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You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> S v AG (Financial Remedy: Lottery Prize) [2011] EWHC 2637 (Fam) (14 October 2011) URL: http://www.bailii.org/ew/cases/EWHC/Fam/2011/2637.html Cite as: [2012] Fam Law 18, [2011] 3 FCR 523, [2011] EWHC 2637 (Fam) |
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This judgment is being handed down in private on 14 October 2011. It consists of 43 paragraphs and has been signed
and dated by the judge. The judgment is being distributed on the
strict
understanding that in any report no person other than the advocates or the
solicitors
instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be
strictly
preserved. The judge gives permission for the judgment to be reported in anonymised form under the name
S
v
AG
(
Financial
Remedy:
Lottery Prize).
FAMILY DIVISION
![]() ![]() |
||
B e f o r e :
____________________
![]() | Applicant |
|
Represented by: Mr John Ison (to whom the court granted right of audience) - and - |
||
AG Represented by: Mr Cassio Caseres (to whom the court granted right of audience) - and - MR (who did not appear and was not represented) |
Respondent 2nd Respondent |
____________________
____________________
VERSION
OF JUDGMENT (ANONYMISED
VERSION)
____________________
Crown Copyright ©
Mr Justice Mostyn:
There are many perplexingsituations
that may one day require examination. What, for example, of the individual
spouse
who each week invests a
small
part of his or her
spare
cash in the National Lottery, and one day wins £1m, or £10m?
Should
this asset be
viewed
like any
sudden
accretion to the
value
of the joint home or other matrimonial investment, due to market movements? Or might it, in
some
circumstances at least, be more analogous to property brought into a marriage or inherited property? Would it for example make any difference, if the other
spouse
was opposed to all gaming as a waste of money, or if the
very
limited money expended came from inherited property? There appears to have been a quite extensive jurisprudence in this area in Australia, including Zyk
v
Zyk (1995) FLC 92-644, 19 Fam LR 797 (referred to in Lynch
v
Lynch (26 October 2000, unreported) (Full Court of the Family Court of Australia), cited to us). In the circumstances there, a husband'
s
lottery win was equated with a contribution by the husband to the joint assets, and the final award, based on the
spouses'
respective contributions, was tailored accordingly. I mention Zyk'
s
case not to
suggest
that the
same
approach to or use of contributions would necessarily apply under the English
statute—but
![]()
simply
to illustrate
some
of the problems and considerations that may one day need to be addressed in this jurisdiction.
16. Mr Pointer's
![]()
second
charge, made by reference to the 21 years of the marriage, is that the judge failed to recognise "that the importance of the
source
of the assets will diminish over time".
Such
is a quotation from the
speech
of Baroness Hale in Miller
v.
Miller, McFarlane
v.
McFarlane [2006] UKHL 24, [2006] 2 AC 618, at [148]. As authority for that proposition
she
referred to the passage in the
speech
of Lord Nicholls in White, cited above, at 611B, where he
said:
![]()
"The initial cash contribution made by Mr White's
father in the early days cannot carry much weight 33 years later."
Lord Nicholls was there referring to an interest-free loan of £11,000, made to the parties in 1963 and later released, which had enabled them to purchase the farm upon which, until 1994, they had both worked and which, by the time of the trial in 1996, was worth £3.5m. Thus, on the facts in White, the importance of thesource
of the contribution of £11,000 diminished over time. The question is whether
such
justified the absolute terms of Baroness Hale'
s
proposition.
17. The answer to the question, or at any rate Lord Nicholls' answer to the question, is made clear in hisspeech
in Miller/McFarlane, cited above, at [25] as follows:
"Non-matrimonial property represents a contribution made to the marriage by one of the parties.Sometimes,
as the years pass, the weight fairly to be attributed to this contribution will diminish,
sometimes
it will not. After many years of marriage the continuing weight to be attributed to modest
savings
introduced by one party at the outset of the marriage may well be different from the weight attributable to a
valuable
heirloom intended to be retained in
specie."
18. Thus, with respect to Baroness Hale, I believe that the true proposition is that the importance of thesource
of the assets may diminish over time. Three
situations
come to mind:
(a) Over time matrimonial property ofsuch
![]()
value
has been acquired as to diminish the
significance
of the initial contribution by one
spouse
of non-matrimonial property.
(b) Over time the non-matrimonial property initially contributed has been mixed with matrimonial property in circumstances in which the contributor may besaid
to have accepted that it
should
be treated as matrimonial property or in which, at any rate, the task of identifying its current
value
is too difficult.
(c) The contributor of non-matrimonial property has chosen to invest it in the purchase of a matrimonial home which, althoughvested
in his or her
sole
name, has – as in most cases one would expect – come over time to be treated by the parties as a central item of matrimonial property.
Thesituations
described in (a) and (b) above were both present in White. By contrast, there is nothing in the facts of the present case which logically justifies a conclusion that, as the long marriage proceeded, there was a diminution in the importance of the
source
of the parties' entire wealth, at all times ring-fenced by
share
certificates in the wife'
s
![]()
sole
name which to a large extent were just kept
safely
and left to reproduce themselves and to grow in
value.
19. Mr Pointer's
third charge is that the judge failed to follow the guidance given by this court in Charman cited above. The judge (
so
runs the argument) in effect found that the wife had made a
special
contribution to the welfare of the family. Thus he
should
have had regard to the guidance in Charman, at [90], that fair allowance for
special
contribution within the
sharing
principle would be most unlikely to give rise to departure from equality further than to 66.6% - 33.3%. One third of £57m is £19m
so
(
suggests
Mr Pointer) the husband'
s
claim to £18m is well-pitched.
20. But the phrase "aspecial
contribution" is now a term of art in the law of ancillary relief which is used to describe a contribution entirely different from that of non-matrimonial property. As this court
said
in Charman, at [80]:
"The notion of aspecial
contribution to the welfare of the family will not
successfully
have been purged of inherent gender discrimination unless it is accepted that
such
a contribution can, in principle, take a number of forms; that it can be non-
financial
as well as
financial;
and that it can thus be made by a party whose role has been exclusively that of a home-maker. Nevertheless in practice … the claim to have made a
special
contribution
seems
![]()
so
far to have arisen only in cases of
substantial
wealth generated by a party'
s
![]()
success
in business during the marriage."
21. Thus aspecial
contribution arises in circumstances in which a
spouse's
contribution, direct or indirect, to the creation of matrimonial property has been
so
extraordinary as to dictate a departure within the
sharing
principle from the ordinary consequence of its equal division. It is therefore no accident that this court'
s
reference, at [90], to the unlikelihood of departure from equality further than to 66.6% - 33.3% was of "division of matrimonial property". By contrast, although non-matrimonial property also falls within the
sharing
principle, equal division is not the ordinary consequence of its application. The consequences of the application to non-matrimonial property of the two other principles of need and of compensation are likely to be
very
different; but the ordinary consequence of the application to it of the
sharing
principle is extensive departure from equal division, often (
so
it would appear) to 100% - 0%. Although Mr Pointer recognises the difference between the "
special
contribution" which this court addressed in Charman and the contribution of non-matrimonial property exemplified by the present case (who could be more cognisant of it than he?), his attempt to represent the difference as immaterial is entirely unconvincing.
22. Mr Pointer's
final charge is that, in relation to the awards in eleven other reported decisions "involving" non-matrimonial property and beginning with White in 2000, the judge'
s
award to the husband of only 9.3% of the parties' assets (£5.3m out of £57m) is appealably disproportionate. Mr Pointer collects the principal figures referable to the other decisions into a
schedule.
As by his presentation he intended, a first glance at the
schedule
identifies three awards of as much as 40%. But brief enquiry into the facts of those cases – White itself, GW
v.
RW (
Financial
Provision: Departure from Equality [2003] 2 FLR 108 and C
v.
C [2007] EWHC 2033 (Fam), [2009] 1 FLR 8 – reveals that in each there was a
substantial
element of matrimonial as well as non-matrimonial property. To be fair, a further perusal of the
schedule
does identify at any rate one case in which the award was made
solely
out of non-matrimonial property. It was the decision of Baron J in NA
v.
MA [2006] EWHC 2900 (Fam), [2007] 1 FLR 1760 and it is, as Mr Pointer
stresses,
an example of an award of 23%. But, in that the respondent'
s
assets there had a
value
of £40m, rather than, as here, of £57m, and in that the applicant'
s
needs were there estimated at £9.2m rather than, as here, at (
say)
£5.3m, the amount of the award to the applicant, which was no more and no less than the estimated amount of her needs, was bound to bear a much higher ratio to the
value
of the assets than in the present case. That it there amounted to 23% demonstrates nothing. What was much more interesting was the moment during the hearing when we asked Mr Pointer to
show
us a reported decision in which the assets were entirely non-matrimonial and in which, by reference to the
sharing
principle, the applicant
secured
an award in excess of her or his needs. He confessed to be unable to do
so.
![]()
Such
a decision will no doubt be made – but not in this court today.
- Therefore, the law is now reasonably clear. In the application of the
sharing
principle (as opposed to the needs principle) matrimonial property will normally be divided equally (
see
para 14(iii) of my judgment in N
v
F). By contrast, it will be a rare case where the
sharing
participle will lead to any distribution to the claimant of non-matrimonial property. Of course an award from non-matrimonial property to meet needs is a common place, but as Wilson LJ has pointed out we await the first decision where the
sharing
principle has led to an award from non-matrimonial property in excess of needs.
- While matrimonial property will normally be divided equally, this is not an invariable rule. The reason for this is that
sometimes
the matrimonial property in question will not be the product of the endeavours of the parties within the
social-economic
partnership that is marriage (as Guest J described it in the Australian case of Farmer and Bramley [2000] FamCA 1615 at para 188).
Sometimes
one party brings assets in which become "part of the economic life of [the] marriage…utilised, converted,
sustained
and enjoyed during the contribution period" (ibid at para 190). This is the concept of mingling referred to by me in N
v
F at para 9 (where I cited the remarks of Lord Nicholls in Miller & McFarlane at paras 24 – 25 and of Baroness Hale at para 148), and by Wilson LJ in K
v
L at para 18(b). But even if there has been much mingling the original non-matrimonial
source
of the money often demands reflection in the award. Thus in
S
![]()
v
![]()
S
[2007] 1 FLR 1496 Burton J divided the matrimonial property 60/40 to reflect this factor.
- In Miller & McFarlane Lord Nicholls
specified
that the matrimonial home
should
always be designated matrimonial property, whatever its
source.
He
stated
at para 22 that "the parties' matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage.
So
it
should
normally be treated as matrimonial property for this purpose." This is reflected in the remarks of Wilson LJ in K
v
L at para 18(c). But even the matrimonial home is not necessarily divided equally under the
sharing
principle; an unequal division may be justified if unequal contributions to its acquisition can be demonstrated. In
Vaughan
![]()
v
![]()
Vaughan
[2008] 1 FLR 1108 Wilson LJ
stated
at para 49:
Such
would be the award notwithstanding that the home had been owned by the husband, free of mortgage,
since
well before the marriage and that, putting to one
side
his misconduct in dissipating assets following the breakdown of the marriage (the effect of which is intended to be rectified by the calculation), the contributions of each party to the welfare of the family during the marriage were in effect
agreed
to have been equal in
value
albeit not in kind. Although, in the words of Baroness Hale in Miller
v.
Miller, McFarlane
v.
McFarlane [2006] UKHL 24, [2006] 2 AC 618 at 663E, "the importance of the
source
of the assets will diminish over time", I consider that the husband'
s
prior ownership of the home carried
somewhat
greater
significance
than either the district or circuit judge appears to have ascribed to it.
- These principles lead me to try to address the questions posed by Mance LJ. Is a lottery prize to be characterised as matrimonial or non-matrimonial property? Of course, it all depends, but I believe that certain obvious points can be made.
- One point of
view
is that the prize is a windfall. The price of the ticket, £1 or £2, is
so
inconsequential as can be
safely
disregarded. Arguments that the £1 or £2 derives from the joint matrimonial economy are, it can be
said,
pure
sophistry.
The money could just as easily have been found on the pavement. Thus in Holmes (1990) FLC 92-181 Cohen J
stated:
![]()
Yet, ignoring any contribution to the price of the winning ticket, this part of the winnings was brought into the pool of family assets by the wife, and no contribution to it was made by the husbandSimilar
logic, but leading to an opposite result, was deployed by Mullane J in McTaggart (1988) FLC 91-920:
Myview
is that these arguments are misconceived. The $500,000 was a windfall. It is nothing more. It was not the fruit of
some
labour or
skill
of the husband. It was not a contribution by him to the matrimonial property. The courts have declined to recognise windfalls during the marriage as contributions by one of the parties. … I do not accept that the lottery winnings
should
be treated as a contribution by either party. I do not accept that they
should
be treated differently to any other matrimonial property acquired by the parties during the marriage.
Thus, the prize there was treated as a windfall enuring to the benefit of both parties.
- It may be argued that the
view
Cohen J is concordant with the
view
of Lord Nicholls in White concerning inherited property. Why
should
a lottery prize received during the marriage be regarded as any less non-matrimonial as an unexpected inheritance received by one party from an eccentric uncle? Even if the inheritance were expected it would
still
be characterised as non-matrimonial, and that would be the case even if the parties had planned their whole marital economy on its anticipated receipt.
- The contrary
view
is that the prize is a product of a joint endeavour and a function of the partnership economy. This was the clear
view
of the Full Court in Zyk [1995] FamCA 135 (Nicholson CJ, Fogarty and Baker JJ), where it was
stated:
![]()
49. In common parlance a windfall is used to describe a chance or unexpected benefit which the people involved neither anticipated nor made any effort towards. The receipt of asubstantial
lottery prize may in general be referred to in that way. However, we doubt whether, for the purposes of the exercise under
s.79,
that is the correct analysis. The parties purchase a ticket and expend part of their earnings or capital for the express purpose of winning the prize or a prize. Whilst the chances of winning the major prize are remote, the reality is that
somebody
does and it is the expectation, or at least hope, of each entrant that he or
she
may be that person. It is not the product of any particular
skill
but it is the product of the chosen expenditure of a
small
![]()
sum
of money. Contributions is, we think, the preferable description within
s.79
because an acquisition of a prize contributes to the property of the parties. If it or part of it
still
remains in existence at the time of the trial or is represented by other then existing assets that will constitute part of the property to which
s.79
will apply. If it has been disposed of in the meantime in other ways that may or may not have been a contribution to property or the family depending on the circumstances. The use of the term "windfall" creates conceptual difficulties within
s.79
and can lead to inconsistent outcomes (
see
later). The approach of treating it as a contribution is consistent with the treatment of gifts from family as a contribution by or on behalf of that party:
see
Kessey (1994) FLC 92-495.
50. In ourview,
the critical question in
such
cases is - by whom is that contribution made? In the ordinary run of marriages a ticket is purchased by one or other of the parties from money which he or
she
happens to have at that particular time. That fact
should
not determine the issue. Where both parties are in receipt of income and where their marriage is predicated upon the basis of each contributing their income towards the joint partnership constituted by their marriage, the purchase of the ticket would be regarded as a purchase from joint funds in the
same
way as any other purchase within that context and would be treated accordingly:
see
Anastasio. Where one party is working and the other is not the
same
conclusion would ordinarily apply because that is the mode of partnership
selected
by the parties. The income of the working member is treated as joint in the
same
way as the domestic activities of the non-working partner are regarded as being for their joint benefit. In the essential
sense
this analysis is
similar
to that provided by the Full Court in Hauff [1986] FamCA 16; (1986) FLC 91-747 in discussing the rationale for treating
superannuation
benefits of one party, including contributions by the employer, as the product of joint contributions.
51. In thesort
of case to which we have referred above the conclusion would be that the ticket was purchased by joint funds and the contribution of the prize would be
seen
as a contribution by the parties equally. There may be cases where the parties have
so
conducted their affairs and/or
so
expressed their intentions that this would not be the appropriate conclusion, but in the generality of cases with which this Court would normally deal this appears to us to be the correct approach and the correct outcome.
52. Insome
cases a distinction has been
sought
to be drawn because the ticket is purchased by one party to the marriage in a
syndicate
with third persons. Whilst there may be
some
![]()
superficial
attractions in this, we do not think that it is correct. The only relevant point of distinction is that the party to the marriage purchases not the whole ticket but a
share
in a ticket (or group of tickets) with other persons. That
share
would ordinarily be treated as coming from joint funds with his or her married partner, and any resultant prize would be a joint contribution by them to the property of their marriage.
Similarly,
a distinction is
sometimes
![]()
sought
to be drawn in cases where the purchase is the continuance of a pre-marriage practice by one party. However, in ordinary circumstances the above approach would apply, because from marriage the purchase would usually be treated as coming from their joint incomes.
- In my judgment, Mance LJ was right to warn
against
an uncritical acceptance of the Australian approach, which focuses on an analysis of contributions and where the concept of equal
sharing
is generally eschewed. As I have
stated,
the result is highly fact
specific,
and does not depend centrally on the origin of the trifling amount to purchase the ticket. If the parties are in effect operating a
syndicate,
whether formal or informal, where both are aware that tickets are being bought and where both have
agreed
tacitly or expressly to their purchase, then it is easy to
see
the prize as a joint
venture
and therefore as matrimonial property, normally to be equally
shared.
On the other hand if one party is unilaterally buying tickets, from his or her own earned income, without the knowledge of the other party, then it is equally easy to
see
the prize as a receipt by that party alone akin to an external donation, and therefore as non-matrimonial property. This case will be fortified if the party in question is buying the ticket as part of a
syndicate
with others, and more
so
if the marriage has become troubled and unhappy with the parties drifting into
separate
lives
socially
and economically (as I will find to be the case here).
- The Australian case of Farmer and Bramley concerned a prize won by the husband well after
separation,
indeed after the wife had remarried. Here I believe it to be unanswerable that
such
a prize in
such
a case would be classed as non-matrimonial property, but in Australia its characterisation gave rise to much debate in the Full Court and a division between its members. I will find in this case that the prize was received during the marriage and not, as contended for by W, after a de facto
separation.
I do not therefore need to dwell on the reasoning
save
to remark on the exceptional clarity and intellectual acuity of the judgment of Guest J which contains many
valuable
insights into the treatment of the thorny issue of post-
separation
accrual.
- With these preliminary observations I now turn to the facts of this case as I find them to be.
- I heard oral testimony from H and W, and from their adult children J and M. I am
satisfied
that neither H, W nor M gave me wholly truthful evidence. W and M played up the difficulties that beset this marriage; H played those troubles down. Moreover neither W nor M gave me truthful evidence about the receipt of the lottery prize. W has gone out of her way to obscure both the receipt and the use of the lottery prize money in order to try to defeat or limit the claim of H.
- The basic facts are these:
i) H and W are both Colombian. W is 51; H celebrated his 55th birthday while he was giving evidence to me on Tuesday 11 October 2011. They were married in Cali, Colombia on 27 July 1984. There is no evidence before me as to the nature of the marital property régime under which they married.
ii) On 22 December 1986 J was born; he is
aged
25. On 23 March 1988 M was born;
she
is 23.
iii) In about 1991 H came to this country to try to better the family'
s
fortunes. He found a job in a
Spanish
restaurant. He was joined by W and the children 4 months later.
iv) Thereafter both H and W worked; H as a janitor/caretaker W as a chambermaid/housekeeper. At
some
point the family obtained council accommodation in a three bedroom flat in Clapham Park. They were living there in 2000.
v)
On 30 December 1999 W and her friend MEM entered into a written
syndicate
![]()
agreement
for the National Lottery Big Draw 2000. It was
stated
by Mr Ison that the ticket cost £2; this was not disputed by Mr Caceres. The ticket won £1m. A cheque was issued on 7 January 2000 payable to MEM and when cleared was, according to a document from RBS, "paid into accounts opened in the name of 2
syndicate
members". On 10 January 2000 £500,000 was paid into an account in the name of W with RBS No. 00771586.
vi)
In May 2000 W purchased in her
sole
name 108 A Road, London
SW12
for £275,000.
She
![]()
says
that
she
expended £25,000 on purchase costs and £90,000 on a complete renovation of the property. None of these figures has been corroborated by documents. After the building works were completed the family moved from Clapham Park to 108 A Road.
vii)
On 1 January 2004 H was removed from 108 A Road by the police in the context of an episode of
serious
domestic
violence.
The parties have been fully
separated
from that date.
viii)
On 20 October 2005 H registered a Notice of Matrimonial Home Rights
against
the property.
ix) On 7 August 2006 W mortgaged the property for £300,000; £299,503.50 was paid into her Lloyds account No. 17165960 on 19
September
2006. On 25 May 2007
she
wrote a cheque (No. 000008) for £100,000; on 28 June 2007
she
wrote a cheque (No. 000009) for £200,000. Her evidence as to the identity of the payees was garbled but I am
satisfied
that in each instance it was MR, the
Second
Respondent.
x) On 8 August 2006 H issued divorce proceedings here. W countered this by issuing on 14
September
2006 divorce proceedings in Cali, Colombia. Plainly
she
did
so
in the misplaced belief that
she
would thereby avoid any claim by H
against
her.
xi) On 15 May 2007 Decree Nisi was pronounced here by District Judge Million. However, on 16 August 2007 the Tribunal
Superior
Del Distrito Judicial de Cali,
Sala
de Familia, heard W'
s
divorce action. The three judges heard oral evidence from H'
s
![]()
sister,
a friend of W, and W'
s
mother and found, based on that evidence that H and W had not been living together "for about the last four years" and decreed a divorce and that "the matrimonial partnership formed by the
spouses
is declared dissolved and in liquidation. Ordered to proceed to liquidation by means authorised in Law". I have no evidence as to the economic ramifications of that order. The effect of this divorce, provided it was entitled to recognition here, was to overreach the Decree Nisi and to nullify H'
s
English divorce proceedings.
xii) There was then a delay of nearly three years, for which I was given no explanation. On 9 April 2010 H applied under
s12
and 13 MFPA 1984 for leave to apply for
financial
relief following an overseas divorce. In
seeming
response to this W paid from her RBS account No. 00771535 to MR £170,508.06 and on 6 May 2010 £80,260.83. Whether this is in whole or part the
same
money as that referred to in para ix) above is wholly obscure.
xiii) On 11 June 2010 Eleanor King J granted leave under
s13
MFPA 1984 and dismissed the divorce proceedings.
She
gave case managements directions. Further case management directions and disclosure orders were given by the court on 11 August 2010, 3 November 2010, 24 November 2010, 17 December 2010, 31 January 2011, 17 March 2011 (when the final hearing before me was fixed), 15 April 2011, and 4 July 2011. On the last occasion
Sir
Peter
Singer
joined MR as 2nd Respondent and made a freezing order
against
her in respect of the funds (or their proceeds) transferred to her (
see
para xii) above). He ordered her to file a
statement
detailing the use of those funds. Although there is evidence that
she
was
served
by post the 2nd Respondent has not made the
statement
that was ordered, nor has
she
attended before me.
xiv) On a date unknown to me W was remarried to AP.
- The following key issues of fact are live between the parties:
i) Whether the parties were de facto
separated,
albeit under the
same
roof, in the
Santos
![]()
v
![]()
Santos
[1972] Fam 247
sense
from 1996, as W contends.
ii) Whether W in fact won £500,000 on the lottery, or whether her
seeming
participation was just a charade
sought
by MEM, as W contends.
- It is clear to me that this marriage was bitterly unhappy from around the mid-1990s if not earlier. Although H
sought
to downplay it it is clear that from that time he had a
serious
alcohol problem, although he was at all times a functional alcoholic able to hold down a job. On 18 June 2010 the GP of H and W Dr
S
wrote "I can confirm that Mrs P and her ex-husband Mr
S,
who was a patient had both registered at my
surgery
in 1993. Mr
S
![]()
suffered
with a history of alcoholism and Mrs P, then
S,
would accompany him to the
surgery
on his Doctor'
s
appointments". H'
s
alcoholism led to frequent bouts of abuse, and things became a deal worse after the lottery win. H frankly
said
that the win destroyed them.
- It has been famously observed that every unhappy family is unhappy in its own way. It is therefore invidious to pick over the bones of this failed union. Both parties raise conduct
against
the other and I will deal with that later.
Suffice
to
say
that I am
satisfied
that W'
s
case that the parties were de facto
separated
from 1996 is false.
Specifically:
![]()
i) I reject W'
s
evidence (and M'
s
evidence also) that from 1996
she
permanently
slept
apart from H in M'
s
bedroom. Equally, I reject H'
s
evidence that W never moved out of the bedroom and that normal marital relations were at all times maintained. Rather, I accept the evidence of J that for about two months when in Clapham Park and for a
similar
period when in 108 A Road W went to
sleep
in M'
s
bedroom, but otherwise
she
and H
shared
a room.
ii) The parties continued to operate a joint economy with H paying the rent, the car expenses and most of the bills from his earnings, and W paying for the food and the children'
s
clothes and other expenses from her earnings.
iii) The parties went on at least two holidays together to Barcelona and to Colombia after 1996.
iv) After the purchase of 108 A Road in 2000 the whole family moved there. W
agreed
to H joining them as "he was my husband", as
she
put it.
v)
The evidence of H'
s
![]()
sister,
W'
s
friend (MF), and W'
s
mother to the Cali court was unanimous that the parties did not
separate
until 2003.
vi)
I accept the evidence of W and both children that living with H was
very
difficult. He was both abusive and mean. Equally I accept the evidence of H that W was overbearing and tyrannical. It was a truly toxic admixture. There was not much in the way of true
spousal
![]()
society
between H and W for many years. But they were not
separated.
![]()
- It is an
agreed
fact that H was wholly ignorant of W'
s
participation in the lottery. It is also
agreed
that her contribution to the winning ticket came from her earnings.
- W'
s
case that
she
did not actually win £500,000 is impossible to credit. Her case as
set
out in her principal affidavit is as follows:
I did not tell the Petitioner exactly how I received the funds to purchase 108 A Road.He was however aware at all times that I had received money from a friend to enable me to purchase it for myself.I did not win and nor have I ever won the National Lottery.It was my close friend MEM who won the National Lottery on the 31/12/1999.MEM [also from Colombia] did not wish to disclose the winning or her identity to anyone including her own extended family and friends. In fact this was the advice given to her by the National Lottery. MEM enlisted me as a close friend to assist her insharing
her winnings.
She
was aware of my disastrous marriage and the abuse the children and I were experiencing.
She
offered to loan me the money to enable me to buy my own home.
In fact her help was on the condition that I purchased the home in mysole
name.
I received thesum
of £415,000 from MEM
- There are legion problems with this
story:
![]()
i) If MEM wished to obscure her win why would
she
![]()
agree
to present herself to the world as a joint winner with W?
ii) W admitted
signing
the
syndicate
![]()
agreement
with MEM dated 30 December 1999.
iii) RBS acknowledged that the win was by two
syndicate
members.
iv) RBS opened an account in W'
s
name and paid into it £500,000.
v)
W used that money as her own.
vi)
MEM in a letter dated 9 March 2011 to H'
s
then
solicitor
![]()
specifically
confirmed that W was a co-winner. That account was not challenged by W.
She
did not call for MEM to attend to be cross-examined.
vii)
In her affidavit M
stated
"
Since
my mother won the lottery in 2000, my father
started
to drink even more". In her oral evidence
she
rowed back hard from this
saying
that this was just an assumption, that
she
had never been told this and that indeed the word "lottery" never was used in the family language. I do not believe any of this. It is clear that M was put up to changing her
story
by W.
viii)
In his evidence J confirmed that W had won the lottery.
- I therefore find that W did indeed win £500,000 on the lottery which
she
received on 7 January 2000.
- I now turn to the present
financial
circumstances of the parties.
- W lives in 108 A Road with her husband Mr P and J and M. W works as a housekeeper for C W Lamley & Co who provide
serviced
apartments in Earls Court.
She
earns net £1,182 per month. Her husband works as a buildings maintenance
supervisor
earning about £1,070 per month net. J works as a
sales
assistant and contributes £200 per month to his bed and board. M works as a receptionist in a
school
and also contributes £200 per month. The household income is thus £2,652 per month. W puts the family budget at £3,655 per month but this includes £700 for legal costs and £577 on the mortgage which presently
stands
at £304,000. As I will explain, even after meeting H'
s
claim, W will have no need of a mortgage of this level. I am
satisfied
that on a bona fide basis the household income is
sufficient
to meet the necessary expenditure.
- Mr Ison
suggested
that W'
s
present capital comprised the equity in 108 A Road and the monies held by the 2nd Respondent. W asserted that the money paid to MR was in discharge of debts owed to her. I reject that argument entirely. In my judgment the funds were
sent
to her to avoid H'
s
claims. Therefore on the basis argued for by Mr Ison W'
s
capital is as follows:
A Road (per Savills
![]()
valuation)
![]()
495,000 less costs of sale
![]()
(14,850) less mortgage (305,000) Monies transferred to MR 250,768 425,918
- In addition, W owns a property in Cali, Colombia. Initially H provided a modest deposit in 1994 and his
sister
raised a mortgage to buy it. In 2003 W
says
that
she
paid off the mortgage in the
sum
of £15,000. However, W now
says
that the property is worth 20m pesos or £6,700. H accepts that W is
solely
beneficially entitled to this property and my order will record that admission by him.
- Even after meeting H'
s
claim W will have a
sufficient
capital base to provide both her accommodation and revenue needs in old
age.
I am assuming that both W and her husband will receive full
state
pensions on retirement.
- H'
s
position is that he works as a porter for a hotel in
St
John'
s
Wood earning £1,217 per month net. He lives in a rented one bedroom flat provided by a Housing Association in
South
Norwood. His rent is £83 per week. His overall expenses, including rent, are £937 per month or £11,250 per annum. This represents a
very
modest lifestyle. Mr Ison has established that receipt of a lump
sum
would not imperil his tenancy.
- In my judgment H'
s
present income and housing needs are met. However, H has an urgent need to make provision for his old
age.
I assume that H will retire at
age
65 and will receive a full
state
pension.
- A Duxbury calculation on £11,250 per annum for a 65 year old gives a capital requirement of £82,080 when allowance is made for a full
state
pension. Of course I recognise that H is 10 years off retirement and that he will invest his lump
sum
and achieve growth. But meantime inflation will take its effect. If I assume an inflation rate of 3% H will need to have £15,119 per annum to have the
same
![]()
standard
of living as he has now. I think it is reasonable to assume that net investment growth will exactly balance the effect of inflation over the next decade.
- I now
state
my conclusions. The first port of call is to apply the needs principle. This was a long marriage and both parties have needs, particularly to provide for themselves in old
age.
I judge that H has a need for a lump
sum
to be paid now of £82,000. On that basis W would be left with a capital base of just over £350,000 (£425,918 + £6,700 (Cali) – £82,000 = £350,618). By downsizing her home at the point of retirement W and her new husband will have ample funds to provide for their old
age.
![]()
- I now turn to the application of the
sharing
principle. I judge the initial receipt of the lottery prize to be non-matrimonial property. This is a case that clearly falls into the
second
![]()
scenario
described by me at para 15 above. However, when W purchased 108 A Road
she
converted that part of her non-matrimonial assets into matrimonial property.
- Given that the
source
of this matrimonial property was not joint endeavour but rather non-matrimonial property of W'
s,
and given the relatively
short
period that H actually lived in 108 A Road, I do not believe that H is entitled to an equal
sharing
of it, or anything like it. I judge that a
sharing
of 15% - 20% would be fair. The
value
of the property after costs of
sale
(but ignoring the mortgage) is £480,150. My assessment of the application of the
sharing
principle gives a range of award to H of £72,000 - £96,000.
Standing
back and weighing together the application of both the
sharing
and needs principles I conclude that a lump
sum
award of £85,000 is the right result. It will be paid in 28 days and will be on the clean break basis.
- The compensation principle is not applicable in this case.
- On payment of the lump
sum
W will be able to reduce her mortgage to just over £139,000 (£305,000 (present mortgage) + £85,000 (lump
sum)
– £250,768 (held by MR) = £139,332). This will be affordable from her overall household income.
- Although I have not mechanically recited the provisions of
s25
MCA 1973 (applied by
s18(3)
MFPA 1984) I confirm that I have taken them all into account and they are fully reflected in what I have already written.
- Both parties have raised conduct. It is a common feature of many
financial
![]()
remedy
cases where parties represent themselves. Although both parties behaved poorly towards each other, H perhaps worse than W, the
very
high threshold mandated by the authorities (Miller and McFarlane,
S
![]()
v
![]()
S,
McCartney
v
Mills-McCartney [2008] 1 FLR 1508) for conduct to be capable of being reckoned is not crossed. In the latter case Bennett J
stated
at para 287:
[The] authorities undoubtedlyshow
that the conduct must be truly exceptional before it passes the
statutory
criteria.
- I am required by
s16
MFPA 1984 to have regard to the matters recited therein before making any order. I confirm that I have done
so.
None of the matters mentioned has any bearing on my award. The parties' connection with Colombia is now purely historical. While there was a delay of a little under three years following the Cali divorce before this application was made, that is not of
such a length as to affect my decision.