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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> P v P [2015] EWCA Civ 447 (06 May 2015) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2015/447.html Cite as: [2015] EWCA Civ 447 |
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CIVIL
DIVISION)
ON APPEAL FROM THE FAMILY COURT
MR JUSTICE MOSTYN
FD12D04963
Strand, London, WC2A 2LL |
||
![]() |
B e f o r e :
LADY JUSTICE BLACK
and
SIR DAVID KEENE
____________________
![]() | Appellant |
|
- and - |
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![]() | Respondent |
____________________
Mr Max Lewis (instructed by Moss Fallon solicitors) for the 1st Respondent
The 2nd Respondent provided
a skeleton argument but was neither
present
or represented at the hearing
Hearing date: 26th February 2015
____________________
VERSION
OF JUDGMENT
Crown Copyright ©
BLACK LJ :
The terms of the settlement
Post-nuptial settlement
The judge's order
i) a sum of £23,000 was to bepaid
to the wife absolutely;
ii) a sum of £134,000 was to be
provided
for the benefit of the wife for life, to be held by independent trustees, with the wife entitled to use the capital sum for or towards the
purchase
of a
property
for her occupation and having the benefit of the income during her lifetime.
Outline facts
The judge's reasoning
"resolve the familiar tension between balancing the right to share matrimonialproperty
of which the most important element is the matrimonial home, however
provided,
with the fact that there is a trust here and the intention of the trust was, as the husband's father clearly stated, to ensure that in the long term the
property
remained available as a farm or estate asset."
"Now, in my judgment justice in this case, reflecting the sharingprinciple
in relation to the core element of matrimonial
property
and, at the same time, the existence of the trust and its
purpose,
entitles the wife to a further award, but not on an outright basis from the trust. Half of the net
value
of [the farmhouse] is £157,000. She will be getting £23,000 outright, so that leaves £134,000. That sum will be extracted from the trust and appointed to the wife, but on the terms of a life tenancy. There will be independent trustees, no
power
of advancement, and on her death the sum will revert to the estate. The details will need to be sorted out in circumstances which I will mention. It therefore follows that the trust will be
varied
to create a wife's fund, of which £23,000 will be outright and £134,000 will be on the life tenancy terms which I have mentioned."
The nature of the appeal
The judge's judgment in relation to permission
to appeal
The law
"(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may make any one or more of the following orders, that is to say –
(a) ….
(b) ….
(c) an ordervarying
for the benefit of the
parties
to the marriage and of the children of the family or either or any of them any ante-nuptial or
post-nuptial
settlement (including such a settlement made by will or codicil) made on the
parties
to the marriage, other than one in the form of a
pension
arrangement (within the meaning of section 25D below);
(d) an order extinguishing or reducing the interest of either of theparties
to the marriage under any such settlement, other than one in the form of a
pension
arrangement (within the meaning of section 25D below)"
"290. Surveying all this learning, identifying what is of enduring significance whilst ruthlessly jettisoning what has become more or less irrelevant in modern conditions, I canperhaps
summarise matters as follows:
i) The court's discretion under section 24(1)(c) is both unfettered and, in theory, unlimited. As MissParker
![]()
put
it, no limit on the extent of the
power
to
vary
or on the form any
variation
can take is specified, so it is within the court's
powers
to
vary
(at one end of the scale) by wholly excluding a beneficiary from a settlement, to (at the other end) transferring some asset or other to a non-beneficiary free from all trusts. She
points
to E
v
E (Financial
Provision)
[1990] 2 FLR 233 and C
v
C (
Variation
of
Post-Nuptial
Settlement: Company Shares) [2003] EWHC 1222 (Fam), [2003] 2 FLR 493, as illustrations of
property
held on trust being transferred free from any trusts to the applicant, in E
v
E a sum of £50,000 and in C
v
C shares in a Cayman company.
ii) That said, the startingpoint
is section 25 of the 1973 Act, so the court must, in the usual way, have regard to all the circumstances of the case and, in
particular,
to the matters listed in section 25(2)(a)-(h).
iii) The objective to be achieved is a result which, as far as it ispossible
to make it, is one fair to both sides, looking to the effect of the order considered as a whole.
iv) The settlement ought not to be interfered with further than is necessary to achieve thatpurpose,
in other words to do justice between the
parties.
v)
Specifically, the court ought to be
very
slow to deprive innocent third
parties
of their rights under the settlement. If their interests are to be adversely affected then the court, looking at the wider
picture,
will normally seek to ensure that they receive some benefit which, even if not
pecuniary,
is approximately equivalent, so that they do not suffer substantial injury. As Sheldon J
put
it in the
passage
in Cartwright which I have already quoted: "if and in so far as [the
variation]
would affect the interests of the child, it should be
permitted
only if, after taking into account all the terms of the intended order, all monetary considerations and any other relevant factors, however intangible, it can be said, on the while, to be for their benefit or, at least, not to their disadvantage."
"291. MissParker
submitted that the central theme which
permeates
these authorities is that it is
permissible
for the court to invade third
party
interests within the confines of the trust structure, but only to the extent that fairness so requires. It is acknowledged that in the generality of cases, the court should indeed be slow to do so. Broadly speaking, I accept that submission.
292. Moreover, as she rightlypoints
out, the court always retains a discretion as to the extent of any
variation.
Even in circumstances where the court could quite
properly
![]()
vary
a
post-nuptial
settlement so as to transfer (say) the matrimonial home to a wife free from any trusts, it may nonetheless direct some less intrusive form of
variation,
such as to transfer the
property
to the wife for life and thereafter to the other beneficiaries, to confirm the right to remain in occupation indefinitely without any form of transfer, or to direct that the applicant has a right to remain in occupation until (say) other orders made have been complied with. All of this depends, of course, as she says, on the court's
views
as to what is fair on the facts, as it finds them, of the
particular
case."
"300. Miss Evans-Gordon for herpart
submits that any legitimate
variation
could not require the introduction of new
property
from outside the settlement as would be necessary to
pay
the mortgage and other outgoings. I agree. …."
"The law
The discretionarypowers
conferred on the court by the amended ss 23-25A of the Matrimonial Causes Act 1973 to redistribute the assets of spouses are almost limitless. That represents an acknowledgement by
Parliament
that if justice is to be achieved between spouses at divorce the court must be equipped, in a society where the forms of wealth-holding are diverse and often sophisticated, to
penetrate
outer forms and get to the heart of ownership. For their
part,
the judges who administer this jurisdiction have traditionally accepted the Shakespearean
principle
that 'it is excellent to have a giant's strength but tyrannous to use it like a giant'. The
precise
boundaries of that judicial self-restraint have never been rigidly defined – nor could they be, if the jurisdiction is to retain its flexibility. But certain
principles
emerge from the authorities. One is that the court is not obliged to limit its orders exclusively to resources of capital or income which are shown actually to exist. The availability of unidentified resources may, for example, be inferred from a spouse's expenditure or style of living, or from his inability or unwillingness to allow the complexity of his affairs to be
penetrated
with the
precision
necessary to ascertain his actual wealth or the degree of liquidity of his assets. Another is that where a spouse enjoys access to wealth but no absolute entitlement to it (as in the case, for example, of a beneficiary under a discretionary trust or someone who is dependent on the generosity of a relative), the court will not act in direct invasion of the rights of, or usurp the discretion exercisable by, a third
party.
Nor will it
put
upon a third
party
undue
pressure
to act in a way which will enhance the means of the maintaining spouse. This does not, however, mean that the court acts in total disregard of the
potential
availability of wealth from sources owned or administered by others. There will be occasions when it becomes
permissible
for a judge deliberately to frame his orders in a form which affords judicious encouragement to third
parties
to
provide
the maintaining spouse with the means to comply with the court's
view
of the justice of the case. There are bound to be instances where the boundary between improper
pressure
and judicious encouragement
proves
to be a fine one, and it will require attention to the
particular
circumstances of each case to see whether it has been crossed."
Discussion of the arguments advanced by the trustees by way of appeal
Order not canvassed with the parties
Wrong approach to the trust and to the wife's entitlement
Reliance on the husband's family
Conclusion
Jackson LJ:
"(a) The judge below is fully seised of the matter and so the application will take minimal time. Indeed the judge may have already decided that the case raises questions fit for appeal.
(b) An application at this stage involves neitherparty
in additional cost.
(c) No harm is done if the application fails. The litigant enjoys two bites at the cherry.
(d) If the application succeeds and the litigant subsequently decides to appeal, they avoid the expensive and time-consumingpermission
stage in the Appeal Court.
(e) No harm is done if the application succeeds but the litigant subsequently decides not to appeal."
"It is therefore my clearview
that in the future, in the field of ancillary relief at the
very
least, an application for
permission
to appeal must always be made to the judge at first instance before an approach is made to the Court of Appeal."
Sir David Keene: