Scottish Sheriff Court Decisions

1. The pursuer is 47 years of age, lives at 110/112 Fod Street, Halbeath, Dunfermline, and is unable to work through disability after an accident in 1998 at her former employment at a school.

2. The defender is 50 years of age, lives at 35 Longstone Gardens, Edinburgh, and has been employed since February 1979 as a Prison Officer in the Scottish Prison Service.

3. The pursuer was habitually resident in Scotland for more than one year immediately preceding the raising of this action. She had resided within the Sheriffdom of Lothian and Borders for a period in excess of forty days immediately preceding the raising of this action. This Court accordingly has jurisdiction. The pursuer was unaware of any other proceedings continuing in Scotland or elsewhere in respect of the marriage or capable of affecting its validity or subsistence.

4. The pursuer and defender were married on 24 March 1979.

5. The pursuer and defender met while both were in the Army, but both left prior to their marriage, the defender joining the Scottish Prison Service on 5 February 1979.

6. The matrimonial home was 35 Longstone Gardens, aforesaid.

7. One child was born to the pursuer and defender on 11 March 1980 - a daughter, Michelle Anne Weir.

8. Relations between the pursuer and defender deteriorated until they separated on 17 January 1994 ("the relevant date"), since when they have neither lived together, nor had marital relations.

9. The marriage has broken down irretrievably and there is no prospect of a reconciliation.

10.1 Close to the time when the pursuer and defender separated, their daughter, Michelle, who was then between 13 and 14 years of age, was consulted by them as to with which parent she wished to live.

10.2 Said Michelle chose to live with the defender and, in accordance with what the pursuer and defender had themselves agreed (namely that the parent not chosen by Michelle would move out of the matrimonial home), she and the defender stayed on in the matrimonial home along with all of its contents and the pursuer moved out, taking only her own clothes and personal effects.

10.3 The pursuer has not stayed at the former matrimonial home since 17 January 1994.

10.4 After 17 January 1994, the defender and said Michelle continued to live at the said former matrimonial home until Michelle married in February 2004 when she moved to live with her husband in their own accommodation, which is a small flat.

10.5. Since February 2004, the defender lives alone at said former matrimonial home.

10.6 The defender's long-term intention was to give the former matrimonial home to Michelle and her husband for them to live in and for them to give their flat in exchange to the defender for him to live in.

10.7 If the defender is forced to sell the matrimonial home, he will do so but would prefer to gift it to his daughter, Michelle.

11.1 The pursuer and defender took the opportunity of a 44% incentive discount offered in 1987 to purchase the "tied" Scottish Prison Service accommodation in which they lived at 35 Longstone Gardens aforesaid.

11.2 Although the pursuer and defender are joint owners of said property the mortgage interest payments and the associated endowment assurance policy premiums have been paid by the defender since parties separated.

11.3 Said property is a house on two floors comprising living room/dining room, kitchen, bathroom and three bedrooms, along with garden to front and rear.

11.4 The pursuer understood that, in the light of the separation arrangements, the said former matrimonial home would not be marketed or sold as long as the said daughter Michelle was under full-time education; whereas the defender proceeded on the basis that, as Michelle was their only child, the said home was basically Michelle's and, as long as she lived there, she could have it.

11.5 Michelle was sixteen years of age on 11 March 1996, concluded her full-time education when she left school in the Summer of 1996, and was in employment thereafter.

12.1 The pursuer had worked full-time as a telephonist in the Army for a period of approximately 31/2 years.

12.2 About the time of the marriage in March 1979, the pursuer left the Army and worked as a civilian until she stopped work because she was expecting Michelle, who was born on 11 March 1980.

12.3 The pursuer remained at home as a full-time wife and mother until Michelle began nursery in about 1983, when the pursuer worked as a telephonist at the Caledonian Hotel on the equivalent of a full-time basis for approximately one year.

12.4 In order to fit in with Michelle's nursery and school hours, the pursuer worked part-time (approximately 15 hours per week) as a school crossing patrol between 1983 and 1987. Between 1987 and 1999, the pursuer worked part-time (approximately 20 hours per week) as a school auxiliary, initially to fit in with Michelle's school hours and holidays.

12.5 While the pursuer was in paid employment, her earnings (and those of the defender) were paid into a joint Trustee Savings Bank Account from which the mortgage and other household payments were made.

12.6 After parties separated in 1994, the pursuer continued the work as a school auxiliary because there was a possibility (which did not come to pass) of an amalgamation of schools with the likelihood of additional hours of work.

12.7 In 1998, the pursuer was involved in an accident while working at school and, as a result of the injuries which she sustained, has since then been medically unfit for work.

12.8 The pursuer suffers from complex regional pain syndrome in her right arm, receives long-term medication, and is unable to carry out many household tasks.

12.9 Since 1999, the pursuer has been in receipt of Incapacity Benefit, Industrial Injury Benefit and Disability Living Allowance.

12.10 The pursuer has no pension provision.

13.1 When parties separated, the pursuer lived initially in lodgings and then in rented accommodation which she had to furnish, and in respect of which she had her own housing costs.

13.2 The pursuer has continued to live in rented accommodation and does not own any heritable property.

14. In or about 1991, the pursuer inherited the sum of £3,835.26 from her grand-mother. This sum was placed in the bank account from which purchases were made for the household, including the purchase of a carpet for the matrimonial home.

15.1 The defender served in the Army for some six or seven years from entry as a Cadet until October 1978.

15.2 The defender joined the Scottish Prison Service on 5 February 1979 and is still employed as a Prison Officer, currently earning £24,250.00 per annum,

15.3 The defender's pension with the Scottish Prison Service had a cash equivalent value at the relevant date (17 January 1994) of £42,588.42.

15.4 The defender expects to retire at the age of 55 years (which he will be on 24 October 2009) with a projected pension comprising a lump sum of approximately £34,000.00 and monthly payments amounting to approximately £11,350.00 per annum.

15.5 Retirement for the defender is required at age 55 years and, although the defender could be asked by his employers to stay on, on a year by year basis, this is not guaranteed and depends on whether a position is available.

16.1 The value of the matrimonial home at the relevant date was £52,500.00 and at the present time is £135,000.00.

16.2 The mortgage over the matrimonial home is with Lloyds TSB Homeloans Ltd, Account No: 8770017601885; at the relevant date, the amount was £34,946.85, whereas the current figure is £34,547.54.

16.3 There are two Abbey Life Endowment Policies associated with the mortgage, namely policies numbers 6707256G and 6715321I, which had surrender values at the relevant date of £2,362.31 and £878.81 and at the present time are valued at £7,446.13 and £5,247.25.

16.4 Since the relevant date, the defender has paid £28,039.23 in respect of mortgage interest payments but, on or about 30 November 2001, the defender received a cash gift in respect of the mortgage of £1,727.00 and it is appropriate to deduct that sum from the total mortgage interest payments, leaving a net total of mortgage interest payments of (£28,039.23-£1,727.00) £26,312.23. In addition, the defender has paid £9,256.95 (£4,688.55+£4,568.40) in respect of premiums on the Abbey Life Policies. The net total of these payments made by the defender amounts to £35,569.18, one half of which amounts to £17,784.59.

17.1 The other matrimonial assets at the relevant date consisted of

17.2 The value of Policy No: 12947743 was received by the pursuer; while the value of Policies Nos: 12947750 and 1467598 and the house contents were received by the defender.

18.1 The matrimonial debts at the relevant date consisted of:

18.2 The indebtedness to the Masterloan and the two Barclaycard Accounts was settled by the defender, while the indebtedness to Mr Colin Humphrey was settled by the pursuer.

FINDS IN FACT AND IN LAW:

1. This is an action of divorce in which ultimately the merits of the grounds of divorce were not opposed by the defender and the main issue was whether the former matrimonial home should be the subject of an order for sale, as craved by the pursuer; or whether the title should be transferred to the defender in exchange for a payment of one-half of the net value as at the relevant date, as craved by the defender.

2. I heard evidence on 7 March and 7 April 2005 (followed by submissions on 7 and 27 April) from, on behalf of the pursuer, the pursuer herself and her friend, Mrs Esther A Weir and, on behalf of the defender, only from the defender himself. I found the pursuer and her friend, Mrs Weir, to be straightforward, frank witnesses and I had no hesitation in assessing them as credible and reliable; and I was prepared to make findings based upon their evidence.

As regards the defender, I have already set out in my earlier Judgment my assessment of his credibility and reliability in that regard. At this later stage, there was little factual dispute between the parties and I had no reason not to make findings based upon his evidence.

3. In the light of the unchallenged evidence of the pursuer and her friend, I had no difficulty in accepting that the marriage has broken down irretrievably as established by the parties' non-cohabitation for a period exceeding five years and that there is no prospect of a reconciliation. I accordingly grant decree of divorce.

4.1. The matrimonial property which I was invited to consider was the subject of two Joint Minutes of Admission (Nos. 17 and 18 of process) and involved the matrimonial home, over which there was an outstanding mortgage and associated with which there were two endowment assurance policies, the defender's pension, the house contents and three insurance policies which were effective at the relevant date although all have since been surrendered. There were also matrimonial debts.

4.2 The defender's pension was valued at £42,588.42 and the value of the matrimonial home at the relevant date was £52,500.00 and at today's date was £135,000.00 (an increase of 157%); and the division of these items is what is at issue here.

5. In his submissions, Mr Thorley, the solicitor for the pursuer, drew attention to the provisions of sections 8, 9, 10, 11 and 14 of the Family Law (Scotland) Act 1985. He noted that section 8 dealt with the orders which could be sought and which could include one or more of a capital sum, the transfer of property, a periodical allowance or an incidental order. In this case, he noted that the pursuer was seeking a capital sum and an incidental order for the sale of the former matrimonial home.

6. Mr Thorley noted that section 8 also made reference to the making of a Pension Sharing Order. This was an action raised prior to Pension Sharing Orders being introduced by legislation and accordingly, this action dealt with the former provision of Earmarking Orders. He said that it was for those reasons that the pursuer did not seek an Earmarking Order with which there were recognised difficulties. In this case the pursuer sought an Order of Capital Payment in relation to the Pension of the defender.

7. Mr Thorley noted that the orders for financial provision required to be justified by the principles in section 9(1), noting that this section provided the cornerstone for further steps. The matrimonial property required, in terms of section 10, to be shared fairly and that property would be taken to be shared fairly when it was shared equally or in such other proportion as was justified by the special circumstances set out in section 10(6).

He noted that the remainder of section 9 introduced further provisions to take account of various circumstances in order to achieve fair sharing. A balancing act was required taking account of section 9(1)(b) to (e), 9(2) and 11(2) in order to allow the Court to find a fair share for division between the parties.

8.2. In the light of the facts and circumstances of the present case, Mr Thorley submitted that the defender was in a relatively better position than the pursuer in terms of resources. The defender is in full-time employment with a pension, is living in a purchased house and can look forward to retirement. The pursuer was not in a position to work, had no pension and was living in rented accommodation.

It was important to consider the resources of the parties as any order for financial provision required, in terms of section 8(2)(b) to be reasonable having regard to the resources of the parties. He submitted that this was particularly relevant when considering the order sought for sale of the matrimonial home. At the present time, the pursuer was not in a position to obtain any mortgage since she did not work. He submitted that the defender, following the sale of the property, could still have capital available to him which would allow him to purchase another property assisted by way of mortgage.

8.3 Noting that the pursuer here was seeking an order for sale, Mr Thorley also noted that it was not disputed that the pursuer had not lived in the property since the date of separation. Equally it was not disputed that the pursuer had made no contribution financially towards the matrimonial home since her departure. Her position was clearly that she had not then been in a position to do so.

There had been a considerable increase in the value of the matrimonial home since parties separated. He also noted that the defender did not agree to divorce until the parties' separation of five years had elapsed and had thereafter relied upon a Minute of Agreement to seek to prevent sale. The pursuer now sought an order for the sale of the jointly owned matrimonial home and, specifically, the case of McCaskill was referred to.

9. Mr Thorley noted that the defender sought transfer of the title of the property into his name. He sought that order under section 8(1)(aa) of the 1985 Act. In order for him to obtain such an order, Mr Thorley submitted that the defender likewise had to satisfy the Court that the order was justified by the principles set out in section 9 of the said Act and reasonable having regard to the resources of the parties. He noted that the defender had not set out any case under section 9 aside from section 9(1)(a). His averments substantially in Answer 8 related to the Minute of Agreement which had been set aside in relation to the sale of the property. Mr Thorley noted that the pleadings of the defender in Answer 8 continued that "the defender requires to continue to reside in the former matrimonial home to provide a base for said child". The child was now 25 years of age and no longer resided in the property. On that basis, there did not appear to Mr Thorley to be any reasons set out by the defender why transfer in terms of sections 8, 9 and 10 of the Act should in fact take place. It did not appear to be suggested that, in terms of section 10(1) and 10(6) of the Act, that there were any special circumstances upon which the defender relied.

Taking into account the decision of the Court on 28 November 2002, and the subsequent departure of Michelle, it was difficult to know what reasons the defender was in fact setting out to justify that the property should not be sold.

10. Mr Thorley submitted that, as in the case of McCaskill, it was clearly appropriate to examine the two options offered by the parties in their pleadings and for the Court to decide which would achieve a fair and practical result in accordance with common sense. Again in terms of the case of McCaskill, it was important to note that the parties were the pro indiviso proprietors of the property. On the ordinary principles of the common law of property, any increase in the value of jointly owned property enured to the benefit of all joint owners. He submitted that the option sought by the pursuer in this case to obtain sale of the property would mean that the free proceeds of sale would be shared between the parties at the relevant date - and that would satisfy the requirements of section 8(2)(a), 9(1)(a) and 10(1 to 4) of the Act. Secondly, the surplus over that value would also be shared between them - which would be in accordance with the principles of common law. Mr Thorley submitted that, in the circumstances applicable here, the defender's option to seek transfer would "scarcely be appropriate". In terms of the case of McCaskill, "it could not be reasonably described as fair, practical and in accordance with common sense. It would be so inequitable that no reasonable Sheriff, properly exercising his discretion, could conceivably make such an Order".

In all the circumstances, the pursuer sought sale of the property.

11. Thereafter, as regards a division of the proceeds of sale, Mr Thorley submitted that it was a matter for the Court as to whether the pursuer had made out a case in terms of section 9(1)(b) of the Act. He submitted that she had suffered economic disadvantage as a result of the marriage. She had given up her career in the Army, had obtained part-time posts following upon the birth of the parties' child, and was now unable to work on a full-time basis. Contrasting that situation with that of the defender, he had worked full-time throughout the course of the marriage, had advanced his career and had increased his pension rights. In terms of the case of Little -v- Little, 1990 SLT 785; 1991 SCLR 47, it was a matter for the discretion of the Court in each case. It could be suggested that in the circumstances in which the pursuer had had no assets provided to her since the parties separated and taking into account the principles of sections 9(1)(a) and (b) of the Act, a 60/40 division of the net free proceeds of sale of the property in her favour would be appropriate. Mr Thorley did, however, accept that applying the common law of property would result in an equal division. Mr Thorley also accepted that the pursuer would require to reimburse the defender in respect of payments which he had made since the relevant date in respect of the mortgage interest and related assurance premiums.

12.1 As regards the capital sum craved, Mr Thorley explained that, principally, this related to the defender's pension. When these proceedings had been raised, they were raised prior to the coming into effect of "Pension Sharing Orders". The application was made for divorce at the time of "Earmarking" Orders which were generally accepted now by Actuaries as not being particularly desirable. One of the particular reasons for this was that the Court, in making such an Order, earmarked a certain amount of capital to be paid at the time when the party entitled to the pension actually obtained the pension. The difficulty was that it became apparent that persons who were entitled to pension rights might or indeed could reduce the amount of lump sum payment that they were to receive in order to receive increased pension payments, which essentially prevented the Earmarking Order from working.

In this case, on the basis of a sale of the property, there would be capital available. In these circumstances, the pursuer sought the benefit of a capital payment at this stage. Mr Thorley noted with interest that, in the case of McCaskill, the defender had had a pension also and the Sheriff there had ordered that the defender make a payment of capital as opposed to any form of Pension Order. In this case, the pursuer sought, after sale, an Order for payment of Capital. He also kept in mind that the pension figure provided was in fact a relevant date value and no doubt the pension itself had increased in value substantially since that date.

12.2 Mr Thorley noted that there were of course certain other assets and liabilities which required to be taken into account and in respect of which the pursuer had produced calculations showing what she believed she would be entitled to in terms of capital payment.

Regarding the calculations produced, Mr Thorley referred to the sum of £3,835.26 inherited by the pursuer and, whereas the pursuer had initially sought to have the value of it added back to her (in terms of section 10(4) of the 1985 Act), he accepted that it could be treated as a payment which had simply been put into the common pot for expenditure on household contents and purposes.

Again, for the reasons explained earlier, the pursuer sought to obtain a 60/40% sharing of the capital assets, again based upon the principles set out in terms of sections 9(1)(a) and (b) of the 1985 Act.

13. As regards interest, Mr Thorley noted that, in terms of section 14(2)(j) of the 1985 Act, the Court could make an Incidental Order as to the date from which interest on any amount awarded should run. He submitted that this would be appropriate in relation to an Order for payment of a capital sum in terms of crave 4. In this case, the principal asset referred to was the pension of the defender. Mr Thorley submitted that, if the pursuer had obtained a capital sum at the date of the separation, she could have invested that and would therefore have been in a better position than at present. Mr Thorley accepted that the Court might take the view that interest could run from the date of citation in this case, although it would not be appropriate to order any interest to run from before then. He accepted that it was a matter for the discretion of the Court as to the choice of date from which any interest should run. He submitted that an appropriate date could be the date of citation.

14. As regards the question of expenses, this would be the subject of submissions later.

15. For the defender, Miss Wilkie submitted that the issues between the parties in this case could be summarised as:-

In terms of section 10 of the said Act of 1985, "the net value of the matrimonial property shall be taken to be shared fairly between the parties to the marriage where it is shared equally or in such other proportion as are justified by special circumstances". She submitted that the position of the defender was that the matrimonial property should be shared equally, since there were no circumstances to justify a departure from the general principle of equal division, whereas the pursuer had sought to argue that there were special circumstances justifying a departure. The question of whether special circumstances existed was relevant in assessing if the property should be divided equally and whether the value of the matrimonial home should be assessed as at the relevant date or at the present day value.

16. Miss Wilkie noted that, in the case of Little -v- Little already referred to, the Inner House had allowed the Judge at First Instance to use his discretion to treat certain items of matrimonial property differently than others. The Court had also advocated the principle of allowing judicial discretion to achieve a fair and practical result in accordance with common sense.

She noted that it was a matter of agreement between the parties in this case that the pursuer had left the matrimonial home on the relevant date and had subsequently not made any payments towards the mortgage, linked endowment policies, building insurance or aliment for the parties' daughter who had been thirteen years of age at the relevant date. She submitted that the pursuer had not made any such payments since then despite acknowledging in her evidence that she was liable for a one half share of these payments. Evidence had been led in Court that the pursuer had given up working for a short time during Michelle's infancy but had subsequently returned to work on a part-time basis. Thereafter, the pursuer had made no effort to obtain full-time work, or to re-train following the parties' separation and her income on a pro rata basis, had been similar to that which she had received before her marriage. The pursuer had not demonstrated that she had lost the chance of a career and there was no satisfactory evidence about any Army pension scheme which the pursuer might have taken up. The pursuer had given up working for a short time while the child Michelle was a toddler before returning to work as a telephonist at the Caledonian Hotel. Thereafter, the pursuer had said in evidence that she had been forced to give up her career as a Telephonist in any event a few years later due to finding nodules on her throat. Accordingly, Miss Wilkie submitted that any pension which the pursuer might have taken up would have been minimal due to her career change forced by medical circumstances and her subsequent decision to work on a part-time basis only. Miss Wilkie submitted that although the defender had a work pension scheme the value of which at the relevant date was matrimonial property, the pursuer would benefit from the contributions made before the relevant date.

Miss Wilkie accordingly submitted that there was no justification based upon the evidence led for the pursuer to receive any more than a 50% share of the matrimonial property.

17. Miss Wilkie noted that it had been agreed that the matrimonial home had risen in value since the relevant date over eleven years' previously. The defender's position was that the pursuer should be entitled to the value of the property as at the relevant date but should not be entitled to any uplift in value. Miss Wilkie noted that the leading decision on this aspect remained that of the House of Lords in Wallis -v- Wallis, 1993 SLT 1348. In his Decision in that case, Lord Keith of Kinkel had said (at page 1351G) that:

"There can be no doubt that for the purposes of the division contemplated by section 9(1)(a) the matrimonial property is to be valued as at the relevant date and in the absence of special circumstances the net value as at that date is to be divided equally between the parties. It is clear, moreover, that the Act does nothing to address directly the problems which may arise where some item of matrimonial property has increased or fallen in value since the relevant date, although some of these problems may be capable of being resolved by application of section 8(2)(b)."

She noted that Lord Keith continued (at page 1351K-L):

Although the case of Wallis related to a property in the sole name of one party, Miss Wilkie noted that Lord Keith had considered it irrelevant whether the property was owned by one party or jointly as in this case. Finally, Lord Keith had stated (at page 1352C):

18. Miss Wilkie noted that in this case the parties agreed that the pursuer had not lived in the matrimonial home since the relevant date, neither had she sought to exercise any rights to occupy. In addition the pursuer had made no payments towards the funding or upkeep of the property since that date. When the case had first called before the Court in November 2002, the pursuer had expressed that she was not seeking to recover any uplift in value from the relevant date. Her position in this regard had now changed, although her financial circumstances had not. The defender had lived in the property since around 1985 when the property had been purchased as part of a "tied" agreement in relation to his employment with the Scottish Prison Service. The pursuer had benefited at that time from a discount on the purchase price as a result of the defender's employment. The defender had maintained the property since the relevant date. Accordingly Miss Wilkie submitted that there were no special circumstances applicable to the pursuer in terms of section 10(1) of the 1985 Act to justify a departure from the principle of equal sharing as fair sharing. If there were any special circumstances in this case, it was that there was an Agreement in place which had subsequently been set aside, to the effect that the defender reasonably believed that he was not able to purchase the matrimonial home from the pursuer until the parties' daughter left the matrimonial home. This should entitle the defender, as the party who had suffered the greater burden of economic loss as the result of this mistaken belief to claim that this was a special circumstance and was therefore entitled to a greater than 50% share of the matrimonial property. But the defender did not seek this. The circumstances of this case were such that both parties had suffered financial burdens following the relevant date in roughly equal measure. The defender had been left with the responsibility of caring for and supporting Michelle alone along with the upkeep of the house. The pursuer had required to establish a new home.

19. Miss Wilkie submitted that if the pursuer's position was that there were special circumstances, then the principles of section 9 of the 1985 Act should be applied. In particular she submitted that account should be taken of the economic advantage derived from the pursuer through her relief from payment of the mortgage and associated endowment policies. The parties had been advised that the endowment policies tied to the mortgage over the property were very likely to under-perform and that there would be a shortfall in these. Accordingly, the endowment policies would not yield a large enough payment on maturity to pay off the present mortgage. The defender had been unable to re-mortgage at a preferential rate due to the joint ownership of the property to which he believed the Agreement of the parties had tied him. He had contributed to the endowment policies since the date of separation on behalf of himself and the pursuer as this was a condition of the mortgage. The contribution of the defender was not reflected in the value of the policies and for this, he would shoulder the loss. Much as the decision in the case of Wallis had not allowed an uplift by the pursuer in the value of the matrimonial home, neither would it allow the defender to recover from the pursuer in this respect. Miss Wilkie submitted that the same principles should apply across the board. The defender would suffer financial loss as a result of this and also having shouldered the economic burden of caring for the child under sixteen years of age for the first two years following the relevant date. The defender had received no payment of aliment from the pursuer in this respect. [Miss Wilkie accepted that there were no pleadings as regards the need for any balancing payment arising out of the economic burden of caring for the child under sixteen years; but she submitted that that fact could be balanced against any perceived economic disadvantage suffered by the pursuer.]

20. Miss Wilkie noted that the pursuer had made reference to the case of Quinn -v- Quinn, 2003 SLT 5 and the decision by the Sheriff there that he should make an order for the sale of the house because there was no other way that the pursuer could receive a fair share of the matrimonial property. In the present case, the defender had been provisionally offered a further loan of £35,000.00 by his bank should he wish to re-mortgage. The bank had also indicated that they would be content for the security to be taken in the name of the defender alone. This would mean that the defender could make a capital payment of up to £35,000.00 to the pursuer along with relieving her of any further obligations in respect of the mortgage for the property. In total, this would effectively mean that the defender was in a position to give the pursuer matrimonial property of approximately £52,273.77. As the pursuer should properly only be entitled to one half of the value of the matrimonial property as at the relevant date, the defender would only be obliged to make payment of matrimonial property worth approximately £32,195.40. As the defender was able to meet this payment, it would not be equitable to require the division and sale of the house as the pursuer would receive her due payment while allowing a transfer of the property.

21. Miss Wilkie submitted that, in fact, the circumstances of the parties had some parallels to the Outer House case of Welsh -v- Welsh, 1994 SLT 829. In that case, the wife had given up work voluntarily to look after the children; in this case, the pursuer had given up work for a time during Michelle's infancy before returning to work on a part-time basis. In the case of Welsh, the husband had been working full-time and therefore had contributed more income to the household, had remained in and had continued to pay for the upkeep of the matrimonial home after the date of separation. The circumstances were similar to the present case in that respect also. In the case of Welsh, the Court had found that there were no special circumstances justifying an unequal division of the matrimonial property as at the relevant date in relation to the increase in value from the relevant date to the date of divorce, the Court had awarded interest on the wife's share of the matrimonial property for this period. The application of this finding would have the effect of balancing the economic advantage sustained by the defender in keeping the matrimonial property with the economic disadvantage suffered by the pursuer in losing her share of the property, bearing in mind that the pursuer had not made any contribution to the upkeep of the home in the meantime. The section 9 principles would be allowed and a fair division of the matrimonial property would be achieved.

22. Despite the similarities between the present case and the case of McCaskill and the decision by the Sheriff Principal in that case, Miss Wilkie submitted that the approach by the Sheriff Principal could be distinguished on the facts. She submitted that if the pursuer's order was granted and section 9 principles were then considered, it was clear that the defender, who had been making payment of the pursuer's share of the mortgage and associated endowment policies for the past eleven years, would suffer economic disadvantage far in excess of that suffered by the pursuer since the relevant date. She submitted that the approach adopted by the Outer House in the case of Welsh followed a similar methodology but the result was far more appropriate in the circumstances.

23. Finally, Miss Wilkie submitted that the division suggested by the defender of the matrimonial property was a fair and practicable one and accordingly, on behalf of the defender, she moved the Court to award an equal division of all matrimonial property as at the relevant date, with the defender granted a Property Transfer Order as craved on payment of the sum of £32,195.40 to the pursuer. If the Court was of the opinion that this would produce an inequitable result, then an award of interest on the pursuer's share of the matrimonial property in terms of the case of Welsh would be sufficient to redress the balance.

24. In a brief response in connection with the case of Welsh which had been referred to by Miss Wilkie, Mr Thorley submitted that it was a very different case from the present and had been decided in November 1993. In the case of Welsh, the wife/pursuer was willing and conceded that the husband/defender should continue to live at the former matrimonial home and the issue had been whether there was some other way to redress the imbalance created by the increase in value of that house. In addition, the wife/pursuer had, after separating, purchased another property along with a new partner. Since the case was so different, Mr Thorley submitted that it was of no assistance and, in any event, the Sheriff Principal in the case of McCaskill had reviewed the main authorities, some of which post-dated the single Judge decision in the case of Welsh.

[I can record at this stage that my view of the case of Welsh entirely coincided with the submissions made by Mr Thorley. For the reasons which he gave I did not find the case to be of assistance and in particular I considered that it had in many respects been overtaken by later decisions.]

25. I have set out in some detail the submissions which I heard since they were central to my decision in this case. Having reached the conclusions which I did as to credibility and reliability set out in paragraph 2 above, I was satisfied that it was not only necessary but wholly appropriate for me to follow the approach set out by Sheriff Principal Macphail in the case of McCaskill to the making of financial orders in such a case as this. This means that, in the main in this regard, I have preferred the submissions of Mr Thorley to those of Miss Wilkie, although I was persuaded that Miss Wilkie was correct in her submission when she contended for an equal division.

26. The first task of valuation of the matrimonial property at the relevant date has been done and the net value is contained in findings 16, 17 and 18.

There is no dispute that the net value of the matrimonial property at the relevant date, excluding the house and linked assurance policies, was £44,596.52, and that the net value of the house and linked assurance policies was [£52,500.00 + Abbey Life Policies £2,362.31 + £878.81 = £55,741.12 less mortgage (£34,946.85 less mortgage gift £1,727.00) of £33,219.85] = £22,521.27.

27. The next step is to decide upon the appropriate order or orders for financial provision to be made under section 8. Any such order must be justified by the principles set out in section 9 and must be reasonable having regard to the resources (as defined in section 27(1)) of the parties - as required by section 8(2). The Court's approach to its decision is "essentially one of discretion, aimed at achieving a fair and practicable result in accordance with common sense" (per Lord President Hope in the case of Little at page 787C-D; and approved in the case of Jacques by Lord Jauncey of Tullichettle at p 22.

The principle set out in section 9(1)(a) is that the net value of the matrimonial property should be shared "fairly" between the parties. For this purpose section 10(1) provides that "fairly" means "equally" unless some other division is justified by special circumstances. While a number of special circumstances are specified in section 10(6), the words "special circumstances" do not have any technical meaning but refer to any circumstances which are special to the case (per Lord Clyde in the case of Jacques at p 24).

28. In this case, I have to consider how the net value of all of the matrimonial property should be shared between the parties.

29.1. As to the property excluding the house and linked assurance policies, having given careful consideration to the matter in the light of the competing submissions by Mr Thorley and Miss Wilkie, I have concluded that those of Miss Wilkie on this aspect are to be preferred. While it is undoubtedly the case that the pursuer suffered economic disadvantage during the marriage up to the relevant date, I consider that there is force in many of the observations about this made by Miss Wilkie. The pursuer was making an equal contribution to the marriage and this enabled the defender to pursue and progress his career. On the other hand, the defender has been the substantial earner in the marriage and has been able to build up a significant pension entitlement. The parties proceeded during the marriage and up to the relevant date on the basis that finances and resources were shared and dealt with equally, and this is further demonstrated by the pursuer's inheritance in 1991 (finding 14) being placed in the joint household bank account and used for household items. Further, while the defender had the responsibility of providing and caring for the daughter, Michelle, between the relevant date and when she became sixteen years of age and left full-time education, the pursuer had to find and furnish rented accommodation and therefore had her own housing costs.

I am fully persuaded that the economic advantages derived by each party from the contributions of the other and the economic disadvantages suffered by each party in the interests of the other, and of the family, are nicely balanced and that fair account of these would be taken if there was to be equal sharing. I have therefore decided that this property should be divided equally on a 50/50 basis.

29.2. I should add that, in so far as that decision includes the defender's pension valuation, I have accepted Mr Thorley's arguments for this being dealt with as a capital payment rather than an "Earmarking Order". I am satisfied that it would be both appropriate and fair to deal with it in this way and I have proceeded accordingly.

30.1 As to the house and linked assurance policies, just as in the case of McCaskill, the parties in this case are the pro indiviso proprietors of the house to which the assurance policies are fully linked. Accordingly, what I require to do is to examine the two options offered by the parties in their pleadings and decide, in the exercise of a proper judicial discretion, which of them would achieve a fair and practicable result in accordance with common sense (the case of Little). The parties' craves set out two alternative courses for me to follow. I can either make an order for the sale of the house, as craved by the pursuer, or an order transferring the title to the house to the defender, as craved by him. Each course has to be now examined.

30.2 Because of the pro indiviso ownership, on the ordinary principles of the common law of property, any increase in the value of jointly owned property enures to the benefit of all the joint owners.

If I follow the course contended for by Mr Thorley on behalf of the pursuer, I would require to make an order for the sale of the house and divide the net proceeds equally between the parties. In this case, the house is treated as matrimonial property for the purposes of section 9(1)(a). The order is an incidental order in terms of section 14(2)(a) and (k). Such an order is made under section 8(2) linked to section 14(1). It must therefore, in terms of section 8(2)(a), be justified by the principles set out in section 9 and must, in terms of section 8(2)(b), be reasonable having regard to the resources of the parties.

Such an order would secure the following result. First, the free proceeds of the sale would be shared equally between the parties to the extent of the value of the house at the relevant date. That would satisfy the requirements of section 8(2)(a), 9(1)(a) and 10(1) to (4) of the Act. Secondly, the surplus over that value, which will almost certainly arise in view of the increase in value of the house since the relevant date, would also be shared equally between them. That would be in accordance with the principles of the common law, whereby each is entitled to one half of the increase in value.

Such an order would be justified by the principles set out in section 9, and thus satisfy section 8(2)(a).

It would also satisfy section 8(2)(b) by being reasonable having regard to the resources of the parties. It would also have the merit of being fair, practicable, and in accordance with common sense (Little). This is the course commended by the First Division in the case of Jacques at p 331G to 332C.

30.3. The only available alternative to that course on the pleadings in this case is to make an order in terms of section 8(1)(aa) transferring the title to the house to the defender in exchange for a payment by him to the pursuer. The sum to be paid by the defender in terms of his amended pleadings is £32,195.40 but, in detailed calculations which were part of the submissions, this figure emerged as £33,717.29.

It is clear that such an order should be made only if circumstances make it appropriate (case of Wallis per Lord Keith of Kinkel at p 55F-G). I do not consider that it would be appropriate in this case. The value of the house is now £135,000.00, an increase of 157% over £52,500.00, its value at the relevant date. Thus, the present value of each party's one half pro indiviso share is £67,500.00. If I were to make the order sought by the defender, its effect would be that, for a payment of only £33,717.29, he would acquire, and the pursuer would relinquish, her interest in the house for some £33,782.71 less than its market value of £67,500.00. The defender would receive an asset worth £67,500.00 in return for a payment of £33,717.29: an undeserved windfall of some £33,782.71, when his proved expenditure on the house, which he is entitled to ask the Court to consider, had been only £17,784.59.

That would be the result of the application of the case of Wallis, which no doubt would have to be followed if the path of a section 8(1)(aa) order were to be chosen. But there is nothing in the whole circumstances of this case to indicate that that would be an appropriate result. It could not reasonably be described as fair, practicable, and in accordance with common sense. In the words of Sheriff Principal Macphail in the case of McCaskill "it would be so inequitable that no reasonable Sheriff, properly exercising his discretion, could conceivably make such an order". I respectfully agree.

It follows that I agree with Mr Thorley's submissions on transfer and I do not consider that the defender has shown that an order under section 8(1)(aa) of the 1985 Act is justified by the principles set out under section 9 of the Act and reasonable having regard to the resources of the parties.

30.4 Having concluded that, in the whole circumstances here, an order for sale of the house would be appropriate and that, after deduction of the outstanding mortgage (less the proceeds of the Abbey Life Policies associated with the mortgage) and the expenses connected with the marketing and sale, the free proceeds thereof should then be divided equally between the parties, account requires to be taken of the sum of £35,569.18 (finding 16.4) which has been paid by the defender since the relevant date in respect of mortgage interest and assurance policy premiums. The pursuer is due to meet one half of this figure and the sum of £17,784.59 would accordingly require to be deducted from the pursuer's one half share of the net free proceeds of sale. (This deals with Miss Wilkie's submission regarding the economic disadvantage suffered by the defender in having met all of the costs associated with the mortgage interest and linked assurance policy premiums).

31. The question of the date from which interest on the capital sum would run is complicated by the existence of the original Minute of Agreement and this being set aside by the Court on 28 November 2002 in relation to the sale of the matrimonial home. The date of citation would be a possible starting date and could be justified on the basis that the capital sum concerned would not have been in any way related to the Minute of Agreement and its effect on the sale of the house. On the other hand, the setting aside of the Minute of Agreement in relation to the sale of the house would have had a very significant bearing on the situation over all and seems to me to be a fair and reasonable starting point.

I shall accordingly make an Incidental Order in terms of section 14(2)(j) of the 1985 Act ordering interest (on the capital sum of £22,456.86) to run at the rate of 8 per cent per annum from 28 November 2002, being the date of the decision to set aside the Minute of Agreement in relation to the sale of the matrimonial home, until payment.

32.1 In determining the capital sum to deal with the property excluding the house and linked assurance policies, I have arrived at the figure which the defender would require to pay to the pursuer of £22,456.86, based upon the following calculations: /

"JDA"

Thereafter, the question of expenses would be dependent on the outcome of the present stage of the case. Mr Thorley anticipated that, in the event of the pursuer being successful, she would wish to seek an award of expenses.

As I have indicated earlier, I shall hear further submissions on this aspect and I

have therefore appointed the case for a procedural hearing to deal with these and

any other matters associated with the order for sale.

"JDA"