SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE

F352/08

JUDGMENT OF SHERIFF PRINCIPAL

R A DUNLOP QC

in the cause

NATALIA YURIEVNA BELOKHVOSTOVA or TSYBINA or KIBBLE

Pursuer and Appellant

against

ALAN BRUCE KIBBLE

Defender and Respondent

__________________

Act: Mr Dickie, Solicitor, Falkirk

Alt: Mr Walker, Solicitor, Falkirk

FALKIRK, 5 November 2009. The Sheriff Principal, having resumed consideration of the cause, allows the appeal and recalls the sheriff's interlocutor of 29 April 2009 insofar as it excludes amendment in terms of paragraphs 1 and 4 of the minute of amendment for the pursuer no 13 of process; allows the record to be opened up and amended in terms of paragraphs 1 and 4 of said minute of amendment and of new closes the record; assigns 13 November 2009 at 9.45am within the Sheriff Court House, Falkirk as a hearing on the expenses of the appeal and on further procedure.

NOTE:

[1] This is an appeal in an action of divorce in which the pursuer seeks various orders, including an order for payment of a capital sum. The pursuer avers that on the date when the parties ceased to cohabit ("the relevant date") the matrimonial property of the parties included inter alia the matrimonial home at 67 Spey Court, Grangemouth. While this property was purchased before the parties' marriage, the pursuer's contention is that it was acquired by the defender for use by the parties as a family home and that accordingly it fell within the definition of "matrimonial property" in section 10(4) of the Family Law (Scotland) Act 1985 (hereinafter referred to as "the 1985 Act").

[2] In response to these averments the defender denies that the property in question was acquired in contemplation of marriage but that, in any event, the parties had specifically agreed that it would not be "matrimonial property". In this latter regard reference was made to an antenuptial marriage contract entered into by the parties on the day before their marriage (no. 5/1/2 of process). So far as relevant to the present appeal, the agreement provides as follows:

"In contemplation of the marriage the parties agree as follows:

1. In terms of section 10(4) of the Family (Scotland) Act 1985 (sic) the following do not constitute "matrimonial property", not having been acquired before the marriage for use as a family home:-

(a) the dwellinghouse at 67 Spey Court, Grangemouth ..."

[3] The pursuer does not dispute the fact that she signed this agreement. However, mindful of the possibility that this agreement might have adverse consequences for her claim for financial provision, the pursuer lodged a minute of amendment in terms of which, among other things, an additional crave was proposed seeking an order that the antenuptial marriage contract should be set aside. The legal basis for this crave is said to be the provisions of section16 of the 1985 Act which provides inter alia as follows:-

"(1) Where the parties to a marriage ... have entered into an agreement as to financial provision to be made on divorce ..., the court may make an order setting aside or varying -

.....

b) the agreement or any term of it where the agreement was not fair and reasonable at the time it was entered into."

[4] The sheriff allowed the record to be amended in terms of certain parts of the minute of amendment but refused to allow amendment insofar as the additional crave and related plea in law were concerned (paragraphs 1 and 4 of the minute). In taking this course of action he accepted the submission of the solicitor for the defender that, on a proper construction of section 16(1) of the 1985 Act, it only applied to those agreements which had been entered into by "parties to a marriage". In short the provisions of section 16(1) did not apply to antenuptial agreements.

[5] The pursuer now appeals against that decision with leave of the sheriff. While there are a number of academic texts which support the pursuer's contention that the sheriff was wrong to exclude antenuptial agreements from the scope of section 16, parties were agreed that there was no authority on this point.

[6] It should be said at the outset that parties were agreed that an antenuptial agreement was capable of binding the parties to it and effectively operating as a bar to any claim for financial provision. Reference in this regard was made to Thomson v Thomson 1981 SC 344 and to the report of the Scottish Law Commission (no. 67) on Aliment and Financial Provision. The issue which separates the parties however is whether the court has any power to police such agreements by reference to the fair and reasonable test in section 16(1)(b) of the 1985 Act.

[7] The short proposition advanced by the solicitor for the pursuer was that the applicability of section 16(1) can only be considered at the time at which an application for an order is made. Such an order can only be made in the context of an action of divorce and it necessarily followed that the parties to "an agreement as to financial provision to be made on divorce" would be parties to a marriage at the time that an order under section 16 came to be considered. It was submitted that no greater significance than that should be attached to the words "parties to a marriage". These words simply reflected the correct description of the parties to an agreement at the time at which an application for an order under section 16 fell to be considered.

[8] In resisting the appeal, the solicitor for the defender advanced two separate arguments. Firstly he renewed the submission made to the sheriff that section 16 did not apply to antenuptial agreements. He submitted that the words "parties to the marriage" qualified the word "agreement" and that what section 16(1) was referring to were agreements which had been entered into by parties who were at that time married. In support of this construction he referred to the previous legal position set out in section 5(1) of the Divorce (Scotland) Act 1976 which spoke in terms of "any settlement made in contemplation of or during the marriage" and attached significance to the fact that Parliament had not included similar words in section 16 of the 1985 Act. He submitted that it should be presumed from this omission that Parliament did not intend antenuptial contracts or any agreement made in contemplation of marriage to be included among those agreements covered by the provisions of section 16. He submitted that further support for that proposition could be found in the terms of section 14(2)(h) of the 1985 Act which made specific reference to an antenuptial marriage settlement, although he acknowledged that that provision was dealing with an entirely different arrangement. Adopting a purposive construction of section 16 of the 1985 Act he submitted that it was intended to apply only to those agreements reached between parties to a marriage following the breakdown of that marriage.

[9] Secondly the solicitor for the defender submitted that, in any event, the antenuptial marriage contract was not "an agreement as to financial provision to be made on divorce". All that the contract amounted to was an agreement that certain property will not fall within the definition of "matrimonial property". Although practically speaking such an agreement might preclude the court from making an order for financial provision which reflected the value of the property at 67 Spey Court, Grangemouth, nevertheless it did not in terms amount to an agreement as to financial provision to be made on divorce.

[10] In responding to this second ground of opposition the solicitor for the pursuer submitted that the agreement had a potentially material effect on the amount of the capital sum which might otherwise be payable and that in those circumstances it was an agreement which fell within the scope of section 16.

[11] In my opinion the submissions for the pursuer are to be preferred. One of the objects of the 1985 Act is to provide a framework for the courts when making decisions relating to financial provision on divorce and to set out in some detail the principles which are to be applied and the factors which are to be taken into account in arriving at such decisions (Little v Little 1990 SLT 785). Section 16 is part of that framework and it is capable of having a direct bearing on the manner in which the court exercises the jurisdiction conferred on it by section 8(2). It is self evident that the need to have resort to it will only arise when there is a claim for financial provision. It implicitly recognises that a claim for financial provision might be barred by the terms of an agreement and, in giving the court power to set aside or vary an agreement, the legislature clearly intends that such a consequence might be moderated in appropriate circumstances. This judicial control sits easily in a statutory scheme which has as its objective the determination of an appropriate order for financial provision on divorce.

[12] In my view the starting point for the applicability of section 16 is the existence of an agreement as to financial provision to be made on divorce - in other words an agreement that is intended to settle, either in whole or in part, the financial arrangements between the parties on the occasion of divorce. The existence of such an agreement is directly relevant to the court's consideration of the appropriate orders to make in terms of section 8(2) and when set in this context, and with the object and intent of the Act in mind, there seems to me no justification for distinguishing such agreements which have been concluded before marriage from those concluded after. Whether concluded before or after marriage they share a common identity in making financial provision on divorce and in my view it is that common identity which brings both within the scope of section 16.

[13] Accordingly in my opinion the words "parties to a marriage" do not have the effect contended for by the defender but simply reflect the correct description of the parties to an agreement viewed at the time that section 16 comes into play. It is a general description appropriate to the parties to a divorce action and its use in section 16 is consistent with its use elsewhere in the Act (see for example sections 8(1), 9(1)(a) and 12(4)(a)). In my view therefore the sheriff was in error in thinking that an agreement entered into by parties before marriage was not an agreement which fell within the scope of section 16 and as treating that as a reason for refusing the amendment insofar as it sought to introduce a crave founding on section 16.

[14] So far as concerns the defender's second ground of opposition to the appeal it should be noted that this was not an argument addressed to the sheriff. In addressing this issue now I think it is important to point out that an assumption was made by both parties that, unless set aside or varied, the antenuptial marriage contract would exclude the court from holding that the property at 67 Spey Court, Grangemouth was "matrimonial property" as defined in section 10(4) of the Act even if in reality it was "matrimonial property". On that hypothesis I think it is clear that this second ground of opposition would also fall to be rejected. According to the scheme of the 1985 Act the value of the matrimonial property is in most cases a highly material ingredient in the justification of an order for financial provision on divorce. If the effect of the agreement is to exclude the court from holding certain property to be "matrimonial property" within the meaning of section 10(4), there is then a direct effect on the amount of any financial provision which the court might order. In such circumstances it seems to me that the agreement could properly be described as "an agreement as to financial provision on divorce".

[15] However I am by no means fully persuaded at this stage that the assumption made by parties is valid and in my view the proposition requires more detailed consideration than was attempted at the appeal. I did wonder whether I ought to hear parties further on this point but concluded that that was not necessary. The issue whether the contract has the effect assumed by the parties is one which is already open for consideration on the unamended pleadings and it is only if the issue is resolved in favour of the defender that the pursuer might require to have resort to the provisions of section 16 at all. In those circumstances I see much advantage in reserving consideration of the issue until all the evidence has been heard. The proof that has already been allowed in the case is proof before answer and accordingly the relevancy of the pursuer's amended averments will be able to be addressed once the evidence has been led. Accordingly, whichever way one approaches this second ground of opposition, in my view it does not warrant the refusal of the amendment proposed.

[16] Since the defender did not suggest that there were any other grounds of opposition to the amendment I have allowed the appeal and allowed the record to be amended in terms of the paragraphs 1 and 4 of the minute of amendment.

[17] Parties asked me to reserve the question of expenses.