A rare example of a ‘modest means’ appeal

Family Law|November 14th 2016

As His Honour Judge Booth pointed out in his judgment in C v C, one of the difficulties with dealing with appeals against financial remedy orders on divorce is that most of the decided cases are ‘big money’ cases, as it is only wealthy litigants who can afford to take their cases to the Court of Appeal and beyond. Accordingly, he said, there is relatively little guidance on those difficult cases where there is not enough to go round.

C v C was what I shall call a ‘modest means’ appeal, where the assets of the marriage were modest, and not enough to enable the court to provide both parties with what they wanted. It concerned an appeal by a husband against an order made at the conclusion of contested financial remedy proceedings.

The history of the case was as follows. The parties began cohabiting in 2001 and married in July 2005. They have three children, a son aged 6 and twins aged 5. The parties separated on 1 January 2014 when the husband left the family home. The children remain with the mother. Divorce proceedings were commenced immediately after the separation and the wife issued her financial remedies application. The hearing of the application took place on 1 October 2014 and the divorce was finalised by the decree absolute on 9 October.

The financial circumstances of the parties were, as I have indicated, relatively modest.

The wife was a school teacher. At the time of the final hearing, she was unemployed, having taken voluntary redundancy from her previous employment, but she was confident that she would soon be re-employed in a similar capacity. Her earnings in her previous position had been £39,000 a year gross.

The husband had a number of business interests. He was a landlord with a portfolio of 22 rental properties, and in addition, he had four companies. He took a salary from one of the businesses, had dividends on his shareholding and received the rental income from his property portfolio. In broad figures, he had a total annual income of £56,500. He had no liability to income tax as he was carrying forward a very substantial loss in his property portfolio business.

As to capital, the former matrimonial home had no equity, or possibly even a negative equity, and the husband’s property portfolio had a significant negative equity. The only ‘positive’ asset that the parties had was the sum of £64,000 in a bank account, that the husband claimed was the working capital of his business.

The order made by the District Judge on 1 October 2014 was essentially to award the wife the entire sum in the bank account, to enable her, with the aid of a mortgage, to purchase a home for herself and the children. The husband, complaining that this left him with nothing but debt, appealed against the order.

The appeal was heard by His Honour Judge Booth. He began his consideration of the appeal by reminding him of his job as appeal judge. His role, he said, was to review the decision of the lower court, and in carrying out that review, he could only interfere if he was persuaded that the District Judge was wrong.

What he said next was instructive:

“What does ‘wrong’ mean in this context? The Appeal Courts have deliberately refused to define ‘wrong’, but in this context it essentially means this: that either the District Judge has ordered something that he had no power to order, or arrived at a conclusion on the basis of no evidence, those being two examples, or in exercising the discretionary powers under the Matrimonial Causes Act in identifying the parties’ assets and incomes, and in carrying out the re-distributed phase of the exercise, he has come to a conclusion that is so wide of the mark as to be outside the wide ambit of reasonable conclusions that would amount to a fair outcome. It is not sufficient that I might have reached a different conclusion – that is no test of the measure of the order being wrong.”

The heart of the appeal, he said, was the husband’s complaint that it was wrong in principle for the court to provide for the wife to receive all the liquid capital from the marriage and to leave the husband with all the debts. Judge Booth had to decide “whether on the facts of this case that was a fair outcome, or whether it was so wide of the mark as to be outside the wide discretion available to the District Judge”.

And then Judge Booth said this:

“The important finding, in my judgment, was in relation to the District Judge accepting [the wife’s] evidence in preference to that of [the husband]. She had described to him how throughout their marriage, [the husband] had been saddled with huge debt and, on paper, had always been without funds, yet during their marriage they had enjoyed all the trappings of a successful lifestyle with no suggestion while they were together that [the husband] would not be able to make that state of affairs continue into the future.”

How many times do we see this? A family who, on paper, appear to have little, living a lifestyle which suggests that they have much more. Of course, it is difficult for a husband in such circumstances to argue that the funds that paid for that lifestyle will suddenly dry up, simultaneously with the divorce.

The District Judge’s priority, said Judge Booth, was that laid down by statute: the welfare of the children whilst they remained minors. That is traditionally interpreted by the courts as providing them with a home, and it is that traditional approach that the District Judge took in this case. This meant giving the wife all of the available capital, as anything less would not give her the chance of acquiring a property of her own.

Judge Booth went on:

“Is it necessarily unfair that one party comes out with nothing and the other party gets everything there is? Not necessarily; it will depend on the facts of the case. Is it necessarily unfair that one party comes out carrying a burden of very substantial debt as [the husband] does here, and the other party gets the modest amount that is available for distribution? Again, not necessarily, as it depends on the facts of the case.”

It may be, he said, that the order could be categorised as harsh to the husband, but that does not make it wrong. On the contrary, he concluded that the order was right. It may have left the husband with capital assets that have no value:

“But those assets that he has allow him to generate a significant income. It allows him a lifestyle that appears from [the wife’s] evidence to go significantly beyond the figures. All of that will continue for [the husband]. Those are all legitimate matters for the District Judge to weigh in the balance which he plainly did.”

Accordingly, the husband’s appeal was dismissed.

The full report of the appeal can be read here.

Photo by woodleywonderworks via Flickr under a Creative Commons licence.

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Comments(20)

  1. JamesB says:

    I read this. The appeal was dismissed. The wife got everything. The Judge said, its not about being fair or able to define how one person gets it all or knowing about what is going on, or setting precedent, or being open to scrutiny, its about something more important than that. Although he didn’t say what it was about and that is left in the air.

    I will fill that in. It’s about giving everything to the side with the children if there is not enough to go round. That is bad law and why we need 50:50 shared contact to stop these kind of stich ups. Thanks for posting. This subject and this case smells bad and shows why these courts need to be avoided, and are increasingly being as per objective statistics and articles including many on here over the years to unmarried households being in the majority, as much as possible by people.

    • John Bolch says:

      Who said the father here wanted shared contact? As far as we know, the arrangements for the children were agreed between the parents.

      • JamesB says:

        Not for the first time you have missed my point. Which is that the person with the children cleans up and that it shouldn’t be like that.

        • John Bolch says:

          Not for the first time, you’ve missed the point: it’s about the welfare of the children, not the rights of the parents.

          • JamesB says:

            Well, at least we are talking about the core of the issue.

            Essentially You are trying to say that contact and finances are separate.

            I am saying that they are not as one influences the other, which is what you and the Judge are pussyfooting around saying. You need a global deal which both buy into or you split everything 50 50 that’s what I am saying. You and people like you trying to put the ‘innocents’ first is encouraging less marriage and more bad behaviour of grabbing kids and pulling drawbridge up and claiming all on the back of it. You can’t have your cake and eat it.

          • JamesB says:

            By ‘innocents’ I mean the children of the marriage to spell that out.

          • JamesB says:

            To spell it out, you can’t have your cake and eat it is referring to you wanting to maintain the current laws and have more people go along with them and the status quo and the establishment by being ok with the laws of marriage. I say that is not viable given the number of people voting with their feet and not getting married or getting married with prenups, better law would and should help with resolving these issues which you raise, but then propose to resolve by marrying people against their will in the form of cohabitation agreements which will not work as people will then Skype to not have bad law in their lives which is the reason why fewer are marrying as you rightly have posted and I give you credit for that.

          • JamesB says:

            You also (wrongly) blame men for getting nothing, which as it is the case here, is usually not them to blame. The system is at fault. You post this and don’t offer an opinion on it. You think this is fair? It is not and goes against what you say about women as victims.

          • JamesB says:

            Do you really think this fair? I could post all evening on this, but I give you credit of showing the issue in the form of the post. Its more relevant than posting about men huffing in court and being at fault and deserving of nothing for that which has been a bad argument of yours in the past, this is more like the issues of the court, next perhaps you could post how to stop this bad justice.

          • JamesB says:

            I will leave it there for now but think this is not right and lawyers shouldn’t just ignore it and I give Andrew credit for noticing also.

          • John Bolch says:

            I don’t blame anyone for anything.

          • John Bolch says:

            No, you can’t. And that is shown by the quid pro quo: the mother must house and look after the children for as long as they are dependent, perhaps another 16 years. During that time the father is ‘free’ to re-build his own finances.

          • JamesB says:

            I did notice that you did not answer my question on whether you thought this situation was fair or not. You said it is legal but not if it is fair, with the man giving everything and 25% of future income I believe and think it is too one sided, you didn’t answer the question.

          • JamesB says:

            You didn’t answer the question – again, I meant. As you also didn’t answer on so many things. I think when writing, perhaps even as a lawyer you should offer your insight and experiences and background. You don’t even say if you are married divorced straight with or without children etc. Also on if you think the law is treating this man fairly. I think it is not.

  2. Andrew says:

    Correct no doubt in the light of the present law. But grossly unfair and further proof that the law needs change.

    The yardstick of equality should be the starting point in all cases, rich and poor, save those exceptionally rare cases of misconduct which cannot be disregarded or “stellar contribution”.

    The only difference in smaller cases is that it may be necessary to postpone the division during the minority of children.

    And where there is a prenup that should trump (excuse the word!) all other considerations – with the same caveat for the children.

    It’s not rocket science, it is justice, and couples splitting up would know where they stand and be able to reach agreement quickly. Either spouse persisting in litigation would of course face the risk of Part 36 which works in p.i. and Inheritance Act cases and would work in matrimonial finance too.

  3. JamesB says:

    It also appears to not be about Judges ever daring to criticise each other. If I were husband I would appeal. I thought there was a yardstick of equality or something in this law which is not being paid enough weight in this finding, even given the appalling bias of the courts and the law I didn’t think they were this bad.

    Does bring back bad memories. I dated a woman who had three kids to an ex professional footballer. She won everything on divorce, he had nothing except the csa to deal with, he had retired. He drunk himself to death. Spinners comment about men jumping from court windows and how I have felt being there and the metal detectors and men throwing eggs and rotten tomatoes and US judges being armed. I think we need to open these places up to fairness a bit more please.

  4. JamesB says:

    There are many examples like that and I don’t want to go on about them, its just surprising that the law is sooo slow to adapt to stop its current injustices as I would rather establishment changed then got thrown out as per Brexit and Trump. I don’t want the fascists or communists but more fairness and common sense on this subject on going and in future please.

  5. Ronnie says:

    It’s always in favor of the WOMAN isn’t it?! Okay, in this and many other cases it may well make sense when she has to look after the KIDS. But why does it STILL have to be blindly applied when there are NO kids from the marriage??!!

    In such cases — and there are many of them — it is manifestly unfair! Having been in a marriage where the working wife contributed NOTHING financially in almost five years, and yet was awarded a nice fat sum at the end of it — which she initiated — it is clear that the law is totally unfair, and it is time it was changed to reflect the realities of the 21st century. Since MEN still mostly pay for dates for instance, he is soon going to need his money — not her.

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