O v O

CourtRoyal Court
JudgeBirt, Deputy Bailiff and Jurats Le Breton and Morgan
Judgment Date14 November 2005
Date14 November 2005
Birt, Deputy Bailiff and Jurats Le Breton and Morgan

S.E. Fitz for the appellant;

A. Winchester for the respondent.

Cases cited:

(1) Baker v. Baker, [1995] 2 FLR 829; [1996] 1 F.C.R. 567, considered.

(2) Cordle v. Cordle, [2002] 1 W.L.R. 1441; [2002] 1 FLR 207; [2001] EWCA Civ. 1791, dicta of Thorpe, L.J. applied.

(3) Elliott v. Elliott, [2001] 1 F.C.R. 477; [2000] EWCA Civ. 407, dicta of Thorpe, L.J. considered.

(4) White v. White, [2001] 1 A.C. 596; [2001] 1 All E.R. 1; [2000] 2 FLR 981; [2000] 3 F.C.R. 555, distinguished.

Legislation construed:

Bankruptcy (Désastre) (Jersey) Law 1990, art. 12:

"(8) It shall be the duty of the court in deciding in what manner to exercise its powers . . . to give first consideration to the desirability of reserving the matrimonial home for the occupation of the spouse and any dependants of the debtor having regard to all the circumstances of the 'désastre' including the interests of creditors."

Matrimonial Causes Act 1973 (c.18), s.25:

"(2) . . . [T]he court shall in particular have regard to the following matters:

(a) the income, earning capacity, property and other financial resources which each of the parties . . . has or is likely to have in the foreseeable future . . .

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

. . .

(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family . . ."

Text cited:

Cretney, Masson & Bailey-Harris, Principles of Family Law, 7th ed., para. 14-097, at 403-404 (2002).

Family Law—financial provision—Mesher order—order postponing sale of matrimonial home and division of proceeds but requiring regular payments by husband inappropriate if (a) creditors could enforce claims against husband's share, putting wife and children's home at risk; (b) difficult to enforce payments as husband in financial difficulty and self-employed with no capital assets; (c) parties' poor relationship; and (d) possibility wife unable to obtain adequate housing in future

Family Law—financial provision—equality—equal division of assets between husband and wife not necessarily appropriate—housing for minor children and parent with care primary consideration—insufficient funds in ordinary case for equal division after housing provision—court to consider criteria in Matrimonial Causes Act 1973, s.25 and make non-discriminatory and fair order

The appellant applied for financial relief in divorce proceedings.

The parties, who were married for 16 years, separated in 2003 and a decree nisi was granted in 2004. The appellant (the wife) remained in the matrimonial home with their three children, aged 17, 14 and 9. She had an annual net income of £15,912 and was 39 years old. The respondent (the husband), who was 43, worked as a self-employed builder and had a gross annual income of approximately £45,600 but also substantial debts.

The parties' relationship was very poor and the wife had previously issued injunction proceedings against the husband, who did not contribute towards maintenance for her or the children after the separation. The wife applied to the Registrar of the Family Division for financial provision, namely, that the matrimonial home should be sold and 90% of the proceeds given to her so that she could purchase an alternative home for herself and the children. She proposed that the remaining 10% should be given to the husband to be used to repay his creditors. The net proceeds of the sale of the home were expected to be approximately £235,000.

The husband repeatedly failed to comply with court orders that he should make full and frank disclosure of his financial position. The Registrar adjourned the wife's application and ordered the husband to pay maintenance, but he failed to make two of the payments. The wife appealed against the adjournment and also submitted that, as the husband had failed to make full and frank disclosure of his assets, adverse inferences should be drawn against him.

The husband submitted in reply that (a) the order sought by the wife would unreasonably deprive him of his half share in the matrimonial home and a Mesher order should therefore be made instead, under which the wife would live in the matrimonial home with the children until the youngest reached majority or finished full-time education, at which time the home would be sold and the proceeds divided equally between the parties; and (b) the wife's proposal was not consistent with the yardstick of equality.

Held, allowing the appeal and ordering the sale of the matrimonial home:

(1) The matrimonial home would be sold and the wife would receive approximately 90% of the proceeds to purchase an alternative home for herself and the children. The husband would receive the remaining 10% to repay his creditors. In addition, there would be a charge of £45,000 in his favour over the wife's new property, realizable at the later of their youngest child either reaching 18 or completing full-time education. The husband would therefore eventually receive approximately 30% of the estimated net sale proceeds. A Mesher order, which would have preserved the matrimonial home for the wife (who had care of the minor children) but also enabled the husband to realize an interest in it once the children reached majority, was not appropriate in the present case. The first consideration was to provide a home for the wife and the minor children, which could not have been achieved satisfactorily if they had remained in the matrimonial home as the husband's creditors might have sought to enforce their claims against his share, in which event the wife and children's accommodation would have been insecure despite the powers under art. 12 of the Bankruptcy (Désastre) (Jersey) Law 1990. Furthermore, a Mesher order would have required the husband to have continued to make payments towards the mortgage and other expenses concerning the matrimonial home. Given both his financial difficulties and his poor relationship with the wife, it was not certain that he could or would have made those payments and any failure to do so would have put the wife and children's home at risk. As he was self-employed and had no capital assets, it would have been difficult for the wife to have enforced the payments. In addition, given her age and income, it was not certain that if a Mesher order were made she would be able to rehouse herself satisfactorily on the eventual sale of the matrimonial home ( paras. 29-31).

(2) The primary consideration when making a distribution was the need to provide a home for the wife and the minor children, and subsequently the husband. As was typical in ordinary cases such as the present, having made provision for housing the wife and children, the parties' limited assets were insufficient to allow for an equal division between them. Even the "big money" cases—which established that where assets exceed the parties' financial requirements there should be no distinction between the party who earned the assets and the party who cared for the family, which was likely to amount to gender discrimination—did not provide that assets should necessarily be divided equally. The "yardstick of equality" was merely intended as a safeguard against discrimination. In an ordinary case such as the present, the court should therefore have considered the criteria set out in s.25 of the English Matrimonial Causes Act 1973, especially the welfare of any minor children and the parties' housing needs, and made an order which was non-discriminatory and fair, having regard to the check against equality ( paras. 22-27; para. 32).

(3) Although it might be appropriate, in certain circumstances, for adverse inferences concerning the assessment of a party's assets to be drawn against him in matrimonial proceedings if he failed to make full and frank disclosure, it would not be appropriate to do so in the present case, as it was clear that the husband did not have any hidden assets ( para. 28).

1 BIRT, DEPUTY BAILIFF: This is an appeal against a decision of the Registrar of the Family Division in connection with the application of the appellant (the wife) for financial relief.

The factual background

2 The parties were married in 1987. There are three children, aged 17, 14 and 9. They separated in May 2003 after some 16 years of marriage. On July 14th, 2004 a decree nisi was granted on the ground of one year's separation with consent. The wife remains in the former matrimonial home with the children and the husband resides in a combined office and flat.

3 The husband is a builder by trade. At times during the marriage he was employed; at other times he was self-employed. For the few years before the separation he had traded through a company. The shares in the company were held equally by the husband and the wife. The wife worked throughout the marriage as a nursery assistant. At the time of the separation, a monthly sum of £2,350 was paid from the company's account into the parties' joint account from which all the household bills were paid. The wife was earning approximately £1,165 net per month at the time of the separation.

4 From the date of separation, the husband ceased to pay anything towards the maintenance of the wife or children. The wife was able to arrange a six-month mortgage break between July and December 2003 but, apart from that period, she has been responsible for paying the mortgage together with the school fees and all the household bills and expenses for herself and the children. At the date of the separation, the...

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