

The defender's solicitor submitted under reference to Haugan v Haugan 1996 SCLR 170 that the sheriff had erred in failing to take into account as a relevant factor in determining the defender's resources the fact that the pursuer was in receipt of legal aid, that clawback provisions would apply to any sums of money recovered by her from the defender in the present action and that the Scottish Legal Aid Board would seek to recover from him any expenses awarded against him in this action. The defender's solicitor stated that he had drawn these considerations to the attention of the sheriff in the course of his submissions at the close of the proof, and he submitted that the sheriff had erred in not taking them into account since he had made no reference to them either in his interlocutor or in his note.

The pursuer's solicitor did not dispute that these matters had indeed been drawn to the attention of the sheriff but she suggested that it did not follow from the fact that he had not explicitly mentioned them that he had not taken them into account - and indeed, in explaining at page 20 of his judgement why he had decided that the periodical allowance should be paid for a period of six years, the sheriff does refer to "the needs and resources of the parties, and all the circumstances of the case". In any event, it seems to me that he could only have been faulted in this particular respect if it had been demonstrated that an award of expenses against the defender would, if enforced, have had a material impact upon his resources. Whether or not this would have been so would clearly have depended upon the likely amount of these expenses, and nothing was said by the defender's solicitor to suggest how much these would be.

In addition to Haugen v Haugen, the defender's solicitor referred at this point in his submissions to Tyrrell v Tyrrell 1990 SCLR 244, Petrie v Petrie 1988 SCLR 390, Gray v Gray 1991 SCLR 422, Millar v Millar 1990 SCLR 666, Buckle v Buckle 1995 SCLR 590, Semple v Semple 1995 SCLR 569, Barclay v Barclay 1991 SCLR 205 and Johnstone v Johnstone 1990 SLT (Sh.Ct.) 79.

The defender's solicitor turned eventually to the grounds of appeal set out in the note of appeal. The first of these is in the following terms:

The sheriff erred in awarding a periodical allowance to the pursuer et separatim in the amount and duration of payment of that periodical allowance in terms of section 9(1)(d) and (e) of the Family Law (Scotland) Act 1985 bearing in mind the needs and resources of the parties.

The defender's solicitor submitted in this context that the sheriff had erred in law in failing to take into account the factors referred to in paragraphs (b), (d) and (e) of section 11(4) of the Act and paragraphs (b), (c), (d) and (e) of section 11(5). Under reference to paragraph (b) of section 11(4), he drew attention in particular to the fact that the parties had only lived together from the date of their marriage in 1993 until early in 1999. Following their separation the defender had paid interim aliment to the pursuer until the date of the sheriff's interlocutor, namely 30^th June 2003, in terms of which he had been ordered to pay a periodical allowance to the pursuer for a further period of six years until 2009. By then sixteen years would have elapsed since the date of the marriage, and the effect of the sheriff's interlocutor would be that for two thirds of this period, namely from 1999 to 2009, the defender would have been paying interim aliment, and thereafter a periodical allowance, to the pursuer. With reference to paragraph (d) of section 11(4), the defender's solicitor suggested that the sheriff had failed in particular to take into account the resources of the defender himself, and with reference to paragraph (e) of section 11(4) the defender's solicitor submitted that the sheriff had failed to take into account the whole history of the case, and in particular the payments of interim aliment which had already been made to the pursuer by the defender.

These last submissions are focused in the fourth ground of appeal which reads:

The sheriff erred in failing to take into account, in respect of section 9(1)(d), the factors contained in section 11(4)(b) and (d) of the said Act and in respect of section 9(1)(e) the terms of section 11(5)(b), (c), (d) and (e) of the said Act.

Referring to this ground of appeal, the defender's solicitor acknowledged that it effectively raised the same points as he had made under reference to the first ground of appeal. But he then referred to the sheriff's mixed finding in fact and in law 6 and submitted that the amount of the periodical allowance which the defender had been ordered to pay to the pursuer and the period during which it was to be paid were grossly excessive in light of the defender's needs and resources, the length of the marriage, the period since the parties' separation during which the defender had been paying interim aliment to the pursuer and the fact that he was de facto supporting his current partner and her two children. The pursuer, said the defender's solicitor, had already had four years between February 1999 and the date of the sheriff's interlocutor to adjust to her separation from the defender and she did not need another six years to adjust to the loss of the defender's support on divorce. In short, the sheriff ought not to have ordered the defender to pay a periodical allowance at all to the pursuer and, even if he had been right to do so in principle, he should not have ordered the defender to pay as much as £700 per month in this context or for as long as six years from the date of the decree of divorce.

In my opinion there is no substance in these submissions. It is true that in his mixed finding 6 the sheriff does not explicitly refer to all the factors to which he was obliged to have regard in terms of section 11(4) and (5) of the Act. But in my view it is perfectly clear on reading his judgement as a whole that the sheriff did indeed have regard to all the relevant factors. It was a matter for him in the exercise of his discretion to determine what order, if any, he should make about the payment of a periodical allowance by the defender to the pursuer, and nothing that was said by the defender's solicitor under reference to the first and fourth grounds of appeal has persuaded me that there is any basis upon which I could properly interfere in this appeal with the sheriff's exercise of his discretion.

The second ground of appeal reads as follows:

The sheriff erred in finding that in terms of section 11(7) of the said Act the defender had dissipated the matrimonial assets in particular bearing in mind that earlier awards of interim aliment had resulted in an inevitable utilisation of these assets thereby prejudicing the defender and consequently that interest be paid on the balance outstanding until full settlement has been made.

The defender's solicitor drew attention here to the sheriff's mixed finding in fact and in law 8 which, he submitted, should be deleted. He suggested that the defender had not dissipated the matrimonial assets and that it had been as a result, not of any deliberate action on his part, but rather of necessity that he had acted as he had in resorting to the sums at credit of his three bank accounts in order to meet his alimentary obligations to the pursuer and their child Jordan. In this situation, while he could not argue with the proposition that interest should be paid on the individual instalments of the capital sum from the date upon which each became due until payment, the defender's solicitor submitted that the sheriff had been wrong to award interest on the whole balance of the capital sum outstanding from time to time until payment in full had been made (assuming that this was in fact what he had done).

The pursuer's solicitor submitted that the sheriff had not erred in finding that the defender had dissipated the matrimonial assets. But, as already indicated, neither she nor the defender's solicitor referred me to the notes of the evidence which had been heard by the sheriff. In this situation I think that it would be quite wrong for me to interfere with the sheriff's finding that in terms of section 11(7) of the Act "the conduct of the defender in dissipating the matrimonial assets has resulted in the absence of resources to pay the pursuer her share of the matrimonial property except by instalments". The blunt fact is that the sheriff heard the evidence of the parties on this matter, and only a detailed scrutiny of the notes of that evidence would have disclosed whether or not there was any basis for disturbing the sheriff's finding in this respect.

The pursuer's solicitor frankly acknowledged that she was handicapped in responding to the defender's solicitor's submissions about payment of interest by the fact that she was unable to discern from the terms of the sheriff's interlocutor exactly what he had in mind here. She referred in this context to McEwan v McEwan 1997 SLT 118 in which the wife had been found entitled to payment of a capital sum of £29,780 whereof £2,780 was to be paid at the date of decree of divorce and the balance of £27,000 was to be paid by monthly instalments of £500 with interest on the balance outstanding from month to month until final payment. She suggested that the sheriff in the present case had followed a similar course, and further that this had been a reasonable exercise of discretion on his part. She submitted that, in having dissipated the matrimonial assets, the defender had effectively borrowed the sum of £13,307.89 from the pursuer. If he had borrowed this money from a bank he would have had to pay interest on the whole sum outstanding from time to time until repayment had been made in full and it was reasonable therefore in the present case that he should pay interest on the whole balance of the capital sum outstanding from time to time.

As already indicated, the difficulty here is to understand what the sheriff intended should be done about payment of interest on the capital sum. In the operative part of his interlocutor dated 30^th June 2003 he decerned against the defender for payment of £13,307.89 "said balance payable by instalments of £2,000 per annum the first payment being due within 12 months of the date hereof with interest at the rate of 8 per cent per annum on said capital sum from the time the same falls due until payment". The reference here to interest "on said capital sum" suggests that the interest is to be paid on the whole of the capital sum outstanding from time to time rather on each individual instalment from the date upon which it becomes due until payment. On the other hand the words "from the time the same falls due" suggest that the sheriff had in mind some future date upon which interest should become payable rather than the date of decree itself. If he had meant the date of decree he could simply have said "from the date hereof" rather than "from the time the same falls due". Moreover, it is not clear here whether the expression "the same" refers to the capital sum or to each instalment of £2,000. In his mixed finding in fact and in law 8 the sheriff found that it was "reasonable that interest be paid on the balance outstanding until full settlement has been made". Given the context of this particular finding, coming as it does after a finding that the defender had dissipated the matrimonial assets, it may well be said that the sheriff's view here was that interest should be paid on the whole balance of the capital sum outstanding from time to time rather than on individual instalments. Unfortunately the sheriff does not deal explicitly with this particular issue in the section of his note headed "Decision of the Court". But at page 19 he gives as one reason for awarding the pursuer a periodical allowance for an extended period the fact that the pursuer "would not receive her full share of the capital". I take it that what the sheriff is referring to here is the fact that the defender has no current resources from which to make payment now of the capital sum of £13,307.89 with the result that this will have to be paid by annual instalments of £2,000 per annum. If this is correct, and if the sheriff had intended that interest should be paid on the whole balance of the capital sum outstanding from time to time, then it may be said to be somewhat inequitable that the fact that this capital sum will in fact have to be paid by instalments should also afford a reason for awarding a periodical allowance to the pursuer. Moreover, on page 20 of his judgement the sheriff observes that the defender "will require to pay £1,100 to the pursuer each month and an additional £2,000 per annum in instalments but I do not consider these figures to be beyond his means when the benefits he receives are added to his monthly salary". If interest is to be paid on the whole balance of the capital sum outstanding from time to time, then in the first year alone this will amount to £1,064.63, and in the second £904.63 (being 8% of £13,307.89 and £11,307.89 respectively). These are not insignificant sums and it might be thought that the sheriff would have mentioned them in this context if he had intended that interest should be paid on the whole balance of the capital sum rather than on individual instalments.

It is unfortunate that the situation should have been left in this state of uncertainty. In the circumstances I am persuaded that I may properly interfere with the sheriff's decision in this respect in order to put the matter beyond doubt. Given that the sheriff had in mind as one reason for awarding a periodical allowance to the pursuer the fact that the capital sum of £13,307.89 would have to be paid by instalments, I consider that it is wrong that the defender should in effect be doubly penalised by having in addition to pay interest on the whole balance outstanding from time to time until payment has been made in full. I have therefore deleted the final sentence in the sheriff's mixed finding 8 and have amended the operative part of his interlocutor to make it clear that interest will be payable only on each instalment of £2,000 (or £1,307.89 as the case may be) from the date upon it becomes due until it is paid.

The third ground of appeal reads:

The sheriff erred, bearing in mind the defender's needs and resources, in making an award of a capital sum of transfer after certain assets payable by instalments in the sum of £2,000 per annum.

The defender's solicitor drew attention to the sheriff's mixed finding in fact and in law 12 and submitted that upon the basis that the defender had been ordered to pay aliment for Jordan at the rate of £400 per month and a periodical allowance for the pursuer of £700 per month the sheriff's order that he should pay the capital sum by annual instalments of £2,000 (approximately £180 per month) was excessive given the defender's needs and resources and the fact that he was currently maintaining his partner Miranda Ross and her two children. It was submitted that the sheriff should have ordered the capital sum to be paid by instalments of no more than £1,000 per annum.

In my opinion there is again no substance in these submissions. It was for the sheriff in the exercise of his discretion to determine the amount of these instalments and I am quite unable to say that he erred in this context.

The fifth and final ground of appeal reads:

The sheriff erred in not holding that it (sic) was satisfied that an order for payment of a capital sum and/or for transfer of property would be insufficient to satisfy the requirements of section 8(2) of the said Act.

The defender's solicitor drew attention here to the terms of section 13(2)(b) of the Act to which I have already referred. He pointed out that the sheriff had not made an express finding in fact and in law to the effect that he considered that payment by the defender to the pursuer of a capital sum would be insufficient to satisfy the requirements of section 8(2) and he submitted that, having failed to consider the terms of section 13(2)(b), the sheriff had not been entitled to order payment by the defender to the pursuer of a periodical allowance.

It is true that the sheriff did not refer to section 13(2)(b) in any of his findings in fact and in law. Arguably it would have been better if he had done so, if only to counter the possibility of a submission such as has been made by the defender in this case. But in my opinion the omission is not fatal so long as it is clear from the rest of his judgement, as indeed it is, that the sheriff gave proper consideration to the terms of section 13(2)(b). As the pursuer's solicitor pointed out, there are repeated references in the sheriff's judgement to this particular issue. Almost the first thing he did in the operative part of his interlocutor was to sustain the third plea-in-law for the pursuer and repel, inter alia, the second plea-in-law for the defender, and it will be observed that both these pleas-in-law refer to the sufficiency of an order for payment of a capital sum to satisfy the requirements of section 8(2) of the Act. Then at pages 16 and 18 of his judgement, in summarising the submissions for the pursuer and the defender respectively, the sheriff specifically refers to section 13(2)(b) and the sufficiency of an order for payment of a capital sum. Finally, as already indicated, at the foot of page 19 the sheriff gave as one reason for awarding a periodical allowance to the pursuer the fact that she "would not receive her full share of the capital". It seems to me to be implicit in this that the sheriff was indeed of the opinion that the order which he had made for payment of a capital sum would be insufficient to satisfy the requirements of section 8(2).

In his reply to the submissions of the pursuer's solicitor, the defender's solicitor presented, without opposition from the former, a further argument to the effect that in his mixed finding in fact and law 6 the sheriff had not found as required by section 9(1)(e) of the Act that the pursuer was likely to suffer serious financial hardship as a result of the divorce. The sheriff, said the defender's solicitor, had referred to the likely effect upon the pursuer of not receiving a periodical allowance and also to her ill-health. He had thus based his decision to award a periodical allowance to her for a period of six years on the fact of her ill-health rather than the fact that she was likely to suffer serious financial hardship as a result of the divorce. He had accordingly fallen into error with the result that he ought not to have awarded a periodical allowance for more than three years as permitted by section 9(1)(d) of the Act.

In response, the pursuer's solicitor submitted that it was not the pursuer's medical condition which would cause her serious financial hardship following the divorce, but the fact of the divorce itself. Had she remained married to the pursuer she would not in any event have been able to work on account of her medical condition. Moreover, at page 16 of his judgement the sheriff had specifically mentioned a submission for the pursuer to the effect that section 9(1)(e) applied in the present case in that her "health problems make her even more dependent and serious financial hardship would be caused to both her and the child if she was not to have the support of the defender financially".

It is true that the sheriff did not make a specific finding to the effect that at the time of the divorce the pursuer seemed likely to suffer serious financial hardship as a result of the divorce. On the other hand, in addition to rehearsing the submission for the pursuer to which I was referred by her solicitor, the sheriff expressly sustained her third plea-in-law which asserts, inter alia, that an order for payment of a periodical allowance would be justified by the principle set forth in section 9(1)(e) of the Act. It is hard to believe that the sheriff should have done this if he was not satisfied that the principle set out in section 9(1)(e) applied in the present case. Besides, he clearly had in mind the differences between the principles set out in section 9(1)(d) and (e) respectively when he wrote at page 20 of his judgement:

I consider that an award (of a periodical allowance) is justified beyond the period of three years. Having regard to the age, health and the fact that the pursuer will not be able to earn, the duration of the marriage, the standard of living of the parties during the marriage, the needs and resources of the parties, and all the circumstances of the case, I am satisfied that a periodical allowance should be paid for a period of six years. I appreciate that such an award is only made in exceptional circumstances but I consider that the illness of the pursuer and her total inability to work justifies such an award. I was not prepared to make the periodical allowance payable until death or remarriage because of the age of the pursuer and the short duration of the marriage. A period of six years should enable the pursuer to provide for her child until he has reached virtual independence.

It seems to me to be implicit in this passage that the sheriff must have had in mind the terms of section 9(1)(e) and the effect upon the pursuer's financial position of granting decree of divorce. Thus he specifically referred to "the age, health and the fact that the pursuer will not be able to earn, the duration of the marriage, the standard of living of the parties during the marriage, the needs and resources of the parties, and all the circumstances of the case" which were the very matters to which he was directed to have regard by section 11(5) for the purposes of section 9(1)(e). One could wish that he had specifically found that at the time of the divorce the pursuer seemed likely to suffer serious financial hardship as a result of the divorce. He did not do so, but on balance I think that he must nonetheless have been satisfied on this point. In any event, it seems to me to be perfectly clear as a matter of fact that, given in particular her medical condition and her inability to secure employment, the pursuer will indeed suffer serious financial hardship as a result of the divorce since she will lose the support to which she has hitherto been entitled as the defender's wife.

At the conclusion of the hearing of the appeal the parties' solicitors agreed that expenses should follow success. The pursuer has been very largely successful in resisting the defender's appeal. But he has not been entirely unsuccessful in that I have made some small changes to the sheriff's interlocutor. In these circumstances I think that I ought to give parties an opportunity to be heard on the question of expenses.