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Scottish Sheriff Court Decisions


You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> Woodhouse v. Mooney [2006] ScotSC 42 (21 April 2006)
URL: http://www.bailii.org/scot/cases/ScotSC/2006/42.html
Cite as: [2006] ScotSC 42

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F333/04

 

 

 

 

 

 

 

 

 

 

 

JUDGEMENT OF

 

SHERIFF WILLIAM SEITH STANNERS IRELAND

 

in the cause

 

ROBERT BOAM WOODHOUSE

 

Pursuer

 

against

 

DEBORAH NOYAN MOONEY or WOODHOUSE

 

Defender

­­

 

KILMARNOCK : 21 April 2006

 

The Sheriff, having resumed consideration of the cause, Finds the following facts admitted or proved:

 

FINDINGS IN FACT

 

1.             The parties were married at Newton Mearns on 22 August 1987.

 

2.             There are 4 children of the marriage, namely Mark Boam Woodhouse, born 26 October 1988, Grant Nicholas Woodhouse, born 26 April 1993, Stewart James Woodhouse, born 19 September 1995 and Rachel NoyonWoodhouse, born 3 January 1997. All of the children are in full time education and reside with the Defender at the former matrimonial home. Only the 3 youngest children are now under the age of 16 years.

 

3.              The parties separated on 10 February 2003, and since that date they have not lived together nor had marital relations. The marriage has broken down irretrievably. There is no prospect of reconciliation.

 

4.              The relevant date for the purpose of Section 10(3) of the Family Law (Scotland) Act 1985 is 10 February 2003.

 

5.              At the relevant date there was matrimonial property in the Pursuer's name as follows:

 

(i)             the matrimonial home at Braeheads Maunshaeugh Road, Fenwick is worth £460000.00 and subject to a mortgage of £66000.00;

(ii)           Scottish Provident Endowment Policy number 206969301, worth £13944.00;

(iii)          Heritable property at 73a Portland Street, Troon, worth £35000.00;

(iv)         Heritable property at 12 Townend, Kilmaurs, worth £42000.00;

(v)           Heritable property at 2 Kilmarnock Road, Monkton, worth £60000.00;

(vi)         Heritable Property at 9a Cheapside Street, Eaglesham, worth £67000.00;

(vii)        Heritable Property at 86 Main Road, Fenwick, worth £44000.00;

(viii)      An account with Ameritrade Brokers (formerly Aufhauser), with a balance of $643.61-£380.00;

(ix)         Sum at credit at Clydesdale Bank PLC, account number 10582085 of £1591.50;

(x)           Sum at credit at Clydesdale Bank, account number 20582085 of £80.00;

(xi)         Sum at credit at HSBC, bank account number 91083163 of £127.05;

(xii)        Sum at credit of Saudi American, bank account number 72863 of $162355.00-£95800.00;

(xiii)      Cash deposit (for car) £10000.00;

(xiv)      Share holdings with Aviva and Cable & Wireless, worth £300.00;

(xv)       Pension policy with Prudential (previously Scottish Amicable, previously M&G), number M105B246, with a cash equivalent transfer value of £1129.00;

 

6.             At the relevant date there was matrimonial property in the ownership of the Defender as follows:

 

(i)             heritable property at 105 Wellbeck Crescent, Troon, worth £45000.00;

(ii)           heritable property at 40a Main Street, Fenwick, worth £48000.00;

(iii)          heritable property at 34 Main Street, Fenwick, worth £44000.00;

(iv)         Abbey National TESSA account number 56790710, worth £5169.15;

 

7.             At the relevant date there was matrimonial property in the joint ownership of parties as follows:

(i)             sums at credit at Clydesdale Bank, account number 343093 of £1627.25;

(ii)           sums at credit at Clydesdale Bank, account number 343085 of £2177.80;

(iii)          the furniture and contents of the matrimonial home.

 

8.             Prior to the relevant date the parties opened various accounts for the benefit of the children as follows:

 

(i)             Abbey National, account number R15862709WOO in the name of the Defender as Trustee for Mark Boam Woodhouse, which had a balance of £16675.41;

(ii)           Abbey National, account number X12145240WOO in the name of the Defender as Trustee for Mark Boam Woodhouse which had a balance of £133.15;

(iii)          Abbey National, account number X11648464WOO in the name of the Defender as Trustee for Rachel Noyon Woodhouse, with a balance of £270.33;

(iv)         Abbey National, account number X10637100W00 in the names of both parties as trustees for Stewart James Woodhouse with a balance of £300.00;

(v)           Abbey National, Bond number 84729 in the name of the Defender as Trustee for Grant Nicholas Woodhouse, with a balance of £13312.25;

(vi)         Abbey National, Bond number 847390 in the name of the Defender as Trustee for Mark Boam Woodhouse, with a balance of £3245.86.

 

9.             Immediately following the parties separation, the Defender withdraw all sums at credit in each of the Clydesdale Bank accounts, with the exception of account number 20582085. In addition, she withdrew a total of £22000.00 from accounts in the children's names to fund the purchase of a motor vehicle.

 

10.         At the relevant date, the Pursuers had a credit card debt in the sum of £2497.55 due to HSBC, Master Card number 5434 6030 2765 7689

 

11.         Between 29 August 2003 and 2 April 2004 the Pursuer sold his investment properties referred to at paragraph 5, items (iii) to (vii) inclusive. The cumulative sale price of said properties was £268450.00. The Pursuer currently has about £363000.00 in offshore accounts.

 

12.         The Defender has retained her investment properties referred to at paragraph 6 (i), (ii) and (iii). Said properties yield a rental income to the Defender. The current values of the properties are as follows:

 

(i)             105 Wellbeck Crescent, Troon - £65000.00,

(ii)           40a Main Road, Fenwick - £70000.00,

(iii)          34 Main Road, Fenwick - £65000.00,

 

13            The Pursuer owned heritable property at 77 Milton Avenue, Barnet, Herts during the course of the parties' marriage. In September 1999 the Pursuer sold that property. The net free proceeds of sale amounted to £161516.34. The Pursuer deposited the net free proceeds of sale into an offshore account. Interest accumulated on the proceeds of sale until the account closed in June 2002. The closing balance of the account on 13 June 2002 was £180115.66.

 

14           With exception of a period in 1988 and 1989, the Pursuer has worked abroad, mainly in the Middle East, throughout the parties' marriage. At the time of the parties' separation, the Pursuer was living and working in Saudi Arabia. The Pursuer's most recent overseas contract of employment ended in August 2004. The Defender also worked abroad during the parties' marriage. She has not worked at all since early 1993. She was living in Scotland at the date of the parties' separation.

 

15.         On 17 December 2004, the Pursuer suffered a heart attack while in Bahrain.

 

16.         The current value of the former matrimonial home is £550000.00. The terms of the report and valuation by CKD Galbraith, dated 19 May 2005 and produced at 5/38 are true and accurate.

 

17.         For the purposes of proof in the present action, copy documents may be treated as principals.

 

18.         The property at 77 Milton Avenue, Barnet, England was purchased by the Pursuer prior to the marriage of the parties and was not imported into matrimonial property.

 

19.         There are special circumstances to exclude the proceeds of sale of the property at 77 Milton Avenue, Barnet, England from matrimonial property, and the interest earned on the sale price, amounting to a sum of £180115.66.

 

20.         There are no grounds, in terms of special circumstances, to exclude the difference between £180155.66, and the sum of £213000.00.

 

21.         The Pursuer invested the proceeds of the sale of the said 77 Milton Avenue, Barnet, England, and the interest subsequently earned on that sum, in the ultimate purchase of 4 properties. The Defender was involved in selecting, fitting out and managing those said properties.

 

22.         The property at 13 Oakley Court, Barnet, England was the property of the Pursuer's late father. Title to that property, on his death, was not immediately taken by the Pursuer's mother. The property was leasehold. The Pursuer, with the assistance of his sister, obtained an extended lease for that property. The Pursuer contributed £16000.00 or thereby to the cost of obtaining that extended lease. That on the sale of that property, that sum of £16000.00 was repaid to the Pursuer and that the free proceeds, subject to any other legal expenses, were paid to the Pursuer's mother. The Pursuer was not the owner, nor had any other propriety interest in that property, during the course of the marriage.

 

23.         The Pursuer has no other assets which he has not disclosed to the Defender, nor the Court.

 

24.         Between October and December 2004, after the Pursuer's dismissal from his own employment in August 2004, the Pursuer was engaged in assisting colleagues in a business plan in Bahrain. He did so in the hope that this might lead to further employment for him in the Middle East in the oil industry. He received only expenses for this assistance to his colleagues in that period.

 

25.         The Pursuer, after his recovery from his heart attack, has sought employment. He has sought employment in his original field of working with a computer software programme called "SAP". He has not been successful in gaining employment.

 

26.         Whilst the Pursuer was employed in the Middle East, he earned substantial sums in excess of the equivalent of $100000.00 per annum. Because of his age, he has not been able to obtain similar employment subsequently.

 

27.         He has researched the possibility of employment in the UK, but has not yet obtained employment. If he finds employment, it is likely to provide an income in the range between £30000.00 and £45000.00, the latter sum being at the top of the range of possible salaries he may obtain.

 

28.         He has not worked since he suffered his heart attack and has not generated any income, excepting interest on his capital accounts, held in banks. He has not hidden, nor has he not disclosed, any sources of income, either to the Defender or the Court.

 

29.         On 4 August 2005, the Pursuer purchased a property for residential use at The Grange, The Grove, Houghton Conquest, Bedfordshire, England. The purchase price for the property was £550000.00. In addition, the Pursuer paid £22000.00 stamp duty. The Pursuer applied £342000.00 of his capital to the purchase price. There is a secure loan over the subjects, in the sum of £230000.00. The Pursuer, who had previously lived with his mother, had been looking at purchasing a home in England since the parties' separation. The property is a substantial one, but the Pursuer purchased same partly in the hope that in due course of time, the children of the marriage would visit him for residential contact.

 

30.         The Defender and the children of the marriage, presently live in the former matrimonial home at Braeheads, Maunsheugh Road, Fenwick. This is a substantial property enjoying 6 bedrooms and 4 public rooms. It has substantial grounds.

 

31.         Since the date of separation the Defender has only looked one other property of a similar type to the matrimonial home. To purchase that would have taken between £320000.00 and £340000.00. The Defender has not looked at other properties which she might be able to purchase, should she require to purchase a smaller property to accommodate herself and the children.

 

32.         Since the date of separation the Pursuer has continued to pay the mortgage of the matrimonial home and also has remitted the sum of £450.00 per month to the Defender. The matrimonial home has deteriorated.

 

33.         The Defender hopes to obtain employment as a foster carer. The matrimonial home has been approved by the relevant local authority for that purpose. The Defender has not commenced employment as a foster carer and her earnings from that employment are not certain.

 

34.         The Defender, due to indebtedness, and lack of remunerative employment, is not in a position to maintain the matrimonial home and to continue to live there with the children of the marriage. It would be best that the matrimonial home was sold, a capital payment be made to the Defender, by the Pursuer, and thereafter for the Defender to buy a home, on a smaller scale, suitable for herself and the children.

 

35.         From the flatted properties in her name, the Defender generates annual income in or around £12600.00, which after deduction of necessary costs of running said properties, would be in the region of £12000.00 per annum.

 

36.         The Defender has obtained, in principle, indication that she may be able to borrow £66000.00, which could be used to assist her in purchasing a suitable home for herself and the children.

 

37.         The 3 younger children, Grant, Stewart and Rachel, all attend Belmont House School, Newton Mearns, Glasgow, this is a private fee paying school. Since the date of separation the Pursuer has paid those school fees, notwithstanding that he has had no income. He has drawn the monies from his capital resources. The eldest child, Mark, attended Belmont House School, but is now a pupil at Glenalmond School, which is also fee paying. The Pursuer is agreeable to paying the equivalent sum for the school fees for Mark at Belmont House School, to allow Mark to attend at Glenalmond School. The Pursuer would prefer that all the children attend private schools, but he is unable, having no income, to continue to pay such fees beyond the summer term of 2006.

 

38.         The Pursuer, when he worked abroad, saw the children only when he had holidays of approximately 7-8 weeks per year. After the parties separated, he had infrequent contact with the children due in part to the reluctance of the Defender to such contact, but also due to concerns the Defender reasonably had about the Pursuer's engagement with the children, and especially the Pursuer's insight into a hyper activity condition from which the child Stewart suffers from, which requires a special diet.

 

39.         The Pursuer does wish to have contact with the children. He has, under order of the Court, had telephone contact and subsequent periods of personal contact with them in Scotland. It would be in the best interests of the children that they continue to enjoy contact with the Pursuer. It is not necessary, in order that that contact take place, that the Court now requires to make a formal contact order. The Defender will facilitate contact by the Pursuer with the 3 youngest children of the marriage under 16 years of age. It is not necessary, given the attitude of the Defender to contact, that this be subject to a formal Court order. The arrangements for contact are best left to be arranged between the Pursuer and the Defender.

 

40.         The Pursuer presently pays £450.00 per month to the Defender. The Defender's outgoings exceed her income by the figure of £240.00 or thereby per month. The Defender, who has not worked, and is not immediately likely to obtain remunerative employment as a foster carer, will require a period of readjustment after divorce. It is reasonable that the Pursuer be required to pay a periodical allowance for a period of 6 months after the decree of divorce.


 

FINDS IN FACT AND LAW

 

1.             That the marriage between the parties has broken down irretrievably. There is no prospect of a reconciliation. The parties have lived apart for 2 years. The Defender, by her oath, consents to decree of divorce, on that basis.

 

2.             Contact by the Pursuer, with the children Grant, Stewart and Rachel, would be in their best interest. That the Defender is now willing to facilitate contact between the Pursuer and the children. It is better that no order is made than that an order is made as regards contact. The arrangements for future contact between the Pursuer and the children, are best regulated by the parties themselves.

 

3.             That in order to make provision for a division of matrimonial property on divorce, there are no special circumstances to justify transferring the matrimonial home from the Pursuer to the Defender.

 

4.             That the best way to order the division of matrimonial property on divorce would be to ordain the Pursuer to make a capital payment to the Defender.

 

Therefore Finds that the marriage between the parties has broken down irretrievably, there is no prospect of reconciliation, the parties having lived apart for a period of 2 years, the Defender consenting to divorce, therefore divorces the Pursuers from the Defender; Ordains the Pursuer to make a capital payment to the Defender is the sum of THREE HUNDRED AND SIXTEEN THOUSAND FIVE HUNDRED AND EIGHTY POUNDS (£316580.00) STERLING with interest from the date of decree at the rate of 8% per annum until payment; Ordains the Pursuer to pay the school fees of Belmont House School, Newton Mearns, Glasgow in relation to Grant Nicholas Woodhouse, Stewart James Woodhouse and Rachel Noyon Woodhouse, including all tuition fees and all additional fees in respect of extra-curricula activities, until the term ending in Summer 2006; Ordains the Pursuer to pay to the Defender, as regards the child Mark Boam Woodhouse, the sum equivalent to that which would have been paid to Belmount House School, for the said Mark Woodhouse, and that until the end of the summer term 2006 (to assist in the said child's schooling at Glenalmond School); as regards contact, Makes No Order; Ordains the Pursuer to pay to the Defender the sum of FOUR HUNDRED AND FIFTY POUNDS (£450.00) STERLING per month, in advance, as periodical allowance, for a period of 6 months; Capitalises that in the sum of TWO THOUSAND AND SEVEN HUNDRED POUNDS (£2700.00) STERLING with interest at the rate of 8% per annum from the date of decree until payment; Accordingly, Sustains the Pursuer's first plea in law; Repels the Pursuer's second plea in law; Repels the Pursuer's third plea in law as no longer necessary, or insisted upon; Sustains the Pursuer's fourth plea in law, in part; Sustains the Pursuer's fifth plea in law; Sustains the Defender's first plea in law; Sustains the Defender's second plea in law in part as regards the payment by the Pursuer to Defender of a capital sum; Repels the Defender's third plea in law; Sustains, in part, the Defender's fourth plea in law; Repels the Defender's fifth plea in law; Sustains in part the Pursuer's sixth plea in law; Appoints parties to be heard on the question of expenses on Wednesday 17 May 2006 at 10.00 am; Reserving to pronounce further.

 

INTRODUCTION

 

This is an action for Divorce, originally on the basis that the marriage had broken down irretrievably due to the alleged adultery of the Defender, but now as amended, on the basis that the parties have lived apart for a period in excess of 2 years and the Defender consents to Decree of Divorce on that basis, given that the marriage has broken down and there is no prospect of reconciliation. Each of the parties, as discussed below, had financial craves which required to be determined on the Court granting Decree of Divorce. There is also a crave by the Pursuer for contact with the 3 younger children, of the marriage, under 16 years of age. The question of the expenses of the cause, I have, as parties invited me so to do, reserved for a hearing which I have appointed for that purpose. The Pursuer was represented by Mrs McLachlan, Solicitor and the Defender by Mr Hayhow, Counsel.

 

I heard evidence on the 1 June 2005 from the Pursuer and on the 2 June 2005 from the Pursuer, the Pursuer's mother Norah Mary Woodhouse, Susan Anne Pretty, the Pursuer's sister and William Adair, a private investigator. Unfortunately, the next diets of Proof which could be identified as convenient to the Court programme and the availability of parties and their representatives was 3 October 2005. Prior to that date the Pursuer had lodged a Minute of Amendment (number 28 of process) which had not required Answer and I also, notwithstanding the Pursuer had closed his Proof, but of consent, allowed the Pursuer to be recalled. On that date I also heard an additional witness for the Pursuer, Mrs Linda Johnstone, the wife of the gentleman whom it was said had been in a relationship with the Defender. I also heard evidence on that day from the Defender and again from the Defender on 4 October 2005. At that stage, the conclusion of the Proof, on Pursuer's unopposed motion, I allowed amendment of the Pleadings to effectively change the ground of the Divorce from one of adultery to that of the Defender consenting to the Divorce on the basis that the parties had lived apart for a period of 2 years.

 

I heard parties on their submissions on 6 October 2005. Unfortunately, due to the lateness of the hour, submissions were not concluded and again, most unfortunately, the only further suitable date which could be identified was 9 December 2005. On that date, having heard parties further in their submissions, I made avizandum.

 

It is, however, important to state that given the Court's obligation to obtain the views of the children where there is an outstanding crave for contact, I arranged, as I report more fully below, to interview the 3 younger children of the marriage and their older brother Mark, who is now over 16 years of age, on 11 July and appointed that date as a Child Welfare Hearing. Having dealt with the issue of contact at that time, I appointed a further Child Welfare Hearing for 15 August. I again report more fully on these hearings under the section "Contact" below.

 

In writing this Judgement, I have not, as is sometimes the case, simply summarised the submissions of parties representatives, but rather have felt it appropriate to identify the essential issues in dispute between the parties in this cause and to deal with parties submissions under a number of headings. However, given the inter-relationship between certain of these matters, there may well be an element of repetition of the submissions, but it seems to me that by adopting this methodology, the issues are not only more clearly identified, but my reasoning in reaching the conclusions which I made is, I trust, clearer.


 

BASIS ON WHICH PARTIES OUGHT TO BE DIVORCED

 

As I have stated, the Pursuer's action for Divorce was originally on the grounds of the Defender's adultery. Evidence on this allegation was led from the Pursuer, the private investigator and Mrs Johnstone and to some limited extent from the Pursuer's other witnesses. However, at the conclusion of all the evidence, given that the Defender, although she had denied adultery, accepted on oath, that the marriage had broken down irretrievably, that there was no prospect of reconciliation and that she consented to Divorce, the Pursuer has amended the basis of the ground on which Divorce is now sought. I have therefore not been called upon, nor of course did I hear any submissions on the evidence, as to the Defender's alleged adultery, to reach any concluded view on that matter and, of course, I have not done so in my Findings In Fact. However, I am satisfied by both the evidence of the Pursuer, on oath, and the Defender, on oath, that the marriage has broken down irretrievably, that they have lived apart for a period in excess of 2 years, that there is no prospect of a reconciliation and that the Defender consents to Divorce. Parties invited me to grant Decree of Divorce on that basis and I have done so.

 

FINANCIAL ISSUES

 

Parties had entered into a joint minute of admissions (number 26 of process) which sets out the matters agreed as to the financial affairs of the parties as at the relevant date. Further, in their submissions, parties were agreed that the figures listed in 5/42 of process were accurate and those figures indeed form the basis of their respective submissions on the financial matters. Mrs McLachlan had taken some time in her submissions to bring to the attention of the Court the statutory provisions in the Family Law (Scotland) Act 1985 and principles arising from the case law. Mr Hayhow, in his submissions, commented upon those which he believed were most relevant to the Court's decision in this case and I am grateful to both Mrs McLachlan and Mr Hayhow for their assistance.

 

I now turn to the issues which I have identified as being in dispute between parties in this cause.

 

WHETHER THE PURUSER HAS ADDITIONAL CAPITAL AND INCOME RESOURCES WHICH HE HAS NOT DISCLOSED

 

Mrs McLachlan drew to the Court's attention, Defender's averment that he has additional assets, but submitted that the Defender had not proved this, nor had the Defender set out in Record, nor established in her evidence that this was the case, with the exception of a property at 13 Oakly Court, Barnet. This property was sold in August 2004. This property was clearly the property of the late father of the Pursuer, had been inherited by the Pursuer's mother and not by the Defender. It was not, as the Defender claimed, the property of the Pursuer. Mrs McLachlan pointed out that the Pursuer had granted a power of attorney to the Defender whilst he had been working abroad as regards the Defender's financial affairs in the United Kingdom. Moreover, the Pursuer provided monies to the Defender to allow her to purchase properties in her own name. These circumstances, said Mrs McLachlan, were not indicative of a secretive or controlling man. She reminded the Court that in cross examination, it had been suggested to the Pursuer that he had an undisclosed bank account in Saudi Arabia, but that in re-examination it had become clear under reference to productions 5/26 and 5/27 that what had seemed to be a separate account, given a particular reference number, was in fact a sender's reference number. Accordingly, it could not be inferred that there was any additional bank account which had not been disclosed. The only contrary evidence that the property in Barnet was that truly of the Pursuer, had come from the Defender, who had a recollection of a conversation, in which it was said that the Pursuer intended selling his half share. The Court was asked, however, to consider this apparent recollection by the Defender which had not been put to the Pursuer in cross examination and had to be read against a background of Defender's evidence, taken as a whole, which showed she had a poor memory as regards financial details. As regards the Pursuer's income, the Pursuer had been candid. He had given evidence of his present unemployment, his search for work and had explained that visits to Bahrain in October and December 2004 (which occurred after his dismissal from his own employment in August 2004) were to assist colleagues in a business plan and that that assistance might to lead to further employment for the Pursuer in the Middle East. The Pursuer had given evidence that he had only received expenses for those attendances in the Middle East in October-December 2004. Further his evidence, in October 2005, as to possible future earnings, showed those to be considerably less than the salary he had previously earned.

 

He had, of course, since the Proof in June, purchased a new property in August 2005. However, importantly, the source of funds was his previously held holdings in offshore funds and he had taken out a substantial mortgage, which he hoped to reduce on obtaining a financial settlement, hopefully on the sale of the matrimonial home, which was in his name. Mrs McLachlan submitted that there was no evidence that he had either additional capital, had any sources of hidden income, nor any expectation of substantial earnings, should he in fact be fortunate to find employment.

 

Mr Hayhow, in his submissions on this aspect, as indeed on the other matters arising in this case regarding financial settlement, submitted that the view that the Court took on the Pursuer's credibility, was crucial.

 

Mr Hayhow drew to the Court's attention the admission, by the Pursuer in his evidence, that in compiling his curriculum vitae, to assist his search for employment, he had deliberately omitted his age, which should be regarded by the Court, as showing that the Pursuer had a propensity for deceit. Moreover, that by pretending to be his late father, to accomplish the purchase of an extended lease to increase the value of the property in Oakly Court, Barnet, on its resale, he had clearly been deceitful. The Court could also have regard to his evidence as to why he had been in the Middle East between October and December 2004. It was submitted that those reasons had not been volunteered by him, but had required to be brought out in cross examination. Moreover, the Court should have regard to the Defender's evidence that she had been told that the Pursuer was working in Bahrain, as a result of her own enquiry, and had also heard that from a friend. All of that had to be read against a background that the Pursuer was a chartered accountant, with experience in SAP (a particular software programme for the oil industry). The Court should take a view that he was working in a remunerative capacity whilst in the Middle East between October and December 2004. The Court should also have regard to the Pursuer's evidence, that he could subsequently have obtained employment, with a very high salary, in Tehran. This showed that he had a continuing high earning capacity and that if he was not at present working, he soon would be and at a highly remunerated level. The Court should also have regard to his evidence that he had gone to Orlando, Florida, USA, after the separation of the parties and that that visit had included a search for property in the USA. This showed again, submitted Mr Hayhow, that the Pursuer enjoyed a high lifestyle. The Pursuer had taken on a high mortgage on the purchase of his new home in England. The Court should carefully consider whether he would have taken on such a high mortgage if the Court were to believe his evidence that he was likely to obtain employment in the salary range of only £30000.00-£45000.00. This was not a sustainable position for the Pursuer to hold. It rather pointed to an expected income of £80000.00, although as Counsel accepted, he could not suggest ultimately a particular figure for the expected income, either the Pursuer might have, might shortly enjoy or might enjoy in the future. The Court, however, should draw an inference that the Pursuer anticipated a much higher income which could be around that figure, taking a "broad brush" approach. Moreover, the purchase of the new home in England, which could be inferred by its very size, was too big for the Pursuer alone, was indicative too, of the Pursuer anticipating a high income in the future. He had also denuded himself of capital by that purchase. He had given evidence that preservation of capital was more important to him than paying school fees for his children in the future and this was an additional factor which called into question the Pursuer's credibility. Further, the Pursuer was the owner of a Porsche motor vehicle.

 

In summary, Mr Hayhow submitted that all of these factors pointed to a man who was hiding his true assets and his true expectations of income.

 

REASONING

 

I had the advantage of Mrs McLachlan and Counsel's submissions and, importantly, the opportunity to consider the evidence in light of those submissions. Importantly, too, I have had the advantage of hearing and seeing the witnesses, especially the Pursuer and the Defender, being examined on oath.

 

It is a fair impression of the Pursuer, that sometimes in his evidence he gave brief answers, both to his solicitor and indeed to Counsel for the Defender. As an example, he often only used the word "correct" in an answer to a question put to him. However, in reviewing his evidence and my notes on same, I have been drawn to the view that the Pursuer has not sought to mislead the Court on his assets, as to his time in Bahrain between his dismissal in August 2004 and the event of his heart attack in December 2004, nor do I find that he has sought to mislead the Court as to his likely future income. I have accepted his evidence as both credible and reliable, that having lost his job in August 2004, he was hopeful in finding new employment in the Middle East. To that end he did visit Bahrain on 3 occasions between October and December 2004. I have accepted his evidence that he did so to assist a friend, but also that had the submission of a tender being successful, he was hopeful that he might, as a result thereof, gain further highly remunerative employment in the Middle East. I accept from him that that opportunity did not arise. I accept that he received sums of money for his living expenses. Despite trenchant cross examination, I have been drawn to a view in watching him, that I could accept that that was all he was in Bahrain for and all that he anticipated. He was not earning a substantial salary during that period. Thereafter, the Defender had a heart attack on 17 December 2004 whilst in Bahrain. I accepted his evidence that since that time he has not worked or earned income. He has tried, through employment agencies (which appears to be the normal method of obtaining employment in his industry) to find work. I accept his evidence, under reference to productions 8/46-49, that his prospects of salary in any new employment he might find, is likely to be in the region of between £30000.00 and £45000.00, depending on whether employment was to be in Manchester or London. I accepted his evidence that he had omitted his age in his curriculum vitae because he thought that his age was a barrier to him getting interviews for employment. He gave evidence which I accepted that he would be 50 in February 2006 and based on his own experience of employment in the specialism of the oil industry in which he has been employed, that prospective employment would not readily be made available to someone of his age if he revealed it. An example of this was his submission of his curriculum vitae for employment for which he was otherwise eminently suitable, which job vacancy was still unfilled. In that curriculum vitae he had submitted his true age. It was a reasonable assumption for him to believe, I hold, that his age was proving a barrier. I cannot find that he was trying to deceive anyone, but rather to maximise his chances of employment by simply setting out his relevant qualifications and experience and leaving out any question of age which might otherwise have proved a barrier to him obtaining interview.

 

The matter of the Saudi bank account, referred to in Mrs McLachlan's submissions, was not made an issue by Counsel in his submissions. In any event, I am satisfied from the Pursuer's evidence, under reference to the productions to which I have referred, that this was not a further bank account in Saudi Arabia but rather that the difference numbers were indicative of a senders reference as the Pursuer has deponed. I could not rely on the Defender's evidence that her own enquiry and information she said she had obtained from friend was indicative that the Pursuer was truly in gameful employment in Bahrain. The friend was not produced before the Court, and I must say I found the Defender's evidence on this and on other matters relating to financial details to be of poor quality as regards reliability. Even if I were to accept that she had been told by her own enquiry to the company in the Middle East that the accused was working, this does not contradict the Pursuer's own account that the form of "working" was on the basis which he has outlined and which I have accepted. The Pursuer has explained that the trip to Orlando was a holiday - to a property owned by another - and whilst there he had taken the opportunity to see whether any investment opportunities existed in the USA. This visit requires to be set against the Defender's evidence, that as a man of 49, who has no pension, he has to look to the future and to any sources of future income and one way of doing that, would be to make property investments. I accepted his evidence as credible on this point. As regards the Porsche motor car, nothing in my view could be made of this. He had purchased the vehicle relatively cheaply in Saudi Arabia and imported the car back to the UK. It was not in my view to be seen as an extravagance, given the life style which he had enjoyed whilst in Saudi Arabia. Moreover, I accepted his evidence that at the present time he was living off his capital. As regards the question of the Pursuer enjoying a particular high life style which much be indicative of sources of funds, I am not persuaded that this is the case. Both parties enjoyed a high life style during the currency of their marriage. Indeed the Defender had, shortly after the separation, purchased an expensive Range Rover motor vehicle, and indeed had taken monies to do so from the children's accounts. This in my view shows that each of the parties had expectations of particular high life style and I cannot infer, as Counsel invites me to do, that it's indicative that the Pursuer is in some way hiding assets or sources of income now or for the future.

 

As regards the property at Oakly Court, Barnet, I accepted the Pursuer's evidence and that of his mother and sister, that the property had indeed belonged to the late Mr Woodhouse. I accepted their evidence that after his death Mrs Woodhouse had not completed title to that property in her own name. An opportunity had arisen, due to the change in the law in England, whereby the value of the property could be increased if, together with other lessees of the block of flats, they could purchase an extended lease of this particular property. It is true that the Pursuer must be said to have involved himself in the deceit in that he took advantage of a similar name, that of his late father, to carry out all the necessary conveyancing formalities, in order for this gain to be obtained. Moreover, he was frank that he and his sister, and indeed his sister and mother confirmed this in their evidence, had used approximately £16000.00 of their own money to meet the upset price and expenses incurred in obtaining the extended lease. I accepted his evidence and that of his mother that he had obtained return of the £16000.00 on the ultimate sale of the property and that the proceeds thereafter had gone to his mother. I accept that these actings are not to be commended, but on hearing him, his mother and sister in evidence, I am satisfied that this is a true position of his involvement with the property in Barnet. I do not accept that he had a propriety interest in any real sense in that property, except of course in due course he his likely to succeed, with his sister, to his mother's estate.

 

The Defender's recollection that the Pursuer had said to her that he was going to sell his half share, again I could not accept as reliable, set against the evidence of not only the Pursuer, his mother and sister, which in my view was both credible, consistent and therefore reliable. It is significant and bears on the Defender's reliability that this alleged conversation was never put to the Pursuer in cross examination.

 

As regards the Pursuer's purchase of his new property in England between the days of Proof in June and the resumed Proof in October 2005, I cannot hold that this can be described as the Pursuer "denuding" himself of capital. The capital is now in bricks and mortar, but capital it remains. It is true it is a substantial property, though smaller than the matrimonial home, which he owns and in which the Defender and the children presently reside. He has hopes, which I accept, are truthful ones that in due course the children may come to England for contact and that is why he required to purchase a house of that type. He had indicated in his evidence in June that he had intentions to buy a home, and indeed had looked for property in England, and the realisation of that by October 2005 cannot in my view be seen as an entirely new development. He has deponed, and I accepted this that he hopes to reduce the mortgage if the Court decides not to grant a property transfer order as sought by the Defender. He would hope that he would be able to sell the matrimonial home and on its sale realise capital to reduce his mortgage. This in my view is a reasonable view. Moreover, whilst he has no income at present to support the payments for the mortgage, he is effectively living off his other capital. He is looking for work, and hopes to obtain some work, but at the reduced level which I have explained above, which if he obtains same, would assist in meeting the costs of the reduced mortgage. I also accept him as both credible and reliable, and as a reasonable view that if he could not ultimately reduce his mortgage, nor indeed make payments from any income he might obtain to the mortgage, he would require to let the property out. In my view, nothing sinister arises from this account by the Pursuer and does not lead to an inference, as the Defender contends, that he has hidden assets or income nor expectation of high income.

 

With respect to the Defender's Counsel, much of his submissions as regards the view that I ought to take of the Pursuer, as regards his supposed assets and income, were based on supposition. I can well understand that Counsel might take this line in seeking to advance his client's position. However, I am required to proceed on the evidence which I can find to be both credible and reliable and in these circumstances, I have been drawn to the view that the Pursuer does not have hidden assets, nor hidden income, nor underestimated in some deliberate sense, his expectations of income for the future.


 

WHETHER THERE ARE SPECIAL CIRCUMSTANCES TO EXCLUDE ITEMS OF THE PURSUER'S PROPERTY FROM THE TOTAL OF THE NET MATRIMONIAL PROPERTY

 

Mrs McLachlan submitted that in this case there were special circumstances and that those related to an argument in terms of "source of funds" (Section 10(6)(b) of the Act). This source of funds argument related to 4 properties owned by the Pursuer at the relevant date. These were 12 Townhead, Kilmaurs (£42000.00), 2 Kilmarnock Road, Monkton (£60000.00), 9A Cheapside Street, Eaglesham (£67000.00) and 86 Main Road, Fenwick (£44000.00). A total of £213000.00, which she submitted, ought to be deducted from the whole value of the matrimonial property at the relevant date which was £911250.00.

 

Mrs McLachlan referred to the Pursuer's evidence that the Pursuer had purchased the property at 77 Milton Avenue, Barnet in England in 1987, prior to the parties' marriage. This was not matrimonial property, (this description was not disputed by the Defender as became clear). It was a matter of agreement (paragraph 13) of the Joint Minute that the property was sold in September 1999 and that the free proceeds were £161516.34, that he had deposited the proceeds into an off shore account and that interest accumulated until the account was closed in June 2002. The closing balance on the account was £180115.66. The Pursuer had given evidence that that sum was remitted to a Clydesdale Bank Account from which he withdrew sums to buy the 4 properties. It could be said, Mrs McLachlan submitted, that the source of funds and their subsequent use, was a "special circumstance", placing those properties and values outwith the scope of matrimonial property. As support for her submission she referred to the decision of Lord Eassie, in Robertson v Robertson (opinion of 7 December 1999). In that case his Lordship, in referring to an earlier case of Whittome v Whittome, 1994, SLT 115 a Scottish Law Commission Report and Professor Clive's work "Husband and Wife" at para 24, had reached the view that property accumulated during the marriage, but sourced from pre-marital capital, may be excluded from matrimonial property, if it is simply a shift in investment.

 

She submitted the Milton Avenue property could not be said to have been imported into family finances as the properties purchased from the proceeds of that sale and subsequently banked, were acquired only some few months prior to the relevant date and the proceeds of the Milton Avenue property had not been applied to or absorbed into, family finances.

 

Mrs McLachlan referred to decisions to which the Court ought to have regard. In Cunningham v Cunningham (a decision of 3 November 2000) Lord McFadyen had taken a similar approach to Lord Eassie by excluding a holiday home purchased from an inheritance. Whilst Lord Brodie in Whitlett v Whitlett (a decision of 12 February 2003), had taken a different view as regards a particular property - in that case holding a property to be a matrimonial home - he had otherwise adopted the same approach as Lord Eassie in Cunningham.

 

In these circumstances, her principal submission was that I should exclude that sum of £213000.00 from the matrimonial property in terms of Section 10(6)(b). In December 2005, having heard Counsel's submissions for the Defender, Mrs McLachlan then submitted that the interest earned on the proceeds of the Milton Avenue property was not significant to family finances in the context of the Pursuer then earning, prior to the relevant date, in excess of £100000.00 per annum. She did, in developing a secondary argument, then indicate that the Court might take the view that to the extent that the £169516.34 had grown to £213000.00 by the relevant date, that the Court might take the view that the difference of approximately £43483.66 might be said to have been absorbed into matrimonial property, but her principal submission that the full sum ought to be excluded.

 

Counsel for the Defender stressed that the word "may" in Section 10(6) was significant. In this case it was not simply the case of shares owned by one party prior to marriage being switched into other shares from time to time on the advice of a broker, which might not bring such property into the scope of matrimonial property. Nor was this case indicative of a short marriage, where such pre-marital property ought to be excluded as only being imported into the marriage shortly prior to the parties separation. In his submission, the case of Whitlett v Whitlett could be distinguished on his facts, as there the Defender had shares in a company for a significant number of years and there was a short marriage. In Counsel's submission, to exclude the present 4 flats ignored that they were converted into cash during the marriage, were transferred into a bank account and acquired interest over 3 years of the marriage, and then thereafter were changed into heritable property, that latter change was to advance a joint matrimonial purpose which was the acquisition of a portfolio of properties. Moreover it could be seen that the Defender, with funds from the Pursuer, had acquired a number of properties too. In these circumstances it could be said that there was a joint enterprise to build a portfolio of properties. Further, had not the Pursuer had the Defender to look after his children, Counsel posed the question whether the Pursuer would have been able to sit on funds of £180000.00 or thereby and generate interest for 3 years. The purpose, too, had to be examined. In this marriage, it might be said, the Pursuer generated income and the Defender was looking after the children and that that division of effort contributed equally to them being able to embark on a joint enterprise. Counsel reminded the Court of the Defender's evidence that she had, in a practical sense, bought the properties for the Pursuer and had furnished them and managed them - this again pointed to a joint enterprise. To exclude these properties from the total matrimonial property, to be divided, would be rare, in Counsel's experience and would not fit with Lord President Hope's dicta in Little v Little, 1990, SLT 785, that the object of the Court was to obtain a fair and practical result that was conform to common sense.

 

REASONING

 

By Section 10(1) of the Act, the Court is required : -

 

"In applying the principle set out in Section 9(1)(a) of this Act, [that the net value of the matrimonial property should be shared fairly between the parties in the marriage], the net value of the matrimonial property should be taken to be shared fairly between the parties to the marriage, where it is shared equally, or in such other proportions are as justified by special circumstances".

 

The Act further requires per Section 10(6)(b) : -

 

""In Subsection (1) above, special circumstances without prejudice to the generality of the words may include - .......

 

(b) the source of the funds or assets used to acquire any of the matrimonial property, when those funds or assets were not derived from the income or efforts of the parties during the marriage".

 

Authoritive guidance to lower Courts as to how to treat the words "special circumstances" can be found in the speeches of Lord Jauncey and Lord Clyde in the case of Jacques v Jacques, 1997, SC(HL) 20, (1997) SLT 459.

 

At page 462, Lord Clyde said : -

 

"The words "special circumstances" do not have any technical meaning, but refer to any circumstances which are special to the case, Section 10(6), gives illustrations of what may be included ...... . Moreover, in stating that the words "may" include the stated illustrations, it is indicating that there is no necessary conclusion that any of the illustrations must require some unequal sharing ...... As a matter of construction, it is sufficient to understand that in the ordinary course an equal division will be fair, but where there are special circumstances, some unequal division may be justified"".

 

At page 461, Lord Jauncey said : -

 

"The provisions of Section 10(6) give guidance to the Court at first instance but do not fetter its discretion in applying the principle set out in Section 9(1)(a)".

 

Against that statutory, and authoritive background, I proceeded in deciding this issue in the particular circumstances arising in this case.

 

It is not disputed that the property at 77 Milton Avenue was the Pursuer's property prior to marriage. I take that as a starting point. The proceeds of its sale and the realisation of £161516.34, which the Pursuer then banked, although that event occurred during the marriage, might be said simply to be changing the form of the property (heritable property) into another form (cash), that property was still under the control of the Pursuer and not - on the evidence before me - applied to support the family or its advancement, nor any joint enterprise. A similar view, in my opinion, ought to be taken of the interest subsequently earned on that sum, whereby the sum grew to £180116.66 by June 2002. Again there is no evidence to suggest that there were any intromission with these funds towards family finances. That is hardly surprising, given the high earnings the Pursuer had throughout this period, which afforded both him and the Defender a high standard of living. I find therefore to that extent that the source of funds argument, advanced by Mrs McLachlan, supported by the reasoning in the cases of Robertson and Cunningham and to an extent in Whitlett, holds some force, namely that the source of the funds and their application were "separate" from family finances.

 

However, there is force in Counsel's contention that the funds thereafter were applied to buy 4 properties at roughly the same time that the Pursuer provided funds to the Defender to buy 3 properties. I therefore accept the Defender's evidence as more persuasive that the purchase of properties was a joint enterprise by both the Defender and Pursuer and indeed I accept her evidence that she had played a role in selecting the properties, their outfitting and their management. It also seems to me that the Pursuer's argument that the properties were bought relatively shortly prior to separation in this case is not significant. The plan was, and would I am satisfied remained, that the properties would be a portfolio of properties for the effective use of the parties in the future. I am not, however, persuaded that the Defender's broader argument as regards the Defender being able to gain on the £180000.00 because the Defender was looking after the children has merit. The interest was earned solely on the sum deposited - there was no joint enterprise, and the growth of the funds, as I have said, did not affect the family finances, nor was it added to by the Defender looking after the children. The interest was earned as a natural consequence of its investment, alone.

 

There is, however force, too, in Counsel's reference to the dicta of the Lord President in Little. I require to make a judgement, which in all the circumstances is fair and conforms to common sense. In this case, I have come to the view that the rise in value of the sum, by the purchase of the 4 properties, ought not to be excluded and that because of the input by the Defender into the joint enterprise to build up a portfolio of properties.

 

However, whilst Mrs McLachlan at least acknowledged the possibility that the Court might have regard to the difference between the £180000.00 and the final sum of £213000.00 I do not think it would be in line with the earlier decisions I have referred to above, and which I find persuasive, to fully take that difference into account. The principle seems to me to be that the amounts to be excluded are those that cannot be said to derive from the efforts of the parties jointly or in some proportion during the marriage. It seems to me that Mrs McLachlan position is not giving full regard to the principle arising from those cases and nor would it be, to repeat Counsel's submission, fair to the Pursuer to regard the interest element as part of that joint enterprise.

 

In light of that, I have decided it would be a proper exercise of the Court's discretion to exclude the sum of £180115.66 from the matrimonial fund to be divided, but to hold that a sum thereafter of £32884.34 should not be, representing the increase in value of the sum in the bank of £180115.66 and the final value of the flatted properties.

 

In these circumstances, the Pursuer's submission in my view as regards special circumstances in terms of Section 10(6)(b), exceeds in the larger part of the sum but not as regards the increase in value in the amount that I have identified.

 

WHETHER IT WOULD BE AN APPROPRIATE ORDER TO TRANSFER THE MATRIMONIAL HOME TO THE DEFENDER

 

 

The Defender's submission was that there was "special circumstances" in terms of Section 10(6) and Counsel accepted that such an order would mean that the Defender would receive more than 50% of the net matrimonial property. It is important, of course, to recognise that Counsel's submission was made against his particular submissions, that "special circumstances" did not apply to exclude certain of the properties owned by the Pursuer at the relevant date, which I have written on above.

 

The reasoning why such an order would be justified, Counsel submitted, was that the sale of the house and the consequent need for the children to move to a new home, would be disruptive. They would be moving from a home they had know all their lives. This would be especially disruptive, if too, the children needed to move from their private schools. It was submitted that Rachel, having dyslexia, and Grant having, broadly hyper activity problems, would be particularly affected. It was also submitted to be important to recognise that if the children moved they would not be able to take their family animals with them. Further, the Defender had a plan to be a foster carer and in that regard the present matrimonial home had been found suitable by the relevant local authority. The Defender, it is submitted, had seen only one house in the local area of similar standard since the time of the separation of the parties.

 

Mindful of the Lord Ordinary's reasoning in the case of Adams v Adams, 1997, SLT page 149, that it may be thought to be unrealistic to transfer the matrimonial home where the wife would require to live on a stringent budget, which not be in the children's best interests, Counsel submitted that the Defender in this case, could afford to finance the house and its upkeep. Counsel further submitted that in following the case of Little the Court should be mindful of arising at a common sense judgement which would not be met if the Pursuer was to remain in a house in England, worth £550000.00, which less mortgage outstanding amounted to a sum of some £340000.00 or thereby where he would be living on his own. This was to be set against a position whereby the Defender would be expected, on one calculation by the Pursuer's agent, to buy a house with £286000.00. This was based on the Pursuer's general submissions as to how the Court ought to divide the matrimonial property, which provided for, on Pursuer's submission, a capital payment of £200000.00 to equalise the parties assets - assuming that his pre-marital property was excluded - to which was to be added £86000.00 or thereby in recognition by the Pursuer of an argument which could be made in terms of Section 9(1)(c) - the economic burden of caring for the children.

 

Counsel did, of course, recognise that in line with the principle stated authoritatively by the House of Lords in Wallis v Wallis, 1993, SLT 1348, that the Court could not take into account any value other than the value of the house at the relevant date (therefore not any subsequent increase in value).

 

Counsel's second argument was that the Defender was entitled to have the property transfer order made, leading to a division of more than 50% in her favour, because of the application of Section 9(1)(b), - the economic disadvantage she had suffered - and Section 9(1)(c), the economic burden of caring for the children after the Divorce. In applying these principles, the Court ought to make a property transfer order.

 

As regards Section 9(1)(b), Counsel acknowledged that the Court would have to have regard to Section 11(2), which provides that the Court shall have regard to the extent of the economic advantages or disadvantages sustained by either party, have been balanced by the economic advantages or disadvantages sustained by the other party and any resulting imbalance will be corrected by a sharing of the value of the matrimonial property or otherwise.

 

Counsel submitted that the economic disadvantages suffered by the Defender was apparent. She had given up a career to look after the children, whilst the Pursuer had, throughout the marriage, generated significant income. He had, it was submitted, been able to concentrate on his career because the Defender had looked after the children. Moreover, as regards capital by the relevant date, under reference to 5/42 of process, this showed that the Pursuer had capital, not excluding any matters, on his submission, in terms of Section 10(6), of £762000.00, whilst the Defender had £142000.00, which evidenced, it was submitted, a substantial deficit. In these circumstances, a greater than 50% split would be justified.

 

As regards Section 9(1)(c), the Defender's future earning capacity would be restricted by looking after the children, both as regards the type of work she could obtain and the hours she might be able to work.

 

Returning to the question of whether the Defender could sustain the upkeep of the present matrimonial home, Counsel referred to the Defender's prospects of obtaining employment as a foster carer. Moreover, she had obtained an estimate that she could borrow a sum of £66000.00. If times became straightened, she had the option of selling one of her flatted properties to meet any problem. Indeed, it might also be said, that a transfer of the matrimonial home to the Defender would obviate the necessity of the Pursuer finding money to make a capital payment to her.

 

Mrs McLachlan submitted that the Court had to have regard to the words "special circumstances". The emphasis had to be on the word "special", in these circumstances it could not be said to be out of the ordinary in a Divorce case that families have to "downsize", having regard to the financial realities that Divorce, and a division of matrimonial property, inevitably brings about. This was especially so, as here, where there would be capital made available, after the sale of the matrimonial home, to allow the Defender to buy a house suitable for herself and the children. In the present case, the Defender had not, unlike the wife in the case of Adams, even thought through a budget she might require.

 

Indeed, her financial circumstances at present, living in the matrimonial home, might be thought to be precarious. Notwithstanding that the Pursuer was presently paying the mortgage and £450.00 per month to the Defender, she had a monthly shortfall of £240.00 per month, and notwithstanding, too, the income she received from her flatted properties. Accordingly, her position was, if anything, worsening and would worsen if a transfer order was made; she could not sustain the upkeep