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Cite as: [2010] JRC 202

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[2010]JRC202

royal court

(Samedi Division)

9th November 2010

Before     :

Sir Philip Bailhache, Kt., Commissioner, and Jurats Fisher and Nicolle.

 

Between

A

Appellant

And

B

Respondent

Advocate M. J. Haines for the Appellant.

Advocate R. E. Colley for the Respondent.

judgment

the commissioner:

Introduction

1.        This is an appeal by A ("the wife") against decisions of the Deputy Registrar of the Family Division ("the Deputy Registrar") of 27th July, 2009, in relation to ancillary matters, and in relation to the costs of the associated residence and contact proceedings concerning the only child of the marriage, C.  We shall refer for convenience to the respondent to this appeal, B, as "the husband". 

2.        The parties met in January 1999 and were married in the United Kingdom in August 2001.  The wife was then 41 and the husband was 35.  C was born in 2003.  At the time of the marriage, the wife owned a two bedroom flat which she had bought in 1987.  She sold the flat and applied the net proceeds of sale to the purchase of a property which was bought by the husband and the wife in joint names.  The purchase price was £124,500.  According to the wife, she contributed £43,000 and the husband contributed nothing.  According to the husband, he put in £10,000 while the wife put in about £25,000.  Nothing really turns upon this disagreement.  The husband also owned a flat in Cambridgeshire, which he let to a tenant for a rent which covered the mortgage payments.  In 2003, he sold that flat which, after payment of the outstanding mortgage, yielded about £25,000.  During the early years of the marriage, both parties had their own bank accounts into which their respective salaries were paid, and a joint account from which the expenses of the matrimonial home and other family expenses were met.  Both parties transferred money from their individual accounts to the joint account for that purpose.  The net proceeds of sale of the husband's flat were, according to the wife, paid into the husband's personal account.  According to him, they were paid into the joint account to meet joint liabilities.  Again, nothing really turns on this disagreement. 

3.        C was born with Downes Syndrome and needs special care.  From the time of her birth, the wife no longer worked and remained at home to look after her.  In 2006, the husband obtained employment in Jersey, and the family moved to the Island.  In 2007, C was enrolled at a local school.  In January 2007, the parties bought a house in St Helier, for £365,000.  It was purchased with the benefit of a mortgage from the Royal Bank of Scotland.  The parties had sold their property in England, and applied the net proceeds of sale which were approximately £65,000, towards the purchase price.  The property is now valued at £400,000 to £425,000.  The median point, which both parties have agreed, is £412,500.  After deducting the outstanding loan from the Royal Bank of Scotland of £212,000, the net equity in the property is £200,500. 

4.        In September 2007, the wife's mother, D, came to Jersey to spend a three week holiday with her daughter and son-in-law.  D is a widow.  According to her affidavit, which was not before the Deputy Registrar but was admitted for the purposes of this appeal, she became concerned about the level of debt that the parties had, and she agreed to lend £60,000 to them, free of interest, in order to reduce their liabilities.  The affidavit of D, and the oral evidence of the wife, both describe this advance as a "loan".  According to the evidence of the husband, both before the Deputy Registrar and before this Court, it was a gift.  The husband stated that there was no discussion about it; he was merely told one evening during D's holiday that money had been paid into the mortgage account.  There was no documentary evidence which assists in determining whether the advance was a loan or a gift, and it remains in dispute between the parties.  We have not heard oral evidence from D or from any other witnesses who might be able to throw light upon the nature of the transaction.  In the event, we do not find it necessary to resolve the dispute for the purposes of this appeal. 

5.        During 2008, if not before, the marriage was under strain.  The wife felt alone and unhappy.  She had few friends, and she suspected the husband of being unfaithful to her.  In 2008, the family went to the United Kingdom and the wife went to visit her mother.  The husband returned to Jersey and expected the wife and C to return a few days later.  They did not do so.  The wife then applied to the English court for a residence order in relation to C. 

Procedural history

6.        That move by the wife led the husband to issue an Order of Justice seeking the immediate return of C to the jurisdiction of this Court.  An injunction was obtained requiring the wife to return C to the Island.  In June 2008, the wife and C returned to Jersey.  It was clear at that stage that the wife was suffering from stress and was unwell.  In July 2008, she was seen by a consultant psychiatrist, E.  E produced a report dated 28th August, 2008, which was before the Deputy Registrar but which we have not seen.  It appears that the doctor diagnosed obsessional traits but found no evidence of any specific mental disorder.  On 10th September, 2008, in the proceedings relating to the residence and contact order, the Deputy Registrar ordered that a joint letter of instruction be sent to E to provide an addendum to his report on the psychological health of the wife.  On 6th February, 2009, the matter came back before the Deputy Registrar, who ordered that the hearing dates of 25th to 27th February, 2009, be vacated; the psychological report was not available, the joint letter of instruction not having been agreed.  The parties were ordered to agree those instructions within seven days.  The Deputy Registrar also ordered a report from the wife's GP. 

7.        On 17th March, 2009, the Deputy Registrar ordered a further case review on 27th March and further ordered that instructions be sent forthwith to F to provide a psychological report on the wife's emotional health and well-being.  On 27th March that order was renewed, but it appears that the wife had not attended upon the psychologist.  The Deputy Registrar ordered that, if the wife failed to co-operate in the preparation of that report, adverse inferences might be drawn.  Affidavits of evidence and schedules of assets and liabilities and income positions were ordered to be prepared by 27th June.  Both parties were also ordered to file open statements as to the orders sought by the same date. 

8.        On 24th June, 2009, in the presence of the husband's advocate but not the wife's advocate, the Deputy Registrar ordered that the wife should file her affidavit of means within seven days in default of which adverse inferences might be drawn.  The Deputy Registrar also ordered:-

"that should the respondent fail to attend Court for the petitioner's application in respect of ancillary relief which is being heard on the week of the 13th July, 2009, immediately following the hearing in respect of C, then adverse inferences may be drawn and presumptions made as to her finances, and ancillary relief orders may be made in her absence and an order for indemnity costs may be made against her."

9.        On 27th July, 2009, the matter was again before the Deputy Registrar, both in relation to the contact proceedings and in relation to ancillary relief.  Counsel then acting for the wife was present, but stated that he was without instructions.  The wife was not present.  Counsel stated that he had been in contact with the wife's family, but they had been unable to make contact with the wife despite strenuous efforts.  He said that, according to his understanding, there had been no contact between the wife and her family since March 2009.  Although without instructions, Counsel made no application for an adjournment. 

10.      The Deputy Registrar then heard evidence from the Court Welfare Officer, G, and submissions from Advocate Colley for the husband on issues relating to contact, with which we are not concerned.  Reference was also made to a report by H.  The hearing then continued in relation to ancillary matters.  Evidence was heard from the husband, who testified as to the disputed gift of £60,000 from D, the history of the marriage, and his financial situation.  He expressed the wish for a clean break; he did not want the wife to have any sort of charge upon the house.  He asked the Deputy Registrar to transfer the house into his name.  He said that he thought that his legal costs had been increased by the conduct of the wife in failing to attend for hearings.  There was no other evidence which was, as Advocate Colley rightly stated, "somewhat one-sided, I have to say".  Advocate Colley then addressed the Deputy Registrar on the financial order which her client was requesting.  No documentation had been filed on the part of the wife and the only information available to the Deputy Registrar as to her means had come from the husband.  There is no suggestion that the husband deliberately misled the Deputy Registrar, but the information upon which she relied was incorrect in a number of ways.  D was said to be "relatively wealthy"; that, it seems from her affidavit, is not the case.  The wife was said to have £20,000 in her bank account; we do not have the bank statement as at 29th July, but by 25th August, 2009, it was in fact £10.  It was suggested that the wife's legal costs had been paid by D, but not that the wife was indebted to her mother to that extent.  It was suggested that the equity in the matrimonial home was £160,000, when it was rather more than that.  It was suggested that the wife failed to engage in the proceedings and had refused to see the psychologist.  No criticism is made of Advocate Colley.  She was acting in the best interests of her client in what was, as she said, a "difficult case". 

11.      Having heard these submissions, the Deputy Registrar made an indemnity costs order against the wife in relation to the ancillary relief dispute, and a costs order on the standard basis in relation to the contact dispute.  She ordered that the matrimonial home should vest in the husband, together with the contents of the house, and that the wife should pay nominal maintenance for C in the sum of £1 per annum.  No lump sum was to be paid to the wife.  The costs orders were not, however, to be enforced without the leave of the Court.  The Deputy Registrar delivered her reasons on 26th April, 2010. 

12.      As to the reasons for continuing the hearing in the absence of the wife, the Deputy Registrar stated:-

"Advocate Winchester attended Court but said he had been unable to get instructions, although he did not request that the matter be adjourned.  He said he had been in touch with her family who had tried to contact her.  There had however been some telephone contact between them and the respondent.  The respondent has had regular but inconsistent telephone and text contact with the petitioner for C.  It was Advocate Colley's submission therefore that the respondent was aware of these proceedings.  The psychiatrist states that she has an obsessional personality trait, and finds it difficult to adjust to events which are not precise and do not fall within a specific action place she has organised in her mind, but this does not constitute a mental disorder, merely an over-riding trait in her personality.  Should the matter therefore proceed today or should there be further delay to wait to see if and when she does choose to take part?  There have already been delays in the proceedings arising from the breakdown of the marriage between the petitioner and respondent and legal costs have mounted.  The petitioner has again had to come to court despite working and looking after C and is incurring further legal costs.  There should be some finality in the proceedings and I am therefore continuing with the hearing.  The hearing date was organised so the respondent would not have to come over to Jersey from England for two hearings."

13.      The Deputy Registrar examined very carefully each of the checklist factors and concluded that the husband's financial needs included the provision of a home for C, who was likely to remain dependent upon him for the rest of her life.  She concluded that there were special and unusual circumstances justifying an order for indemnity costs against the wife.  Those circumstances were not specified, but it may be inferred that the Deputy Registrar considered that the failure of the wife to engage in the proceedings had increased the husband's costs, and that this was a reason for ordering her to pay them on the indemnity basis.  Those orders for costs were not intended to be enforced and again we think that it may be inferred that the Deputy Registrar took the view that those costs could be notionally set off against any lump sum which might otherwise have been ordered for the wife.  Be all that as it may, it is not disputed that the effect of the order was that the wife received nothing, and that all the matrimonial assets of any value were transferred to the husband.  It is against that order that the wife appeals. 

The wife's health

14.      It is clear that the Deputy Registrar took the view that the wife was being difficult, and deliberately refusing to comply with court orders and to engage in the judicial process.  Unfortunately, that was a misapprehension.  The evidence now available to the Court makes it clear that the wife suffered a catastrophic mental breakdown early in 2009.  This is not contested by counsel for the husband, and we need therefore only summarise the relevant facts.  

15.      By order of 16th April, 2010, Birt, Bailiff granted the wife leave to adduce further evidence in the form of medical reports from I of 23rd September, 2009, and J of 26th February, 2010.  By further order of 3rd August, 2010, Bailhache, Commissioner, admitted a further psychiatric report of K of 9th June, 2010.  From those reports, it emerges that in January 2009 the wife had seen her GP in England and was reported to have had disorganised thoughts, having gone missing for fifteen hours after crashing her car the previous day.  She was referred for psychiatric treatment and was seen again by E.  She was extremely anxious and expressed feelings of abandonment and betrayal.  The psychiatrist thought that she was showing features of an emotionally unstable personality order, and he prescribed drugs for her anxiety.  Subsequently, her behaviour deteriorated to the extent that on 13th March, 2009, her brother-in-law took her to the Accident and Emergency Department of a hospital in Kent for assessment by the Mental Health Care Team.  She had been travelling across the country acting in a confused and bizarre manner, and talking to herself.  At the assessment, she had apparently given a coherent account of herself, but, after she had been dropped off at the airport to travel to Jersey for the hearing on 27th March, she had failed to board the flight and had gone missing.  A study of cash withdrawals from her bank account shows that she meandered through England and into Scotland over a period of many weeks.  She had virtually no contact with her family for about five months, apart from the occasional text message. 

16.      She surfaced on 26th August, 2009 in Inverness, where she had checked into the Ramada Hotel in a confused and disorientated state.  Hotel staff called the police and she was taken to Inverness Hospital where she was detained under the Mental Health (Care and Treatment)(Scotland) Act 2003 for a period of one month.  After the expiry of that period, she remained in hospital as a voluntary patient until her discharge on 5th October.  I, consultant psychiatrist at New Craig's Hospital, Inverness, concluded that she had "a mixed personality disorder with obsessional, dependent and anxious avoidant traits".  He was unable to state whether prior to her admission to hospital she had been in a position to instruct a solicitor, or what her mental state was, although he had little doubt that she was in emotional turmoil.  Her tendency to avoid dealing with situations may also have led to her failure to give any instructions to her solicitor. 

17.      After leaving Inverness, the wife made her way to Edinburgh, where a further crisis occurred.  On 15th December, 2009, she had gone to the Sheraton Hotel, where she told staff that a booking had been made through the "virtual world."  She had become tearful and upset, stating that she believed that someone was trying to destroy her.  Before going to the Sheraton Hotel, she had been staying in hostel accommodation in Edinburgh where her behaviour had been bizarre and had given rise to concerns amongst staff.  The police were called to the Sheraton Hotel and the wife was taken to the Royal Edinburgh Hospital, where she was detained under the 2003 Act.  At interview with J, she was guarded and suspicious.  Inter alia, she believed that she had been "thrown into the 63rd Command Regiment of the US Army in Inverness".  She was perplexed and could hear voices from miles away.  She was vulnerable and showing signs of a psychotic illness.  She refused to submit to any physical examination and was detained under an emergency procedure. 

18.      Over the first few weeks of her admission, she was behaving bizarrely, although denying that she was mentally ill and refusing to engage with staff and to accept treatment.  Eventually, she did accept some anti-psychotic medication and her condition began gradually to improve.  On 27th January, 2010, there was a meeting on the ward with the wife's sister, L, and it was agreed that it would be beneficial if she were to be transferred to a hospital near Canterbury, to be closer to her family.  The compulsory treatment order was renewed on 12th February, 2010, on the basis that she lacked capacity to make decisions regarding her medication.  On 5th March, 2010, the wife was transferred to St Martin's Hospital in Canterbury, and on 15th March, she was released into the care of her sister.  The opinion of J and M of the Royal Edinburgh Hospital is that the wife had been suffering from a psychotic illness at the time of her admission in December, 2009.  They could not say with certainty for how long she had been suffering in that way, but it was possible that she had been unwell for some time prior to her admission. 

19.      We conclude, on a balance of probabilities, that the wife was not well enough to participate in the proceedings before the Deputy Registrar on 27th July, 2009, and that, if the Deputy Registrar had been aware of the history that has now been placed before us, it is very unlikely that the hearing would have taken place.  There were a number of indicators before the Court on 27th July that something had gone wrong.  The Court Welfare Officer, G, gave evidence on that day that:-

"...what my concern would be is that I think there is definitely a worry about A at the moment and there's got to be clear concerns if her family can't get in contact and she hasn't been seen by her mother for some time and, you know, my own contact with A there's clearly worries about her, her health at the moment."

H's report of 8th July, 2009, which was also before the Court, recorded:-

"...I have to convey to the Court my extreme concern about A's wellbeing.  Although the psychiatric report of August 2008 does not indicate evidence of a formal psychiatric disorder it is also clear from the positive reports of the educational psychologist, teacher and her mother that A's behaviour is somewhat uncharacteristic.  There does appear to have been a period until C was over the age of 4 years when B, A's mother, as well as the nursery school were satisfied that A was a competent and good mother to her daughter, C.  The Court will appreciate that given this significant breakdown in the mother and daughter relationship, as a clinical psychologist I am concerned about A's wellbeing."

However, it is of course easy to be wise after the event.  We will say that it is unfortunate that an application for an adjournment was not made by the wife's counsel at that time, even if he was without instructions.  Such an application would inevitably have focused the mind of the Deputy Registrar on the desirability or otherwise of proceeding in the absence of one of the parties, and required her to justify the decision to do so. 

20.      Both counsel agreed that the test to be applied by this Court on appeal from the Family Registrar is to be found in Downes-v-Marshall [2010] JRC 115B. At paragraph 20, the Court stated:-

"20.  What then should be the test on appeal to this Court?  We wish to underline the fact that we confine ourselves to appeals from the Family Registrar and his deputy pursuant to article 3 of the Matrimonial Causes (Jersey) Law 1949 where evidence has been heard before them and a discretion has been exercised.  We are not concerned with appeals from the Master of the Royal Court (notwithstanding that they are all Greffier Substitutes), where different considerations may apply.  An appeal from the Family Registrar should only be allowed if there has been a procedural irregularity or if, in exercising his discretion, he has taken into account irrelevant matters, or ignored relevant matters, or otherwise arrived at a conclusion which the Court believes to be wrong.  This test is not precisely the test applied on appeal from this Court to the Court of Appeal.  It reserves a wider discretion for this Court to intervene, but it places nonetheless greater weight on the registrar's exercise of discretion.  This test will, we think, establish the right balance.  Sufficient weight is to be attributed to the registrar's findings of fact and exercise of discretion to discourage litigants from seeking a fresh bite at the cherry.  On the other hand, this Court will have the power to intervene if it thinks that the registrar has gone wrong to the extent that intervention is required in the interests of justice and fairness."

21.      In our judgement, for reasons that are perhaps understandable, the Deputy Registrar did go wrong to the extent that this Court should intervene.  One party was not present, and the decision to proceed in her absence can now be seen to have been based upon a misapprehension.  The view was taken that the wife was being obstructive and deliberately refusing to engage in the judicial process.  As we have now found, the wife was in fact incapable, by reason of mental illness, from participating in the proceedings on 27th July, 2009. 

The merits of the appeal

22.      Was the conclusion at which the Deputy Registrar arrived a fair outcome to the proceedings?  Counsel for the wife submitted that it was not.  Mr Haines contended that the Deputy Registrar's justification for declining to make a lump sum award to the wife was that she had made costs orders against her which were not to be enforced.  The costs orders were not, however, quantified, and ought not in any event to have been made. 

23.      Counsel submitted that an indemnity costs order in relation to ancillary proceedings was wholly exceptional.  The Deputy Registrar had stated:- "I accept that there are special and unusual circumstances in this case leading towards an order for indemnity costs against her."  She had not specifically identified what those special and unusual circumstances were, but she appeared to have accepted the husband's submission that the wife's litigation conduct had increased his legal costs.  She had also apparently accepted the husband's submission that "for several months now, A has failed to engage in the proceedings".  The husband's counsel had contended that it was to be assumed that the wife was fully aware of the hearing taking place on 27th July.  Mr Haines submitted that there was no evidence to that effect.  The wife's then advocate had stated that there had not been contact between the wife and her family since March, 2009.  He was himself without instructions.  Mr Haines also submitted that the Deputy Registrar failed to take account of the fact that the current behaviour of the wife was uncharacteristic, was inexplicable in the sense that a hitherto loving mother had cut herself off from her only child, and had caused others, including professional people, to express concern about her mental health.  Counsel submitted that the fresh evidence now before the Court painted an entirely different picture. 

24.      In relation to the costs of the contact proceedings, counsel drew our attention to the English case of Re T (order for costs) [2005] 2 FLR 681 which had also been, very properly, drawn to the attention of the Deputy Registrar by Advocate Colley.  At paragraph [36], Wall LJ approved the trial judge's summary of the principles in the following way:-

"2.1    The CPR apply.  Under normal circumstances, according to r 44.3(2)(a), the general rule is that costs should follow the event although the court can make a different order (r 443(2)(b)). 

2.2      However, this general rule does not apply to family proceedings (Family Proceedings (Miscellaneous Amendments) Rules 1999). 

2.3      It is suggested that even in family proceedings, the general rule is probably the starting point but can more easily be displaced (Gojkovic-v-Gojkovic (No 2) [1992] Fam 40). 

2.4      In cases involving children in particular, costs awarded against one parent or another are exceptional since the court is anxious to avoid the situation where a parent may feel "punished" by the other parent which will reduce co-operation between them.  This will only impinge ultimately on the welfare of the child or the children concerned (London Borough of Sutton-v-Davis (Costs) (No 2) [1994] 2 FLR 569; re M (Local Authority's Costs) [1995] 1 FLR 533). 

2.5      The conduct of the parties is in reality the major consideration when deciding whether or not an exceptional order for costs should be made.  It should only be made if the penalised party has been unreasonable in his or her conduct.  Moreover the 'unreasonableness' must relate to the conduct of the litigation rather than the welfare of the child ( R-v-R (Costs: Child Case)[1997] 1 FLR 95). 

2.6      One has to be very careful in this distinction when, as in the case of (the mother), the apparent unreasonableness is as a result of the personality of the relevant party.  In such circumstances, there is often an overlap of that party's conduct of the litigation and the conduct relating to the welfare of the child."

An award of costs in contact proceedings was therefore "exceptional". 

25.      Counsel for the husband did not really contest any of these submissions.  She contended, however, that the focus on the question of costs was a red herring, because they were not to be enforced.  The costs incurred by the husband had to be taken into account, but the important consideration was how to ensure that a home remained available for C, and how the husband could make ends meet.  The needs of C were first and paramount.  

26.      We do not agree that the costs orders made by the Deputy Registrar are a red herring.  They were, in effect, the only real justification for an award which gave everything to the husband and left the wife with nothing.  The Deputy Registrar did, of course, have a discretion in the matter of costs, but we cannot believe that, if she had had the knowledge which this Court now possesses, the orders would have been made.  The orders should in any event have been quantified, even in general terms, so as to ensure that the final result was fair.  We do not think that the costs orders were justified, and they are accordingly set aside. 

27.      Having set aside the orders for costs, one is left with an order which transferred the wife's interest in the matrimonial home to the husband without any compensating lump sum payment.  The financial information before the Court shows that the husband is in employment in the finance sector with gross earnings of £67,900 per annum at January 2010.  He is also entitled to a pension of approximately £15,500 per annum.  He has liabilities in terms of legal costs and credit card debts of £94,000 and a bank overdraft of £4,677.  The wife is unemployed and living with her sister.  Her only asset is cash at the bank of £2,023.  She owes her mother £39,000 in relation to her legal costs, and she has a liability, on her account, to her mother for the loan of £60,000, thus totalling £99,000. 

Submissions of the parties

28.      Counsel for the wife submitted that the outcome before the Deputy Registrar was plainly unfair to the wife.  He acknowledged that the interests of C were of the first importance, and that the ultimate order should not deprive the child of her home.  Counsel contended that a clean break was not possible and that a Mesher order, which conferred an interest in the property upon the wife, was the equitable solution.  At the same time, the wife needed funds to re-establish herself and to cover the costs of contact with C.  Mr Haines suggested an immediate payment by the husband of £20,000.  This would cover accommodation costs of £1200 (a deposit and the first month's rent), furniture and equipment for the flat, and a car (£8,800) and the expenses of travel and accommodation in Jersey to have contact with C of £10,000.  Counsel also sought annual payments of £4,800 commencing on 1st January, 2012, and continuing for five years, totalling £24,000.  Finally, he sought a Mesher order, which would give the wife 13.09% of the value of the house (£412,500), i.e. £54,000.  Counsel suggested that the trigger events which would lead to the sale of the house were:-

(i)        the death of the husband;

(ii)       the attainment of the age of 16 by C;

(iii)      the re-marriage of the husband;

(iv)      the co-habitation by the husband with another person as man and wife for a period in excess of three months;

(v)       the voluntary sale of the former matrimonial home by agreement; or

(vi)      the further order of the Court. 

In tabular form, the claim submitted by counsel on behalf of the wife can be expressed in this way:-

Immediate cash payment

£20,000

Annual payments for five years

£24,000

13.09% of the value of the matrimonial home

£54,000

Total

£98,000

This would represent just under 50% of the net value of the matrimonial home. 

29.      Mrs Colley seeks the dismissal of the wife's claim for capital and income.  The husband wanted a clean break.  The Court's primary concern should be for C, and the husband therefore sought the transfer of the former matrimonial home to him together with the outstanding mortgage for which he would accept responsibility.  Even if D's contribution of £60,000 was properly to be classified as a loan, it was a "soft" debt.  The husband would offer to pay up to £5,000 to facilitate the wife's prospective contact with C over the first year, such payments to be made directly to the providers of travel and accommodation.  The husband was in the early stages of a new relationship, and no financial contribution was being made by his new partner.  The husband's father, who had been living with him since September 2009, and was helping to look after C, contributed £300 per month to the household expenses.  Counsel did not accept that the wife's future employment prospects were not good.  Counsel also contended that no account had been taken of the State benefits to which the wife was currently entitled in England, namely disability living allowance, housing benefit and council tax benefit. 

30.      Counsel contended that the ready availability of State benefits for the wife should be taken into account in any order made by the Court.  Housing benefit would pay the rent for the kind of housing to which reference had been made in the wife's affidavit.  Housing benefit would be denied if the wife had capital available to her in excess of £16,000.  Any lump sum payment should be less than £16,000 so as not to deprive her of that benefit.  It would be foolish to exceed that figure. 

31.      Counsel was opposed to the making of a Mesher order, which would be unusual, she contended, in that no contribution to the expenses of maintaining the house or paying the mortgage was being made by the wife.  The proposed trigger events were unsatisfactory.  C was a disabled child who would very likely be reliant on her father for the rest of her life.  A trigger event related to the husband's personal circumstances would be inappropriate in that it would not sufficiently protect the position of the child.  The only reasonable trigger event would be C's death.  More generally, counsel submitted that the Deputy Registrar had considered all the relevant factors and had reached the right result in the interests of the child. 

Conclusion

32.      Mental illness, like physical illness, is not necessarily a life-long curse.  There is no doubt from the medical evidence which has now been admitted that the wife suffered a catastrophic mental breakdown after the collapse of her marriage.  That might have given the impression that she was contemptuous of the judicial process and unwilling to engage with the husband or the Court in relation to the resolution of the differences between them.  She might have given the impression that she was disinterested in the welfare of her daughter and careless about maintaining a relationship with her.  Having seen the wife in the witness box, we are entirely satisfied that these would, if they did arise in the court below, have been false impressions.  The wife is still vulnerable, but we have no doubt that she has realistic expectations about her complete recovery and about her ability to re-enter the employment market in due course.  It must not be forgotten that for the first four years of C's life, the wife was a devoted and loving mother who was her child's primary carer.  We understand that at this stage she seeks no more than contact with C, and we have no doubt that very sympathetic consideration will be given to that desire when the matter comes before the Registrar shortly.  The husband, to his credit, supports this aspiration, and it is important that the mother/daughter relationship be restored as soon as practicable. 

33.      We make those prefatory comments because the restoration of contact between the wife and C will not be without difficulties, including financial difficulties.  It will be expensive for the wife to travel to Jersey and to be accommodated here while the relationship with the daughter is reconstructed.  It will involve further expense when, in due course, the child goes to stay with her mother and/or maternal family in England.  The wife has needs as much as the husband.  We acknowledge that the wife's needs must be subordinated to those of C, but they must not be overlooked completely.  There is only one substantial asset, namely the former matrimonial home, and, whether or not that property is retained, a home must be preserved for C. 

34.      There is not total agreement between the parties as to their respective financial contributions towards the purchase of the former matrimonial home.  It is clear, however, that both made a financial contribution.  After the birth of C, the husband's salary supported the family and paid the mortgage while the wife looked after the home and the child.  It is well established that no distinction is to be drawn between those different, but equally valuable contributions. 

35.      What then are the needs of C?  As we have stated, she was born with Downs Syndrome and is likely to be dependent upon her parents or other adults for the remainder of her life.  No evidence is before us as to her life expectancy, but we must assume that she will live for a good many years.  She is in good general health and is making progress as well as can be expected for a child with her disability.  Whereas a court would usually limit its consideration of the needs of a child to the conclusion of secondary or tertiary education, that cannot be the case here.  At present, the husband is the sole primary carer, and he needs appropriate accommodation for himself and for C.  Given the income of the husband, and the lack of income of the wife, it is to be assumed that the husband will be solely responsible for the child's maintenance for the foreseeable future. 

36.      Prior to the breakdown of the marriage, the parties enjoyed a reasonably comfortable life-style.  The wife is now aged 50, while the husband is aged 43.  The husband is in good health, and the wife is making a good recovery from her mental breakdown.  As we have found, the parties made more or less equal financial contributions to the matrimonial home, and made equal contributions to the welfare of the family prior to the breakdown of the relationship.  We are unable to resolve the issue of whether or not D's contribution of £60,000 was a gift or a loan.  There appears to be no documentary evidence of a loan; so far as the husband is concerned, the money was placed in the mortgage account without his concurrence and initially without his knowledge.  We think that this issue must be left for D to pursue should she see fit.  In our judgement, there is no conduct of the parties which it would be inequitable to disregard.  The wife's failure to provide financial information to the Deputy Registrar was unfortunate, but in all the circumstances was excusable.  

37.      The Court's duty is to achieve fairness, so far as possible, between the parties.  In J-v-M [2002] JLR 330, the Court referred to the case of White-v-White (2000) 3 FCR 555 and stated, at paragraphs 35 to 36:-

"In the course of his judgment, Lord Nicholls stated that the overriding objective was to make a fair financial arrangement between the parties, giving first consideration to the welfare of the children.  He continued ([2001] 1 All E.R. at 8-9):-

'Self-evidently, fairness requires the court to take into account all the circumstances of the case.  Indeed the statute so provides.  It is also self-evident that the circumstances in which the statutory powers have to be exercised vary widely.  As Butler-Sloss, L.J. ... said in Dart's case, the statutory jurisdiction provides for all applications for ancillary financial relief, from the poverty-stricken to the multi-millionaire.  But there is one principle of universal application which can be stated with confidence.  In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles.  Typically, a husband and wife share the activities of earning money, running their home and caring for their children.  This traditional division of labour is no longer the order of the day.  Frequently both parents work.  Sometimes it is the wife who is the money-earner, and the husband runs the home and cares for the children during the day.  But whatever the division of labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party when considering para. (f) of s.2592) of the 1973 act, relating to the parties' contributions.  This is implicit in the very language of para. (f): '...the contribution which each of the parties has made or is likely .. to make to the welfare of the family, including any contribution by looking after the home or caring for the family.'  (My emphasis).  If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets.  There should be no bias in favour of the money-earner and against the homemaker and the child-carer.  There are cases, of which the Court of Appeal decision in Page-v-Page, [1981] 2 FLR 198 is perhaps an instance, where the court may have lost sight of this principle.  

A practical consideration follows from this.  Sometimes, having carried out the statutory exercise, the judge's conclusion involves a more or less equal division of the available assets.  More often, this is not so.  More often, having looked at all the circumstances, the judge's decision means that one party will receive a bigger share than the other.  Before reaching a firm conclusion and making an order along these lines, a judge would always be well advised to check his tentative views against the yardstick of equality of division.  As a general guide, equality should be departed from only if, and to the extent that, there is a good reason for doing so.  The need to consider and articulate reasons for departing from equality would help the parties and the court to focus on the need to ensure the absence of discrimination.'

We respectfully agree with all these sentiments.  The touchstone in all cases involving a division of matrimonial assets is fairness.  The court must try to achieve fair financial arrangements between the parties, and the welfare of the children is a primary consideration.  There is no place for discrimination between husband and wife.  Where they have both, by their own efforts, built up the family assets, even if their contributions are different in nature, fairness requires that those contributions be given equal weight.  There is no reason why any surplus of assets, once the reasonable needs of the parties have been satisfied, should automatically go to the husband.  Nonetheless a ruthless application of the principle of equality will seldom lead to fairness.  The court is required to take into account all the circumstances of the case."

38.      Equality of division is often a useful starting point, and in our judgement, is so in this case.  There are some pictures and other household effects which are capable of division.  Counsel assured us that this could be sensibly achieved by agreement between them and we are content to leave those matters there.  So far as the former matrimonial home is concerned, the net equity is agreed to be £200,500, and 50% of that figure is £100,250.  We do not agree that it would be appropriate to reduce this figure to less than £16,000 so that the wife would continue to be able to claim state benefits in England.  We can see no good reason why UK tax payers should shoulder the burden of looking after the wife when she has assets which would enable her to be financially self-reliant.  On the other hand, we do accept that the entire financial burden of maintaining the child is likely to fall upon the husband for the foreseeable future, and that is a factor to be borne in mind.  We think that a fair award for the wife would be a lump sum payment of £90,000. 

39.      In reaching that conclusion, we have borne in mind the disparity of earning power between the husband and the wife and the disparity in their ages.  The disparity of age will mean that the wife's working life will be shorter than that of the husband.  In addition, the husband has a small pension of £15,500, while the wife has none.  We take the view that all these factors are counter-balanced by the need to ensure that the husband has adequate funds to provide a home for C and sufficient income to support her in the years ahead.  Can those needs be met at the same time as requiring him to make a lump sum payment to the wife of £90,000? 

40.      The husband in evidence stressed his wish to have a clean break.  We agree that a clean break is highly desirable if it can be achieved.  The Court has been told that the Royal Bank of Scotland is willing, under certain conditions, to advance further sums secured upon the former matrimonial home.  The outstanding mortgage is £212,254 and that could be increased to £292,000, yielding approximately £80,000.  The conditions stipulated by the bank are apparently that the debts to credit card companies are to be liquidated.  Those debts amount to £22,180.  There is also an overdraft of £4,677, or total liabilities of £26,857.  The shortfall is therefore approximately £36,857, made up of £26,857 plus £10,000 (£90,000 minus £80,000).  How could that shortfall be bridged? 

41.      There seems to us to be at least two options available to the husband.  The first is that the former matrimonial home could be sold, and a smaller two bedroom property, suitable for his needs and those of C acquired.  We take judicial notice of the fact that such a property could readily be acquired for £300,000 - £320,000.  The second option is to engage in some family arrangement with his father, so that the current property can be retained.  We have been informed that the husband's father sold his property in the United Kingdom for £150,000 and was left with equity of some £75,000.  If part of that equity were invested in the former matrimonial home, the husband would, with the assistance of a further loan from the bank, be enabled to meet his obligation to make a lump sum payment of £90,000 to the wife. 

42.      Clearly, the husband must be given some time to order his affairs in order to enable him to make the lump sum payment to the wife.  We think that a maximum of six months would be an appropriate period.  In the meantime, he must pay interest on the capital sum of £90,000 at the rate of 5%.  Interest payments of £375 per month must be paid by the husband to the wife, without deduction of tax, on the last day of the month, commencing on 30th November, 2010, or pro rata until payment of the capital sum, of £90,000.  That would allow the wife to plan at least one visit a month to Jersey to re-establish contact with her daughter once the appropriate order has been made by the Registrar. 

43.      We therefore allow the appeal.  The order of the Deputy Registrar of 27th July, 2009, in the ancillary proceedings will be varied to the following extent:-

(i)        Paragraph 1 shall be varied to the extent that the words "within two months of the date of this order" shall be substituted for the words "within three weeks from the granting of this order";

(ii)       Paragraph 3 shall be varied by the addition of the words "after such items of joint property as may be agreed between the parties have been transferred to the respondent [wife]";

(iii)      Paragraph 4 is revoked;

(iv)      Paragraph 7 is revoked;

(v)       Paragraph 8 is revoked and the following paragraph is substituted:-

"8.      The petitioner shall pay to the respondent a lump sum of £90,000, such sum to be paid within six months of the date of this order and in the meantime, to bear interest at the rate of 5% per annum, such interest in the monthly sum of £375 to be paid by the petitioner to the respondent, without deduction of tax, on the last day of each month, the first payment or proportion thereof to be paid on 30th November, 2010". 

44.      The order of the Deputy Registrar of 27th July, 2009, in the residence and contact proceedings will be varied to the extent that paragraph 5 is revoked. 

45.      We give both parties liberty to apply in the event that difficulties should arise in the implementation of this judgment. 

Authorities

Mental Health (Care and Treatment)(Scotland) Act 2003.

Downes-v-Marshall [2010] JRC 115B.

Re T (order for costs) [2005] 2 FLR 681.

J-v-M [2002] JLR 330.

White-v-White (2000) 3 FCR 555.

 


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