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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Wodehouse v Wodehouse [2018] EWCA Civ 3009 (29 November 2018) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2018/3009.html Cite as: [2018] EWCA Civ 3009 |
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2018] EWCA Civ 3009 | ||
CIVIL)
DIVISION
ON APPEAL FROM EASTBOURNE FAMILY COURT
(DEPUTY JUDGE AUSTIN)
HB14D00710
The Royal Courts of Justice Strand, London WC2A 2LL |
||
2018 |
B e f o r e :
(SIR ANDREW McFARLANE)
LADY JUSTICE KING
LORD JUSTICE COULSON
Between:
____________________
ELLEN ELIZABETH WODEHOUSE | Appellant | |
| - and - | ||
HENRY WYNDHAM WODEHOUSE | Respondent |
____________________
165 Fleet Street London EC4A 2DY
Tel No: 020 7404 1400 Email:
civil@epiqglobal.co.uk
(Official Shorthand Writers to the Court)
Mr N Barnes (instructed by Warrens Law and Advocacy) on behalf of the Respondent
____________________
VERSION
OF JUDGMENT (APPROVED)
Crown Copyright ©
Lady Justice King :
value
of the husband's pension fund.
Background
Wodehouse,
the 4th Earl of Kimberley. The Earl is survived by his wife Lady Jane Hope (known in the papers and in this judgment as "the Dowager Countess").
Viner
Close", again in her sole name, this time on a buy-to-let basis.
Viner
Close. Of the money raised, she gave £11,000 to her husband to assist with his business. In 2003,
Viner
Close was sold for £133,000. After repayment of the mortgages, the husband received a further £19,000 and the wife £44,000.
Vicarage
Road" for £130,000 with a mortgage of £110,000. It is accepted that on this occasion the husband invested £26,000 towards the purchase of and, associated costs in relation to, the purchase of that property.
Wodehouse
4th Earl of Kimberley of Hailstone Wills Trust (known as the "Wills Trust"). The total amount of money advanced by the Trust was £405, 489.71 and was secured by a first legal charge dated 1 August 2007.
Vicarage
Road would be used to pay, in whole or in part, the sum now secured by legal charge. In fact, what happened was that in July 2007, the mortgage on
Vicarage
Road was increased from £110,000 to £350,000 by the husband, but he used the money raised to repay his debts rather than to reduce the borrowing from the Trust.
Vicarage
Road was let out, but in 2010 it was repossessed by Northern Rock. Upon sale, the property was in negative equity to the tune of £97,000. That sum remains outstanding to the bank. So far as the court is aware, based upon the information provided by Mr Barnes, the bank has taken no steps to enforce that debt and, unsurprisingly given her lack of resources, neither have any attempts been made by the wife to reach an accommodation with the bank.
Vicarage
Road. This leaves the wife solely responsible for the £97,000 still owing to Northern Rock.
value
in the Trusts. Suffice it to say that, whilst the sums cannot be regarded as insignificant particularly given the constrained financial circumstances of the parties, it would be wholly wrong to suggest that these Trusts represent the assets of multi-millionaires.
Wodehouse
dated 25 September 2000. The Will provides for the Dowager Countess to receive half of the assets within that Trust absolutely, the balance to be hers for life and, thereafter, to be distributed at the discretion of the trustees. The trustees have been frank in saying that the likelihood is the 50% share in respect of which the Dowager Countess holds only a life interest, will be divided equally upon her death, between the husband and his three brothers. The second Trust is a settlement of Lord
Wodehouse
of 10 March 1949 known as the "Falmouth Trust". This is a strict settlement and also provides for the Dowager Countess to have a life interest, thereafter the husband will have a quarter interest in the assets.
Vicarage
Road be sold. The loan attracted modest interest, which was initially paid by the husband and wife but, inevitably, had stopped being serviced by them.
v
Thomas [1995] 2 FLR 668, to conclude that the assets held within the Trust, or either of them were, pursuant to section 25(1)(a) of the Matrimonial Causes Act 1973, a financial resource available to the husband to fund any lump sum order which the court might make. Indeed, in his closing submissions Mr Johnstone of counsel, who represented the Trust said:
"There is no question of an advance of capital being made ... of any amount for many reasons, not least because first, the potential for any outstanding debts after clearance of the loan be charged against MrWodehouse's
putative share in the fund, the interests of the life tenant, the interest of the other beneficiaries."
valuation
before the court, although this court has been told that the husband's estimate at trial was £525,000. Had the estimate of the husband been right, this would have left a net equity (before costs of sale and before arrears of interest were calculated) of £190,500. As matters have turned out, the husband's estimate was wildly optimistic and an offer has only recently been accepted for £400,000. The court was told that, after costs of sale and accrued interests, the shortfall owed to the trustees will be between £15,000 and £20,000 and it is their intention to deduct this from the husband's interest in the Trust upon distribution after the death of the Dowager Countess.
"140. I am not surprised that the Trusteesvery
properly chose to be joined in these proceedings, and oversee and protect their position, but I consider that the Trust, save in its role as commercial mortgagee, is not relevant to this dispute between husband and wife. The plain fact is, that the applicant and respondent have no serious challenge to the amount claimed by the Trust. No attacks upon the
validity
of the Charge can be sustained. The Trustees of the Kimberley Trust [the Wills Trust] are completely blameless in this matter. They are joined simply to state the position of the Trust.
In my judgment, the position of the Trustees on all these aspects and, indeed, in this case generally, is unimpeachable."
"147. The respondent's pension payments were far from substantial and greatly exceeds any pension entitled by the wife which is minimal. The respondent does have support from a partner who has been unwilling or reluctant to participant or particularise. It can only be right that the wife shares in his pension and in my judgment a proportion of 50% would be fair."
"I propose to order as follows:
There shall be a clean break;
The house should be sold forthwith for the best possible price;
The net proceeds of sale should be divided equally between the parties, deducting from the husband's share a sum equivalent to the loans recited in the chronology at February 1998 (£30,000), January 2000 (£11500) and 11 August2018
(shortfall to Northern Rock, £97,000 app)
Both parties being impecunious, the husband's pension should be divided equally by way of a pension sharing order;
There should be no order as to costs as between the applicant wife and the respondent husband."
"9. The respondent shall pay or cause to be paid to the applicant a lump sum of £138,500 by the completion date of the sale of the family home provided for below AND IT IS DIRECTED THAT if the respondent fails to pay all or any part of this lump sum by the completion date of the sale of the family home provided for below:
9.1 simple interest shall accrue on the outstanding balance of the lump sum from the completion date of the sale of the family home provided for below, until payment in full at the rate applicable at the time being to a County Court judgment debt; and
9.2 The third party shall pay or cause to be paid from the respondent's interest in the Trust upon the death of the Dowager Countess, or any earlier distribution of the Trust capital, the balance of the lump sum outstanding including all interest thereon prior to distribution to the respondent. For the avoidance of doubt, in the event that the respondent's interest is insufficient to pay the lump sum or such part that remains unpaid and any interest thereon full, it shall be paid to the applicant in part towards the respondent's lump sum liability."
view
that "such remarks are not well conceived" and expressed himself to be satisfied that the orders settled by Mr Barnes adequately reflected his intentions behind his order and "effectiveness".
"The respondent's interests are known and foreseeable and a quantum can be calculated from the Trust's own disclosure. It is a foreseeable asset. It is foreseeable that it could cover the balance of the sums the judgment says are due to the applicant at some foreseeable future date. It is an asset/resource. It follows, especially since the Trust itself intervened in these proceedings and became a party, that it can be ordered to pay, from the respondent's interests and not from the interests of anyone else, the balance of the sums due to the applicant. This presents and avoids future litigation and all parties know where they stand. It avoids the applicant not receiving sums found to be owed to her due to the effluxion of time or any limitation date or exhaustion of the capital by the respondent prior to the applicant receiving it. It promotes and ensures clarity and a fair outcome. It does not mean that the applicant will receive anything more than what she is entitled to or that any other beneficiary's interests are affected."
The Appeal
"Well, in terms of whether it is right or wrong in principle to be ordering a third party to pay a lump sum.
MR BARNES: It is a third part debt order effectively which is perfectly permissible.
[THE JUDGE]: It is not, it is a lump sum between -- I can tell you that a District Judge or any judge dealing with it has no jurisdiction to make such an order. It can only make orders under the ancillary relief between husband and wife.
MR BARNES: He can make a third party order, I mean just purely under the enforcement regime he can make a third party order.
[THE JUDGE]: That is if you are enforcing. The jurisdiction is to make property adjustment orders or lump sum orders between the parties."
view
expressed during argument, reflects entirely the completely conventional position that the court has no power to order lump sum payments against third parties. This is as a consequence of section 23(1)(c) of the matrimonial causes which provides that a court may "either party to the marriage may make to the other a lump sum or sums as may be specified".
"Well for the all the reasons set out by the learned Deputy District Judge it seems to me that he is simply making a lump sum order payable at some point in the future. That in itself is not an impermissible thing to do. Indeed, it makes it more likely to be enforced and as it says in the judgment it makes less likely that there is going to be future litigation between the parties. Therefore, for all of these reasons I am not of theview
that this is a wrong decision."
view
that it would be wrong for the husband to have to take responsibility for the totality of the £97,000 shortfall in favour of Northern Rock in circumstances where the property had been held in joint names. He, therefore, amended the quantity of the lump sum, to the extent that the total was reduced from £138,000 to £90,000 to reflect the fact that the wife was liable, in her own right, for half of the Northern Rock debt.
2018,
the matter has now come before this court as a second appeal, over 3 years after the hearing before Deputy District Judge Austin. Little wonder that both husband and wife are suffering from litigation exhaustion.
vires,
the court having no jurisdiction to make any order against the Trust as a third party, such an order is in breach of section 23(1)(c) of the Matrimonial Clauses Act 1993. There can be, he submits, no salvaging of the order by any type of an amendment of the order by providing for the lump sum to be payable by the husband on some sort of Thomas
v
Thomas basis. There has been, he reminded the court, no evidence that the Trust would advance money towards the payment of a lump sum. The Trust has already had its fingers badly burnt in relation to what was supposed to be a short-term bridging loan on Selbwood House, and, he submits, that all the evidence points to the fact that it is highly unlikely they would advance anything to the husband, let alone £90,000.
very
long marriage. He further draws the court's attention to the fact that, on his own admission, the Deputy District Judge accepted that there was never going to be sufficient equity in Selkwood House to satisfy his order. It would seem, although it does not appear in the judgment, that the Deputy District Judge did not therefore accept the husband's aspirational estimate of
value
of the property at £525,000 when making his order.
v
Thomas resource. Ultimately, Mr Barnes, practically and sensibly, accepted that the order made by the Deputy District Judge, and repeated by the judge on appeal, cannot stand and that the appeal in respect of the lump sum order must inevitability be allowed.
Pensions
view,
with which I agree, that 50% was "clearly within the discretion that a court is likely to consider and, therefore, it is not something that this court can interfere with".
Outcome
view
that this wife, unhappily, is a woman of straw, I have no doubt that for the wife the existence of that debt continues to be a burden and a shadow on her life and must, inevitability, underscore her feelings of unfairness in relation to the ultimate outcome of these interminable and unsatisfactory proceedings.
Lord Justice Coulson:
The President of the Family Division:
value
of the pro bono contributions made by Mr Nicholas Barnes, for the wife, and Mr Phillip Blatchly and his instructing solicitor, Mr Hilton of Russell Cooke Solicitors for the work that they have put in entirely for free in this case. Their generosity is as impressive as it is welcome.
value
of creating a Financial Remedies Court - which is currently being piloted - so that only judges who are recognised for their knowledge of, and experience in, financial remedies cases following divorce will, in the future, sit on cases of this type.
Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof.
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400
Email:
civil@epiqglobal.co.uk