Scottish Sheriff Court Decisions

Sheriffdom of Tayside ,Central and Fife at Kirkcaldy

Judgment of Sheriff K R W Hogg

In the cause

Janet Johnman McLean or Jamieson,

L Avenue, Leven,Fife Pursuer

against

John Rodhouse,

H Road, Kennoway, Fife Defender

Act Miss Herbert

Alt Mr Grieve

Kirkcaldy August 2008

The sheriff having resumed consideration of the cause made the following findings in fact:-

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1.The parties are as designed in the instance and commenced co-habitation sometime in 1976 and continued to so do until they separated in July 2007. They were co-habitants in terms of Section 25 (1)(a) of the Family Law (Scotland) Act 2006.

2. The natural son of the pursuer Kevin was approximately 9 at the start of the co-habitation and was a relevant child in terms of Section28 (9) and (10) of the Family Law (Scotland) Act 2006.

3. When co-habitation started the pursuer moved into the property belonging to the defender at 2 Brenda Close, Banbury. There was a mortgage of unknown value over the property at the start of the co-habitation.

4. 2 Brenda Close was sold in 1982 for £ 35,000. A property at 39 Riley Drive was bought in the name solely of the defender at a price of £32,000. A mortgage was taken over 39 Riley Drive for an unknown sum. Such mortgage was in the name of the defender. The parties co-habited at that address.

5. A mortgage over 2 Brenda Close was redeemed at the time of purchase of 39 Riley Drive . The mortgage was paid off using the proceeds of an endowment policy when 2 Brenda Close was sold. The sum was unknown.

6 . 39 Riley Drive was sold in July 2000 for £95,000. The defender repaid a mortgage of £33.085 outstanding over the property. Production 6/ 1 was a document showing the redemption figure for the mortgage.

7. The defender then purchased a property at 5 Larchfield , Methil in his sole name for £41,000.No mortgage was taken on that property and the parties co-habited at that address .

8. 5 Larchfield was sold in 2004 for the sum of £51,000 and a property at 34 Hill Road, Kennoway was purchased in the sole name of the defender at a price of £52,000. A mortgage was taken over the property for an unknown sum by the defender. The parties co-habited at that address until they separated in July 2007.

9. Improvement work was done at the property. A fireplace was replaced at a cost of £6000 and a kitchen replaced at a cost of £8,000. The defender paid the cost of these items .

10. As at the date of separation the property at 34 Hill Road, Kennoway was valued at around £70,000 and the redemption figure for the mortgage was £18,978.

11. At date of separation the pursuer owned an ISA value £500 and the defender owned an ISA value £2,492.

12. On separation the pursuer took certain small electrical items from the house and was also given £900 by the defender.

13. During the course of the co-habitation the parties had incurred removal costs from the various properties and costs of farewell parties. No accurate value was given for these. The costs were paid by the defender.

14 During the course of the co-habitation each party had owned a motor vehicle which they had provided for themselves. As at the date of separation the pursuer did not own a car. The defender also owned a motor car being a Toyota of unknown value.

15. During the course of co-habitation the defender paid the insurance premiums for the pursuer's car. The pursuer occasionally used the defender's car to go to the shops for messages.

16 Prior to co-habitation the pursuer did not have a lengthy work record but in the course of co-habitation she had various jobs. She worked full time during the period of the co-habitation until retiral age. No wage slips were produced to confirm payments. She stopped work around 1999 when she became entitled to the state pension. Her income at the date off proof was £102.60 per week.

17 During the period of co-habitation the pursuer used her net income to look after herself and her son Kevin and to provide herself and Kevin with clothing. She also paid for the vast bulk of the food used in the home and provided food for the defender. She also bought some small electrical goods and linen for the home. She also undertook some redecoration work in some of the properties and attended to all housework in all properties where the parties co-habited.

18 The defender was employed during the course of co-habitation for Alcan Ltd. His wage was unknown. When he left on being made redundant in 1997 he received a lump sum and then access to a pension. No figure was given for the redundancy payment received nor the pension received if any at that time. After leaving he took two jobs for short periods of time. He left both of those due to ill health. He was unable to tell what his pension had been. He finally settled on a figure of £275 when he left and £350 at the time of the proof.

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19. The defender paid all mortgage costs, domestic taxes, and household bills for all the properties occupied during the co-habitation. The defender on a rare occasion helped pay the cost of the shopping.

20. The defender spent sums of money on purchasing fishing tackle and on going on fishing trips. He also spent money on accumulated debts during the course of the co-habitation . He and the pursuer went on occasional holidays and some money was spent on those. No accurate figure was forthcoming for any of these items.

21. Some furniture was bought by the defender in the course of the co-habitation and towards the end the defender bought a new car for himself. No accurate figures were produced as to the cost of these items.

22. As at the date of separation the defender had a credit card and a bank card and bank account. No figures were produced to vouch any sum at credit or debit in regard to these accounts.

Finds in Fact and Law

That the Pursuer has failed to prove an entitlement in terms of the Family Law (Scotland) Act 2006 section 28 (2) (a) to a capital sum; sustains the pleas in law for the defender; Repels the pleas in law for the pursuer and assoilzies the defender from the crave of the writ . Reserves the question of expenses and fixes a hearing for the

at am with regard to the expenses

K R W Hogg

Note

In this case I was asked to make an order in terms of the Family Law (Scotland ) Act 2006 section 28(2)(a) and award the pursuer a capital sum of £50,000 arising from the period of co-habitation of the parties. Co-habitation was admitted and so the issue was the economic advantage or disadvantage suffered by both parties. Productions had been lodged being two in number ,the only relevant one being a mortgage redemption statement. I heard three witnesses for the pursuer being the pursuer and her two sons Kevin and Andrew and one witness for the defender being the defender himself.

The pursuer's son Kevin lived in the family home on a permanent basis until he reached age 16 and was a relevant child in terms of the Act. Andrew only stayed on an irregular basis and was at the time over 16. He was not a relevant child at any time.

A Joint Minute was lodged at the time of the proof providing some financial details which are the foundation for many of the findings in fact.

The evidence given strayed frequently from the final record without objection from either party. There was no dispute that there had been a period of co-habitation which had come to an end although no one supplied me with the exact separation date. A substantial amount of evidence was led by both parties as to where they had lived and what was bought as housing accommodation but no detail was given as to how much was paid per month for the mortgage nor what other bills were paid nor by whom.

No detail was supplied as to wages, pensions nor food bills paid. The pursuers agent tried to get round such lack of detail by referring me to the case of Dougan v Dougan 1998 SLT 27 under explanation that she stated that case suggests that an overall picture is taken without a fine financial calculation. The case dealt with an issue in terms of the Family Law (Scotland)Act 1985 section 9(1)(a) and 9(1)(b) and a similar approach should be adopted in the instant case. I will return to that point in the decision.

Pursuer's submission

1. I should treat the action as similar to a claim under section 9 of the Family Law (Scotland) Act 1985. By reference to Dougan v Dougan 1998 SLT27 I did not need to have exact financial calculations and I should look at a broad picture to arrive at a financial conclusion .

2. The pursuer worked for a considerable period of the co-habitation and during that time paid for her own and her son's food and clothing from her own money. She lived at the property belonging to the defender and looked after the house and bought food for the defender and some goods for the house and linens as well. She had done some redecoration. She thus made an indirect contribution as defined by section 28(9)(b) being a non financial contribution looking after the house and also the relevant child.

3. The pursuer was disadvantaged in regard to Kevin because she had the full burden of looking after him and paying for his upkeep and the defender was advantaged by having no expenditure for Kevin.

4. The defender has been advantaged by having a house which over various moves has appreciated in value which has been looked after by the pursuer free of charge for all the co-habitation and the pursuer has not received any advantage in financial terms from the capital growth.

I was also addressed regarding the relevant law to apply.

As I state in the note I was referred to Dougan -v-Dougan 1998 SLT 27 when discussing the way to assess any sum due.

I was first then referred to Budge -v- Budge 1990 SLT 319. That case had taken into account when considering the Family Law (Scotland) Act 1985 section 9( 1)(b) the work of internal decoration could be held to have benefited the defender. In the instant case as I had some evidence of decoration work being done by the pursuer I could hold that the defender had been economically advantaged.

Little -v- Little 1990 SLT 785 was referred to but it was conceded it did not help in this case. It really only suggested that the decision was a balancing act but the legislation was different.

Jesner -v- Jesner 1992 SLT 999 was authority for the view that a fairly broad axe approach had to be taken. The difference was however that the parties had children and the pursuer had looked after them during the marriage.

Welsh -v- Welsh 1994 SLT 828 was a case which was concerned with the non equal division of the matrimonial property. It was suggested that the house being in joint names made the situation different as the house in the instant case had never been transferred into joint names.

Hunter -v-Hunter 1995 SCLR 329 was referred to to cover the issue of the defender paying aliment for his children by another relationship but as I had no evidence upon which I could make a finding in fact it was not a relevant issue.

Finally I was again referred back to Dougan-v-Dougan but was not referred to any passage from the other cases as listed on the list from the pursuer.

The submission concluded with the submission that on the evidence a capital sum of between £15,000 and £20,000 should be awarded to the pursuer and payment made by way of instalments and reserve the question of expenses.

Defender's submission

1. The defender submitted that Section 28 (3)(a)and (b) was such that the pursuer had to satisfy both parts as there was an "and" between the two parts. There was also the word whether and as such it was open to the pursuer to suggest to the court that there was economic advantage or not as the case might be.

I was asked to look at economic advantage first and to decide that the only issue was with regard to the capital appreciation of the property as there was no evidence of income gain nor earning gain .

It was suggested that there was no evidence which I could found upon to establish a capital gain as I had an end point but no starting point, Although I could find that the pursuer had around £50,000 equity in the house owned at the conclusion of co-habitation. I had no evidence of the value of the house at Brenda Drive when the parties started to co-habit.

I had various sums put to me regarding property in the course of co-habitation but all of them were subject to various loans which were repaid.

It was then suggested that the gain if any had to be looked at to see its source and that was supposed to be the contributions made by the pursuer by way of providing the food and not seeking any money for clothing or other items for herself or her son.

Each party had a very similar work record and it had not been proved or even suggested on behalf of the pursuer that she could have got another style of job. She was unskilled and before coming to co-habit had not required to work as she had been supported by her then husband. It was suggested that the pursuer's then work record became patchy.

The defender had increased bills as a result of the co-habitation. He had increased rates and other taxes. When asked to specify these and where I could find evidence of them I was told that I could infer that from the length of the co-habitation.

There was no link between the payment by the pursuer of some grocery bills and the capital gain of the property. When it was suggested by me that was an indirect contribution it was submitted that the property still had to be looked after by the defender before the pursuer moved in and so it was no economic advantage.

There had been no evidence of decoration being done by the pursuer except in her own testimony which had been vague in the extreme.

Surprisingly it was then submitted that the child was not a relevant child in terms of the Act.

The defender had however in his evidence accepted that the child was a child of the family.It was then suggested that the increased costs of heating the house became a disadvantage. I had however no evidence of such costs.

When challenged about the lack of information the response was that the co-habitation was over a long period and as such records were not available. Although no records existed of the debts which the defender advised had been accumulated none the less debts did exist which had been paid by the defender and as such he was disadvantaged by his payments. He had made a decision to down size the properties over the years and the use of the capital released had been fortuitous in giving him the ability to pay debts.

At the end of the co-habitation the funds had been used to improve the house and also the pursuer was given some money from the capital.

Prior to that the funds had funded some parties, removal expenses and a new car together with some holidays and some fishing tackle.

The conclusion of the submission was that the defender had to a great extent funded both the parties' life style over the period of co-habitation and as such no disadvantage had been suffered by the pursuer nor any advantage gained by the defender.

I was also referred to the case of Ranaldi -v- Ranaldi 1994 SLT SH CT 25 a decision of Sheriff Craik in Edinburgh. That case involved parties who ran a boarding house and a counterclaim being made for a capital payment. Again it involved the Family Law (Scotland )Act 1985 and section 9 principals and in the end the decision seems to have been that the capital appreciation of the property was offset against the debt at separation and half of the resulting figure awarded.

I was asked to reserve expenses and also any consideration of section 28(7).

Pursuer's Reply

In reply Miss Herbert asked me to take the view that as at the start of the co-habitation the defender had a fully mortgaged property in which the parties resided as the starting point for any appreciation in value of the properties and thus the accumulation of capital.

The Decision

I first must comment about the evidence I heard in this case. As can be seen from the findings in fact I have been unable to be firm as to the financial position for two reasons. First the pursuer did not produce any paperwork to support most of the assertions made and second the defender did not either in oral evidence or by production confirm many of the alleged financial transactions I was asked to consider.

It was for the pursuer to prove the case. The pursuer's evidence in the main was credible but lacking in substantial detail. That was unhelpful given what I was being asked to decide.

An issue was raised as to whether Kevin was a relevant child as defined in terms of Section 28 (9) and (10). Kevin was led as a witness and the defender accepted in cross examination that Kevin was a child accepted as a child of the family until the age of 16 and I made the appropriate finding in fact to cover that.

By contrast I did not find the defender's evidence at all credible. He was vague, unable to answer a straight question and at pains to try and confuse . Basic items seemed to be beyond him and I did not accept that he could not produce details of his pension, bank statements and mortgage payment statement. He seemed to try and suggest that he had no real idea as to his financial position. I was surprised that no specification of documents had been sought. The defenders evidence was also totally lacking in any detail. He could not tell me his current income and came to a final conclusion that it was probably £350 per month. He had a bank account. No statement was produced The pension was apparently paid into his account. It was a simple thing to produce that figure for what it was worth but no one appeared to have considered the position relevant.

In addition he claimed in evidence to have paid large sums of money for a variety of items notably including two apparent parties where he claimed £2,000 was spent on each. I could not rely on the defender's evidence as most of it was in my judgment an exaggeration. The pursuer's difficulty was however that I had little to compare it against. There was no doubt that the defender had sold various properties and had bought others resulting in a release over the years of capital accumulated within the properties. What had happened to that money I could not properly ascertain as there was a lack of evidence on which I could found any view.

The pursuer was of the view that there was a figure of £50,000 capital in the final property and thus she should receive half of that figure. Unfortunately that was based on a fair and equal sharing of the capital which was not what I understood was contemplated in terms of this legislation.

In terms of section 28 (2) (a) the court may make an order ordering the defender to pay a capital sum of a specified amount. To do so I am directed to have regard to the matters as specified in section 28(3). These matters are (a) whether (and ,if so, to what extent ) the defender has derived economic advantage from contributions made by the pursuer; and (b)whether (and , if so ,to what extent) the pursuer has suffered economic disadvantage in the interests of (i) the defender; or(ii)any relevant child.

Then I am directed in terms of 28(4) that in considering whether to make an order in terms of 28(2)(a) I shall have regard to the matters mentioned in 28(5) and (6).

. 28(5) and 28(6) are mandatory because of the use of the word shall. It appears to me that I first have to decide if the defender has derived economic advantage from contributions made by the pursuer and at the same time decide if the pursuer has suffered economic disadvantage in the interests of either the defender or the relevant child but I must also consider the terms of 28(5) and 28(6) at the same time.

As I have already stated the poverty of the evidence in this case leads me to conclude that the pursuer has only proved that the defender has derived economic advantage from contributions made by the pursuer but that only to the extent of indirect contributions of providing household cooking and cleaning services and direct contributions of payments for food. I am unable to place any financial value on these services and thus the economic advantage. Contributions as indirect has the meaning attributed to it by section 28(9)

I am then unable to hold that the pursuer has suffered any economic disadvantage in the interests of either the defender or the relevant child as I find that the defender provided a home and paid the bills for that property by the mortgage and the services bills and the pursuer has had the advantage of staying at the properties with no payment. The child also stayed until age 16 with no payment. I may say again I would be unable to put any financial figure on such payments as I did not hear any evidence to enable me to do so.

I am still as I see it required to take account of 28(5) and (6) because of the wording shall.

The first of these requires me to have regard to the extent to which any economic advantage derived by the defender from contributions made by the pursuer is offset by an economic disadvantage suffered by the defender in the interest of himself or the relevant child. Given what I have already decided in this case I find that the economic position is in fact neutral as the contributions were first, the indirect one of looking after the house and second, the financial one of paying for the majority of food for the house and the expenses of the child for food and clothing. The economic disadvantage was however the cost of providing the house and paying all the bills related there to.

I then have also to consider as a separate matter the extent to which any economic disadvantage suffered by the pursuer in the interests of the defender or the child is offset by any economic advantage derived by the pursuer from the contribution made by the defender. Again I am unable to see what economic disadvantage the pursuer has suffered. She paid for the items I have specified but in return she lived rent free and with no contribution to the household bills. Again I am of the view that the result was neutral.

In summary I find that the pursuer and defender set out to co-habit and the pursuer did not bring any capital to the association. She wished to work and did so and I did not hear any evidence to suggest that she had suffered any disadvantage in her employment. She paid for the food for herself and her son as she would have done had she remained on her own. Her saving or economic advantage was the cost of providing accommodation for herself and son . Her contribution to the co-habitation was the household chores and payment of food in addition for the defender.

The defender brought the whole capital in the home. Although he released capital during the co-habitation which he appeared to have utilized for various debts and other items none of which were ever well specified he seemed just to be the recipient of the good fortune of property price appreciation. He was at the end of the co-habitation in the same position if he had not co-habited except that he had had food provided for him through out the period of co-habitation and had all the household chores undertaken. He had not had to contribute to the child for the period until the child reached age 16.

I could not find economic advantage. A lack of job prospects or a reduction in the expectation of such on behalf of the pursuer might have been prayed in aid. A balance between the career and the home might have been suggested. None were. A financial contribution to the mortgage payment or the bills might also have suggested an economic disadvantage. I cannot so hold.

The facts proved in this case simply did not allow me to make any award.

The case law to which I was referred did not assist as it was solely concerned with the provisions of Section 9 of the Family Law (Scotland)Act 1985. That in my judgment did not assist in the application of this section of the Family Law (Scotland )Act 2006 as the criteria stated to be applied are in my judgment different.

I am not directed at any point in this legislation to consider a fair sharing of the assets of the parties. Had I been I would still have found that to be an impossible task due to the lack of evidence as to the parties assets and the lack of full disclosure of all sums of money earned during the course of the co-habitation and also a more realistic detail being presented as to payments made. Without all of that and the poverty of most of the evidence the pursuer has not proved the case as is required and I have found accordingly.